Sitting of 16 May 1990

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
Oral Answers to Questions
  TRADE AND INDUSTRY

    Dangerous Goods
    Mr. Jack Thompson: To ask the Secretary of State for Trade and Industry what further steps he is taking to strengthen legislation against sellers of dangerous goods.
    Mr. Gareth Wardell: To ask the Secretary of State for Trade and Industry what further steps he is taking to strengthen legislation against sellers of dangerous goods.
    The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Eric Forth): The introduction of the general safety requirement in part II of the Consumer Protection Act 1987 means that it is now a criminal offence to sell any consumer product that is not reasonably safe. That is supported by specific regulations and by a range of enforcement powers that enable action to be taken effectively and swiftly against unsafe consumer goods. I see no justification for further legislation in this area.
    Mr. Thompson: Will the Minister take into account the fact that local authorities have had carefully to examine staffing levels in their trading standards departments simply as a result of the introduction of the poll tax? Will he consider at least changing part II of the Consumer Protection Act 1987 to extend the period of time for prosecutions from six months to about three years? There is great demand among local authorities for that change and it is important that it is considered. Will the Minister also consider legislation on the importation of radioactive goods such as smoke detectors, certain types of switchgear and watches?
    Mr. Forth: The hon. Gentleman gives me an opportunity to pay tribute to the work done by trading standards departments up and down the land, which do excellent work on behalf of the consumer. Of course, it is for local authorities to decide their priorities. I hope that all local authorities will always give the highest priority to their duties under the Consumer Protection Act 1987 to give resources to the trading standards departments. I am confident that they will do so. As for radioactive material, if the hon. Gentleman will write to me, I shall consider the matter carefully in order to assess, apart from anything else, whether it is my responsibility. I should like to consider the matter in more detail.
    Mr. Wardell: Will the Minister give three good reasons why he is not prepared to amend part II of the Consumer Protection Act 1987 in order to allow trading standards officers more time to prosecute sellers of goods that result in injury or put people's lives at risk?
    Mr. Forth: I shall give the hon. Gentleman one reason. Although my Department has asked for them, I have not yet received positive and substantial reasons why we need such an extension of the time limit. I give the hon. Gentleman this undertaking. As and when anyone gives me real evidence that the six-months time limit is a real obstacle to the effective pursuit of prosecutions, I shall look at it positively. We have asked for such evidence and we are still waiting.
    Mr Nicholas Bennett: Will my hon. Friend consider referring to the Office of Fair Trading a range of goods that have come on to the market in the past couple of years, which claim to be innocuous, are prettily packaged and have no price on them? The appear to be coming from an address in Walworth road.
    Mr. Forth: If I can pick up the drift of what my hon. Friend is saying, I suspect that one of the problems with the products emerging from Walworth road is that we are still waiting for full disclosure of all the details, to say nothing of the fine print. When we see some of that, the goods may well be categorised as grotesquely unsafe to the public.
    Mr. Nigel Griffiths: Does not the Minister realise that not only trading standards officers of local authorities but the prosecution service and the testing stations of his Department determine delays in bringing prosecutions against the sellers of dangerous goods? When trading standards officers throughout the country are telling the Minister that sellers of dangerous goods get away scot-free because of the six-month time limit on prosecutions, why has the Minister failed to review that serious loophole in our consumer protection law?
    Mr. Forth: In his relatively brief tenure in office, the hon. Gentleman has made a speciality of making unsubstantiated statements from the Dispatch Box. I tell him in all generosity that I have had no such information or approaches from trading standards departments. When I receive detailed and substantial evidence that the time limit is causing the problem that he suggests, and as I have undertaken to his hon. Friend the Member for Gower (Mr. Wardell), I shall consider it positively, but I am awaiting that evidence. The hon. Gentleman might well prod trading standards departments to come forward more quickly.

    Teesside Development Corporation
    Mr. Holt: To ask the Secretary of State for Trade and Industry when he last met the chairman of Teesside development corporation to discuss development in Teesside.
    The Minister for Industry (Mr. Douglas Hogg): I have not met Mr. Norman in his capacity as chairman of the Teesside development corporation, but I am well aware of TDC's achievements. I was pleased to see that unemployment in my hon. Friend's constituency has fallen

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    by 22·4 per cent. over the past 12 months. I am advised that the TDC has £1 million worth of factory space under construction.
    Mr. Holt: I am grateful to my hon. and learned Friend for that reply and I hope that it will not be too long before he meets Mr. Norman. When he does, will he please convey to him the thanks of the people of Teesside for the work done by the TDC in regenerating and revitalising our area? If there is any drawback at all, it is that we still have to contend with Cleveland county council. Perhaps we can abolish that and extend the TDC to the whole area.
    Mr. Hogg: I shall indeed bear in mind what my hon. Friend has said, and discuss with Mr. Norman the important fact that during the past two years, by the selective use of regional assistance, about 2,500 new jobs have been attracted into the Cleveland area. That is an important development for the whole region.

    Space Research
    Mr. Atkinson: To ask the Secretary of State for Trade and Industry if he will make a statement on United Kingdom participation in space research for peaceful purposes.
    Mr. Douglas Hogg: The United Kingdom is successfully carrying out a range of civil space activities, principally through the programmes of the European Space Agency. The main emphasis of our programme is on space science and on Earth observation. Development of Earth observation services will open up new commercial opportunities and play a significant role in monitoring the global environment and climate.
    Mr. Atkinson: In view of the negative vibes that we were giving out to the European Space Agency two years ago, may I thank my hon. and learned Friend for that encouraging reply? Is he aware of the various plans to develop a space plane—Hermes in France, Saenger in West Germany, the Orient Express in the United States and our own HOTOL project? Does he agree that it would be sensible to collaborate internationally on such an expensive project, and to include Japan and the Soviet Union if possible? Will he initiate international discussions along those lines?
    Mr. Hogg: We do not have any intention of putting Government money into HOTOL. If it ever takes place, it is likely to be an enormously expensive project, and very few vehicles would be required. If there are industrial participants who are thinking in terms of it, I should certainly commend to those involved international co-operation of the sort suggested by my hon. Friend. I take this opportunity to emphasise the Government's commitment to the programmes sponsored by the European Space Agency.
    Mr. Page: Does my hon. and learned Friend agree that the most profitable aspect of space science has been telecommunications, in which we have been enormously successful in the past? Is he concerned that we might be losing that lead? Is he fully convinced that we are giving all the support necessary to the new projects coming forward?
    Mr. Hogg: That is an important question. The Government are trying to take on projects in space that are likely to give rise to the most useful programmes in the
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    foreseeable future. We have done well in telecommunications in space, and British industry leads the field in that. As a specific reply to my hon. Friend, he may know that we have just announced a commitment of another £32 million towards what is known as DRTM—the data relay technology mission. We shall be researching intercommunications between satellites and between mobile land satellites.

    Steel Industry
    Mr. John Hughes: To ask the Secretary of State for Trade and Industry if he will make a statement on the future of the steel industry in the United Kingdom.
    Mrs. Margaret Ewing: To ask the Secretary of State for Trade and Industry if he will list the principal regular subjects of discussion at meetings between himself and the chairperson and board of British Steel plc on which he answers to Parliament.
    Mr. Douglas Hogg: British Steel is now a private sector company free from Government control. Over the last 10 years there has been a transformation in the fortunes of British Steel, which is now one of the most successful and productive steel companies in the world. I am confident that that success will continue in the future.
    Mr. Hughes: Does the Minister acknowledge that the product of the Government's suicidal economic policies, which have resulted in catastrophically high interest rates, is the loss of the jobs of thousands of workers in the steel industry in Scotland and Wales? Will he explain what steps he has taken to counteract that effect? Is he aware that British Steel has only 2 per cent. of the market share in the Common Market, in which demand is increasing at 3 per cent? What steps will he take to ensure that the British steel industry will meet that demand?
    Mr. Hogg: I am afraid that the hon. Gentleman has not done credit to what is an important issue. The plain truth is that the fortunes of British Steel have been dramatically transformed in the past 10 years and it is now one of the most successful steel-making concerns in the whole of Europe. We should not forget that between 1975 and 1985 the subsidies to the steel industry, expressed in today's money, were £14,430 million. I should have thought that the House would be pleased to note that British Steel is now in profit.
    Mrs. Ewing: This is an extremely important issue and it is clear that the Minister is not responding to the extreme anger that we feel in Scotland today about the despicable and disgraceful announcement by British Steel of the proposed closure of the hot strip mill at Ravenscraig next year. Why is not the Secretary of State for Scotland prepared to come along and sit on the Front Bench to hear the points that hon. Members are raising today? We are talking not just about the loss of 770 jobs directly but about the heart being torn out of the communities of central Scotland and about the core being removed from the Scottish economy.
    When was this decision reached? Is it true that it was reached by the board in March of this year? When did the Department know about it? When did it discuss it with the Scottish Office? When will we have an opportunity to look at this in more detail?
    Mr. Hogg: The hon. Lady is being less than candid with the House. She has complained about the absence of my right hon. and learned Friend the Secretary of State for Scotland; she knows perfectly well that my hon. Friend the Minister of State, Scottish Office is on the Front Bench, and that there is a private notice question down for answer at 3.30 pm, to which my right hon. and learned Friend the Secretary of State will be responding. So it was less than honest of the hon. Lady to pose her question in the way that she did.
    Sir William Clark: Does my hon. and learned Friend agree that the success of the steel industry is proof positive that privatisation is much better than Government control?
    Mr. Hogg: Absolutely; my hon. Friend is entirely right. During the 1970s the British steel industry was virtually destroyed by the Labour party policies that were then in place. Since then, there has been a dramatic upturn in the fortunes of British Steel, which came from a considered decision to let its managers manage their business in accordance with commercial criteria.
    Mr. Oppenheim: Can there he any better example of socialist economic mismanagement than the performance of British Steel in the 1970s? Is not it true that in the 1970s the Labour Government pumped huge amounts of state subsidies into British Steel, which merely encouraged it to build up huge and unnecessary surplus capacity? It was strike-bound most of the time; it was unproductive; and at one point it was losing £1 million a day. Contrast that with today, when British Steel is one of the most profitable and productive steel companies in the world, with one of the best-paid work forces in Britain.
    Mr. Hogg: My hon. Friend is entirely right. He referred to losses, and the House will wish to know that in the period 1979ߝ80 British Steel lost—in today's money—£3,359 million. In the same period the United Kingdom steel industry was, I regret to say, at the bottom of the output league: output per man was about 160 tonnes, whereas we are now third in the ranking with output per man at about 347 tonnes.
    Dr. Reid: On this of all days, the fact that the Secretary of State for Trade and Industry is not at the Dispatch Box now is a shameful disgrace. He cuts an ever more irrelevant and pathetic figure. Does not the Minister begin to understand the feelings of bitterness and betrayal in the Motherwell area? He will be the target of those feelings, and deservedly so. Why did not he heed our warnings about privatisation? Why did he go ahead despite those warnings and why has not he lifted as much as a little finger to argue for investment at Ravenscraig? Will he have the guts to admit that his complacency was wrong and give a guarantee that he will stand alongside Opposition Members who will fight to the end to reverse the decision taken this morning by British Steel?
    Mr. Hogg: The hon. Gentleman's observations simply prove that the Labour party has learned nothing at all about the proper approach to industrial policy. I repeat to the House that between 1975 and 1985 subsidies to the British steel industry, in today's money, amounted to £14,430 million. That is a disgrace. The industry is now profitable and its output is among the most remarkable in Europe. That is a tribute to the process of privatisation.
    Mr. Dickens: Does my hon. and learned Friend agree that there are as many people working for British Steel today as there were 10 years ago? The British taxpayer was putting £600 million a year into British Steel. Today it is making £800 million profit.
    Mr. Hogg: My hon. Friend is entirely right to draw attention to the radically changed productivity record of British Steel. He is also entirely right when he says that what was a catastrophically loss-making industry is now profitable. We should be proud of that and not try to put back in place policies pursued by the Labour party that led to disaster.
    Mr. Gordon Brown: Will the Minister explain how privatisation has ensured the future of Ravenscraig and the strip plant? Is not he ashamed to come before the House as the "do nothing" Minister who has simply walked away from his responsibilities to the steel industry? Will he confirm that the Secretary of State has not only refused to answer questions today but has failed to meet British Steel? When the chief executive of British Steel came to the Department of Trade and Industry yesterday no Minister bothered to meet him and he was met by only a few officials. Will the Minister now meet British Steel and demand that it explains itself? Will he call for the additional long-term investment that is now needed for a long-term and viable future for the steel industry in Scotland, England and Wales? How much more of Britain's manufacturing industry will he betray before he ends this dereliction of duty?
    Mr. Hogg: I must say to the hon. Gentleman that I find his ranting profoundly depressing. Clearly, he has not understood or has not listened to any of the facts that I have given to the House. When the Labour Government were last in power the steel industry made a loss, in today's money of £3,359 million. That was a result of the type of policy—if the hon. Gentleman has one—that he is now calling for—that is, massive intervention. As the hon. Gentleman well knows, my right hon. and learned Friend the Secretary of State for Scotland has been in the far east selling Britain most effectively as a manufacturing country for inward investment. He also knows that my right hon. and learned Friend is coming to respond to a private notice question. The hon. Gentleman is a Scottish Member, so he would be the first to complain if some other Minister were first to make such a response.

    Consumer Capital Goods
    Mr. Stern: To ask the Secretary of State for Trade and Industry what proposals he intends to bring forward to amend the law relating to the protection of purchasers of consumer capital goods.
    Mr. Forth: The Government have announced their support for the Law Commission's recommendations to amend legislation on the sale and supply of goods and services. Those recommendations cover other transactions within the ambit of that legislation and not only those for "consumer capital goods". The private Member's Bill introduced by the hon. Member for Clwyd, South-West (Mr. Jones) would give legislative effect to those proposals.
    Mr. Stern: Will not that private Member's Bill, which is at the moment in the other place, be a useful addition to the body of law if it is passed in its present form? However,

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    once that Bill is passed, is not there still scope for a fresh look at protection of the purchasers of consumer capital goods?
    Mr. Forth: My hon. Friend is correct. In the shape in which it left the House and went to the other place, the private Member's Bill has the Government's full support, and I hope that it ends up on the statute book, because it would add considerably and significantly to consumer protection. My hon. Friend is also correct to say that I undertook that when the Bill is resolved one way or another by both Houses of Parliament, it will be appropriate for me and the Department to look at consumer guarantees—something on which my hon. Friend has pressed me on a number of occasions—to see whether it is appropriate to consider further legislation in that sector. I have undertaken to do that in the past and I gladly do so again.
    Mr. Ashdown: While we are on the subject of consumer protection, is the Minister aware of the disgraceful failure of the Insurance Brokers Registration Council to protect the interests of consumers in the Wessex Trust affair, in which so many have lost, often their life savings? Is he further aware that the IBRC has lost applications for grants and sought to discourage eligible applications? If he says that he cannot and will not intervene to ensure that the IBRC fulfils its obligations, will he at least express his disapproval of its actions?
    Mr. Forth: Far be it from me to invade your territory, Mr. Speaker, but if the right hon. Gentleman spent more time in the House, he would realise that he was asking supplementary questions not only on a subject which has nothing to do with the main question, but on something which has nothing to do with my responsibilities. It is entirely a matter for my hon. Friend the Parliamentary Under-Secretary of State for Corporate Affairs. However, if the right hon. Gentleman wishes to write to the correct Minister in my Department, he will get an answer from my hon. Friend.

    EC Trade
    Mr. Dunnachie: To ask the Secretary of State for Trade and Industry when he will next meet his counterparts in the European Commission to discuss United Kingdom trade with the European Community.
    The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. John Redwood): My right hon. Friend and I regularly meet European Commissioners and discuss with them a wide range of subjects.
    Mr. Dunnachie: Is the Minister aware that imports to the United Kingdom from the EEC totalled some £2·7 billion in the 1970s and that in 1989, the figure had risen to £63·5 billion? In the light of that, will he outline his plans to improve the figure?
    Mr. Redwood: The hon. Gentleman should also note that there has been a big increase in our exports to the European Community because we are trading much more widely with our European partners than we were in 1970. The House should recognise that, since 1983, the ratio between our exports and imports in manufactured goods to the European Community has been improving. That is a direct result of the economic policies pursued by the
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    Government, which have led to a massive increase in investment and productivity and an improvement in our manufacturing performance. I dread to think what would happen if we took the advice of Labour Members and adopted some of the policies emerging from the Labour party's latest policy review. On page 131 of his book, the hon. Member for Dunfermline, East (Mr. Brown) recommends a major increase in corporate and investment taxation. That would be a good way to reverse the encouraging trend in the ratio between exports and imports in manufatured goods to Europe, which has been taking place since 1983.
    Sir Hal Miller: When the Minister meets his counterparts, will he tell them that the motor trade has shown a positive improvement, and raise with them the question of the barriers being erected against cars made by British workers in British plants, using money supplied by British banks, albeit for a Japanese company? Will he do his best to ensure that those artificial barriers to trade are removed, so that we can complete the single market, and compete fairly, and that that takes place long before we move on to further measures of European unity?
    Mr. Redwood: My hon. Friend has done a great deal for the British motor industry and I am sure that he will be pleased to know that my right hon. Friend the Secretary of State has carried the argument strongly into the counsels of our European partners. He has made it clear that cars produced in Britain, by whatever company under whatever ownership pattern, are British cars and therefore European cars and should circulate freely within the Common Market. That remains our position, and we have every confidence that our partners will accept it. My hon. Friend can rest assured that the Government will fight strongly for that right. We are proud of the revival in the British motor car manufacturing industry by new investors and existing investors who are already in this country. The cars are British. Opposition Members love to knock these investments, but they should welcome them and recognise the great contribution that British skills and money are making to the investments.
    Mr. Skinner: What about the Italian fireplaces?
    Ms. Quin rose—
    Mr. Cryer: What about a few more Back Benchers?
    Mr. Speaker: Order. We cannot have this background noise. It is extremely disruptive and it does not help our debates.
    Ms. Quin: From the Minister's earlier reply it would be difficult for many people to realise that we have a huge trade deficit with the EEC. As we do have such a deficit, why are the Government cutting export promotion research?
    Mr. Redwood: The Government offer a range of assistance to stimulate exports in the best way that is suitable for exporters. The DTI is happy to offer that advice and assistance through its successful export promotion.
    The proof of the pudding is in the eating. Our exports are improving relative to our imports, and the Government's macro-economic policies are an important part of the policy to bring together the two lines between imports and exports. There is nothing on offer from the

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    Opposition. Their latest policy review is a sham and a pipe dream of the worst sort. There are no policies within it for controlling inflation or excess demand. The Government have put forward the necessary policies, and they will work.

    Regional Assistance, Shropshire
    Mr. Gill: To ask the Secretary of State for Trade and Industry whether he will consider extending regional selective assistance to south Shropshire.
    Mr. Douglas Hogg: Regional selective assistance is available to those parts of south Shropshire that have been designated as intermediate areas under the Industrial Development Act 1982. I have no plans to extend assisted area status to other parts of south Shropshire.
    Mr. Gill: My hon. and learned Friend will be aware of the £14 million of taxpayers' money which is being made available to the Unitgate company for a poultry processing plant at Scunthorpe. He will further be aware of that company's declared intention to make 500 employees redundant at its plant at Craven Arms in my constituency. In refusing to make grants universally available or to scrap the system altogether, is my hon. and learned Friend aware of the serious competitive distortions that are caused within industries, leading inevitably to the transfer of jobs from one area to another? In the light of the example that I have given, will the Government review their policy?
    Mr. Hogg: My hon. Friend referred to jobs in his constituency. I am sure that he is as pleased as I am to note that during the past 12 months unemployment in his constituency has fallen by 23·7 per cent. I am aware of my hon. Friend's concern about the particular application to which he has drawn attention. Indeed, he has seen my right hon. Friend the Secretary of State to discuss it. There is, however, a misunderstanding. The scheme to which my hon. Friend referred at Scunthorpe involves a chicken plant, for which RSA was provided. The facility in his constituency is a turkey concern. They have feathers in common, but nothing else. I am satisfied that RSA is being applied sensibly and usefully.

    Car Production
    Mr. Boswell: To ask the Secretary of State for Trade and Industry whether he will list the numbers of cars produced in the United Kingdom over the last five years.
    Mr. Squire: To ask the Secretary of State for Trade and Industry whether he will list the numbers of cars produced in the United Kingdom over the last five years.
    The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Nicholas Ridley): To the nearest thousand, 1,048,000 cars were produced in 1985; 1,019,000 in 1986; 1,143,000 in 1987; 1,227,000 in 1988 and 1,299,000 in 1989.
    Mr. Boswell: I thank my right hon. Friend for that answer and recognise the improving trend that it shows. However, does he agree that the figures still show an overlarge deficit in that sector? With the new investment from both Japanese and home-grown companies, does he think that the figures will improve still further in the next five years, with consequential benefits both for the balance of trade and for British steel production?
    Mr. Ridley: My hon. Friend is right. We have reversed the disastrous effects of Labour's policies in the late 1970s, when the production of cars fell from 1·5 million to fewer than 1 million per year. With present investments in prospect, the Society of Motor Manufacturers and Traders estimates that 2 million units will be produced per annum by the mid- 1990s. That will more than twice overtake the position that we inherited. It is a remarkable demonstration of the success of the Government's policies compared with those that the Opposition are still peddling.
    Mr. Squire: Does my right hon. Friend agree that while those figures confirm that Opposition claims of a collapse of manufacturing industry are not borne out in the motor industry in any way, shape or form, it remains critical in such a multinational industry that wages and productivity remain competitive so that we can be attractive to investment, not just now but over the next decade?
    Mr. Ridley: My hon. Friend is right—productivity is the key to competitive success and to improving wages. It may interest the House to know that Rover produced six cars per man-year in 1979, but in 1989 it produced 20 cars per man-year. That is the sort of level which, although still not adequate, shows the extreme necessity of higher productivity in British industry, and which has been achieved in that case. That is necessary if we are to regain market shares throughout the world.
    Mr. Harry Ewing: Will the Secretary of State consider both aspects of the manufacture of new cars, the other aspect being the sale of new cars? Will he discuss with manufacturers the type of advertising material that places heavy emphasis on the very high top speeds that the cars can achieve in a short time? Is he aware of the number of recent tragic accidents in which youngsters have been killed trying to reach the high top speeds that manufacturers advertise for their vehicles?
    Mr. Ridley: The hon. Gentleman may be interested to know that last year 991,000 cars built in British factories were sold to United Kingdom customers in the home market. That is the highest for any year since 1973. If customers want high acceleration, manufacturers must provide it. I remind the hon. Gentleman that the law of the land sets speed limits and they are enforced by the police. He is right to suggest that people should not break the law of the land and cause accidents. However, I am not responsible for the traffic laws, and it is necessary for manufacturers to produce what the customers want.
    Mr. Win Griffiths: Does the Secretary of State intend to provide any evidence to the European Commission inquiry into why car prices in Britain are so much higher than in the European Community?
    Mr. Ridley: As the hon. Gentleman knows, the matter has been referred to the Monopolies and Mergers Commission for an in-depth study. In view of my statutory position in relation to the MMC, it would be wrong of me to make any comment or to refer any evidence myself. The MMC's duty is to collect such evidence as it thinks necessary to pursue its inquiries.
    Mr. Grylls: Does my right hon. Friend agree that the increase in the production of cars in Britain is very much attendant on their having free entry to the continental market? Although he has taken a robust line on the matter

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    with his colleagues, can he tell us when the problem will be resolved and when cars from plants located in Britain will be allowed freely into countries such as France?
    Mr. Ridley: I agree entirely with my hon. Friend's sentiments. At present, cars manufactured in Britain, by whatever company and whoever owns it, are allowed free circulation into the European Community. We intend to maintain that position and I believe that under the treaty of Rome it should be maintained. A new question has been raised by some member states in relation to the regime for the import of Japanese cars after 1992. I make it absolutely clear that the Government are adamant that there should be no change in the position of what are called transplants. They will continue to maintain free entry into the market, without there being any effects on any other matter.
    Mr. Henderson: The Secretary of State will know that recent proposals from the Commission identify cars produced in Sunderland, potentially in Derby and also in Swindon, as cars which, during the transitional period, would be counted as part of the Japanese quota. I understand the strong words that the Secretary of State expressed this week to the Japanese Government. Can he tell the House how he intends to ensure that cars made in Sunderland, Derby and Swindon will be classified as British? Does he accept that if he is to get majority EC support for the proposal he will inevitably have to talk to the French, the Italians and the Spanish about extending the time limit on the transitional period?
    Mr. Ridley: I did not use strong words on the issue to the Japanese, but I certainly did to the Commission, and to the Spaniards, the French and the Italians. They are the ones who received the strong words, to the effect that there will be no question but that these cars will have the free circulation to which they are entitled under the treaty of Rome. I believe that the matter will be resolved soon and entirely in our favour.

    Balance of Trade (Japan)
    Mrs. Gorman: To ask the Secretary of State for Trade and Industry what recent representations he has received regarding the United Kingdom's balance of trade with Japan.
    Mr. Redwood: The Department of Trade and Industry receives a number of representations from time to time on the matter. My hon. Friend may like to know that in the most recent year our exports to Japan have risen by 30 per cent. and imports by only 9 per cent. We hope that that welcome improvement in trend will continue.
    Mrs. Gorman: I thank my hon. Friend for his reply. I know that he understands the free market and how it works. Does he agree that our constant worry about the balance of trade deficit with countries such as Japan is about as important as worrying about the balance of trade between Birmingham and Edinburgh, or between Bradford and Bruges? When British people voluntarily buy goods that they want, what they part with is money—which the foreigners cannot eat or stuff into their futons, and which is subsequently reinvested in Britain. Does he agree that what we should worry about is abolishing obstacles to free trade both here and abroad?
    Mr. Redwood: In her usual colourful way, my hon. Friend has made a good economic point. She is right that the party to which she and I belong does not wish to see obstacles placed in the way of people buying the things that they wish to buy. I wish that we could say the same of the Labour party, which wants credit controls to stop people buying Japanese videos, televisions and similar products. Where my hon. Friend and I believe that it is important to make strong representations to our trading partners is if they fall short of the high standards of free trade that we all wish to see worldwide. There are occasions when it is necessary to make strong representations. My right hon. Friend the Secretary of State has just returned from a strenuous trip to Japan, where he has been making some of the points that British business wanted us to make. I should add that Japanese trade is much smoother in that respect than trade with some other countries.
    Dr. Kim Howells: Does the Minister consider, in the light of his previous answer, that an additional reason for our comparatively low sales of cars and other goods to Japan may be that the Government have done their best to gut innovative research and development in this country, and that we are simply not keeping up with trends and developments in many important areas?
    Mr. Redwood: I am afraid that the hon. Gentleman is badly informed. The Japanese are having to set up car plants in this country because they also wish to set up design centres here, which will draw heavily upon the skills of British designers and engineers for the next generation of Japanese cars for the European market, with a strong skill input from people in this country. He also ignores the point of my reply to the previous question— that our export performance with Japan is improving because customers recognise that we offer goods of quality with substantial skill and design content and they are buying more of our goods day by day.
    Mr. Dunn: Surely the truth of the matter is that we do not enjoy free and fair trade with the empire of Japan. Is not it a fact that Japanese goods find it easy to gain access to markets in this country whereas our exports find it immensely difficulty to gain access to Japanese markets? Should not we tell the Japanese Government that unless they mend their ways in terms of economic warfare we shall declare war?
    Mr. Redwood: My hon. Friend should note that the average tariff on industrial products imported into Japan is substantially lower than that on industrial products imported into the European Community. There have been some isolated sectoral problems with Japan. We are pleased with the progress made, for example, with whisky as exports are growing rapidly as a result of changes made by the Japanese Government. There are problems in the footwear and leather sector, which my right hon. Friend the Secretary of State has drawn to the attention of our Japanese opposite numbers. The House should recognise that Japan is not a bad trading partner, that we are pleased with the way trade is developing, we give a warm welcome to Japanese investors here, and it would be wrong to jeopardise that position with ill-chosen words.
    Dr. Moonie: Will the Minister tell the House exactly what are the figures for the balance of our trade with Japan over the past year?
    Mr. Redwood: The balance of trade with Japan in 1989 was minus £4·8 billion.

    Car Exports (Japan)
    Mr. Neil Hamilton: To ask the Secretary of State for Trade and Industry whether he will list the levels of United Kingdom exports of cars to Japan in (a) 1988 and (b) 1989.
    Mr. Redwood: My hon. Friend will be pleased to know that in 1988 we exported 8,099 cars to Japan, worth £65 million, and in 1989 we exported 15,500 cars worth £126 million, which makes the point that the Opposition do not want to understand—that the position is improving rapidly and the improvement is very welcome.
    Mr. Hamilton: Does my hon. Friend agree that the growing strength of the British car industry is entirely due to the tremendous changes that have been brought about in industrial relations in that industry as a result of legislation introduced during the past 12 years, all of which was opposed by Labour Members, and that the jobs of British car workers are protected by the increasing export performance of British car companies to countries such as Japan? Will he confirm that Japan is our ninth best export market?
    Mr. Redwood: My hon. Friend is right on both counts. Of course, the improved industrial relations record is a most important feature. It is a shame that even now the Labour party cannot agree on the importance of those reforms and totally opposes some of them in the political advice given to the Government in the Labour party's latest policy review— the fourth or fifth review, I have lost count of how many there have been.
    The House may also like to know how well trade in motor cars with Japan went in the 1970s, when the Opposition had a chance to put into practice the policies that they are still preaching. In the worst year, we exported 891 cars compared with 15,500 last year. In the Labour Government's best year, to give them credit, the figure reached 3,393. Those were the years when the British motor industry was dogged by high taxation, high borrowing and bad labour relations —the same recipe as the Labour party's new policy review.
    Mr. Roy Hughes: How do the puny levels of British car exports to Japan compare with the levels of British car exports to the Common Market, and how do our actual exports compare with the radiant forecasts made by Lord Stokes when he was chairman of British Leyland way back in 1972? Can the Minister also tell us something about the import of cars into Britain from the Common Market?
    Mr. Redwood: The hon. Gentleman's question is outside the terms of the main question. We import more cars than we export to member states of the European Community, and the total trade in cars is much larger than that with Japan. The figures are in the Library if the hon. Gentleman cares to look them up, or he can table an appropriate question. The point that he is trying to make misses the dynamics of the British motor car industry. As my right hon. Friend the Secretary of State said, the industry went through a bad time in the 1970s, improved in the 1980s and will have a splendid time in the 1990s
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    —the decade of manufacturing revival under a Conservative Government with most welcome inward investment from several overseas countries.
    Mr. Roger King: My hon. Friend will probably know that the mini-car produced by Rover Group has long been a good seller in Japan—it sells in ever greater quantities each and every year —but is he also aware that Nissan in Sunderland will be producing a unique five-door version to succeed the Bluebird which will be exported exclusively to Japan? Japanese transplant factories are thus producing goods for their own home market.
    Mr. Redwood: Indeed. I am grateful to my hon. Friend for bringing his expertise to bear on the subject. He is an expert on the motor industry and his support and encouragement for it are most welcome. I am even more pleased to note that he does so much to promote exports to Japan without receiving any commission for it.

    West Midlands
    Mr. Bellingham: To ask the Secretary of State for Trade and Industry what recent representations he has received from engineering firms in the west midlands.
    Mr. Douglas Hogg: My right hon. Friend the Secretary of State regularly receives representations on a range of issues from engineering firms operating in the west midlands.
    Mr. Bellingham: Is my hon. and learned Friend aware that many companies in King's Lynn and west Norfolk have done well as subcontractors for some of the great firms in the west midlands and, as a result, unemployment has come down sharply? What has happened to the employment picture in the west midlands over the past two years?
    Mr. Hogg: Most people would say that that was a planted question, but it is not. However, the answer is extremely cheering. I chanced to have an analysis done of west midlands constituencies and I will share the results with the House. Between March 1989 and March 1990 a sample result showed unemployment in Sutton Coldfield down 29 per cent., in Solihull down 28 per cent., in Halesowen down 26 per cent., in Dudley, West down 21 per cent., in Dudley, East down 19 per cent., in Birmingham, Yardley down 19 per cent., in Birmingham, Hodge Hill down 21 per cent., in Birmingham, Hall Green down 18 per cent. and in Aldridge-Brownhills down 18 per cent.—dramatic falls in unemployment right across the west midlands.
    Mr. Grocott: Can the Minister confirm that substantially fewer engineering firms in the west midlands are now in a position to make representations to him than when the Government came to power in 1979?
    Mr. Hogg: That is the sort of dreary question that we have got used to hearing from Labour Members. Let us look at the facts. Productivity in the engineering industry in the west midlands has gone up hugely in the past two years, profitability in the west midlands has gone up hugely, exports have gone up very much and inward investment has been extraordinarily successful. The opportunities for the west midlands are huge, and if the hon. Gentleman asks for figures, I will give him them.
    Mr. Conway: Is my hon. and learned Friend aware that the engineering companies in Shropshire, which is part of the west midlands, are doing well under revitalised mangement? How would they progress if we had an inflation rate of 27 per cent. and the highest corporation tax in the industrialised world—both were legacies of the last Labour Government—if we were ever stupid enough to have another Labour Government?
    Mr. Hogg: The plain truth is that the Labour party's policies would be a disaster for the west midlands. Let us examine just two of them. First, by their very nature, Labour's economic policies would cause inflation to escalate fast. Then there is the party's taxation policy. We have not heard much from the hon. Member for The Wrekin (Mr. Grocott) about a payroll tax, but it unquestionably features in Labour party policy. A payroll tax which would cost industry about £3 billion would be disastrous.
    Mr. Speaker indicated dissent.
    Mr. Hogg: You shake your head, Mr. Speaker, as perhaps you should. [Interruption.] I can take a hint as well as the next man.

    Trade Statistics
    Mr. Wigley: To ask the Secretary of State for Trade and Industry whether he has received any correspondence from the Statistics Users Council on the availability of indicators on import penetration, export performance productivity, market share and home demand since the publication of the Armstrong-Rees report.
    Mr. Ridley: Yes, I received a letter from the chairman of the Statistics Users Council on that topic on 4 May 1990, 12 months after the publication of the Armstrong-Rees report.
    Mr. Wigley: Will the Secretary of State confirm that the correspondence that he has received is critical of the present availability of indicators? Does he accept that there must be a proper, full background of statistical information if those involved in that sphere are to improve their performance? In view of our present balance of payments it is vital that all those tools should be available.
    Mr. Ridley: I agree with the hon. Gentleman that an appropriate amount of information should be available to businesses, especially when they cannot get it from sources within the industry. Against that we must weigh the burden, cost and disadvantage of excessive form-filling on the part of businesses. However, in the light of representations from the chairman of the Statistic Users Council, I am prepared to consider with industry circumstances in which businesses want to fill in the forms so that they can obtain information when there is no other source of supply. In those circumstances, it would be right to go a little further than we have in the past.
    Mr. Foreman: My right hon. Friend has spoken about meeting the requirements of industry. Would not we know more about that large balancing item in our external trade statistics, and about the real state of our economy, if we had more information? Is it not time that we improved the
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    quality of our official statistics for precisely that purpose, as it would improve the quality of our economic governance?
    Mr. Ridley: While the statistics that the hon. Member for Caernarfon (Mr. Wigley) asked about are totally different from what my hon. Friend inquires about, I am all for having good statistics relating to the effects of economic policy. The difficulty with the figures that my hon. Friend mentions— which are really a matter for my right hon. Friend the Chancellor of the Exchequer— is that, while the figures for exports and imports tend to be accurate, what is not so clearly defined is how the captial account is made up— from what elements and in what proportions. How best to rectify that is a matter for my right hon. Friend the Chancellor.

    Postal Service
    Mr. Harry Barnes: To ask the Secretary of State for Trade and Industry when he next intends to meet the chairman of the Post Office to discuss the future of the postal service.
    Mr. Forth: My right hon. Friend the Secretary of State will meet the chairman of the Post Office, Sir Bryan Nicholson, on 21 May. They will discuss various matters of mutual interest.
    Mr. Barnes: Will the Minister give an assurance that the national public monopoly on Royal Mail letters will remain? There is growing speculation that private companies are having discussions with his Department about that. We need to lay to rest once and for all fears that the Royal Mail and letters will go down the plughole, as water did.
    Mr. Forth: The hon. Gentleman will be aware—as all Conservative Members are—of the undertaking given by my right hon. Friend the Prime Minister during the last election campaign that the Royal Mail would not be privatised. We should bear that in mind.
    I hope that the hon. Gentleman agrees that it is incumbent on Post Office management and on the Government to work together to ensure that the people of this country have the best mail service that the Post Office is capable of delivering. That is something which is constantly considered by Post Office management, as are its duty and responsibility. We are always prepared to look positively at any suggestions that it may make to ensure that the best possible services are delivered, now and in the future.
    Sir Anthony Grant: When my hon. Friend meets the chairman of the Post Office, will he tell him in no uncertain terms that unless the Post Office can guarantee that a first-class letter will reach its recipient the next day, the Government will give it to someone else who can?
    Mr. Forth: My hon. Friend is entitled to lay such a hard task upon the Post Office, but it would be unreasonable to ask the Post Office to do that in the near future. Not only is that not achieved in any other country of which I am aware, but it does not give tribute and credit to the Post Office for its stern efforts to improve the delivery performance, a target which the Post Office has set for

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    itself. The Government and the Post Office management are looking closely at its performance, and I can assure my
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    hon. Friend that we shall leave no stone unturned in seeking ever-better performance in the Post Office in future.

Ravenscraig (Strip Mill Closure)
3.30 pm
Mr. Donald Dewar(by private notice): To ask the Secretary of State for Scotland whether he will make a statement about the imminent closure of the strip mill at Ravenscraig.
The Secretary of State for Scotland (Mr. Malcolm Rifkind): British Steel announced this morning its intention to close the hot strip mill at its Ravenscraig steel works during the first half of 1991.
While this, of course, is a matter for the commercial judgment of the company, I must make it clear that I deplored the decision and its implications for the work force. I am also very disturbed by the potential implications of closing the hot strip mill for the future of Ravenscraig as a whole.
As yet, British Steel has not provided any details as to why it believes that the closure of the hot strip mill is necessary. I very much hope that it will do so, as those affected are entitled to the fullest possible information. The hot strip mill has been a valuable asset for the company over the past three years and we are not aware why it has ceased to be so.
I also very much hope that British Steel will take all its work force at Ravenscraig into its confidence as to the longer-term employment prospects.
The decision announced by British Steel is not due to come into effect until the first half of next year. There is still, therefore, opportunity for the company to reconsider its decision and see the hot strip mill as an asset rather than as a liability.
The Scottish Office, naturally, regrets any decision that has significant adverse employment implications. As we would with any other major employer in Scotland, we shall seek to persuade British Steel to reconsider its proposal in the interests both of the company and of its work force.
Mr. Dewar: The Secretary of State has said that he deplores today's events. Will he join me in condemning a brutal announcement in uncompromising terms? Surely it is not enough simply to say that those who are about to die should be fully informed about the facts. The question is what is the Secretary of State prepared to do to recover the situation.
Does he agree that there is a strong case for the retention of the Ravenscraig strip mill in view of the growth in the European market and North sea activity? Is it not foolhardy to assume that the demand for strip products can be met by retaining capacity at only two plants? Is it not a decision based on a defeatist view of British Steel's prospects? Is it not essential that British Steel thinks again?
Does the Secretary of State accept that there is great bitterness about the way in which the work force has been betrayed by the company, but also dismay over the inactivity and spineless approach of Ministers?
Finally, will the Secretary of State tell the House why he did not meet Sir Robert Scholey for seven long and weary months? Those were the missing weeks and the dead days when damaging decisions were being taken and the Secretary of State was nowhere to be seen. Does he remember the Question Time promises on 28 March that a meeting would take place
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"in the relatively near future"—[Official Report, 28 March 1990; Vol. 170, c. 483.]
and as recently as 2 May that it would be shortly, yet those meetings never took place? Was not the fate of Ravenscraig strip mill worth the effort?
The Secretary of State told the press this morning that the future of Ravenscraig was not crucial to the future of the Scottish economy. Does he remember his speech at the Tory party conference at Perth almost exactly a year ago when he boasted that Ravenscraig had what he was pleased to call a new lease of life? He said:
"In the private sector the strip mill is working flat out, its order book full, its workforce fully employed."
What does the Secretary of State now say to the 770 people who are about to taste the misery of the dole queue and to the thousands of others who are frightened about their future? What consolation can they take from the Prime Minister's statement in a recent interview that she has a soft spot for the loyal work force at Ravenscraig?
I repeat the essential questions: will the Secretary of State give a guarantee that he is prepared to do everything he can to reverse this decision? Will he commit himself to fight now to stop closure being a threat to steel making at Ravenscraig when 1994 comes? Will he state plainly the steps that he intends to take to recover this disastrous situation?
Mr. Rifkind: I agree with the hon. Gentleman about the desirability of doing that which can be done to reverse the decision. I was interested that he emphasised what he believes are the strong commercial reasons for retaining the hot strip mill at Ravenscraig: the strength of the market for its products, the competitiveness of its work force and the superb way in which the work force has responded to the requests made of it. I agree with and endorse all that he said about that. I further agree that if there is a prospect of British Steel reconsidering the decision, the case must be put on commercial grounds and not on emotional or political grounds. I hope that all hon. Members agree with that.
The hon. Gentleman was correct to say that at various times in the House in the past few weeks the question of contact with British Steel has been raised. He will recall, if he wishes to consult Hansard, that that was with regard to new investment, and in particular regard to Dalzell and the plate mill. As I said at that time, the Government have presented to British Steel their own paper on the desirability of considering Dalzell for future plate investment. Far from delaying on these matters, they have been actively promoted in the past few months.
With regard to the relevance of Ravenscraig to the wider Scottish economy, I say to the hon. Gentleman what I have said on many previous occasions: I believe that the future of Ravenscraig is crucial to the economy of Lanarkshire because of the employment implications if it were ever to close. Of course it has significance and implications for the wider Scottish economy, but some 98 per cent. of Ravenscraig's products do not go to steel users in Scotland but are exported to customers elsewhere in the United Kingdom or overseas. The Scottish economy is infinitely stronger and more broadly based than 20 years ago, and it is sufficiently robust to deal with the problem to which the hon. Gentleman referred.
I do not suggest that the future of Ravenscraig is other than of crucial importance to the economy of Lanarkshire.

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Clearly, an employer with thousands of employees in one part of Scotland has a particular role and responsibility in that respect.
Mr. Alick Buchanan-Smith: May I assure my right hon. and learned Friend that Conservative Members support the robust line that he is taking, and we are grateful for it? Will he press British Steel very strongly about the commercial justification for this decision? Speaking from experience when I dealt with it in relation to the offshore oil industry, I did not find it enterprising in taking advantage of the opportunities of our own country and of those offshore. Will he impress on it the need to take advantage, in the interests of Scotland, of the opportunities that are available?
Mr. Rifkind: My right hon. Friend is correct. It is possible to suggest that the penetration of the British steel market by imports has in part been caused not by British Steel's lack of competitiveness but by its lack of capacity. When future investment decisions about plate and Dalzell are being made, that will deserve to be an important consideration.
Mr. Malcolm Bruce: Will the Secretary of State acknowledge that, far from being robust, his performance in the House is one of great weakness? He should have foreseen that this was coming when the privatisation of British Steel was first mooted and should have undertaken then to secure the future of an independent Scottish steel industry which would not have been closed by a management that has never disguised its hostility to Ravenscraig. Will the right hon. and learned Gentleman now give us some indication of the direct and positive action that he will secure to create an independent, viable, Scottish steel industry that will be competitive and secure for the long-term future?
Mr. Rifkind: I must remind the hon. Gentleman that, at the time of privatisation, British Steel gave a guarantee about the hot strip mill which expired only in 1989. Even under British Steel's current proposals, the hot strip mill will have continued in operation more than two years after British Steel's assurances have run out.
I remind the hon. Gentleman that British Steel announced in its prospectus at the time of flotation that it would be prepared to consider an alternative private sector purchaser for its assets if it had no continuing need for those assets in Scotand. My right hon. Friend the Prime Minister and I have drawn attention to the importance of that declaration, which may become increasingly important in the light of today's remarks.
Sir Hector Monro: Will my right hon. and learned Friend accept that I am absolutely furious at British Steel's decision to stop one of the heartbeats of the Scottish economy? Does he accept that we owe it to a superb work force to do everything possible in the House and in the Government to keep the plant open? Has my right hon. and learned Friend heard whether any of the directors have resigned, in view of this disgraceful decision and the protests about it?
Mr. Rifkind: I do not have that information, but I happily endorse what my hon. Friend said about the quality of the work force. I have already had contact today
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with Mr. Brennan, leader of the shop stewards at Ravenscraig, and I look forward to meeting him and his colleagues in the near future.
Dr. John Reid: Let there be no doubt: Ravenscraig will fight this decision, and it will be right to do so. The Opposition will fight alongside Ravenscraig. It appears from the right hon. and learned Gentleman's answers that he does not have the stomach for that fight.
Will the right hon. and learned Gentleman confirm that since October last year, despite pressure, he has not met the chairman of British Steel? Is that not a pathetic reflection on his attitude towards British Steel? Is it not a remarkable coincidence that the first time that the right hon. and learned Gentleman met the chairman was yesterday morning, to receive the news less than 24 hours after the closure of the Conservative party conference in Scotland? Why did he not listen when we warned during privatisation that British Steel planned privatisation in 1988, flotation in 1989, amputation of the hot strip mill in 1990 and closure thereafter?
Will the right hon. and learned Gentleman explicitly confirm his remarks this morning, when he said:
"I do not believe that the future of Ravenscraig is crucial to the Scottish economy"?
If the right hon. and learned Gentleman made that statement, it was one of appalling complacency. It makes him an accessory to this betrayal. He should either join us now in the fight or resign while he has a shred of intergrity left as Secretary of State.
Mr. Rifkind: My remarks this morning about the wider implications for the Scottish economy were identical to those that I made in the Scottish Grand Committee a year ago, and I stand by them entirely, for the reasons that I explained at that time. I repeat that I believe that the future of Ravenscraig is crucial to the Lanarkshire economy, for the reasons I gave. If the hon. Gentleman wishes to do a service to his constituents, rather than make political points he would be better advised to seek co-operation with all those on both sides of the House who would like British Steel to reconsider that decision. If the hon. Gentleman does not welcome that co-operation, he shows himself as being politically partisan and uninterested in the well-being of his constituents.
Mr. Allan Stewart: Will my right hon. and learned Friend bear in mind that the House has heard a great deal of rhetoric from the Opposition but not a single positive suggestion of a course of action other than that which he has rightly and properly announced to the House? Is it not deplorable that during this serious announcement several Scottish Labour Back Benchers were smiling and laughing? Will he further underline the importance of British Steel's obligation to offer Ravenscraig for sale if it has no further use for the plant? Does he agree that there is a danger that at some point in the future British Steel will make that decision but not make it public?
Mr. Rifkind: I agree with my hon. Friend that it is important that, at the appropriate time, British Steel honours the commitment that it gave in the prospectus. I understand that it still maintains that it sees a value in its assets in Scotland. We must point out to it that the

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credibility of that assertion is not assisted— indeed, it is seriously damaged— by its current proposals for the hot strip mill.
Mrs. Margaret Ewing: Does not the Secretary of State realise that his pleas that people unite behind him in a campaign to save Ravenscraig ring hollow because of his distinct failure to address the issue, despite former pleas from Members on both sides of the House? Is it not the case that he failed to recognise the investment starvation of the Ravenscraig works headed by British Steel and that he made no attempt to have a meeting with Black Bob Scholey to discuss the matter at an appropriate time and ensure that the investment was made? Is he not presiding over the death of the steel industry in Scotland? Is not the only option left to the Scottish steel industry to become independent? The market and the skilled work force are there and the people of Ravenscraig and Dalzell are the people who will build that industry, not the Secretary of State.
Mr. Rifkind: The first part of the hon. Lady's question would carry more conviction if the shop stewards at Ravenscraig had not reacted with absolute fury to the partisan conduct of the SNP and if the shop stewards and trade unions had not dismissed the SNP as political posturers with no real commitment to the well-being of the industry.
On the latter part of the hon. Lady's remarks, the question whether there could be a free-standing steel industry in Scotland with alternative ownership depends in part on the attitude of British Steel and whether other persons or bodies in Scotland or overseas would be interested in such an acquisition if it were available.
Sir Nicholas Fairbairn: Will my right hon. and learned Friend confirm that the reason why British Steel has temporarily chosen to centre its works in Wales is that the Labour Government and the nationalised steel industry preferred to invest there? Is it not the case that they did so without the support of our party but with the support of the Scottish nationalists?
Mr. Rifkind: My hon. and learned Friend is correct in his recollection of those matters.
Mr. Norman Buchan: Is not the figure that the Secretary of State gave—that Scottish industry used only 2 per cent.of the steel from Ravenscraig— a terrible indictment of the past 10 years' history of this Government? They have torn the heart out of heavy industry and manufacturing industry in Scotland. If he had any vision or intention of developing a manufacturing and heavy industry base in Scotland, he would recognise that we require the steel mill and more. As he has no stomach for the fight, will he keep it in mind that he should see himself not only as the Secretary of State of a Tory Government but as the spokesman for Scotland on this matter? He must work for Scotland.
Mr. Rifkind: On the earlier part of the hon. Gentleman's remarks, I hope that he will be fair and will recollect that between 1974 and 1979 many thousands of steel jobs were lost. The Labour Government of the day accepted that that was commercially sensible and necessary. Indeed, it has been a feature of the steel industry
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under successive Governments of whatever political complexion that the battle to achieve competitiveness and commercial viability has led to that conclusion.
I endorse the thrust of the hon. Gentleman's latter remarks. If hon. Members on both sides of the House wish to have the maximum prospect of influencing British Steel, Scotland must speak with a single voice, and all those who have an interest in these matters must concentrate on sensible, commercial, mature arguments and resist the temptation to indulge in political back-biting which may give pleasure to their supporters but will be of little benefit to the well-being of the steel industry.
Mr. Bill Walker: Does my right hon. and learned Friend agree that, because the European regulations prevent any form of Government aid, there is no question of the Government being able to pump public funds into this concern?
Does my right hon. and learned Friend also agree that the productivity and work records of the work force and management at Ravenscraig merit them being told clearly what British Steel's investment programme is for the future of Ravenscraig, particularly slab production? Is it not also important that, if it does not give that information, British Steel should be instructed by all in politics in Scotland to get on with the job of offering the Scottish plants for sale, and then we shall see what commercial interests there are in carrying on productivity in Scotland?
Mr. Rifkind: It is indeed the case that the rules of the European Commission preclude any member Government of the European Community from giving financial aid to primary steel production. On my hon. Friend's latter remarks, I endorse the view that the work force at Ravenscraig, who have responded superbly to the requests of British Steel management in recent years, are entitled to the fullest information from British Steel, not only about the reasons for the decision announced this morning, but about British Steel's future intentions for its plant and the livelihood of its work force.
Mr. Alexander Eadie: Is not the right hon. and learned Gentleman aware that the announcement that he has made today is, to some extent—bearing in mind that it was a commercial decision—an indictment of the policy he has implemented in relation to the privatisation of the steel industry, where the Government have lost control of the situation? Would he further agree that he must not be too hard on the people of Ravenscraig if they are a bit emotional about their position? After all, their jobs and their ability to sustain their wives and families are on the line, and any hon. Member would be emotional about that. Does he realise that a spin-off from this will be a loss to British Rail, which depends on Ravenscraig for 40 per cent. of its freight? If the right hon. and learned Gentleman is serious about the fight, let us hear what he proposes to do. The problem will not go away as easily as the right hon. and learned Gentleman thinks.
Mr. Rifkind: The hon. Gentleman is correct to refer to the understandably strong feelings of those who work at Ravenscraig. However, I remind him that it was Mr. Tommy Brennan, the shop steward at Ravenscraig, who appealed for an end to political partisan in-fighting, and for all the Scottish political parties to co-operate in seeking

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to press on British Steel that there was a good commercial case for investment in Ravenscraig and British Steel should have confidence in its future.
Mr. Richard Holt: All of us with British Steel works in our constituencies are concerned at British Steel's announcement today. While I applaud my right hon. and learned Friend's attitude, may I remind him that Corby steel works was closed down and today that town has over-employment, that Teesside has suffered its share of job losses, but today it is booming, and that only last week Consett announced a new and exciting venture and industrial park that will use integrated alternative energies and bring 1,300 jobs to that part of the world in the near future? Should not we stop looking backwards and start looking forwards?
Mr. Rifkind: My hon. Friend is correct to emphasise that, while the steel corporation was under public sector ownership, there were massive job losses in Consett, Corby and Shotton, under successive Governments, both Labour and Conservative. He is also quite correct to emphasise that the only real contribution that we can make to the well-being of the work force in the steel industry, whether in Ravenscraig or elsewhere, is to look to the future and put a commercial case showing why there should be investment and confidence in a particular steel plant.
Mr. Tom Clarke: Is the Secretary of State aware that Members from steel constituencies such as mine will regard his statement today as pathetic and humiliating? Does he accept that neither he nor his hon. Friend the Member for Stirling (Mr. Forsyth) is in a position to fight for Ravenscraig, given their posture during the closure of Gartcosh, which is where the story began? Will he further agree that his failure to defend the Scottish steel industry, in the light of the European straitjacket, of the lack of investment and of the experience in the North sea, where 41 per cent. of tubes and pipes used came from overseas, hardly qualifies him to fight for what is left of this industry? In view of the devastation that this announcement has heaped on my constituents and on the people of Lanarkshire in general, will he and the hon. Member for Stirling put their jobs on the line in the same tragic way as these people have done today?
Mr. Rifkind: I would have more time for the hon. Gentleman's remarks if he had referred to the major job losses in the steel industry during the period of the Labour Government of which he was such a conspicuous admirer. We all know that there have been major rationalisations in steel employment. The hon. Gentleman cannot expect to carry authority if he thinks that massive job losses under a Labour Government are acceptable but that, when they happen subsequently, they are to be condemned. He would do a service to his constituents if he concentrated on ways in which we can encourage British Steel to reconsider its position instead of indulging in the rather emotional hype that we have just heard.
Sir Hal Miller: Does the Secretary of State agree that this whole discussion shows how wise we were to privatise British Steel so that the additional investment is made in Wales and elsewhere according to the requirements of the market, and so that we get away from doing what the Labour Government did, which was
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to refuse to implement the closure of the Beswick plants, which led to tragic losses both of subsidy and of jobs and to the closure of steel firms in the west midlands?
Mr. Rifkind: I very much agree. My hon. Friend has rightly identified the proper approach.
Mr. John McAllion: In the last few years the Secretary of State has been telling us that the Scottish economy is in good shape and on course to grow even stronger in the 1990s. How does he square that with today's closure and the loss of 800 jobs, or with the sustained withdrawal of investment from Scottish steel and the slow strangulation of the Scottish steel industry? Does he not recognise that an economy without the steel industry is like a car without an engine— it is going nowhere, which is precisely where he and his party are going unless they act to reverse this catastrophic decision?
Mr. Rifkind: The remarks that I made at new year have been more than vindicated by events since then. There have been continuing significant falls in unemployment; there have been massive new inward investment decisions which have been welcomed throughout Scotland; and the Scottish economy is now doing better than that of the United Kingdom as a whole.
Mr. Ian Gow: Does not a due sense of humility oblige my right hon. and learned Friend not to seek to substitute his own commercial judgment for that of British Steel?
Mr. Rifkind: That is a perfectly fair observation, but what I have said is not quite what my hon. Friend implies. I have said that if British Steel believes that there are good commercial reasons for reversing the view that it has taken over the past three years, its work force, who have responded splendidly to encouragement to increase productivity and competitiveness, are entitled to know what British Steel's commercial considerations are. So far that information has not been forthcoming.
Mr. Menzies Campbell: Does not the right hon. and learned Gentleman feel a sense of paradox in that the work force at this plant have been the subject of praise from him and others yet they now find themselves completely frustrated and unable to do anything but accept a decision made elsewhere? If he was only told about this yesterday, was not that an insult to his office, to the people who work in the plant and to the people of Scotland? If he was told yesterday, why did he not tell the House before?
Mr. Rifkind: The hon. and learned Gentleman is talking nonsense, and he knows it. British Steel is a private company. I understand that the matter was put to the board on Monday, and as board members themselves were asked to authorise the proposal only on Monday I do not think that I or anyone else can complain about being informed on Tuesday.
Mr. Phillip Oppenheim: Is it not the case that the health of the steel industry as a whole depends on management and not politicians making decisions of this sort? The sad truth is that there was never any economic justification for building the strip mill at Ravenscraig. Does my right hon. and learned Friend agree that the attitude of Opposition Members shows that their conversion to the market is wafer-thin? They are in favour

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of the market only in so far as it makes life easy for them. When it comes to the difficult decisions, they are always more than ready to jettison the market.
Mr. Rifkind: My hon. Friend is right. Only investment that has a commercial rationale is likely to stand the test of time. No one is doing any service to any part of the United Kingdom by wishing to maintain economic activity which requires massive subsidy and does not have an economic rationale.
Mr. Michael J. Martin: The Secretary of State is wrong to say that the closure affects only the economy of Lanarkshire, because the economy of my constituency and every other part of Scotland is affected by this tragic decision. I hope that he will bear that in mind. Given the problems of the Scottish economy and the fact that steel is a major part of it, it is strange that the Secretary of State has not met Bob Scholey. Will he tell us the reason for that? Only a few years ago an all-party Select Committee made an excellent case for Ravenscraig staying open. Perhaps the Secretary of State should refer to that report.
Mr. Rifkind: Of course I accept that there are implications for other constituencies arising from the decision about Ravenscraig. I in no way depart from my central propositon about the crucial importance of Ravenscraig to the economy of Lanarkshire; that is self evident.
The hon. Gentleman asked me about meetings with Sir Robert Scholey. I do not regularly meet the chairmen of major private companies in Scotland. I have meetings when they are required for a specific purpose. The hon. Gentleman will be well aware that over the past few weeks the main interest of the House has been in the future of Dalzell and future plate mill investment. Some weeks ago we submitted a lengthy paper to British Steel arguing the commercial case for Dalzell being the favoured location for investment in plate. British Steel is currently considering that paper and it will be necessary to have discussions with the company on its analysis of that.
Mr. Ian Bruce: Does my right hon. and learned Friend agree that British Steel has been extremely successful during a period of reduction in the steel market throughout the European Community while we had steel quotas? Is he satisfied that Government subsidies to the Italian and other steel industies have left us with a level playing field? Are subsidies by other Euro Governments to their steel industries causing additional problems for the steel industry in Britain and especially in Scotland?
Mr. Rifkind: I certainly acknowledge the importance of my hon. Friend's point, which is primarily for my right hon. Friend the Secretary of State for Trade and Industry. My hon. Friend is correct when he says that British Steel has been very successful in winning new markets in Europe. It is precisely for that reason that Ravenscraig and especially the hot strip mill have been so fully utilised in the past three years. That is precisely why it has proved wise for British Steel to continue to use this valuable asset.
Mr. Alex Salmond: Is the Secretary of State aware that the squalid excuses that he has given constitute the weakest ever performance at the Dispatch
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Box? Will he explain to the Scottish people why, when we have an enormous market building up in the North sea, Scottish steel has been run down? Why has he failed to meet the chairman of British Steel, and why is he not putting his job on the line to defend the Scottish steel industry?
Mr. Rifkind: The hon. Gentleman would sound slightly more convincing if he would explain to the shop stewards at Ravenscraig why his view on the steel industry should he supported when every senior trade union spokesman in Scotland has dismissed SNP policy as positively harmful to the interests of his industry.
Mr. Tim Smith rose—
Mr. Speaker: Order. Was the hon. Gentleman here for the statement?
Mr. Smith: Yes.
Mr. Speaker: In that case, I can call him.
Mr. Smith: Can my right hon. and learned Friend confirm that, between 1975 and 1980, £3·3 billion worth of taxpayers' money was invested in British Steel, and that in the next five years the figure was £4·5 billion, but that during that period thousands of jobs were lost? Since then the British steel industry has been transformed and privatised. Is not one of the principal advantages of privatisation that management can now manage without political interference? Would it not be a grave mistake to go back on such a system?
Mr. Rifkind: If my hon. Friend is saying that it would be a grave mistake for political considerations to determine investment by British Steel or any other company, I entirely agree with him. It is important that the commercial arguments that may be used to justify a major closure should be fully examined. If British Steel is confident that it is justified in its commercial interpretation of the situation, there should be no reluctance on its part to discuss its reasons with its work force, which is most affected by the decision.
Mr. Robert Hughes: Has the Secretary of State no shame in coming to the House to call for a bipartisan approach to saving Ravenscraig when he and his colleagues spent two or three days in Aberdeen in an orgy of self-indulgence and eulogy on the Tory party and the free market? How can he call for a bipartisan approach when he has resisted such an approach to investment? Is the Department of Trade and Industry backing his approach to saving Ravenscraig?
Mr. Rifkind: The approach that I have suggested might be helpful to the interests of Ravenscraig is the approach called for by the shop stewards, and the one that the Standing Commission for the defence of the Scottish steel industry said would be in the interests of Scotland. If the hon. Gentleman is seriously interested in assisting the prospects for Ravenscraig, he must ask himself whether the kind of politically partisan remarks that he has made will help or harm the objectives which he says he desires.
Mr. Thomas Graham: Some weeks ago, I asked a question about the Scottish steel industry and the support that should come from the Government for the magnificent work being done by that industry in Scotland. The Minister for Industry accused

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me of leading with my double chin. Let us see leadership from the Secretary of State to ensure that we save the steel industry in Scotland. If he is unsuccessful, not only he but every Scottish Office Minister should resign.
Mr. Rifkind:I was waiting to hear whether the hon. Gentleman was offering to resign the representation of his constituency if he were unsuccessful in maintaining employment in a company in his constituency. I did not catch him making that offer.
Mr. Gavin Strang: Does not the Secretary of State realise that this will not be seen as a commercial issue in Scotland because, even if it were in the commercial interests of British Steel to close the plant, it would not be acceptable to the Scottish people? People recognise that the steel industry is crucial to the long-term industrial future of Scotland. Is he not aware that it is all very well to have these reports of how the Conservative party in Scotland and Scottish Office Ministers will be leading a campaign against closure, but his Government presided over the decimation of the market for steel products in Scotland with the closure of the plants at Bathgate and Linwood and elsewhere and the rundown in the shipbuilding and engineering industries. His Government have paved the way to this decision, through privatisation. They should use the powers they took to privatise the industry to secure its future in Scotland.
Mr. Rifkind: By his intervention, all that the hon. Member has proven is that he is good at making political points but not much use to the steel workers in Ravenscraig.
Mr. Donald Coleman:I remind the Secretary of State of the informed view of Ian MacGregor, who said that a minimum of five steel plants was essential for the British steel industry. How can he say that today's announcement conforms with that informed view of the former chairman of British Steel? How is today's announcement of a partial closure at Ravenscraig compatible with the announcement by the then Secretary of State for Trade and Industry, the right hon. and learned Member for Rushcliffe (Mr. Clarke), that, should Ravenscraig be threatened with closure, another buyer could be found? How can closure take place in such circumstances?
Mr. Rifkind:I am interested in the reported remarks of Sir Ian MacGregor, who clearly carries a great deal of
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authority on steel matters. It would be helpful if his views were seriously considered. British Steel—it was not only my right hon. and learned Friend—gave a commitment in its prospectus to make its assets available to an alternative purchaser if it had no further use for them.
Mr. Roy Hughes: Does the Secretary of State appreciate that British Steel's announcement is of considerable relevance to the steel industry in Wales? I appreciate the success of both Llanwern and Port Talbot in recent years, but does not the announcement mean a general scaling down of the steel industry as a whole, which could have a highly detrimental effect on the British economy?
Following the Budget, the Secretary of State mounted a successful rescue operation for the poll tax in Scotland. Will he do the same for Ravenscraig, or will he resign his high office?
Mr. Rifkind:I must leave my right hon. Friend the Secretary of State for Wales to comment on the implications of today's announcement for the Welsh economy. I believe that there is an opportunity for mature Scottish opinion to make its voice heard and to put forward a serious and sober case setting out why British Steel should reconsider on commercial grounds the decision that it is proposing to implement at Ravenscraig.
Mr. Jimmy Hood: Is the Secretary of State aware that Opposition Members are angry? To be honest, however, we are not surprised. When the Government were pushing the privatisation of the steel industry through the House, we in Scotland told them that the right hon. and learned Gentleman was washing his hands of the Scottish steel industry. Easter is past, but we still have a Pontius Pilate at the Dispatch Box. The hon. Member for Tayside, North (Mr. Walker) called upon the right hon. and learned Gentleman to resign; Opposition Members call upon him to resign. Indeed, the whole of Scotland will want his head if he lets British Steel pull out of Ravenscraig.
Mr. Rifkind: When a Labour Government preside over massive reductions in employment in the steel industry, Labour Members seem to find that acceptable and commercially necessary. They apply different criteria when they think that it is in their political interests to do so. The hon. Gentleman may impress himself, but not his constituents.

Oil Pollution (Devon Coast)
4.12 pm
Mr. Anthony Steen(by private notice): To ask the Secretary of State for Transport if he will make a statement on the devastation caused by oil pollution along the south Devon coastline.
The Minister for Aviation and Shipping (Mr. Patrick McLoughlin): At 15.09 on Saturday 12 May a collision took place between the Liberian-registered oil tanker Rosebay and the Brixham trawler Dionne Marie 14 miles south of Start point. Rosebay sustained damage to her port side, which resulted in about 1,100 tonnes of crude oil being spilt into the sea. The master immediately took action to minimise the extent of the spill, by transferring oil from the damaged tank into other tanks. Within 90 minutes the oil leak ceased. The marine pollution control unit was informed of the collision by Brixham coastguard at 15.25 and activated its counter-pollution aircraft at 15.30. The first aircraft began spraying at 18.00.
The marine accident investigation branch is investigating the collision. Its initial findings are that it was the duty of the fishing vessel under the international collision regulations to give way, but her watchkeeper did not see the tanker and made no alteration of course. The tanker took evasive action but it did not prevent the collision. Visibility at the time was approximately three to four miles. The MAIB report into the collision will be completed as soon as possible.
The dispersant spraying operations, which continued the next day, successfully dispersed 75 per cent. of the spilled oil. However, the remaining 25 per cent. emulsified with sea water to form an estimated 700 tonnes of what in the industry is called "mousse", which does not respond to treatment with dispersant. With natural breakdown that has now reduced to 400 tonnes. Had the dispersant spraying not taken place the original spill would have emulsified into some 3,500 tonnes of mousse. That would have had to be either recovered at sea—a difficult, slow, and weather-dependent process— or cleared off the beaches.
A joint Government-local authority response centre has been set up to direct and control the beach-cleaning operations. The area is difficult, with rocky cliffs and fast-flowing estuaries. There are several important amenity beaches, some bird colonies and an area designated as one of outstanding natural beauty. The MPCU is overseeing the preparation of detailed plans for clean-up by the local authorities. Appropriate techniques and storage sites have been identified.
The main beach-cleaning effort began at first light today. Local authority and MPCU equipment was deployed to appropriate access points during the course of yesterday evening. The main emphasis will be on the mechanical recovery of oil from amenity beaches and accessible rocky areas, pressure washing of hard surfaces and the eventual use of dispersants for final clean-up where that is essential. Much of the rocky areas will be inaccessible and the only option will be to watch for oil moving from those areas to more sensitive ones. Extra specialist personnel provided by the MPCU from the Warren Spring laboratory have been allocated to South
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Hams district council, which is bearing the brunt of the pollution. In addition, trained operators will accompany specialist equipment as it is deployed, to advise on use.
I pay tribute to the local authorities involved for their preparation, which enabled them to make a rapid response to what is obviously a major threat to an area of outstanding natural beauty. Their concern is shared fully by myself and local Members of Parliament. Indeed, my hon. Friend the Member for Teignbridge (Mr. Nicholls) is on the Bench with me. It was because of the prompt action of the Department of Transport's marine pollution control unit that 75 per cent. of the oil did not reach the shore.
Mr. Steen: The oil spillage is a major catastrophe for one of the most beautiful parts of the country. I pay tribute to the Minister for alerting me to the problem and then keeping closely in touch with me as the progress of the slicks was reported to him.
The first problem is that although the damage has been curtailed to about 12 miles of the 88 miles of heritage coastline, which is a great tribute to the Government and the county council, it still means that 12 miles of beaches are saturated by oil. In one place— Challaborough beach, Bigbury— it is up to 18 in. deep. A great deal of work needs to be done. How will those involved disperse 12 in. of oil on some of the heritage coastline? Where will they put all the oil and sand that they clean?
Can my hon. Friend confirm that both public and private beaches will be cleaned and that some of the inaccessible coves will be approached by helicopter? Devon county council has said that helicopters are not available. Will my hon. Friend make them available if required? Will the services of the military be called upon if necessary? There are 700 commandos in my constituency, the Royal Naval college at Dartmouth and also HMS Cambridge. Will the military be called upon for immediate action should that be required?
There has been good co-ordination at local level, but to deal with the mousse once it has landed on the shore, the Ministry of Agriculture, Fisheries and Food needs to issue a licence. Devon county council and South Hams district council fear that getting a licence out of MAFF may mean a further delay. Can my hon. Friend help with that? There are five fine estuaries as well as a number of other inlets. Is everything being done to ensure that oil does not get up the estuaries?
The area is one of the finest in Britain for the tourist industry. Will my hon. Friend say something about that industry and about what will happen to those whose livelihoods have been affected by this terrible spillage? As to the remedial action that is being carried out by his Department, Devon county council and South Hams district council, to which I pay tribute, will the Minister confirm that no cost will fall on the community charge payer and that the Government will find ways of funding it entirely from the centre?
This is a catastrophe of a type which has never happened to this coastline before. We have to learn something about the cause.
Mr. Speaker: Order. This is a question to the Minister. The hon. Gentleman might apply for an Adjournment debate to make all these points.
Mr. Steen: I am grateful to you for your guidance, Mr. Speaker.

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Does the Minister intend to investigate not only the cause of the accident but whether oil tankers should be lying along the south Devon coastline for many hours? Should not some of the larger oil tankers have double skins to protect them from such a collision? Will the Minister say something to the people of south Devon to help them deal with the terrible tragedy?
Mr. McLoughlin:I shall try to respond to the many points that my hon. Friend put to me. I can understand that the cost, and the matter of who will meet it, will cause concern to my hon. Friend's constituents. I give him a total assurance that the cost of the clean-up operation will be met entirely by the polluter. There is insurance cover on the tanker. There will be no cost to community charge payers. I am sure that my hon. Friend and his constituents will be grateful for that. It is in line with Government policy that the polluter should pay for the damage that he does. That is an important point, which needs to be made.
If there are any problems about getting agreement from the Ministry of Agriculture, Fisheries and Food, we shall be ready to help. We have already obtained from the Ministry the permission that is necessary to use dispersants. We keep in close contact with the Ministry. I do not foresee any difficulty, but if there is, we shall take it up.
Special action is being taken to try to safeguard the estuaries. My hon. Friend has rightly pointed out a great difficulty in that there are a number of estuaries in the area. A great effort is being made to protect them by putting booms across to try to stop the oil going up the estuaries.
Tourism is an important point. It is impossible to give a definitive estimate as to when all the oil will be cleaned up, but I very much hope that within two weeks we shall have restored as best we can some of the worst affected areas. I assure my hon. Friend that the restoration operation will apply to the whole coastline. There will be difficulty in the more inaccessible parts, which are rocky and treacherous. Obviously, we could not put anybody in danger. My hon. Friend asked about the use of helicopters. That will be considered. If it is thought the most appropriate way to help, we shall take advice on it.
My hon. Friend asked about the use of the Army. At the moment we feel that there are enough people and facilities in place. However, should we think it necessary to call on the resources of the armed forces, that option is open to us, but we do not yet feel that that is necessary.
Mr. David Harris: Does my hon. Friend accept that serious though the incident is—it is very serious, particularly in the constituency of my hon. Friend the Member for South Hams (Mr. Steen)—if prompt action had not been taken by the marine pollution control unit, we would have had a massive environmental disaster, stretching not just along the Devonshire coast but along the coast of Cornwall? Will my hon. Friend deal with a point that he did not answer? Will he assure the House that there will be a thorough inquiry into how the collision took place?
Mr. McLoughlin: I join my hon. Friend in congratulating the marine pollution control unit, headed by Captain McLeod, and the people who work in it. There was a very prompt response. The unit was informed at 15.25 and was spraying at 18.00. If it had not been for the speed of the response, the position would have been more serious, as my hon. Friend said. I assure my hon. Friend,
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as I said previously, that an accident investigation is being carried out at the moment and that any lessons that can be learned from it will certainly be learned.
Mr. Simon Hughes: Above all, I welcome the Minister's statement that the polluter and not the poll tax payer will pay. Will he confirm that the polluter will be prosecuted if any offence has been committed, and that that is being actively investigated? There has been a comprehensive response but sadly it has not been sufficient, and it has not stopped damage to the environment. To that extent, the response has without doubt been too little, or too late, or both. Therefore, given that the estuaries are now at risk as well as the coastline, will the Minister say what action is being taken? I understand that booms are not restraining the oil but have been breached, and that oil is now going up into the estuaries on the Devon coast. Is action being taken to deal with that as well as the other matters that I mentioned?
Mr. McLoughlin: We have been given constant prophecies of doom and gloom by the hon. Gentleman. He started on Monday with a question on energy, telling us that the community charge payer would have to pay. If he had taken the time and trouble to investigate and to find out the facts, he would have realised that that is not the case and that the polluter will pay. It is typical of the hon. Gentleman to say that the response is too little, too late. As far as he is concerned, anything that was done would have been too little and too late. I regard setting up an operation within two or three hours of the incident being reported as very effective. We have 3,000 miles of coastline to protect around the United Kingdom and the Department does an excellent job in protecting it.
Mr. Robert Adley: My hon. Friend knows that people who live and work along the Devon and Cornwall coast lie in fear and trepidation of such events, and we are grateful for the speed with which the problem was tackled. Will my hon. Friend investigate the links between oil companies and detergent companies? Is he aware that many detergent companies are owned by oil companies, so the companies that create the problem in the first place make a profit out of trying to clean it up? Will he study his files? He mentioned Warren Spring laboratory. If he looks at the old files, he will see that I tried and failed some 16 years ago to get the Department to take seriously an invention by one of my constituents, who was driven out of business because oil companies wanted to go on selling detergents rather than see my constituent's Oil Mop company come to successful fruition. Will he carry out a full investigation so that at some time in the future we may be able to prevent people who have a commercial interest in selling detergents from having a first crack of the whip and let those who have the technology lift oil from the water at an early stage before it comes ashore?
Mr. McLoughlin: I am grateful to my hon. Friend. All the responses to deal with such problems are directed by the marine pollution control unit. It says what should be used and charges the polluter for any costs incurred by the Department of Transport.
I cannot accept some of the theory behind what my hon. Friend said—that somehow masters of oil tankers and other vessels go all out to cause collisions so that

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companies can benefit from the clean-up operation. Such accidents are serious and it is to the master's credit that he immediately switched tanks to stop any further spill going into the sea. Of course we shall investigate any complaints that my hon. Friend draws to our attention. However, I congratulate those involved on what has been a fairly successful operation. It has not been totally successful. I wish that it had been, as it would have saved us all a lot of trouble and it would also have prevented some devastating effects on the coastline. We regret that there has been pollution, but I assure my hon. Friends that everything is being done to ensure that that pollution is removed as soon as possible.
Mr. Dennis Skinner: The Minister said that the polluter will have to pay. Is he aware that this has the makings of a long-drawn-out legal wrangle? The case of the disaster off Alaska is still being resolved in the courts and the case arising from the disaster off Birkenhead has not yet been settled. I cannot imagine that as there has been a collision there will not be contending parties who will say, "It is not my fault." The Government have a responsibility not to stay at arm's length, but to make it abundantly clear to all those working for local authorities in Devon and for other organisations that might have to foot the bill, that while the wrangling is going on in court, the Government will ensure that money is in place. Otherwise it will be paid for in the community charge. The Minister has to answer those questions so that people in Devon fully understand the consequences.
Mr. McLoughlin: Not only is the vessel insurance cover about £8 million, but the United Kingdom is a member of an international organisation that provides compensation of up to £30 million for oil pollution. I do not think that the Alaska oil spill was covered by such an international agreement.
Mr. Ian Bruce: Will my hon. Friend comment on the availability of resources to the marine pollution control unit? It clearly acted with the utmost speed, but it may not have had sufficient resources to saturate the problem. Will he have discussions with the armed forces, particularly the Navy, to see whether the pollution dispersant can be made available to them at immediate notice in the same way that helicopters are made available for sea rescue? Can my hon. Friend assure me that the slicks will not reach Dorset? Finally, if the fishing vessel, not the carrier, is shown to have been at fault, will the insurance held by the carrier compensate those affected?
Mr. McLoughlin: An investigation is going on and it would be wrong for me to apportion blame at this stage. The dispersant is on 24-hour standby and a number of planes which I inspected two weeks ago, are already part of the marine pollution control unit and on standby. We have also substantially increased the number of hours flown around our coastline for observation purposes. Therefore, quite a lot is being done in that regard. Ships were on their way within two hours, so that was a satisfactory response. However, we are always ready to learn from any incident.
Mr. Jeremy Hanley: My hon. Friend the Member for South Hams (Mr. Steen) is
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fortunate in representing one of the most beautiful constituencies, and one that I visit every year. However, I am worried by my hon. Friend the Minister's statement earlier that the fishing vessel may have been at fault. If so, any amount of insurance that is carried by the oil company will be worthless and there will be legal wrangles. The hon. Member for Bolsover (Mr. Skinner), in one of his rare gleams of sense, has put his finger on the important point of who will provide the money while the matter is being sorted out. Will my hon. Friend take a personal interest in the matter and visit the site so that he can experience at first hand its natural beauty? Perhaps he can fly over the site in a helicopter to see the extent of the damage.
Mr. McLoughlin: I am assured that in this case the polluter will pay and that there will be no problem about the recovery of the money. That is the best advice that I have. I was in Devon last week, admittedly in north not south Devon, but I am only too well aware of the outstanding beauty of the area.
Mr. Tam Dalyell: In response to the hon. Member for Dorset, South (Mr. Bruce), the Minister said, doubtless in good faith, that he hoped that everything possible was being done, but is not the anecdotal evidence that some of us have from the North sea coast that the marine pollution control unit is chronically and seriously under-resourced? May we have any facts that the Minister has on the amount of money that has been spent on it, what the estimates are for a proper unit which, sure enough, will be needed sooner or later, how that will be achieved and what, in the view of his expert advisers, is the shortfall? This is a serious issue.
Mr. McLoughlin: I reject what the hon. Gentleman has said. I am satisfied that we have an effective marine pollution control unit, which responded within a short time of being notified. Within five minutes of the head of the unit being told of the incident, an aircraft was flying to the site. Had it not been for that speedy reaction, we should be dealing with a far more serious incident.
Ms. Joan Ruddock: I am grateful for the opportunity to question the Minister on this subject. However, I hoped that his hon. Friend the Minister for Public Transport would be present to issue a statement on the tragic deaths of four railway workers this morning on the Metropolitan line. Perhaps a note could be sent to me about that.
The House is grateful to the Minister for announcing an inquiry into the Rosebay incident. Can he say whether the Liberian authorities have agreed to co-operate? Will he publish the report, and will he ensure that the inquiry examines the level of crewing on the tanker and establishes whether their skills and training were adequate for accident prevention and were properly employed on this occasion? Can he confirm that the tanker was in its correct navigational lane? After similar incidents— for example, the Amoco Cadiz and Torrey Canyon disasters— separate tanker lanes were enforced, reducing the danger of tankers passing near to land.
Does the Minister agree that the devastating effects of the accident might have been avoided if the tanker had had a double skin? There is growing international support for a requirement for all tankers to have double skins, to avoid

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oil spillage. Will he join me in condemning the economic expediency that rejects such measures, and puts profits before the protection of the environment?
The Minister will be aware that discussions are taking place in the International Maritime Organisation about whether vessels weighing more than 150 tonnes should carry their own oil spill response plan. Will he give us the Government's views on that proposal, which Opposition Members believe could limit appalling environmental damage and the economic threat to the all-important tourist area of Devon?
Mr. McLoughlin: Let me repeat that an accident investigation is in progress, and of course its report will be published, as is normal with marine accident investigation reports. Its initial finding is that, under international collision regulations, it was the duty of the fishing vessel to give way. However, the watchkeeper did not see the tanker and therefore did not alter his course. The tanker took evasive action, but could not prevent the collision. Visibility was three to four miles. I hope that the report will be completed as soon as possible. I have already given its interim findings. The quick action of the master of the Rosebay prevented what could have been a much more serious accident, given the amount of oil on the ship.
The hon. Member for Lewisham, Deptford (Ms. Ruddock) referred to double skins. I accept that that is an important matter, and it is being investigated by the IMO. However, it would be no good trying to apply such a requirement unilaterally. The IMO is conducting a detailed review of technical standards and the procedures that apply to tankers. Double skins may not be the only answer; I have been advised that there are serious problems with gas build-ups.

Caernarfon Hospital
4.39 pm
Mr. Dafydd Wigley: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 20, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"The closure at the end of this week of the Caernarfon hospital casualty unit"—
the only casualty unit in the town.
The matter is specific as it arises from the recent decision to close Caernarfon cottage hospital—the sixth hospital closure to be announced in the county in the past 12 months—but it has assumed greater importance because we had expected the closure to be phased and that there would be some co-ordination of alternatives, but the casualty unit is to be closed this week. We learned yesterday that the general practitioners who are expected to cover for the closure have not agreed on how that cover is to be achieved.
The matter is important because, obviously, mothers of children who have accidents and need urgent treatment do not know where to go, and given the short notice of the closure, there has been no opportunity for the town to be notified about the alternative arrangements, and in some circumstances it could be a matter of life and death.
The matter needs urgent consideration because of the stampede by the health authority, acting without proper co-ordination and public information. No doubt co-ordination has been badly affected because of a senior secretarial strike taking place this week, arising from the failure of the authority to negotiate a proper salary settlement. The problem arises largely from the chaos in the health authority, which has a £4 million deficit this year and is in a mad panic, closing wards and services in all directions.
The responsibility for that must be identified. If it is the fault of the health authority for its failure to manage its affairs, quite frankly, the health authority managers should resign. Alternatively, it is the fault of the Welsh Office for failing to provide the health authority with adequate resources and for failing to insist on proper strategic planning of services.
The casualty unit closure is a blow to the town of Caernarfon, causing considerable difficulty in the area. It requires urgent debate. The Welsh Office Ministers must come out of their bunker and face up to the health shambles for which they must take ultimate responsibility.
Mr. Speaker: The hon. Member for Caernarfon (Mr. Wigley) seeks leave to move the Adjournment of the House under Standing Order No. 20, for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
"The closure at the end of this week of the Caernarfon hospital casualty unit."
I have listened with care to what the hon. Gentleman has said about this important matter, which affects his constituency. As he knows, I have to decide whether to give it precedence over the business set down for today or for tomorrow. I regret that in this case the matter does not meet the criteria of the Standing Order. I cannot, therefore, submit his application to the House.

Amusement Machines (Protection of Children)
4.42 pm
Mr. Patrick Thompson: I beg to move,
That leave be given to bring in a Bill to empower local authorities to prohibit in their area the use by children of amusement machines.
There is good support from both sides of the House for a measure along the lines of what I am proposing. That may not be immediately apparent from the number of hon. Members in the Chamber, but I know that I can muster good support for the measure should it come to a Division.
The Bill aims to give local authorities teeth to deal with the serious problem of arcade addiction. It is right that the Bill should specify the age of 16. If local authorities felt that the problem was serious in their areas, they would be given powers to ban those under 16 from amusement arcades. Young people under 16 are not yet responsible for their own actions and need guidance from adults. Sixteen is the right age limit and will achieve maximum support in the House.
We have legislation to protect those under 16 from under-age drinking, smoking or buying cigarettes and solvent abuse. More recently, measures have been introduced to prevent them from using chatlines. We should also protect them from the evil of gambling.
I have been involved in the campaign against under-age gambling for at least two years. The misery caused by addiction to amusement-with-prize machines in arcades is real among young people and their families. Many cases have been brought to my attention in Norwich and in all parts of the country. I am grateful to the National Council on Gambling, Westminster city council and the associated amusement arcades action group and other organisations for bringing all those cases to my attention. There are on record cases of theft, attempted suicide, broken homes, child prostitution and more serious crimes as a result of arcade addiction. Many hon. Members, including my hon. Friends the Members for Brighton, Kemptown (Mr. Bowden) and for Lancashire, West (Mr. Hind) and the hon. Member for Glasgow, Pollok (Mr. Dunnachie), have had serious cases of arcade addiction brought to their attention.
Arcade addiction is more serious than official statistics suggest. Even on the basis of Home Office figures. as many as 1·3 million out of 5 million children in the 10 to 16-year-old age group are spending money on amusement-with-prize machines. Of those, at least 250,000 children could be gambling in arcades unaccompanied by parents or friends. A recent survey conducted by the Gaming Board for Great Britain showed that, of 151 arcades visited in 1987, 94 were admitting under-16s and 53 of them were members of the British Amusement Catering Trades Association. Yet there is a code of practice that seeks to prevent under-16s gambling in arcades. In spite of that, the code of practice is still being flouted and that is why legislation is necessary.
I do not want to place too much emphasis on statistics, but the facts call into serious question the view taken by the Home Office that a change in the law is unwarranted. I do not agree with that view and I am most grateful to my
908
hon. Friend the Parliamentary Under-Secretary of State for the Home Department for being present to listen to my ten-minute Bill. I have had the opportunity to discuss the matter with him on a number of occasions. However, I commend the various initiatives that the Home Office has taken with local authorities and with BACTA. The display of notices outside amusement arcades and the code of conduct are good practice. I thank the Home Office for its support to that extent, but I seek to persuade my hon. Friend and his colleagues in the Department that a change in the law commands good support in the House, and I hope that the Bill will eventually be enacted.
In Norwich there are very good liaison arrangements between the education and youth services, the social services, the city council and the police, in dealing with arcade addiction. But all those initiatives do not address the main issue. Access to arcades is all too easy for young people, many of whom are also playing truant from school. The figures are extremely disturbing, but time does not permit me to go into detail on that serious connected issue. The attraction of the bright lights is causing young children to go into the arcades and gamble. Even if the numbers were small—it is difficult to ascertain the exact numbers because so many of the cases that have been brought to our attention have been confidential, as families do not seek to publicise the problem—there is a real risk of serious addiction and it is important that we should address it.
Under present legislation, potential arcade operators have to apply to local authorities for permits and for planning permission. The wording of schedule 9 of the Gaming Act 1968 makes it more difficult for a local authority to refuse to renew a permit than to deny an applicant a permit and planning permission in the first place. Local authorities are therefore wary of refusing to renew permits unless they are denied access to inspect or unless there are serious problems with the operation of the machines.
That is why I believe that it is sensible to give local authorities discretion, as the Bill seeks, to ban under-16s from amusement arcades should they feel that the problem is serious in their area. It is reasonable to make the age limit of 16 a legal requirement.
Acceptance of the Bill would bring amusement-with-prize machines and arcades in line with the law on other forms of gambling. The distressing cases that have been brought to my attention and to that of other hon. Members provide all the evidence that is needed to justify the Bill or a similar measure, and I commend it to the House.
Question put and agreed to.
Bill ordered to be brought in by Mr. Patrick Thompson, Mr. Jack Aspinwall, Mr. Andrew Bowden, Mr. Simon Coombs, Mr. Derek Fatchett, Mr. Tony Favell, Mr. Paul Flynn, Mr Roger Gale, Mr. Conal Gregory, Mr. Kenneth Hind, Sir Charles Irving and Miss Ann Widdecombe.

Amusement Machines (Protection of Children)
  AMUSEMENT MACHINES (PROTECTION OF CHILDREN)
  Mr. Patrick Thompson accordingly presented a Bill to empower local authorities to prohibit in their area the use by children of amusement machines: And the same was read the First time; and ordered to be read a Second time upon Friday 8 June and to be printed. [Bill 142.]

Questions to Ministers
4.53 pm
Mr. Bob Cryer: On a point of order, Madam Deputy Speaker. One of the ways of calling Ministers to account is by raising on the Floor of the House the difficulties that one encounters.
I have recently tabled a series of questions to the Department of Employment. Often the question produces the rubric, "I will answer this question as soon as possible." I give plenty of time—generally a week—for a priority answer to a written question. The Department is evading responsibility for immediate answer to the House when information is sought for a particular purpose and by a particular date. I raise this matter in the knowledge that successive Speakers have deprecated any unnecessary, planned or deliberate delay, and I wish to re-emphasise the importance of that.
Madam Deputy Speaker (Miss Betty Boothroyd): I join former Speakers and Deputy Speakers in deprecating such action, and I shall make a point of looking into the matter.

Orders of the Day

  Finance Bill
  (Clauses 3, 9, 10, 20, 23, 25 and 68)
  Considered in Committee [Progress 15 May.]
  [MISS BETTY BOOTHROYD in the Chair]

  Finance Bill
    Clause 20

      CARE FOR CHILDREN
      4.54 pm
      Mr. Paul Boateng: I beg to move amendment No. 40, in page 11, line 6, at beginning insert —
      '( ) In section 154(2) of the Taxes Act 1988 after "section 155" there shall be inserted "or section 155A.".'.
      This is a technical drafting amendment designed to meet a surprising omission by the Government draftsmen. I trust that it will be accepted by the Government in that spirit. It is entirely helpful and non-controversial.
      The Chief Secretary to the Treasury (Mr. Norman Lamont): One of the most exciting things that can happen in a football match is when, with the first kick of the ball, someone scores a goal. I am happy to thank the hon. Member for Brent, South (Mr. Boateng) for his suggestion.
      Amendment No. 40 is not technically correct, but it identifies a defect in the Bill. I am grateful to the hon. Gentleman for moving it and I undertake to table an amendment on Report to deal with the omission.
      Mr. Boateng: I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Mr. Boateng: I beg to move amendment No. 41, in page 11, line 6, at beginning insert—
      'The following section shall be inserted after section 131 of the Taxes Act 1988—
      "131A. Where an employee makes a contribution out of his emoluments towards the cost of the provision of childcare, and the conditions set out in section 155A below are satisfied in respect of such care, that contribution shall be regarded for the purposes of section 198 below as an expense wholly, exclusively and necessarily incurred in the performance of the duties of his employment.".'.
      The Second Deputy Chairman of Ways and Means (Miss Betty Boothroyd): With this, it will be convenient to consider the following amendments: No. 25, in page 11, line 6, leave out from second 'section' to end of line 10 and insert
      '144 of the Taxes Act 1988—

      CARE FOR CHILDREN

        Care for children
        144A—(1) Notwithstanding any other provisions of the Taxes Acts the provision for an employee of care for a child or the financing of such provision by any means (including vouchers redeemable only for such care and reimbursement of the employee's expenses incurred in procuring such care) shall not be treated as an emolument chargeable to income tax under Schedule E if the conditions in subsection (1B) below are met.
        (1B) The conditions are that—'.
        No. 5, in page 11, line 10, at end insert—

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        '( ) the employee is not a person to whom section 154(1) applies by virtue of his being employed as a director of a company or in employment with emoluments at the rate of £25,000 a year or more.'.
        No. 6, in page 11, line 13, at end insert —
        '(aa) the care is provided primarily during the employee's working hours in the employment by reason of which it is provided.'.
        No. 26, in page 11, line 14, leave out sub-paragraphs (b) and (c) and insert —
        '(b) the care is provided on premises which are not the normal place of residence of the child or employee.'.
        No. 13, in page 11, leave out lines 14 and 15.
        No. 7, in page 11, line 15, at end insert —
        '(bb) the care is provided under arrangements which are equally available to any other employee of the same employer whose child has an equal or greater need of such provision and for whose child it is practicable to make such provision.'.
        No. 27, in page 11, line 21, leave out subsections (2) and (3).
        No. 42, in page 11, line 21, at end insert —
        '(e) in the case of close companies (as defined in section 414 of the Taxes Act 1988), child care facilities of a broadly similar nature are made available by the employer to all employees (this condition will be satisfied even if not all employees make use of the facilities so provided.)'.
        No. 43, in page 11, line 21, at end insert —
        '(f) at premises where child care facilities are provided, they must be of a broadly similar standard.'.
        No. 8, in page 11, line 25, at end insert 'and'.
        No. 9, in page 11, line 27, leave out from 'persons' to end of line 30.
        No. 10, in page 11, line 28, after 'employer', insert
        'or an associated company of the employer'.
        No. 16, in page 11, line 29, leave out
        'and managing the provision of the care.'.
        No. 11, in page 12, line 25, at end insert
        '"associated company" has the meaning given in section 416 below;'.
        No. 12, in page 12, line 29, after 'educational', insert 'or recreational'.
        No. 17, in page 12, line 30, leave out 'eighteen' and insert 'sixteen'.
        No. 14, in page 12, leave out lines 31 and 32.
        No. 18, in page 12, line 37, at end insert —
        '(3) This section shall operate to relieve the taxable benefit from basic rate tax only. The benefit is still to be charged at the excess of higher rate over basic rate tax.'.
        Mr. Boateng: I am obliged to the Chief Secretary for his kind words, but I do not intend to allow them to go to my newly exposed head. I fancy that he is unlikely to be so welcoming to these amendments.
        The amendments, sadly, are necessary as a result of the defective and stunted clause 20, which the amendments seek to improve. It is defective and stunted because the Government have been the subject of two competing forces. The first is an impulse, for public relations purposes, to appear to be doing good, in this case to hard-pressed parents, and women in particular, who are at a tax disadvantage when they are in receipt of child care benefits from their employer. They are the recipients of what the Government would have us believe is their largesse.
        The second competing force is a compulsion that characterised every aspect of the Budget— to do as little as possible at minimal cost. We therefore have this push-me-pull-me provision, which fails to address the
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        central issue of removing obstacles to the provision of workplace nurseries and child care provision for working parents.
        Given the past of the Chief Secretary, it is perhaps not surprising that clause 20, which he will seek to defend this afternoon, is stunted and defective, because at every turn he has opposed the reasonable suggestions made by Labour Members on every Finance Bill since 1985 to overcome the hurdle to the expansion of child care provision for working parents. He fought us tooth and nail, and the last time that he replied to a debate on this anomaly in the taxation rules he was scathing of the arguments ably and convincingly put forward by my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith). He told—us-and he will remember the debate well:
        "There is no reason to believe that the present tax treatment of child care expenses is a barrier to the employment of women with children."—[Official Report, 11 July 1989; Vol. 156, c. 894.]
        On 11 July 1989, there was apparently no reason to believe that a barrier existed, yet today he accepts that there is a barrier, which the Government are belatedly seeking to remove. We look forward to learning what changed his mind.
        We must not look a gift horse in the mouth; we are glad to see the Chief Secretary in his place at all. He was not present yesterday; he left it to his minions, pleasant and engaging though they are, to do the business. We are entitled to ask why the right hon. Gentleman has taken the time out this afternoon to address the Commitee on this issue. It may well be that he does not trust the Economic Secretary or the Financial Secretary to resist—
        Mr. Nicholas Brown (Newcastle-upon-Tyne, East): Understandably.
        Mr. Boateng: My hon. Friend is being slightly, and uncharacteristically, uncharitable. I am sure that the Chief Secretary trusts his colleagues' understanding. Indeed, he fears that their understanding is such that they may concede the reasonable points that he has already heard and that he knows will be forthcoming not only from the Opposition but from at least one Conservative Member. Not trusting them, the right hon. Gentleman has come here to ensure that there are no concessions.
        5 pm
        We should not be surprised that Conservative Members speak with a forked tongue about child care. I do not mean to be unkind—[HON. MEMBERS: "Oh."] Well, perhaps on reflection, I do mean to be unkind. We have become used to such behaviour by Conservative Members. Indeed, there is a game that can be played, "Spot the quote". One wins a prize—a day out in the Kingsway day nursery, surrounded by photogenic children and attentive staff—if one can say who said what.
        Let us look at some of the comments that Conservative Members have made about child care. First, there is this advice on how working mothers might be helped:
        "Can they in fact go out at all at that stage in their children's life?"
        Should not
        "several women get together and arrange that one looks after the children while the others work part time"?
        I wonder who said that. Any offers from Conservative Members? It was someone to whom they should pay attention—indeed, someone to whom they must pay

        913
        attention day in, day out. The Chief Secretary suffered more in that respect than any other person. It was, of course, the Prime Minister, no doubt speaking from her vast experience while other women took care of her children as she practised part tune at the Bar and practised part time as a politician. [Laughter.] One may well laugh, because the right hon. Lady did not ever practise part time in that way, nor did she come to a cosy relationship with other part-time working mothers to look after her delightful twins.
        Another well-known Conservative Member said:
        "If they want or need help in this task they should make the appropriate arrangements and meet the costs."—[Official Report, 12 July 1988; Vol. 137, c. 150.]
        Who said that? Any offers from Conservative Members? It was not the same lady but none other than the hon. Member for Derbyshire, South (Mrs. Currie)—a figure from the past, but one who speaks with the authentic voice of many Conservative Members when talking about child care.
        There is another example, and this is the choice quote. There is a double prize for any Conservative Member or, indeed, any Opposition Member—I shall extend the offer —who can guess who said this:
        "I don't think the State should step in to help the working mother unless her life has collapsed."
        Who said that?
        Ms. Hilary Armstrong: The chairman of the ministerial group on women's issues.
        Mr. Boateng: Indeed, it was none other than the right hon. Member for Oxford, West and Abingdon (Mr. Patten), whose job is to chair the ministerial group on women's issues. That comment shows the attitude of Conservative Members to working mothers and to child care. If they come to the Dispatch Box expecting us to be thankful for clause 20, they have another think coming. We are here to bury these little Caesars, not to praise them, and they should be under no illusions about that.
        We need to reflect on the response by those who have the responsibility for the day-to-day care of children and those who have the responsibility for the day-to-day management of these facilities. What is their response to the largesse in what the Government would have us believe is their generous little clause? The Busy Bees consultancy works with companies that are interested in subsidising child care in order to help them establish child care provision, and it is doing important and valuable work. The managing director states:
        "This tax exemption will not in the end benefit anything like the numbers of employees we had originally hoped. Only employees of very large companies stand to benefit. Many firms have a need for 10 or 20 places, for which it is not economically viable to set up a nursery. With very little more imagination, a lot more could have been achieved."
        Why has that imagination not been applied to what the Chancellor described as this small supply-side measure? It may be a small supply-side measure, but it gets smaller by the hour. The orchestrated fanfare that greeted the Chancellor's comments on this measure would have led people to believe that we would be dealing with a growing number of workplace nurseries and other forms of child care provision based in the nursery. That has not happened. The 3,000 children who benefit from existing workplace nursery provision are unlikely to be joined by
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        large numbers. We are not tackling the demographic time bomb in relation to women at work and not freeing parents to maximise their contributions to the economy.
        This is not just a child care issue or educational issue, although it is both; it is also an economic issue. It is about maximising the pool of skills if our economy is to go forward, but the Government have failed in that respect.
        Mr. Tim Smith: Will the hon. Gentleman give way?
        Mr. Boateng: I shall give way in due course because I know that the hon. Gentleman has a valuable contribution to make.
        The scale of the problem shows that it is all that much more of a pity that the Government have missed this opportunity. A survey by the Department of Employment and the Training Agency found that only 198 of the 1·1 million persons surveyed had kids in employer-provided creches. That is the scale of the inadequacy of existing provision. Only 3 per cent. of the institutions or organisations surveyed provided workplace nurseries, with only 20 in the private sector and the rest in the public sector. Despite the trailing of this measure in the run-up to the Budget, only 5 per cent. of the companies surveyed even considered establishing a workplace nursery.
        Hon. Members ask whether this measure effectively encourages employers—even the 5 per cent. who were considering it—to take the plunge. We must reach the sad conclusion that it will not, because it fails to have the flexibility necessary to bring about the expansion that we all seek. That flexibility would enable companies which wish to provide nursery places to buy them in existing community nurseries and to choose between what local authorities and the voluntary sector offer. Companies would be able to buy places and in so doing encourage the expansion of existing provision.
        Companies are specifically excluded from doing that under clause 20 as it is presently drafted unless they can show that they are involved in the management and financing of centres. That is why we tabled amendment No. 9. I hope that the Minister will concede that our amendment would enable his provision to have the effect that it should have of expanding the present supply of workplace nurseries and places for the children of working parents in nurseries.
        We look to the Minister to make an early response on this matter and to concede that our amendment will have the effect that I have outlined. If not, we shall have no option but to press amendment No. 9 to a Division. It is absolutely vital if we are to succeed in expanding child care provision.
        Mr. A. J. Beith: I agree with the hon. Gentleman's general sentiments, but why is he willing to accept so many of the Government's own restrictions, such as the rule that nursery care cannot be provided on domestic premises? Will he bear in mind the fact that many well-organised playgroups start in domestic premises? If the hon. Gentleman accepts so many of the Government's restrictions, rather than supporting the type of amendments that I have tabled and the hon. Member for Billericay (Mrs. Gorman) has tabled, he will leave the Bill restricted.
        Mr. Boateng: We know that the Chief Secretary has set his mind against any expansion on that scale. As the hon.

        915
        Gentleman rightly says, our amendments are modest. We ask not for the world but merely that the Chief Secretary accept amendments which are within the spirit of the Chancellor's Budget statement.
        At the end of the day and at the beginning, fiscal measures such as the Government propose are not the best and certainly not the only way of providing the level and standard of child care that we seek. There is no alternative to a comprehensive child care policy. There is no substitute for a policy that is designed to maximise choice and flexibility for working women while maintaining standards at all times. We are not prepared to tolerate a policy by which the Government simply seek to meet the economic needs of the time and to overcome the demographic time bomb. We are not prepared to sacrifice the life chances of young children. We do not believe that that is right.
        Mr. Michael Stern rose—
        Mr. Boateng: That is why we say that the Government should attend to the generation and release of resources to enable local authorities to play the co-ordinating role that we believe that it is right for them to play. Local authorities have the necessary expertise and know-how. They are ideally placed to exercise a strategic function in the provision of child care. We want to hear the Government's proposals on that matter.
        Should we take it that the Government's only concern is a minimal extension of child care provision by the means that they have outlined, which would involve little effort or attention from the Government? Do they cling to the mistaken belief—the Chief Secretary expressed it on 11 July last year—that the market will mysteriously meet the needs of children and working parents? There is every reason to believe that it will not.
        Mr. Tim Smith: Will the hon. Gentleman give way?
        Mr. Boateng: Simply by mentioning the word "market", I have prompted an immediate response from the die-hard monetarists who still lurk on the Conservative Benches. I feel obliged to let the hon. Gentleman have his say.
        Mr. Smith: It was the word "mysterious" that prompted me to intervene, not the word "market". There is nothing mysterious about the way in which the market will work. If employers want to employ more mothers and women, they will make the necessary arrangements. The market will accommodate them.
        5.15 pm
        Mr. Boateng: The hon. Gentleman may say that that will happen, but the Confederation of British Industry, which is certainly aware of the mysteries of the market, calls more and more frequently on the Government to intervene to moderate the operation of those mysteries, which seem to work so obviously against the interests of the British economy. The Institute for Fiscal Studies specifically warns against some of the measures promoted by the monetarists. I make no apology for mentioning the CBI or the Institute for Fiscal Studies. Why should a Treasury Opposition spokesman apologise for calling in aid of our case the CBI and the Institute for Fiscal Studies?
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        It is a sign of the extent to which Conservative Members have slipped from reality, with regard not only to child care but to the economy.
        We are committed to a comprehensive child care policy.
        Mr. Stern: Will the hon. Gentleman give way?
        Mr. Boateng: In due course.
        Our amendments must be seen in that context. I hope that the Chief Secretary will address himself to amendment No. 41 specifically and assure us that it is acceptable. Surely this matter should not divide or stretch the consensus of the House. It seeks to recognise the position, which will not be uncommon, when provision is made by an employer for child care but the employer says to the employee, "We expect you to make a contribution." It seems right that in those circumstances the philosophy that underlies section 156(1) of the Income and Corporation Taxes Act 1988 on contributions that might be deducted from benefit should apply and the employee should not have to pay tax on the part of his or her emoluments that goes towards child care provided by the employer. That does not seem unreasonable. Certainly it does not make excessive demands on the Treasury. We look to the Chief Secretary to take that on board at an early stage in his reply.
        All the experience of recent years is that unless measures are taken to encourage employers to make provision for child care and to facilitate take-up by employees, the hoped-for expansion in child care simply will not take place. We want that expansion to take place, for the benefit of the child and of the economy. It is in that spirit that we have tabled the amendments and look for a positive response from the Minister.
        Mrs. Teresa Gorman: It ill behoves the hon. Member for Brent, South (Mr. Boateng) to berate the Conservative party on any change of mind because his party has changed its mind on so many policies in the past 10 years that it is hard to keep up with them. It has changed its mind on nationalisation and council house sales, and has practically ditched clause IV—the backbone of its philosophy. It is squirming around trying to find some new policies and has hit on the woman's vote as one opportunity to make hay while the sun shines in the lead-up to the next election.
        Nevertheless, I find myself largely in sympathy with the amendment tabled by the hon. Gentleman, most of all because it is an almost straight crib from my recent ten-minute Bill. Labour Members knew from my discussions with them that my ten-minute Bill attracted enormous attention, not least from trade unions, which wrote to congratulate me on the forward-looking views of the Conservative party in making such a point to the House.
        I received a number of letters from women who said that they had never before written to a Conservative Member of Parliament, but were absolutely 100 per cent. behind the Conservative party as the party moving such ideas into the public arena. Even the National Union of Teachers wrote to me congratulating me on my success in the House of Commons. It wrote to tell me that there was a major shortage of teachers in schools and 400,000 qualified teachers, inactive at home, looking after children. It said that it greatly welcomed the Conservative party's

        917
        initiative in putting that fact in the public arena. It is the Conservative party that is at last putting that principle into legislation, with clause 20.
        My only quarrel with clause 20 is that it limits the opportunity for employers to pay for workplace nurseries to the workplace itself. My amendments seek to expand that idea so that an employer may pay for child care provision other than at the workplace, but in a formally constituted nursery. That would mean that a mother would not have to take her children to her workplace, but could leave them near home in a nursery, knowing that they were properly cared for and having the peace of mind to go about her job for the rest of the day.
        I am sure that, when the Treasury decided to make this concession, it did not realise that it was so limited in scope and that perhaps only about 3,000 women stood to benefit. I hope that today we can persuade my right hon. Friend the Chief Secretary that it would be equitable to expand that provision so that a great many more women can have that opportunity.
        At present, the proposal is also limited to large employers who can afford to pay for a workplace nursery. I wish to extend it so that a number of small firms can combine to use nursery places. That would stimulate the growth not only of new nurseries but of the labour force available to small businesses. It therefore falls in with the pattern of Conservative Administration ideas to stimulate the market economy.
        I understand that the Treasury will be concerned about the likely cost of such a concession. I appreciate that the Treasury does not like opening up new tax allowances, but we give tax allowances for things of which we approve. The Conservative party is the party of home ownership and gives tax allowances on mortgage interest. We are the party that, recognising the importance of pensioners building up savings as they grow older, has given tax allowances on those savings so that they can be added to income and allow pensioners to be self-supporting. In the past, we have also agreed that it is a good idea to encourage people to have meals during their working day, so we give a tax allowance on meal vouchers. The principle of tax allowances in support of things in which we believe is thus a well established practice in Conservative philosophy.
        I estimate that the concession to allow a nursery to be provided somewhere other than at the workplace would cost about £25 million—a small amount of money—for one year. What is more, that money will come back to the Treasury, partly through the increased economic activity of women going to work and partly from the taxes collected on the prosperous new nurseries stimulated by imaginative extension of the principle. The Treasury, which usually anticipates a 100 per cent. loss on any concession, could thus look forward to a gain in revenue if the idea were extended to a broader spectrum of women.
        As the first woman to speak in this debate, I wish to consider the matter from a woman's point of view. There is nothing new about married women with children going out to work to supplement the family income. That has been done for generations. In poorer families, women often went out to do domestic work. In the cotton towns of the north they provided much of the labour in the factories.
        The needs of modern society have widened the type of work available, and the changing status of women, for which we have all fought in the past 50 years, has meant
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        that many of them choose to carry on some form of paid work outside the home. Every girl these days earns her own living between leaving school and getting married. Some undertake a long training and become so absorbed in the subject that they want to continue that work after marriage. For many of those girls, the sort of work involved in running a home is insufficient to use all their abilities and they feel that they are not working to their full capacity.
        Some men I know are far too ready with the phrase, "a woman's place is in the home", forgetting that their own daughters will almost certainly earn their living outside the home, and that some of them will want to carry on their careers. While they condemn women in careers in round terms, they would be thrilled if their own daughters were to achieve those new career heights. The choice is up to the woman—if she has no particular interest and finds work in her home satisfying and absorbing, clearly she will develop her interests in that centre. If she has a pronounced interest in some other direction in which she has already achieved some measure of success, it is essential for her own satisfaction and the happiness of her family that she should use all her talents to the full.
        Ms. Dawn Primarolo: I am sure that the hon. Lady would not wish to suggest—if she does, it is incorrect—that women, whether married or not, do not have the right to economic independence in their own right. Their right to pursue their careers, whether or not they have children, should not be frustrated by the lack of child care facilities or some out-of-date idea that once women marry they should be satisfied to stay in the home and not have economic independence in their own right.
        Mrs. Gorman: I certainly agree with the hon. Lady that women and their families should be able to make provision for their own needs, and it should not be a matter for state intervention. However, there should be tax provision, as I am arguing.
        People in general, apart from men with working wives, are often unsympathetic to working wives. It is a pity that so many women with young children have to be out of their careers for 10 years or more. After 10 years it is often hard to pick up again, especially if it is scientific work because things change and develop so rapidly.
        "It would make a tremendous difference if part of the expenses of employing other people to run her home were allowed against tax."
        I must make a confession—those are not my words, but the words of a working woman in the 1950s. Clearly, she is a woman with hands-on experience of the problem and great sympathy for the woman's point of view—a woman's woman. The woman concerned was, of course, our great Prime Minister and I hope that as First Lord of the Treasury she will seek to influence the thinking of the Treasury in this respect. I am sure that Treasury Ministers will wish to broaden these measures to include a much wider spectrum of women, just as I am sure that my right hon. Friend the Prime Minister, whose sentiments are clearly my own in these matters, would wish them to do so. All women who go to work will benefit from such an extension.
        5.30 pm
        Mrs. Sylvia Heal (Mid-Staffordshire): I welcome the opportunity to make my maiden speech in the House. In so doing, I am mindful of and will respect the traditions

        919
        and customs of the House. I should like to record my thanks to right hon. and hon. Members and to the staff of the House for their warm welcome, many offers of help, numerous pieces of advice and several offers of pairing.
        I should have liked to enter the House under different circumstances, and I wish therefore to pay tribute to my predecessor, the late John Heddle. He was a Member of the House for a decade and he represented the Mid-Staffordshire constituency following its formation in 1983. I extend my sympathy to his widow and family. Although I did not have the privilege of meeting him, I know from comments made by my constituents that he was regarded as a man who worked hard and conscientiously to represent them. I am sure that he is missed by his former constituents, and not least his family.
        I look forward with enthusiasm and confidence, however, to the challenges that the electors of Mid-Staffordshire have given me. My constituency was formed by the Boundary Commission in 1983. It is a long, narrow constituency stretching from the north to the west midlands and it is not based on a single community. It is predominantly rural, but it contains three main towns.
        Lichfield is a pleasant cathedral town and the birthplace of the wit Samuel Johnson, who dubbed it a city of philosophers. In the middle of the constituency is Rugeley, a predominantly industrial town dominated by two power stations and a mine. Thirty miles to the north lies Stone, a canal-side market town which has attracted a wide variety of national and international companies.
        During the time I have been associated with Mid-Staffordshire, I have learnt why the people there have a pride and affection for the area, which many right hon. and hon. Members on both sides of the House visited during the election campaign. Indeed, the influx of so many politicians and representatives of the media gave a mini-boost to the local economy which was much appreciated.
        Although peace and tranquility have returned, many of the problems in the area remain. The constituency is set in the heart of middle England and comprises industrial, commercial and rural concerns, with large housing estates, small picturesque hamlets and a work force of professional, managerial and skilled people, so it can rightly be seen as a microcosm of the United Kingdom. That is why the issues that concern my constituents affect the whole country. The continuing increase in the rate of inflation is bringing misery and a hard financial struggle to many home owners and making it impossible for others to get a foothold on the property ladder. Industry is looking for more stability to give it the confidence to plan ahead for the investment and growth that are essential for the prosperity of us all.
        The Health Service and education were also issues in the election campaign, but one issue came to dominate it and it would be remiss of me not to mention it. I refer to the poll tax—the harshest, most regressive and unfair tax to be imposed on the British people in more than 600 years. It is misleading to pretend that the rebate system offers any real protection because even the least well of will have to pay a minimum of 20 per cent. The many debates and Divisions in the House on the poll tax have resulted in a majority for the Government, but I find my views best summed up by Dr. Johnson, who said:
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        "Though we cannot out-vote them we will out-argue them. They shall not do wrong without it being shown to themselves and to the world."
        Today we have been debating workplace nurseries, which are meant to provide access to employment for parents. There is, however, another group of people for whom access to employment is difficult—people with disabilities. The Office of Population Censuses and Surveys records the fact that about two thirds people with disabilities depend on state benefits. Because of the additional costs incurred from chronic illness and disability, this means that many face added problems in trying to live on an inadequate income, which further affects the quality of their lives.
        The current benefit system is both chaotic and unjust. It should be replaced by a single system of assessment of disabled people and their careers. Benefit should be paid according to need, not according to how people became disabled or whether they were in employment at the time. Only 31 per cent. of all disabled adults of working age are employed, compared with 69 per cent. of the general population. That is certainly not due to any lack of motivation or ability—it is due to lack of opportunity. Many of us take the challenges and rewards of employment for granted. Those who have experienced a period of unemployment will know that it brings not just a loss of income but a loss of dignity, self-esteem and social contact.
        Even if people with disabilities have the qualifications and expertise to do a job, they have to overcome discrimination on the grounds of their disability. Studies conducted by the Spastics Society in 1986 and 1989 provide scientific evidence to back up what disabled people know from their own experience—that they face discrimination often from the moment of initial inquiry about a job. The Spastics Society's research shows that two in every three valid applications from candidates with a disability will be treated in a discriminatory way.
        The society attempted theoretically to place a secretary in appropriate vacancies advertised in newspapers. For each position, two applications were sent and similar characteristics were described in each letter, except that the applicant's disability was mentioned in only one of them. Nearly twice as many interviews were granted when the disability was not mentioned as when it was. Such results spell discrimination in capital letters.
        Discrimination means seeing an applicant's disabilities rather than his abilities, and although many employers would like to behave in a more socially responsible way, they fail to recruit people with disabilities because of ignorance and fear that it will involve them in extra work, expense and special consideration. Yet often these are small considerations such as a handrail, a ramp, a flashing light on a phone, or a lower desk or work bench. For some, the requirement may not be a physical adaptation of the office or factory but a flexible working pattern—flexi-time or part-time working.
        It is important to make a distinction between physically and mentally disabled people, because people recovering from mental illness often face even greater hurdles when trying to return to employment. The illness or breakdown may have been a long time ago and the person may be completely recovered, but although the person may have the best qualifications and the right experience for the job, a history of mental illness can lead to the second-best applicant getting the job.

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        It is not only the private sector which fails to employ disabled job-seekers. Government Departments and, with some notable exceptions, local authorities also fail to meet the quota set in the 1944 Act. In view of demographic changes, skill shortages and the challenge of 1992, the Government should be taking a lead in ensuring that there are no obstacles to encouraging people with disabilities to enter or return to the employment market with appropriate schemes of rehabilitation and training. However, that in itself is not sufficient. Having acquired skills and regained their confidence, the hopes of such people are dashed when the door of opportunity to employment remains closed. I am convinced that, if real progress is to be made in providing equality of opportunity for people with disabilities, a more active approach by employers is necessary and legislation to outlaw discrimination is an important step.
        It has been a privilege to address the House and I thank hon. Members for the courtesy that they have extended to me. Following my success in the by-election, I was reminded of the words of Aneurin Bevan when he said:
        "Election is only part of representation. It becomes full representation only if the elected person speaks with the authentic accents of those who elected him"—
        or, in this case, her.
        "That does not mean he need be provincial and that he speaks in the vernacular. It does mean he should share their values, that is, being in touch with their realities."
        I believe that I share the values of the people of Mid-Staffordshire and I shall endeavour to represent them in the House to the best of my ability for a long time to come.
        Mr. Stern: I am delighted to have this opportunity to follow the hon. Member for Mid-Staffordshire (Mrs. Heal) in what the whole Committee will agree was a most distinguished maiden speech. We are grateful to her for her kind and perceptive comments about her predecessor, who was well liked by all hon. Members As the hon. Member for Derby, South (Mrs. Beckett) knows, because she is another veteran of attempts to define disability benefits when we sat for many hours in Committee on the 1985 and 1986 Social Security Bills, I am delighted to welcome an hon. Member who has such a clear and deep understanding of the issues that are involved.
        My two words of warning are, first, that the hon. Member for Mid-Staffordshire should not assume that on subsequent occasions she will be surrounded by so many of her hon. Friends and, secondly, that any mention of pairing will inevitably give rise to about 150 letters arriving in her pigeon hole.
        My speech is a breach of about four years' silence on Finance Bills, because it is the first occasion on which I have had the opportunity to speak on a Finance Bill since last year, when I ceased to be a PPS. I shall take the opportunity to support what the Government are trying to do by way of the clause and to oppose the thinking behind some of the amendments. As the hon. Member for Brent, South (Mr. Boateng) said, I share with Ministers something of a Damascene conversion on the clause, because for years I was opposed to the principle of workplace nurseries. However, I have come to support it because the form of tax relief proposed in the clause will achieve the limited objective that has been set out for it.
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        5.45 pm
        The clause is not designed to provide general tax relief for child care. If it did, I and many hon. Members would be wholly opposed to it. It is designed to do what a new tax relief can at the right time and place and on occasions achieve. It will give a limited nudge to an existing market in order to help it expand without at the same time distorting that market. If we were to give the tax relief that is blithely set out in amendment No. 41 or, I regret to say, in the amendment spoken to by my hon. Friend the Member for Billericay (Mrs. Gorman), not only would we not achieve the objective of the clause, but we would set up a vast new distortion for about one third and what we hope will eventually be almost a half of the working population. No system of tax relief should be designed to do that and I should not support such a system.
        The hon. Member for Brent, South made several blithe assumptions. He has fallen into a trap, as so many people do when looking at a particular tax relief. He looks at what the tax relief would cost and what it would achieve, assuming no change in circumstances. However, it is plain that if tax relief of the range and extent that he proposes in amendment No. 41 were to be given, it would affect not a few thousand people but a few million, and it would affect them to the extent of what is probably their greatest living expense.
        My estimate—I invite the hon. Gentleman to challenge it—is that to give tax relief to all working mothers, or to working fathers when they have the responsibility, on what they have spent out of their income on child care would cost several billion pounds. So much for the value—
        Mr. Boateng: The hon. Gentleman invites an immediate response. Will he give way?
        Mr. Stern: I shall do so in due course. I assure the hon. Gentleman that I shall give way to him more quickly than he gave way to me.
        Amendment No. 41 deals with an employee making a contribution, which will be determined by that employee, towards the cost of child care. The other conditions in the clause would then have to be satisfied. Apart from the provisions in the clause, there is no limit to the size of the contribution that the employee could choose to make. One assumes from the wording of the amendent that the employee could spend up to the limit of income. We read with some surprise the document that came from Walworth road yesterday because it says that there will be no uncosted pledges. However, any pledge of this nature is wholly uncosted because it is wholly uncostable. We read that all pledges about future public spending would have to be based on what the economy could afford. Within 24 hours of that document being issued, we have heard a pledge that I assume will cost the Exchequer several billion pounds. I shall now give way to the hon. Member for Brent, South.
        Mr. Boateng: I do not want to interrupt the hon. Gentleman's flow, but he pushes me and I am happy to answer him. He misunderstands the import of amendment No. 41, either unintentionally or mischievously, and seeks somehow to undermine the good sense of the provision. The amendment seeks to deal with a relatively rare but important occurrence when an employer provides a work-place nursery for his employees. He would provide such a place within the restrictions of the current clause and would then require the employee to make a

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        contribution. Let us take a fairly typical example from the constituency of my hon. Friend the Member for Mid-Staffordshire (Mrs. Heal)—the Busy Bee nursery. My hon. Friend is to be congratulated on her excellent maiden speech.
        The Second Deputy Chairman: Order. I appreciate that the hon. Member was invited to intervene, but I hope that he will not make a second speech at this stage. He must remember that this is an intervention.
        Mr. Boateng: That is why I was reluctant to intervene. I was brought to my feet by a Conservative Member. I shall deal with the example when I wind up the debate. The hon. Member for Bristol, North-West (Mr. Stern) is misdirected and his ideas are misconceived.
        Mr. Stern: I look forward to the hon. Gentleman making his second speech.
        The amendment says nothing about an employee being required to make a contribution. It refers merely to an employee making a contribution. As several of my hon. Friends have pointed out, the hon. Member for Brent, South has eschewed the invitation, as no doubt he will again when he winds up, to put a cost on the amendments. So we see, within 24 hours, yesterday's Walworth road document being discredited.
        We are not talking about general provision of child care with tax relief, nor should I support such a move because the cost would be astronomic. We need to decide what we mean by child care to realise how astronomic the cost would be. People think, particularly when they read the briefings with which we have been showered, that when we talk about providing for child care we are talking about something that is done through a workplace nursery or through a registered child minder. However, we must take it into account that that is only a tiny proportion of child care as it is borne by most families and principally by most women.
        For example, many local authorities have estimated over the years, although no reliable research is available because of the nature of the subject, that unregistered child minding vastly exceeds registered child minding.
        Mr. Gerald Bermingham: The hon. Gentleman fails to take into account the fact that, if one provides facilities and allows tax relief for those who put children into child care, one creates further taxpayers because people are able to go to work. Secondly, what is his authority for making such an outrageously incorrect statement about child minding?
        Mr. Stern: The hon. Gentleman is being disingenuous. I challenge any Opposition Member to deny that when we are talking about unregistered child minding, we are talking about something which, by its very nature, cannot be measured. It can only be estimated by the local authority officers who have the job of providing care. Unregistered child minding has been known to exist for many years, and tax relief cannot deal with it. In many cases, it is accompanied by a failure to declare income on the part of the child minder and I am told by social security officers that they find, when they catch up with cases involving unregistered child minders, that it is accompanied by a failure to deregister for benefits. That is one aspect of the problem that we are nowhere near tackling.
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        Even that aspect is dwarfed by those who bear the greatest share of child care—not workplace nurseries or registered child minders, but relatives. In countless families in my constituency, the woman or, much less frequently, the man, is able to go to work because a grandparent or another relative is prepared to care for the child without tax relief or payment but as a matter of normal family duty. I should regard it as grossly unfair if we were to give a huge tax privilege—one far beyond the purpose of the clause—to those who choose to use commercial arrangements, while not providing an equivalent incentive to those who act as families have acted for thousands of years.
        Mr. Anthony Coombs: In 1980 a survey on women in employment was carried out. I should have thought that the trend of more women going to work since then has reinforced the point of the survey. It found that not only did 34 per cent. of working women use the child's grandmother as the main support for child care while at work, but 44 per cent. of full-time working mothers used grandparents and a further 13 per cent. used their husbands.
        Mr. Stern: I endorse what my hon. Friend said, which underlines my point. We are talking about a limited tax relief. If we extend it to all those who lay out what one might call declarable money on child minding, we shall create a huge distortion in the market.
        My hon. Friend the Member for Billericay has tabled an amendment that has been backed by a number of, one assumes, disinterested organisations such as the Institute of Directors. Although my hon. Friend and I often find ourselves in a minority in defending libertarian principles and protesting when we feel that Governments are going too far, on this occasion I am wholly in disagreement with her because what she is suggesting is nothing more than a tax farm. It will enable wealthy individuals to print alternative money in the form of child care vouchers, which inevitably in many cases will not be spent on child care, but will form another black market. There will be no way to police the way in which the child care voucher is spent, or whether it is spent on child care. I remind her of Gresham's law, which says that bad money tends to drive out good. Her amendment would create a large sum of bad money.
        I welcome the clause because it will give a limited push to what, for many people, is a welcome development. That is the involvement of the employer in making it easier for particular employees to take on particular jobs. If the new tax relief works, it will be self-limiting, because it will apply only to a limited number of people in a limited number of circumstances. To go beyond the purpose of the clause would be an expensive folly with unbounded social effects. For that reason, I hope that my right hon. Friend the Minister will have no hesitation in resisting the amendment.
        Mr. Beith: I am delighted to congratulate the hon. Member for Mid-Staffordshire (Mrs. Heal) on a most effective maiden speech, well prepared and well delivered. The hon. Lady's remarks showed a breadth of knowledge about the problems of the disabled which I hope that she will bring to the House on many occasions in the future. I am sure that it will not be long before she makes her second speech. My only piece of advice to her is that in some ways the second speech is more difficult than the

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        maiden. The indulgence of the House, which is automatic when a Member makes his or her maiden speech, disappears thereafter.
        I hope that what happened to me when I made my second speech late at night does not happen to the hon. Lady. When I rose, I was mistaken by Mr. Deputy Speaker for one of my colleagues, who was sitting in the Cafeteria at the time. When his name appeared on the annunciator screen, he was presented with the dilemma of whether to enter the Chamber and make a speech or whether to continue eating his meal. That is unlikely to happen to the hon. Lady, however, as she is easily recognisable and has made such a distinctive and valuable start to her career in this place.
        Child care provisions urgently need to be extended. Child care is important because women who choose to work outside the home should have the freedom to do so. I emphasise "choose" because I do not think that we should be pushing women in either direction. They should not feel pressure to work outside the home, but neither should they feel that they ought not to do so. One of the effects of the poll tax, with its joint and several liability, will be to make many married women who do not have an income feel that they must have one because they have a liability but no income. The state should be neutral and married women should have a free choice. Barriers as preventive as the lack of adequate child care should not stand in the way of women who choose to work.
        6 pm
        There is a crying need in the economy for the skills of many women, and that need will become greater in the next few years. That is widely recognised, and the industry has pressed strongly for amendments of the kind that I and the hon. Member for Billericay (Mrs. Gorman) have tabled. Perhaps the hon. Lady is more radical than members of the Labour party, but that comes as no surprise to me. Indeed, I have always known that to be the case. I must he careful, however, because she attacked me and others the other week for being Christians, so I know that I am in trouble with the hon. Lady already.
        Mrs. Gorman: In the speech to which the hon. Gentleman refers I criticised theologians who have extreme views, not Christians.
        Mr. Beith: I suggest that the hon. Lady reads the report of her speech to see how wide she appeared to range on that occasion.
        A much wider child care policy needs to be established than that which can be achieved within the framework of the Bill. There must be greater support for local authority nursery provision and greater support and provision for the voluntary sector. Provision should be extended to out-of-school facilities for children. The provisions that we are discussing, which are limited, appear not to extend into that third area.
        The Minister of State, Department of Education and Science took an initiative on out-of-school provision and wrote to 25,000 schools in England urging them to consider using their facilities for child care provision out of school hours. So far, the groups campaigning for this provision have found only about seven schools which have managed to make a response. That is hardly surprising, given the financial pressures that schools are facing. It will take more than a letter to 25,000 schools to deal with a
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        problem which will remain for many women even if all the provisions that the Government have set out in the Bill are implemented, improved and tidied up.
        Children of school age must be provided for and cared for when they finish school each day and during school holidays. The provisions set out in the Bill do not meet that need. In considering successive Finance Bills, we have campaigned for wider tax relief for child care, but the Government have not provided it. We are talking today about tax relief for workplace nurseries. In that respect, the Government have given the Labour party that for which it asked. It has been given precisely that for which it campaigned.
        I vividly recall a debate which took place during consideration of the 1989 Finance Bill in Committee. I was telephoned by a representative of a campaign which had been mounted for workplace nurseries and told off in no uncertain terms because I intended to raise in Committee—as, indeed, I did—the wider question of tax relief for child care. I was told that the Labour party intended to raise the issue of workplace nurseries on Report and that those responsible for the campaign did not want the matter to go any wider than that.
        I pursued my amendment and the hon. Member for Islington, South and Finsbury (Mr. Smith) dealt with the issue thus:
        "Unfortunately, the Democrats"—
        his word, not mine—
        "have mixed up the issue with the much broader issue of tax relief for child care expenses in general."
        He was referring to nursery provision. He than said that
        "the new clause fails to take into account the principal mechanism whereby assistance can be given for child care, which is to ensure that good quality nursery provision by employers, local authorities and voluntary organisations is made available on a much wider scale than it is at present. Furthermore, child benefit should properly reflect the costs of bringing up a child."
        Shortly after that, he said:
        "The new clause would use tax relief instead of dealing with those problems. Therefore, we cannot support it"—[Official Report, Standing Committee G, 22 June 1989; c. 623–4.]
        The hon. Gentleman was addressing the argument that it is inappropriate to use tax relief to secure wider child care. Even the clause that we are seeking to amend uses tax relief to encourage employers to provide workplace nurseries. The crux of my argument is that the workplace nursery can never be more than an extremely limited solution to the problem of child care for working mothers. The Government's tax relief efforts must therefore be devoted to wider objectives. Even now, the official Opposition's amendments severely restrict the range of relief and, oddly, do not even relate it to the standard rate of tax, As the hon. Member for Brent, South (Mr. Boateng) said, the clause is almost unbelievably limited in its scope.
        If, as I hope, the House of Commons introduces a workplace nursery for its staff—those employed by the House of Commons Commission—it is doubtful whether Members could send children to it, and it is certain that journalists, BBC staff and those who work for the Department of the Environment in this place would not be able to obtain tax relief for vouchers that their employers might provide to send children to the nursery. Even though all the employees to whom I have referred work

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        within this building, they would not be able to send their children to the nursery because their employers would not be providing or managing it.
        That is an extreme example of the degree of restriction implicit in the clause. On the face of it, a building or set of premises used by several organisations could not have a workplace nursery used by all the organisations unless they were all fully involved in its management. That would seem to be pretty difficult nursery to run. A nursery run by the House of Commons, all its Members, the BBC and most daily newspapers in the land would be pretty difficult to run. I should not like to work for such a wide range of employers.
        I have provided an extreme example, but I will move on to a more common state of affairs. Let us suppose that there are several firms on a trading estate which have factories nearby. One quite large firm might say, "We think that we could manage to operate a workplace nursery. We could probably take up half the places for our employees and we shall offer the other places to some of the neighbouring firms so that we can bring the total number of places to a reasonable level. We shall then have their support and the vouchers that they give to their employees." Such a scheme would fall foul of the narrow provisions of the clause, yet it would be a natural arrangement for several employers with premises fairly close to one another. The Government's provisions fall down even in that example of workplace nursery provision.
        Even the widening to which I have spoken would not meet the needs and position of many people. There are so many employers who cannot reasonably provide child care at the workplace. There are employers who have many sites with only a few employees at each one. That is certainly true in retailing, and the same can be said of manufacturing services industries. There are firms with many employees who work in scattered locations throughout the country or even around a city, and they will be unable to make workplace nursery provision.
        Small businesses with relatively few employees could not reasonably make child care provision. It would not be economical to provide the facility because they would not have enough employees to take it up. Even quite large firms—firms employing perhaps 100 people—might be uncertain about the level of take-up in any one year. The obvious solution for many firms is to look to others to help them. In this way the Government are failing to observe their philosophy, ideas and principle.
        The Government propose to set up an anti-private-enterprise scheme. Let us suppose that a Government Department with many sites throughout the country wants to make nursery provision. It might decide to invite an outside catering contractor to provide services at a site where it might not be economic to run its own catering services. If the Department has a location where there are relatively few employees but where another provider could make nursery provision available, it would be unable to privatise its nursery provision. Under the Bill, it would have to manage the nursery provision itself. Given the Government's philosophy, what is the sense in saying that in the public sector the Government have to manage everything?
        Mr. Bermingham: Does the hon. Gentleman agree that another spin-off is the advantage to the large organisation at the expense of the small? I always thought that the provision was meant to encourage small organisations, but it fails to do that.
        Mr. Beith: That is undoubtedly so. My earlier argument was that employers with a small number of staff cannot possibly undertake the sort of workplace nursery provision that would be sustainable for a period of time. Many of them could more usefully provide tax-free vouchers to the employee, provided that they were used for registered child care or nursery education and could be redeemed only by an organisation or individual registered for that purpose.
        Mr. Timothy Raison: What would be the equity of providing vouchers for those who go out to work while providing nothing for those who stay at home and look after their children?
        Mr. Beith: The whole point of the argument that has run through the debate is that, in order to have the freedom to go out to work, many mothers have to provide for child care out of their taxed income. The Government are saying that they will make provision for those with child care facilities on the premises where they work without that being subject to tax. A great many other mothers will have to pay for child care out of their taxed income because the employer cannot assist them in any untaxed way. Those who choose to look after their children at home do not face that barrier.
        The right hon. Gentleman may believe that the state should not become involved and that there should be no tax relief. If so, he should oppose the clause. However, once we enter that area—and there are many good social and employment arguments for so doing—we have to find a more sensible scheme. There appears to be greater equity between those who have access to workplace nurseries and those who do not than the right hon. Gentleman described.
        The amendments attempt to go wider. They are all based on a voucher principle which allows child care to be provided in a wide range of locations, including domestic locations. I am worried that under Labour's proposals it would not be possible for a playgroup in an individual's home, properly registered and operating, to be the subject of vouchers provided by an employer. A skilled, trained and qualified nursery nurse looking after several young children would not qualify under the Opposition's proposal, still less under the Government's.
        We must have a reasonably flexible approach because many women, especially those travelling a long way to work, will not want to take their children to some urban centre for child care. It would be more sensible and reassuring if their children were looked after in their local community by people whom they know and where there is access to neighbours and friends should anything go wrong. If a child is taken ill, a neighbour or friend could provide reassurance and take the child home for the rest of the day.
        That is another example of how the workplace nursery is of limited help. It is obviously valued by those very few women, as a proportion of the total, who have access to workplace nurseries. Even where such nurseries exist, quite a few women still choose to make other child care arrangements. We must allow for them, and the

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        amendments are designed for that purpose. If we do not provide for them, we shall have created expectations which will not he satisfied. When the Government made their announcement, there was widespread expectation that much would be done for working women, but the provisions in the Bill will help only a few.
        A number of other amendments are designed to deal with specific problems. Amendments Nos. 42 and 43 are intended to prevent two-tier standards of nursery care in workplace nurseries, and to prevent the possibility of only the directors of a small company benefiting from the facilities. That is a deliberate anti-abuse provision that we have suggested to the Government.
        Amendment No. 17 has been tabled because we are puzzled about the age definition of a child. The Government say that it is 18. Do the Government envisage workplace nursery relief being extended to 15 and 16-year-olds? That is not what we understood from their previous statements. We want the Government to address the problem of out-of-school child care after 4 o'clock—after 3 o'clock at primary school level—and during school holidays.
        Amendment No. 18 restricts tax relief to the basic rate, which seems to be a much more sensible use of the money. If the Government want to help those in the ordinary tax bracket, they should not subsidise nursery provision at the higher rate of tax, any more than they should subsidise mortgage relief at the higher rate of tax.
        6.15 pm
        As part of a wider child care policy, our object is to encourage employers to give a flexible form of assistance to their employees through child care. They should take account of the different needs and requirements of their staff and do whatever is possible and appropriate for them. For many small businesses, a workplace nursery is inconceivable. For many large businesses, providing child care through another organisation would be more logical than trying to develop an in-house facility. In the public sector, it is ludicrous to assume that all nursery provision must be managed by the public sector employer. The provisions are too narrow—that is why we have tabled our amendments.
        Mr. Graham Riddick: I, too, join the hon. Members for Berwick-upon-Tweed (Mr. Beith) and for Bristol, North-West (Mr. Stern) in congratulating the hon. Member for Mid-Staffordshire (Mrs. Heal) on her excellent speech. It proves that there was no need for the image-makers of Walworth road to gag her as they did during the by-election.
        I have come hot foot from the tennis courts, having represented this House at tennis. I am pleased to say that the Lords and Commons tennis team beat Westminster school 7–2.
        I am not unsympathetic to the broadening of workplace nursery provision as suggested by my hon. Friend the Member for Billericay (Mrs. Gorman). The issue is something of a dilemma because there is a strong argument for not encouraging mothers to go out to work. There are those who argue that, while a mother has young children, her place is at home. I note that my hon. Friend the Member for Orpington (Mr. Stanbrook) agrees with that. On the other hand, there is clearly a tightening of the labour market, and the economic well-being of Britain means that we need to encourage more women to return to
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        the job market—certainly after their children have gone to school, but even while they are still fairly young. The answer to the dilemma is to leave the decision to each and every woman—
        Mr. Andrew Mitchell: What about the husbands?
        Mr. Riddick: Yes, the decision is also one for the fathers. They must have a genuine choice. The argument of many of my hon. Friends is that the free market should cater for the increased demand for more women to return to work. I have no doubt that, if we left that to the free market, there would be a much greater provision of workplace nurseries—but in time. I do not argue against the use of tax relief to encourage desirable or important objectives. We have used tax relief to encourage home ownership, occupational pensions and so on. Therefore, why should not it be used to encourage women to return to work if they so wish?
        I welcome the tax relief announced by the Chancellor of the Exchequer in his Budget speech, but if we are to introduce tax relief for workplace nursery provision, we should do it properly. The provision in the Bill is very restrictive.
        A firm in my constituency, Shaws Pallets, which is based in Slaithwaite, a village in Colne valley, has drawn my attention to a problem. The company has set up a workplace nursery to cater for the children of its employees. It wishes to offer places to employees of other companies in the village. However, the tax relief to be made available through the Bill will not extend to employees of other firms. There is a case for such an extension. The Treasury is discriminating against people whose firms cannot afford to set up a workplace nursery.
        I have had a letter from the Retail Consortium; no doubt other hon. Members also received a copy. Many retailers need to encourage more women to go back to work. The Retail Consortium makes the point that the Government are discriminating against small stores that cannot provide the facilities which are required, and that there is very little flexibility in the provision for tax relief.
        We should not be too niggardly. There is a sound argument that there is no need for the Government to introduce the provision at all and that we should leave it to the free market. If we are to introduce tax relief, the Government should make it meaningful and ensure that the proposal works. That is why I support my hon. Friend the Member for Billericay. I hope that my right hon. Friend the Chief Secretary will consider the matter again and take up the proposal in the amendment tabled by my hon. Friend.
        Mr. Bermingham: A short time ago the hon. Member for Bristol, North-West (Mr. Stern), who is not in his place, gave way to me; I asked him a simple question when he accused the Labour party of producing a proposal that would cost much money. He spoke in his usual accountancy terms. I never trust accountants because they can make figures tell anything they want. The hon. Gentleman forgot to say that the minute someone is allowed to exercise the economic right to go back to work, because the amount involved in child minding can be deducted as a tax expense, two more taxpayers and two more jobs have been created. The person going back to

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        work will pay tax and the person who is being employed to mind the child will also pay tax. That figure has to be offset against tax relief.
        Some years ago I read that, unless more people went to work, the gross national product would not grow. If there is a demographic profile, as there is in this country, of a reducing number of young persons entering the labour market and an increasing number of people leaving it through retirement, there will be fewer persons in the labour market. If we want to keep up the number in the labour market, thus enabling us to pay for the pensions and other benefits that we all want, we have to encourage people to go back to work. We have a massive waste of skills because married women who want to go back to work cannot afford to do so. It is no good a woman earning £50 in a part-time, shared job if it is going to cost her £40 or £60 to have her children looked after. That is lunacy.
        Apart from the fact, so I understand, that women's need to go back to work is increasing, and people want to do it, they do not want to be stuck at home seven days a week with the children. My brother-in-law, who is a doctor, tells me that much of the stress and trouble within families is caused because the mother is housebound and cannot get out to work. She feels frustrated because she has so much to offer society but is denied the opportunity to do so.
        The Government once again demonstrate their tunnel vision. I shall be glad when the channel tunnel is finished; we could put all the Treasury Ministers in it to show them what a real tunnel is like. They could go through it, blinkered as ever. Treasury Ministers are blinkered in their proposals in clause 20. Under the clause the employees of a big company that can provide a workplace nursery will get tax relief, but if a little company, a profession or a shop is not big enough to have its own workplace nursery, the employees will not get any tax relief. That is lunacy.
        What are we doing? Once again we are saying to small businesses, "Yah-boo, tough, the Treasury does not understand your problems; you cannot compete with the big boys." We want the little businesses to prosper, but that is not the view of the Treasury. Treasury Ministers cannot see further than the end of their noses. The hon. Member for Colne Valley (Mr. Riddick) has given a classic example. The position is the same in St. Helens. The big companies such as Pilkington's will be able to provide workplace nurseries, but the little factories, particularly in the clothing trade, which desperately want machinists, cannot afford them. It takes many years to teach machinists their skills. The factories want them back, but they cannot encourage them because they cannot compete with the big boys in the provision of workplace nurseries.
        If the Minister—I am sorry, I mean the Chief Secretary; I have demoted him again, but that is one of my bad habits —thought of the interests of the economy generally, he would broaden the provision to enable women to go back to work. If women could employ people to act as child minders, or if they could put their children in workplace nurseries or in nurseries provided by local authorities, the labour market would increase enormously. My hon. Friend the Member for Durham, North-West (Ms. Armstrong) told us about a local authority laying on a wonderful child minding scheme.
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        If the provision was widened, it would pay for itself in due course. There would be another spin-off benefit. As soon as tax relief is claimed, the Inland Revenue knows to whom the money has been paid. What an easy way to get rid of unauthorised child minders. The Inland Revenue would tell the local authority immediately if a person was not registered. The Inland Revenue is like that; it will snitch on anybody at any time. The Chief Secretary would do a wonderful job by getting rid of unauthorised child minders. They would pop out of the woodwork all over the place. The Chief Secretary would improve the standard of child care.
        The Government have an opportunity to do something, but they will not take it. They never do. It will be the same with capital gains tax later this evening. Once again the Government cannot see beyond their tunnel vision. What a pity. They could do so much good if they listened to the voices of all hon. Members on both sides of the House.
        Mr. Ivor Stanbrook: I hope that the House will forgive me having been absent during part of the debate. I am totally opposed to the amendments and I believe that the Government's attitude towards the problem of working mothers is wrong. When my hon. Friend the Member for Billericay (Mrs. Gorman) proposed her ten-minute Bill recently to assist mothers of young children to go out to work, I was appalled at her apparent repudiation of traditional Conservative values with regard to the family. Therefore, I opposed her Bill. She was successful, and all I got for my pains was personal abuse from her, gratuitous insults from another lady Member of Parliament, and vitriolic attacks in the press. I also received many letters. I was, however, convinced of the support for my views by the many letters of support I received and by the guilt implicit in many of the letters which criticised me.
        6.30 pm
        Fortunately, I have obtained greater wisdom from that experience because it revealed to me the true nature of the evil which lies at the root of our industrial and social policies. It also helps to explain why we British have been so unsuccessful in running our economy since the war and why we, unlike our continental competitors, have weathered the 1987 economic storm so badly. It is due to the attitude that I speak of which is inherent in my hon. Friend's amendments.
        Over the past 30 years or more, under Governments of both major parties, we have become addicted to the notion that happiness lies in "doing your own thing". Never mind obligations to others, to the children we have brought into the world, to the person to whom we made our marriage vows or to elderly parents; all that matters is self-fulfilment, and the yardstick of success is material reward.
        The addiction affects the whole of society, all classes of people and both sexes. Feminists in particular think of the family unit and child rearing as oppressive. Getting women into the labour force is the weapon which gains the independence they desire for their sex. They have succeeded to an extent that no one thought possible 30 years ago. We now have a continuously expanding labour force in Britain, and the expansion is provided mostly by married women. We positively encourage married women, including mothers of very young children, to go out to

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        work. The Government have joined in the rush and the amendments tabled by my hon. Friend the Member for Billericay are designed to help it along.
        There are now twice as many mothers in the labour force, proportionately, in this country than there are in any of our continental competitors. Does that improve our productivity? Of course not. As we have a larger labour force, we think that we can tolerate the inefficiency and overmanning of our industries. In Europe they know better They have far fewer married women in employment. They positively encourage the mothers of young children to stay at home with them. The average male worker in Europe is paid more and produces more than his British counterpart because their economies are based on increasing productivity and are not dissipated on a growing labour force.
        For many people we have made it necessary for there to be two or more incomes coming into the household. We have disastrously tipped the fiscal balance against the traditional family. Most working mothers are forced to go out to work out of economic necessity. It is not their fault. Their husbands are not earning enough to provide for all the needs of the family. In fiscal terms we have put enormous obstacles in the way of a family which seeks to give its children the security and love derived from the presence of the mother.
        We are still committing that error in the clause we are debating. Instead of the old rule which made the breadwinner responsible for the household rates, we have substituted a system which requires the mother to pay a contribution towards local public service charges even if she is not in paid employment and has no resources of her own to pay the community charge. The community charge. if it is not modified, is likely to break up more families.
        There have been 30 years of progressive fiscal neglect of the family. My original objection to the proposal by my hon. Friend the Member for Billericay was expressed in inadequate terms because it was based on only half of the truth. Never mind the social consequences of a generation brought up without love or a sense of obligation to others; never mind the unhappiness caused to children by our policies. Think only of the damage that we are doing to the economy by solving our labour problems in such a way.
        One of my correspondents, Mrs. Annemieke Lines, told me:
        "Redressing the fiscal balance in favour of those bearing the responsibility of bringing up the next generation will do far more to persuade young mothers to look after their children than outright condemnation for not doing so".
        I accept that.
        The Government have completely the wrong approach to this problem. My hon. Friend is completely off-beam in her amendments, and I hope that they will be rejected. I implore the Government to delve more deeply into the economic and social consequences of what they are doing and to cease to be pulled along by the wretched engine of feminism.
        Ms. Armstrong: I am grateful for the opportunity to speak in this debate, not least because I speak shortly after my hon. Friend the Member for Mid-Staffordshire (Mrs. Heal), who made a measured but powerful speech. I hope that some hon. Members who criticised her as a candidate will take note of the content of her speech and her performance, and will recognise that we all say things in
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        by-elections and at election time that we regret later. I hope that some hon. Members regret some of the things that they said during the Mid-Staffordshire by-election.
        The hon. Member for Orpington (Mr. Stanbrook) has just spoken and I follow him with a sense of great sadness. He seems to have no understanding of the power of relationships in which people who both work are capable of loving their children. To listen to him one would think that it was impossible for fathers to take any part in their children's upbringing, care and nourishment because they go out to work.
        Both my parents worked and contributed to society, but they brought me up never to put myself first and always to think of my responsibilities in the public domain. They did that while they worked, and I know that I am not alone in the House or in the country in having benefited from parents who were able to give to other people and therefore had more to give to the family. I am sad that the hon. Gentleman does not understand the contribution that working parents are able to make to the family.
        The dilemma expressed by the hon. Member for Orpington has also hit the Government because in so many of their words and actions over the past year they have demonstrated that they cannot come to terms with the fact that work and the family go together. The Government need to sort out their policies to support that ideal rather than causing contradictory problems. It is significant that this is the only Government-inspired debate in which we have the opportunity to talk about child care. That demonstrates the narrowness and the poverty of the Government's understanding of issues which face us today.
        If the Government had a coherent strategy on child care, or accepted the need for one, the abolition of the workplace nursery tax would be but a marginal part of their policy. I do not know where the hon. Member for Orpington got his figures on the number of married women in Europe who go out to work. They certainly do not match up with any figures for European Community countries. The EC report on child care shows that we lag behind in our provisions for children and for parents who wish to work.
        Mr. Stanbrook: Can the hon. Lady deny that fewer married women go out to work in Europe than in Britain? The Government make play of the fact that our labour force is increasing all the time, all because of the increased employment of married women.
        Ms. Armstrong: In France, Germany, Italy and Spain that is not the case, but the hon. Gentleman may have figures which confound those from the EC. Britain comes near the bottom of the league when it comes to mothers with young children who are able to work. We have more women out of the work force for longer than most of our European competitors, and when they do return they do so at a lower level both in terms of status and pay. The main reason that is given for that is lack of adequate child care. During that time we are wasting the money that we have invested in their training, their experience and the commitment that they wish to make. It is for those reasons, if for no other, that we need more adequate child care facilities.
        Mr. Humfrey Malins: Will the hon. Lady give way?
        Ms. Armstrong: No. The hon. Gentleman has only just come into the Chamber and we have been debating the matter for the past three hours.
        The Government are prepared to tackle child care only with this minimal measure and, while that continues to be the case, we shall not be able to give our children the sort of start that they need. I hope that the hon. Member for Orpington will recognise that throughout the continent children have better opportunities than they have here. I was in Barcelona last weekend at the European child care network conference and few there were struggling in the way that the British delegation was with inadequate, patchy, mixed and poorly regulated provisions.
        Mr. Malins: Will the hon. Lady give way?
        Ms. Armstrong: No.
        It is clear that other members of the Government have had different views of the tax. The right hon. Member for Sutton Coldfield (Sir N. Fowler), speaking on the imposition of the workplace nursery tax after his resignation, said:
        "It is an eccentric policy and indeed up to April 1984 it was not policy at all. For almost 40 years the positon had been that no one had paid tax on the benefit from a workplace nursery. The policy was then changed on the view that tax had always been payable but had simply not been collected. We are now left in the extraordinary position that a motorist who has free parking at his place of work in central London does not pay tax on this undoubted benefit, while a mother who makes use of a workplace nursery does. It is time that this curious policy was taken away and put out of its misery."
        I agree with the right hon. Gentleman, but he did not make his views known when he was a member of the Cabinet.
        The Government's proposal is narrow. It is a small gesture which is an inadequate response to our needs or demands. However, I counsel and caution those who argue that tax relief should be the main way in which we extend our child care provisions. The experience of most countries is that that means has dismally failed. It has not served as a lever to increase the numberof places nor to maintain quality.
        The Opposition are determined to increase opportunities for child care but we shall ensure that they are of the highest quality. There is no point in opening up the provision of child care of a dubious quality only to have to deal with the problems that that creates later. We have to make sure that it is of the highest quality, and that is why the Opposition have argued for a partnership among the public, voluntary and private sectors.
        6.45 pm
        Employers have a responsibility to contribute to child care provision, but it is the responsibility of all society to ensure that it is of the highest quality. I commend to the House those local authorities who, despite the Government, have been trying hard to ensure that they can develop such partnerships. I shall be attending the launch of such a partnership in north Tyneside on Monday. There the local authority, despite being capped by the Government, is trying its hardest to meet the needs of the economy and of children.
        If the Government are serious about the changes in the Bill, I urge them to look much further. Some of the Opposition's amendments give a lead in terms of fiscal policy, but none of my hon. Friends would pretend that fiscal policy can sort out the problems. We now have the
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        opportunity to create a completely new relationship between work and the family in which women have the right to work, to train and to gain experience.
        If we develop a proper work and family policy, we shall develop opportunities for fathers to be much more crucially involved in child care and to play their part in it. That is what people are looking for. It is a popular policy wherever I go. I urge the Minister to talk to his colleagues in the Cabinet and to ensure that we have a comprehensive child care policy which will address the needs of children and of men and women who happen to be parents.
        Mr. Andrew Mitchell: I shall not detain the House for more than five minutes because many of the points that I wanted to make have already been made. But it would be remiss of me not to start by congratulating the hon. Member for Mid-Staffordshire (Mrs. Heal) on her maiden speech. I too had the pleasure, along with many of my colleagues, of visiting her constituency recently. Her eloquent and elegant comments, particularly about the role and the position of the disabled in society, were well made and I hope that we shall hear more from her on that subject in future.
        When one strips away the political hoo-hah, there is a wide measure of agreement on the Back Benches on both sides of the House about the direction in which the Government should move in future. It is a pity that the Government have not been given more credit for introducing tax relief for workplace nurseries. It is a major step forward, which I welcome. It is right to make it clear at the start that the Government deserve credit for that.
        I declare what must at least be described as a tangential interest as the husband of a highly qualified member of the medical profession. That experience leads me to believe that while I agree with much of what has been said by almost every hon. Member who has spoken, I find little to agree with in the speech made by my hon. Friend the Member for Orpington (Mr. Stanbrook).
        I, along with most of my hon. Friends, incline to the view that we should have what has come to be known since the early 1980s as a level playing field with regard to the spending of taxpayers' money and should try to strip out as many tax reliefs as possible. But let us be frank. We recognise that in some cases such as mortgage tax relief there is a political imperative and in others, such as with pensions, there is an economic and political imperative, which encourage us to produce such a tax distortion. That is the argument that the Treasury accepted when it introduced tax relief for workplace nurseries. I welcome that, but we should accept that whether or not it is a good thing to have such tax reliefs is a pass which has now been sold. The Treasury—and I agree—has expressed the view and put it into legislation that we should have them. There are personal, economic and political gains to be had from that.
        There is the possibility of a tremendous economic gain. In the part of the country that I represent, we are facing a 40 per cent. reduction in the number of school leavers. We desperately need to encourage women back into the workplace. Frequently, people come to my surgeries and tell me how much they pay for child care, and what they earn from a part-time or even a full-time job; often the difference is very narrow. This is an important measure, and I hope that the Treasury keeps its effect under review in the light of what will happen this year.

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        The knitwear industry, which is a major industry in the part of the world that I represent, will benefit significantly from the Bill. There is also the question of personal gain. Conservatives believe in extending choice and opportunity, and the Bill will do that. Many women do not want to go out to work, but prefer to stay at home and look after the children; others are better mothers because they go out to work. There are no black-and-white rules.
        Mr. Graham Allen: Will the hon. Gentleman give way?
        Mr. Mitchell: No; my time is very limited.
        Having made those points of principle, I shall now deal briefly with some specific points. I hope that Treasury Ministers will consider whether the Bill may prove too restrictive. There is some discrimination—as my hon. Friend the Member for Billericay (Mrs. Gorman) pointed out—against small businesses and smaller employers, who will not have the time or the wherewithal to support the necessary operations that are enshrined in the Bill. It is important for us to keep under review whether its reach is sufficient.
        The hon. Member for Berwick-upon-Tweed (Mr. Beith) referred to premises being made available by employers, and a number of amendments address that point. A firm's staff may be spread around a city, and it is impractical to expect staff to bring their children to a central workplace nursery: they will not do it. I agree with the suggestion that employers should be allowed to buy space in creches or nurseries established by third parties, and I endorse what my hon. Friend the Member for Billericay said about a voucher system. We should consider the possibility of employers paying a third party direct. Creche facilities and child minding services are often provided in accommodation that may have been converted or adapted, but is still primarily occupied for domestic use. I hope that my right hon. Friend the Chief Secretary will bear it in mind that the need for specialist creche or nursery facilities as opposed to domestic accommodation is not an easy case to pursue.
        In the Bill, care is defined to exclude
        "supervised activity provided primarily for education purposes".
        While I do not advocate a system that allows private education to be provided in the guise of child care, surely we should not prohibit the provision of pre-school education as part of those child care facilities. The line between supervised activity —as defined in the Bill—and education is difficult to draw in practice. Children may be taught to read and write at nursery; will that be disqualified by the Bill? I hope that my right hon. Friend will consider that point—if not today, perhaps in the future.
        The clause is a major step forward. It is a pity that Opposition Front Benchers did not give the Government more credit for listening to what many hon. Members have said. I hope that my right hon. Friend will keep the operation of the clause under review, and consider whether next year we need to go further.
        Mr. Norman Lamont: This has been a lively debate. It could hardly have been otherwise, with contributions from my hon. Friend the Member for Billericay (Mrs. Gorman) and from the hon. Member for Brent, South (Mr. Boateng). We all understand why the hon. Member for
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        Brent, South has had to leave the Chamber repeatedly during this debate; we regret that, and sympathise with him and with his constituents.
        Let me join other hon. Members in congratulating the hon. Member for Mid-Staffordshire (Mrs. Heal). Everyone who heard her maiden speech will agree that it was outstanding. It was not only confident, eloquent and authoritative but extremely knowledgable, and it demonstrated that the disabled and mentally ill have recruited a powerful ally. All Conservative Members also appreciated her generous tribute to John Heddle.
        The hon. Member for Brent, South made a robust attack on the Government. Although it was an attack, he was right to identify many conflicting considerations and genuine dilemmas. I shall explain the Government's philosophy and approach, which—as the hon. Gentleman rightly said—is different from the approach that we adopted in last year's Finance Bill.
        My hon. Friend the Member for Gedling (Mr. Mitchell) was right to say that we must bear in mind not only the Bill's social consequences but the consequences of our taxation policy. It is the Government's philosophy—and their repeated intention—to broaden the tax base, and whenever possible to limit the use of special reliefs. It is true that we have made special exemptions where we considered that appropriate. However, on the whole the cost of those reliefs has been modest. In general, our aim has been greater neutrality and a broader tax base, with lower rates and limited reliefs. Some of the proposals made in the debate would involve large amounts of money—perhaps not as an immediate consequence of the amendments, but they would be likely to move the boundaries of relief further away.
        My hon. Friend the Member for Bristol, North-West (Mr. Stern) accurately summed up the purpose of the Budget changes. The hon. Member for Brent, South frequently used the word "largesse". I am not sure that Conservative Members have used it in relation to the amendment. My hon. Friend the Member for Bristol, North-West rightly stressed that the clause was not intended as a step towards a general child care allowance. We have never claimed that. The hon. Member for Berwick-upon-Tweed (Mr. Beith) repeated his request for a general child allowance, extending to child care in the home, but I do not agree with that in principle, and it would also be extremely expensive. It was never our intention, and it is not what the changes were designed to achieve.
        Familiar points about tax policy were implicit in the speech of my hon. Friend the Member for Gedling. We do not want employers to be able to formulate tax-efficient remuneration packages; by and large, we want people to be remunerated in cash. We want fewer benefits in kind. That has been the idea behind many of our changes—for instance, the taxation of company cars.
        My hon. Friend the Member for Orpington (Mr. Stanbrook) made his views clear, as he has done before. The Government's view is that the tax system should be neutral: it should be left to individuals to decide whether they wish to work or to stay at home with their children. I do not think that that neutrality is substantially compromised by this limited change. My hon. Friend the Member for Bristol, North-West emphasised that the change is limited.
        The hon. Member for Brent, South asked why we were making the change. There are several reasons. First, it was

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        put to us repeatedly that employers found it troublesome to continue assessing and reporting to the Inland Revenue the value of day nurseries. Secondly, it was argued that the burden on industry was an effective deterrent to the development of workplace nurseries. It was also argued repeatedly in the House that there was some resentment about the tax treatment of workplace nurseries. We have made a limited change, putting the tax treatment of workplace nurseries very much in line with that of other benefits in kind. For example, there is a tax exemption for workplace canteens that are provided on the premises. The treatment of workplace nurseries is broadly analogous to those limited concessions.
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        In the Budget and in the Bill we have done exactly what the Labour party asked us to do when we debated the Finance Bill last year. Benefits in kind are extremely complicated and it is difficult to draw boundaries. There are only two ways of achieving a policy that does not create anomalies. One is to have no relief whatsoever, and the other is to go to the extreme proposed by the hon. Member for Berwick-upon-Tweed and have relief for all the costs of child care, including child care at home. That would be enormously expensive and would carry a heavy dead weight cost.
        Mr. Beith: I should like to get the definition right. I referred not to all the costs but to the costs incurred in all kinds of child care.
        Mr. Lamont: I accept the correction, but the costs would still be huge, and would carry a large element of dead weight.
        The hon. Member for Brent, South pointed out the irony that last year I resisted precisely what we have done in this year's Budget. I have had it quoted back to me that I said that if we moved a small way we would create a great deal of pressure for much more relief. Looking at the 20 amendments that have been tabled, I realise that all the arguents I used last year were not exactly lacking in force. None the less, it is right that we are making a small, limited change and it is equally right that it should be ring-fenced.
        The hon. Member for Berwick-upon-Tweed referred to amendment No. 41, which proposes that any contribution by an employee to the cost of a nursery place provided for by an employer shall be deductible for tax purposes. It would be difficult to concede that principle in addition to the concession that we have already made that it would not be assessable to tax as a benefit. It would create a clear unfairness against those who were paying their own child care costs and did not have the benefit of a workplace nursery. To do that on top of the concession we have already made would exacerbate that unfairness.
        Mr. Raison: My right hon. Friend has been making an extremely good speech directed against his own proposals. He has argued the case against tax relief on benefits in kind; he has argued that as a matter of general policy we should not be looking for more tax relief, especially when they give particular benefit to those who are better off. He also said that he sought equal treatment. How can one possibly say that there is equal treatment if one provides tax relief to those who are earning money yet provides
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        nothing for those families in which the mother stays at home to look after her children? It appears to me to be a fundamentally unequal proposition.
        Mr. Lamont: As I have tried to explain, we have made an extremely limited concession at a cost of some £10 million. It is precisely analogous to the way in which we treat certain other benefits in kind and communal facilities such as sports facilities and canteens which are provided on the employer's premises. Only in those circumstances are they exempt from tax. That is already built in to our policy on the taxation of benefits in kind. I do not think that what we have done is markedly out of line with the treatment of other benefits. That is why we can make a limited move in that direction.
        The hon. Member for Brent, South also talked about amendments Nos. 8 and 9. The hon. Member for Berwick-upon-Tweed and my hon. Friend the Member for Colne Valley (Mr. Riddick) were concerned about small companies. Under the Bill it is possible for people to share in the provision of nurseries. They have to share in the financing and the management of them. We shall see whether we can clarify that in some document, but it is not intended that the management responsibility should be onerous. It would be quite sufficient for the company to monitor the performance of the nursery and to be represented on the management committee; it does not mean it would have to be involved in its day-to-day management, nor does finance have to be provided in equal proportions between the partners. It will be possible for firms to collaborate.
        In the interests of saving time, perhaps I could write to the hon. Member for Berwick-upon-Tweed. I can assure him that the anxieties he expressed about companies getting together and about the BBC participating in a facility in this building are not well grounded, but I shall write to him and explain why. I shall also write to my hon. Friend the Member for Colne Valley. It will be possible for companies to operate as a group and for small companies to participate in such schemes.
        My hon. Friend the Member for Billericay spoke to amendments Nos. 25, 26 and 27 with her customary verve and exuberance, and we all very much enjoyed listening to her. Amendment No. 25 seeks to insert a new provision into the Income and Corporation Taxes Act 1988 so that child care provided for an employee, including vouchers, cash allowances and reimbursement of expenses, would be exempt from taxation as a benefit in kind. I was rebuked by my right hon. Friend the Member for Aylesbury (Mr. Raison), but that really would drive a coach and horses through the tax system. We do not give people relief for vouchers except to a de minimis amount for meals or for travel. There is no limit to the number of things for which people might claim the reimbursement of expenses or a voucher for the purchase of a benefit. They might claim that any important purchase should be exempt from tax. Apart from the objection made by my hon. Friend the Member for Bristol, North-West, that would be difficult to police.
        My hon. Friend's amendment shifts the relief much more in the direction of a general child care allowance. It would be much more difficult to defend the new boundary line if employers were allowed to remunerate bought in nursery care and it would be easy to ask why employers should not fund child minders. It would be extremely difficult to draw that distinction.

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        I am well aware that my hon. Friend wants there to be a general child care allowance, so perhaps she will forgive me if I am a little suspicious of why she proposes pushing the boundary only so far, leaving me a little anxious that it will be difficult to resist her next campaign. That applies equally to amendment No. 27.
        In amendment No. 26, my hon. Friend comes a little way towards meeting us because she proposes the conditions that child care should not be provided at the residence of the child. But in doing that she is in slight danger of creating another anomaly, because employer funding of a nanny at a person's home would be excluded, but if a child was left at a child minder's home elsewhere that would be covered. That would be a very difficult boundary to defend. The cost of what my hon. Friend and other hon. Members have been proposing might be relatively small in the first few years, but it would gradually build up and, if it became more like a child care allowance, it would involve a significant sum of money. A general child care allowance would certainly cost hundreds of millions of pounds.
        The amendments underline the fact that there is no logical stopping point in the debate; it is extremely difficult to draw the line. We have made a modest, limited amendment. I have tried to explain the reasons for making it, and I believe that it will make life a little easier for some employers. There is little tax revenue at stake. The amendment that we have made accords with the general policy on the taxation of benefits in kind. It is a limited change, and it will do a modest amount of good. In that spirit, I commend the clause to the House and urge it to reject the amendments.
        Mr. Boateng: I thank the Chief Secretary and hon. Members for their forbearance when I had to leave the Chamber. There has been a deplorable, murderous attack on a soft target in Wembley surrounded by civilians' homes and people going about their ordinary business. That attack was futile and mindless, and those who perpetrate such attacks will not succeed in their objectives. On behalf not only of my constituents but of the whole House, I thank the police and ambulance services for their sterling work in dealing with the deceased and injured.
        The debate has demonstrated the almost schizophrenic nature of the Conservative party on this issue. We heard from that tendency within the Conservative party which is geared to the philosophy of kinder, küche, kirche. They are concerned that women should remain with their children by the hearth and in the church. They see no role for them in the wider world. That philosophy is epitomised by the hon. Member for Orpington (Mr. Stanbrook), and it is alive, well and flourishing in the Conservative party.
        There is the hard-line tendency, ably demonstrated by the Chief Secretary, who was almost dragged to the Dispatch Box to make the concession announced by the Chancellor, presumably against the Chief Secretary's best advice, in the Budget. That is why the Chancellor talked of a small measure and said:
        "We have always made it clear that it is not for the Government to encourage or discourage women with children to go out to work. That is rightly a decision for them to take, and one in which the Government would be wise not to interfere."—[Official Report, 20 March 1990; Vol. 169, c.1020.]
        The Financial Secretary to the Treasury (Mr. Peter Lilley): Hear, hear.
        Mr. Boateng: I hear the Financial Secretary say, "Hear hear." The erstwhile Secretary of State for Employment, before he returned to the bosom of his family, declared the 1990s to be the decade of the working woman.
        Conservative Members must decide which of those tendencies they will adhere to—the recidivist, atavistic tendency of the hon. Member for Orpington, the monetarist tendency, which is in its last gasps, of the Chief Secretary or the more benign tendency of the former Employment Secretary, whose banner was well taken up by the hon. Member for Gedling (Mr. Mitchell), and who deserves a word of praise. He erred—the Chief Secretary will know this—in expecting Labour Members to say "thank you" for this measure, because in 1984, where this aberration has its origins, the Conservative party agreed that it was better to put those who seek to obtain a company car in a preferential position compared with those who seek to obtain and use a workplace nursery. Conservative Members—and the Chief Secretary encouraged them—were responsible for elevating a Porsche above Petula and Patrick. That is the reality—the Porsche comes first, and let Petula and Patrick's parents take care of them.
        The Government have changed a bit, but they have not changed enough. That is why we intend to press amendment No. 9, which deals with our most modest request—that employees, particularly those employed by small companies, have the option to attend community nurseries, voluntary nurseries or local authority nurseries if that is what they decide. That is in accordance with the reality of the demand and the spirit of the Bill.
        Mr. Riddick: Will the hon. Gentleman give way?
        7.15 pm
        Mr. Boateng: No, I am afraid that time is too short.
        I must take to task the hon. Member for Bristol, North-West (Mr. Stern), who suggested that amendment No. 41 is profligate. "How much would it cost?" came the cry, as though we were about to take billions from the Treasury. If the hon. Gentleman looks in a little more detail at amendment No. 41—I know that he will give it his attention, if not now, in due course—he will find that it is strictly limited to workplace nurseries, bearing in mind the strictures of the Chief Secretary. Any contribution made by the employee will become taxable in the employer's hands. The employer may pay tax at 35 per cent. while the employee pays tax at 25 per cent. in these circumstances, there is a net gain to the Treasury. What could be more prudent, more moderate or more in tune with the correct degree of fiscal rectitude than that? It is indeed a modest amendment.
        If there were any justice or any truth in Conservative Members' approach to these matters, they would accept amendment No. 41. If they cannot do so, we say that they should accept amendment No. 9. Let them do something for the kids, something for employers who are seeking to expand the pool of skilled labour on which they might usefully draw, and something for the working women and parents of this country, because—let us make no bones about it—the Government may do nothing now but we shall do something soon and we shall do a great deal.
        The Chairman of Ways and Means (Mr. Harold Walker): Do I understand that the hon. Gentleman will seek to divide the House on amendment No. 9 and that he will therefore seek to withdraw amendment No. 41?
        Mr. Boateng: Yes. I beg to ask leave to withdraw the amendment.
        Amendment, by leave, withdrawn.
        Amendment proposed: No. 9, in page 11, line 27, leave out from 'persons' to end of line 30.—[Mr. Boateng.]
        Question put, That the amendment be made:—
        The Committee divided: Ayes, 176, Noes 259.

        Division No. 211]

        [7.16 pm

        AYES

        Abbott, Ms Diane

        Flannery, Martin

        Allen, Graham

        Foot, Rt Hon Michael

        Alton, David

        Foster, Derek

        Anderson, Donald

        Foulkes, George

        Archer, Rt Hon Peter

        Fraser, John

        Armstrong, Hilary

        Fyfe, Maria

        Barnes, Harry (Derbyshire NE)

        Galloway, George

        Barnes, Mrs Rosie (Greenwich)

        Garrett, John (Norwich South)

        Barron, Kevin

        Garrett, Ted (Wallsend)

        Battle, John

        Gould, Bryan

        Beckett, Margaret

        Graham, Thomas

        Beith, A. J.

        Griffiths, Nigel (Edinburgh S)

        Benn, Rt Hon Tony

        Griffiths, Win (Bridgend)

        Bermingham, Gerald

        Grocott, Bruce

        Bidwell, Sydney

        Heal, Mrs Sylvia

        Blunkett, David

        Healey, Rt Hon Denis

        Boateng, Paul

        Hinchliffe, David

        Boyes, Roland

        Hoey, Ms Kate (Vauxhall)

        Bradley, Keith

        Hogg, N. (C'nauld & Kilsyth)

        Brown, Gordon (D'mline E)

        Home Robertson, John

        Brown, Nicholas (Newcastle E)

        Hood, Jimmy

        Brown, Ron (Edinburgh Leith)

        Howells, Dr. Kim (Pontypridd)

        Bruce, Malcolm (Gordon)

        Hughes, John (Coventry NE)

        Buchan, Norman

        Hughes, Robert (Aberdeen N)

        Buckley, George J.

        Hughes, Roy (Newport E)

        Caborn, Richard

        Johnston, Sir Russell

        Callaghan, Jim

        Jones, Barry (Alyn & Deeside)

        Campbell, Menzies (Fife NE)

        Jones, Martyn (Clwyd S W)

        Campbell, Ron (Blyth Valley)

        Kaufman, Rt Hon Gerald

        Campbell-Savours, D. N.

        Kennedy, Charles

        Carlile, Alex (Mont'g)

        Kinnock, Rt Hon Neil

        Cartwright, John

        Kirkwood, Archy

        Clark, Dr David (S Shields)

        Leighton, Ron

        Clarke, Tom (Monklands W)

        Lestor, Joan (Eccles)

        Clay, Bob

        Lewis, Terry

        Clelland, David

        Litherland, Robert

        Clwyd, Mrs Ann

        Livingstone, Ken

        Cohen, Harry

        Livsey, Richard

        Cook, Frank (Stockton N)

        Lloyd, Tony (Stretford)

        Cook, Robin (Livingston)

        Loyden, Eddie

        Corbett, Robin

        McAllion, John

        Corbyn, Jeremy

        McAvoy, Thomas

        Cryer, Bob

        McFall, John

        Cummings, John

        McKelvey, William

        Cunliffe, Lawrence

        McLeish, Henry

        Cunningham, Dr John

        Maclennan, Robert

        Dalyell, Tam

        McWilliam, John

        Darling, Alistair

        Madden, Max

        Davies, Rt Hon Denzil (Llanelli)

        Mahon, Mrs Alice

        Davies, Ron (Caerphilly)

        Marshall, David (Shettleston)

        Dewar, Donald

        Marshall, Jim (Leicester S)

        Dixon, Don

        Martin, Michael J. (Springburn)

        Dobson, Frank

        Martlew, Eric

        Doran, Frank

        Meacher, Michael

        Dunnachie, Jimmy

        Meale, Alan

        Dunwoody, Hon Mrs Gwyneth

        Michie, Bill (Sheffield Heeley)

        Eadie, Alexander

        Mitchell, Austin (G't Grimsby)

        Eastham, Ken

        Molyneaux, Rt Hon James

        Evans, John (St Helens N)

        Moonie, Dr Lewis

        Ewing, Harry (Falkirk E)

        Morley, Elliot

        Ewing, Mrs Margaret (Moray)

        Morris, Rt Hon J. (Aberavon)

        Fearn, Ronald

        Mowlam, Marjorie

        Field, Frank (Birkenhead)

        Mullin, Chris

        944

        Murphy, Paul

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

        Oakes, Rt Hon Gordon

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

        O'Brien, William

        Smith, J. P. (Vale of Glam)

        O'Neill, Martin

        Soley, Clive

        Orme, Rt Hon Stanley

        Spearing, Nigel

        Parry, Robert

        Steel, Rt Hon Sir David

        Patchett, Terry

        Steinberg, Gerry

        Pendry, Tom

        Strang, Gavin

        Pike, Peter L.

        Straw, Jack

        Powell, Ray (Ogmore)

        Taylor, Mrs Ann (Dewsbury)

        Primarolo, Dawn

        Taylor, Matthew (Truro)

        Quin, Ms Joyce

        Thompson, Jack (Wansbeck)

        Radice, Giles

        Turner, Dennis

        Redmond, Martin

        Wallace, James

        Rees, Rt Hon Merlyn

        Warden, Gareth (Gower)

        Reid, Dr John

        Wareing, Robert N.

        Richardson, Jo

        Welsh, Andrew (Angus E)

        Robinson, Geoffrey

        Wigley, Dafydd

        Rogers, Allan

        Williams, Alan W. (Carm'then)

        Rooker, Jeff

        Wilson, Brian

        Ruddock, Joan

        Winnick, David

        Sedgemore, Brian

        Wray, Jimmy

        Sheerman, Barry

        Young, David (Bolton SE)

        Sheldon, Rt Hon Robert

        Short, Clare

        Tellers for the Ayes:

        Skinner, Dennis

        Mr. Frank Haynes and

        Smith, Andrew (Oxford E)

        Mrs. Llin Golding.

        NOES

        Adley, Robert

        Clark, Dr Michael (Rochford)

        Aitken, Jonathan

        Clark, Sir W. (Croydon S)

        Alison, Rt Hon Michael

        Clarke, Rt Hon K. (Rushcliffe)

        Amery, Rt Hon Julian

        Colvin, Michael

        Amess, David

        Conway, Derek

        Amos, Alan

        Coombs, Anthony (Wyre F'rest)

        Arbuthnot, James

        Coombs, Simon (Swindon)

        Arnold, Jacques (Gravesham)

        Couchman, James

        Arnold, Tom (Hazel Grove)

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

        Atkins, Robert

        Davis, David (Boothferry)

        Atkinson, David

        Day, Stephen

        Baker, Rt Hon K. (Mole Valley)

        Dickens, Geoffrey

        Baker, Nicholas (Dorset N)

        Dicks, Terry

        Baldry, Tony

        Douglas-Hamilton, Lord James

        Batiste, Spencer

        Dover, Den

        Beaumont-Dark, Anthony

        Dunn, Bob

        Bellingham, Henry

        Durant, Tony

        Bendall, Vivian

        Dykes, Hugh

        Bennett, Nicholas (Pembroke)

        Evans, David (Welwyn Hatf'd)

        Benyon, W.

        Evennett, David

        Bevan, David Gilroy

        Fairbairn, Sir Nicholas

        Biffen, Rt Hon John

        Favell, Tony

        Blaker, Rt Hon Sir Peter

        Fishburn, John Dudley

        Body, Sir Richard

        Forman, Nigel

        Bonsor, Sir Nicholas

        Forsyth, Michael (Stirling)

        Boscawen, Hon Robert

        Fowler, Rt Hon Sir Norman

        Boswell, Tim

        Fox, Sir Marcus

        Bottomley, Mrs Virginia

        Franks, Cecil

        Bowden, Gerald (Dulwich)

        Freeman, Roger

        Bowis, John

        French, Douglas

        Boyson, Rt Hon Dr Sir Rhodes

        Fry, Peter

        Braine, Rt Hon Sir Bernard

        Gardiner, George

        Brandon-Bravo, Martin

        Garel-Jones, Tristan

        Brazier, Julian

        Gill, Christopher

        Bright, Graham

        Glyn, Dr Sir Alan

        Brooke, Rt Hon Peter

        Goodhart, Sir Philip

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

        Goodlad, Alastair

        Bruce, Ian (Dorset South)

        Goodson-Wickes, Dr Charles

        Burns, Simon

        Gorman, Mrs Teresa

        Burt, Alistair

        Gow, Ian

        Butcher, John

        Grant, Sir Anthony (CambsSW)

        Butler, Chris

        Greenway, Harry (Ealing N)

        Carlisle, John, (Luton N)

        Greenway, John (Ryedale)

        Carlisle, Kenneth (Lincoln)

        Griffiths, Peter (Portsmouth N)

        Carrington, Matthew

        Grylls, Michael

        Carttiss, Michael

        Hague, William

        Chalker, Rt Hon Mrs Lynda

        Hamilton, Neil (Tatton)

        Channon, Rt Hon Paul

        Hanley, Jeremy

        Chapman, Sydney

        Hannam, John

        Chope, Christopher

        Hargreaves, Ken (Hyndburn)

        Churchill, Mr

        Harris, David

        945

        Haselhurst, Alan

        Neubert, Michael

        Hawkins, Christopher

        Newton, Rt Hon Tony

        Hayhoe, Rt Hon Sir Barney

        Nicholls, Patrick

        Heathcoat-Amory, David

        Nicholson, David (Taunton)

        Heseltine, Rt Hon Michael

        Nicholson, Emma (Devon West)

        Hicks, Mrs Maureen (Wolv' NE)

        Norris, Steve

        Hicks, Robert (Cornwall SE)

        Onslow, Rt Hon Cranley

        Hill, James

        Oppenheim, Phillip

        Hogg, Hon Douglas (Gr'th'm)

        Page, Richard

        Howarth, G. (Cannock & B'wd)

        Paice, James

        Howe, Rt Hon Sir Geoffrey

        Parkinson, Rt Hon Cecil

        Howell, Ralph (North Norfolk)

        Patnick, Irvine

        Hughes, Robert G. (Harrow W)

        Patten, Rt Hon Chris (Bath)

        Hunt, Sir John (Ravensbourne)

        Patten, Rt Hon John

        Hunter, Andrew

        Pawsey, James

        Irvine, Michael

        Peacock, Mrs Elizabeth

        Irving, Sir Charles

        Porter, David (Waveney)

        Jack, Michael

        Raffan, Keith

        Jackson, Robert

        Raison, Rt Hon Timothy

        Janman, Tim

        Redwood, John

        Jessel, Toby

        Renton, Rt Hon Tim

        Johnson Smith, Sir Geoffrey

        Rhodes James, Robert

        Jones, Robert B (Herts W)

        Riddick, Graham

        Kellett-Bowman, Dame Elaine

        Ridley, Rt Hon Nicholas

        Key, Robert

        Ridsdale, Sir Julian

        Kilfedder, James

        Rifkind, Rt Hon Malcolm

        King, Roger (B'ham N'thfield)

        Roberts, Wyn (Conwy)

        Kirkhope, Timothy

        Rost, Peter

        Knapman, Roger

        Rowe, Andrew

        Knight, Greg (Derby North)

        Ryder, Richard

        Knight, Dame Jill (Edgbaston)

        Sainsbury, Hon Tim

        Knowles, Michael

        Scott, Rt Hon Nicholas

        Knox, David

        Shaw, David (Dover)

        Lamont, Rt Hon Norman

        Shaw, Sir Giles (Pudsey)

        Lang, Ian

        Shelton, Sir William

        Latham, Michael

        Shephard, Mrs G. (Norfolk SW)

        Lee, John (Pendle)

        Skeet, Sir Trevor

        Leigh, Edward (Gainsbor'gh)

        Smith, Tim (Beaconsfield)

        Lennox-Boyd, Hon Mark

        Speller, Tony

        Lightbown, David

        Spicer, Sir Jim (Dorset W)

        Lilley, Peter

        Spicer, Michael (S Worcs)

        Lloyd, Sir Ian (Havant)

        Stanbrook, Ivor

        Lloyd, Peter (Fareham)

        Stanley, Rt Hon Sir John

        Lord, Michael

        Steen, Anthony

        Luce, Rt Hon Richard

        Stern, Michael

        Lyell, Rt Hon Sir Nicholas

        Stevens, Lewis

        McCrindle, Robert

        Stewart, Allan (Eastwood)

        Macfarlane, Sir Neil

        Stewart, Andy (Sherwood)

        MacGregor, Rt Hon John

        Stewart, Rt Hon Ian (Herts N)

        MacKay, Andrew (E Berkshire)

        Stradling Thomas, Sir John

        Maclean, David

        Sumberg, David

        McLoughlin, Patrick

        Taylor, Ian (Esher)

        Madel, David

        Taylor, John M (Solihull)

        Major, Rt Hon John

        Taylor, Teddy (S'end E)

        Malins, Humfrey

        Temple-Morris, Peter

        Mans, Keith

        Thompson, D. (Calder Valley)

        Maples, John

        Thompson, Patrick (Norwich N)

        Marshall, Michael (Arundel)

        Thorne, Neil

        Martin, David (Portsmouth S)

        Thornton, Malcolm

        Mates, Michael

        Thurnham, Peter

        Maude, Hon Francis

        Townend, John (Bridlington)

        Mawhinney, Dr Brian

        Townsend, Cyril D. (B'heath)

        Mayhew, Rt Hon Sir Patrick

        Twinn, Dr Ian

        Mellor, David

        Waddington, Rt Hon David

        Meyer, Sir Anthony

        Waldegrave, Rt Hon William

        Miller, Sir Hal

        Walden, George

        Mills, Iain

        Walker, Bill (T'side North)

        Miscampbell, Norman

        Waller, Gary

        Mitchell, Andrew (Gedling)

        Wardle, Charles (Bexhill)

        Moate, Roger

        Watts, John

        Monro, Sir Hector

        Whitney, Ray

        Montgomery, Sir Fergus

        Widdecombe, Ann

        Morris, M (N'hampton S)

        Wiggin, Jerry

        Morrison, Sir Charles

        Wilshire, David

        Moss, Malcolm

        Winterton, Mrs Ann

        Moynihan, Hon Colin

        Wolfson, Mark

        Mudd, David

        Wood, Timothy

        946

        Woodcock, Dr. Mike

        Tellers for the Noes:

        Yeo, Tim

        Mr. Tom Sackville and

        Younger, Rt Hon George

        Mr. Michael Fallon.

        Question accordingly negatived.
        Amendment proposed: No. 18, in page 12, line 37, at end insert—
        '(3) This section shall operate to relieve the taxable benefit from basic rate tax only. The benefit is still to be charged at the excess of higher rate over basic rate tax.'.—[Mr. Beith.]
        Question put, That the amendment be made:—
        The Committee divided: Ayes 89, Noes 236.

        Division No. 212]

        [7.31 pm

        AYES

        Allen, Graham

        Jones, Martyn (Clwyd S W)

        Alton, David

        Kennedy, Charles

        Archer, Rt Hon Peter

        Kinnock, Rt Hon Neil

        Banks, Tony (Newham NW)

        Kirkwood, Archy

        Barnes, Harry (Derbyshire NE)

        Leighton, Ron

        Barnes, Mrs Rosie (Greenwich)

        Lewis, Terry

        Battle, John

        Livsey, Richard

        Beckett, Margaret

        Lloyd, Tony (Stretford)

        Beith, A. J.

        Loyden, Eddie

        Bermingham, Gerald

        McFall, John

        Boateng, Paul

        Maclennan, Robert

        Boyes, Roland

        Madden, Max

        Bradley, Keith

        Martlew, Eric

        Brown, Ron (Edinburgh Leith)

        Maxton, John

        Bruce, Malcolm (Gordon)

        Meale, Alan

        Callaghan, Jim

        Molyneaux, Rt Hon James

        Campbell, Menzies (Fife NE)

        Moonie, Dr Lewis

        Campbell-Savours, D. N.

        Mullin, Chris

        Carlile, Alex (Mont'g)

        Murphy, Paul

        Cartwright, John

        Parry, Robert

        Clarke, Tom (Monklands W)

        Patchett, Terry

        Clay, Bob

        Pike, Peter L.

        Clelland, David

        Powell, Ray (Ogmore)

        Clwyd, Mrs Ann

        Radice, Giles

        Cook, Frank (Stockton N)

        Robertson, George

        Cryer, Bob

        Ruddock, Joan

        Cunliffe, Lawrence

        Skinner, Dennis

        Dalyell, Tam

        Smith, Andrew (Oxford E)

        Dixon, Don

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

        Eadie, Alexander

        Smith, J. P. (Vale of Glam)

        Eastham, Ken

        Spearing, Nigel

        Evans, John (St Helens N)

        Steel, Rt Hon Sir David

        Ewing, Harry (Falkirk E)

        Strang, Gavin

        Fearn, Ronald

        Taylor, Mrs Ann (Dewsbury)

        Fisher, Mark

        Turner, Dennis

        Foster, Derek

        Warden, Gareth (Gower)

        Foulkes, George

        Wareing, Robert N.

        Garrett, Ted (Wallsend)

        Welsh, Andrew (Angus E)

        Golding, Mrs Llin

        Wigley, Dafydd

        Grocott, Bruce

        Williams, Alan W. (Carm'then)

        Haynes, Frank

        Winnick, David

        Home Robertson, John

        Young, David (Bolton SE)

        Hood, Jimmy

        Howells, Dr. Kim (Pontypridd)

        Tellers for the Ayes:

        Hughes, John (Coventry NE)

        Mr. James Wallace and

        Johnston, Sir Russell

        Mr. Matthew Taylor.

        Jones, Barry (Alyn & Deeside)

        NOES

        Adley, Robert

        Batiste, Spencer

        Aitken, Jonathan

        Beaumont-Dark, Anthony

        Alison, Rt Hon Michael

        Bellingham, Henry

        Amery, Rt Hon Julian

        Bendall, Vivian

        Amess, David

        Bennett, Nicholas (Pembroke)

        Amos, Alan

        Benyon, W.

        Arbuthnot, James

        Bevan, David Gilroy

        Arnold, Jacques (Gravesham)

        Biffen, Rt Hon John

        Arnold, Tom (Hazel Grove)

        Blaker, Rt Hon Sir Peter

        Atkins, Robert

        Body, Sir Richard

        Atkinson, David

        Boscawen, Hon Robert

        Baker, Rt Hon K. (Mole Valley)

        Boswell, Tim

        Baker, Nicholas (Dorset N)

        Bottomley, Peter

        Baldry, Tony

        Bottomley, Mrs Virginia

        947

        Bowis, John

        Hunter, Andrew

        Braine, Rt Hon Sir Bernard

        Irvine, Michael

        Brandon-Bravo, Martin

        Irving, Sir Charles

        Brazier, Julian

        Jack, Michael

        Bright, Graham

        Jackson, Robert

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

        Janman, Tim

        Bruce, Ian (Dorset South)

        Jessel, Toby

        Burns, Simon

        Johnson Smith, Sir Geoffrey

        Burt, Alistair

        Kellett-Bowman, Dame Elaine

        Butcher, John

        Kilfedder, James

        Butler, Chris

        King, Roger (B'ham N'thfield)

        Carlisle, John, (Luton N)

        Kirkhope, Timothy

        Carlisle, Kenneth (Lincoln)

        Knapman, Roger

        Carrington, Matthew

        Knowles, Michael

        Carttiss, Michael

        Knox, David

        Chalker, Rt Hon Mrs Lynda

        Lamont, Rt Hon Norman

        Channon, Rt Hon Paul

        Lee, John (Pendle)

        Chope, Christopher

        Leigh, Edward (Gainsbor'gh)

        Churchill, Mr

        Lennox-Boyd, Hon Mark

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

        Lilley, Peter

        Clark, Dr Michael (Rochford)

        Lloyd, Peter (Fareham)

        Clark, Sir W. (Croydon S)

        Lord, Michael

        Clarke, Rt Hon K. (Rushcliffe)

        Luce, Rt Hon Richard

        Conway, Derek

        Lyell, Rt Hon Sir Nicholas

        Coombs, Anthony (Wyre F'rest)

        McCrindle, Robert

        Coombs, Simon (Swindon)

        Macfarlane, Sir Neil

        Couchman, James

        MacGregor, Rt Hon John

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

        MacKay, Andrew (E Berkshire)

        Davis, David (Boothferry)

        Maclean, David

        Day, Stephen

        McLoughlin, Patrick

        Dicks, Terry

        Madel, David

        Douglas-Hamilton, Lord James

        Major, Rt Hon John

        Dover, Den

        Mans, Keith

        Dunn, Bob

        Maples, John

        Durant, Tony

        Marshall, Michael (Arundel)

        Dykes, Hugh

        Martin, David (Portsmouth S)

        Evans, David (Welwyn Hatf'd)

        Mates, Michael

        Evennett, David

        Maude, Hon Francis

        Fairbairn, Sir Nicholas

        Mawhinney, Dr Brian

        Fallon, Michael

        Mayhew, Rt Hon Sir Patrick

        Favell, Tony

        Mellor, David

        Fishburn, John Dudley

        Meyer, Sir Anthony

        Forman, Nigel

        Miller, Sir Hal

        Forsyth, Michael (Stirling)

        Mills, Iain

        Fox, Sir Marcus

        Miscampbell, Norman

        Franks, Cecil

        Mitchell, Andrew (Gedling)

        Freeman, Roger

        Moate, Roger

        French, Douglas

        Monro, Sir Hector

        Fry, Peter

        Montgomery, Sir Fergus

        Gardiner, George

        Morris, M (N'hampton S)

        Garel-Jones, Tristan

        Morrison, Sir Charles

        Gill, Christopher

        Moss, Malcolm

        Glyn, Dr Sir Alan

        Moynihan, Hon Colin

        Goodhart, Sir Philip

        Mudd, David

        Goodlad, Alastair

        Neubert, Michael

        Goodson-Wickes, Dr Charles

        Newton, Rt Hon Tony

        Gorman, Mrs Teresa

        Nicholson, David (Taunton)

        Gow, Ian

        Nicholson, Emma (Devon West)

        Grant, Sir Anthony (CambsSW)

        Norris, Steve

        Greenway, Harry (Ealing N)

        Onslow, Rt Hon Cranley

        Greenway, John (Ryedale)

        Oppenheim, Phillip

        Griffiths, Peter (Portsmouth N)

        Page, Richard

        Grylls, Michael

        Paice, James

        Hague, William

        Parkinson, Rt Hon Cecil

        Hamilton, Neil (Tatton)

        Patnick, Irvine

        Hanley, Jeremy

        Patten, Rt Hon Chris (Bath)

        Hannam, John

        Patten, Rt Hon John

        Hargreaves, Ken (Hyndburn)

        Pawsey, James

        Harris, David

        Peacock, Mrs Elizabeth

        Haselhurst, Alan

        Porter, David (Waveney)

        Hayhoe, Rt Hon Sir Barney

        Raffan, Keith

        Heathcoat-Amory, David

        Raison, Rt Hon Timothy

        Heseltine, Rt Hon Michael

        Redwood, John

        Hicks, Mrs Maureen (Wolv' NE)

        Renton, Rt Hon Tim

        Hicks, Robert (Cornwall SE)

        Rhodes James, Robert

        Hill, James

        Riddick, Graham

        Hogg, Hon Douglas (Gr'th'm)

        Ridley, Rt Hon Nicholas

        Howarth, G. (Cannock & B'wd)

        Rifkind, Rt Hon Malcolm

        Howe, Rt Hon Sir Geoffrey

        Roberts, Wyn (Conwy)

        Hughes, Robert G. (Harrow W)

        Rost, Peter

        948

        Rowe, Andrew

        Thornton, Malcolm

        Ryder, Richard

        Thurnham, Peter

        Sackville, Hon Tom

        Townend, John (Bridlington)

        Sainsbury, Hon Tim

        Twinn, Dr Ian

        Scott, Rt Hon Nicholas

        Waddington, Rt Hon David

        Shaw, David (Dover)

        Waldegrave, Rt Hon William

        Shaw, Sir Giles (Pudsey)

        Walden, George

        Shelton, Sir William

        Walker, Bill (T'side North)

        Shephard, Mrs G. (Norfolk SW)

        Waller, Gary

        Smith, Tim (Beaconsfield)

        Wardle, Charles (Bexhill)

        Speller, Tony

        Watts, John

        Spicer, Sir Jim (Dorset W)

        Wells, Bowen

        Spicer, Michael (S Worcs)

        Whitney, Ray

        Stanley, Rt Hon Sir John

        Widdecombe, Ann

        Steen, Anthony

        Wilkinson, John

        Stern, Michael

        Wilshire, David

        Stewart, Allan (Eastwood)

        Winterton, Mrs Ann

        Stewart, Andy (Sherwood)

        Wolfson, Mark

        Stewart, Rt Hon Ian (Herts N)

        Wood, Timothy

        Stradling Thomas, Sir John

        Woodcock, Dr. Mike

        Taylor, Ian (Esher)

        Yeo, Tim

        Taylor, John M (Solihull)

        Younger, Rt Hon George

        Taylor, Teddy (S'end E)

        Temple-Morris, Peter

        Tellers for the Noes:

        Thompson, Patrick (Norwich N)

        Mr. David Lightbown and Mr. Sydney Chapman.

        Thorne, Neil

        Question accordingly negatived.
        Clause 20 ordered to stand part of the Bill.
        Mr. Boateng: On a point of order, Mr. Walker. Hon. Members will be aware that late this afternoon there occurred in Wembley, in my constituency, a cowardly and murderous attack on an army installation in a quiet suburban street. One person was killed and at least eight were seriously injured. Wembley town centre was shaken by the blast.
        As this is the second such attack in London in a very short period, there would clearly seem to be a pattern to these events and it appears to be the start of a major terrorist campaign. In view of that, would it not be in order for a member of Her Majesty's Government to come to the House and make a statement about the steps that are to be taken to counter that campaign?
        Clearly, difficulties are always involved in such incidents. Those responsible for these murderous attacks are likely to strike at random. They have no care for the civilian population and do not mind the hardship, suffering and agony that they cause to communities. They are beneath contempt. But some action has to be taken to alert the civilian population and such installations to the danger that exists. We must step up our vigilance and our support for the police and emergency services, which must have the resources at their disposal to deal with this menace, and have them now. I hope that a Minister will come to the Despatch Box and make just such a statement because one is urgently needed.
        The Minister of State for Defence Procurement (Mr. Alan Clark): Further to that point of order, Mr. Walker. I express my appreciation of the exceedingly wise and temperate manner in which the hon. Member for Brent, South (Mr. Boateng) made his points. As for a statement by one of my hon. Friends or myself, that matter is under urgent and immediate consideration.

    Clause 23

      TAX-EXEMPT SPECIAL SAVINGS ACCOUNTS
      Mr. John McFall: I beg to move amendment No. 31, in page 14, line 26, after 'society', insert
      'or an industrial and provident society'.
      7.45 pm
      The Chairman: With this it will be convenient to take amendment No. 32, in page 14, line 26, after 'society', insert
      'or an industrial and provident society covered by a loan deposit protection scheme approved by Her Majesty's Treasury'.
      Mr. McFall: I am speaking on behalf of the co-operative movement, which has been largely ignored by the Government in the Bill. We welcome the inclusion of building societies in the TESSA—tax-exempt special savings account—scheme because they are part of the mutual sector. Co-operative societies have a long tradition of being savings institutions in addition to their role as retailers. We should welcome the inclusion of cooperatives within the scheme.
      Since 1844, co-ops have encouraged their members to follow a policy of self-help and thrift, in line with the present Government's view on wider share ownership. The co-operative movement was built on the policy of savings. The surpluses arising on trading were allocated to members pro rata to their trading with the co-operatives. Those amounts were credited to the members' share accounts and formed the working capital of the co-ops, on which a limited rate of interest was payable.
      The membership of co-ops in the United Kingdom today is about 8 million and the retail turnover is slightly less than £6 billion. That shows that it is still a fine example of self-help and a force in the retail market.
      Up to 1984 it was accepted that co-ops were different from other organisations because they were liable to corporation tax at a special 40 per cent. rate, when other companies paid 52 per cent. on taxable profits. It was then decided to make changes in the structure of taxation: relief was withdrawn for the increases in trading stock, and first-year allowances and the special rates for co-ops were withdrawn. To compensate for those withdrawals, the rate of corporation tax was reduced to 35 per cent. The co-operative movement and I felt that that change benefited companies more than co-operatives.
      Along with those changes, tax incentives were introduced to assist various categories of taxpayer, for example the business expansion scheme, profit sharing and personal equity plans. In all those cases, co-ops could not take advantage of any of the tax incentives. All those factors have disadvantaged co-ops in relation to their competitors. Therefore, if the proposed TESSA savings scheme is introduced, and co-ops are once again excluded, there is a considerable danger that that will result in money being withdrawn from co-operatives and invested in TESSAs with banks and building societies. That would undoubtedly place co-ops in considerable difficulties.
      Therefore, we request that co-ops should have the same opportunities to participate in the operation of the new TESSAs as banks and building societies. We emphasise
      950
      that we are asking not for special treatment but merely for parity of treatment with those concerns, which we see as competitors in obtaining capital.
      Amendments Nos. 31 and 32 are intended as alternatives. The first would bring all industrial and provident societies, including co-operatives and friendly societies, into the net. If the Government feel that that is too wide, the second amendment would bring in societies whose depositors are already protected under a scheme drawn up under the Banking Act 1987. Those schemes give our savers protection comparable with that enjoyed by depositors with banks and building societies.
      We believe that either amendment would assist the Chancellor's objective of encouraging savings, because they would widen the social range of people taking advantage of the new concessions on TESSAs. I commend the amendments to the House.
      Mr. Lilley: One of the key features of TESSA is that we have taken great care to keep the rules and regulations and general red tape to an absolute minimum. We can do that for a scheme that is confined to banks and building societies because for each of those types of institution there is already a proper statutory framework in the Banking Act 1987 or Building Societies Act 1986 providing for authorisation, regulation and investor protection, so we did not need to add that to clause 23.
      Once we tried, however, to go wider than the two main groups of deposit takers, it would be necessary to complicate the Finance Bill provisions to take account of the different circumstances of the bodies concerned. I should be very reluctant to do that, and in the absence of a proper regulatory framework, the Inland Revenue would need to get more involved in checking that institutions were operating the new TESSA scheme properly.
      The two amendments would appear to bring in all industrial and provident societies, many of which do not typically take deposits at all. It is true that it would be theoretically possible to limit the scope of the clause to co-ops, which I imagine is the intention of the hon. Member for Dumbarton (Mr. McFall).
      It is true that co-ops have historically undertaken small-scale deposit taking. The hon. Members who sponsored the amendments were obviously well aware of that, and I recognise that the co-ops' depositors are covered by an investor protection scheme, as the hon. Gentleman mentioned. But the point is that co-ops benefit from total exemption from the Banking Act and are not subject to the detailed authorisation or prudential supervision applied to banks and building societies. I do not therefore think it appropriate that they should be allowed to offer TESSAs.
      Moreover, co-ops' exemptions under the Banking Act exist largely because their deposit taking is on a small scale and incidental to their main trading activity. If societies wanted to expand their deposit-taking activities significantly or to enter the mainstream of retail banking with products such as TESSAs, those exemptions would no longer be appropriate.
      Co-ops also have a certain tax advantage; they can pay interest gross on their deposits to taxpayers and non-taxpayers alike. So they do not get a bad deal overall under the present arrangements.
      The co-operative movement is not excluded from TESSA altogether, since I understand that the Co-op bank is authorised under the Banking Act. I must advise the

      951
      House not to accept the amendments, which go further than is necessary or desirable and which complicate unduly what is now a very simple scheme.
      Mr. McFall: The Minister correctly said that the Co-op bank is included, but there are many other aspects to the co-operative movement and it was to highlight them that I moved the amendment. I have no intention of pressing it to a Division but I should like the Minister to consider incorporating co-ops in future. As I said earlier, we have a membership of 8 million and a turnover of £6 billion, a not inconsiderable element in the economy. Perhaps if the Minister cannot give me an answer today, he will do so at some time in the future.
      Mr. Lilley: I shall certainly do that, and I welcome the co-operative spirit in which the hon. Gentleman moved the amendment. We recognise the valuable contribution that the co-operative movement makes, both to its members and to the economy, and I shall look into the matter in that spirit.
      Mr. Harry Ewing: I have not previously attended the debates on the Finance Bill, but the Minister's agreement to consider what my hon. Friend the Member for Dumbarton (Mr. McFall) has proposed was helpful. I look forward to the outcome of his consideration.
      To help the Minister's consideration, may I say a word or two as the former chairman of a co-operative society, the former chairman of the Scottish co-operative wages board and salaries committee and as a member of the national wages board? In my younger days I was deeply involved in the co-operative movement, so I am well aware of the integral part that that movement has played in various localities, especially in the industrial areas of Great Britain.
      It is certainly true, as my hon. Friend would concede, that much of the co-operative movement has disappeared from industrial Britain for the very reasons that my hon. Friend adduced—the co-operative movement, through no fault of Governments, has gradually been placed at a disadvantage vis-a-vis its competitors. If the movement were placed at an even greater disadvantage, that could be serious.
      The problem is that the capital that shareholders invest in the movement is not in shares in the sense in which they are quoted on the stock exchange; nor are they shares in the sense that they must be sold to someone else before a person can redeem his investment. This is a banking system from which people can withdraw share capital at seven days' notice. When more attractive avenues for savings open up, there can be a run on share capital, and co-operative societies throughout the country face severe difficulties when such runs occur because they can have a grave impact on a society's trading position.
      I am glad that my hon. Friend the Member for Dumbarton has taken this opportunity to speak about his amendments, and he is right not to push them to the vote. He has given the House a chance to hear about the continuing importance of the co-operative movement in many places throughout the country. Indeed, I notice that co-operative organisations are springing up again in deprived areas where groups are getting together to form them. In many ways that takes us back to the days of the
      952
      Rochdale pioneers and even to the founder of the co-operative movement himself—Owen. History has come full circle, so I am glad that the Minister is keeping an open mind. I hope that he will consider the amendments as seriously as he spoke about them.
      Amendment negatived.
      Question proposed, That the clause stand part of the Bill.
      Mr. John Battle: This was a Budget of small measures, and TESSAs are another small measure. One of the Government's claimed highlights in an otherwise lacklustre Bill is the introduction of the tax-exempt special savings accounts, now running under the acronym TESSAs. They constitute the Government's attempt to make savings more attractive.
      This seems to me a backhanded attempt to acknowledge that a great economic error was made in the 1988 Budget—the tax cuts of the right hon. Member for Blaby (Mr. Lawson), which were much heralded at the time but which have since been shown to have fuelled a massive increase in consumer spending and to have generated a spending boom. By handing out deep tax cuts, the Government merely fuelled a massive trade deficit.
      The tax-cutting Budget of 1988 also resulted in a massive redistribution of wealth from the poorest to the richest. In the 11 years during which the Government have been in office, £6 ·7 billion has been taken from the bottom 50 per cent. of the population and £5 ·6 billion of that has gone to the richest 10 per cent. Of that sum, £4 ·8 billion has gone to the top 5 per cent.
      8 pm
      We encourage savings, but we are entitled to ask whether that will encourage real savings or whether it will be another tax break for those who already have savings. TESSAs were welcomed by the Secretary of State for Wales and there was a tribute to that welcome in The Times on 21 March:
      "A wry smile flashed across the relaxed face of Peter Walker, out-going Secretary of State for Wales, when John Major disclosed details of the new Tax-Exempt Special Savings Account—which he promptly abbreviated to `Tessa'. For that is the name of Walker's wife. After the speech Walker admitted he had indeed been smiling for that reason. 'I was at the Cabinet meeting this morning when John Major told us the news and I told him that I was very grateful that, for my last Budget, there was something in it dedicated to my wife'".
      Perhaps the right hon. Gentleman and his wife are thinking of taking up a TESSA. They are in a good position to do so because TESSAs will not reach down to the small savers but will be geared to people in the middle and higher income brackets.
      TESSAs were welcomed with caution by the City. There was not an immediate response, nor the view that they would result in an increase in savings throughout the population. A recent report from the Select Committee on the Treasury and Civil Service said:
      "We would not necessarily expect to see a very sharp increase in aggregate in savings in the short term as a result of the Budget measures."
      A Mr. Olivier, of Hambros unit trusts business, was reported in the Financial Times as saying:
      "TESSAs are more likely to reshuffle old money about."
      If that is the case there may well be no real encouragement for new savings.
      The key question is, who will be expected to save in the current economic climate? The Bill gives some tax

      953
      concessions to companies and to the City but does nothing to help the poorest to meet higher costs in rents, mortgages and the poll tax. It does nothing for 7 million people on low pay. The Treasury figures show that, although 85 per cent. of couples who earn more than £35,000 a year will benefit, only 25 per cent. of those who earn between £5,000 and £10,000 will gain from the Budget.
      The number of people caught in the poverty trap of taxes and means-tested benefits is estimated to increase to 410,000, compared with 290,000 in November 1985. Since the poll tax was introduced at the beginning of last month, a family on half average earnings will be about £1·80 a week worse off as a result of the Bill. That also results from the holding back of an increase in child benefit and the introduction of the poll tax. Many families will pay an extra 91p a week in spending taxes.
      Let us look at those who would not benefit from taking up a TESSA because they have no liability to tax anyway. They include people on benefit or income support, the unemployed, pensioners without substantial occupational pensions, and single people earning less than £6,500 who are unlikely to have much spare cash to move into TESSAs. Couples earning less than £13,000 are also unlikely to have much spare cash to spend on them.
      In the case of married couples where the wife does not work and there is not much in the way of savings, the interest income is already covered by the wife's tax allowance, so TESSAs will not benefit such couples. The same applies to couples where the wife is earning less than £3,000 and there are no large savings. Anyone with a mortgage of more than £30,000 is unlikely to take up a TESSA because it would be better for him to pay off his mortgage.
      The categories of people that I have mentioned make up the bulk of my constituents, and I am sure that they fit the constituents of many other hon. Members. The average wage is £269·50 a week, but on the whole people in my constituency do not earn as much as that. Although west Yorkshire is a low-wage area, it is at the top of the savings league; the people there save 14 ·8 per cent. of their income. They are good savers, although they have very low incomes, hut TESSAs will not help them. The real beneficiaries will be married couples who already have investment income of £3,300 or more on current interest rates and who have at least £25,000 in the bank or about £60,000 in shares. Couples where the wife earns over £3,300 but who do not have a mortgage of more than £30,000 will also benefit, as will single people earning more than £6,500.
      There are two essential requirements for a TESSA to be of any advantage to a family. The first is that that family has the resources to be able to put money into a TESSA. The second is that there would otherwise have been a tax liability on the interest receivable. If the first requirement is not satisfied, in practice it is not possible to use a TESSA at all or no tax advantage can be obtained. If the second requirement is not satisfied, a TESSA can be operated, but it obviously offers the family no tax advantage.
      Before we can make a judgment about whether there are adequate resources to put money into TESSAs, we must bear in mind the requirement that the money cannot be withdrawn before the end of the five-year period. That means that only people who are able to save as a matter of course each year out of income are likely to be able to take up TESSAs.
      954
      As I have said, non-taxpayers, those on benefit and pensioners who do not have a substantial occupational pensions will not be able to benefit, nor will those whose incomes are largely taken up trying to survive by day-to-day expenditure. That category could be said to include single people earning less than £6,500, virtually all single-parent families and married couples earning less than £13,000 a year. They are all unlikely to have any disposable income for TESSAs, especially after mortgage rises are taken into account. We challenge the Government's notion that TESSAs are a great gift and an incentive to savers. It will be seen that the advantages of TESSAs are for high-income families and that that advantage will be magnified because both husband and wife can take up a TESSA.
      Despite the Government's warnings about the inflationary wage spiral, top company directors continue to award themselves rises far in excess of inflation. Recent increases in directors' salaries have been as high as 171 per cent., and average rises are 40 per cent. I am not talking just about boardroom directors. A recent feature in the Financial Times showed that Britain's business managers —those earning between £30,000 and £200,000 a year—are on schedule for pay increases of between 12 and 14 per cent. Perhaps it is to precisely such people that TESSAs are directed. It would have been better not to directly redistribute income to them in the first place in the tax-cutting Budget of 1988.
      It remains to be seen whether TESSAs will result in a new build-up of savings rather than switches from other accounts or perhaps from shares. Will they attract people who would have saved in the medium term anyway? It could be argued that, at a time of a high interest rates, no one with a mortgage is likely to save money on a regular and long-term basis when it could be used to repay that mortgage. Have the Government considered that argument?
      One could push the logic of the argument and say that TESSAs will encourage borrowing. If the Government have not considered it they might like to take account of the way that TESSAs will impact on working out repayments of mortgage interest. In practice, they may have the opposite effect to encouraging savings.
      This is a small measure, and we believe that TESSAs will have a marginal effect—at best, increasing the personal sector savings ratio. We question the usefulness of a scheme which, in the current economic climate, merely rewards existing savers for their existing savings. There is no evidence that TESSAs will encourage those on low incomes to save. A much better alternative to TESSAs would be positive public support for bodies such as credit unions, which provide community-based means of encouraging even those on the lowest incomes to save and share. Even such bodies found favour and encouragement in The Economist on 31 March. I shall be pressing my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) to do all that he can for credit unions when he is appointed Chancellor of the Exchequer, as he will be soon.
      Mr. Lilley: The hon. Member for Leeds, West (Mr. Battle) described TESSA as a tiny measure. I think that it is an important measure both for what it achieves and for the signals that it generates in the economy as a whole. It is one of the most imaginative features of the Budget. He suggested that the name "tax-exempt special savings

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      account" was a deliberate attempt to ingratiate ourselves with my right hon. Friend the Member for Worcester (Mr. Walker). There may be some truth in that, but, if so, it was because I could not find a name for the scheme that would result in the acronym NORMA and that meant the same thing.
      This is a straightforward and simple instrument. It took a lot of paring down to make it as simple as it is. We have deliberately kept the rules and restrictions to a bare minimum. That is desirable in any case, but it is especially important if the scheme is to attract ordinary taxpayers. We do not want a scheme which appeals only to sophisticated financial whiz kids. TESSA is for all taxpayers. I am pleased to note that it has been welcomed from both sides of the House and outside.
      Contrary to what the hon. Member for Leeds, West said, TESSA is aimed at the ordinary person and, because of that, we based the scheme on the most simple and straightforward form of saving—putting money into a high street bank or building society. We are not saying that this form of saving is better than any other. My right hon. Friend the Chancellor took the opportunity in the Budget to encourage other forms of saving, including significant increases in the amount that could be saved in personal equity plans. I hope that many of those who are encouraged to begin saving in a TESSA will go on to discover the attractions of share ownership. If we are to influence people's decisions at the margins between saving and spending, rather than just affecting the choice between different ways of saving, it is absolutely right to target the most simple and familiar form of saving.
      TESSAs can be started from 1 January 1991. Already there are signs that the major banks and building societies will offer TESSAs. We are delighted that they are putting their marketing efforts behind this form of savings. In some cases, institutions may offer several variants, aimed at the people in different circumstances. I welcome this because we want TESSA to reach as many people as possible. It is clear that she will be a great success.
      The hon. Member for Leeds, West said that TESSAs will not benefit those in low income groups because so many of them are not paying tax. We have raised tax relief by 35 per cent. in real terms, and inevitably, if a larger chunk of income is relieved from tax, more people are paying less tax. They should not benefit twice from the absence of tax—through not paying on low incomes, and with a relief such as TESSA. That is inevitable, but it is more desirable that allowances are set at this level rather than at the level that we inherited.
      The hon. Member for Leeds, West claimed that TESSA is aimed at, and will benefit, the rich. There is a £9,000 limit on the amount that can be paid into a TESSA over five years. During the Budget debate, the Leader of the Opposition said of the £16,000 limit on savings above which people could not benefit from community charge relief, that it was not "a prince's ransom". Therefore, £9,000 is even less of a prince's ransom. It is a respectable, modest amount and many people will be able to aspire to contribute that over five years.
      8.15 pm
      The hon. Member for Leeds, West quoted a City document which said that TESSA would simply result in the reshuffling of old money. All money is either in bank
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      notes—in the minority of cases—or in bank and building society deposits. TESSA will encourage people to shift from highly liquid deposits to deposits for which there is a growing incentive not to spend. There is a distinction between having money in a deposit that is spent frequently and therefore circulates freely about the economy and having money in a deposit that is saved. The latter is the one that we are trying to encourage. Once people have put their money into a TESSA, they will have put it into something like a mousetrap. They will lose nothing by doing so, but should they then spend the money they will have to forgo the tax relief that has built up in the TESSA. There may be a reluctance to withdraw money from a TESSA, but there is not to withdraw from ordinary deposit accounts. That is an incentive to save and is thoroughly desirable.
      Ms. Diane Abbott: I apologise for not being here for the beginning of the Minister's speech.
      There is an argument over whether TESSA will involve only the reshuffling of money, or, as Conservative Members imply, result in an increase in the overall volume of saving. The Select Committee on the Treasury and Civil Service has addressed this question, and we questioned Treasury officials when we took evidence on the Budget. They said clearly that any claims that TESSA would increase the overall volume of savings were invalid. It will involve switching money not from ordinary deposit accounts or current accounts but from other forms of saving. The Committee could find no one to say that TESSA would either mean people switching money from a liquid state to a savings account or do anything to increase the overall level of saving.
      The claims by the Chancellor of the Exchequer that this is a Budget for saving were bogus and invalid. This is not just the common coin of political half-truths but a serious matter because under the Government the savings ratio has dropped sharply and one of our problems is lack of saving.
      Mr. Lilley: I will examine the evidence to which the hon. Lady refers, but I doubt whether her interpretation of it will be the same as mine. I am sure that my officials did not say that most contributions to TESSAs would come from some other source than deposits already in the banks and building societies. We do not know where it will come from, but undoubtedly a great deal of it will come from money already in the banking system. It will be rendered less liquid by being put into TESSAs.
      The hon. Member for Leeds, West said that this was a measure to redeem the tax cuts made in the 1988 Budget. That is not the case. We are trying, by the period of high interest rates through which it is necessary to go, to ensure that borrowing is discouraged and saving is encouraged, and to bring about a balance between the two. We welcome the fact that we now have much higher investment in the economy. Every pound of investment requires a pound of savings to finance it. We want a higher level of savings, so we want to encourage a climate in which savings are looked upon favourably. TESSA will contribute to the creation of a new climate, over and above the amount of money drawn into it, which could none the less be considerable. This is an important measure. It has

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      been widely welcomed in the City, by savers and by hon. Members on both sides of the Committee. I commend the clause to the Committee.
      Mr. Battle: The Financial Secretary to the Treasury seems to have narrowed the definition of "ordinary person-. He has not acknowledged that many people will be excluded from the scheme. For example, not everyone has a bank account. Surely we should encourage people throughout the income range to take up savings.
      It seems that the measure will not reach the many. It appears to be a residue of the trickle-down theory. It will not reach those on low pay. It will not involve the least well-off. I accept that the limit is £9,000, and that is why it is a small measure. It will be crucially undermined by the impact of interest rates on mortgages. Until 1980, the measure could have been useful for a low to middle-income family, but with the introduction of independent taxation for women, the majority of people in that band will not enjoy any tax advantages from TESSAs. It seems that TESSAs are most handy for middle and high-income, mortgage-free families and for single people. If they were not going out of fashion, it would seem to be a classic yuppie handout. That would seem to be so unless the impact of TESSAs can be widened to embrace the entire population.
      Mr. Ian Taylor: The hon. Gentleman is forgetting that there are many on modest incomes and with modest cash flows who strive to amass some capital. That is why many of my right hon. and hon. Friends were keen that the capital cut-off point for social benefits should be increased from £8,000 to £16,000. We welcomed that increase. We are talking of material sums for people on modest incomes. We want to give incentives to them, through the tax system, to save more. I think that TESSAs will have quite a considerable impact on those who are paying tax and earning an income, and at the lowest levels.
      Mr. Battle: I must disagree with the hon. Gentleman. We may find ourselves in dispute over the term "modest income". I have tried clearly to identify income bands in which people will not be able to take up TESSAs. As I have said, they will not be available to most of my constituents. I represent part of west Yorkshire, an area which has the lowest pay rates in the country. I must add that it has the highest saving rates.
      Mr Beith: And the Halifax building society.
      Mr. Battle: There is a savings tradition, and my right hon. and hon. Friends and I are not opposed in principle to saving. We are questioning whether TESSAs represent a wide-ranging measure. They might prove to be the result of a rather narrow measure. As a throw-away line, I suggest that they might prove to be Now Only the Rich Man's Answer. That would produce the sort of acronym for which the Minister was looking.
      Mr. Lilley: I shall not respond to the final part of the response of the hon. Member for Leeds, West (Mr. Battle). I merely say that I wish that I had thought of it myself.
      The hon. Gentleman argued that his constituents, or many of them, will not benefit from TESSAs. There are 34 million people with deposits in banks and building societies. Of that total, 14 million are not taxpayers and therefore will benefit from the abolition of composite rate tax. I am sure that he will welcome that. The other 20
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      million are taxpayers, and they will be able to benefit from establishing TESSAs if they so wish. I know that we have made considerable progress, but I do not think that we are yet a nation of 20 million yuppies.
      Mr. John Home Robertson: I am disappointed that the Financial Secretary to the Treasury has not responded to the remarks of my hon. Friend the Member for Leeds, West (Mr. Battle) about credit unions, with which I much agreed. Credit unions are a genuinely practical way in which people in deprived areas can help themselves. In a particularly deprived part of my constituency, people are trying to work together to establish a credit union. I appreciate that that is not strictly relevant to a debate about TESSAs, but the people that my hon. Friend and I are talking about would find it difficult, if not impossible, to take advantage of TESSAs. A credit union, however, is a way in which such people can help themselves and in turn help their own communities. I do not know whether the Minister has had an opportunity to consider the concept of credit unions on other occasions. I sincerely hope that the Government will look favourably on that sort of local initiative.
      Question put and agreed to.
      Clause 23 ordered to stand part of the Bill.

    Clause 25

      AUTHORISATION AND OTHER STATUTORY CONTROLS
      Mr. Beith: I beg to move amendment No. 44, in page 16, line 45, leave out
      'at the time the trust was established'
      and insert 'immediately after the disposal'.
      The Temporary Chairman (Mr. Michael Shersby): With this is will be convenient to discuss the following amendments: No. 45, in page 17, line 9, leave out 'subsection (4).'.
      No. 46, in page 17, line 37, leave out 'subsection (7).'
      Mr. Beith: It is no secret that my party has been committed to employee share ownership schemes since long before I was old enough to be a member of it. It has campaigned on the issue time and again over the years. It made progress during the Lib-Lab pact, during which new legislation was introduced on share ownership. I am pleased to say that that ownership is widening. My party continues the campaign, it is glad that the Government show a significant interest in employee share ownership plans and other forms of wider share ownership, and it will continue to urge them on, year by year, to do more.
      The Bill is helpful but my colleagues and I wish to suggest some ways in which employee share ownership schemes can be taken further. We believe that the concept is good in principle. It gives the employee a stake in the firm for which he works, a greater involvement in its affairs and an opportunity to share in its prosperity, not merely through the wages paid for work but through the direct fruit of the dividend on the company's profits. Wider share ownership often has a transforming effect in the workplace as more and more of a company's employees become committed by their share ownership, as well as by their work, to the success of the company. We therefore want to give this form of share ownership as much encouragement as possible.
      I hope that that feeling has spread widely, even into areas of the Labour and trade union movement which

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      were initially hostile to wider share ownership. In the old days, it seemed to them—it may still seem so to some of them—to be an unfortunate breaking down of the traditional distinctions between labour and capital. I am in favour of that, and that is why I am so committed to wider share ownership schemes.
      The amendments necessarily take us into a technical area. Under common law, a company can claim a tax deduction for the regular payments that it makes to an employee share ownership trust, provided that it can be shown that the payments are of revenue and not of capital. Whether the payments are revenue in nature is not always clear. Last year's Finance Bill, as it then was, created the qualifying employee share ownership trust. Payments made by a company to a qualifying trust could be guaranteed a tax deduction whether the payments were capital or revenue in nature. The relief provided by the relevant sections was so restrictive, however, that so far as I know the provisions have not been used. The efforts made by the Government in last year's Finance Bill therefore seem not to have borne fruit, unless the Minister has come across an example that I have not yet found.
      In practice, trusts continue to prefer the relative uncertainty of the common law provisions to which I have referred. There are two principal reasons for that. First, the structure of a qualifying trust means that it does not fall within the exemptions to the Financial Services Act 1988. The trustees must register and comply with the rules of an appropriate FSA self-regulatory organisation. That costs money and is a rather bureaucratic complication for trustees who are not really interested in providing an investment service. They are there to distribute shares to employees and to obtain funds from the company for that purpose, and having to go through the mechanism of the Financial Services Act 1988 is not something that they anticipated. Secondly, all the employees of a company must participate as beneficiaries of the trust on similar terms. That means that there can be no discrimination between employees. That, too, has proved to be a restriction.
      To make the qualifying trusts more popular, clauses 25 to 32 propose to give roll-over relief to gifts of shares made to a qualifying trust. Thus, a person selling shares to such a trust need not suffer capital gains tax on the sale, provided that the proceeds are reinvested in acquiring capital assets. That in itself is good but the existing restrictions and the additional restrictions in the Bill make it unlikely that the provision will make any contribution to the trusts taking off in a big way.
      We have suggested a series of amendments designed to relax some of the existing restrictions and to remove the restrictions in the Bill, some of which are contained in parts of the Bill that we shall discuss in Standing Committee. I hope that the Minister will accept our general objective, which is to try to make the provisions usable—indeed, attractive—so as to help to create further trusts. We do not want the creation of trusts to continue to rely mainly on common law provisions which existed before this legislation.
      8.30 pm
      Amendment No. 44 is intended to allow the trusts to be established in advance. That is especially necessary where a new shelf company is being used as a vehicle for a
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      management buy-out. Amendment No. 45 would delete a subsection which requires at least 10 per cent. of the ordinary share capital of a company to be in the hands of the trust. In a management buy-out, 60 to 80 per cent. of the equity is provided by institutions, with 20 to 40 per cent. being in the hands of managers and employees. In that context, a 10 per cent. threshold is unrealistically high. I do not understand why it is necessary, and I hope that the Minister will reconsider.
      Amendment No. 46 would remove another subsection which denies relief to a vendor if the trustees of the trust make an offside transaction. That is unfair, because the vendor will have no control over the actions of the trustees. There are three areas where there are yet more restrictions which could lead to the continued inappropriateness, in the minds of potential trustees, of the whole Finance Act mechanism in launching employee share ownership plans. I shall discuss that further in Standing Committee.
      Our intention is to make the Finance Bill provisions helpful and suitable in encouraging the creation of further employee share ownership plans. I hope that the Minister realises that something must be done if that objective is to be achieved.
      Mr. Lilley: To the shock, horror, and consternation of the Committee, I accept amendment No. 44. The matter could be dealt with in either of the two suggested ways, but the way suggested by the hon. Gentleman has, on balance, at least as many advantages as the way it is dealt with in the Bill. As I am in a good mood, I accept the amendment and urge my hon. Friends to support it in the unlikely event of a Division.
      On amendment No. 45, given the valuable nature of the new capital gains relief, there are certain conditions which the Bill requires to be met if it is to be obtained. One of those is that within a certain period the ESOP must have a 10 per cent. stake in the company to which the sale relates. Unlike some other employee share arrangements recognised in the tax system, ESOPs will often be concerned with large stakes in companies.
      The new relief proposed in the Bill is very valuable and it is right that it should be confined to cases where employees are being given a significant stake in the company. The level of what should count as significant is inevitably a matter of judgment. We think that 10 per cent. strikes the right balance, representing as it does a stake large enough to ensure the employees a degree of involvement in the company's affairs, while not being so large as to make the new relief unattractive. It was also the lowest figure suggested in representations made by the main ESOP proponents.
      To remove the test altogether would mean that the new relief would be available if only a tiny proportion of the company's shares were to pass to the ESOP trust. That would mean that relief could be claimed where the employees were being given no effective stake in the company, and the proprietors maintained total effective control. We do not think that giving relief in such circumstances could be justified, and I urge the Committee to reject the amendment.
      Clause 25(7) denies the capital gains relief for share disposals to ESOPs if the ESOP breaks the conditions for qualifying ESOPs in the period running from the year in which the share disposal takes place to the year in which replacement assets are acquired. Amendment No. 46 would allow relief to be claimed in those circumstances.

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      The main effect of the amendment would be extra compliance and administrative work. In the absence of clause 25(7), relief would be allowed and then clawed back under clauses 28 to 30, which recover the relief where, at any time after the sale of shares, the ESOP breaks the rules. In the cases covered by clause 25(7), it will usually be known when the claim is made that the ESOP has broken the rules, and in those circumstances it saves everyone work to deny the relief from the outset, as clause 25(7) does. For that reason, I cannot commend the amendment to the Committee, but I appreciate the manner in which the amendments were proposed.
      Mr. Beith: I am grateful to the Minister for accepting amendment No. 44. I hope that it is a good sign and that we can further tidy up these parts of the Bill in Standing Committee. I hope that many other Liberal Democrat amendments will be accepted.
      I fully appreciate and accept the reasoning behind the 10 per cent. threshold in general. However, I wonder whether the management buy-out aspect has been properly considered. To achieve a management buy-out, it is necessary for there to be a large institutional stake. If the managers are to be fully committed, they also require a significant stake. I shall take further advice on whether there is any other way to deal with that. I hope that the Minister's officials will also give it further thought. I am at one with the Minister in thinking that at least a 10 per cent. stake is usually desirable, but I should not want a management buy-out to be frustrated by that.
      I shall reflect on the Minister's response to amendment No. 46. His key point was that in most cases relief will not be claimed until it is clear whether the trust has behaved as it should. My anxiety is that the person who will be denied the relief is the vendor, who has no control over the actions of those who could cause him to lose it. I appreciate the Minister's acceptance of amendment No. 44.
      Amendment agreed to.
      Question proposed, That the clause, as amended, stand part of the Bill.
      Mr. Nicholas Brown: The clause is welcome and we do not wish to divide the House on this or subsequent clauses that deal with ESOPs. We wish only to explore technical matters of detail. I am sure that the clauses will go through Committee in a reasonably speedy and workmanlike way. That is in keeping with our approach during the past two years. This is the third year that we have discussed employee share ownership plans—or employee share ownership trusts, depending on which nomenclature people prefer.
      The schemes appear to have drawn support from both sides of the House. We have arrived at a peculiar bipartisan approach, but for different reasons. Conservative Members view ESOPs as a form of popular capitalism, whereas we realise that they are an appropriate vehicle for workers' control, as our policy review makes clear.
      Mr. Norman Lamont: It is the other way round.
      Mr. Brown: I guess that the Chief Secretary is referring to the fact that workers' control has brought about appropriate vehicles because a large number of ESOPs are privatised bus companies—
      Mr. Ian Taylor: That is a good joke.
      Mr. Brown: It is all the better for being spontaneous.
      The approach of the House to these issues was set during the passage of the Finance Bill last year by that opinion former, the man we thought of—just for a few minutes, no longer—as Red Norman. He said:
      "In a free enterprise economy, there is room for many different forms of ownership, which can include a number of companies where a majority of shares are owned by the labour force. If the increasing awareness of and interest in ESOPs results in more worker-owned companies, I should not regret that…Anything that could encourage more membership by the work force in the unquoted sector is to be welcomed."—[Official Report, Standing Committee G, 6 June 1989; columns 304–5.]
      That ringing incitement to the work force to take over their companies made my hon. Friends and myself draw breath. Indeed, given his previous disappointments in the appointments to the Cabinet, we thought that the right hon. Gentleman was making a bid for election to the shadow Cabinet instead. For those few moments one or two of us might even have considered supporting him. Of course, events moved on, and we are pleased that the right hon. Gentleman has found his rightful place in the appropriate Cabinet and has not resiled from his views on employee share ownership trusts.
      It is only fair to point out that all the trusts so far relate to private companies. That is the way in which the law to date has affected the transfer of shares in public companies. The hon. Member for Esher (Mr. Taylor) has spoken on the point on a number of occasions and may take justifiable pride in the clause that is before us. For the first time the measure will give an advantage to Finance Bill schemes over case law ESOPs, which many of us felt were hitherto in a more privileged position.
      The clause, and those subsequent upon it, will provide roll-over tax relief if the shares are sold into an ESOP. That relief was not available before. The requirements for democratic distribution of the shares remain, as do the requirements for worker trustees. All that is on the right lines, but there are remaining problems, and the clause is wide enough for us to discuss them.
      The overriding problem relates particularly to private companies. Although I mention it, it does not detract from my overall support for the clause. If a company is doing badly, there is not a great temptation to the work force to purchase it; naturally it would be reluctant to do so. If a company is doing well, unfortunately it is the case in British industry that those who run it want to retain it. There are still more tax-efficient methods of rewarding executives for the contribution that they make to the company. Indeed, it is widely felt in British board rooms that executives need incentives. The same view does not seem to have been transferred to the approach to the rest of the work force. Far too many British board rooms still seem to think that their work force needs to be competitive and priced down rather than given incentives and further involvement.
      There are other difficulties that pertain particularly to the ESOT structure. It is still the case that a majority of the trustees of the ESOT have to be employees. I hope that the Financial Secretary will consider the matter again, perhaps not now but for future Finance Bills. I am sure that the commitment given by his predecessor to review the issue year by year continues. In the larger ESOTs, the need for professional, financial and other expert advice is not just

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      necessary but of overwhelming importance. No doubt some of the larger ESOTs could not function unless such professional advice was available.
      In issues that are fairly complex, the existing employee trustees not only have to form a majority, and therefore take responsibility ultimately—if they are all voting the same way—for decisions, but they are also completely exposed to personal liability. I understand the reasons for it, but those two burdens are heavy ones to place on people who ideally should be shop floor workers. To mix their involvement with the involvement of professional advisers, experts in their own spheres, seems to be desirable. The burden of complete personal liability is very heavy and is not an inducement to an ordinary working person to seek election.
      I want to take the opportunity to praise members of the different work forces in the road transport industry in particular and in other industries for having taken an adventurous step in coming forward to undertake a burdensome office on behalf of their fellow workers. It is a heavy responsibility to shoulder. The individuals to whom I have spoken are very conscious of that.
      I also want to take the opportunity to praise the Unity Trust bank which, as hon. Members who follow the matter know, is the main financial backer of employee share ownership trusts. Without the encouragement that the bank has given to such schemes, many of them would not have got under way.
      8.45 pm
      The Financial Secretary should consider for future Financial Bills the inclusion in ESOTs of regular part-time workers as well as full-time employees. I am not talking about people on short-term contracts. I see the difficulties there, but it should be possible for people who are permanently employed, but for a smaller number of weeks, to be involved in the ESOT, even on a pro rata basis, although ideally they should have full-time involvement.
      The new relief is designed to be limited to sales of shares in qualifying ESOPs. It will provide a boost for them at the expense of the case law ESOPs. As the Financial Secretary said in answer to the hon. Member for Berwick-upon-Tweed (Mr. Beith), the relief is limited by a number of tests. It is limited particularly to ESOPs set up by trading companies or trading groups. The Finance Act 1989 allowed investment companies to set up ESOPs. Indeed, no reason was put forward at the time as to why investment companies should not set up ESOPs.
      Of course, it gave them the corporation tax deductions consequent upon that. However, clause 25 and the subsequent clauses will not allow an investment company ESOP the roll-over tax relief. I understand that tax avoidance issues may be involved. Given everything that I have said on tax avoidance in the past, it would be wrong for me not to be conscious of the potential. If the Financial Secretary says that that is his defence, I shall certainly understand his motivation. However, it is right to explore it further and that is what I hope to do.
      I understand the position to be that a qualifying ESOP can be set up by a non-trading investment company—that was common ground on last year's Finance Act—and that the new roll-over relief cannot be claimed for the sale of shares in such a company to its ESOP. That is what we are deciding this year. I accept that it is in line with the general
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      view of the Inland Revenue that trading companies or groups are more commercial and less easy to manipulate for tax purposes. That is probably right.
      However, we have to ask whether the Government's approach is wholly consistent. If investment companies are intrinsically undesirable, why should we have allowed them to establish qualifying ESOPs in the first place? If clause 25 and the succeeding clauses are intended to encourage shareholders to sell to ESOPs rather than to creditors or others, how does the restriction help? I do not put those questions to the Financial Secretary in a spirit of animosity, because I realise that tax avoidance issues may sit alongside my remarks. Nevertheless, I shall welcome a response from him in his summation of the debate.
      The hon. Member for Berwick-upon-Tweed referred to the 10 per cent. test contained in clause 25(4). As a test, it is arbitrary, and I was much taken with the Financial Secretary's statement that it represented the lowest test of all the representations that the Government received from interested groups.
      Why is such a test needed? Although I followed what the Financial Secretary said to the hon. Member for Berwick-upon-Tweed, that question still merits an answer, because, although the 10 per cent. test is less strict than the 25 per cent. test used at one stage in the Capital Gains Tax Act 1979, it is stricter than the section 85 rule, for general offers, which has no threshold.
      If an ESOP currently holds 2 per cent. of the founding company's shares, why should relief be available if Peter sells 8 per cent. of his 29 per cent. shareholding, but not be available to Nick if he sells all of his 7 per cent. shareholding? Why should relief become available to Nick only if Peter later decides to sell 2 per cent. of his shareholding to the ESOP? The threshold sets up those ambiguities. Has the Financial Secretary thought of a way through, or does he believe that such ambiguities are consequent upon the setting of any threshold? I suspect that that is the answer.
      I must raise a number of drafting issues with the Financial Secretary. Clause 25(5) states that the claimant must obtain consideration. That would be difficult to interpret and I am not sure that it is right. Can the Financial Secretary justify inclusion of that phrase in the clause? Similarly, in clause 25(7), am I to understand—I may have got it wrong—that a small chargeable event could mean that roll-over relief would be completely denied? I am sure that that is not the Government's intention, but the clause could be interpreted in such a way. Could the Financial Secretary respond a little more fully than simply to say that that is not his intention, and that it could not be interpreted in such a way?
      Clause 25(5) states that all the consideration must be used to purchase replacement assets. Surely that is contradicted by clause 27(2), which we shall discuss further in Standing Committee. At this stage, I merely want to draw the Financial Secretary's attention to the fact that clause 27(2) and clause 27(3) enable partial roll-over relief. If that is enabled by clause 27, why should clause 25(5) say that it is not?
      In principle, the relief given in clause 25 is much wider than existing roll-over relief. It extends to the acquisition of almost any type of chargeable asset and to assets the eventual sale of which is unlikely in practice to cause capital gains tax to be paid.

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      I must return to the issue of tax avoidance, where my sympathies are entirely with the Inland Revenue. The clause may provide substantial possibilities for avoidance, and I should like the Financial Secretary to tell us how much consideration the Government have given to that issue and precisely what steps they have taken to minimise avoidance, which is implicit in the clause.
      Relief is aimed principally at sales of shares to an ESOP at full market value. How will the clause cope with what I should have thought were socially desirable steps—I should have thought that they were desirable to the Government, too—for example, when shares are gifted to an ESOP or sold at a lower or nominal value? I am sure that the Government will have considered that matter in general, but how does the clause affect it in particular? I am sure that we would all agree that the sort of thing to be encountered is when the owner of a small or medium-sized company, which is not asset-rich, is retiring or seeking to leave for other reasons and the company can be given over to the work force. The tax system should positively encourage such an idea. As the hon. Member for Esher has said in previous debates, at least the system should not provide a positive disincentive.
      As I am sure hon. Members will appreciate, these are technical matters and they are difficult to popularise. Nevertheless, the events that lie behind the drier points that we are discussing today are serious, and have had a profound effect on the lives of a number of working people, whose companies have been transformed from municipally owned undertakings or companies that traded in the public sector into employee share ownership trusts.
      Many trade union branches have been involved in such transfers. The bus industry is the prime example. Unions had to think long and hard before encouraging their members to enter into such undertakings. I note on the latest list of such groups that the Buswise group on Tyne and Wear, with some 18,000 employees, is by far the largest existing ESOP.
      My constituents ask me whether they should enter into such an undertaking. They also ask, as well they might, given my current duties on the Opposition Front Bench, what will happen when the Government change. Will their investment in the ESOP be for naught? Will the risk that they have taken come to nothing if the municipal bus trust is taken back into public ownership'? It is not our intention to take such trusts back into public ownership. Our commitment to an integrated passenger transport network in the metropolitan areas can be carried out without renationalising enterprises which we regret have been put into such difficult positions.
      I applaud the endeavours of employees of ESOPs to take the best possible option available to them in the most intractable circumstances. They were placed in such circumstances by the Government and not due to economic circumstances or anything else. They have taken a brave step and next year, or the year after, we may well be discussing the affairs of people working in community care who are also considering whether, given the changes that the Government are making, ESOPs are the vehicle for them. People in that walk of life are looking carefully at what has happened in the bus industry.
      ESOPs have a much wider future than merely providing a refuge of last resort for municipal undertakings that are being privatised. I regret that debate has sometimes been too narrowly focused on privatisation. There are many good things about ESOPs and I hope that, with continued
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      encouragement from the Opposition and, in fairness, with the good will that has come from the Government as well, albeit for different reasons, we shall eventually arrive at the point where ESOPs are not only desirable in theory but positively attractive in practice.
      9 pm
      Mr. Ian Taylor: It is an annual pleasure to follow the jovial hon. Member for Newcastle upon Tyne, East (Mr. Brown) in debates on employee share ownership, and today is no exception. I will pass on to him a message given to me by the managing director of another bus company, who said that, when the shares passed into the hands of the workers in that bus company, for the first time the buses stopped for passengers, so there is hope for the hon. Gentleman if he is late for a meeting in Tyne and Wear.
      This is one of the remarkable subjects that seems to unite the House. It unites the supporters of Karl Marx and Adam Smith and, in deference to the hon. Member for Berwick-upon-Tweed (Mr. Beith), probably Lloyd George —I do not know the latest guru of the Liberal Democrats.
      Just to show that I am a good party man at heart, I should say that, although the hon. Member for Newcastle upon Tyne, East said that he saw ESOPs as a means of workers' control, it is important that he should explain to some of his colleagues that workers may end up in control through a progressive transfer of shares into their hands which, if it happens, is a good thing, but that workers' control, in some sort of socialist sense, should not be the sole justification for employee ownership. It is better to start at 1, 2 or 3 per cent. if that is all that is possible, than to hold out for 51 per cent. I have often found on platforms that that understanding has not spread completely through the Labour party, but I am sure that the hon. Gentleman will continue to spread the gospel of popular capitalism, even if he calls it something else.
      I welcome clause 25. It represents satisfaction of one of the most important of the submissions that were made to the Treasury last year when we were considering some of the implications of the introduction of the qualifying ESOP in the Finance Act 1989. I also particularly welcome the 10 per cent. criterion. The Americans have a 30 per cent. criterion, so the Treasury has been excessively generous. I withdraw the word "excessively" as it might set a precedent, but the Treasury has certainly been generous in bringing in the 10 per cent. criterion.
      My only worry would be that 10 per cent. is still a substantial number of shares if they all come in one go. One thing that we shall be looking at in Standing Committee is whether it is possible, using only the 1978 Act scheme, for 10 per cent. of a company to pass out to shareholders during the seven-year period, which is one of the qualifying conditions. That is in no way a criticism —it is merely an attempt to ensure that there is a possibility of understanding whether the seven-year rule is sufficient.
      Sadly, during the past year there has been difficulty in persuading companies to use the qualifying employee share ownership trust set up in last year's Finance Act. Trusts have been set up under the case law, as the hon. Member for Newcastle upon Tyne, East said, but those of us who believe that this should become a proper system, widely understood, with clear tax provisions, welcome the fact that it is proposed that, under clause 25, the roll-over relief will apply only to transfers of shares into a qualifying

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      share option trust. That seems to make the qualifying route much more popular and is certainly a boost to it in comparison with the case law version.
      I want briefly to draw attention to two other points which could transform some of the attitudes of potential appliers of ESOPs because they were not available until recently. The first is the fact that the Companies Act 1989 came into force on 1 April 1990. That was an important provision, giving companies the ability to guarantee the borrowings of an employee benefit trust. That is something which many of us wanted early on, and now that it has come in, I think that it will attract the attention of practitioners.
      I was delighted when my hon. Friend the Financial Secretary announced in a written answer on 9 May—at column 123 of Hansard—that a clearance procedure was to be introduced, and was under discussion by the Inland Revenue. Tax advisers are used to telephoning the Inland Revenue and obtaining clearance procedures for other financial purposes. Given the complexities of employee share ownership schemes, and the similarity of terms provisions, they felt that such procedures were necessary here.
      In many instances, lack of clearance procedure made the case law version more desirable. The matter needed to be tidied up, and I thank my hon. Friend the Financial Secretary for doing that.
      I believe that the Treasury could make further gestures to remove some of the cotton wool around the employee share ownership plan. All the hon. Members who have spoken tonight want the ESOP scheme to expand. If it is to expand, companies and their advisers must regard it as a vehicle that is not only a sensible way to spread capital to workers, but something that will not cause horrendous corporate problems. It must be something that firms see as meeting their objectives.
      Although I have always favoured the similarity of terms provisions, I have a slight doubt as to whether we should always insist upon it, as it seems to be a disincentive for many firms which cannot decide whether to introduce the schemes. Some firms seem not to believe that running an ESOP with similarity of terms provisions in parallel with the 1984 executive share option scheme is sufficient. To date I have always thought that it was, but there is an increasing volume of evidence to the contrary.
      The hon. Member for Newcastle upon Tyne, East raised some good points about part-time workers. Increasingly, they will be an essential part of any labour force, and part-time workers who have a proper contract should be beneficiaries under an employee share ownership plan.
      In Committee last year I raised the question of capital gains tax liability within a trust if the trust disburses shares at a higher price than that at which it first bought them that would involve double taxation.
      It is interesting that many of the people who advise companies on whether to adopt a qualifying employee share trust—especially those from the Unity Trust bank —are concerned about the trustee clauses, not only in regard to personal liability but because of the complexity of an election among the workers. My hon. Friend the Financial Secretary should consider whether there should be an alternative system. Appointing as trustees one
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      representative each from the work force and management, plus an independent adviser, would simplify matters. That is not an anti-union suggestion—I think that it would find widespread support among Opposition Members.
      As for the seven-year period during which shares must be distributed to the individual beneficiaries, I support the requirement to get shares into the hands of individuals as soon as possible. That is an essential part of individual share ownership, which is inherent in the employee share ownership trust principle. We are not moving into an institutional shareholding area. The problem emerges when a substantial number of shares could be obtained by the employee trust. It is then difficult to get them out within the seven-year period if only the 1978 Act is used, particularly if a company wanted to make available one 1978 Act share plus one other share, difficulties would be involved. We may need to consider either extending the period or altering the point at which tax arises when a share is distributed to an employee outside a 1978 Act scheme. Perhaps employees could get some roll-over relief so that they pay tax when they realise a share as opposed to when they receive it.
      There is not time to discuss technical matters this evening, but in fairness to the Standing Committee, it was worth while flagging them. The Government have done an excellent job. Industry and practitioners have been flabby and slightly weak-willed about introducing the scheme. I hope that we can now toughen them up. The giving of taxation reliefs only to a qualifying trust should make that much more attractive, and I hope that in the coming months we shall see a fairly rapid and wide rise of employees becoming shareholders through that system. That would be extremely welcome. One of the great objectives of the next 10 years is spreading capital through share ownership. This is one measure in which the Government can justifiably take pride.
      Mr. Lilley: We have had an excellent debate with knowledgeable speeches by the hon. Member for Newcastle upon Tyne, East (Mr. Brown) and my hon. Friend the Member for Esher (Mr. Taylor), both of whom have acquired expertise outside the House and, I suspect, from paying more attention to finance debates than I did previously. I have had to make up for lost time in studying this important subject.
      It is useful to know that, having said a few words in favour of co-operatives, if I now advocate ESOPs as a vehicle for worker control I can hope to pick up some votes in the Labour party national executive elections, should I be so inclined. I was a little surprised by some of the inquiries of the hon. Member for Newcastle upon Tyne, East, who did not feel it was necessary to have a majority of worker trustees or to transfer a minimum amount to employees. I thought that he might have been making a bid for membership of our Cabinet, so that he and I could pass en route.
      The Government have consistently supported and encouraged employee share ownership. Privatisations have always included valuable and widely seized opportunities for employees to obtain shares on very favourable terms and, more generally, we have introduced and extended a wide range of tax relief in 10 out of the last 11 annual Budgets. We estimate that up to March last year, the latest date for which figures are available,

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      all-employee share schemes resulted in 2 million employees receiving shares or options over shares with an intitial market value of some £5 billion.
      Against that background, we introduced our legislation on ESOPs last year. My right hon. Friend explained then the difference between approved employee share schemes and ESOPs, and acknowledged that ESOPs have a particular role to play in the unquoted company sector.
      The clauses provide a futher tax relief to encourage the establishment of statutory ESOPs. The relief takes the form of a capital gains tax deferral for sales of shares to ESOPs. The clauses set out the conditions to be met if relief is to be obtained, the nature of the relief and provide for its recovery if the statutory ESOP subsequently ceases to meet the qualifying conditions.
      ESOPs involve trusts, set up for the benefit of a company's employees, which invest in the company's shares and then distribute them to its work force.
      Following discussions with the main proponents of ESOPs, sections 67 to 74 and schedule 5 of last year's Finance Act provided relief from corporation tax for company contributions to ESOP trusts. Relief is due provided certain conditions are met. They are designed to secure the Government's objectives for ESOPs. First, individual employee share ownership in the companies in which they work should be extended. Secondly, it should be on an all-employee, similar-terms basis. That is valuable, despite the slight wavering of my hon. Friend the Member for Esher. Such ownership should he provided as promptly as possible, and it should be under arrangements that do not lend themselves to the sort of criticism that we have heard of ESOPs abroad, where they can be used for poison pill operations and the like.
      9.15 pm
      In line with the commitment given by my predecessor during last year's Standing Committee debates, we have kept a close watch on developments, and I have had meetings with those most closely concerned with promoting ESOPs.
      The case for giving a further incentive to ESOPs has been strongly put to us, and, consistent with our underlying aim of ensuring individual employee ownership on reasonable terms and within a reasonable time, we have decided to demonstrate our continued commitment to ESOPs by introducing this further relief. We hope that this up-front capital gains tax relief will make the difference in some cases between a company deciding to set up an ESOP or not. We hope that the existence of the relief will persuade owners of shares in unquoted companies to sell them to an ESOP. Comments made since the Budget strengthen our hope that that will be so.
      I am grateful to my hon. Friend the Member for Esher and the hon. Member for Newcastle upon Tyne, East for the broad support that they have given to the relief, and I welcome their contributions. My hon. Friend the Member for Esher, who has established a position as probably the leading exponent of ESOPs in the House, welcomed our 10 per cent. rule and remarked that it was more generous than the 30 per cent. rule that obtains in the United States of America. None the less, he wondered whether it might prove higher than necessary. ESOPs will often be concerned with large stakes in the company concerned. They may often rely on borrowings and individual contributions; distributions may, in consequence, take
      970
      some time. Up to seven years is allowed under the 1989 legislation; a 1·4 per cent. per annum transfer does not seem excessive.
      My hon. Friend the Member for Esher correctly remarked that the changes under the Companies Act 1989 have only just come into effect and that they will provide greater stimulus to statutory ESOPs, along with the new incentive. The fact that Companies Act changes have only recently come into force may be why we have not seen much sign of activity in statutory ESOPs. We would not expect to know about them because it takes some time before they come to the notice of the authorities.
      My hon. Friend welcomed the clearance procedure that I recently announced. He said that it was under consideration, but it is established and available to those setting up trusts.
      My hon. Friend reinforced the inquiry made by the hon. Member for Newcastle upon Tyne, East about the position of part-time workers. ESOPs can distribute to part-time workers as long as they are distributed through an approved all-employee arrangement.
      The last point that my hon. Friend the Member for Esher made was about capital gains tax if shares are sold at a higher price than that for which they were acquired. We have received some interest, but not much. Given the freedom of operation available to ESOPs, unlike approved employee share schemes, large amounts could be involved and there would be the risk, if these reliefs were given, of ESOPs being used solely as tax shelters. We are determined that that should not happen. ESOPs should serve only as a means of furthering individual employee share ownership and as a means of producing it without unnecessary delay. To exempt their income and gains would encourage ESOPs to delay for as long as possible the distribution of shares to employees.
      The hon. Member for Newcastle upon Tyne, East made constructively comments. He said that, if a company was doing badly, employees would not wish to take up shares via an ESOP and that, if it was doing well, they would not be able to afford to do so. In fact, quite a number of ESOPs are the result of shares being gifted to employees. I am happy to say that all the schemes of which I am aware are in successful companies. They seem to have overcome the obstacles foreseen by the hon. Gentleman.
      Perhaps I can spell out a little more clearly the position of part-time employees. The benefits for an ESOP trust could be substantial and, although distributions must be on an all-employee similar terms basis, there is scope for variation, depending on length of service and level of remuneration. It seems right to restrict those benefits to those who make the most substantial contributions to the success of their company. If, however, the ESOP trust operates in conjunction with a profit-sharing scheme trust, where the tax relief is more narrowly confined, part-time employees may still be allowed to benefit, as they frequently are under these schemes.
      Mr. Beith: Will the hon. Gentleman settle for the first answer?
      Mr. Lilley: The answers are more or less the same. If the hon. Gentleman studies the text, he will find that one answer was more condensed than the other.
      The hon. Member for Newcastle upon Tyne, East said that shop floor workers who are trustees bear full liability and that this is a burdensome responsibility. In fact,

      971
      companies are able to indemnify them against the responsibility. That would ease the burden and help employee trustees to play a full part, which is what we want to happen.
      Exclusion of relief for investment companies was tentatively queried by the hon. Member for Newcastle upon Tyne, East. He was right in his suspicion that this restriction has been introduced to prevent tax avoidance. Our contacts with proponents of ESOPs suggest that interest in the new relief is likely to be related essentially to trading companies. If the relief were extended to investment companies, there would be a risk of it being abused for what are really sales and transfers of investments to third parties. I know that the hon. Gentleman would not wish that to happen any more than I do.
      The hon. Gentleman made a number of inquiries about drafting matters. Clause 25(5) deals with whether the claimant must obtain consideration—CGT jargon for a sale. Normally gifts already attract CGT deferral under last year's rules for gifts. The hon. Gentleman asked whether under clause 25(7) even a small chargeable event would deny relief. I am afraid that that is the case. Substantial scope for abuse would be opened up if we differentiated between small and large-scale chargeable events. Again, this measure was introduced to prevent tax avoidance.
      The hon. Gentleman asked whether relief was confined to all cases where all proceeds were reinvested. No; clause 27(3) extends relief to cases where part is reinvested. I was asked how the provisions would cope in terms of shares gifted to ESOPs. In most cases, gift holdover relief will be available where shares are given to ESOPs and, where it is not, the new relief will be available.
      I hope that I have dealt with most of the points raised by the hon. Member for Newcastle upon Tyne, East. If on studying the Official Report I find that questions have not been answered or have been inadequately answered, I shall either write to him or take the opportunity in the pleasurable meetings which we are scheduled to hold on Tuesdays and Thursdays henceforth to respond more fully to his points. I am grateful for hon. Members' constructive and knowledgeable contributions to the debate.
      Question put and agreed to.
      Clause 25, as amended, ordered to stand part of the Bill.
      Bill (Clauses 3, 9, 10, 20, 23, 25 and 68), reported, with amendments; to lie upon the Table.

  Personal Equity Plans
  9.25 pm
  Mr. Chris Smith: I beg to move,
  That the Personal Equity Plan (Amendment) Regulations 1990 (S.I., 1990, No. 678), dated 20th March 1990, a copy of which was laid before this House on 21st March, be revoked.
  We tabled a prayer on these regulations because we thought that it would be useful to discuss some of the issues of anxiety to which the personal equity plan system and the changes proposed in the statutory instrument give rise. We do not intend to divide the House on the matter, but we wish to flag up several issues which give us pause for thought.
  Personal equity plans were initially announced in the Budget of March 1986 with a start date in January the following year. At that stage, a limit of £2,400 was placed on the annual investment qualifying for a PEP. Provided that the shares were held for a minimum period of between 12 and 24 months, any capital gains and reinvestment dividends were free of tax. In the 1988 Budget, the annual limit was raised from £2,400 to £3,000. In 1989, the annual limit was raised again, from £3,000 to £4,800. It is worth recalling that the overall increase was well over 50 per cent.
  The regulations before us raise that annual limit of £4,800 still further, to £6,000. That is a 25 per cent. increase in one calendar year. The House will note that the successive increases in each of the three years were well over the rate of inflation. The overall increases in the annual limit are extremely generous. Therefore, it was with some surprise that when I looked at the Red Book to see what figure was included for the cost of the changes to personal equity plans this year, I found that the item was marked as carrying a negligible cost.
  Given the fairly dramatic increase in take-up of PEPs in the past 12 months, I fail to understand why the cost of a substantial increase in the annual limit can be regarded as negligible. It will lead—admittedly with a time lag of at least a year—to considerable taxation benefits in terms both of capital gains and of income tax on dividends. It would be useful to have some further thoughts from the Financial Secretary about why that estimate has been included in the Red Book.
  We have a number of criticisms to make of personal equity plans in general. I should make it clear, as I have done a number of times to many different audiences in the City and elsewhere, that Labour Members will honour the tax treatment of those shares that are included in the PEPs portfolios, and the income from them, when we come to Government.
  Our criticisms of PEPs are, first, that they have tended to benefit larger investors, repackaging existing portfolios of shares, rather than encourage new investors to come into the equity market. The Financial Secretary will doubtless recall that when we had an extremely interesting discussion on that precise point about a year ago the then Financial Secretary, now elevated to Chief Secretary, maintained that the take-up of PEPs was being substantially generated by new, small savers, rather than by larger investors.
  We did not agree then, and we do not agree now, as experience and logic seem to show that precisely the opposite is the case. That is especially true in logic, because, to take best advantage of a PEP, remembering

  973
  that the key advantage lies in capital gains tax relief rather than income tax relief, one has to have already exceeded the £5,000 threshold for capital gains tax purposes. The small-scale saver with a handful of shares will certainly not find himself in that position. Studies carried out by the Institute for Fiscal Studies seem to show that, by and large, PEPs are being used by people with large-scale shareholdings, and the benefits are considerable in those cases.
  Secondly, we doubt whether it is wise to have accorded PEPs far more favourable tax treatment than any other sort of saving. When we debated PEPs last year, one matter that I pressed on the Government was the removal of the composite rate tax system for building society interest. I am delighted that the Government actually listened to that, albeit a year later.
  We find it odd, however, that PEPs have been given such special treatment within the tax system, even after the additional boost to savings of a number of different kinds that the Finance Bill and Budget have provided. For example, the increase in the annual limit for PEPs has gone up by well over 100 per cent. in two years. That is in contrast with the treatment in the Finance Bill of the tax-exempt limit for friendly societies, which we shall be discussing soon in Standing Committee. The increase in that limit has been from £100 to £150—an overall increase of 50 per cent., and the last increase was five years ago. The contrast becomes absolutely clear—a more than 100 per cent. increase in the overall limit for PEPs over three years, but a figure of 50 per cent. over five years for friendly societies. We do not regard that as even-handed.
  Thirdly, we believe that PEPs by and large serve in the equity markets merely to recycle existing equities. Of course there is a place in the economy for such recycling. but do we really want to give such generous tax treatment to encourage it? On the whole, PEPs do not encourage or facilitate the creation of new wealth or enterprise—they encourage people to continue making profits out of existing wealth and enterprise.
  Mr. Gerald Bermingham: Does my hon. Friend agree that, if PEPs were structured so as to include employee shareholders within companies, that might be a way of encouraging employees of companies to take, by way of bonus or other dividend, shares within the company for which they work, thus giving them greater involvement within the company?
  Mr. Smith: I do not think that my hon. Friend was present for our last debate, when my hon. Friend the Member for Newcastle upon Tyne, East (Mr. Brown) set out in extremely learned and expert fashion the constructive view that we take of employee share ownership trusts. In our view, they are perhaps a more appropriate and useful vehicle for encouraging share-owning participation by workers in their companies than the sort of scheme that my hon. Friend has in mind.
  Nevertheless, I would point out to my hon. Friend, for whom I have great respect, that his idea is an important one. We should certainly want to examine ways of using the tax system to encourage new enterprise and business in our economy, but I fear that PEPs are a very badly targeted vehicle for achieving that end. That is why we have doubts about the precise benefits that PEPs, with their enormous tax advantages, can bring.
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  The statutory instrument has two major defects, the first of which—the rise in the annual limit from £4,800 to £6,000—I have already mentioned briefly. There is a danger that that substantial increase may render nugatory all the other changes to improve savings of other sorts that the Chancellor is making in the Finance Bill. If we advance the case in the tax system for PEPs by a much greater amount than the case for other forms of saving, other forms of personal saving are not necessarily thereby improved.
  Our second and more important criticism of the order relates to regulation 7, which reduces to 50 per cent. the value of investments that must be held by unit trusts, funds of funds and investment trusts in United Kingdom companies. In other words, regulation 7 makes it easier for holders of PEPs, by means of various trusts and funds of funds, to hold their investments abroad instead of in this country.
  The issue arose briefly during our discussions a year ago. At that time, the then Financial Secretary to the Treasury, now the Chief Secretary and presumably one of the authors of the document before us, said:
  "we thought it only right to require that unit and investment trusts should invest mostly in United Kingdom equities."—[Official Report, 10 May 1989; Vol. 152, c. 951.]
  We agree with that, but we now find a year later that the Government are placing before the House an order which reduces that requirement to 50 per cent. Tax relief should not be generously available on income derived from investments up to 50 per cent. of which can be held abroad.
  Government policy should be not just about encouraging saving but about encouraging investment in Britain. The change in regulation 7 goes completely in the wrong direction. That is a grave error and we hope that the Government will have second thoughts. Despite our criticisms of PEPs as a whole, we think that the system should be used as far as possible to encourage investment in United Kingdom equities. Providing tax advantages and tax relief to facilitate investment abroad is not one of the priorities for which we want to see the tax system used.
  9.42 pm
  Mr. A. J. Beith: I was reassured to hear that the hon. Member for Islington, South and Finsbury (Mr. Smith) does not wish to divide the House this year. He divided the House and voted against the PEP scheme in the equivalent debate last year. That could be a milestone on the long road that the Labour party is taking towards popular capitalism, but we must not get too excited. Perhaps some of the hon. Gentleman's comments gave a rather different impression.
  The Minister knows that I have been a critic of the PEP scheme from the start, not because I disagree with its objectives but because I do not think that it went far enough to meet them and in particular it did not go far enough to meet the objectives of extending share ownership to the largest possible number of people. That remains my criticism of the scheme and that is why I shall suggest further changes that should be made to it.
  Before the Budget we outlined a series of measures designed to boost savings, and widen savings and share ownership. I am pleased to say that the Government have moved on some of our suggestions. The first of the three key elements that we suggest now, just as we did last year, is the abolition of composite rate tax on building society and bank accounts. I am pleased that the Government

  975
  propose to do that in a year. The second is the extending of PEPs to bank and building society accounts, which to a large extent is met by the TESSA scheme. Our third measure is the creation of an alternative PEP scheme for people who are not liable to capital gains tax. The Government have not adopted that suggestion and have not yet addressed the issue.
  The only major benefit of a PEP scheme is the capital gains tax relief that it provides. By definition, the vast majority of people whom one might wish to encourage to take out a PEP as an objective of widening share ownership have no capital gains tax liability at all. The people who are most likely to benefit from the present scheme are those who have already used up their considerable capital gains tax relief and must therefore possess a fairly substantial portfolio of shares in any case.
  If the scheme is to be widened, it must contain reliefs that make it attractive to people who do not have any capital gains tax liability and are first-time share buyers or people who may at the moment own shares in one or two privatised companies, or perhaps in three such companies, and whose total portfolio is only £1,000. They will have no capital gains tax to pay, so they are a long way from needing such relief. Therefore, there must be some other form of relief. They get relief on dividends, but we know that that is small, and less than they would get if they had the same money in a bank or building society, as the divident income would be less than that from a bank deposit.
  Our proposal was that there should be an alternative PEP scheme giving front-ended income tax relief on the money deposited in the scheme, but that nobody should be allowed to have both types of scheme. That would mean, if one was offering it to large numbers of people who have no or only a few shares, the opportunity of a real and encouraging tax relief. If the Government are serious about widening share ownership by means other than employee share ownership plans, they must widen the scheme in such a way. That is easily the most promising route to take if the PEP scheme is to fulfil the purposes for which it was originally set up.
  The hon. Member for Hackney, North and Stoke Newington (Ms. Abbott), who serves on the Select Committee on the Treasury and Civil Service, referred to the exchanges in the evidence sessions of that Committee about whether this was a Budget to increase savings. The Chancellor was careful in his choice of words when questioned on the subject. He said that it was not a Budget for savings but a Budget for savers. In other words, it gave certain advantages to those who chose to save. He held out no hope that it would greatly extend or increase the amount of saving in the economy. Many people agree. I hope that there will be some increase.
  A different social purpose would be achieved by widening the number of people who save, even if that did not increase greatly the savings ratio. It is socially desirable that more people should be encouraged to save and develop the habit of saving and that ownership of industry should be much wider. Therefore, the Government have missed the boat in not developing PEP in the way that I have suggested. That does not lead me to resist the changes that they are making this year, some of which will prove useful
  976
  The hon. Member for Islington, South and Finsbury referred to a point that came up both last year and this year, which is about what was last year the 75 per cent. rule, which will become this year the 50 per cent. rule, on the amount of investments by a trust that can be made overseas. That presents a problem to the Government. It appears to me to be a breach of the Prime Minister's Madrid conditions for entering the exchange rate mechanism. It is a restriction on capital movements of the sort that she told all other European Countries they must get rid of before Britain would join the ERM.
  That point was emphasised and repeated by Lord Joseph in an article in the Financial Times, I think today. The Government had better produce an answer on that. This year, they have reduced the restriction from 75 to 50 per cent. but that restriction is still inconsistent with the principle of the single market and free movement of capital. The Government may say that it is a bargaining counter and that when other countries remove their restrictions we shall remove ours.
  The widening of savings and share ownership is desirable. I shall support the Government's improvement of PEP but I wish that they would go much further.
  9.48 pm
  Mr. Gerald Bermingham: When I intervened in the speech of my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith), I received the reply that my point had been partly dealt with in an earlier debate. I also received the assurance that my party is beginning to think along the lines of what is best for the capital market and the investment market. I suppose that I should declare a disappointed interest in PEP in that, in 1988, I bought into a scheme. It must be about the only one that ever lost money, and it managed to do so faster than the stock market was going down. I became a little disillusioned.
  I have watched the limit rise from £3,000 to £4,800 and now to £6,000 and I have listened to what has been said about capital gains tax allowances. All the time one asks oneself, "What is the Treasury playing at?" We have PEPs, which have nil capital gains tax as long as one remains within their terms. In the old days there would be part unit trusts and part shares in the capital market. There had to be management, of course, and a great deal of money was made managing. Managers are now trying to reduce their charges and are becoming terribly competitive. The Government are allowing the unit trust element to fall to 50 per cent., and that means that 50 per cent. of the unit trust element will be invested abroad. More capital is leaving the country, and one begins to wonder what the Government are playing at.
  The Government introduced similar schemes that were capital gains tax-free provided that they were held for long enough. Again, what are the Government playing at? Are they in favour of CGT or are they not? They are encouraging people to find schemes whereby they avoid CGT. If I had been sitting on the Government Benches last year listening to the Budget statement, I should have blown my top trying to think, as Conservative Members should, what the Government were doing. Effectively, they increased CGT by 33 per cent. They took it from 30 per cent. to 40 per cent. That was done by a Government who are meant to be interested in capital. There are schemes to avoid CGT, the Government have increased the rate of

  977
  CGT and at the same time they are driving industry towards considering shareholdings from an income-providing point of view, not from the standpoint of capital growth. That means that companies have to pay a dividend, so capital flow is reduced. Companies have to borrow from the banks, which are doing rather nicely with a current borrowing rate of about 18 per cent. That is doing nothing to help industry.
  My remarks are not Labour party policy and I may have to answer for some of them later, but be that as it may. If we try to apply a purely logical mind to capital investment in industry, we must ask whether we are to encourage investment for capital growth or income return. If people want income return, the obvious answer is to encourage them to invest in building societies, for example. The Japanese do things extremely well if a capital return is required. They encourage investment in companies with a view to capital growth. They do not discourage that by having the majority of investment taxed at 40 per cent., which is the income tax rate in any event. We do not encourage the small investor by taxing him because he invests in a single investment whereas if he goes to a managed fund he may well escape CGT.
  If we encourage people to invest for capital growth by, for example, coupling the investment with a provision that states that if dividend is reinvested it will not be subject to taxation, there is a logical approach to be perceived. It is a fairly rational idea that is employed elsewhere. It stops companies distributing moneys, it allows reinvestment in the company and at the same time it means that companies do not have to borrow. With that approach I can understand people being encouraged to invest.
  By and large, the small investor does not invest for income. He puts money away for a rainy day, and sometimes for the children. Sometimes he is making provision for something that will confront him in five or 10 years' time. If he realises that he will not pay tax on capital growth, there will be a considerable incentive for him to invest.
  I appreciate that the fund managers will say, "If the pension funds find that there is no such thing as capital gains tax any more and there is only capital growth, not income growth, how are pensions to be paid?" I understand the argument, but logic tells me that the managers will dispose of some of their shareholdings from time to time. That might make the market move around a little.
  At the end of the day, what is the logic of PEPs? Either we believe in capital gains tax or we do not. Perhaps the Minister will care to answer my question: do the Government believe in capital investment, or do they not? Do they believe in capital gains tax? If they do, why should two schemes be exempt from capital gains tax provided that they are held for long enough? If there is to be capital gains tax, let it be upon every gain.
  If the Government do not believe in capital gains tax, they should have the courage to say so. Their action last year in raising it from 30 per cent. to 40 per cent. shows little sense if they do not believe in it, and they should abolish it. The market could then reconsider the value of capital growth as opposed to income growth. The Government must not play around. They should not use the idea of investment abroad together with an increase in the percentages because that encourages capital outflow
  978
  rather than capital inflow and investment in Britain. The Government should come clean. It is either one or the other.
  I am interested to know where the Government stand. The next general election cannot be too far away, and I am interested in what the Government propose thereafter. Will Britain become just an offshore island of Europe, or will we once again encourage investment in British industry? Will we encourage British industry to expand? Will we encourage fund managers to invest in British industry rather than abroad?
  I hope that the Minister will give us a clue about the direction of his thoughts. If he is not thinking, and if his Department is not thinking, but simply dealing with each issue as and when it arises, please say so. At least that would be an honest answer and the House is entitled to know.
  9.56 pm
  The Financial Secretary to the Treasury (Mr. Peter Lilley): I thank the Opposition for providing an opportunity once again to debate personal equity plans, which are a tremendous Government success story. The success of our policies is evident in the figures from the latest stock exchange share ownership survey published at the time of the Budget. About 11 million people, or one adult in every four, now owns shares, compared with one in 14 in 1979. Share ownership is widely spread—two thirds of share owners are outside the ranks of professionals and managers and 60 per cent. are outside the south-east.
  The Government remain committed to widening and deepening share ownership, building on the remarkable achievements to date, and PEPs are playing their full part in that. The effect of the measures that we have introduced to improve the attractiveness of PEPs is shown in the figures that I gave the House on 23 February. They showed that, by 31 December 1989, the number of plan managers had risen to 340 compared with 180 a year earlier. Some 300,000 plans were taken out in 1989 and the total amount contributed to PEPs has risen to 1.5 billion, not counting investment growth.
  I am pleased to give the House the latest provisional figures for 5 April this year. In 1989–90, 400,000 plans were taken out and £1,200 million invested, both figures setting new records for PEPs. That brings the total number of plans taken out since PEPs started to nearly 850,000, and the total invested—ignoring investment growth—to almost £2 billion. Those figures do not reflect the impact of the changes that we announced in this year's Budget, which were implemented in the regulations that we are debating today.
  In the Budget, my right hon. Friend the Chancellor made four significant further improvements to personal equity plans. First, the overall annual limit on annual investment goes up from £4,800 to £6,000. Secondly, the limit on qualifying unit and investment trusts rises from £2,400 to £3,000. Thirdly, the rule for qualifying unit and investment trusts is relaxed—they now need to hold at least 50 per cent. rather than 75 per cent. of their portfolio in United Kingdom ordinary shares. Fourthly, the amount which can be invested in unit and investment trusts not meeting that requirement goes up from £750 to £900.
  Those measures are an important component of my right hon. Friend's Budget for savers. They will increase

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  the amount that individuals can save, increase incentive for managers to market schemes, and remove obstacles facing investment trusts.
  Those four changes are the meat of the regulations before us, but the regulations also sweep up some technical relaxations and clarifications which we announced last year. For example, regulation 6(1) clarifies the market value rule in the light of comments made by the Select Committee on Statutory Instruments last year. All in all, the effect of the changes in the regulations should be to make PEPs still more attractive. I look forward to an even more successful year than the last.
  The hon. Member for Islington, South and Finsbury (Mr. Smith) asked why the cost of the relief is negligible, given the excellent take-up to which I have referred.
  It being Ten o'clock, the debate stood adjourned.
  Ordered,
  That, at this day's sitting, the Motion in the name of Mr. Neil Kinnock relating to Income Tax may be proceeded with, though opposed, until half-past Eleven o'clock or until the end of a period of one and a half hours after it has been entered upon, whichever is the later—[Mr. Nicholas Baker.]
  Question again proposed.
  Mr. Lilley: The cost of the relief is simply the cost of tax forgone on capital gains made within the plans and on dividends paid into them. It is thus not a relief on the total amount of money put in. It only builds up over time. Often there will not be any gain that would have been taxed until the gain exceeds £5,000. In any case, most gains may not have been realised until later, so it is a long-term cost in terms of tax forgone. It builds up over time—hence the negligible figure.
  Mr. Chris Smith: Am I right in thinking, therefore, that a cost is anticipated to the Exchequer in, say, three or four years but not in 12 months' time? If so, has the Treasury any idea of the likely cost?
  Mr. Lilley: The hon. Gentleman is correct—the cost will build up in future. It may still be fairly small in the short time scale. I will let him know whether we have any estimates about how rapidly it will build up and whether I can give him any figures in our planning timetable.
  The hon. Gentleman said that the relief has benefited larger investors, particularly those repackaging portfolios, and not the new investor. Last year the average amount committed to PEPs was only £3,000, whereas people could have invested £4,800 in a new plan or, because of a change in the regulations during the year, a total of £7,800. That suggests that the PEP is not just being used by people transferring a slug of a large existing portfolio each year into a plan to take advantage of the relief. Quite a few people are putting aside the amount that they can afford to save.
  As for new investors, we have no direct information on what proportion of those taking out plans had not previously invested in equities. The hon. Gentleman referred to the survey by the Institute of Fiscal Studies, which suggested that one third of new plans were taken up by people who had had no equities before. If so, that is very encouraging news, especially as that would not include those who had privatised shares before. If we manage to increase by one third the total number of shareholders through the battery of measures that we are introducing, that will be a major achievement which will be
  980
  welcomed by my hon. Friends. We have already trebled the number of shareholders. A further increase would be a major gain.
  The suggestion was made that PEPs get a bigger tax advantage than any other form of saving. That is not the case. The tax relief on PEPs is arithmetically equivalent to relief given on pensions. Indeed, the hon. Member for Berwick-upon-Tweed (Mr. Beith) proposed that, since the relief is no great advantage to those who have unused capital gains tax relief of £5,000, who are not making similar gains within PEPs, or who for other reasons are not getting a tax advantage, we should introduce front-ended relief.
  I assure the hon. Member that front-ended relief, so long as one pays tax when one takes out money from a PEP, is arithmetically equivalent to relief given on PEPs but involves more regulatory problems because people try to use it as a tax avoidance device. Therefore, he would not achieve anything by going down that route that we do not achieve by the PEPs scheme. I think that that is the case —I am always hesitant at this time of night, and it took me a long time to convince a lot of people that that was true.
  The hon. Member for Islington, South and Finsbury contrasted the present PEPs rules with those for friendly societies. I agree that we have uprated the special tax privilege for friendly societies by only 50 per cent., to £150, but we also introduced a Green Paper stating that friendly societies will be allowed to handle PEPs, so they will be able to take full advantage of PEP relief.
  Mr. Chris Smith: The Financial Secretary referred to the Green Paper on friendly societies. He will recall that last year, when he was Economic Secretary to the Treasury, we pressed hard for an anticipated date for the proposals contained in the Green Paper to be brought before the House. Can he give us a date now?
  Mr. Lilley: I regret that I cannot give a specific date, but we have made progress by issuing a Green Paper and the matter is moving in the direction that the hon. Gentleman would wish. The nods and winks that I gave then about the timing of such a procedure are still valid. My hon. Friend the Economic Secretary has fingertip control of the whole legislative procedure.
  My predecessor was quoted as saying that it was only right that most of the PEPs relief should be available for investment in United Kingdom equities. The hon. Member for Islington, South and Finsbury criticised the reduction in the requirement for qualifying investment trusts from 75 per cent. to 50 per cent. In practice, investment trusts will have to maintain more than 50 per cent. on average to avoid falling below the amount when they make changes in their portfolios. Therefore, the requirement for investment to be mainly in United Kingdom equities will in effect be maintained, and the average will be above 50 per cent.
  Investment trusts told us that they found it difficult to be sure of meeting the 75 per cent. limit which previously obtained. Most trusts are not tailored exclusively for PEPs. Therefore, they have to have portfolios with attractions for people who do not have PEPs. A number of trusts run saving schemes which are desirable and can be matched with PEPs—people put a regular amount of money into a PEP. It is desirable to harness an investment trust behind a PEP. Therefore, we thought it right on balance to make such changes.

  981
  The hon. Member for Berwick-upon-Tweed asked whether we were being sufficiently Euro-fanatical and whether we were meeting the Madrid criteria. That is a de minimis matter. The absolute bar and restrictions which operate in certain areas of the investment and savings industry on the continent constitute a more substantial restriction on the flow of funds. The noble Lord Joseph made the same point in his article, to which the hon. Member for Berwick-upon-Tweed referred.
  I hope that I have covered most of the issues raised in the debate. I shall not detain the House longer at this late hour.
  Mr. Bermingham: Like the beggar who comes to the club of professionals and asks the question to which he never gets an answer, I wonder whether the Financial Secretary will be kind enough to answer a simple question. Are he and the Government committed to retaining or to getting rid of capital gains tax?
  Mr. Lilley: I apologise to the hon. Gentleman for not responding to the question that he elaborated in his speech. We have no current plans to get rid of capital gains tax. We reformed it in the 1988 Budget, aligning the capital gains tax rate with income tax. For the majority of people, that had the effect of reducing the capital gains tax rate that they faced—previously it was 30 per cent. and now it is 25 per cent. It may come as a surprise to hon. Members to learn that the majority of people in Britain pay tax at the basic rate—rather than at the higher rate, as most hon. Members do—but that is the case and the majority of those paying capital gains tax are basic rate payers, not higher rate payers. The higher rate payers pay large amounts of capital gains tax. The Treasury is happy to relieve them of those sums and has good use to put them to.
  Question put and negatived.

  Personal Equity Plans

    DEFENCE
    Ordered,
    That Mr. Dick Douglas be discharged from the Defence Committee and Mr. John Home Robertson be added to the Committee.—[Mr. Ray Powell, on behalf of the Committee of Selection.]

    ENVIRONMENT
    Ordered,
    That Mr. George Howarth be discharged from the Environment Committee and Dr. Kim Howells be added to the Committee. —[Mr. Ray Powell, on behalf of the Committee of Selection.]

  North Tayside (Flooding)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Kenneth Carlisle.]
  10.10 pm
  Mr. Bill Walker: On Sunday night of 4 February and on Monday 5 February the River Tay burst its banks in a number of places and severe flooding occurred on a scale not previously experienced this century. That was hardly surprising because on 3 February the River Tay was already flowing at record levels—three times the normal February levels.
  Following weeks of precipitation and with the ground saturation at record levels, the intense rainfall and the melting snow of 4 and 5 February produced a massive run-off of water from the catchments of the central and southern highlands, all of which went into loch and river systems which were already well above their normal levels for the time of year.
  I remind my hon. Friend the Minister that the River Tay, the longest river, has a flow of water far greater than any other United Kingdom river. Evidence from the Tay river purification board shows that the River Tummel had a flow going through the Pitlochry dam which was the largest ever recorded. That flow reached its peak of 90 cumecs at 1.30 am on 5 February, the Hydro Board reported that about 75 per cent. of that flow originated in the River Garry catchment. The board has no control of flows in the River Garry.
  On the River Tay at Grandtully the peak flow of 683 cumecs was reached at 3 am on 5 February. Below Logierait the combined rivers of the Tay, Tummel and Garry produced an immense volume of water—about 1,500-plus cumecs.
  The railway line was subjected to all the force of that immense volume of water and, not surprisingly, the line was washed away, as was much of the top soil in the adjacent farms. At least five breaches occurred in that area and a huge washout hole was created.
  Two tenanted farms are facing a bill of £32,000 just to clear the fields of sand and stone, and that does not include repairs to flood banks. At other farms and private dwellings in the area the damage to the flood banks and the environment was substantial.
  It is essential that an independent hydraulic inquiry be set up, particularly to look into the main causes of the flooding and to get rid of some of the myths that have been circulating about who is to blame.
  Afforestation and the Hydro Board are frequently given as the cause. Unless the truth is ascertained, those accusations—the myths—may just stick. In the area of the Dalguise railway viaduct, and downstream of Caputh, the damage calls for a report to define where future flood waters should go.
  If the banks of the River Tay had not been breached in those and other areas, Perth city centre would have been flooded. The new flood warning scheme proposed by the Tay river purification board is to be welcomed, as is the Government's support for the scheme. However, warnings or not, the flood water must go somewhere, and only an in-depth hydraulic inquiry can produce viable proposals about where future flood waters should go. The people of Perthshire are looking to the Government to restore the environment and to provide sensible, viable solutions to the risks that a similar future flood may bring.

  983
  The Victoria bridge at Caputh was subjected to massive pressure when the river flow reached its peak of more than 1,700 cumecs at 7.15 am on Monday 5 February. My hon. Friend the Minister will be aware that I have a meeting arranged with him for Friday morning when I shall lead a delegation from the Tayside region to talk about the bridge.
  In the area below Caputh, major breaches in the flood banks occurred. That was before the peak flow at about 3 am. A large area of land in the vicinity of Spittalfield, Meikleour, Kercock and Braecock was flooded to a considerable depth. A new river course was created in the area, and topsoil was washed away up to a depth of between 10 and 12 ft. Raspberry Fields vanished, and a new deep loch was created between Braecock and Meikleour. The village of Spittalfield was within inches of being completely flooded. The new loch probably saved Perth city centre from severe flooding. It delayed the peak measurement of 1,750 cumecs downstream at Ballathie. That was the greatest flow recorded at Ballathie since the station was opened in 1953.
  Throughout the upper Tay system and down to Ballathie, the flood of 4 and 5 February 1990 surpassed any previously recorded in the gauging station's records. Expensive new bungalows at Little Dunkeld were flooded to a depth of 10 to 12 ft. Many old Victorian buildings were flooded for the first time. The police and emergency services performed magnificently. A pregnant woman was lifted by helicopter from the Delvine estate and taken to hospital; cattle were also airlifted out by helicopter. I was astonished that none of that was reported in the national news.
  Many individuals and livestock were rescued by boat, and the Glenlyon road was washed away, as was the railway line north of Dunkeld, and the village of Dalguise was flooded. The Tay river purification board, the National Farmers Union and the Scottish Office all responded quickly and positively. A Scottish Office Minister—the noble Lord Sanderson—and I made an early visit to the area.
  I wish to pay special thanks to the Tayside police, who did a magnificent job. However, sadly, the Tayside regional council, which is responsible for emergency planning and which was requested by Lord Sanderson to call a meeting to discuss the problem, has still not held the meeting, although more than two months have elapsed since the floods. In my view, because the floods and environmental damage were in rural Perthshire, the Labour administration of the Tayside region was not bothered, and is still not bothered. It is clear that it does not care. It would have been different had the floods been in Dundee, and of course it is just possible that they could have been in Dundee if they had not been in my constituency.
  The standards and specifications laid down by the SDD for river flood bank repairs are unrealistic. The use of clay-based material for the repair of banks involves the transport of the clay from a long distance away as there is no local adequate source. Transport costs make that requirement unrealistic. The repair also has to be fully turfed and finally netted, all of which makes the cost of repair considerable. Consequently, many farmers and landowners have decided to replace their respective flood
  984
  banks in the former traditional manner which the Department used when much of the flooded farmland was in its ownership. Consequently, because the farmers and landowners are pursuing that course, the claims for grant aid will not be made. That is not satisfactory. It cannot be what my noble Friend the Minister of State envisaged or intended when he announced that he was instructing his officials to be flexible and helpful. That all makes nonsense of the Government's wish to be seen to be acting positively and sympathetically towards the victims of the flood.
  As the Department has made no contact with Perth college and its advisers, John Dakers and Alex Taylor, who regularly give advice to farmers and landowners on such matters as flood banks, it appears that the Government's good intentions are being frustrated by their own officials, who made a very bad impression at the meeting called by the Perth National Farmers Union on 10 February in Birnam.
  It is essential that the Government look urgently at means of restoring the environmental damage. It is right that we should restore damage created by man, whether by coal mines, old steel works or any other form of environmental damage. We should also restore environmental damage caused by nature. I hope that the Government will join me in pressing the EEC to allocate funds for that project and will be prepared to put up adequate funds to restore the badly damaged areas which will require huge quantities of top soil and adequate flood barriers.
  I remind my hon. Friend that the banks are not looking kindly on requests for loans to restore the land to its original state. I shall let my hon. Friend have details of the likely cost of the environmental restoration.
  I recommend that no new bailey bridge should be erected over the River Tay, for extracting pyrites or other purposes, until the independent hydrology report has been presented. Until we know what caused the flood and the damage, it would be unwise to erect any structure across the Tay. My hon. Friend will be aware that the Tay was washed away during the floods.
  I also recommend that a single body be made responsible for flood prevention schemes throughout the river and that the Tayside region be instructed to act positively and constructively and be required to operate with Tay river purification board, which did such a splendid job. I recommend the chief executive and the chairman for the positive and responsible way in which they acted. The council should be instructed to co-operate with the Hydro Board, the NFU committee established to watch over the river and with British Rail, all of which have an interest in what has happened. An urgent review should be made of the demands being made by SDD officials before grants are awarded for river flood bank repairs.
  This has been a serious and traumatic experience for many of my constituents, and we are grateful and thankful for the Government's positive and quick response. I hope that they will not now be frustrated by the actions of their own officials and by the inaction of Tayside regional council.
  10.24 pm
  The Parliamentary Under-Secretary of State for Scotland (Lord James Douglas-Hamilton): I am glad to respond to my hon. Friend the Member for Tayside,

  985
  North (Mr. Walker) and I congratulate him warmly on having secured this debate on the Adjournment on behalf of his constituents.
  I join my hon. Friend in paying tribute to the emergency services, which acted speedily. There was considerable damage. For example, the village of Spittalfield, being one of two main outflows from a large flood bank breach at Braecock farm, Caputh, appeared to be threatened by a cross-country torrent of flood water. After an emergency meeting of interested parties at Spittalfield on 7 February, Tayside roads department deposited a considerable amount of material at Braecock, which successfully diverted the Spittalfield flood flow into the other main flood channel.
  I assure my hon. Friend that the Government have every sympathy for those affected by the flooding early in February. I know that rivers burst their channels with much force and quickly inundated large tracts of land. My hon. Friend knows that my colleagues and I have kept closely in touch with what is happening about the flooding in north Tayside and elsewhere. Not only have we had regular and frequent reports from our officials, but the Minister of State visited the worst affected areas in the immediate aftermath of the floods in the company of my hon. Friend to see the damage at first hand and to talk to councillors, farmers and local residents about the problems confronting them in restoring things to normal.
  Scottish Office officials have been active in the area and have maintained contact with Tayside regional council, the National Farmers Union for Scotland and individual farmers. My hon. Friend has written on behalf of many of his constituents. From all those wide-ranging contacts, we have been kept well informed of the losses and damage suffered by the people in north Tayside, and by the farming community in particular.
  Without doubt, the rainfall and river levels experienced in February and March were quite exceptional. The most important thing that can be done for farm land is to ensure that flood defences are restored to good order to prevent further damage. For that reason, the Scottish Office moved swiftly to make special assistance available for the repair of elevated farm flood banks. For a temporary period, grant rates are being increased to 75 per cent. in less favoured areas and 60 per cent. elsewhere, from the normal rates of 50 per cent. and 40 per cent. respectively. Those are the same arrangements as were made last year, which proved effective in securing comprehensive, good quality repairs. The prompt announcement of those special arrangements was widely welcomed. If taken up in full, the total amount of grant will be some £600,000 in Scotland; I announce that figure for the first time.
  My hon. Friend will be interested to know that 29 applications from his constituency have been made for approval of proposed repair work to damaged flood banks. Engineering specifications have been provided by specialists in the Scottish Office in almost all those cases, enabling the farmers concerned to obtain estimates from the contractors.
  There is also assistance for the non-agricultural sector. The scheme of financial assistance to local authorities—the Bellwin scheme—was triggered by my right hon. and learned Friend the Secretary of State on 8 February. It has been reviewed because of the abolition of domestic rates and their replacement by the community charge on 1 April. The main change is that the threshold above which grant will be paid is now expressed as a flat rate per
  986
  community charge payer, and in all cases this results in lower thresholds than before. The level of grant above the threshold is also increased from 75 per cent. to 85 per cent. Claims are still awaited from local authorities, which have until 31 July to make their applications. The Scottish Office has recently sent out a circular to local authorities which brings together the various sources of central Government funding available to offset expenditure arising from an emergency.
  I am glad to confirm that the Scottish Office has endorsed proposals by the Tay river purification board to install a flood warning system and has adjusted the board's borrowing consent to permit the necessary expenditure to he incurred this year. I feel sure that the board will welcome that.
  My hon. Friend has correctly focused on the need for a co-ordinated approach to water management problems in Tayside. It is true that the number of interests is large and, individually, their views may not always be compatible. My hon. Friend has called for a public inquiry. I entirely agree with him on the point of principle. We need to look beyond individual cases and beyond immediate questions of repair and restoration. If we thought that a public inquiry was the right way to look into those wider issues, we should hold one, but there is a mechanism to hand which we think is more appropriate.
  Under the Flood Prevention (Scotland) Act 1961, Tayside regional council is the flood prevention authority for non-agricultural land. It also has powers under local government legislation to take measures to safeguard life and property and to incur expenditure where an emergency or disaster threatens or has occurred. Accordingly, my noble Friend the Minister of State suggested to Tayside regional council that it was best placed to invite parties to meet to identify the various viewpoints, to discuss how problems should be addressed and, no doubt, to form a working group. I am sure this is the correct way forward. It follows the pattern set in the Highland region following flooding last year, and I am confident that it will achieve my hon. Friend's objective.
  The council has agreed to do this and has already said that an independent study by experts in hydrology—my hon. Friend called for such a study—should be commissioned to examine the feasibility of river management measures for flood alleviation. The council has asked for assistance towards the cost of such a study and my noble Friend the Minister of State will write to the council soon with an offer of a financial contribution up to a maximum of £10,000.
  I should like to turn to some of the specific issues which have arisen. I am well aware that there was a quite prolonged period when wet ground and high river levels prevented heavy plant and machinery from gaining access to the floodbank breaches. Working conditions have improved dramatically in the past few weeks and I would urge farmers to press ahead with repairs and to take advantage of the enhanced grants. Other assistance is also available which would be of help to farmers suffering from the after-effects of the flood. Arterial drainage grants provide help with restoring eroded river banks or clearing blocked drainage ditches, and the European Community element of the farm and conservation grant scheme provides assistance towards replacing fences and the reseeding of grassland.
  We have helped in a variety of other ways, too. Officials have been instructed to operate the grant schemes and

  987
  other schemes with the maximum flexibility that the rules will allow. Farmers who are already following fixed plans will be given greater freedom than is usual to change these so as to take account of flood damage. Farmers who wish to enter the set-aside scheme but who had missed the application deadline are being allowed to make late applications.
  I well understand the anxiety of some farmers who think that the deadline of 31 August for floodbank claims is too tight and that the engineering specifications are too demanding. On the first of these, it is essential to establish the repairs so that they can resist erosion when high waters next return, which could be as soon as September with the Tay. As to the standards required, my hon. Friend must recognise that these must be closely related to the threat of attack by flood water, which will vary from place to place. It could jeopardise investment if standards were insufficient for the purpose. My hon. Friend will wish to note—I emphasise this point because he was concerned about it—that officials of the Scottish Office would be happy to discuss individual cases on their merits with farmers. The officials gave me that undertaking.
  I am very much aware that floodbank grants of 75 per cent. or 60 per cent. still leave individuals to find the remainder. Since floodbank repairs are costly, some may find difficulty raising their share, but I cannot agree that the Government contribution should be raised to 100 per cent. as has been suggested. For the Government to do that would be to take over responsibility for protecting private property. Responsibility for agricultural land lies with riparian landowners, and it is right and proper that they should contribute on an individual basis. As I have already pointed out, the same arrangements were effective elsewhere last year and it would be most unfair to the other farmers to make a further exception now.
  We have also looked at the costs of land restoration. They can be, as my hon. Friend knows from estimates that he has seen, nearly £40,000 per acre. Prime agricultural land in north Tayside is valued at about £1,000 per acre. Restoration at those prices would not be a good investment for a landowner, or the taxpayer, on cost-benefit grounds.
  My hon. Friend referred to the damage to agricultural land and called for assistance, on environmental grounds, for its restoration. However, the latest reports that I have had suggest that even the worst-hit farms made a remarkable recovery in the favourable weather of April and early May. Cropping has resumed in all but isolated pockets on individual farms. I have to say that this is a tribute to the skill, hard work and dedication of the farmers who are my hon. Friend's constituents in the area. In some cases, the deposit of silt will actually provide a fertility bonus in the longer term.
  However, in one or two cases, areas were totally scoured out, or cut off so dramatically that they can no longer serve any useful agricultural purpose. Some areas may have to be written off. Land restoration is excluded from the farm and conservation grant scheme. To qualify for the environmentally sensitive areas scheme, land must be within an area specially designated for the purpose. The seriously damaged cases in question are not in such a designated area. The Nature Conservancy Council and the
  988
  Countryside Commission for Scotland, which have small grant budgets in any case, could not apply their funds for the purpose of restoring agricultural production.
  Mr. John Home Robertson: Will the Minister give way?
  Lord James Douglas-Hamilton: No. I have a great deal to say in the two minutes that remain.
  The Scottish Development Agency's arrangements for derelict land are for the purpose of recovery from industrial dereliction created by man. There are no powers, therefore, which would clearly apply for the purpose of restoring these areas of land.
  The hope has been expressed that assistance might be obtained from EC funds. The provisions of EC regulation 4256/88, which governs assistance from the Community's agriculture funds to help areas recover agricultural production after a natural disaster, do not apply to north Tayside. It does not fall within the specially designated areas which qualify for such aid, which are Northern Ireland, the Highlands and Islands development board area and parts of Dumfries and Galloway. So assistance for Tayside from this source would not qualify under the agriculture fund. Nor can I hold out any hope of assistance from the funds made available to the United Kingdom as emergency aid. Those funds are entirely at the Commission's discretion and are given primarily as a humanitarian gesture.
  I hope that my hon. Friend is ready to acknowledge that the Government have responded sympathetically to the difficulties of his constituents. We are making generous grants available for floodbank repairs with a public sector contribution which could run to more than £600,000 in Scotland, more than half of which would be available to farmers, in north Tayside in my hon. Friend's constituency. That is a reasonable offer to farmers, and I hope that they will take full advantage of it.
  We shall also contribute up to £10,000 towards the cost of the independent study by consultant hydrologists, which Tayside regional council proposes to commission. We responded promptly and positively to the Tay river purification board's proposals for a flood warning system, and, of course, I have described the improvements in the Bellwin arrangements. All in all, I suggest to my hon. Friend, that the Government have taken rapid and measured action both to help deal with the immediate emergency and to have the longer-term issues properly
  I congratulate my hon. Friend again most warmly on bringing this subject to the attention of the House. It has provided an opportunity to state clearly the terms of the circular sent out to local authorities on what is being done in Scotland. I shall read with utmost care what has been said and respond to him more fully if any details have not been covered in this brief debate. I thank him again.
  Mr. Home Robertson: I am sorry that the Minister could not give way to me. I simply wish to associate the Opposition with the anxiety expressed by the hon. Member for Tayside, North (Mr. Walker) about the disaster that affected his constituency. I am a little disappointed by the Government's piecemeal approach, which the Minister outlined. There seems to be a case for some co-ordinating unit at the Scottish Office to help to draw together advice, practical assistance and financial support in order to overcome this type of natural disaster wherever it may strike. As I said, I am sorry that the

  989
  Minister could not give way to me. I simply wished to say that I shared the anxiety of the hon. Member for Tayside, North.
  Lord James Douglas-Hamilton: I am glad to respond to the hon. Gentleman's point. I thank him for associating himself with the pleas of my hon. Friend the Member for Tayside, North. We believe that the way forward for Tayside regional council is to establish a working group. That suggestion has been made. It has worked well in the
  990
  Highland region. Often, things are not best organised in detail from the centre. The people on the spot who are responsible for the emergency services have to play a key role. My hon. Friend appreciates that and has paid tribute to those people. I thank him again for having given the House the opportunity to consider the matter today.
  Question put and agreed to.
  Adjourned accordingly at twenty minutes to Eleven o'clock.

NORTHERN IRELAND

  Stevens Inquiry
  Mr. A. Cecil Walker
  To ask the Secretary of State for Northern Ireland what is the total cost of the Stevens inquiry; how many persons have been taken in for questioning as a result of this inquiry and subsequently released without charge; and how many persons are now in custody as a result of this inquiry.

  Mr. Brooke
  Ninety-four persons, have been arrested as a result of the inquiry led by DCC Stevens. Fifty-nine have been charged, and 24 persons are now in custody. The final cost of the inquiry is not yet available. Up to 24 April, however, £307,000 had been spent. It is estimated that final costs for the period ending 31 March 1990 will be around £500,000.

  Fair Employment
  Rev. William McCrea
  To ask the Secretary of State for Northern Ireland if he will list all firms in Mid-Ulster which are registered with the Northern Ireland Fair Employment Commission in Strabane district council, Omagh district council and Cookstown district council areas.

  Mr. Needham
  Information in the form requested is not yet available. The Fair Employment Commission expects, however, to be in a position to provide information in that form later this year.

  Rev. William McCrea
  To ask the Secretary of State for Northern Ireland if he will list the numbers of employees in each public organisation by the Fair Employment Commission's definition of Protestant and Roman Catholics in Omagh council area for those companies or organisations on the fair employment register.

  Mr. Needham
  The Fair Employment Commission holds monitoring information on the numbers of people employed by public authorities which are specified under the Fair Employment (Specification of Public Authorities) Order (NI) 1989. This is not however disaggregated by district council area.

  Mineral Extraction, Cavanacaw
  Rev. William McCrea
  To ask the Secretary of State for Northern Ireland what conditions are being imposed upon the mineral operation being carried on at Cavanacaw, Omagh so as to ensure the future welfare and safety of the environment; and whether final approval has been granted for the mineral extraction in this area.

  Mr. Needham
  The conditions of the prospecting licence include provision for restoration of lands affected by prospecting operations. No approval has been given for 406
  a mining lease in the Cavanacaw area near Omagh, but planning permission has been granted for a temporary exploration trench for mineral exploration subject to conditions imposed in the interest of amenity and road safety. In addition, a consent has been granted for the making of a discharge into a waterway under the terms of the Water Act (NI) 1972 subject to conditions to ensure that the waterway will not be polluted. I have sent copies of the planning decision notice and the Water Act consent to the hon. Gentleman and the Library.

  Cash Limits
  Mr. Michael Brown
  To ask the Secretary of State for Northern Ireland if he will make a statement about the cash limit for Northern Ireland departmental services for 1990–91.

  Mr. Brooke
  Subject to parliamentary approval of the main estimates for Northern Ireland departmental services through the Draft Appropriation (No. 2) (Northern Ireland) Order 1990 which was laid before Parliament today, the following changes will be made to the cash limit for Northern Ireland departmental services (NIDI) for 1990–91 (only the first of these affects the level of public expenditure resources available to Northern Ireland). The changes are:

  (a) an addition of £6·7 million in respect of the 1990 Health Service review body awards. This provides additional public expenditure provision for the health and personal social services boards in Northern Ireland: the addition will be charged to the reserve and will not therefore add to the planned total of United Kingdom public expenditure;

  (b) a reduction of £15 million, reflecting an increase in the estimates of the employers' and employees' contribution to the Health Service. As a transfer within central Government this does not affect public expenditure;

  (c) a reduction of £10 million, reflecting higher forecast repayments of borrowings by Northern Ireland Electricity;

  (d) a reduction of £4·6 million, reflecting reduced expenditure on the rundown of the gas industry in Northern Ireland.

  The last two items reflect reallocation of resources within existing plans from cash-limited services to non-cash-limited services.

  The net effect of these changes is a reduction of £22·9 million in the cash limit NIDI, from £2,972·194 million to £2,949·294 million.

  Mr. Brian Nelson
  Mr. A. Cecil Walker
  To ask the Secretary of State for Northern Ireland if he will make a statement on the security role of Brian Nelson in north Belfast.

  Mr. Brooke
  [holding answer 30 April 1990]: Mr. Nelson is currently in custody charged with possession of information likely to be of use to terrorists. His case is therefore sub judice and I can make no comment about it.

  Beef Industry
  Mr. McGrady
  To ask the Secretary of State for Northern Ireland what financial or other arrangements he proposes to make to alleviate the financial problems now affecting the beef industry in Northern Ireland.
  407
  Mr. Peter Bottomley
  [holding answer 14 May 1990]: The Northern Ireland beef sector will benefit considerably from the changes agreed at the recent EC price-fixing negotiations. It is estimated that returns to beef producers will increase by about £8 million in a full year as a result of the changes in beef support and agrimonetary arrangements which were secured. The Northern Ireland beef sector should benefit, in particular, from the reduction in monetary compensation amounts on trade in cattle and beef across the land border with the Republic of Ireland and with other regions of the EC.

OVERSEAS DEVELOPMENT

  Third World Economic Development
  Mr. John Marshall
  To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to the reply on 14 May from the Minister for Overseas Development to the hon. Member for Hendon, South, if he will list in the Official Report details of studies of the development role of a social market economy sponsored by his Department.

  Mrs. Chalker
  The information is as follows:

  ODA sponsored research on the role of markets and economic liberalisation

  Duration

  Cost (to ODA) £

  1. Pricing and trade structure in the Chinese economy1

  Drs. Ahmed/Hussain/Stern, LSE

  1987–90

  172,568

  2. Policy change in the Chinese grain sector

  Dr. Buckwell, Wye

  1987–88

  14,800

  3. Conditional aid programmes:

  Lessons from the World Bank's experience of structural adjustment loans Professor Mosley, Manchester Professor Toye, IDS

  1987–90

  109,187

  4. World Bank report on long term perspectives for sub-Saharan Africa

  Mr. S. Please, World Bank

  1988–90

  50,000

  Total

  346,555

  1 Not yet completed.

ATTORNEY-GENERAL

  Courts (Access)
  Mr. Harry Barnes
  To ask the Attorney-General if he has any plans to improve access for disabled people to courts and other law buildings.

  The Attorney-General
  New and adapted or reconditioned court buildings provide, to the maximum possible extent, all the facilities required for the disabled, including lifts and ramps as necessary. Other buildings have had improvements incorporated where this has been feasible. New court rooms are designed to high acoustic standards which benefit the hard of hearing. Internal signs are made as clear as possible. Court staff are always available to assist disabled court users.

PRIME MINISTER

  Community Charge
  Mr. Wigley
  To ask the Prime Minister what representations she has received from Criccieth town council concerning the community charge; and if she will make a statement.

  The Prime Minister
  A letter has been received from Criccieth town council and a reply has now been sent by my right hon. Friend the Secretary of State for Wales.

  Correspondence
  Mr. Lewis
  To ask the Prime Minister when she expects to reply to the letter dated 17 April from the Reverend Andy Lindop of the Parish of St. John's, Mosley Common, Worsley, regarding the charge capping of Wigan metropolitan borough council.

  The Prime Minister
  There is no record of the letter to which the hon. Member refers having been received. May I suggest that a copy is sent to my right hon. Friend the Secretary of State for the Environment, who will arrange for an early reply.

  Parliamentary Questions
  Mr. Wigley
  To ask the Prime Minister if she will take steps to ensure that Ministers do not avoid the answering of priority written questions within the established time scale by stating in answer to such a question that a Minister will write to the hon. Member who asked the question; and if she will make a statement.

  The Prime Minister
  It is for individual Ministers to decide how to answer questions.

  Disarmament
  Mr. Kaufman
  To ask the Prime Minister whether it continues to be her policy that nuclear disarmament in Europe has gone far enough.

  The Prime Minister
  The Government support arms control agreements, whether nuclear or conventional, which enhance stability and allow security to be maintained at lower levels of forces.

EDUCATION AND SCIENCE

  Agricultural and Food Research
  Mr. Dalyell
  To ask the Secretary of State for Education and Science what assessment has been made of the success or otherwise of the system of three-year contracts at the AFRC institutes, as to whether personnel starting on a three-year contract fulfil that contract.

  Mr. Jackson
  The Agricultural and Food Research Council has recently reviewed all short-term appointments at its institutes. The majority of these appointments are three-year contracts. The results of the review indicate that AFRC's policy of recruiting staff on short-term appointments is successful and that the majority of personnel appointed in this way completed their contract.

  Mr. Dalyell
  To ask the Secretary of State for Education and Science what assessment he has made of the
  409
  selective scientific effectiveness of (a) those on three-year contracts attached to A FRC institutes and (b) those on core programmes.

  Mr. Jackson
  Responsibility for such assessments falls essentially to the Agricultural and Food Research Council itself. I understand that the council maintains a rigorous assessment of programmes and their effectiveness at its institutes by means of four-yearly visiting groups and annual reviews. This includes core programmes and three-year contracts, whether funded by the council itself or by industry.

FOREIGN AND COMMONWEALTH AFFAIRS

  Western Sahara
  Sir David Steel
  To ask the Secretary of State for Foreign and Commonwealth Affairs what support Her Majesty's Government are giving to the Secretary-General of the United Nations following his recent visit to Morocco and Algeria in making progress towards holding the referendum in the western Sahara.

  Mr. Waldegrave
  We have consistently supported the United Nations Secretary-General in his efforts to find a solution to the dispute over the western Sahara. We have also joined our Community partners in welcoming the acceptance by both parties of the United Nations Secretary-General's referendum proposals.

  Children's Rights
  Mr. Vaz
  To ask the Secretary of State for Foreign and Commonwealth Affairs when the Government expect to ratify the United Nations convention on the rights of the child.

  Mr. Sainsbury
  I refer the hon. Member to the reply I gave to the hon. Member for Clydesdale (Mr. Hood) on 9 May 1990, column 176.

  Falkland Islands
  Dr. Woodcock
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will estimate the depletion of the illex fishery around the Falkland Islands as a direct result of not applying a 200-mile fishery zone.

  Mr. Sainsbury
  Recent scientific advice indicates that if the Falkland Islands interim conservation and management zone (FICZ) were extended to 200 miles, escapement for illex squid could be expected to increase by less than 5 per cent. and that effective conservation of the stock requires multilateral efforts to control fishing well beyond 200 miles.

  Human Rights
  Mr. Maclennan
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether Her Majesty's Government will publish information about their periodic reports to the human rights committee under the international covenant on civil and political rights.

  Mr. Sainsbury
  Copies of our reports under the international covenant on civil and political rights are freely available from the Foreign and Commonwealth Office. Copies have also been placed in the Library of the House.

  Palestine
  Mr. Vaz
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many reports of breaches of human rights in Palestine Her Majesty's Government have received in the past 12 months; and if he will make a statement.

  Mr. Waldegrave
  We receive frequent reports of human rights abuses in the occupied territories. We regularly take up individual cases with the Israeli authorities on both a national and Community basis. The Israelis are well aware of our view that they should administer the occupied territories in accordance with their obligations under international law.

HOME DEPARTMENT

  West Midlands Police
  Ms. Short
  To ask the Secretary of State for the Home Department (1) if he will call for a report from the chief constable of West Midlands on which years the following officers served in the West Midlands serious crimes squad: DS James Milligan 6269, DI Terence Mills 4512, DS Paul Owen 5056, DC John Perkins 4145, DC Alan Pickering 3273, DC James Price 9307, DC Michael Quin 2274, DS John Rawlings 1353, DC John Rawlings 3540, DS Peter Reynolds 3772, DS Timothy Russell 7099, DC Laurence Shaw 5498, DS Michael Swinneton 8296 and DI Henry Thomas;

  (2) if he will call for a report from the chief constable of West Midlands on which years the following officers served in the West Midlands serious crimes squad: DS David Ford 9210, DCI Robert Goodchild 9416, DS William Guilt 4587, DC Alfred Hayward 6764, DI Peter Higgins 3435, Det. Supt. Mick Holder, DC Michael Houkins 2344, DS Colin James 6924, DS Roy Jennings 5062, DC Conrad Joseph, DS Richard Leary 2487, DS Danny Lloyd 7448, DS Leslie Leek 1691, DC Robert Maison 9110, DC Hugh McLelland 6540, DCI Paul Matthews, DS James McManus 2303 and DC Charles 4175;

  (3) if he will call for a report from the chief constable of West Midlands on which years the following officers served in the West Midlands serious crimes squad: DS Martin Thomas 9362, DC David Woodley 2853, DC Clifford Wesley 3455, DCI Banks 1317, Det. Supt. Bob Morris, DCI Roy Taylor `A'61, Det. Supt. Stan Beechey, DC Paul Bucknall 5269, DS Brian Morton, DC Brookes 7099, DI Geoffrey Edwards 6861, DS Michael Doyle 7302, DC Alan Campbell 6444 and DS Bryant 45;

  (4) if he will call for a report from the chief constable of West Midlands on which years the following officers served in the West Midlands serious crimes squad: DC Colin Abbotts 9078, DC Ronald Adams 6220, DS Anthony Ball 6843, DS Peter Bowen 2224, DS Norman Burns 6513, DC David Bowen Evans 5202, DCI John Brown 5436, DI Kenneth Cook 1337, DS Albert Cawley 9085, DS Michael Cooper 9448, Det. Supt. Roger Corbett 9412, DI Eddie Curry 6579, Det. Supt. Brian Davies, DS Joseph Dayle 3457, DS John Davies 7090 and DC Ronald Evans 9292.

  Mr. Peter Lloyd
  No. My right hon. and learned Friend has no plans to call for a report on such matters.

  Disabled Offenders
  Mr. Harry Barnes
  To ask the Secretary of State for the Home Department how many disabled people are in prisons; and what special arrangements are made for them.

  Mr. Mellor
  No records are kept centrally of the numbers of prisoners with disabilities, but such information as is available suggests that the numbers are relatively small. Prison establishments seek to meet the needs of those inmates on an individual basis—for example by providing books for the visually handicapped or by modifying cellular accommodation for those with mobility problems. Six establishments have toilets in the hospital area which are suitable for people with disabilities, and the standard brief for the design of future prisons provides for these and other facilities for the disabled.

  Mr. Harry Barnes
  To ask the Secretary of State for the Home Department what guidance he has given concerning the sentencing of offenders who are disabled.

  Mr. John Patten
  Sentencing in individual cases is a matter for the courts within their overall powers as laid down by legislation and in accordance with guidance given by the Court of Appeal. The Court of Appeal has made it clear that, for all offenders, custody should be given only when necessary and that it should be no longer than necessary. The national standards for community service orders, which came into effect on 1 April 1989, asked probation areas to ensure that community service placements are available for disabled offenders.

  Criminal Injuries Compensation Board
  Mr. Darling
  To ask the Secretary of State for the Home Department what plans he has to reduce the backlog of cases pending before the Criminal Injuries Compensation Board.

  Mr. John Patten
  In February we approved the recruitment of 60 extra staff for the board. Ten of these are already in post and the rest are expected to be in post by the end of June.

  The reply to a question from my hon. Friend the Member for Westminster, North (Sir J. Wheeler) on 8 December at columns 409–17, set out the terms of the revised criminal injuries compensation scheme and described other steps taken to improve the board's performance. The revised scheme, which came into effect on 1 February, allows the board to resolve certain cases more quickly by delegating decisions to staff and expediting appeal procedures. The first phase of the major computer project at the board began in March. We shall monitor the effectiveness of these measures in reducing arrears of work at the board.

  Mr. Darling
  To ask the Secretary of State for the Home Department how many cases awaited determination by the Criminal Injuries Compensation Board as at 31 March; and what is the average time between submission of a claim and its determination.

  Mr. John Patten
  The number of applications awaiting initial determination by a single member of the board at 31 March was 65,100. In a further 2,842 applications interim 412
  awards had been made and the final determination deferred. There were also 9,096 cases awaiting appeal hearings and 10,748 where an award had been offered but not yet accepted by the applicant, making a total of 87,786 applications outstanding. Of these, about 50,000 represent the board's working balance, that is, cases which would be under consideration even if there were no arrears.

  Information about the average time taken to resolve applications is not available in the form requested, but the percentage of cases submitted to a single member of the board within certain periods from registration is shown in paragraph 6.1 of the board's 25th annual report (Cm. 900), a copy of which is in the Library.

  Demonstration (Arrests)
  Mr. Terry Fields
  To ask the Secretary of State for the Home Department how many people the police have arrested for incidents arising out of the anti-poll tax demonstration in London on 31 March(a) on the day of the demonstration itself and (b) as a result of operation Carnaby; and how many of those arrested have been charged.

  Mr. Peter Lloyd
  I am informed by the Commissioner of Police of the Metropolis that 427 people were arrested on 31 March in connection with the disorder which occurred during and following the demonstration in London against the community charge. Of these, 409 have been charged with criminal offences.

  Fifty-two people have subsequently been arrested as a result of the continuing police investigation into the disorder. Of these, 39 have been charged with criminal offences.

  Bogus Welfare Workers
  Mr. Alfred Morris
  To ask the Secretary of State for the Home Department what action he proposes to co-ordinate inter-departmental action in regard to recently reported cases of people posing as health visitors or social workers when visiting families with young children; of how many such cases he is aware; and if he will make a statement.

  Mr. Peter Lloyd
  I understand from the chief constable of South Yorkshire that the recent inter-force conference about the subject of bogus social workers and health visitors revealed 60 unexplained visits throughout England and Wales. In 24 of these access was gained to the house and in 14 young children were touched.

  Police forces across England and Wales are taking co-ordinated action to bring the offenders to justice, consulting local authority social services departments where necessary. They have warned parents throughout the country to take great care about allowing callers access to their children and to contact the police at once if their suspicions are roused. They have advised all those seeking legitimate access to identify themselves. Their advice has been wholly endorsed by a statement issued on 15 May by the Association of Directors of Social Services and the NSPCC.

  Strangeways Prison
  Mr. Alfred Morris
  To ask the Secretary of State for the Home Department how much of the total costs of police involvement in the siege of Strangeways prison he expects to fall on Greater Manchester police authority and how
  413
  much will be met by his Department; what study he has made of the effect of the costs to be borne by the Greater Manchester police authority on the performance of the police service in the conurbation; if he is prepared now to meet the costs of police involvement in the siege as a whole; and if he will make a statement.

  Mr. Peter Lloyd
  I refer the right hon. Member to the reply given to a question from the hon. Member for Manchester, Central (Mr. Litherland) on 8 May at column 28. We have not yet received from the police authority a full assessment of the additional costs which it incurred as a result of the disturbances.

  Police Accommodation Allowance
  Mr. Shersby
  To ask the Secretary of State for the Home Department if he will make an estimate of the cost to public funds of the provided accommodation allowance payable to police officers in provided accommodation for the year commencing 1 April.

  Mr. Peter Lloyd
  About 18,000 officers live in provided accommodation. Provided accommodation allowance has been set at £300·00 per officer per year and is payable for three years. Estimates accordingly provide for direct public expenditure of £5·4 million per year on this allowance for each year that it is payable.

  Wildlife and Countryside Act
  Mr. Simon Hughes
  To ask the Secretary of State for the Home Department what information he has in respect of prosecutions, convictions, and penalties levied in connection with deaths of protected species and listed in the Wildlife and Countryside Act 1981 and the Food and Environment Protection Act 1985; and if he will make a statement.

  Mr. Peter Lloyd
  [holding answer 11 May 1990]: It is not possible from the information held centrally to distinguish between offences where species protected under the Wildlife and Countryside Act 1981 have been intentionally killed and those where they have been intentionally injured or taken. In 1988 there were a total of 133 prosecutions and 114 convictions under the Act.

  In 1988 there were no prosecutions for offences under the Food and Environment Protection Act 1985 which involved the death of a protected species.

  Juvenile Offenders
  Mr. Thurnham
  To ask the Secretary of State for the Home Department what is the latest number of juvenile offenders in youth custody; and if he will make a statement.

  Mr. Mellor
  [pursuant to his reply, 19 March 1990, c. 455–56]: The number of juvenile offenders in prison service establishments on 31 December 1989 was 327, not 358 as stated in the earlier reply.

  Illegal Broadcasting
  Sir John Wheeler
  To ask the Secretary of State for the Home Department what information he has about the extent of the problem caused to listeners of authorised commercial radio broadcasts by their inability to tune to authorised stations because of interference by illegal 414
  broadcasts; how many complaints he has received from the public; and what discussions he has held with listeners' representative bodies and commercial radio operators.

  Mr. Forth
  I have been asked to reply.

  The radio investigation service (RIS) of my Department's radiocommunications agency receives frequent complaints of radio interference caused by unlicensed broadcasting stations. Officials of the agency regularly correspond with, and on occasions meet, listeners' representative bodies and broadcasting organisations.

HEALTH

  Cot Deaths
  Mr. Andrew Smith
  To ask the Secretary of State for Health if he will make a statement on the progress made to date by the expert working group set up to assess the work of Mr. Barry Richardson's research into cot deaths.

  Mr. Rowlands
  To ask the Secretary of State for Health if he will make a statement on the progress made to date by the expert working group set up to assess the work of Mr. Barry Richardson's research into cot deaths.

  Ms. Short
  To ask the Secretary of State for Health if he will make a statement on the progress made to date by the expert working group set up to assess the work of Mr. Barry Richardson's research into cot deaths.

  Mrs. Virginia Bottomley
  The expert working group set up by the chief medical officer on 9 March was asked to consider and report on the work done by Mr. Mitchell and Mr. Richardson, together with the findings of the laboratory of the Government chemist and any other data; and make any necessary recommendations. He has asked the group to report as soon as possible and will make public its findings.

  The experts are working towards a report with commendable speed. The group first met on 3 April and studied Mr. Richardson's then latest paper and other evidence; it met again on 3 May to hear from individuals and associations, with important information, one of whom was Mr. Barry Richardson. It will next meet on 20 June.

  Postgraduate Allowance Training (Fees)
  Mr. Butler
  To ask the Secretary of State for Health what information he has on the disparity of fees charged by regional advisers for authorising postgraduate education allowance training; and if he has any proposals to standardise such fees.

  Mrs. Virginia Bottomley
  The Department has had discussions with the committee of regional advisers in general practice in England (CRAGPIE) on a suitable level of fees to be charged for the accreditation of courses for the postgraduate education allowance and we have asked CRAGPIE to agree as a matter of urgency a national scale of fees.

  Miscarriages
  Miss Emma Nicholson
  To ask the Secretary of State for Health what proportion of pregnancies notified to doctors resulted in a miscarriage in each of the last 10 years.
  415
  Mrs. Virginia Bottomley
  This information is not collected centrally. Information is available centrally only on miscarriages which occur in NHS hospitals or result in a stay in an NHS hospital. Information for the years 1979 to 1985 is given in the table.

  Estimated number of hospital stays in NHS hospitals in England with a diagnosis of "spontaneous abortion"

  Year

  Estimated numbers

  1979

  24,690

  1980

  26,800

  1981

  26,310

  1982

  27,530

  1983

  28,270

  1984

  29,790

  1985

  31,620

  Source: Hospital inpatient inquiry.

  Hearing Aids
  Mr. Alex Carlile
  To ask the Secretary of State for Health whether deaf children are required to take out insurance on commercial hearing aids supplied free of charge on the National Health Service; and if he will make a statement.

  Mr. Dorrell
  I refer the hon. and learned Member to the reply my hon. Friend the then Under-Secretary of State for Health, gave the hon. Member for Gordon (Mr. Bruce) on 1 May at column 538.

  Thalassaemia
  Mr. Vaz
  To ask the Secretary of State for Health how many deaths there have been from thalassaemia for each year over the last 10 years.

  Mr. Dorrell
  The information is shown in the table.

  Number of deaths from thalassaemia1 of persons in England and Wales, 1980–892

  Year

  Number of deaths

  1980

  7

  1981

  11

  1982

  5

  1983

  3

  1984

  11

  1985

  12

  1986

  6

  1987

  10

  1988

  6

  1989

  28

  1 Assigned to the International Classification of Diseases (ICD) ninth revision code 282.4.

  2 Provisional.

  Specialist Hospitals
  Mrs. Dunwoody
  To ask the Secretary of State for Health what provision he is making in the reorganisation of the National Health Service for the maintenance of specialist hospitals; and whether he will make special funding available.

  Mrs. Virginia Bottomley
  The special health authorities for the London postgraduate teaching hospitals will retain their current status and their specialist teaching, research 416
  and service roles. They will, of course, be able to apply for NHS trust status if they wish. The Government intend that the funding of these institutions will continue to enable them to carry out their valuable teaching and research activities.

  Mental Illness
  Mr. Ashley
  To ask the Secretary of State for Health what steps he is taking to ensure that people with mental handicap and mental illness are enabled to give their views about their community care needs during the assessment procedure.

  Mr. Dorrell
  It is important that proper opportunities are provided for patients to take part in discussions relating to different treatment possibilities; and to agree the programme to be implemented. Our White Paper "Caring for People" stressed that the views of the person requiring care, and those of his or her carers, should be taken into account during the assessment procedure. This includes people with a mental handicap or mental illness. In our guidance to authorities we intend to underline the requirement for assessment procedures to take account of the views of all types of users and their carers.

  Abortion
  Mr. Alton
  To ask the Secretary of State for Health how many abortions were performed on unborn children under statutory ground 2 at 25, 26, 27 and 28 weeks of gestation, respectively, during 1989.

  Mr. Dorrell
  The provisional figure for 1 January to 30 September 1989 shows no such abortions.

  Wakefield District Health Authority
  Mr. Hinchliffe
  To ask the Secretary of State for Health (1) in view of the costs incurred by Wakefield district health authority arising from the court action taken against it by Mr. Ray Corner, the authority's former director of finance, what action has been taken by his Department in conjunction with Yorkshire regional health authority and Wakefield district health authority to ensure that staff of any rank will not be suspended or dismissed in a similar manner;

  (2) what discussions have taken place between his Department, Yorkshire regional health authority and Wakefield district health authority on the suspension and subsequent dismissal by the district general manager of Mr. Ray Corner, the authority's former director of finance;

  (3) if he will take steps to ensure that the £24,000 compensation to be paid by Wakefield district health authority to its former director of finance, Mr. Ray Corner, in respect of his suspension and subsequent dismissal from his post and the costs of all legal expenses arising from his action against the authority, will be met from his Department's budget for the preparation for self-governing trusts.

  Mrs. Virginia Bottomley
  This is a matter for the local health authority. The NHS management executive has been kept informed of developments.

  Registered Child Minders
  Ms. Armstrong
  To ask the Secretary of State for Health how many child minders are registered in(a) England, (b) Scotland, (c) Wales and (d) Northern Ireland.

  Mrs. Virginia Bottomley
  At 31 March 1988 there were 74,588 registered child minders in England. Information about Scotland is a matter for my right hon. and learned Friend the Secretary of State for Scotland. Information about Northern Ireland and Wales are matters for my right hon. Friends the Secretaries of State for Northern Ireland and for Wales.

  Ms. Armstrong
  To ask the Secretary of State for Health if he will list those local authorities which have waiting periods of(a) six to 12 months, (b) 12 to 18 months, (c) 18 to 24 months and (d) over 24 months for registration of child minders.

  Mrs. Virginia Bottomley
  This information is not collected centrally. It is for local authorities to decide on the appropriate level of resources necessary for carrying out their registration duty under the Nurses and Childminders Registration Act 1948. Where individual cases are brought to the Department's attention, inquiries are made of the local authority concerned to establish the facts and what action, if any, is being taken to remedy the position. Advice will be given on the registration process including the length of time to handle applications in the new guidance to be issued under the Children Act 1989.

  Ms. Armstrong
  To ask the Secretary of State for Health if he will list those local authorities which have licensed other bodies to register child minders on their behalf.

  Mrs. Virginia Bottomley
  Under the provisions of the Nurseries and Childminders Regulation Act 1948, as amended, local social services departments have a statutory duty to register child minders. This duty must not be delegated.

  So far as is known no such delegation has occurred.

  Ms. Armstrong
  To ask the Secretary of State for Health how many registered child minders are currently claiming free milk benefit.

  Mr. Dorrell
  The figures are not kept in the form requested. However, some 90,000 registered child minders, playgroups and day nurseries are registered (under the Welfare Food Regulations 1988) to receive the free milk, or dried baby milk, available for children under five years old in day care. The majority of these are child minders.

  Speech Therapists
  Mr. Watson
  To ask the Secretary of State for Health what is the number of speech therapists per 100,000 population recommended by the Government-commissioned Enderby report; and how many health authorities meet that recommended level.

  Mrs. Virginia Bottomley
  The article "Communication Disorders, Planning a Service to meet the Needs" published in the December 1989 issue of the British Journal of Disorders of Communication by Dr. Enderby and Dr. Davies, and based on research by Dr. Davies funded by the Department, did not make any recommendations about numbers of speech therapists.

  Paramedic Training
  Mr. Evennett
  To ask the Secretary of State for Health (1) whether any extended paramedic training scheme for ambulance crews in England provides a qualification validated by the National Council for Vocational Qualifications; and if he will make a statement;

  (2) whether he has any plans to introduce a standard paramedic training syllabus for ambulance crews in England; and if he will make a statement.

  Mr. Dorrell
  There is already an extended (paramedic) training programme provided by the National Health Service training authority which has been endorsed by the NHS for use by the ambulance service.

  The NHSTA is in the process of converting the training syllabus into degrees of competence in accordance with NCVQ requirements in consultation with representatives of the various employment sectors and interested bodies.

  "Stockport Health Authority News"
  Mr. Andrew F. Bennett
  To ask the Secretary of State for Health what was the cost of publishing "Stockport Health Authority News, Special Edition."

  Mr. Dorrell
  I am advised that each edition of the Stockport health authority's publication "Stockport Health Authority News" costs about £360 to print and is circulated to health staff within the authority.

  NHS Reform
  Mr. Winnick
  To ask the Secretary of State for Health what more recent representations he has received regarding hospitals opting out of the existing National Health Service management structure.

  Mrs. Virginia Bottomley
  I refer the hon. Member to the reply I gave him on 12 February at columns 22–25. Since then a further four units have expressed interest in NHS trust status and two others have amalgamated. This brings the total number of units which have expressed interest in trust status to 193.

  Benzodiazepines
  Mr. Fearn
  To ask the Secretary of State for Health what reports he has received of foetal damage caused by benzodiazepines.

  Mrs. Virginia Bottomley
  On available information, t he Committee on Safety of Medicines has received 103 reports of foetal damage which may be associated with benzodiazepines. A report of a suspected adverse drug reaction does not necessarily mean a causal relationship. Product data sheets for benzodiazepines state that these should not be used in pregnancy.

  Mr. Fearn
  To ask the Secretary of State for Health if he will provide a breakdown of the number of prescriptions issued by community pharmacists for each individual benzodiazepine.

  Mrs. Virginia Bottomley
  I refer the hon. Member to the reply that I gave him on 27 February at column 121. Figures for 1989 are not yet available.

  Mr. Fearn
  To ask the Secretary of State for Health if he will initiate an inquiry into the reasons for the disparity in the number of prescriptions for benzodiazepines given to men and women.
  419
  Mrs. Virginia Bottomley
  We have taken all reasonable steps to provide doctors with information about the use of benzodiazepines and make them aware of the need to prescribe these drugs carefully. It is for doctors using their professional clinical judgment to decide how best to prescribe for individual patients. An inquiry of the kind suggested would not add new information to aid doctors in their individual prescribing decisions and we therefore have no plans to initiate one.

  Mr. Fearn
  To ask the Secretary of State for Health what information he has on the number of people who have attempted suicide after withdrawing from benzodiazepines.

  Mrs. Virginia Bottomley
  This information is not collected centrally.

  Bogus Welfare Workers
  Mr. Alfred Morris
  To ask the Secretary of State for Health what information his Department has on the number of visits made to families with young children by people posing, in the Manchester area and elsewhere, as health visitors or social workers; if there is any action he will be taking; and if he will make a statement.

  Mrs. Virginia Bottomley
  Maintaining a record of the number of such visits is properly a task for the police. We will keep under review the need for action beyond endorsing advice already given that families should check carefully the credentials of any visitors before allowing them to see young children. No bona fide social worker would personally purport to conduct a medical examination of a child.

  Intensive Care
  Mr. Alfred Morris
  To ask the Secretary of State for Health to what extent the points system for deciding whether patients are to receive life or death intensive care treatment, known as the Apache II scoring system, is used in(a) Manchester's and (b) other British hospitals in making priority decisions about the use of current resources for such treatment; if his Department has given or will be giving any instructions about use of the system in National Health Service hospitals; and if he will make a statement.

  Mr. Dorrell
  The decision on whether a patient requires intensive care is a matter for the clinician responsible for that case. We have no plans to issue instructions on the clinical criteria which should be used.

  Midwives
  Mr. Ashley
  To ask the Secretary of State for Health if he will list the regional health authorities in rank order according to the number of trained midwives per 100,000 women of child-bearing age.

  Mrs. Virginia Bottomley
  [holding answer 8 May 1990]: The requested information is shown in the table.

  Health authorities will have regard to a number of different factors in setting staffing levels for their maternity services. The number of women of child-bearing age is not in itself particularly meaningful for this purpose, given that age distributions and fertility rates within that group will vary in different places.
  420

  Midwives1 employed in the NHS at 30 September 1988 per 100,000 women of child-bearing age2 within each region

  Qualified midwives (WTE) per 100,000 women of child-bearing age

  Per 100,000

  England

  188·4

  North Western

  253·5

  Yorkshire

  207·6

  Northern

  202·0

  West Midlands

  199·2

  North East Thames

  198·5

  Mersey

  197·0

  East Anglian

  190·2

  Wessex

  186·1

  Trent

  180·5

  North West Thames3

  175·6

  South West Thames

  168·9

  Oxford

  167·7

  South Western

  150·4

  South East Thames

  143·1

  Source: DoH (SM 13) Annual census of NHS non-medical manpower and OPCS population census.

  1 Includes hospital and community midwifery staff.

  2 Women of child-bearing age are those between the ages of 15 and 44 years.

  3 Includes staff employed in SHAs.

  Conductive Education
  Dr. Twinn
  To ask the Secretary of State for Health what action has been taken to promote the development in the United Kingdom of conductive education as practised at the Peto institute.

  Mr. Scott
  I have been asked to reply.

  I announced in the House in December 1989 details of our proposal to create a formal link with the Peto institute. We have agreed to provide a total of £5 million from Government funds over four financial years towards the capital costs of the new international institute projected by the Hungarian Government, subject to satisfactory progress with construction and conclusion of an agreement covering access for United Kingdom children and trainee conductors. Discussions to conclude this agreement will take place shortly.

  Access for British trainee conductors will be particularly important for the long-term future of conductive education in this country. The Foundation for Conductive Education in Birmingham was formed to establish conductive education in the United Kingdom and has signed a long-term agreement to bring conductive education to this country, under Hungarian direction. To ensure that trainee conductors receive the maximum support for and benefit from their training, the Government are providing more than £92,000 over three years for the foundation to employ a tutor in Budapest.

  To help parents who are considering taking a disabled child to the Peto institute in Budapest, we are funding the production by the foundation of a guide offering information about conductive education itself and the financial and other implications of visiting Hungary.

SOCIAL SECURITY

  Child Maintenance
  Mr. Morley
  To ask the Secretary of State for Social Security whether he has any plans to provide an incentive to absent parents to provide maintenance for their children who are living on benefits.
  421
  Mrs. Gillian Shephard
  Absent parents, like all parents, have a clear legal responsibility to maintain their families wherever they can afford to, but in far too many cases that responsibility has not been fulfilled. No maintenance is paid for over three quarters of lone-parent families receiving income support. Income support for lone-parent families cost £1·9 billion in 1989–90.

  As already announced, the Government are reviewing the maintenance system to see what changes need to be made to the way maintenance is awarded, and collected. A survey is under way to provide full and up-to-date information as a basis for deciding the best way forward. We are also examining systems in use in other countries to see what lessons can be learnt. We aim to bring forward proposals later this year.

  In the shorter term we have taken action to improve the payment of maintenance under the current system. This includes a new clause introduced to the current Social Security Bill, under which DSS will be able to enforce a lone parent's maintenance order for her when payments are not being made in full, if she is claiming income support. This will ensure that prompt action is taken in all cases and will reduce the chance of the absent parent getting into the habit of non-payment.

  Hostels
  Mr. Andrew Mitchell
  To ask the Secretary of State for Social Security whether he is now in a position to announce help for those hostels which currently do not receive direct payments of income support for service charges.

  Mrs. Gillian Shephard
  I am pleased to announce that from 21 May all hostels and nightshelters may receive direct payments of income support for service charges, including meals, from the outset of a claimant's residence.

  This will safeguard the interests of those hostels which have experienced difficulty collecting service charges from residents. This will still allow those hostels which do not wish to take advantage of the direct payment arrangements to encourage their residents to take responsibility for managing their own finances.

TRANSPORT

  Stockport Bypass
  Mr. Tom Arnold
  To ask the Secretary of State for Transport what is his detailed timetable for the construction of the A6 (M) Stockport north-south bypass.

  Mr. Atkins
  We expect to publish supplementary orders and a compulsory purchase order in autumn next year. Progress after that depends upon how much objection there is to them. A public inquiry will be necessary if there are unresolved objections. I am writing to my hon. Friend.

  Traffic Lights
  Mr. Higgins
  To ask the Secretary of State for Transport how many new sets of traffic lights have been installed in the Greater London area in the past two years.

  Mr. Atkins
  Traffic lights have been installed at approximately 300 new sites in the past two years, of which about half were new pelican crossings.

  Disabled Drivers
  Mr. Harry Barnes
  To ask the Secretary of State for Transport what is his policy concerning the access of disabled people and their cars to pedestrian-only areas; and if he will make a statement.

  Mr. Atkins
  The Department's policy towards the access of orange badge holders' vehicles to pedestrian zones is set out in local transport note 1/87 "Getting the Right Balance".

  Orange badge holders' vehicles should not normally need to be exempted from access restrictions if a sufficient number of convenient parking places can be provided. If this is not possible, there may be a case for allowing some form of access for disabled people's vehicles.

  The guidance stresses the importance of consultation with organisations representing people with disabilities when zones are being planned.

  A copy of local transport note 1/87 has been placed in the Library.

  Mr. Harry Barnes
  To ask the Secretary of State for Transport how many disabled orange badge holders there are in Derbyshire.

  Mr. Atkins
  The number is 26,942 at 31 March 1989, the latest date for which figures are available centrally.

  Mr. Harry Barnes
  To ask the Secretary of State for Transport if he will list those councils which ban vehicles belonging to disabled orange badge holders from pedestrian-only areas.

  Mr. Atkins
  The decision to ban vehicles displaying an orange badge from pedestrian zones is primarily for individual local authorities to take. Information on the number of local authorities which have implemented such a ban is not held centrally.

  Mr. Harry Barnes
  To ask the Secretary of State for Transport if he has any plans to amend the orange badge scheme for disabled drivers.

  Mr. Atkins
  Revised regulations governing the scheme were issued for consultation on 9 April. The changes are designed to clarify the eligibility criteria for badges, curb abuse and tailor the parking concessions provided under the scheme more closely to the needs of severely disabled people.

  Major organisations representing disabled people, the local authority associations and the police are being consulted on the detailed changes to the statutory regulations.

  A copy has been placed in the Library.

  British Rail
  Mr. Livsey
  To ask the Secretary of State for Transport what Government financial support has been allocated to British Rail provincial and its predecessors in actual terms and real terms in(a) 1975–76, (b) 1980–81, (c) 1985–86, (d) 1988–89, (e) 1989–90 and (f) 1990–91 projected.

  Mr. Freeman
  Figures for Government support paid to the British Railways Board, including public service obligation grant under EC regulation 1191/69 and section 3 of the Railways Act 1974, and level crossings grant under EC regulation 1192/69, are given in the table. Final claims have not yet been agreed for the years 1988–89 and 1989–90.
  423

  Cash £ million1

  1990–91 prices £ million1

  19752

  307

  1,052

  19802

  591

  1,072

  1985–86

  838

  1,113

  1988–89

  557

  632

  1989–90

  511

  544

  1990–913

  497

  497

  1 Rounded to the nearest £ million.

  2 Before 1984–85 BR's financial year ran from 1 January to 31 December.

  3 This is a planning figure based on a technical adjustment of the figures in Chapter 7 of The Government's Expenditure Plans 1990–91 to 1992–93 (Cm 1007).

  Before 1987–88 BR was not required to state the division of grant between sectors. In its annual report and accounts for 1988–89 BR estimated the PSO grant requirement for provincial to be £408 million (£461 million at 1990–91 prices). The Government's objectives for BR for the three years to 1992–93 endorsed BR's own target of reducing provincial's grant requirement to £367 million (1989–90 prices) by 1992–93, and requested BR to examine ways of reducing this by some £20 million.

  Parking Act 1989
  Mr. Kirkhope
  To ask the Secretary of State for Transport when he intends to bring into force the Parking Act 1989.

  Mr. Atkins
  The Parking Act 1989 is being brought into force by commencement order today. It paves the way for a wider range of parking equipment to be approved for use by local authorities in parking places under their control. In particular "cashless" systems—which offer advantages in security, flexibility and convenience—will be able to be approved for off-street use. An explanatory circular (DTp 2/90 WO 21/90) has been issued to local authorities and is available from Her Majesty's Stationery Office.

  East London River Crossing
  Mr. Evennett
  To ask the Secretary of State for Transport when he expects the present inquiry on the proposed east London river crossing to be concluded.

  Mr. Atkins
  The public inquiries into certain design changes on this scheme do not start until 3 July. They are being held concurrently with an inquiry into planning applications for the further development of London City airport. I cannot speculate how long these concurrent inquiries will last.

  Dock Employment
  Mr. Stern
  To ask the Secretary of State for Transport what has been the change in employment in docks since the abolition of the dock labour scheme.

  Mr. McLoughlin
  At the time of abolition there were 9,223 registered dock workers. To date, 4,734 redundancies have been notified to this Department under the compensation payments scheme.

  Airport Rail Links
  Mr. Fearn
  To ask the Secretary of State for Transport what studies his Department has undertaken into the feasibility of through trains from Heathrow and Gatwick airports to Manchester and Birmingham airports.
  424
  Mr. Freeman
  None. This is for British Rail and airport operators to initiate.

ENVIRONMENT

  Rural Industry
  Mr. Alex Carlile
  To ask the Secretary of State for the Environment what financial support was given in real terms to industry in rural areas in(a) 1979 and (b)

  Mr. Heathcoat-Amory
  Most Government schemes for financial assistance to industry provide assistance for urban and rural areas alike. Where there are special rural problems in England, the Rural Development Commission, which is grant-aided by my Department, can provide assistance with both economic and social development. The commission's total gross expenditure at 1989–90 prices was £36·6 million in the financial year 1978–79 and £37·2 million in 1989–90.

  Urban Regeneration
  Mr. Michael J. Martin
  To ask the Secretary of State for the Environment when there will be a Government response to the Audit Commission document, "Urban Regeneration and Economic Development."

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

  Property Transfers, London
  Mr. Chris Smith
  To ask the Secretary of State for the Environment if he will list all those properties vested in the London residuary body, with a voluntary organisation or organisations in occupation, which have been transferred to the relevant borough council; and if he will give the estimated market value and the consideration paid for transfer in each case.

  Mr. Heathcoat-Amory
  The London residuary body has disposed of interests in the following properties occupied by voluntary organisations to the relevant borough councils. Sales at less than the estimated market value at the time of disposal are subject to clawback provisions and to covenants as to use.

  Address

  Estimated market value £

  Consideration paid £

  13–15 Stockwell road, SW9

  350,000

  1

  5–5A Westminster Bridge road, SE1

  2,000,000

  1

  286 Camden road, N7

  240,000

  1

  Palingswick House, King street, W6

  2,000,000

  1

  80 York way, N1

  2,000,000

  1

  Rio Cinema, 103 Kingsland Road, E8

  100,000

  1

  65 Bell road, Hounslow

  140,000

  140,000

  177 Abbey street, SE1

  225,000

  224,000

  153 Hammersmith road, W14

  325,000

  325,000

  Waste Recycling
  Mr. Colvin
  To ask the Secretary of State for the Environment, pursuant to his reply of 25 April,Official Report, column 322, (1) whether the incentive to which he

  425
  referred for waste collection authorities which recycle waste, will apply to a mechanised recycling plant receiving mixed domestic waste;

  (2) what steps he proposes to take to ensure that the introduction of financial credits for waste collection authorities will be used for diverting waste from landfill, rather than as a means for funding source separation and that schemes which subsequently result in a higher percentage of waste diverted from landfill, but that do not require source separation, will not be disadvantaged by the support offered through public expenditure;

  (3) what steps he proposes to take to ensure that recycling initiatives, such as financial credits from one public body to another, designed to promote source separation of waste, will not be allowed to disadvantage market-led and funded schemes for waste reclamation and recycling.

  Mr. Heathcoat-Amory
  The Government wish to encourage all environmentally beneficial and cost-effective methods of recycling domestic waste and avoiding disposal to landfill. The proposal for recycling credits, which we hope will be the subject of an amendment to be brought forward to the Environmental Protection Bill, is not intended to favour one recycling method over another. It will simply seek to ensure that the benefits of landfill avoidance feed through as financial incentives to those responsible for diverting domestic waste to recycling, whether in the public sector or not.

  Mr. Hayward
  To ask the Secretary of State for the Environment what encouragement is being given to local authorities that wish to increase the level of recycled waste.

  Mr. Heathcoat-Amory
  The provisions of the Environmental Protection Bill will require every local authority involved in waste collection or disposal to make plans that will give priority to the recycling of waste wherever practicable. Other provisions of the Bill will allow them to specify environmentally favourable options for waste disposal, such as recycling, even if they are not the cheapest in purely financial terms and will require waste disposal authorities to pass to collection authorities the savings that accrue because refuse has been recycled rather than passed to them for disposal. The Bill will also strengthen the existing powers of local authorities to arrange recycling schemes for their localities.

  The Government are also working with local authorities to develop projects such as recycling city in Sheffield and Cardiff and similar plans in other areas which can, when fully evaluated, be used as models for future schemes. We shall be providing comprehensive advice to local authorities to assist them in the production of recycling plans and the development of recycling projects.

  Chipboard Factories
  Mr. Beith
  To ask the Secretary of State for the Environment (1) what steps he is taking to take account of the views of environmental groups in respect of emissions from chipboard factories; and if he will make a statement;

  (2) if he will make it his policy to set an emission limit of just particles from timber dryers at 25 mg per cubic metre in respect of chipboard factories; and if he will make a statement.

  Mr. Heathcoat-Amory
  Chipboard factories will come under the new and more rigorous controls provided by 426
  part I of the Environmental Protection Bill. Operators of chipboard factories will be required to use the best available techniques not entailing excessive cost (BATNEEC) to minimise emissions and their potential for harming the environment.

  Guidance will be issued on appropriate air pollution controls for these processes and it is intended that this will contain a limit for emissions of particulate matter which is achievable using BATNEEC. Bodies representing relevant interests, including environmental ones, will be given the opportunity to comment on the draft guidance before it is issued by my right hon. Friend the Secretary of State.

  Political Activities (Disqualification)
  Mr. Flannery
  To ask the Secretary of State for the Environment what are his estimates of the numbers of individuals disqualified from political activities as a result of the Local Government and Housing Act.

  Mr. Heathcoat-Amory
  On the basis of the lists received from 428 out of the 491 authorities concerned, I understand that some 32,000 holders of local authority posts in England have been included in lists under section 2 of the Local Government and Housing Act 1989 as subject to political restrictions. This figure does not include all posts of chief executive, monitoring officer, chief officer and deputy chief officer, whose posts are subject to the political restrictions but are not necessarily included in the lists under the 1989 Act.

  Local government officers whose posts are in these lists, other than the holders of the specific posts I have mentioned, have the right to exemption if the independent adjudicator considers that their posts do not meet the statutory criteria.

  Wild Geese
  Mrs. Ray Michie
  To ask the Secretary of State for the Environment when he last made a statement regarding wild geese management.

  Mr. Heathcoat-Amory
  My right hon. Friend has made no recent statement on this subject. Various steps have been taken to control wild geese where necessary including scaring and limited shooting.

  Drinking Water
  Mr. Anthony Coombs
  To ask the Secretary of State for the Environment what level of investment is planned over the next five years to improve standards of drinking water.

  Mr. Heathcoat-Amory
  Water undertakers in England and Wales will be spending £1·8 billion, at November 1989 prices, up to the end of 1995 to remedy current situations of non-compliance with the EC drinking water directive.

  Sewage Outfalls
  Mr. Butler
  To ask the Secretary of State for the Environment what information he has on the practicality of sterilising sewage outfalls by the process of infusing hydrogen peroxide.

  Mr. Heathcoat-Amory
  My Department has received information on the use of hydrogen peroxide as a disinfectant from Interox Chemicals Ltd. which markets the "Oxymaster" range of disinfectants based on peracetic acid.

  Dogs
  Mr. Thurnham
  To ask the Secretary of State for the Environment what further measures he intends to take to reduce the problems caused by dogs; and if he will make a statement.

  Mr. Heathcoat-Amory
  We remain committed to the package of measures outlined in the consultation paper "Action on Dogs" which we issued last year. These include duties on local authorities to deal with strays and to enforce the existing requirement that dogs should wear a collar and identification tag. We are discussing with the RSPCA and others how this package might be strengthened in some respect. We intend to legislate at a convenient opportunity.

  Unleaded Petrol
  Sir Dudley Smith
  To ask the Secretary of State for the Environment how many grades of unleaded petrol are now marketed; and what guidance is given to drivers as to which grade will not prove harmful to their cars, where these are converted for unleaded petrol use.

  Mr. Heathcoat-Amory
  Two grades of unleaded petrol are being marketed—95 octane "Premium" and 97/98 octane "Super" or "Super Plus". The vast majority of new cars can use 95 octane and from 1 October this year all new cars will be required to be able to do so. Super unleaded is being marketed for a relatively small number of cars that cannot be, or are not, tuned for 95 octane. Any car that is tuned for 95 octane can use the super fuel but will show no advantage for the extra expense. The Department has issued guidance on which existing cars can use 95 octane unleaded, and information is also being disseminated by the motor and petrol trades. Any motorist who does not find unequivocal guidance in his car manual or from one of the other sources should consult his dealer or other qualified person.

  Cleveland Structure Plan
  Mr. Frank Cook
  To ask the Secretary of State for the Environment when he will publish the draft modifications to the Cleveland structure plan; what are the reasons for the delay; and what assessment he has made of the damage to development prospects in the area arising from such delay.

  Mr. Moynihan
  It is hoped to publish the Secretary of State's proposed modifications to the Cleveland structure plan in June. It has not been possible to do so earlier because of the need to resolve some complex issues raised in the report of the panel which conducted the examination in public. I am not aware of any damage to development prospects in Cleveland as a result of this timetable. Local planning authorities have continued to carry out their functions and, where appropriate, have taken the new structure plan into account as a material consideration in reaching their decisions. Similarly, recent appeal decisions issued by the Secretary of State have had regard to the emerging structure plan.

  Endangered Species
  Mr. Dalyell
  To ask the Secretary of State for the Environment, pursuant to his reply to the hon. Member for Linlithgow of 26 February,Official Report, columns
  428
  21–22, whether he will seek to recover the operating costs of the Endangered Species (Import and Export) Act 1976, as he is empowered to do under section 1(5) of that Act.

  Mr. Heathcoat-Amory
  Section 1(5) of the 1976 Act empowers the Secretary of State to charge for the issue of a licence under the Act. He has no plans to invoke those powers at present.

  Mr. Dalyell
  To ask the Secretary of State for the Environment (1) pursuant to his reply to the hon. Member for Linlithgow of 26 February,Official Report, columns 21–22, (a) if he will publish the list provided by the Nature Conservancy Council in 1985 of species unlikely to survive in captivity, and therefore eligible for protection under section 3 (dd) of the Endangered Species (Import and Export) Act 1976 and (b) which of those listed species are still exempt from licensing under that Act or any other legislation and not restricted for import;

  (2) if he has conveniently available figures to show how many birds of species included in the Nature Conservancy Council's list of species unlikely to survive in captivity were recorded in Ministry of Agriculture, Fisheries and Food's quarantine statistics as imported into the United Kingdom during 1988; and what was the average mortality suffered on arrival or in quarantine.

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

  Mr. Dalyell
  To ask the Secretary of State for the Environment, pursuant to his reply to the hon. Member for Linlithgow of 26 February,Official Report, columns 21–22, what action his Department takes to ensure that sufficient regard is taken of section 3(dd) of the Endangered Species (Import and Export) Act 1976, in consideration of its schedules and in the administration of licences.

  Mr. Heathcoat-Amory
  In the light of the Ministry of Agriculture, Fisheries and Food quarantine statistics for 1988 we are considering whether, in view of section 3(dd), any further species should be brought within the control of the 1976 Act. Inclusion in the list provided by the Nature Conservancy Council of species which generally do not survive well in captivity except in specialist hands is a factor which is taken into account in deciding import applications for those species.

  Radiation
  Mr. Strang
  To ask the Secretary of State for the Environment if he will list all aspects of governmental involvement with nuclear radiation; and if he will provide a breakdown of the allocation of responsibilities between the different Government Departments for radioactive materials and waste production, control and management.

  Mr. Heathcoat-Amory
  The Secretary of State for the Environment is responsible for radioactive waste management strategy in England, and for the regulation of the use and the authorisation for disposal of radioactive substances under the Radioactive Substances Act 1960. Other Government Departments with responsibilities for radioactive materials include the Department of Energy; Ministry of Agriculture, Fisheries and Food; Ministry of Defence; Department of Health; Welsh Office; Scottish Office; Northern Ireland Office; Department of Transport; Department of Employment.

  Leeds Development Corporation
  Dr. Hampson
  To ask the Secretary of State for the Environment what progress Leeds development corporation has made to date; and if he will make a statement.

  Mr. Moynihan
  Leeds development corporation was established less than two years ago and it has already done much to stimulate the regeneration of its area.

  Since designation there has been nearly £60 million of private sector investment, more than 1·5 million sq ft of industrial and commercial floor space completed and 105 dwellings completed or under construction. Further developments are in the pipeline. This has created over 1,300 construction and 5,200 permanent jobs.

  Three major joint development competitions have been launched in partnership with Leeds city council, British Waterways and British Gas. These will provide housing and community facilities and industrial and commercial developments. The corporation is giving high priority to minimise disruption to existing businesses and finding alternative premises where necessary. It is assisting businesses to improve their premises and thereby safeguard existing jobs.

  The corporation is improving the environment and has planted 150,000 trees and shrubs. It is working jointly with Leeds city council, British Waterways and the Government's Leeds/Bradford city action team to enhance the potential of the River Aire and the Leeds/Liverpool canal.

  I congratulate Leeds development corporation—and those organisations with which it is working—on creating exciting new opportunities for the people of Leeds.

  Woolaway Houses
  Mr. Stern
  To ask the Secretary of State for the Environment how many privately owned Woolaway houses, qualifying for assistance with repair, remain unrepaired(a) nationally and (b) in Bristol.

  Mr. Chope
  This information is not available in the form requested. We estimate that there are 1,007 owners of Woolaway houses in England and Wales eligible for assistance under the housing defects legislation. Of these, 291 have received assistance by way of repair, or have repairs under way. The equivalent figures for Bristol are 222 and 86, respectively. A further 53 Woolaway houses in Bristol have been repurchased, and all but 13 of the remaining 83 owners have now received offers of assistance from the council—67 by way of repair, and three by way of repurchase.

  Packaging
  Ms. Walley
  To ask the Secretary of State for the Environment what representations he has received following his call for an all out attack on excessive packaging at a packaging conference on 25 March; and if he will make a statement.

  Mr. Heathcoat-Amory
  [holding answer 11 May 1990]: My right hon. Friend and other Ministers have received many representations in support of his call on 25 March for reductions in excessive packaging, and for an enhanced effort to promote recycling by manufacturers, retailers, local authorities, voluntary groups and Government
  430
  Departments. We have also received representations from the packaging industry emphasising the economic and environmental advantages of well-designed packaging.

  Local Government Finance
  Sir John Wheeler
  To ask the Secretary of State for the Environment what would be the estimated charge on the basis of current expenditure(a) per household and (b) per capita for each London borough if a system of local income tax were to be introduced.

  Mr. Nicholas Bennett
  To ask the Secretary of State for the Environment what would be the estimated charge on the basis of current expenditure(a) per household and (b) per capita for each English district if a system of local income tax were introduced.

  Mr. Portillo
  I have no information on which to estimate the average amount which would be payable in any area under a system of local income tax either per household or per capita. Estimated local income tax rates which could have applied in each local authority area in 1990–91 were placed in the Library on 4 April.

  Sir Alan Glyn
  To ask the Secretary of State for the Environment what figure was allowed for in respect of the cost of repairing the roof of Shire hall, Reading, in setting the standard spending assessment for Berkshire county council; and what assessment was made of the likely effect on the level of the community charge in Windsor and Maidenhead.

  Mr. Portillo
  [holding answer 18 April 1990]: No specific figure for this item of expenditure was allowed for in calculating the standard spending assessment for Berkshire county council.

  The SSA includes support for the costs of capital expenditure financed from credit approvals. But at the recommendation of the Association of County Councils, credit approvals for this type of expenditure are distributed on the basis of population rather than for particular projects.

  Sir Alan Glyn
  To ask the Secretary of State for the Environment what is the effect of the use by the Royal County of Berkshire of capital reserves to fund revenue expenditure on the community charge for Windsor and Maidenhead.

  Mr. Portillo
  [holding answer 19 April 1990]: The precept which Berkshire county council has levied on Windsor and Maidenhead reflects the revenue which it has chosen to raise. That in turn reflects its general financial position, including the extent to which capital reserves may generate interest and the extent to which capital expenditure is being financed from revenue income.

  Mr. Harry Barnes
  To ask the Secretary of State for the Environment, pursuant to his answer of 3 May to the hon. Member for Derbyshire North-East,Official Report, columns 617–18, about local government revenue, if he will list the equivalent percentage details for Wandsworth and Westminster councils.

  Mr Chope
  The equivalent calculation cannot be made for individual authorities because some revenues are paid to charging authorities' collection funds on behalf of charging authorities and precepting authorities. The
  431
  relevant amounts paid into Wandsworth's general fund and collection fund are given in the table. Complete information is not yet available for the city of Westminster.

  Amounts to be paid into Wandsworth's General Fund and Collection Fund

  £000

  General Fund

  Specific and Supplementary grants (excluding community charge benefit and transitional relief)

  34,717

  Collection Fund

  Government grants (including community charge benefit and transitional relief)

  158,308

  Business rates

  60,386

  Community charges (net of community charge benefit and transitional relief)

  23,608

  Water Pollution
  Ms. Walley
  To ask the Secretary of State for the Environment, pursuant to the answer of 4 April,Official Report, column 669, if the source of the solvent affecting groundwater at the Blewbury borehole in south Oxfordshire has been identified.

  Mr. Heathcoat-Amory
  [holding answer 15 May 1990]: No definite source of the carbon tetrachloride found in groundwater at the Blewbury borehole has yet been identified. Work is continuing in order to discover the origins of this contamination.

SCOTLAND

  Rents-to-Mortgages Scheme
  Mr. Bill Walker
  To ask the Secretary of State for Scotland whether he has any plans to amend the rents-to-mortgages scheme in Scotland; and if he will make a statement.

  Lord James Douglas-Hamilton
  Early experience of the rents-to-mortgages trial scheme for Scottish Homes and new town development corporation tenants indicates that it is enabling those who could not previously afford to buy their own homes to do so.

  I shall continue to monitor the trial scheme closely to see whether it fulfils its early promise and will make a further statement in due course.

  Water Supplies
  Mr. Andrew Welsh
  To ask the Secretary of State for Scotland if he will list the number of water supplies in Scotland in breach of the 50 micrograms per litre limit of the amount of lead permitted; and if he will list the number of people covered by each water supply.

  Lord James Douglas-Hamilton
  Water supplies in Scotland do not generally breach the 50 micrograms per litre standard for lead at the point of supply to the consumer. Breaches of the standard at consumers' taps are caused by pick-up of lead from pipes and plumbing systems, mostly within the consumer's property, after the water leaves the mains. Installation of water treatment is in progress in 26 supply areas where it is known that some tap samples fail to meet the standard set in the EC drinking water directive. It is estimated that about 37,000 people in these areas may be involved.
  432
  Water authorities are currently embarking on assessments to establish in which zones the new 50 micrograms per litre standard for any sample, as set in the drinking water quality regulations now in force, may not be met and whether additional treatment schemes will be effective in further reducing lead levels at taps.

  Criminal Injuries Compensation Board
  Mr. Darling
  To ask the Secretary of State for Scotland how many cases awaited determination by the Criminal Injuries Compensation Board in Scotland as of 31 March; and what is the average time between submission of the claim and the determination.

  Lord James Douglas-Hamilton
  Separate details of the number of Scottish cases awaiting determination and of the average time taken by the Criminal Injuries Compensation Board to resolve Scottish cases are not available. The criminal injuries compensation scheme administered by the board provides compensation for victims of crimes of violence throughout Great Britain. For information on a Great Britain basis such as the hon. Member seeks, I refer him to the answer given today to his question to my right hon. and learned Friend the Secretary of State for the Home Department.

  Fishing Vessels
  Mr. Austin Mitchell
  To ask the Secretary of State for Scotland if he will supply figures for the costs and earnings of United Kingdom fishing vessels in Scotland for the period 1983 to 1989 broken down by vessel size(a) under 40 ft, (b) 40 to 79·9 ft, (c) 80 to 109–9 ft, (d) 110 to 139·9 ft and (e) 140 ft and over.

  Mr. Lang
  [holding answer 15 May 1990]: This information is not available in the form requested. I will write to the hon. Member as soon as possible.

  Health Service
  Mr. Nigel Griffiths
  To ask the Secretary of State for Scotland what is the number of junior hospital doctors working in the Royal Hospital for Sick Children in Edinburgh.

  Mr. Michael Forsyth
  The most recent figures available from Lothian health board show 26 junior doctors with duties in the Royal Hospital for Sick Children, Edinburgh.

  Mr. Canavan
  To ask the Secretary of State for Scotland whether he will investigate nurse staffing levels at Falkirk and District royal infirmary; and if he will instruct the Forth Valley health board not to implement any further reductions which would threaten the standards of patient care.

  Mr. Michael Forsyth
  [holding answer 11 May 1990]: Nurse staffing levels at Falkirk and District royal infirmary are primarily a matter for Forth Valley health board. The nurse staffing numbers for 1989–90 have increased slightly compared to 1988–89. The board has no proposals to reduce the nurse staffing levels at the hospital.

  Central Institutions
  Mr. Worthington
  To ask the Secretary of State for Scotland how much the principals of each of the central institutions were paid in 1987–88, 1988–89, 1989–90 and 1990–91.
  433
  Mr. Lang
  [holding answer 15 May 1990]: This information is not held centrally. Until February 1990, the salary levels were determined on the basis of agreements of the Scottish joint negotiating committee for teaching staff in further education which has now been abolished and I am sending to the hon. Gentleman copies of the relevant circulars issued by the joint committee. Salaries are now for determination by the boards of governors of the colleges themselves.

  Coastal Erosion
  Mr. Wallace
  To ask the Secretary of State for Scotland (1) whether he proposes to make any additional funds available to local authorities to enable them to tackle the problems of coastal erosion; and if he will make a statement;

  (2) what resources have been made available to local authorities in the present financial year and 1989–90 to tackle the problem of coastal erosion.

  Lord James Douglas-Hamilton
  [holding answer 15 May 1990]: Coast protection is one item covered by the capital expenditure allocations made each year by my right hon. and learned Friend for local authorities' water and sewerage programmes. Within their permitted capital expenditure, authorities are free to set their own priorities for expenditure on such works. Allocations for authorities' water and sewerage programmes in 1989–90 totalled £126 million and in 1990–91, £137·5 million. Provisional allocations for 1991–92 total £159·6 million and for 1992–93, £182 million. Nevertheless expenditure on coast protection remains relatively small and in 1988–89 was less than £1 million.

  Grants are available to regional and islands councils, under the Coast Protection Act 1949, for coast protection schemes providing that certain criteria are met. The percentage grant available varies from 20 per cent. to 80 per cent. depending on authority. No changes are proposed.

  Education (Ethnic Monitoring)
  Mr. Worthington
  To ask the Secretary of State for Scotland why he has decided not to obtain ethnically based data on pupils and teachers in Scottish schools.

  Mr. Lang
  [holding answer 15 May 1990]: Information is currently being collected about the ethnic origin, religion and home languages of all secondary pupils and of primary entrants. It is not proposed to obtain corresponding information about school teachers because so few teachers in Scotland come from minority groups.

EMPLOYMENT

  Business Failures, Yorkshire
  Mr. O'Brien
  To ask the Secretary of State for Employment how many businesses have failed in the Yorkshire region over the past 12 months; and if he will make a statement.

  Mr. Nicholls
  The best available guide to trends in numbers of businesses comes from VAT data. In 1988, the latest year for which figures have been published by this Department, an estimated 10,700 businesses came off the VAT register in the counties of North, South and West 434
  Yorkshire. Companies may leave the register for a variety of different reasons. In the same period, there were an estimated 13,800 registrations, giving a net increase of 3,100, or 3·3 per cent.

  Small Businesses
  Mr. Fearn
  To ask the Secretary of State for Employment what information he has regarding(a) the general level of debt and (b) the sums owed by Government Departments and agencies to small businesses.

  Mr. Nicholls
  I regret that the in formation requested is not available.

  Training
  Ms. Short
  To ask the Secretary of State for Employment if he will publish details for Great Britain and for the west midlands region for each year from April 1986 to the most recent date, of the total number of YTS trainees(a) within each of the four provider types and their sub-categories and (b) with disabilities within each of the four provider types and their sub-categories.

  Mr. Eggar
  The information requested can be provided only at disproportionate cost.

  Mr. Leighton
  To ask the Secretary of State for Employment what percentage of the potential client group is receiving employment training.

  Mr. Nicholls
  The information requested is not available.

  Ms. Ruddock
  To ask the Secretary of State for Employment how many people are undertaking employment training in each London area office; and how many are women requiring child care costs to be paid.

  Mr. Nicholls
  [holding answer 14 May 1990]: The number of people on employment training in each London area office is given in the table. No information is available about the number of women claiming or receiving child care payments because information about the number of trainees receiving child care payments is not disaggregated by sex.

  Employment training

  In training at 30 March 1990—London region

  Area office

  Numbers

  London North

  4,935

  London West

  1,238

  London East

  2,870

  London South

  2,129

  Inner London North

  7,699

  Inner London South

  3,827

  Ms. Ruddock
  To ask the Secretary of State for Employment if he will make a statement on his assessment of the effectiveness to date of his policy of encouraging women to take up employment training courses by paying child care costs.

  Mr. Nicholls
  [holding answer 14 May 1990]: Assistance with the cost of child care is available to any lone parent in employment training (ET). Payments for help with child care are being made for some 3 per cent. of trainees. After only 18 months of ET I regard this as encouraging.

  Health and Safety Executive
  Mr. Andrew Welsh
  To ask the Secretary of State for Employment what are the staffing levels for(a) Scotland and (b) Angus for the Health and Safety Executive in each of the last 10 years.

  Mr. Nicholls
  The following information is available (1 April figures):

  (1)

  (2)

  HSE staff based in Scotland

  of which: staff serving HSE's Scotland East Area (including Angus)

  1980

  1214·0

  1137·5

  1981

  1214·0

  1140·5

  1982

  1195·0

  1130·0

  1983

  1182·5

  1122·0

  1984

  1174·5

  1114·5

  1985

  193·0

  118·0

  1986

  177·0

  106·5

  1987

  180·0

  108·5

  1988

  177·0

  109·0

  1989

  171·0

  107·0

  1990

  177·5

  111·0

  1Staff located in Scotland in mines and quarries inspectorate's Scottish and north eastern district have been excluded as, prior to April 1985, central records cannot identify mines and quarries field staff by location.

  Factories
  Mr. Bill Michie
  To ask the Secretary of State for Employment whether the Health and Safety Executive will undertake or commission research into the proportion of factory premises which are not registered with the factory inspectorate and the proportion of factory employees who work in unregistered premises.

  Mr. Nicholls
  Each year the factory inspectorate spends a percentage of its resources on the identification and inspection of unregistered fixed workplaces as part of its programme of preventative inspections.

  The Health and Safety Executive has no plans to undertake or commission other research into the proportion of unregistered factory premises or the number of employees who work in such premises.

  TVEI
  Mr. Pawsey
  To ask the Secretary of State for Employment what funding is available for the technical and vocational education initiative for 1990–91; and how much was available in 1989–90.

  Mr. Eggar
  The funding available for the technical and vocational education initiative (TVEI) in 1990–91 is £134 million. Expenditure in 1989–90 was £129 million.

  Jobcentres
  Mr. Yeo
  To ask the Secretary of State for Employment (1) what assessment has been made of the impact on rural areas of the mergers of jobcentres with unemployment benefit offices;

  (2) if he will list those towns with populations below 10,000 whose mergers of jobcentres and unemployment benefit offices have taken place in the last 12 months;

  (3) if he will list the towns with population below 10,000 whose mergers of jobcentres and unemployment benefit offices will take place during the current financial year;
  436
  (4) what steps are being taken to maintain access to his Department's services for people in rural areas following the reduction in the number of jobcentres and unemployment benefit offices resulting from his policy of merging these two.

  Mr. Eggar
  On 1 December 1989 my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler) said that the employment service would be moving progressively to bring jobcentres and benefit offices together under one roof to form a new network of employment service offices.

  As part of this development it remains ES policy to provide its clients in rural areas with reasonable access to the full range of ES services. This will continue to be provided in the new network of employment service offices and supplemented in some locations through the use of outreach facilities to deliver advisory and counselling programmes and other services. By the end of March 1990 113 new offices had been established. Some 500 offices are scheduled to be established by March 1991. The information on size of towns where ES offices are located is not readily available and can be provided only at disproportionate cost.

  Right hon. and hon. Members are informed when changes are to be made to employment service offices in their constituencies.

  Channel Tunnel
  Mr. Allen
  To ask the Secretary of State for Employment if he will accept anonymous evidence from workers on the channel tunnel for his inquiry into safety.

  Mr. Nicholls
  It is the Health and Safety Executive's policy to consider any representations made to it about particular safety matters and to treat representations in confidence if asked to do so.

  Mr. Tony Lloyd
  To ask the Secretary of State for Employment what is the fatal and major injury rate per 100,000 workers for the construction of the channel tunnel on the(a) British side, (b) the French side and (c) for the construction industry as a whole.

  Mr. Nicholls
  [holding answer 15 May 1990]: The fatal and major injury rate per 100,000 workers in the construction industry in Great Britain for the year April 1988 to March 1989, the latest period for which information is available, was 275. Comparable incidence rates for the British side of the channel tunnel cannot be calculated because of the considerable rise in employment during the period. Information to enable a figure to be calculated in the form requested for the French side is not available.

  Training and Enterprise Councils
  Mrs. Dunwoody
  To ask the Secretary of State for Employment what training opportunities are available through the training and enterprise councils to women with no qualifications.

  Mr. Eggar
  Each training and enterprise council will set out in its corporate and business plans how it intends to meet the training requirements of individuals in its area. Where appropriate this will include the provision of training opportunities for those with few or no qualifications, whether women or men.

  Fishing Industry (Ex-employees)
  Mr. Austin Mitchell
  To ask the Secretary of State for Employment what information his Department has, by region, on the employment destination of ex-employees in the United Kingdom fish-catching sector who have left the industry since 1985.

  Mr. Nicholls
  The information requested is not available.

  Age Discrimination
  Mr. Wigley
  To ask the Secretary of State for Employment if he will introduce legislation to make it illegal to discriminate on the basis of age in employment.

  Mr. Nicholls
  The Government have no plans to introduce such legislation. The Government believe that older workers are a valuable resource. Age discrimination is unfair to individuals and not in an employer's own interest. We continue to put this message across to employers through various media, particularly in the context of publicity about demographic change. In addition, instructions to jobcentre staff have been strengthened to ensure that all upper age limits on vacancies notified by employers are challenged.

  There are encouraging signs that employers are heeding this message. We shall continue our efforts to ensure that this progress continues.

  Enterprise Allowance Scheme
  Mr. Blair
  To ask the Secretary of State for Employment if his Department has any plans to increase the amount paid under the enterprise allowance scheme.

  Mr. Eggar
  No.

  Labour Statistics
  Mr. Lewis
  To ask the Secretary of State for Employment what is the latest figure for the reduction in jobs in the manufacturing sector since 1979: and what has been the figure for each of the past five years in(a) the Bolton and Bury travel-to-work areas and (b) the rest of the north-west area.

  Mr. Nicholls
  The number of employees in employment in the United Kingdom in the manufacturing sector fell by 2,013,000 (27·7 per cent.) between June 1979 and December 1989.

  Information about employment in travel-to-work areas is available only from the census of employment. The latest available figures are for September 1987; the earliest on a comparable basis are for September 1981. Between these two dates, the number of employees in employment in the manufacturing industry sector in the Bolton and Bury travel-to-work area fell by 9,600 or 15 per cent.

  Changes in employees in employment for the north-west region in the manufacturing sector in each of the past five years are as follows:

  Employees in employment—north-west region Manufacturing industries (SIC 1980 divisions 2 to 4)

  December

  Number (thousands)1

  Yearly change (thousands)1

  Yearly percentage change

  1985

  670

  5

  0·8

  1986

  659

  -11

  -1·7

  1987

  668

  10

  1·5

  438

  December

  Number (thousands)1

  Yearly change (thousands)1

  Yearly percentage change

  1988

  688

  20

  2·9

  1989

  685

  -2

  -0·4

  1 Unadjusted for seasonal variations.

  Low Pay
  Mr. Ron Davies
  To ask the Secretary of State for Employment if he will make a statement on Her Majesty's Government's policy on low pay.

  Mr. Nicholls
  The best way to help the lower paid is through continuing economic and employment growth and greater prosperity for all.

  Disabled People
  Mr. Ashley
  To ask the Secretary of State for Employment what information his Department has as to the number of disabled peole who are able to work for(a) 10 to 15 hours per week, (b) 16 to 19 hours per week and (c) 20 to 24 hours per week.

  Mr. Eggar
  [holding answer 15 May 1990]: I regret I hat this information is not currently available. However, a study commissioned by this Department, which will report soon, will provide much new information about people with disabilities including the numbers of hours per week they are able to work.

DEFENCE

  Low Flying
  Mr. Livsey
  To ask the Secretary of State for Defence if he will provide information on the perceived noise decibels for the following aircraft in tactical training areas where they fly at an altitude of 100 ft:(a) Hawk, (b) Jaguar, (c) Tornado and (d) F1–11.

  Mr. Neubert
  The most comprehensive information on aircraft noise currently available to the Ministry of Defence relies on a noise database collected in 1983 during exercise Bedlam, the report of which is already available in the House of Commons Library. To supplement this information, further work is planned this year to provide actual measurements of noise generated by aircraft at heights down to 100 ft but the results of this further work are not expected to be available until early next year. It should be noted that neither the Hawk nor the F1–11 aircraft carry out any operational low-flying training in the tactical training areas.

  RAF Chivenor (Helicopters)
  Mr. Speller
  To ask the Secretary of State for Defence when he expects to replace the Wessex helicopters at RAF Chivenor with Sea King helicopters.

  Mr. Archie Hamilton
  There are no plans to do so.

  Radiation
  Mr. McFall
  To ask the Secretary of State for Defence if he has any plans to collate centrally the records for radiation does exposure of submarine refit personnel prior
  439
  to 1979; and if he will assess the distribution of total radiation dose exposure for refit workers in the ranges up to 5, greater than 5 to 10, greater than 10 to 15, greater than 15 to 20, greater than 20 to 25, greater than 25 to 30, greater than 30 to 35, greater than 35 to 40, greater than 40 to 45, greater than 45 to 50 and greater than 50 milliSieverts, in terms of percentage of overall work force.

  Mr. Neubert
  Records of radiation dose exposures of submarine refit personnel prior to 1979 are already held centrally. The analysis requested, however, could be supplied only at disproportionate cost.

  Mr. McFall
  To ask the Secretary of State for Defence in what form the records for individual radiation dose exposure of submarine refit personnel were collated and held prior to 1979; if they are available to the House; and if he will make a statement.

  Mr. Neubert
  Individual radiation dose records prior to 1979 are held centrally in paper form. Analysis of this information could be supplied to the House only at a disproportionate cost.

  Mr. McFall
  To ask the Secretary of State for Defence without identifying any individual by name or by any other means what is the total occupational, whole body equivalent radiation dose exposure of each individual worker employed in the Royal Navy dockyards in the United Kingdom, in milliSieverts, grouped in the bands up to 5, greater than 5 to 10, greater than 10 to 15, greater than 15 to 20, greater than 20 to 25, greater than 25 to 30, greater than 30 to 35, greater than 35 to 40, greater than 40 to 45, greater than 45 to 50 and greater than 50 for each year since the onset of the naval nuclear propulsion programme and if he will make a statement.

  Mr. Neubert
  The data requested were contained in my reply to the hon. Member on 18 April at column 942. Further sub-division of the data into 5 mSv intervals can be produced only at disproportionate cost.

  Mr. McFall
  To ask the Secretary of State for Defence what is the average radiation dose exposure of refit workers involved with the United States nuclear propulsion programme; what is the average radiation dose exposure of refit workers in the United Kingdom; and if he will make a statement.

  Mr. Neubert
  Information concerning the average radiation dose exposure of American refit workers is a matter for the United States authorities. The figures showing the average radiation dose exposure of refit workers in the royal dockyards were given in my reply to the hon. Member on 2 May at column 944.

NATIONAL FINANCE

  European Community Trade
  Mr. James Lamond
  To ask the Chancellor of the Exchequer what was the balance of trade with the European Economic Community in(a) 1979 and (b)

  Mr. Leadbitter
  To ask the Chancellor of the Exchequer what was the balance of trade with the European Economic Community in(a) 1979 and (b)
  440
  Mr. Lewis
  To ask the Chancellor of the Exchequer what was the balance of trade with the European Economic Community in(a) 1979 and (b)

  Mr. Norman Lamont
  I refer the hon. Members to the reply that I gave on 18 April 1990,Official Report, columns 855–56.

  Mr. Teddy Taylor
  To ask the Chancellor of the Exchequer if he will make a statement on the reasons for the deficit in manufacturing trade with the European Economic Community; and what is the current export/import ratio.

  Mr. Norman Lamont
  The deficit with the European Community is, like the deficit with other countries, the result of domestic demand temporarily growing faster than domestic supply. The deficit will fall as demand and capacity pressures ease further. The export/import ratio in 1989 was 73 per cent.

  Manufactured Goods
  Mr. Cryer
  To ask the Chancellor of the Exchequer if he will make a statement on the current deficit in the balance of trade in manufactured goods.

  Mr. Norman Lamont
  The latest information is available in table A9 of the "Monthly Review of External Trade Statistics", available in the Library of the House, or on the Central Statistical Office database, which may be accessed through the Library.

  Value Added Tax
  Mr. Amos
  To ask the Chancellor of the Exchequer what was the net number of new firms registered for value added tax purposes for the last year for which figures are available; and if he will make a statement.

  Mr. Ryder
  On the basis of Customs and Excise data on registrations and deregistrations processed, the net increase in the number of businesses registered for value added tax in 1989 was 84,374. This reflected 261,783 new registrations and 177,409 deregistrations. The net increase was more than three-and-a-half times higher than in 1980.

  Interest Rates
  Mr. Geraint Howells
  To ask the Chancellor of the Exchequer what representations he has received from businesses and business associations concerning interest rate levels.

  Mr. Ryder
  My right hon. Friend has received a number of such representations.

  Economic Growth
  Mr. Livsey
  To ask the Chancellor of the Exchequer what effects he expects the anticipated level of economic growth in 1991 to have on industry.

  Mr. Norman Lamont
  The latest forecast for the growth of manufacturing industry in the first half of 1991 on a year earlier is¾ per cent. This forecast was published in the Financial Statement and Budget Report.

  Erratic Items (Imports)
  Mr. Morgan
  To ask the Chancellor of the Exchequer what is his latest estimate of the level of imports into the United Kingdom of items classified as erratic items, in 1990.

  Mr. Norman Lamont
  The value of erratic imports, defined as ships, North sea installations, aircraft (together comprising SITC(REV 3) 792 and 793), precious stones (667) and silver (681·1) on a seasonally adjusted, balance of payments basis is £1,801 million, for the first quarter of 1990.

  Japanese Investment
  Mr. Robert G. Hughes
  To ask the Chancellor of the Exchequer what was the level of Japanese investment in the United Kingdom in(a) 1979 and (b)

  Mr. Hanley
  To ask the Chancellor of the Exchequer what was the level of Japanese investment in the United Kingdom in(a) 1979 and (b)

  Mr. Norman Lamont
  The available information on the book value of direct investment in the United Kingdom by Japanese companies is given in table 12 of "Business Monitor M04 (Census of Overseas Assets)" published by the Central Statistical Office. Information on portfolio investment in the United Kingdom, by country, is not available.

  Manufacturing Investment
  Mr. Pike
  To ask the Chancellor of the Exchequer what was regional investment in real constant value terms in manufacturing industries for the latest year for which figures are available and in 1979.

  Mr. Norman Lamont
  The information is not available in the form requested. However, current price information for capital expenditure (investment) in regional manufacturing industry is published annually in "Business Monitor PA 1002, Report on the Census of Production", summary volume. Copies of this volume up to 1987, the latest available year, are available from the House of Commons Library. Constant price estimates are not made because there are no regional price indices.

  Mr. Meacher
  To ask the Chancellor of the Exchequer if he will provide the information given in his reply of 8 March,Official Report, column 749, on manufacturing investment, with the privatised companies in a separate column.

  Mr. Norman Lamont
  [holding answer 9 May 1990]: I regret that the information cannot be provided. To do so would involve disclosing figures for individual undertakings in breach of the Statistics of Trade Act 1947.

  Manufacturing Trade
  Mr. Buchan
  To ask the Chancellor of the Exchequer if he will publish in the Official Report tables showing the balance of payments and the balance in manufacturing trade between the United Kingdom and the other member states of the European Economic Community.

  Mr. Norman Lamont
  Information on the balance of payments with the EC is available only on an annual basis 442
  in the CSO pink book. The latest available data are in section 10 (pages 62–66) of the 1989 edition which is available in the Library. Information on the balance of payments between the United Kingdom and individual member states is not available.

  The table shows the balance of trade in manufactures between the United Kingdom and the European Community. The 1988 figure is consistent with the data in the 1989 pink book and the 1989 figure is the latest available.

  Balance of trade in manufactures with the European Community1

  Balance of payments basis

  £ million

  1988

  -12,538

  1989

  -13,583

  1 SITC5–8.

  Crude Oil Exports
  Mr. Dobson
  To ask the Chancellor of the Exchequer what are the causes of the overseas trade statistics under-recording direct exports of crude oil; who records the tonnages under-recorded; and what is the percentage of the total exports in each year since 1979 represented by the under-recorded direct exports.

  Mr. Norman Lamont
  [holding answer 9 May 1990]: The under-recording concerns exports of crude oil loaded offshore directly on to tankers. The powers of the Customs and Excise Management Act do not cover this trade. Until the end of 1987 information was assembled by the Department of Energy from an administrative source known as the prior notice waiver system. This system was ended in December 1987. Although an alternative system was set up, some oil companies failed to report complete data for this trade to Customs. However, the Department of Energy routinely collects information on oil production and disposals, and the comparison of this data with that sent to Customs and Excise enables an adjustment for under-recording to be estimated.

  Figures published by the Central Statistical Office for the current account of the balance of payments and for visible trade on a balance of payments basis include an adjustment for the under-recording of oil exports. On this basis therefore oil exports are not under-recorded, although for the most recent months' figures, issued in the monthly trade figures press notice, the adjustments made to oil exports are partly estimated; figures are revised as further details become available.

  Figures published for "Overseas Trade Statistics of the United Kingdom" for 1988 did not include any adjustment for under-recorded oil exports. The adjustment advised to Customs by the Department of Energy for 1989 and subsequently, will appear in the cumulative figures.

  There was unlikely to have been under-recording under the prior notice waiver system which was discontinued at the end of 1987. About 10 per cent. of total exports of crude oil in each of 1988 and 1989 was not reported by oil companies to Customs and Excise.

TRADE AND INDUSTRY

  Non-alcoholic Drinks
  Mr. Stott
  To ask the Secretary of State for Trade and Industry what action he proposes to take to tackle any possible overcharging for non-alcoholic drinks.

  Mr. Redwood
  Action is already in hand to ensure effective competition in wholesale supplies to retailers. Tenants of the major brewers have been free since 1 May to buy non-alcoholic drinks from the most competitive supplier. The supply of carbonated soft drinks was also referred to the Monopolies and Mergers Commission on 25 April.

  The retail margin is however determined by the individual retailer. Consumers who feel they are charged too much have the ultimate sanction of taking their custom elsewhere.

  Manufacturing Deficit
  Mr. Livingstone
  To ask the Secretary of State for Trade and Industry if he will list the EEC countries with which the United Kingdom has a manufacturing trade deficit.

  Mr. Tony Lloyd
  To ask the Secretary of State for Trade and Industry if he will list the European Economic Community countries with which the United Kingdom has a manufacturing trade deficit.

  Mr. Lofthouse
  To ask the Secretary of State for Trade and Industry if he will list the European Economic Community countries with which the United Kingdom has a manufacturing trade deficit.

  Mr. Redwood
  In the first quarter of 1990 the United Kingdom had a manufacturing trade deficit with the Federal Republic of Germany, Netherlands, Italy, France, Belgium-Luxembourg, Denmark and Portugal.

  Plessey
  Mr. Corbett
  To ask the Secretary of State for Trade and Industry what recent representations he has received on the subject of the GEC/Siemens takeover of Plessey.

  Mr. Cox
  To ask the Secretary of State for Trade and Industry what recent representations he has received on the subject of the GEC/Siemens takeover of Plessey.

  Mr. Ridley
  I have received two recent representations about the GEC/Siemens takeover of Plessey.

  British Exporters
  Mr. McWilliam
  To ask the Secretary of State for Trade and Industry if he has any new proposals to help British exporters.

  Mr. Allen McKay
  To ask the Secretary of State for Trade and Industry if he has any new proposals to help British exporters.

  Mr. Redwood
  The volume of United Kingdom exports has continued to grow reflecting the strong position of United Kingdom industry. Excluding oil and erratic items, the volume of exports in the first quarter of 1990 was 8 per 444
  cent. higher than a year earlier. There is a wide range of advice and support available from my Department to assist United Kingdom exporters and of which many firms make use.

  Regional Policy
  Mr. Hood
  To ask the Secretary of State for Trade and Industry if he will make a statement on regional policy.

  Mr. Home Robertson
  To ask the Secretary of State for Trade and Industry if he will make a statement on regional policy.

  Mr. Norman Hogg
  To ask the Secretary of State for Trade and Industry if he will make a statement on the regions.

  Mr. Douglas Hogg
  The Government remain committed to an effective regional policy and will continue to make the necessary resources available.

  Mr. Ronnie Campbell
  To ask the Secretary of State for Trade and Industry when he last met a regional body of the Confederation of British Industry to discuss regional policy.

  Mr. Buckley
  To ask the Secretary of State for Trade and Industry when he last met a regional body of the Confederation of British Industry to discuss regional policy.

  Mr. Tom Clarke
  To ask the Secretary of State for Trade and Industry when he last met a regional body of the Confederation of British Industry to discuss regional policy.

  Mr. Douglas Hogg
  My Department maintains regular contact with the CBI at all levels on a wide range of matters relating to industry.

  LAUTRO
  Mr. Win Griffiths
  To ask the Secretary of State for Trade and Industry if he will make a statement on the work of the Life Assurance and Unit Trust Regulatory Organisation.

  Mr. Bernie Grant
  To ask the Secretary of State for Trade and Industry if he will make a statement on the Life Assurance and Unit Trust Regulatory Organisation.

  Mr. Redwood
  The Life Assurance and Unit Trust Regulatory Organisation is one of five self-regulating organisations recognised by the Securities and Investments Board under the Financial Services Act 1986. It is responsible for regulating the investment business of insurance companies and friendly societies engaged in retail marketing of life insurance products, and operators of regulated collective investment schemes engaged in retail marketing of units in such schemes.

  Estate Agents
  Mr. David Evans
  To ask the Secretary of State for Trade and Industry when he expects to bring forward his recently announced proposals to strengthen the law governing the regulation of estate agents.

  Mr. Forth
  I intend that in the next few weeks a draft order and regulations under the Estate Agents Act 1979
  445
  will be sent to interested parties. My proposals for amending the Trade Descriptions Act 1968 by extending it to cover misdescription of real property have already been circulated.

  Industrial Investment
  Mr. Bidwell
  To ask the Secretary of State for Trade and Industry when he will next meet the director general of the National Economic Development Council to discuss the impact of Government policies on British industrial investment intentions.

  Mr. Geoffrey Robinson
  To ask the Secretary of State for Trade and Industry when he will next meet the director general of the National Economic Development Council to discuss the impact of Government policies on British industrial investment intentions.

  Mr. Radice
  To ask the Secretary of State for Trade and Industry when he will next meet the director general of the National Economic Development Council to discuss the impact of Government policies on British industrial investment intentions.

  Mr. Douglas Hogg
  My Department has frequent contacts with NEDO officials on a wide range of business matters and I last chaired the council on 4 April. I have no immediate plans to meet the director general.

  Mr. Campbell-Savours
  To ask the Secretary of State for Trade and Industry what proposals he has for further industrial investment in the north-west of England.

  Mr. Douglas Hogg
  My Department will continue to support investment as appropriate in the north-west, including through regional selective assistance and the consultancy and export initiatives.

  Financial Services
  Mr. Murphy
  To ask the Secretary of State for Trade and Industry if he will make a statement on the efficacy of the system of financial services regulation set up since 1979.

  Mr. Redwood
  The Financial Services Act 1986, which came into force in April 1988, established a comprehensive structure for the protection of investors and regulation of investment business in the United Kingdom. Under the Act, the Securities and Investments Board has prime responsibility for ensuring that the appropriate standard of protection for investors is provided in respect of persons carrying on investment business.

  Steel Industry
  Dr. Kim Howells
  To ask the Secretary of State for Trade and Industry if he will make a statement on the future of the steel industry in the United Kingdom.

  Mr. Douglas Hogg
  I am confident that the United Kingdom steel industry will continue to perform well now that all of it is in the private sector and free from Government interference.

  Mr. Hoyle
  To ask the Secretary of State for Trade and Industry if he will make a statement on the future of the steel industry in the United Kingdom.
  446
  Mr. Douglas Hogg
  I refer the hon. Gentleman to the answer I gave to the hon. Member for Coventry, North-East (Mr. Hughes) earlier today.

  Mr. David Nicholson
  To ask the Secretary of State for Trade and Industry how many tonnes of steel per man year were produced in the United Kingdom in(a) 1981 and (b)

  Mr. David Shaw
  To ask the Secretary of State for Trade and Industry how many tonnes of steel per man year were produced in the United Kingdom in(a) 1981 and (b)

  Mr. Douglas Hogg
  Crude steel production per man year rose from 159 tonnes in 1981 to 344 tonnes in 1989.

  Iraq
  Mr. Ron Brown
  To ask the Secretary of State for Trade and Industry how many British firms currently trade with Iraq; and if he will make a statement.

  Mr. Redwood
  Iraq is an important market offering worthwhile opportunities to a wide range of United Kingdom exporters, but we do not keep records of the number of companies involved.

  Mr. Caborn
  To ask the Secretary of State for Trade and Industry if he will place in the Library information given to potential British exporters to Iraq by his Department and by the British consulate in Iraq.

  Mr. Redwood
  A selection, and complete list, of the numerous handouts available to potential exporters to Iraq both here and at our embassy in Baghdad have been placed in the Library.

  Arms Exports
  Mr. Beith
  To ask the Secretary of State for Trade and Industry if he has any plans to review the working of the export licensing system for arms exports.

  Mr. Redwood
  The administration by my Department of export licensing including arms exports, was thoroughly reviewed in 1988. The need for changes to ensure that the controls remain effective and are efficiently administered is kept under continual review.

  Company Prosecutions
  Mr. Orme
  To ask the Secretary of State for Trade and Industry how many prosecutions arising from company investigations commenced after 1 June 1979; and how many of the prosecutions were successful.

  Mr. Redwood
  I am aware of 132 successful prosecutions completed since 1 January 1979 arising from investigations under the Companies Acts; some of those prosecutions may have commenced before that date.

  The figure given includes prosecutions carried out not only by my Department but by other prosecution authorities, for example the DPP, Serious Fraud Office and the police.

  Further information is given in the annual report prepared under section 729 of the Companies Act 1985 and published by Her Majesty's Stationery Office. This report is available in the Library.

  Defence Industry
  Mr. Andrew F. Bennett
  To ask the Secretary of State for Trade and Industry if he will make a further statement about the United Kingdom defence industry and attempts to find alternative products.

  Mr. Douglas Hogg
  I have nothing to add to the replies I have given to the hon. Member's earlier questions on this subject.

  Monopolies and Mergers
  Mr. Maxton
  To ask the Secretary of State for Trade and Industry if he will initiate a review of monopolies and mergers legislation.

  Mr. Meale
  To ask the Secretary of State for Trade and Industry if he will initiate a review of monopolies and mergers legislation.

  Mr. Redwood
  We have recently implemented the conclusions of our review of mergers policy, which were published in 1988. As we said in our White Paper, "Opening Markets: New Policy on Restrictive Trade Practices", Cm. 727, we are currently reviewing the provisions in the Fair Trading Act 1973 and Competition Act 1980 dealing with the position of the individual, anti-competitive firm.

  Mr. Barron
  To ask the Secretary of State for Trade and Industry when he next expects to meet the directors of the Office of Fair Trading to discuss monopolies and mergers.

  Mr. Battle
  To ask the Secretary of State for Trade and Industry when he next expects to meet the directors of the Office of Fair Trading to discuss monopolies and mergers.

  Mr. Redwood
  My right hon. Friend and I met the Director General of Fair Trading on 2 April. There are no further meetings currently planned with Ministers in this Department.

  Mr. Cousins
  To ask the Secretary of State for Trade and Industry if he will visit the state of Massachusetts to study its regulatory system for mergers and takeovers.

  Mr. Redwood
  [holding answer 14 May 1990]: Neither my right hon. Friend nor I have current plans to visit the Commonwealth of Massachusetts.

  European Community Trade
  Mr. Doran
  To ask the Secretary of State for Trade and Industry when he will next meet his counterparts in the European Commission to discuss United Kingdom trade with the European Community.

  Mrs. Dunwoody
  To ask the Secretary of State for Trade and Industry when he will next meet his counterparts in the European Commission to discuss United Kingdom trade with the European Community.

  Mr. Redwood
  Ministers meet European Commissioners on a regular basis to discuss a range of issues of common interest.

  Pharmaceuticals
  Mr. Martlew
  To ask the Secretary of State for Trade and Industry what representations he has received on the subject of parallel imports of pharmaceuticals.
  448
  Mr. Redwood
  Representatives of the pharmaceutical industry have contributed to consultations initiated by my Department on the question of parallel imports in overseas markets.

  Eastern Europe
  Mr. Hind
  To ask the Secretary of State for Trade and Industry if he has any plans to improve the provision of export credit guarantees for Warsaw pact countries; and if he will make a statement.

  Mr. Redwood
  The provision by ECGD of export credit guarantees—including those for countries in the Warsaw pact—is kept under regular review. Any improvement in the provision of such guarantees is made as and when justified. A review of ECGD's investment insurance cover for eastern European countries was recently undertaken and as a result some wide-ranging extensions to the scheme for those markets were announced.

  Postal Service
  Mrs. Maureen Hicks
  To ask the Secretary of State for Trade and Industry if he will make a statement about the future of the postal service monopoly.

  Mr. Forth
  The letter monopoly is a privilege, not a right. While we keep the options under review, there are no plans to end the letter monopoly at present, although in the event of serious disruption we would consider suspending it. The Government and the Post Office remain fully committed to the existence of a national letter service available to everyone, including those in rural areas, at a reasonable and uniform tariff.

  Mr. Allen Adams
  To ask the Secretary of State for Trade and Industry when he next intends to meet the chairman of the Post Office to discuss the future of the postal service.

  Mr. Forth
  My right hon. Friend the Secretary of State expects to meet the chairman of the Post Office, Sir Bryan Nicholson, on 21 May. They will discuss matters of mutual interest.

  Product Safety
  Mr. Wray
  To ask the Secretary of State for Trade and Industry what discussions he has had with trading standards officers on product safety.

  Mr. Worthington
  To ask the Secretary of State for Trade and Industry what discussions he has had with trading standards officers on product safety.

  Mr. Forth
  I have met trading standards officers and members of their representative organisations on several occasions at which product safety was one of the issues discussed. Also officials of my Department keep in regular contact with trading standards officers.

  Ms. Primarolo
  To ask the Secretary of State for Trade and Industry what discussions he has had with the Consumers Association on product safety.

  Mr. Patchett
  To ask the Secretary of State for Trade and Industry what discussions he has had with the Consumers Association on product safety.
  449
  Mr. Forth
  I have had no recent meeting with the Consumers Association but it meets officials in my Department on a regular basis.

  Dangerous Goods
  Mr. Steinberg
  To ask the Secretary of State for Trade and Industry if he will consider introducing legislation to extend the time limit for prosecuting sellers of dangerous goods.

  Mr. Snape
  To ask the Secretary of State for Trade and Industry if he will consider introducing legislation to extend the time limit for prosecuting sellers of dangerous goods.

  Mr. Soley
  To ask the Secretary of State for Trade and Industry if he will consider introducing legislation to extend the time limit for prosecuting sellers of dangerous goods.

  Mr. Forth
  When the Consumer Protection Act 1987 passed through the House there was no concern expressed about the time limit of six months in respect of prosecutions for a breach of general safety requirement. If there is substantial evidence that this time limit is now leading to proceedings being frustrated I am prepared to consider what might be done to help the enforcement authorities.

  Mr. Turner
  To ask the Secretary of State for Trade and Industry what further steps he is taking to strengthen legislation against sellers of dangerous goods.

  Mr. Forth
  The introduction of the general safety requirement in part II of the Consumer Protection Act 1987 means that it is now a criminal offence to sell any consumer product that is not reasonably safe. This is supported by specific regulations and by a range of enforcement powers that enable action to be taken effectively and swiftly against unsafe consumer goods. I see no justification for further legislation in this area.

  Insolvencies—England and Wales

  Individuals

  Companies

  Total

  Bankruptcy orders

  Individual voluntary arrangements

  Deeds of arrangement

  Total

  Compulsory liquidations

  Creditors' voluntary liquidations

  1989

  1st quarter

  2,224

  1,972

  251

  1

  2,567

  854

  1,713

  2nd quarter

  2,418

  2,103

  315

  0

  2,814

  1,103

  1,711

  3rd quarter

  2,159

  1,837

  321

  1

  2,027

  548

  1,479

  4th quarter

  2,565

  2,226

  337

  2

  3,047

  1,515

  1,532

  1990

  1st quarter

  2,942

  2,514

  427

  1

  3,339

  1,267

  2,072

  Insolvencies—Scotland

  Individuals Sequestrations

  Total

  Companies Compulsory liquidations

  Creditors' voluntary liquidations

  1989

  1st quarter

  445

  121

  67

  54

  2nd quarter

  659

  99

  60

  39

  3rd quarter

  563

  143

  87

  56

  4th quarter

  634

  95

  45

  50

  Textiles Industry
  Mr. Riddick
  To ask the Secretary of State for Trade and Industry when he last met representatives of the textiles industry; and what matters were discussed.

  Mr. Douglas Hogg
  The Minister for Trade met members of the North East Lancashire Textile Manufacturers Association on 4 May. The main topic of discussion was the multi-fibre arrangement.

  Insider Dealing
  Mr. Nicholas Brown
  To ask the Secretary of State for Trade and Industry if he will make a statement on the present regulations to deal with insider dealing.

  Mr. Buchan
  To ask the Secretary of State for Trade and Industry if he will make a statement on the present regulations to deal with insider dealing.

  Mr. Redwood
  The Government will continue to pursue all insider dealing cases where prosecution is justified under the code for Crown prosecutors. Convictions have been obtained in 11 out of 20 cases brought under the legislation. Two prosecutions are in progress and 13 inspections into possible breaches of the legislation are being carried out.

  The Government published a consultative document on proposals for changes to the law on insider dealing late last year. I am grateful to all who responded, and careful consideration is being given to their comments.

  Bankruptcies
  Mr. Matthew Taylor
  To ask the Secretary of State for Trade and Industry what are the latest figures on the trend in business bankruptcies in(a) the United Kingdom, (b) England and (c) Cornwall.

  Mr. Redwood
  Because of the differences in the relevant legislation for the different parts of the United Kingdom, it is inappropriate to provide figures for the United Kingdom as a whole. Separate figures are not available for England or Cornwall. The available information is given in the following table:
  451

  Individuals Sequestrations

  Total

  Companies Compulsory liquidations

  Creditors' voluntary liquidations

  1990

  1st quarter

  665

  113

  60

  53

  Insolvencies—Northern Ireland

  Individuals

  Companies

  Total

  Bankruptcy adjudication orders

  Other1

  Total

  Compulsory liquidations

  Creditors' voluntary liquidations

  1989

  1st quarter

  59

  54

  5

  28

  15

  13

  2nd quarter

  59

  52

  7

  30

  16

  14

  3rd quarter

  53

  50

  3

  28

  14

  14

  4th quarter

  66

  64

  2

  38

  24

  14

  1990

  1st quarter

  58

  50

  8

  27

  6

  21

  1 Arrangement protection orders and orders for the administration of estates of deceased insolvents.

  Procurement and Information Technology
  Mr. Cunliffe
  To ask the Secretary of State for Trade and Industry what representations have been made to him about public procurement policy and information technology in the European Economic Community.

  Mr. Cummings
  To ask the Secretary of State for Trade and Industry what representations have been made to him about public procurement policy and information technology in the European Economic Community.

  Mr. Ernie Ross
  To ask the Secretary of State for Trade and Industry what representations have been made to him about public procurement policy and information technology in the European Economic Community.

  Mr. Forth
  My right hon. Friend the Secretary of State for Trade and Industry has not received any representations about public procurement policy and information technology in the European Economic Community.

  Mr. Rogers
  To ask the Secretary of State for Trade and Industry what is the Department's latest estimate of the balance of trade in information technology with Japan and the United States of America.

  Mr. Darling
  To ask the Secretary of State for Trade and Industry what is his Department's latest estimate of the balance of trade in information technology with Japan and the United States of America.

  Mr. Ron Davies
  To ask the Secretary of State for Trade and Industry what is his Department's latest estimate of the balance of trade in information technology with Japan and the United States of America.

  Mr. Redwood
  In the year to March 1990 the estimated crude deficit on trade in electronics and information technology products (defined as divisions 75 and 76 of the standard international trade classification) was £2 billion with Japan, and £1·6 billion with the United States of America.

  Manufacturing Industry
  Mr. Frank Field
  To ask the Secretary of State for Trade and Industry when he next intends to meet the president of the Confederation of British Industry to discuss the performance of British manufacturing industry.

  Mr. Eadie
  To ask the Secretary of State for Trade and Industry when he next intends to meet the president of the Confederation of British Industry to discuss the performance of British manufacturing industry.

  Mr. Eastham
  To ask the Secretary of State for Trade and Industry when he next intends to meet the president of the Confederation of British Industry to discuss the performance of British manufacturing industry.

  Mr. Fisher
  To ask the Secretary of State for Trade and Industry when he next intends to meet the president of the Confederation of British Industry to discuss the performance of British manufacturing industry.

  Mr. Douglas Hogg
  I have no immediate plans to discuss the performance of British manufacturing industry with the president of the CBI, although I expect to see him at the CBI's annual dinner on 17 May.

  Environment Policy
  Mr. David Marshall
  To ask the Secretary of State for Trade and Industry if he has any new proposals to encourage British industry to be environmentally friendly.

  Mr. Jim Marshall
  To ask the Secretary of State for Trade and Industry if he has any new proposals to encourage British industry to be environmentally friendly.

  Mr. Forth
  I shall continue to encourage British industry to respond positively to the challenges and opportunities presented by environmental issues.

  European Commission
  Mr. Bradley
  To ask the Secretary of State for Trade and Industry when he last met the Vice President of the European Commission, Sir Leon Brittan, to discuss competition policy.
  453
  Mr. Boateng
  To ask the Secretary of State for Trade and Industry when he last met the Vice President of the European Commission, Sir Leon Brittan, to discuss that part of his remit which affects the United Kingdom.

  Mr. Boyes
  To ask the Secretary of State for Trade and Industry when he last met the Vice President of the European Commission, Sir Leon Brittan, to discuss industry policy.

  Mr. Ridley
  I meet Sir Leon Brittan as and when necessary for discussion of a wide range of topics.

  Engineering Products
  Mr. Robert Hughes
  To ask the Secretary of State for Trade and Industry what is the current balance of trade in engineering products.

  Mr. Sean Hughes
  To ask the Secretary of State for Trade and Industry what is the current balance of trade in engineering products.

  Mr. Douglas Hogg
  The crude deficit on the balance of trade for engineering products (defined as divisions 71 to 79 of the standard international trade classification) was £8·2 billion in the year to March 1990.

  Scotch Whisky
  Mr. Wallace
  To ask the Secretary of State for Trade and Industry when he last met representatives of the Scotch whisky industry; and what subjects were discussed.

  Mr. Douglas Hogg
  I met representatives of the Scotch whisky industry on 5 April to discuss my proposal to introduce legislation permitting gin, rum, vodka and whisky sold on licensed premises to be served in a single round metric quantity of 25 ml from the middle of this year and to prohibit the use of the existing imperial quantities after 31 December 1994. Having considered the industry's representations, I announced on 3 May my intention to consult interested parties about the possibility of also permitting one further metric quantity of 35 ml and of extending to other spirits the requirement for prescribed measures.

  Mr. Sims
  To ask the Secretary of State for Trade and Industry whether, in view of the United States section 301 initiative against Taiwan in regard to distilled spirits, he is taking steps to ensure that any resultant liberalisation applies equally to Scotch whisky.

  Mr. Redwood
  The authorities in Taiwan are well aware of United Kingdom concerns. Her Majesty's Government have no dealngs with the Taiwanese authorities, but United Kingdom concerns on this and other matters are put across very clearly in Taipei and London by the Anglo-Taiwan Trade Committee, a private organisation set up to promote British exports to Taiwan.

  The Scotch Whisky Association recently went on a mission to Taiwan during which further representations were made to the appropriate Taiwanese authorities.

  Departmental Reorganisation
  Mr. Bill Michie
  To ask the Secretary of State for Trade and Industry if he has yet reached a decision on the reorganisation of his Department.
  454
  Mr. Austin Mitchell
  To ask the Secretary of State for Trade and Industry if he has yet reached a decision on the reorganisation of his Department.

  Mr. Morley
  To ask the Secretary of State for Trade and Industry if he has yet reached a decision on the reorganisation of his Department.

  Mr. Forth
  I have nothing to add to the statement on the structure of my Department which my right hon. Friend made on 21 February in answer to a question from my hon. Friend the Member for Nottingham, East (Mr. Knowles),Official Report, columns 783–84.

  Capital Adequacy
  Mr. Ian Taylor
  To ask the Secretary of State for Trade and Industry what assessment has been made by his Department of the implications for British financial institutions of any change in arrangements for capital adequacy.

  Mr. Redwood
  The European Commission has consulted member states and other interested parties in preparing its proposals for a directive on the capital adequacy of Community investment firms, which should be published shortly. The Government will continue to take account of the views of British financial institutions during the negotiation of the directive. I am particularly concerned that the levels of initial capital proposed may he against the interests of smaller and new financial intermediaries.

  British-built Cars
  Mr. Batiste
  To ask the Secretary of State for Trade and Industry whether he will list the levels of sales in the United Kingdom of British-built cars in(a) 1974, (b) 1979 and (c)

  Mr. Mans
  To ask the Secretary of State for Trade and Industry whether he will list the levels of sales in the United Kingdom of British-built cars in(a) 1974, (b) 1979 and (c)

  Mr. Douglas Hogg
  The available figures, showing United Kingdom registrations of British-built cars, are as follows:

  (a) 915 thousand;

  (b) 750 thousand;

  (c) 991 thousand.

  Car Production
  Mr. Donald Thompson
  To ask the Secretary of State for Trade and Industry whether he will list the numbers of cars produced in the United Kingdom over the last five years.

  Mr. Douglas Hogg
  I refer my hon. Friend to my replies earlier today to my hon. Friends the Members for Daventry (Mr. Boswell) and for Hornchurch (Mr. Squire).

  Mr. Favell
  To ask the Secretary of State for Trade and Industry how many cars were produced in the United Kingdom in(a) 1979 and (b)

  Mr. Douglas Hogg
  The figures are as follows:

  (a) 1·070 million.

  (b) 1·299 million.

  Hosiery and Knitwear
  Mr. Janner
  To ask the Secretary of State for Trade and Industry whether he will make a statement regarding the hosiery and knitwear industry in Leicester.

  Mr. Douglas Hogg
  I refer the hon. and learned Member to my answer to his question given in the Official Report for 9 January at column 599.

  West Germany
  Mr. Martyn Jones
  To ask the Secretary of State for Trade and Industry if he will make a statement on the level of United Kingdom trade with West Germany.

  Mr. Lambie
  To ask the Secretary of State for Trade and Industry if he will make a statement on the level of United Kingdom trade with West Germany.

  Mr. Ingram
  To ask the Secretary of State for Trade and Industry if he will make a statement on the level of United Kingdom trade with West Germany.

  Mr. Redwood
  In the first quarter of 1990 United Kingdom visible exports to West Germany were £3 billion, an increase of 20 per cent. over the first quarter of 1989. On the same comparison, visible imports from West Germany rose by 11 per cent., to £5 billion.

  Mr. Clelland
  To ask the Secretary of State for Trade and Industry when he last met his West German counterpart to discuss the trade deficit of the United Kingdom with West Germany.

  Mr. Frank Cook
  To ask the Secretary of State for Trade and Industry when he last met his West German counterpart to discuss the trade deficit of the United Kingdom with West Germany.

  Mr. Cohen
  To ask the Secretary of State for Trade and Industry when he last met his West German counterpart to discuss the trade deficit of the United Kingdom with Germany.

  Mr. Redwood
  DTI Ministers maintain close contacts with their West German opposite numbers on a range of issues. The Secretary of State last met the Federal Economics Minister, Dr. Haussmann, in London at the Anglo-German summit on 30 March.

  Car Industry
  Mrs. Fyfe
  To ask the Secretary of State for Trade and Industry when he will next meet the major car manufacturers to discuss matters relating to the car industry.

  Mr. Galloway
  To ask the Secretary of State for Trade and Industry when he will next meet the major car manufacturers to discuss matters relating to the car industry.

  Mr. Douglas Hogg
  The Government have regular contacts with the major car manufacturers on a range of issues of interest to the industry.

  Mr. Roger King
  To ask the Secretary of State for Trade and Industry what was the value of British motor industry exports for the year 1989.
  456
  Mr. Douglas Hogg
  The figure is £8,193 million.

  EC Industry Council
  Mr. McCartney
  To ask the Secretary of State for Trade and Industry what matters he expects to discuss at the next meeting of the European Economic Community Industry Council.

  Mr. Douglas Hogg
  The next meeting of the Industry Council, at which I will be representing the United Kingdom, will be held on 28 May. The provisional agenda proposes discussion on steel, shipbuilding, semiconductors, small and medium-sized enterprises, and audio-visual matters.

  Small Investors
  Mr. Knapman
  To ask the Secretary of State for Trade and Industry what discussions he has had with institutions in the City of London on ways to encourage the growth in the number of small investors.

  Mr. Redwood
  I regularly discuss ways of promoting wider share ownership with institutions and individuals, both in the City and elsewhere. In a recent speech to the Institute of Economic Affairs I outlined a number of areas in which further action is needed to encourage the small investor. I also welcome other innovative ways of making the City more accessible to small shareholders which are being developed.

  Iron and Steel Exports
  Mr. Devlin
  To ask the Secretary of State for Trade and Industry what was the level of exports of United Kingdom-produced iron and steel in(a) 1979 and (b)

  Mr. Redwood
  United Kingdom exports of iron and steel products on an ECSC basis were(a) 3·72 million tonnes, with a value of £767 million, in 1979; and (b) 5·60 million tonnes, with a value of £1,886 million in 1989.

  Industrial Performance
  Mr. Adley
  To ask the Secretary of State for Trade and Industry what proposals he has to improve the performance of British industry.

  Mr. Douglas Hogg
  The Government continue to pursue policies intended to improve the climate for business activity, and to reduce the burdens on business. In addition, my Department continues to operate a range of specific schemes to improve business performance under the enterprise initiative.

  Single Market
  Mr. Irvine
  To ask the Secretary of State for Trade and Industry how many of the directives necessary to complete the single European market have yet to be implemented; and whether he will make a statement.

  Mr. Redwood
  The Commission's fifth progress report on the single market shows that the United Kingdom, as recorded by the European Community, has the best record in the Community for the implementation into national legislation of single market measures with nine measures
  457
  not implemented as at 1 March 1990. Unfortunately only 21 of the directives have been implemented in all European Community member states.

  My Department's publication "Progress on Commission White Paper" also shows that as at 1 March there were 60 individual directives which had been adopted and which were not yet required to have entered into force. Also, 139 measures had not been adopted, five of which had not yet been presented to the Council. Copies of this publication have been deposited in both Libraries.

  Textile Trade
  Mr. Graham
  To ask the Secretary of State for Trade and Industry which issues he will raise in relation to the international trade in textiles when he next meets his European Economic Community counterparts.

  Mr. Ted Garrett
  To ask the Secretary of State for Trade and Industry which issues he will raise in relation to the international trade in textiles when he next meets his European Economic Community counterparts.

  Dr. Godman
  To ask the Secretary of State for Trade and Industry which issues he will raise in relation to the international trade in textiles when he next meets his European Economic Community counterparts.

  Mr. Redwood
  When he sees his EC colleagues at the informal Trade Ministers' meeting in Dublin this week, my right hon. Friend the Secretary of State for Trade and Industry will be discussing developments in the Uruguay round negotiations on international trade in textiles and the way forward, both in relation to the EC's preferred method of phasing out the multi-fibre arrangement over a transitional period and the parallel strengthening of GATT rules and disciplines.

  Director General of Fair Trading
  Mr. McCrindle
  To ask the Secretary of State for Trade and Industry on how many occasions during the past 12 months he has rejected the formal advice of the Director General of Fair Trading.

  Mr. Forth
  In the last 12 months formal recommendations from the Director General of Fair Trading have not been accepted on two occasions.

  Pirate Radio
  Mr. Evennett
  To ask the Secretary of State for Trade and Industry what additional action he intends to take to deal with pirate radio broadcasting in Greater London.

  Mr. Forth
  Pirate radio is a nuisance that can endanger lives and disrupt business. The radio investigation service of my Department's radiocommunications agency has powers to raid pirate stations and prosecute offenders where this proves necessary. It will be considerably helped in its efforts by new powers in the Broadcasting Bill that is currently before the House.

  Passenger Car Prices
  Mr. Dykes
  To ask the Secretary of State for Trade and Industry if he will initiate an independent inquiry into passenger car prices in the United Kingdom.
  458
  Mr. Douglas Hogg
  The Director General of Fair Trading announced on 9 May that he had made a reference to the Monopolies and Mergers Commission on the supply of new motor cars in the United Kingdom.

  Business Receiverships
  Mr. Ieuan Wyn Jones
  To ask the Secretary of State for Trade and Industry if he will obtain a copy for his departmental library of the recently published KPMG Peat Marwick McLintock survey on the number of businesses forced into receivership.

  Mr. Redwood
  Yes.

  East Midlands
  Mrs. Currie
  To ask the Secretary of State for Trade and Industry if he will estimate the level of investment in the east midlands now provided by foreign-owned companies; and how that number may change by 1995.

  Mr. Douglas Hogg
  According to the latest figures available to the Department's Invest in Britain Bureau, from 1979 to 1989, 142 inward investment decisions were made to locate in the east midlands. These include the establishment of a new business, expansion or acquisition of an existing business and involvement in joint venture. The projects were expected to create 11,640 new jobs and, since 1983 when the relevant records were started, to have safeguarded a further 8,900. The figures are based on information provided by the companies themselves at the time of the investment decision and do not take account of subsequent developments.

  Although growth in inward investment in the United Kingdom is expected to continue into the 1990s, it is not possible to predict the likely amount of such investment nor its location.

  Consumer Guarantees Bill
  Mr. Watson
  To ask the Secretary of State for Trade and Industry what further representations he has had on the Consumer Guarantees Bill.

  Mr. Alan W. Williams
  To ask the Secretary of State for Trade and Industry what further representations he has had on the Consumer Guarantees Bill.

  Mr. Wilson
  To ask the Secretary of State for Trade and Industry what further representations he has had on the Consumer Guarantees Bill.

  Mr. Forth
  At the Committee stage of the Bill I undertook to inform members of the Committee of the representations I had received about various aspects of the Bill, where I had the agreement of the parties concerned to do so. This I have done. Further representations received since Committee were made in confidence and it would he inappropriate to give details of them.

  Telecommunications
  Mr. Ian Bruce
  To ask the Secretary of State for Trade and Industry what plans the Government have to allow more suppliers into the telecommunications market.

  Mr. Forth
  The major liberalisation which the Government have already introduced in United Kingdom
  459
  telecommunications, including the recent announcement of licences for three personal communications networks, has allowed many new suppliers to flourish. I have no further significant plans at present, pending the Government's review, starting in November this year, of the BT/Mercury duopoly in the provision of fixed link services.

  Wessex Trust
  Mr. Ashdown
  To ask the Secretary of State for Trade and Industry if he will make a statement on action taken by his Department since the collapse of Wessex Trust in 1984.

  Mr. Redwood
  Between February and July 1986 my Department contributed to the investigation into Wessex Trust co-ordinated by the fraud investigation group of the Crown prosecution service by carrying out inquiries into companies concerned in the affairs of the trust.

  Investors' Compensation
  Sir William Clark
  To ask the Secretary of State for Trade and Industry what plans he has to amend the Financial Services Act 1986 to empower the Securities and Investments Board to require recognised professional bodies to contribute to the central investors compensation scheme.

  Mr. Redwood
  None. Paragraph 3 of schedule 3 to the Financial Services Act requires the recognised professional bodies to have adequate arrangements for compensating investors.

  Exports (Manufactures)
  Mr. John Evans
  To ask the Secretary of State for Trade and Industry what steps his Department plans to take to increase exports of British manufactured goods.

  Mr. Redwood
  In 1989, the United Kingdom exported £75 billion worth of manufactured goods, a 16 per cent. increase on 1988. The Government will continue to follow the macro-economic policies which have created a climate in which United Kingdom firms can prosper and increase their exports. The Government will also continue to provide direct support to United Kingdom firms seeking business overseas by providing a wide range of advice, information and assistance through the British Overseas Trade Board.

  Illegal Broadcasting
  Sir John Wheeler
  To ask the Secretary of State for Trade and Industry how many raids have been carried out in 1990 by radio investigation service enforcement teams in the Greater London area; with what result; and how many prosecutions have been successful.

  Mr. Forth
  The radio investigation service of my Department's radiocommunications agency has so far this year carried out a total of 169 raids on unlicensed broadcasting stations operating in the Greater London area. On each occasion equipment used in the commission of the offence was seized and on 14 occasions persons believed to be connected with the unlicensed station were interviewed with a view to prosecution.

  Between I January and 30 April 1990, 33 persons were successfully prosecuted for their involvement with such
  460
  stations in the Greater London area. The average fine imposed was £287 and average costs of £209 were ordered to be paid. However, one person was sentenced to seven days' imprisonment. Invariably the courts ordered that the equipment used in the offence be forfeited.

  Sir John Wheeler
  To ask the Secretary of State for Trade and Industry how many officials are employed in radio investigation service enforcement teams in the Greater London area; what is the extent of their workload; and what proposals he has to increase the numbers of such personnel.

  Mr. Forth
  The radio investigation service of my Department's radiocommunications agency currently employs 25 officers on enforcement work in the Greater London area. Their remit involves regulating all categories of radio use and responding to complaints of interference from authorised users. The performance of the radio investigation service is kept under review to ensure that the service is correctly resourced.

  Technology Transfer
  Mr. Atkinson
  To ask the Secretary of State for Trade and Industry whether the transfer of technology was discussed at the recent Bonn CSCE conference on economic co-operation in Europe; and if he will make a statement.

  Mr. Redwood
  Among the issues discussed at the conference was the encouragement of exchanges of know-how in a number of fields including the environment, agro-industry and food processing. Participating states also agreed to co-operate in fields such as energy conservation; raw material saving techniques; hydrocarbon technologies; and the safety of nuclear energy installations.

  Internal Market Council
  Mr. French
  To ask the Secretary of State for Trade and Industry if he will make a statement on the Internal Market Council held in Brussels on 14 May.

  Mr. Redwood
  I attended the Internal Market Council in Brussels on 14 May. The Council held preliminary discussions on the legal protection of computer programmes, and on a proposal for extending the patent life for pharmaceuticals. Further discussions were also held on the European company statute.

  The Commission made a presentation on barriers to takeover. The United Kingdom gave a strong welcome to the proposals to amend three directives in company law, which were the Commission's response to a United Kingdom request for action. The proposals represent a step towards a fair and transparent market, in which shareholders' interests are properly respected.

  There was also substantive discussion of the motor insurance services directive. The Irish Presidency had worked hard to produce a compromise, which the United Kingdom was prepared to accept, although it did not go as far in liberalising motor insurance as we would have liked. It was disappointing that some member states could not accept even this compromise, and seemed intent on blocking moves towards a common market in motor insurance. The proposal will be discussed again in June following further work in the Committee of Permanent Representatives.

  Indonesia
  Mr. Madden
  To ask the Secretary of State for Trade and Industry if he will make it his policy to refuse export licences for the export of military equipment, including Tornado aircraft and naval vessels, to Indonesia.

  Mr. Redwood
  [holding answer 14 May 1990]: Export licence applications for military equipment, including aircraft and naval vessels, are considered on a case-by-case basis, in accordance with stringent criteria. It is not our practice to grant a licence for the export of military equipment which would not be in the national interest or which is likely to be used for internal repression.

  Bristol Evening Post
  Mr. Sayeed
  To ask the Secretary of State for Trade and Industry when he expects to be able to announce his decision over the report by the Monopolies and Mergers Commission on the attempt by Mr. David Sullivan to take a controlling interest in the Bristol Evening Post plc.

  Mr. Redwood
  [holding answer 14 May 1990]: The report will be published and the Secretary of State's decision announced as soon as is practicable.

  Industrial Output
  Mr. Ralph Howell
  To ask the Secretary of State for Trade and Industry if he will give details of(a) the overall output and (b) the output per person engaged, in each of the following industries, for the years 1979 and 1989: (i) agriculture, (ii) the steel industry, (iii) coal mining, (iv) car industry, (v) electrical goods industry, (vi) local government and (vii) the National Health Service.

  Mr. Norman Lamont
  I have been asked to reply.

  Estimates are not compiled on precisely the basis requested, but index numbers of output and of output per head are available for the following industry groups, on a 1985 = 100 basis, as shown in the table:

  Output

  Output per head

  1979

  1989

  1979

  1989

  (i) Agriculture, forestry and fishing

  76·8

  98·5

  1

  1

  (ii) Metals

  118·2

  124·7

  68·1

  168·2

  (iii) Coal and coke

  136·6

  105·7

  96·8

  221·1

  (iv) Motor vehicles and parts

  132·6

  126·1

  78·7

  127·1

  (v) Electrical and instrument engineering

  79·2

  129·1

  65·0

  133·0

  (vi) Medical, health and veterinary services

  1

  105·0

  1

  1

  1 Not available.

  Figures for local government are not available.

AGRICULTURE, FISHERIES AND FOOD

  Afforestation
  Mr. Ron Davies
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement about the release of agricultural land for afforestation.

  Mr. Gummer
  On 16 March 1988 my right hon. Friend the Secretary of State for the Environment made a statement to the House which set out the Government's462
  objectives for forestry policy in England. In this we foresaw that the main potential for afforestation in England lay on arable land and improved grassland which may no longer be needed for food production.

  In addition, there would be some scope for broadleaved and mixed woodlands on unimproved land but the Forestry Commission was instructed not to approve new planting of predominantly conifers in the uplands of England. The only exception would be small areas where it was clear that such planting would be environmentally acceptable.

  I believe that this approach is still valid.

  Fishing Industry, Dorset
  Mr. Ian Bruce
  To ask the Minister of Agriculture, Fisheries and Food what plans the Government have for the fishing industry in Dorset.

  Mr. Curry
  The characteristics of fisheries around our shores vary considerably but our overall aim is to work for effective conservation of fish and shellfish stocks as renewable resources. Further, representatives of the channel coast fishing industry who are members of the area VII whitefish industry advisory committee provide guidance on the management of quotas for the English channel.

  Bovine Spongiform Encephalopathy
  Mr. Butler
  To ask the Minister of Agriculture, Fisheries and Food what forward estimates he has made of the number of cattle likely to become infected with bovine spongiform encephalopathy.

  Mr. Maclean
  It is not possible to predict with accuracy the number of cattle likely to be affected by bovine spongiform encephalopathy. However, the incidence is not expected to decline significantly until at least 1993.

  Mr. Ron Davies
  To ask the Minister of Agriculture, Fisheries and Food if he will now undertake the random sampling for bovine spongiform encephalopathy of all cattle slaughtered for human consumption in the United Kingdom.

  Mr. Maclean
  We have no plans to do so.

  Mr. Ron Davies
  To ask the Minister of Agriculture, Fisheries and Food if he proposes any initiative to sample for bovine spongiform encephalopathy-type disease among(a) all food animals, (b) companion animals, (c) other animals.

  Mr. Maclean
  We have no plans to do so. However, research into the transmissibility of bovine spongiform encephalopathy to other animals will continue. Research is also being conducted into the possibility of finding a test in the live animal. None is available at the moment.

  Mr. Ron Davies
  To ask the Minister of Agriculture, Fisheries and Food what advice he has issued to cattle breeders concerning the possible vertical transmissibility of bovine spongiform encephalopathy; and if he will make a statement.

  Mr. Maclean
  Revised guidelines about all aspects of bovine spongiform encephalopathy are being prepared for issue to farmers.
  463
  Mr. Ron Davies
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on the occurrence of spongiform encephalopathy in a cat.

  Mr. Maclean
  Pathologists at the Bristol veterinary school and the central veterinary laboratory at Weybridge have diagnosed a sub-acute spongiform encephalopathy in a five-year-old Siamese cat originating from the Bristol area. Inquiries are being made into the case. At present there is no evidence that the condition is transmissible, nor is there any known connection with any spongiform encephalopathies in other animal species.

  Mr. Ron Davies
  To ask the Minister of Agriculture, Fisheries and Food (1) whether he has issued any guidance to the veterinary investigation service concerning the possible incidence of spongiform encephalopathy in domestic animals;

  (2) what instruction or guidelines he has given to the veterinary investigation service to monitor for bovine spongiform encephalopathy-type diseases in animals other than cattle; when such guidelines were issued; and if he will place copies in the Library.

  Mr. Maclean
  The veterinary investigation service is well aware of the need to monitor for the possibility of spongiform encephalopathies in other species and will consider them as differential diagnoses in appropriate cases.

  Mr. Ron Davies
  To ask the Minister of Agriculture, Fisheries and Food what is the estimate of the number of cattle born to cows subsequently confirmed as bovine spongiform encephalopathy sufferers, since the disease was declared notifiable, which have been(a) slaughtered
  464
  for human consumption, (b) exported, (c) retained as suckler cows, (d) destroyed as suffering a notifiable disease, (e) retained as dairy cows or (f) otherwise disposed of; and if he will make a statement.

  Mr. Maclean
  This information is not available.

  Mr. Matthew Taylor
  To ask the Minister of Agriculture, Fisheries and Food (1) whether any cases of possible or confirmed bovine spongiform encephalopathy-related conditions in domesticated animals have been reported to officials of his Department; and if he will make a statement;

  (2) whether any cases of possible or confirmed bovine spongiform encephalopathy-related conditions in domestic cats have been reported to officials of his Department; and if he will make a statement.

  Mr. Maclean
  Transmissible spongiform encephalopathies can be confirmed only by post mortem histopathology of brain tissue and, apart from bovine spongiform encephalopathy in cattle, are not notifiable. In addition to cattle, these diseases are known to occur naturally in man and in sheep, goats, mule deer, elk and farmed mink.

  Some of these diseases have been successfully transmitted under laboratory conditions to a number of species. The experimental animals used have included certain primates, mice, hamsters, sheep, goats, cattle, cats, mink and voles.

  In addition, a spongiform encephalopathy has been identified in a zoo antelope and a domestic cat in Great Britain. It is not known whether these diseases are transmissible, or what relationship they have to BSE.

  Animal Diseases
  Mr. Barry Field
  To ask the Minister of Agriculture, Fisheries and Food what steps he is taking in conjunction with his European Community partners to ensure that the risks of the spread of animal diseases are not increased as a result of the introduction of the Europan single market.

  Mr. Maclean
  In discussions in Brussels I have sought to persuade my European Community partners that changes associated with the realisation of the single market should not be achieved at the cost of an increased risk of spread of animal disease. The directive on veterinary checks on trade in certain animal products, agreed last December after lengthy negotiation, reflects that key contention and leaves me optimistic that in completing the single market we will achieve the right balance between the removal of trade barriers and continued progress towards reducing and eliminating disease threats.

  Animal Feed
  Dr. David Clark
  To ask the Minister of Agriculture, Fisheries and Food if he will list, for each of the last five years, how many imports of animal feed have been contaminated; and, in each case, if he will list the port concerned, the type of feed, the contaminant involved and whether the feed was(a) allowed into the United Kingdom for normal distribution, (b) returned to the country concerned or (c) dispersed in the United Kingdom.

  Mr. Gummer
  Since enforcement of the relevant provisions is a local authority responsibility, the information sought is not available centrally and could be produced only at disproportionate cost.

  The extent of the import trade is considerable-more than 4 million tonnes a year. The commercial companies involved therefore have a strong interest in maintaining their own monitoring of supplies quite apart from that of the enforcement agencies.

  Mr. Ron Davies
  To ask the Minister of Agriculture, Fisheries and Food if he will require the manufacturers of all animal feeding stuffs to label their products indicating the nature and origin of their contents.

  Mr. Maclean
  Manufacturers will be obliged by a recently agreed European Community directive to declare the origin and the contents of animal feeds. The contents must be declared either by listing specific ingredients or categories of similar ingredients.

  This directive will come into force in all member states on 22 January 1992.

  Mr. Ron Davies
  To ask the Minister of Agriculture, Fisheries and Food if he will now ban the use of sheep and cattle-derived protein from all animal feeding stuffs.

  Mr. Maclean
  This material is already banned from use in feedstuffs for ruminant animals. There is no evidence of a scrapie-like disease occurring naturally or under laboratory conditions in pigs and poultry and therefore no reason to ban the use of ruminant protein in their feedstuffs.

  Mr. Ron Davies
  To ask the Minister of Agriculture, Fisheries and Food if he will now ban the use of those offals specified in the Bovine Offals Order for consumption by domestic animals.
  466
  Mr. Maclean
  No. Although inquiries will continue, there is no evidence that the spongiform encephalopathy recently found in a cat is either transmissible or connected with other spongiform encephalopathies.

  Dr. David Clark
  To ask the Minister of Agriculture, Fisheries and Food if he will publish the results of the analysis of the Spanish cargo of animal feed which was investigated at Goole, giving details of which organisation carried out the tests, where the contaminants came from and how the cargo came to be contaminated.

  Mr. Gummer
  Enforcement of the Feedingstuffs Regulations 1988, as amended, and the Agriculture Act 1970 is the responsibility of local authorities. My officials alerted local authorities and port health authorities on Friday 5 May of the possibility of a contaminated cargo of animal feed disembarking at Goole. In this particular case, the port health authorities took appropriate action and cleared the suspect cargo on Tuesday 8 May.

  Pesticides
  Mr. Win Griffiths
  To ask the Minister of Agriculture, Fisheries and Food when the advisory committee on pesticides last met; and what matters were discussed.

  Mr. Maclean
  The advisory committee on pesticides last met on 26 April.

  The main items discussed were a request for approval of a new pesticide and reviews of four existing approvals. In addition, the committee considered tributylin esters in industrial wood preservatives and anti-fouling paints; home-made pesticides; mineral hydrocarbons in food; liaison with the Food Safety Directorate consumer panel and control of the Blandford fly.

  Council of Ministers
  Mr. John Greenway
  To ask the Minister of Agriculture, Fisheries and Food what representations he has received from the National Farmers Union on the outcome of the last Council of Ministers meeting.

  Mr. Maclean
  The price-fixing settlement reached last month has been warmly welcomed by the farming community, including the National Farmers Union.

  Consumer Panel
  Mr. Tony Lloyd
  To ask the Minister of Agriculture, Fisheries and Food when his consumer panel first met; and what matters were discussed.

  Mr. Gummer
  The first meeting of the consumer panel took place on 12 March 1990. It discussed a wide range of issues including BSE, food irradiation, water quality and blood enzyme gels in meat products. The minutes of this meeting are publicly available.

  Consumers Association
  Mr. Cox
  To ask the Minister of Agriculture, Fisheries and Food when he last met the Consumers Association to discuss consumer affairs.

  Mr. Maclean
  Representatives of the Consumers Association attended a meeting with consumer organisations which the Minister hosted on 3 April 1990.
  467
  Discussions focused particularly on the European Community price-fixing proposals, GATT and food labelling.

  Small Farms
  Mr. Amess
  To ask the Minister of Agriculture, Fisheries and Food if he has any plans to increase assistance to small farms.

  Mr. Gummer
  All farms will benefit from the recent agreement on farm prices for 1990–91, which we estimate will boost farmers' returns by at least £500 million in a full year. We have no plans to provide additional assistance to small farms.

  Green Currency
  Mr. Boswell
  To ask the Minister of Agriculture, Fisheries and Food how much green currency disparities have recently been reduced.

  Mr. Gummer
  At the farm price settlement, agreement was reached on green pound devaluations which will have the effect of significantly reducing the monetary gaps between green and market exchange rates in the United Kingdom. On the basis of exchange rates at the time of the settlement the monetary gaps for crops will be reduced by 55 per cent., for milk by 38 per cent., beef by 55 per cent., pigmeat by 86 per cent. and sheep by 56 per cent. This compares with reductions of one third originally proposed by the Commission.

  Green rate changes agreed for other member states will have the effect of reducing or removing monetary gaps for all sectors except cereals in Germany and the Netherlands and cereals, rice, oilseeds, fruit and vegetables, cotton and beef in Spain where it was agreed that no changes would take place.

  Salmon
  Mr. Stern
  To ask the Minister of Agriculture, Fisheries and Food approximately how many salmon are now fished from the River Severn and its tributaries.

  Mr. Curry
  Statistics provided by the former Severn Trent water authority and the National Rivers Authority are published annually by my Department. Catches of salmon in the River Severn catchment for the last five years for which figures are available are given in the table.

  1984

  1985

  1986

  1987

  1988

  Method of capture

  Rod and line

  545

  1,256

  1,254

  929

  1,362

  Commercial instruments

  3,376

  1,651

  3,300

  2,963

  3,511

  TOTAL

  3,921

  2,907

  4,553

  3,892

  4,873

  Insect Damage
  Mr. Dalyell
  To ask the Minister of Agriculture, Fisheries and Food (1) what response he has given to the submission on changed risk of insect damage in a changed climate from AFRC Rothamsted; and what funds are available for this work;

  (2) if he will list the projects contributing to the study of changes in the (a) abundance of, and (b) development of potential pest problem insects, as a result of climatological change or global warming.
  468
  Mr. Maclean
  The Department has advised the AFRC's Rothamsted experimental station that funds amounting to some £100,000 are to be set aside over three years for research there on any change in the risk of insect damage in a changed climate. Work on this project, which was submitted in response to a request by my chief scientists group as an initial step in the Department's programme of research in this area, is due to start in 1991–92.

  Mr. Dalyell
  To ask the Minister of Agriculture, Fisheries and Food what estimates his Department has made of the need for aphid identifiers over the next decade; and what steps he is taking to make financial provision for such training.

  Mr. Maclean
  No staff of this description are employed by the Ministry. Entomologists are employed in a number of capacities and their deployment and training are kept under review.

  Conservation (Training Courses)
  Dr. David Clark
  To ask the Minister of Agriculture, Fisheries and Food if he will list the number of regional training courses on wildlife and landscape conservation that have been held for Agricultural Development Advisory Service officers in each year from 1979 to 1990 and the region in which the courses occurred.

  Mr. Gummer
  Information on regional training on wildlife and landscape conservation for Agricultural Development Advisory Service officers over the period specified is not available. However, records since 1987 show that more than 30 conservation courses have been held in regions. A breakdown of this total is as follows:

  1987

  1988

  1989

  1990 (planned)

  Northern

  —

  1

  1

  1

  Midlands and Western

  2

  4

  3

  3

  Eastern

  3

  2

  4

  —

  South-Eastern

  1

  2

  2

  1

  Dr. David Clark
  To ask the Minister of Agriculture, Fisheries and Food how many regional and national training courses on wildlife and landscape conservation are planned for Agricultural Development Advisory Service officers for 1990.

  Mr. Gummer
  A comprehensive programme of six national and 11 regional training courses on aspects of wildlife and landscape conservation is proposed for 1990.

  Dr. David Clark
  To ask the Minister of Agriculture, Fisheries and Food if he will list the number of national training courses on wildlife and landscape conservation that have been held for Agricultural Development Advisory Service officers in each year from 1979 to 1988.

  Mr. Gummer
  Records of national training on wildlife and landscape conservation for Agricultural Development Advisory Service officers are available from 1980 onwards. The number of courses held each year is as follows:

  Number

  1980

  2

  1981

  4

  1982

  4

  469

  Number

  1983

  4

  1984

  5

  1985

  7

  1986

  8

  1987

  2

  1988

  1

  Meat Exports
  Mr. Ron Davies
  To ask the Minister of Agriculture, Fisheries and Food what action he proposes to take to overturn the current West German ban on bone-in beef from the United Kingdom.

  Mr. Maclean
  Following the European Community's scientific veterinary committee opinion earlier this year that British beef does not pose a problem for public health, our export trade with West Germany is getting back to normal levels under existing Community rules.

  Cattle Exports
  Mr. Ron Davies
  To ask the Minister of Agriculture, Fisheries and Food what action he proposes to take in respect of the European Economic Community ban on live cattle exports from the United Kingdom.

  Mr. Maclean
  We will keep the position under review in the light of new developments on bovine spongiform encephalopathy generally.

  Product Labelling
  Mr. Ron Davies
  To ask the Minister of Agriculture, Fisheries and Food if he proposes to introduce regulations to prohibit or require the labelling of products from transgenic animals.

  Mr. Maclean
  Subject to parliamentary approval, we intend to use powers under the Food Safety Bill to introduce regulations providing for a positive approval system for any food produced by genetic manipulation techniques, including any products from transgenic animals for food use. We have also specifically asked the Food Advisory Committee to consider, on a case-by-case basis and within the context of the Food Labelling Regulations, the need for special labelling of these products following their approval.

  Scrapie
  Mr. Ron Davies
  To ask the Minister of Agriculture, Fisheries and Food if he will introduce measures requiring the processors of ruminant remains to ensure the treatment of such remains and temperatures adequate to destroy scrapie and scrapie-infective agents.

  Mr. Maclean
  The treatments needed to destroy scrapie-like agents during the rendering process are not known. Research will be undertaken into the inactivation of the agent.

  River Mersey
  Mr. Tony Lloyd
  To ask the Minister of Agriculture, Fisheries and Food what programmes the Government have implemented or plan to implement to encourage the. application and development of clean technology in the River Mersey area.
  470
  Mr. Heathcoat-Amory
  I have been asked to reply.

  Part I of the Environmental Protection Bill will apply integrated pollution control to industrial and other processes which have a significant potential to pollute. Under integrated pollution control, discharges to the water environment will be subject for the first time to requirements to apply clean technology to minimise polluting wastes and render them harmless. Many such processes are located in the Mersey basin.

  Mr. Tony Lloyd
  To ask the Minister of Agriculture, Fisheries and Food what progress the River Mersey campaign has made towards the agreements in the North sea conference for(a) 50 per cent. reduction in red list substances and (b) 70 per cent. reduction in heavy metals.

  Mr. Heathcoat-Amory
  I have been asked to reply.

  It was agreed at the second North sea conference to reduce quantities of substances that are persistent toxic and liable to bioaccumulate, reaching the North sea by values in the order of 50 per cent. The Government took the view that other seas around the United Kingdom would be given the same degree of environmental safeguarding. Progress in implementation of this was published in the United Kingdom North sea action plan which was presented to the third North sea conference in March 1990. The Mersey catchment basin has made a satisfactory contribution to this progress.

  It was agreed at the third North sea conference. for substances that cause a major threat to the marine environment, and at least for dioxines, mercury, cadmium and lead, to achieve reductions between 1985 and 1995 of total inputs of the order of 70 per cent. or more, provided that the use of the best available technology or other low waste technology measures enables such reductions. The Department is preparing guidance on how this should be implemented.

  Sewage Sludge Disposal
  Mr. Tony Lloyd
  To ask the Minister of Agriculture, Fisheries and Food what is Government policy with regard to the dumping of industrial effluent into sewerage systems.

  Mr. Heathcoat-Amory
  I have been asked to reply.

  Treatment in a sewage works may be an appropriate solution for certain industrial effluents. The discharge of any such effluents to a public sewer requires the consent of the water service company under section 2 of the Public Health (Drainage of Trade Premises) Act 1937, and it may impose conditions. Discharges from sewage works or sewers to rivers or coastal waters require the consent of the National Rivers Authority.

  Mr. Tony Lloyd
  To ask the Minister of Agriculture, Fisheries and Food if the Government plan to build more incinerators to dispose of sewage sludge as sea dumping is phased out.

  Mr. Heathcoat-Amory
  I have been asked to reply.

  It is the responsibility of the water service companies to make provision for the disposal of sewage sludge. It is likely that a greater proportion of sewage sludge will be incinerated as dumping of sludge at sea is terminated.

  Mr. Tony Lloyd
  To ask the Minister of Agriculture, Fisheries and Food if heavy metal and other contaminants are released into the environment at the same level in sewage sludge as in sea dumping.
  471
  Mr. Maclean
  In excess of 95 per cent. of sewage sludge is water. The solid element is largely organic matter which will decompose in the environment whether on land or in the sea. Contaminants associated with this organic matter are likely to be released into the environment. In many cases, however, contaminants such as heavy metals are rapidly reabsorbed on to other solid materials such as clay particles.

WALES

  Moorings
  Mr. Wigley
  To ask the Secretary of State for Wales if he will arrange to discuss with his Wales tourist board, the Crown Estate and yachting and boating interests, the policy being followed by the Crown Estate with regard to charges for moorings in Welsh resorts; and if he will make a statement.

  Clwyd

  District

  1987

  1988

  1989

  AP

  AL

  AP

  AL

  AP

  AL

  Alyn and Deeside

  37

  9

  24

  7

  30

  5

  Colwyn

  28

  6

  25

  5

  32

  10

  Delyn

  24

  5

  25

  10

  42

  12

  Glyndwr

  21

  5

  27

  6

  36

  4

  Rhuddlan

  23

  9

  22

  10

  32

  11

  Wrexham Maelor

  31

  10

  47

  14

  37

  8

  Total

  164

  44

  170

  52

  109

  50

  Dyfed

  District

  1987

  1988

  1989

  AP

  AL

  AP

  AL

  AP

  AL

  Carmarthen

  16

  4

  28

  9

  56

  7

  Ceredigion

  31

  7

  57

  8

  81

  11

  Dinefwr

  15

  2

  16

  3

  42

  5

  Llanelli

  30

  9

  22

  9

  33

  9

  Preseli

  19

  2

  15

  5

  26

  1

  South Pembrokeshire

  14

  3

  21

  2

  49

  6

  Total

  125

  27

  159

  36

  287

  39

  Mid Glamorgan

  District

  1987

  1988

  1989

  AP

  AL

  AP

  AL

  AP

  AL

  Cynon Valley

  14

  3

  18

  3

  27

  7

  Merthyr Tydfil

  12

  4

  19

  4

  9

  4

  Ogwr

  41

  6

  62

  8

  58

  14

  Rhondda

  10

  0

  14

  5

  29

  7

  Rhymney Valley

  16

  4

  16

  7

  24

  5

  Taff Ely

  38

  6

  38

  10

  56

  10

  Total

  131

  23

  167

  37

  203

  47

  South Glamorgan

  District

  1987

  1988

  1989

  AP

  AL

  AP

  AL

  AP

  AL

  Cardiff

  67

  21

  73

  21

  103

  36

  Vale of Glamorgan

  74

  21

  55

  21

  101

  32

  Total

  141

  42

  128

  42

  204

  68

  472
  Mr. Roberts
  I have no plans to do so.

  Planning Appeals
  Mr. Nicholas Bennett
  To ask the Secretary of State for Wales if he will give the number of planning appeals made to the Welsh Office against decisions made by each Welsh local authority in 1987, 1988 and 1989 together with the number of appeals upheld in each year against each authority.

  Mr. David Hunt
  The information is not available in the form requested. Records of planning appeals are held for each district in which they occur but not for the planning authority to whose decisions they relate. Since 1989 records have also been kept of appeals within national parks. The information available is:
  473

  West Glamorgan

  District

  1987

  1988

  1989

  AP

  AL

  AP

  AL

  AP

  AL

  Port Talbot (formerly Afan)

  9

  1

  4

  1

  4

  1

  Lliw Valley

  32

  6

  26

  5

  31

  4

  Neath

  11

  5

  10

  3

  22

  5

  Swansea

  58

  10

  69

  22

  78

  30

  Total

  110

  22

  109

  31

  135

  40

  Gwent

  District

  1987

  1988

  1989

  AP

  AL

  AP

  AL

  AP

  AL

  Blaenau Gwent

  14

  1

  7

  3

  15

  6

  Islwyn

  19

  6

  13

  5

  29

  6

  Monmouth

  76

  12

  70

  12

  105

  18

  Newport

  37

  8

  49

  6

  73

  10

  Torfaen

  19

  6

  26

  7

  33

  6

  Total

  165

  33

  165

  33

  255

  46

  Gwynedd

  1987

  1988

  1l989

  District

  AP

  AL

  AP

  AL

  AP

  AL

  Aberconwy

  51

  6

  51

  14

  61

  12

  Arfon

  34

  7

  29

  3

  37

  2

  Dwyfor

  48

  9

  41

  9

  57

  13

  Meirionnydd

  13

  1

  25

  4

  0

  0

  Ynys Mon

  59

  23

  56

  17

  71

  18

  Total

  205

  46

  202

  47

  226

  45

  Powys

  1987

  1988

  l1989

  District

  AP

  AL

  AP

  AL

  AP

  AL

  Brecknock

  26

  6

  28

  6

  23

  3

  Montgomery

  7

  2

  22

  5

  30

  5

  Radnor

  5

  1

  13

  4

  12

  0

  Total

  38

  9

  63

  15

  65

  8

  1989

  National Parks

  AP

  AL

  Snowdonia

  32

  9

  Brecon Beacons

  21

  4

  Pembrokeshire Coast

  24

  6

  Total

  77

  19

  1 Excludes appeals within national parks.

  AP: Appeals made.

  AL: Appeals allowed.

  New Housing
  Mr. Nicholas Bennett
  To ask the Secretary of State for Wales if he will give details of the new-built housing provided in each local authority area in 1987, 1988 and 1989 provided by(a) the private sector, (b) local authorities and (c) housing associations.

  Mr. David Hunt
  Information on housebuilding completions for 1989 is given in the following table. The total number of housebulding completions was 11,388 in 1989, compared with 11,037 in 1988 and 9,254 in 1987.
  474
  Data by local authority area for 1987 and 1988 were published in "Welsh Housing Statistics No. 9 1989", a copy of which is in the House of Commons Library.

  New dwellings completed 1989

  Private sector

  Local authorities

  Housing associations

  Alyn and Deeside

  148

  29

  0

  Colwyn

  358

  0

  34

  Delyn

  229

  0

  12

  Glyndwr

  249

  42

  7

  Rhuddlan

  67

  24

  16

  Wrexham Maelor

  371

  12

  24

  Carmarthen

  205

  4

  2

  Ceredigion

  262

  3

  65

  Dinefwr

  222

  0

  22

  Llanelli

  63

  81

  0

  Preseli Pembrokeshire

  229

  20

  29

  South Pembrokeshire

  162

  0

  0

  Blaenau Gwent

  167

  39

  64

  Islwyn

  87

  28

  0

  Monmouth

  327

  16

  121

  Newport

  453

  105

  0

  Torfaen1

  245

  0

  0

  Aberconwy

  151

  0

  24

  Arfon

  101

  31

  40

  Dwyfor

  78

  0

  8

  Meirionnydd

  51

  12

  0

  475

  Private sector

  Local authorities

  Housing associations

  Ynys Mon

  182

  0

  21

  Cynon Valley

  148

  0

  67

  Merthyr Tydfil

  165

  20

  26

  Ogwr

  399

  0

  0

  Rhondda

  81

  0

  73

  Rhymney Valley

  182

  24

  80

  Taff Ely

  437

  24

  16

  Brecknock

  150

  12

  65

  Montgomeryshire2

  317

  73

  79

  Radnor

  216

  0

  4

  Cardiff

  1,070

  0

  462

  Vale of Glamorgan

  958

  6

  0

  Port Talbot

  87

  0

  40

  Lliw Valley

  233

  6

  14

  Neath

  141

  4

  0

  Swansea

  302

  9

  50

  Wales

  9,293

  624

  1,465

  1 Including data for Cwmbran which was previously identified separately as a new town.

  2 Including data for Newtown which is designated as a new town.

  Health Authority Expenditure
  Mr. Wigley
  To ask the Secretary of State for Wales if he will publish a table showing to the most recent available date, the cost of administrative and clerical staff as a proportion of net revenue expenditure for each health authority in Wales; and if he will make a statement.

  Mr. David Hunt
  The information requested for 1988–89 (the latest year for which information is available) is as follows:

  Per cent.

  Clwyd

  6·5

  East Dyfed

  6·7

  Gwent

  6·5

  Gwynedd

  6·7

  Mid Glamorgan

  6·3

  Pembrokeshire

  6·7

  Powys

  5·6

  South Glamorgan

  7·6

  West Glamorgan

  6·4

  All district health authorities

  6·7

  WHCSA

  47·2

  HPAW

  26·5

  All Welsh health authorities

  7·2

  Source Health authorities' annual accounts.

  It is to be expected that Powys health authority, which does not have a large acute sector, has a lower than average proportion of its revenue expenditure accounted for by administrative and clerical costs and that South Glamorgan health authority with its teaching and regional services responsibilities has a higher than average figure. WHCSA and HPAW are not really comparable since the nature of their functions and consequently their staff mixes are different from each other and from those of district health authorities.

  Mr. Wigley
  To ask the Secretary of State for Wales if he will publish a table showing for the decade 1979 to 1989 what was the average cost of administrative and clerical staff as a proportion of net revenue expenditure of(a) all health authorities in Wales, excluding South Glamorgan and (b) Gwynedd health authority.

  Mr. David Hunt
  The information requested is as follows:476

  Gwynedd health authority Per cent.

  District health authorities1 Per cent.

  Welsh health authorities2 Per cent.

  1979–80

  6·6

  6·1

  6·6

  1980–81

  12·3

  13·3

  13·8

  1981–82

  11·8

  15·6

  16·1

  1982–83

  11·3

  12·1

  12·6

  1983–84

  11·2

  11·8

  12·4

  1984–85

  8·1

  7·2

  7·8

  1985–86

  7·6

  6·8

  7·4

  1986–87

  7·3

  6·6

  7·2

  1987–88

  7·0

  6·6

  7·1

  1988–89

  6·7

  6·4

  7·1

  1 Excludes South Glamorgan health authority.

  2 District health authorities plus WHCSA (formerly WHTSO) and HPAW but again excluding South Glamorgan heath authority.

  Source: Health authorities' annual accounts.

  Geriatric Services
  Mr. Wigley
  To ask the Secretary of State for Wales what was the number of discharges and deaths of elderly people in Gwynedd from National Health Service hospitals in the county for each year from 1980 to 1989, together with the number of beds, including acute, rehabilitation and support, which were available for elderly people in these hospitals in each of these years.

  Mr. David Hunt
  The latest available data, relating to the number of discharges and deaths of people aged 65 and over from NHS hospitals in Gwynedd, are as follows:

  Numbers

  1980

  8,676

  1981

  9,765

  1982

  8,951

  1983

  11,151

  1984

  11,250

  1985

  12,559

  1986

  14,626

  1987

  15,592

  1988

  16,553

  Information on the number of beds specifically available for the elderly is not available centrally. While information on the number of beds in specialties designated as geriatrics, psychogeriatrics and elderly mentally ill is available, beds in other specialties (eg general medicine, general surgery) can be used for people of all ages.

  In-patient Treatment
  Mr. Wigley
  To ask the Secretary of State for Wales what is the average length of stay for in-patients for all surgical conditions in each of the district health authorities in Wales, respectively, analysed(a) by district general hospitals and (b) by district general hospital and community hospitals combined.

  Mr. David Hunt
  The available information is given in the following table:

  Health authority

  Average length of stay (days) for surgical specialties 1 1988–89

  District general hospitals

  All hospitals

  Clwyd

  5·8

  5·7

  East Dyfed

  5·7

  5·9

  Gwent

  5·5

  5·7

  477

  Health authority

  Average length of stay (days) for surgical specialties 1 1988–89

  District general hospitals

  All hospitals

  Gwynedd

  5·8

  5·1

  Mid Glamorgan

  5·7

  6·0

  Pembrokeshire

  5·8

  5·8

  Powys

  —

  —

  South Glamorgan

  5·8

  6·4

  West Glamorgan

  6·4

  6·6

  1 General surgery, ENT, traumatic and orthopaedic surgery, ophthalmology, radiotherapy, urology, plastic surgery, thoracic surgery, dental surgery, orthodontics, neurosurgery and gynaecology.

  Parliamentary Questions
  Mr. Wigley
  To ask the Secretary of State for Wales if he will recruit into his Department additional staff to facilitate expeditious replies to parliamentary questions.

  Mr. David Hunt
  No. Providing for timely answers to parliamentary questions is given high priority by my staff.

  Health Authority Posts
  Mr. Wigley
  To ask the Secretary of State for Wales how many(a) medical and (b) administrative posts are currently officially frozen in each of the nine district health authorities in Wales.

  Mr. David Hunt
  This information is not available centrally.

  X-Ray Waiting Times
  Mr. Wigley
  To ask the Secretary of State for Wales if he will undertake a study into the time delay in processing and analysing X-ray studies by Gwynedd health authorities; and if he will publish a table showing over the past five years the average waiting time from when a request is made by a doctor for an X-ray for a patient, to the taking of that X-ray and the average time from taking the X-ray to the results being available to the relevant doctor.

  Mr. David Hunt
  The information requested is not available centrally. The hon. Gentleman has written to me separately about the processing of X-ray investigations and I shall reply to him when I have seen the comments of Gwynedd health authority.

  Cardiff Development Corporation
  Mr. Morgan
  To ask the Secretary of State for Wales what are the terms and conditions of employment, including the length of contract and severance terms, of the chief executive of Cardiff development corporation.

  Mr. David Hunt
  The chief executive of Cardiff Bay development corporation is an employee of the corporation. The terms and conditions of employment are, therefore, matters for the chief executive and the board of the corporation. An indication of the chief executive's salary is given in the corporation's annual report.

  Private Nursing Homes
  Mr. Wigley
  To ask the Secretary of State for Wales if he will list, giving the full postal address and the number of authorised beds in each instance and the date of opening all private registered nursing homes in Wales.
  478
  Mr. David Hunt
  I will write to the hon. Gentleman as soon as details have been obtained from district health authorities and place a copy of my letter in the Library of the House.

  Hospital Closures
  Mr. Wigley
  To ask the Secretary of State for Wales if he will list in the Official Report every hospital closure which has been approved by his Department between 3 May 1979 and 1 June 1987; and the date on which approval to close that hospital was given.

  Mr. David Hunt
  I will write to the hon. Gentleman and place a copy of my letter in the Library of the House.

  Mr. Wigley
  To ask the Secretary of State for Wales, pursuant to his reply of 9 May,Official Report, column 152–53, what factors account for the delay in sending formal notification to the authority of, and making a public announcement about, the closure of Caernarfon cottage hospital after the decision to close the hospital had been taken; when the chairman and general manager of Gwynedd health authority were told of his decision: and if he will make a statement.

  Mr. David Hunt
  Unfortunately, a typing error resulted in the date of approval of closure of the cottage hospital Caernarfon, being recorded as 20 March 1990 in my hon. Friend's answer when the correct date was 20 April 1990.I apologise for this mistake.

  Mr. Wigley
  To ask the Secretary of State for Wales (1) what was the original estimate in 1987 for the additional annual running costs at Bronygarth hospital, Penrhyndeudraeth, in order to accommodate the transfer to that hospital of services currently provided at Ysbyty Madog, Porthmadog; and what is his latest estimate of this additional annual running cost;

  (2) what was the original estimated net capital cost, excluding sales value, of his closure of the Madog memorial hospital, Porthmadog and the transfer of facilities to Bronygarth hospital; and what is his latest estimate of this cost.

  Mr. David Hunt
  I refer the hon. Gentleman to my hon. Friend's reply of 14 May 1990 at column 296.

  Mr. Wigley
  To ask the Secretary of State for Wales how much capital expenditure on buildings and equipment has been incurred at the cottage hospital, Caernarfon, since the beginning of the financial year 1984–85; and if he will make a statement.

  Mr. David Hunt
  I shall write to the hon. Gentleman and place a copy of my letter in the Library of the House.

  Mr. Wigley
  To ask the Secretary of State for Wales what is the most recent available estimate of the net annual savings which will be achieved by Gwynedd health authority from the closure, respectively, of(a) Ysbyty Coffa Madog, Porthmadog, (b) Druid hospital, Llangefni, (c) Groesynyd hospital, Conwy, (d) Ysbyty Dewi Sant, Bangor, and (e) the cottage hospital, Caernarfon; and what will be the net annual savings achieved from each of these closures, respectively, in 1990–91, and 1991–92.

  Mr. David Hunt
  Following the issue of the Welsh Office's letters of 3 and 22 March 1989 which conveyed
  479
  approval of Gwynedd health authority's proposals to close Madog memorial hospital, Druid hospital, Groesynyd hospital and St. David's hospital, Bangor, detailed issues relating to the closures are a matter for the health authority, subject to compliance with the relevant conditions set out in the letter of 3 March. The hon. Gentleman should therefore contact the health authority for further information.

  I shall write to the hon. Gentleman about the cottage hospital, Caernarfon.

  Mr. Wigley
  To ask the Secretary of State for Wales if he will review the decision of Gwynedd health authority to make a temporary closure of the gynaecology annexe ward at St. David's hospital, Bangor, and take steps to ensure that women awaiting childbirth do not have to share facilities with women awaiting termination of pregnancy.

  Mr. David Hunt
  Gwynedd health authority is to consider the temporary closure of the gynaecology annexe at its meeting on 21 May in the light of consultation with interested local bodies. Any concerns that the hon. Gentleman may have about the proposals should therefore be made known to Gwynedd health authority.

  Mr. Wigley
  To ask the Secretary of State for Wales whether Gwynedd health authority, in considering its hospital closure programme, followed the requirements of planning paper 5 on procedures for consultation on the closure and change of use of health buildings; and if he will make a statement.

  Mr. David Hunt
  This issue was addressed in the letters of 3 March 1989 and 20 April 1990 from the Welsh Office to the general manager of the health authority, which were copied to the hon. Gentleman.

  Mr. Wigley
  To ask the Secretary of State for Wales whether the provisions of service planning paper 5 are mandatory on health authorities in Wales considering the closure or change of use of hospitals; and what action he takes if health authorities do not follow such provisions.

  Mr. David Hunt
  Service planning paper 5 sets out the guidance on the consultative procedures to be followed by health authorities when proposing to close or change the use of health buildings. My action in cases where authorities do not follow its provisions depends on the individual circumstances.

  Gwynedd Health Authority
  Mr. Wigley
  To ask the Secretary of State for Wales on how many occasions during the past five years his Department has granted temporary financial assistance to Gwynedd health authority; on what dates such assistance was granted; what sums were involved; and what requirements were placed on the health authority, prior to such assistance being agreed, with respect to its strategy for restoring financial balance in the medium term.

  Mr. David Hunt
  A loan of £1·3 million was provided to Gwynedd health authority by cash limit adjustment on 8 February 1988. The loan was made on the understanding that the authority had determined and was consulting on a plan for restoring its financial balance by the end of 1991–92; £0·5 million of this sum was provided for revenue purposes and £0·8 million for capital purposes in recognition of the authority's immediate cash flow problems. The whole of the loan was repaid by the authority the following year.
  480
  Mr. Wigley
  To ask the Secretary of State for Wales whether, prior to 7 February, Gwynedd health authority had given any indication to the director of the National Health Service in Wales as to its likely overspend in either 1989–90 or 1990–91; and if he will make a statement.

  Mr. David Hunt
  The financial plan submitted by the Gwynedd health authority in April 1989 indicated that the authority would cover its projected expenditure in 1989–90 only through the achievement of significant savings from the service rationalisation measures set out in the action plan which it drew up in 1987–88 and the use of a small loan from another health authority. The financial plan also projected the need for substantial loans in 1990–91 to facilitate the capital expenditure necessary to achieve further service rationalisation measures and hence achieve its aim of restoring financial balance in the medium term.

  At its annual review meeting with the executive committee of the health policy board in September 1989, the authority indicated that there had been a deterioration in its financial position since the submission of its financial plan, and that additional remedial action would be necessary if the authority were to contain its expenditure within its notified resources and that this action was to be discussed by the health authority at its meeting in November.

  The income and expenditure monitoring form submitted by the health authority for the period ended 31 December, confirmed the slippage in the authority's planned programme of savings and indicated that this shortfall would be compensated by the transfer of funds from the authority's capital allocation to its revenue allocation.

  Mr. Wigley
  To ask the Secretary of State for Wales what steps he has taken following the information being given by Gwynedd health authority in February to his Department that it anticipated facing a £4 million shortfall in 1990–91; and if he will make a statement.

  Mr. David Hunt
  I refer the hon. Gentleman to the replies that I gave him on Thursday 10 May and Monday 14 May.

  Mr. Wigley
  To ask the Secretary of State for Wales who appointed the consultants currently investigating the financial difficulties of Gwynedd health authority.

  Mr. David Hunt
  I refer the hon. Gentleman to the answer given to him on 14 May at columns 288–89.

  Mr. Wigley
  To ask the Secretary of State for Wales whether he has received any application from Gwynedd health authority to sell the Coed Mawr office site in Bangor; and if he will make a statement.

  Mr. David Hunt
  The health authority has delegated authority to sell the Coed Mawr office site.

  Mr. Wigley
  To ask the Secretary of State for Wales how many abortions have taken place in Gwynedd since Gwynedd health authority decided to curtail its family planning services; and what was the number for the comparable period preceding that decision.

  Mr. David Hunt
  I understand that Gwynedd health authority proposes to consider the outcome of the local consultation exercise on measures to reduce overspending, including a temporary reduction in family planning services, at its meeting on 21 May.

Preamble
The House met at half-past two of the clock: The CHAIRMAN OF COMMITTEES on the Woolsack.
Prayers—Read by the Lord Bishop of Chester.
The Earl of Kintore The Earl of Kintore—Sat first in Parliament after the death of his father.

Religious Broadcasting by Satellite
Lord St. John of Fawsley Lord St. John of Fawsley asked Her Majesty's Government:
What is their policy on the relationship between satellite broadcasting and religion.
The Minister of State, Home Office (Earl Ferrers): My Lords, under the Broadcasting Bill the Independent Television Commission would have power to allow religious groups to own non-domestic satellite channels, such as Sky, if it were satisfied that this would be appropriate. The Bill also includes requirements that religious broadcasting must not be offensive, exploitive or otherwise irresponsible.
Lord St. John of Fawsley: My Lords, I thank my noble friend for that Answer. I very much welcome the lifting of the proposed ban on religious bodies owning satellite television stations, which occurred since I put down my Question.
Is the noble Earl aware that extremely complex problems now arise? First, can he assure the House that on-the-air fund raising will not be allowed on religious stations? Can he also give some indication of the criteria that will be used to distinguish between mainstream religious bodies whose broadcasts would be welcome and fringe bodies, such as the Moonies, whose broadcasts would not be at all welcome?
Earl Ferrers: My Lords, on the second part of my noble friend's question, it will be up to the Independent Television Commission to decide the criteria on which licences are allocated. It will obviously take into account the safeguards in the Bill which are intended to ensure that religious broadcasting is carried out responsibly and is not open to abuse by religious extremists. It will obviously expand upon these requirements in its code on programme standards.
On appeals, Clause 7(1)(b) of the Bill puts the Independent Television Commission under a duty to issue a code, including rules which will have to be observed, on appeals for donations of all kinds. I expect the commission to take great care in covering the areas to which my noble friend referred.
Baroness Birk: My Lords, in the light of the genuine concern about the ownership, as opposed to religious programming, of channels by religious bodies, are the Government satisfied that the ITC will be able to regulate the religious content of
294
broadcasting from non-domestic satellites if the channel is based outside the UK? What action can be taken over unacceptable religious broadcasting from non-domestic satellites?
Earl Ferrers: My Lords, it will be open to religious organisations, if they so wish, to purchase non-domestic channels for broadcasting. If they abuse this position they will come under the scrutiny of the ITC, which in the end has the power to remove such rights.
Lord Dormand of Easington: My Lords, what provision is being made for the large section of the population which has no religious faith at all?
Earl Ferrers: My Lords, those people can switch the television off.
The Lord Bishop of Chester: My Lords, is the noble Earl aware of the immense relief and gratitude felt by most Christians that their views will be considered regarding religious broadcasting and that amendments to the Broadcasting Bill are being made? However, there remains a concern about satellite broadcasting of religion. It is that in the very proper desire to balance religious freedom with responsible control and so to exclude cults or narrow Christian sects, there should not be exclusion of major Christian groups such as the Evangelical Alliance which are not totally ecumenical yet are far from being narrowly cast.
Earl Ferrers: My Lords, I quite understand the anxiety of the right reverend Prelate on this matter. That is something that everyone shares. The ITC is the body that must decide the criteria. That is an important point. That body must take into account the safeguards that the Bill contains which are to ensure that religious broadcasting is carried out responsibly and is not open to abuse by religious extremists. I hope that covers the point made by the right reverand Prelate. The ITC will have to draw up its own codes of practice. The position will be made clear when that happens.
The Earl of Halsbury: My Lords, on a point of order, is it right to use Question Time in order to anticipate the Second Reading of this Bill?
Earl Ferrers: My Lords, I was not aware that anyone was anticipating the Second Reading. I answered the questions that were put to me, and I believe those who asked the questions were perfectly entitled to ask them.
Lord Dormand of Easington: My Lords, is the Minister aware that I am deeply disappointed that he did not achieve his usual high standard in answering my question? Surely, he must agree that one of the purposes of religious broadcasting is to put over a certain viewpoint. It seems to me quite proper that someone who does not hold that viewpoint should also be allowed to put across his opinion.
Earl Ferrers: My Lords, I do not think there is anything to stop anyone from putting over their viewpoints. The anxiety that my noble friend has is whether or not religious organisations can own channels. Religious and non-religious organisations can own channels. I am certain that many of the points which the noble Lord opposite has in mind are fully covered in what is disseminated on television at the moment.
Lord Nugent of Guildford: My Lords, is my noble friend aware that there is a tradition of Christianity in this country, and that most of us feel that all the values which we hold most dear to our hearts and our way of life stem from Christianity? We would expect therefore that legislation in this field would cater for that view.
Earl Ferrers: My Lords, the point my noble friend makes is a fair one. There has been a long tradition in British broadcasting which applies the concept of religious broadcasting in a way which reflects the range of religious views which exist in this country while giving proper weight to the tradition of Christian belief. I do not think it is easy to put that into a specific formula.
Lord Mowbray and Stourton: My Lords, will my noble friend explain to me how Her Majesty's Government can control religious broadcasting in a good or a bad way if the programmes that are broadcast on satellite television come from areas outside the control of the Government?
Earl Ferrers: My Lords, Her Majesty's Government do not try to control what is broadcast. It is up to the Independent Television Commission to do so.
Lord Glenamara: My Lords, how will the codes to which the noble Earl referred distinguish between blatant fund raising and genuine alms-giving which is surely an important part of religion?
Earl Ferrers: My Lords, that is also a valid point. The ITC will have to produce codes of practice and rules which will have to be observed. When producing those, the very points which the noble Lord refers to are bound to be taken into account. However, I cannot anticipate what the commission will state in the codes of practice.
Lord St. John of Fawsley: My Lords, does my noble friend agree that one way forward in this difficult and perplexing area would be to have a religious station jointly owned by the mainstream religions, including the Jewish faith, from which we draw a great many of our values? Would that not be a truly ecumenical venture?
Earl Ferrers: My Lords, I daresay it might be. I have no doubt that it would also have a certain amount of acrimony attached to it as these things usually do. However, that does not matter. There is nothing to stop such a conglomeration of people getting together and purchasing a station. I remind my noble friend that for the first time under the Bill
296
Christian and other religious groups in the United Kingdom will be able to own the following: radio stations; channels carried on cable; and channels carried on non-domestic satellite services. That is a great step forward.
Baroness Birk: My Lords, in view of the complexity of this matter which has been demonstrated this afternoon, will the Government require the ITC to publish the criteria on which it will judge whether to license religious broadcasting channels? I fear that if it does not, there will be even more confusion and anxiety.
Earl Ferrers: My Lords, I should like to consider the point made by the noble Baroness. I should imagine that the criteria will be published; but I prefer to reserve judgment on that point, if I may.

Inflation: Estimate
2.48 p.m.
Lord Dormand of Easington Lord Dormand of Easington asked Her Majesty's Government:
What was the rate of inflation in May 1979 and what is their estimate of the likely rate of inflation by 31st December 1990.
The Paymaster General (The Earl of Caithness): My Lords, the all-items RPI annual inflation rate for May 1979 was 10.3 per cent. Retail price inflation is expected to fall to around 7.25 per cent by the end of this year.
Lord Dormand of Easington: My Lords, is the Minister aware that it is 11 years since the Labour Government left office? Is he further aware that the trade unions are now well under control as the Government constantly remind us, and that we cannot import inflation these days because the countries with which we trade have a much lower rate of inflation than we have? Who is to blame for the 9.4 per cent. inflation rate?
The Earl of Caithness: My Lords, I am aware of the comparison that the noble Lord seeks to make. I am also aware that under Labour the average inflation rate was 15.5 per cent. whereas under this Government it is 7.9 per cent. As the noble Lord is aware, inflation rose as a result of looser monetary supply than we would have wished following the stock market crash when it was agreed by all nations that interest rates should be reduced. Indeed, the party opposite wished us to reduce interest rates even further than we did and more quickly.
Lord Hailsham of Saint Marylebone: My Lords, do I not detect an element of dejd vu about this Question, having regard to what took place at Question Time on Monday?
The Earl of Caithness: My Lords, my noble and learned friend is absolutely right. We are treading very familiar ground.
Lord Bruce of Donington: My Lords, in that case there will be no objection to retreading a little of the

297
ground that was made a little obscure the other day. Is it not the case that the Government's record on inflation is not quite as unsullied as one might be driven to believe in that inflation reached 22.5 per cent. in the first quarter of 1980 and resulted in the decimation of wide sections of British industry? There is no need for the noble Earl to be so coy about the matter. If he cannot predict with any reasonable accuracy the degree to which inflation will fall marginally towards what it was, can he say when unemployment in this country is likely to decrease by a million to its level when the noble Earl's Crovernment took over?
The Earl of Caithness: My Lords, the noble Lord chided me the other day for straying from the Question on the Order Paper. The noble Lord seeks to do that now.
Lord Orr-Ewing: My Lords, can my noble friend say whether it is true that those who wish to maintain the value of their earnings need a wage increase of the same rate as inflation?
The Earl of Caithness: My Lords, my noble friend has raised a most important point. The headline rate of inflation is not a fair comparison for wages. A more appropriate measure would be the tax and prices index which showed a rise last month to 7.7 per cent., which is considerably different from the headline rate.
Lord Hatch of Lusby: My Lords, this Government have now been in office for 11 years. They have always said that their first priority is to reduce inflation. Who is responsible for the fact that inflation has risen rapidly over the past two years, particularly in view of the bonus from oil revenues? Whose responsibility is it? Is it not that of the Government? Is it not the case that so far as concerns inflation the Government's policies are seen to have failed utterly?
The Earl of Caithness: My Lords, it is the Government's duty to bring inflation down, and we shall succeed in doing so. One of the reasons for the substantial rise in the headline rate of inflation was the change from rates to the community charge when local authorities applied the equivalent of a 34 per cent. rate rise which added 1 per cent. to the index. I hope that the noble Lord will take this opportunity to condemn those high-spending local authorities.
Lord Harmar-Nicholls: My Lords, does my noble friend agree that the only alternative to the present system, which has been suggested from time to time, is credit control? Can he tell me which other countries have used credit control as a means of contain ng inflation?
The Earl of Caithness: My Lords, using credit control to reduce inflation does not work. As Mr. Greenspan, the chairman of the board of governors of the Federal Reserve, said:
"In the short run the Federal Reserve can hold down nominal interest rates but the result largely would be more inflation".
298
More apposite to us is the Bundesbank's remark:
"The Bundesbank can only work indirectly by appropriate fixing of interest rates".
It is clear that interest rates is the method by which we can bring down inflation.
Lord Williams of Elvel: My Lords, will the noble Earl respond precisely to the question put by his noble friend Lord Harmar-Nicholls? How many countries use credit controls in the fight against inflation?
The Earl of Caithness: My Lords, I do not know the exact number, but all European countries use interest rates.
Lord Molloy: My Lords, have the Government considered a possible alternative to raising mortgage rates to astronomical levels, which causes great unhappiness and homelessness, with the excuse that they are combating inflation? Why should they deliberately create homelessness and anxiety among people who can no longer afford the houses which they began to purchase a few years ago with the excuse that there is no other solution to bringing down inflation?
The Earl of Caithness: My Lords, the result of the increase in inflation has been high interest rates, which inevitably react on mortgages. I know that the noble Lord will agree with me that inflation is ultimately much more serious than high interest rates. The noble Lord will recall that in the 'seventies pensioners' savings were reduced by a third during the term in office of the Labour Government due entirely to inflation. Under this Government those savings have risen.
Lord Stoddart of Swindon: My Lords, is the noble Earl aware that most other countries require the banks to place a significant proportion of their deposits at the central bank? Will not the Government reconsider their policy and insist that the banks place at least 8 per cent. of their deposits with the Bank of England, which would damp down credit and make a considerable contribution towards bringing down the rate of inflation?
The Earl of Caithness: My Lords, I believe that the noble Lord is referring to the minimum reserve requirements of some banks. That is merely a device to control interest rates. The German constitution will not permit the banks to act in the way that the Bank of England can through Treasury bills. Therefore they use an alternative method known as the minimum reserve requirement. That is purely a device to control interest rates.
Lord Dormand of Easington: My Lords, is the Minister aware that last week in another place the Prime Minister said, in dealing with the problem of inflation, that the Government:
"got the growth going a little too fast"?— [Official Report. Commons, 8/5/90; col. 17.]
How does he explain the difference between that reason and the one that he has given me? In addition,

299
will he give a little more detail as to what is meant by:
"got the growth going a little too fast"?
The Earl of Caithness: My Lords, there was a substantial amount of growth in the economy. There has not been for many years such a long, sustained period of growth as under this Government. That, combined with the loosening of monetary policy following the stock market crash, has led to inflation. That is why we need high interest rates to bring it back down.

Cyclists' Safety Equipment: VAT
2.58 p.m.
Lord Rea Lord Rea asked Her Majesty's Government:
Whether they will exempt crash helmets and other safety equipment designed for pedal cyclists from VAT.
The Earl of Caithness: My Lords, no.
Lord Rea: My Lords, I understood that that was the Answer. I am sorry about that; I had hoped for something rather better. Is the noble Earl aware of an article which was published recently in the British Medical Journal, titled "Cyclists Need Helmets", which pointed out that cycling is next only to motor cycling as the most dangerous form of travel? Motor cyclists' helmets have such an exemption from VAT. Is the noble Earl aware that, despite the danger, cycling is becoming more popular because—apart from the danger of accident and sudden death —it is a healthy convenient and clean form of urban transport? What are the Government doing to encourage cycling and make the world safer for cyclists?
The Earl of Caithness: My Lords, I gave that answer because it would be contrary to European Community law to extend our current VAT zero-rating provisions. The relief for motor cyclists' helmets was introduced in the 1974 Budget and, whereas the sixth VAT directive allows member states to retain zero rates which were in force on 31st December 1975, we cannot widen the scope of existing provisions nor introduce new ones.

Directors' Salaries: Private Sector
3 p.m.
Lord Molloy Lord Molloy asked Her Majesty's Government:
Whether they propose to offer advice to directors and senior managers in the private sector as to what would be appropriate increases in their own salaries and benefits, and if so what.
The Parliamentary Under-Secretary of State, Department of Employment (Lord Strathclyde): My Lords, it would be wholly inappropriate for the Government to offer such advice to businesses in the private sector. Pay is a matter for those who negotiate and determine it.
Lord Molloy: My Lords, is the noble Lord aware that the CBI has indicated its support for wage restraint, and says that managers and directors should not pay themselves more in dividends and salaries than they earn; in other words, it cuts all ways? Do the Government agree with that principle?
Lord Strathclyde: Yes, my Lords.
Baroness Turner of Camden: My Lords, does the Minister agree that it is bad for industrial morale if workers see people at the top of their companies awarding themselves large increases when the workers are told that they should keep their claims within the rate of inflation? Is it not inevitable that our competitive position will be damaged if industrial morale is damaged in that way?
Lord Strathclyde: My Lords, on the question of pay, the most important thing to remember is the main principle of pay; namely, the need to recruit, retain and motivate the right people for the job within what businesses themselves can afford. That must be true whether you are at the lower level of the pay scale or at the very highest level.
Lord Renton: My Lords, is my noble friend aware that in the past 40 years the trend under governments of both complexions has been to get the Government away from fixing incomes, even in the public service? Does he agree that to have government interfering in that way in private industry would be most unwise?
Lord Strathclyde: My Lords, my noble friend is absolutely right. I am not sure whether noble Lords opposite are suggesting that we should interfere.
Lord Tordoff: My Lords, will the noble Lord explain why it is inappropriate for the Government to advise managers to keep their wages under control when they constantly advise other workers to keep their wage claims under control?
Lord Strathclyde: My Lords, we are entering the area of semantics. The Government have always maintained that pay increases should be affordable and should be decided by businesses. That is right and that is what the Government have continually done. That is what the CBI has done too.
Lord Jay: My Lords, are the Government aware that, as long as they tolerate company chairmen payingthemselves half a million pounds a year, there is no chance whatever of the working population generally listening to the Government's appeals for pay restraint?
Lord Strathclyde: My Lords, we are not talking about levels of pay, but about pay increases. On that subject there are numerous examples of major British companies whose directors have taken pay cuts. A noble Lord opposite, from a sedentary position, asks me a supplementary question about naming those companies. The figure for Guinness was 18 per cent. lower, for Pilkingtons 21 per cent. lower and, for the National Freight Corporation, 11 per cent. lower. The list goes on.
Lord Hatch of Lusby: My Lords, does the noble Lord realise that his answer contradicts that of his noble friend Lord Caithness, who has just left the Chamber and who told the House on what figures wage claims should be based? If that is so for wage claims —he gave us specific answers, as will be seen in Hansard tomorrow —why cannot the Government say something of the same kind about the claims for directors' fees?
Lord Strathclyde: My Lords, I believe that my noble friend the Paymaster General was comparing the tax and prices index with the retail prices index, which are two different things. The Government, including both my right honourable friend the Prime Minister and my right honourable and learned friend Sir Geoffrey Howe, have said that leaders of industry should set a good example in pay determination. I entirely endorse that approach and believe that noble Lords opposite agree with that view.
Lord Stoddart of Swindon: My Lords, are not the Government to blame in this matter because they have set the position and given the lead where greed and avarice thrive?
Lord Strathclyde: My Lords, that is a disgraceful suggestion.
Lord Bruce of Donington: My Lords, has not the Government's wages policy always been made clear; namely, that wage increases should be kept within the rate of inflation and preferably below? Has not that policy been pursued by the Government in relation to those who are employed in the public service? Have not the Government also resolutely refused to reproach those who advocate the restrictions and who at the same time pay themselves £1,000, £2,000 or £3,000 more a week, apparently with impunity? Is the noble Lord aware that, speaking in Tokyo only a couple of days ago, Mr Nicholas Ridley, the chief of the Department of Trade and Industry, said:
"Britain also has one of the lowest labour costs in EEC"?
Next time the Government seek to give advice to ordinary working people, will they bear those observations in mind?
Lord Strathclyde: My Lords, I am suprised that, with his wealth of experience, the noble Lord should confuse two issues—first, the new unit price of labour costs and, secondly, the level of pay. The two are not connected. The Government have always made the same statement on the question of pay; namely, that the companies should be able to afford it and that they must pay regard to international competition when setting those wage levels. That is important and that is why we had one of the highest productivity growth economies in the 1980s.
Lord Molloy: My Lords, is the noble Lord aware that, whenever the Government make a statement about inflation, they refer 99 times out of 100 to the wage earner? Will they continue to take the same attitude in support of the CBI which believes that managers and directors should not give themselves excessive pay rises on the one hand and call for
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restriction on the other? Is he further aware that 43 per cent. of the work-force of Great Britain consists of lower-paid workers, two-thirds of whom are women? Is it not about time that those at the very bottom should have a break and those at the top should, as the CBI argues, hold hard to give other folk a chance to catch up?
Lord Strathclyde: My Lords, I can only repeat that pay is for businesses themselves to decide. However, we have always maintained that leaders in industry should set a good example in their own pay determination.

Business
3.6 p.m.
Lord Denham: My Lords, I should like to say a word about this afternoon's short debates standing in the names of the right reverend Prelate the Bishop of Worcester and the noble Lord, Lord Monkswell. As the mover is allowed 15 minutes, and as the Minister should rise to reply not less than 20 minutes before the scheduled end of the debate, in the case of both short debates this means that all other speeches could be as long as 14 minutes. However, I know that the House would prefer noble Lords to keep their speeches within limits slightly more compatible with the spirit of these short debates.

Port of Tyne Bill [H.L.]
Read a third time, and passed, and sent to the Commons.

Europe: Cultural and Social Co-operation
3.7 p.m.
The Lord Bishop of Worcester The Lord Bishop of Worcester rose to call attention to the case for European co-operation in matters cultural, humanitarian and spiritual; and to move for Papers.
The right reverend Prelate said: My Lords, in preparing for a conference in Malvern for 1991, the title of which is, "Threshold for Europe, Britain's Heritage, Britain's Future", I have become deeply drawn to the subject of this afternoon's debate. I can only set the scene. I hope that noble Lords will develop some of the important issues. I look forward to hearing the maiden speech of my noble friend the right reverend Prelate the Bishop of Lichfield and of the noble Marquess, Lord Exeter.
It must now be less than a thousand days to the completion of the single European market. If we were to think of that event solely in terms of setting up a market for 320 million people, we should lose a great opportunity. That is not to deny the importance of prosperity. Prosperous mercantile nations have in the past always been those which have nurtured civilisation. The exchange of goods has always gone with the exchange of ideas.
Nevertheless, Europe possesses other assets which are beyond the material and upon which we should also capitalise.
In an uncertain world I believe that we have a common culture, a common faith and some common experience of democratic institutions. I am proud to be British but I rejoice to be also European. Young people now go to Europe as easily as I would have gone to Manchester at their age. Furthermore, I am told that one-third of our population crosses to Europe every year. In the past we have fought battles for freedom on the soil of Europe. We must now fight them again with other weapons; namely, ideas, our own collective wisdom and a certain spiritual vitality.
On 5th April the European Parliament again stressed that it saw the single European market as more than just an economic entity. It went on to grapple with social and environmental issues. I ask the noble Lord, Lord Trefgarne, whether it is also the opinion of Her Majesty's Government that it will be more than just an economic entity.
What do we mean by Europe? It is surely more than the 12; and more than the 23 of the Council of Europe. It must include those nations which have so recently reclaimed their freedom. In 1942 Winston Churchill expressed the view to Anthony Eden that the European family would act in unity within a council of Europe. In 1950 when that council was launched, he said that the doors were open for all to come in, including our friends from the East, if they shared our purposes. He hoped that the great Soviet Union would also come in. If so all would indeed be well.
How can we keep that spirit of optimism alive and well? Recently in Strasbourg Sir Geoffrey Howe is reported as saying:
"When Gorbachev comes in July, he will speak about the Common Home. He need look no further. Here it is".
Does that represent the considered view of Her Majesty's Government?
For 40 years the Council of Europe has stood for greater European unity, the principles of parliamentary government, human rights, the improvement of living conditions and for human values. I believe that it needs greater affirmation and greater resources. In view of what has been achieved by that council over the years, it would be a pity if other institutions were to be set up. It has recently unanimously agreed to invite all nations involved in the Helsinki process to join it for a full session once a year.
But whatever institutions are proposed for Europe, they will be ineffective if we do not revive the spirit of the people. I quote the well known words of Shelley:
"I care not who writes your laws so long as I may write your songs".
We have a great storehouse of joy in what we call European civilisation. Not for nothing do we speak of what we call the humanities; in fact they make us understand more keenly what it is to be truly human. However, it is not with high culture that I am most concerned. It is in the field of popular culture that
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enormous efforts must be made. In the terms of history, the media explosion is fairly new to us all. We have to ask questions such as: What values do we have, what values do we want and how can we establish those values? In default of wrestling with those questions, we recruit more and more police, build larger cages in our football stadia and introduce even greater prohibitions. These questions about values are not just posed from rectory studies in Barchester. It is clear from listening to the radio and television that they are questions being asked by philosophers, politicians and educationists.
I believe that we must bring together all those who are concerned with youth, whether they be churchmen, sportsmen, educationists, media people or others. We cannot make people good but we must seek the conditions through which the best can come out. We must surely welcome schemes such as ERASMUS, Yes to Europe and Tempus, by which students and business people may make useful exchanges in training and get to know each other, expelling the xenophobia which bedevils everything. In matters humanitarian there is an urgency that people should be considered as well as policies. There is also an urgency that Europe should look outwards to poorer nations in the rest of the world. If Europe were to look only inwards to its own rich man's club, it should be failing in leadership.
Other noble Lords will, I hope, speak about conditions of work and unemployment. The new market in 1992 may produce as many as 2 million new jobs but I am told that as it develops there may be as many as 3 million further unemployed people. The European Parliament recently confirmed that it is committed to the care of the elderly. It will dedicate 1993 as a year for the elderly and the solidarity of all age groups. That is to be welcomed.
At this time I want to draw attention to the needs of the family as the basic unit of society and to the needs of children. There will be much migrant labour, many people will be working a long way from home, and it is desirable that governments should put their weight behind the defence and protection of the family. I sit on the council of the Children's Society and my friends there are asking for a European Community programme for the care of children. It may be considered temerarious that this debate should be initiated from these Benches. I know that the story of the Christian Church includes the story of intolerance, bigotry and power corrupting the institutional church. It also includes the story of saints, martyrs and social reformers.
Time will not allow me to speak of the way in which, centuries ago, the Venerable Bede constantly observed that it was the Christian faith which gave England its unity and identity. Something similar happened after Rome had disappeared and Christianity enabled Europe to see a further day of civilisation. Our Judaeo-Christian faith has shaped many of our institutions. It has caused us to value the human person and to affirm human communities. Twice in our lifetime materialistic and repressive regimes have tried to dominate Europe and have failed to do so.
It is not enough to say, "We have won. " The consumerist and competitive society also has its

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problems and can create disillusion. There are questions that we avoid at our peril. A society which never asks, "Who are we? What is the chief end of man? What are our duties as well as our rights?" is increasingly vulnerable to the insentience and folly of those who would plunder it, including the demagogue and the commissar.
I dare to think that the mainstream Churches are prepared to come to the new Europe in a spirit of humble service. They must work together in their own spirit of glasnost. It has been the wars of religion and the desire of the Church to dominate which in the past has secularised Europe. If they try to do so again, the Churches will almost certainly invite the revenge of the secular environment.
Recently, however, we have seen the Church in Poland, East Germany and Czech-Slovakia providing the grit for the people to survive with their dream of freedom intact. Last year an ecumenical assembly in Basle treated with the subjects of "Justice, Peace and Integrity of Creation". It was awsomely realistic but hopeful.
Vaclav Havel has reminded us of the need to dream dreams and see visions if we want the seemingly impossible to become a reality. I believe that the Churches will be allies in this and with all others who seek to renew the soul of Europe. I beg to move for Papers.
3. 22 p.m.
Lord Beloff: My Lords, it falls to me on behalf of your Lordships to thank the right reverend Prelate for raising a matter that takes us a little above our normal passion for exchanging statistics across the Floor of the House. The subject that he has raised is an important one, and we look forward to it being further illuminated by our two maiden speakers, one ecclesiastical and one lay person.
In listening to the right reverend Prelate, I was encouraged, as I am sure were other noble Lords, by the indications of the interest not only of the Churches but of other organisations and movements in this country in what is happening in Europe. As he reminded us, there is in the younger generation an unprecedented degree of interest. On the other hand, it is desirable that policies to be pursued must be realistic. I share with him a belief in the Council of Europe and its work. Not everying looks as good as we thought it might be in that year of expectations, 1989. There are very grave difficulties with regard to both the newly emancipated, or in some cases only semi-emancipated, countries of Eastern Europe and the countries of the European Community to which we belong.
It looks as though in central and eastern Europe one result of the lifting of the long Soviet night has been the re-awakening of what were its characteristics for so many centuries and which to some extent explain the faiths of its people, their divisions among themselves and not least their religious divisions. One can see emerging on the map the old fault lines between Catholic, Protestant, Orthodox and Uniate which for some time we have thought were submerged in common misery. We also see the recrudescence of such political, ethnic and linguistic: divisions arising from their cultural
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history. One would consider that the Czechs and Slovaks had a great many more practical things to do than to spend their time arguing whether to put back the hyphen between Czech and Slovak. Those are not nice things, and in some parts of Europe they have led, and may lead, to actual violence.
On the other hand, in the West we face the social problems to which the right reverend Prelate referred. It seems incredible that at a time when youth is so hopeful in some respects, other aspects of its behaviour give cause for such anxieties. That links with what the right reverend Prelate said about the third world. We face the eruption on to the western European scene of ethnic rivalries and problems which did not exist previously to the same extent, through the inevitable migration from poorer countries to richer or more hopeful countries. It has been a characteristic of human history over the centuries.
The subject has been referred to in other debates. In this country, France, Germany and the Netherlands we have not found the right balance between the need to retain a single cultural —perhaps spiritual—impulse which can help us to solve our problems and the need to allow for appropriate differentiation.
In that sense the problems of Europe are from the Atlantic to the Urals. Nobody can forecast where the next dramatic explosion calling our attention to our weaknesses in some of these respects may come from. Noble Lords will have read about the desecration of Jewish cemetries in France. That has produced the hitherto unknown spectacle of the president of the Republic walking in a procession to express national regret. It was a moving gesture on the part of the French president and his prime minister; but the fact that it needed to be made in the country which for a couple of centuries was thought to be, above all, the country of the Enlightenment is a grim reminder of what can go wrong. Anti-semitism has had a long history in France. It is clear that it has been fuelled by the apparently equally difficult problem of how to deal with the growing North African minority.
Again and again we see that there are common problems. Whether they can best be solved in co-operation, as suggested in the wording of the Motion, or are those which each government must face in its own way with whatever encouragement it can obtain from its friends or neighbours, is an open question. It is true that we are not yet at the stage when a European impulse can make up for national deficiencies. Being "good Europeans" is a nice comment to make about ourselves but, in the end, what governments can do is not determined by their European adherence.
There are ways in which governments can and should co-operate. We see an example in the relatively minor but significant element of football hooliganism. Because of the element of confidence involved, the more important question is: how far is there full and genuine co-operation between European countries in the management control, and eventually one hopes extirpation, of terrorism? Perhaps in reply the Minister will tell us the progress that has been made in the Trevi agreement. The

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Minister's right honourable friend Mr. Douglas Hurd was then Secretary of State for Home Affairs and he was principally concerned in that agreement.
If some countries mistrust the genuineness with which others regard dangers to themselves—their citizens or their national unity—some of the high hopes based upon co-operation in matters cultural, humanitarian and spiritual are bound to be dashed. There are those who are enemies of our joint civilisation. For instance, there are the neo-nazis (to use an umbrella term) whose activities now stretch from East Germany to France and who in a limited way have an impact on thinking in this country. It is obvious that their activities which cross frontiers must also be challenged by common consent.
Whether it is possible to make a difference through the educational exchanges to which the right reverend Prelate referred, is difficult to say until we have a generation to measure the impact. The problem is that much of what people want done has to be done tomorrow, today or, in some cases, yesterday. Suddenly to call on enough people to teach the English language to the newly-freed nations of Eastern Europe, which would be of considerable benefit to them in a number of ways, and to do that overnight, is clearly asking too much of the resources that we have at out disposal.
Again and again we come up against serious practical problems. That is not to say that they cannot be resolved; but anyone who asks us to embark on exploring the whole range of issues must be prepared to face the evil as well as the good.
3.35 p.m.
Lord Houghton of Sowerby: My Lords, I am fortunate to be able to take part in a debate which unusually has been introduced by a right reverend Prelate. It is infrequent that our debates are initiated from the Bishops' Bench. I was attracted to the debate for two reasons. First, it was being introduced by the right reverend Prelate the Bishop of Worcester. It was in Worcester that I made my only address in a cathedral and it was on a topic to which I shall refer in a moment. It is not surprising to find that the subject and the speeches that we have heard are as suitable to the pulpit as to your Lordships' House. I have not the slightest doubt that the right reverend Prelate has indulged in such thoughts during the course of his administrations.
The three broad headings offer an opportunity for a high-level philosophical debate. I do not know enough about culture. I am a stranger to spiritual thought and activity and, therefore, I have chosen to speak about humanitarianism. In that area we have a broader common denominator in our European associations than we have in the other two.
Of the three subject headings that we are given for the debate the one with which we can deal in a practical way is the humanitarian attitude towards the welfare of animals. It was on the subject of animals that I made my address in Worcester Cathedral. I clearly remember criticising the doctrine of early religious teaching about the supremacy of
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man over the rest of the animal kingdom. I criticised the subjugation of the animal kingdom, its use and the subordination of all living things on land, in the air and in the sea to the use and pleasure of human beings. I dissent from that philosophy.
I am a little outraged to find that by a new and rising prophet by the name of Gummer we are being recalled to that ancient philosophy about the use of animals. We are now told that it was one of God's intentions that we should eat animals. During the past 24 hours ! have searched the Book of Genesis. I was surprised to find that a copy is readily available in your Lordships' House. It bears no sign of use but it was sufficient for my purpose. The modern authorised version of the Old Testament reads more like a fairy tale than anything I remember reading at Sunday school. I found nothing in the Book of Genesis about eating animals, although I did not have time to read it all.
The relationship between man and the animal kingdom is becoming one of the great philosophical and practical issues as regards future life on this planet. We must realise that if the planet is to survive, attitudes that have been bred into mankind and fostered by religious beliefs and practices must be abandoned.
Throughout Europe there are differing standards in the humanitarian approach to the welfare of animals. In Spain there is bullfighting. There are also the abominations of the fiestas at which unspeakable cruelties are inflicted on animals. There is the shocking slaughter of migratory birds in Italy. Men go out wearing cocked hats and feathers, with rifles and bags to shoot birds no bigger than thrushes as if they were brave men conquering the turbulent wildlife around them.
Throughout the Mediterranean basin there is much hardship inflicted on animals. There is cruelty to horses in Greece and torture to human beings in Turkey as if they were animals. All in all, we do not have a very clean sheet here in many respects as regards the treatment of animals. Therefore there is a common denominator throughout Europe which can be separated from the differences of culture to some extent. It can be somewhat detached from spiritual thought and activity where mankind tends to think of his own soul far more than he thinks of the care of animals. Why is it that religion has been founded on the selfish concept of the salvation, existence and future of man? I suggest that that is not in keeping with the broad concept of the development of a planet as unique as this in the universe.
In Europe there is a body known as the Eurogroup. Its members are representatives in the European Parliament and its aim is to look after the care of animals throughout Europe and beyond. It is doing very good work indeed. It could do with some support from the Church. All animals could do with that. The broader view which can now be taken not only of humanitarianism in Europe but throughout the world is one in which, with great respect, those who occupy important positions in our ecclesiastical and religious life should now be seen to participate.

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The Eurogroup is active in the European Parliament. With pressure it brought about the cessation of the import of products from the culling of seals in Labrador. It is seeking to overcome some of the cruel practices as regards the treatment of animals in Europe. We want more punch and power behind that group. No great change can come about in humar affairs without it taking its place in the pulpit. Also, not many great changes in history have come about without them having been in the police court. There is no doubt that the combination of the pulpit and the police court has brought about social change in our history. I am not suggesting that one needs to go into the police court as regards animals, although occasionally one might do so.
That is my message this afternoon. I need take no longer to deliver it. Action needs to be taken. Although at present we need not be concerned with the details of the action, there is a broad common denominator of interest and a broad concept of the standard of humanitarian treatment of other species, in respect of which we can cease to elevate ourselves on a pedestal, which we deny to every other living creature. That is something for the right reverend Prelate who introduced this debate to take back with him. If he does so, that will be very worth while.
3.45 p.m.
The Marquess of Exeter: My Lords, I ask for your indulgence, especially in view of my accent. I am glad to speak before your Lordships for the first time. I greatly appreciated the words of the noble Lord who preceded me about care for nature and for animals in particular. As we move into the last decade of the century, we must take into account the fact that concern for all facets of life will be very much to the fore. Consideration of co-operation on matters of culture, humanitarianism and spirituality is most timely with that in mind.
We seen to live in a time of contrasts. On the one hand, there is in Europe an apparently inexorable movement towards unity at political levels as well as economically. At the same time, as has already been mentioned, there are strong fears on the part of various groups in different parts of the region about the loss of independence. We see that same contrast emerging throughout the world. My home is in Canada and that is taking place within our boundaries between the English and French speaking people.
What is it that can allow for a genuine togetherness, agreement and co-operation? That is something which must exercise your Lordships. What is ot be done in Europe as a whole? In examining the question of culture or spirituality one must see that behind those thrusts lies a fundamental desire for wholeness. That was emphasised by the noble Lord, Lord Houghton. The natural world is dependent on the attitudes which we take towards it. As has been said, that has very often been overlooked because of our own self-preoccupation as human beings. It appears that we have been more anxious about our own salvation than about the salvation of the planet.
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The movement of events is such that we shall all be forced to take that broader picture into account. John Muir, an American naturalist, said:
"When someone tugs at a single thing in nature, he finds it attached to the rest of the world".
That is what we are being forced to come to. Whatever our personal attitudes as individuals in the world, they affect the broader scene which is much greater than we have been willing to admit to ourselves.
I attended a conference in France on the theme of our common European home. Various representatives from Eastern Europe were speaking about environmental matters in their part of the world. For example, I was interested to note the conflict which is presently taking place between Czechoslovakia and Hungary over a large hydro-electric project on the Danube which is being developed between those two countries and which also involves Austria.
All parties are concerned about environmental issues, but from different standpoints. The Czechs are evidently concerned about their use of coal for the generation of power and the effect of air pollution on their forests and more generally. The Hungarians have other concerns. Seemingly they have difficulty in getting together on this. How is that situation to be resolved? Traditionally we tend to argue matters out and then come to some kind of compromise which does not fully suit anyone. However, these days with such issues as environmental matters, it is not one or two countries alone that are concerned, as the occurrence at Chernobyl in the Ukraine reminds us. There was radiation even in the water supply of Vancouver, not far from my home in Canada.
How are global issues to be taken into account by people who are concerned merely with local matters? It seems to me that there is a need for a new approach to education. I was pleased during the recent conference to come into contact with some teachers from Hungary. They had been giving serious thought to these issues and recognised that something must be done to inspire in the young a broader view of the world and a sense of personal responsibility for it. Obviously that is more than just an offering of words by teachers. The adults concerned need to have that kind of view because young people depend heavily on the example that is offered to them.
When we look from the West into Eastern Europe there is a tendency to think that we have the answer to all the problems in that part of the world. President Havel of Czechoslovakia recently spoke of his experiences under a repressive regime. He felt as though he was pinned under a boulder, yet in that state he discovered an inner strength which might have been difficult to find in other circumstances. That has given him an outlook of greater toleration and a wider view of the world. There are many who suffered under repressive regimes in Eastern Europe who have a lot to teach us about qualities of character. We sometimes forget that because we are distracted by the fast pace of our industrialised world.
We should not be too quick to rush into that part of the world to convey what we think of as our good

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news without exhibiting open hearts and an attitude of humility towards what the people in those areas can teach us. There is inspiration for the young, for instance, regarding the qualities of character which really count in life; qualities which are essential in such difficulties as that between the Czechs and the Hungarians on environmental issues, in the discussions between Eastern and Western Europeans, and in the relationship between Europe as a whole and the rest of the world.
If we are to overcome the global problems of the nineties we shall need leadership of a calibre which can take that wider view and can be more open to finding out what works in the largest possible context. I thank your Lordships for your indulgence.
3. 55 p.m.
Lord Bonham-Carter: My Lords, it is my good fortune to follow the noble Marquess, Lord Exeter, in his maiden speech, and to be the first to have the opportunity of congratulating him on the eloquence with which he handled three themes which are close to the heart of our debate today, and for which we must thank the right reverend Prelate the Bishop of Worcester.
I said the noble Marquess spoke about three themes. First, he ended—if I may put it that way —with lessons that can be learnt from the people of Central and Eastern Europe and from the experiences that they suffered. It is important that we recognise that they wanted to join Europe, not necessarily a simulacrum of our society. Secondly, he spoke with eloquence on the need for us to be educated in the dangers that we have inflicted on our environment. He said that in dealing with that we should act not only as individuals, but jointly and in co-operation.
Finally, from his experience in Canada, he expressed—ably, it seemed to me—two common themes of public expectation which exist today; that is to say, the hope for greater unity and the apprehension that that greater unity will in some way diminish our own cultural identities. For all that I should like to congratulate him and thank him for his contribution.
In this discussion, which can range wide and loosely, I share wholeheartedly some of the apprehensions expressed by the noble Lord, Lord Beloff, and in particular the dangers which the recrudescence of nationalism, which is very much on the cards—indeed, it is in front of our very eyes—will bring with it. The successors to communism appear to be nationalism and fundamentalism, both of which are fairly unpleasant in many of their manifestations. Nothing has been more shocking than the outbreak of anti-semitism only 40 years after Belsen. Words are an inadequate way in which to condemn such outrages, but silence is equally unsatisfactory.
We should remember one point in that connection—that politicians have a heavy responsibility. I do not believe that the outburst of anti-semitism in France would have been so outrageous and unqualified had it not been for the
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political posture adopted by M. Le Pen. Leaders in politics have a responsibility for setting standards. If they fail to do so the consequences fall on everyone.
There are many different types of co-operation between countries. Perhaps the most important is that between individuals and between cultures, as it were. There is commercial co-operation. Finally, there is the role which governments and states have to play. It seems to me that the last is in some ways the least important. States can do great damage but I doubt whether they can do a great deal of good. What they can do is ease the flow of commerce—such is the nature of one aspect of the European Community.
Secondly, states can ease the flow of intercourse between cultures and between individuals. I refer, for example, to the history of Anglo-Italian relations. That relationship has hardly at all been between states. It has been almost entirely between individuals and two cultures. It started with Italian workmen coming over here in Elizabethan times and going on to the visits in the 17th century which led to the Grand Tour; the famous visit of Milton to Galileo; the Grand Tour which followed it; the habit of the British settling in Italy, and so on. Anglo-Italian relations really became bad between the states; that is, in the 1930s and 1940s. That would seem to offer a lesson to us in what states can and cannot do in this whole area.
Of course, I suppose that we are concerned primarily with the role of states. What has happened over the past two years or so has been a revolution which has changed the nature of our relationship particularly with the Central and Eastern European countries. Nowhere has the cultural change been more marked than that. Until two years ago cultural relations between this country and, say, Poland, was largely an inter-governmental affair which had to be arranged with some delicacy. There were grave limitations on how far one could go. That applied in a much more restricted sense to individuals. Today, countries like Poland, Czechoslovakia, Hungary and elsewhere are welcoming and inviting Western influence in every aspect of their lives.
Two years ago in your Lordships' House we debated cultural diplomacy. It was generally agreed that the projection of British culture was intrinsically important, not only for us but for those on whom it was projected. The opportunities to project that culture have, as a result of the events of the past few years, vastly increased. The two chief instruments at our disposal, apart from commerce and individuals, are the British Council and the BBC's external service.
The most important asset we have at our disposal is, as we were reminded in that debate, the English language. Of the demand for the English language on the Continent of Europe and within Central and Eastern Europe there is no doubt. I would only say, in that connection, that though we cannot possibly satisfy it fully it is crucial that the resources of the British Council should not be diminished or limited. The British Council has an incredibly important role to play in offering training as well as education.
The Government are encouraging business and commerce to invest in those countries. No

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investment is more rewarding in terms of the influence it brings, or the financial rewards it will ultimately bring, than investment in English language training. Noble Lords may remember that it was ponted out in the debate two years ago—I declare an interest, having been a publisher for much of my life —that the export of British books is greater in terms of return than the export of British motor cars or pharmaceuticals. Books have the additional advantage that they carry with them a message. There is the further advantage that the people who buy English books tend to be influenced by English ways.
There is; another area that I should like to mention before I conclude—the importance of student exchanges. That aspect can hardly be exaggerated. I should like to mention the admirable work done by the Youth Exchange Centre and the British Council in that regard. However, if we compare that with what is done by some other countries it is seen to be pretty inadequate. For example, the Franco-German Youth Office has a budget of £14 million a year, and that is just for the two countries. It was started in 1963. It funds people up to the age of 25. It organises up to 200 teacher exchanges each year, 500 links in further education and innumerable joint activities.
It has been said in this connection—it may have been by the noble Lord, Lord Beloff—that one cannot measure the impact of that kind of youth exchange on the climate of co-operation between countries. I agree that it is extremely difficult to measure. But anyone who in the course of their education spent sometime in another country—I spent a year in the United States—will know that the influence of that experience is never altogether forgotten. Therefore, I hope that in devising policies for co-operation with Europe —East and West —full encouragement for youth exchanges at every level will be made.
If the chief aspect of European co-operation which has changed in the past few years has been that in relations between East and West we cannot neglect the fact that integration of Western Europe, which is going ahead steadily, reveals certain needs which are not being fully met by this country. The chief of those needs is not that we do not teach people English in Western Europe—they seem to learn it by themselves—but that we do not learn their languages Therefore, in thinking about European co-operation and in discussing this whole matter today in your Lordships' House, I believe that we should bear in mind that perhaps a more determined effort to teach foreign languages in English schools—which will mean a massive increase in foreign language teachers; a massive increase on that which we have —should be a high priority in any government's programme.
4.7 p.m.
The Lord Bishop of Lichfield: My Lords, I ask the indulgence of your Lordships as I rise to support the right reverend Prelate the Bishop of Worcester in calling attention to this case for greater European co-operation in these matters humanitarian, cultural and spiritual. I thank the noble Lord, Lord Beloff, for those cautions grounded in historical scholarship
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and much study and thought. I thank the noble Lord, Lord Houghton, for his rebuke perhaps to Christians who have over-emphasised the lordship of man but, I think, in unfaithfulness to their foundation documents, since the Old Testament, I believe, and the New where we are enjoined to consider the lilies do indeed enjoin a reverence for the whole creation. I thank too the noble Marquess for his reference to Vaclav Havel, to whom I also wish to refer.
In asking your Lordships for your indulgence as a newcomer I find myself longing nevertheless to keep the impulse of hope and aspiration with regard to European co-operation in these areas very much alive. From my own limited experience I offer three examples. Just a short time ago I was able to accompany a dear friend, the African Bishop of Scroti in Eastern Uganda, to an all-party parliamentary committee in another place not far from your Lordships' House. That Bishop from North-East Uganda was seeking emergency aid for his people. He was seeking both food and medical aid for the people of a diocese who, despite the valiant efforts of the present Uganda Government, continue to suffer from armed insurgency and the danger of famine at this present moment and over the past two years.
After the Bishop had spoken and pleaded movingly for help for his people I was greatly encouraged by something that I was not prepared for. I discovered that several senior members of this all-party committee were able to establish very swift contact not only with our own High Commission in Kampala but also with other European delegations and embassies in that troubled land. I caught a glimpse—it was a surprise glimpse to me—of how at this point European humanitarian co-operation involving medicine, food and security, can look outwards beyond the prosperous Europe to the crises of a country like Uganda which, 28 years on from independence, is still struggling for stability and prosperity.
I suggest that is the tip of an iceberg, bearing in mind the cautions uttered by the noble Lord, Lord Beloff, in respect of an area where co-operation can work and happen. To that humanitarian example I add a cultural example. I return again to Vaclav Havel, the newly-elected President of Czechoslovakia. During the long political winter that followed the Prague Spring, Dr. Havel, as has been referred to by the noble Marquess, suffered periods of imprisonment. But he has also continued his cultural work—if I may describe it as that—as an author, playwright and a writer.
What has been the key to his mettle and to his power to resist? The key seems to have lain in personal conduct, inward conscience and in the power to reveal the falsity of a system that was oppressing him through what he has called "under the boulder", to pick up the previous quotation. He has described it as "living in the truth". That "living in the truth" he himself describes as,
"living in accordance with a longing for people's rightful dignity, in accordance with moral integrity",
and then, interestingly, in accordance with
"a sense of transcendence over the world".

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He adds:
"The power of truth cannot be measured in terms of disciples because it lies in the hidden aims of life".
I am especially interested in the phrase,
"a sense of transcendence over the world".
In his speech the noble Lord, Lord Bonham-Carter, spoke about literature and books. I am an avid reader of the reviews of contemporary writing in this country. It is my own opinion, in terms of the cultural context of writing, that our own literature of plays and novels could be greatly enriched by that sense of transcendence; of something other; a sense of a mystery beyond the world of everyday relations.
The distinguished Irish poet Seamus Heaney has called for just that dimension which I believe East European writers can contribute within a cultural context. Surely, closer firsthand friendship, with English used as a medium, can enrich us culturally here. Those are examples of humanitarian and cultural co-operation which significantly, I believe, keep the impulse of hope alive for me.
Yet what is most difficult is the co-operation in matters spiritual. Here, in our hopes for a new Europe, may I cautiously refer to some of the spiritual traditions of the Polish nation. I am very aware of the warnings given by the noble Lord, Lord Beloff, about anti-semitism which has arisen there as well as in France. Yet, as a subaltern serving with the Sixth Armoured Division in post-war Germany, I still remember encounters with the tenacious religious faith of Polish officers and men who had chosen to stay within the British Army at the end of the Second World War.
More recently—and this picks up the reference made by the noble Lord, Lord Bonham-Carter, to youth exchange—teenagers from Walsall and Wolverhampton in my own diocese in the West Midlands have greatly enjoyed and benefited spiritually from youth exchange with Polish families and young people. This exchange continued for several years prior to the recent changes. In the new Poland of the past months those traditions—this perhaps chimes with the warnings given by the noble Lord, Lord Beloff—of Polish faith and spiritual life now face the new chastening challenges of a much more open, doubting and questioning society. Poland is itself now a society of choice.
A first-hand observer writes:
"For decades the Church has been the keystone of national and social identity … but now the strength of the Church can no longer derive from its historic position in the past. It must flow, if at all, from the active faith and choices of individual people".
That is a spiritual strength flowing from the individual choices and the active faith of people. The same is true for England and for Europe. My own diocese has been connected with the diocese of Mecklenburg in East Germany for the past few years. A close friend and an assistant bishop there is hoping to come to our clergy conference in a few months' time. Yet he is not sure that he will be able to come because he and Church authorities in that diocese are having to set up a new education system. He wants co-operation and help from us in thinking about that system in the vacuum which he faces.
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Surely, as other speakers have said, at this level spiritual co-operation with Polish and East German people can bring rewards greater than only economic or political rewards. It is for those reasons that I am glad to support my friend the right reverend Prelate the Bishop of Worcester in calling attention to the case and the hope for European co-operation in matters humanitarian, cultural and spiritual.
4.20 p.m.
Lord Mackie of Benshie: My Lords, it is my very pleasant duty to congratulate the right reverend Prelate the Bishop of Lichfield on an outstanding maiden speech. It springs from his distinguished and varied career in the Church, his connections in Uganda and his connection with education in various forms. Obviously, he will apply his wide experience of humanity and Christianity to our benefit in this House.
As a Scot, I was perhaps more impressed by the shrewdness of his comment that the Polish nation now faces complicated issues. It follows closely the observation of my own minister, John Stevenson, in the parish of Kilmuir of the Church of Scotland. He said that Christianity can thrive under Communism but he doubted its survival under comfortable capitalism. It is a fact that we face. We greatly enjoyed the right reverend Prelate's speech. It is a portent of things to come.
We are now coming to a rather less elevated discourse by myself. I want to talk about the Council of Europe. I was glad that the right reverend Prelate who introduced the debate referred specifically to the role of the Council of Europe in these matters. I have been a member of the Council of Europe for about three years. I was appointed to the parliamentary assembly. I have enormously enjoyed it and it has taught me a great deal. The ignorance in this country of the Council of Europe is profound. I dare say that that is true even in this House. People know about the European Community and the European Parliament but they do not know about the Council of Europe. Most people know that it sprang partly from the great speech of Winston Churchill and they know that it exists.
I have been astonished by the effectiveness of that parliamentary assembly, which some people might regard purely as a talking shop or as a source of trips for parliamentarians from all over Europe. It is astonishingly effective. I have been amazed by the enormous respect for the Council of Europe among the people of Eastern Europe. They wanted to be associated with it and they wanted to join because they knew that it had value far beyond the economic and political value of the European Community.
Before last back-end—the autumn in non-agricultural language—I visited Hungary. I was with the committee on refugees, demography, minorities and mass migration. It was the first such meeting of the committee in Eastern Europe. We visited various places. I was impressed by the width of vision of the committee. It does important work and has thought ahead in a way that is typical of the Council of Europe. The Convention of Human Rights and many other conventions originated in the Council of

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Europe. Perhaps I may detail to the House a little of the humanitarian work of the Committee.
It is presently considering the position inside Turkey of kurdish refugees from Iraq. Whatever one may think of certain aspects of Turkish life, the authorities have an enormous problem there which they are trying to tackle. Without doubt the visit of members of our committee to that area was an enormous help not only in bringing the matter to the notice of the world but also in keeping the authorities there up to the mark, to put it bluntly, in their treatment of the Kurdish refugees, who are a miserably unfortunate people, oppressed in the three countries in which they happen to exist. I do not think that too much knowledge can be spread of their predicament. There is also the simple matter of pressing our government and other governments to give money to relief organisations in order to help.
There are similar problems on the borders of Bulgaria and Turkey. There was an unfortunate repression of Turkish citizens inside Bulgaria. They were forced to change their names to Bulgarian names and were eventually more or less expelled from the country where they lived. A committee of the council is looking at the matter. It has been able to produce a whole range of facts which previously were disguised by the Bulgarian Government and were exaggerated by other sources. Unfortunately, as the noble Lord, Lord Beloff, pointed out, other factors are coming to the fore. There is a strong anti-Turkish feeling among the people of Bulgaria which needs to be counteracted by public opinion and education.
I should like to raise the further question not of refugees but of migrants in search of economic improvement in their lives. Until now the problem has been coped with by the prosperous western nations such as France, Germany and the United Kingdom. Indeed a great many Turks have gone to Germany to work in its industries. We all have enormous problems in dealing with these migrants, especially with the second generation. Problems of education have led to appalling problems of unemployment among young blacks and to the xenophobia and racism which we all deplore. The committee to which I referred is looking at the question of new migration to countries that were previously countries of emigration. I refer to Italy, Spain and Portugal.
The noble Lord, Lord Beloff, touched on the problem, which is a purely economic one, of the poor people of North Africa who seek to work in and share the prosperity of their near neighbours on the other side of the Mediterranean. At least our committee can warn those countries of the dangers they face and can point to the need for special measures, such as have been taken in Holland, in order to integrate such communities. It can give a strong warning that unless they educate the second generation they will have tremendous problems.
I have said enough to show the work that is done by one small committee of the Council of Europe. It is absolutely essential that we in this country pay more attention to the Council of Europe. We should think more about it and perhaps do more to promote
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it. It is valued more highly in Europe and in Eastern Europe than it is in this country.
I wholly agree with my noble friend who spoke about the need for education. Occasionally, the Council of Europe has aroused in me nasty feelings of envy, especially when I listen to Dutch people speaking. They can switch from German to French and then into English—and, of course, they also speak Dutch—while I struggle along with my miserable French. I think that we should consider the cultural and humanitarian benefits which may flow to us from the Council of Europe, and also from the other European nations, as well as any benefits which we may be able to offer.
4.30 p.m.
Baroness Seear: My Lords, I am both glad and grateful that it falls to me to add my congratulations to the two maiden speakers whom we have had the opportunity to hear this afternoon; namely, the noble Marquess, Lord Exeter, and the right reverend Prelate the Bishop of Lichfield.
We on these Benches, and the Liberal Democrats as a party, are sometimes thought of as Euro-fanatics who are willing at the drop of a hat to sell our British birthright for a mess of European potage. I should like to make the point this afternoon that we are European fanatics because we realise—and this realisation has never been more important than at present—how profoundly and deeply we in this country are European. Because we are European in that very profound sense, we have an opportunity and an obligation to play a special part in what is happening as regards the changes in Europe today.
Let us consider, for example, the English language. Its roots are to be found both in Latin from Southern Europe and in the German language. It is the mixture of those two European roots which gives us a language that I think we all agree has a subtlety and a sensitivity which make it a quite exceptional instrument for expressing a wide range of ideas and feelings. No doubt that has contributed to the fact that it is so widely used throughout the world and is such an instrument of international and European development.
If one looks at our ideas about government and democracy, one realises that they stem on the one hand from Rome and on the other, in their determination to allow the voice of ordinary people to be heard, from the old Anglo-Saxon folk moots. Those are European roots of a profound and important kind. Moreover, if one looks at the religion of this country, it will be seen that it draws strength and many of its ideas —even if it is unwilling always to admit it—from the old Roman tradition. It also draws its vigorous, nagging, conscientious individualism from the defiance and the individualism of Luther. Three of the most important characteristics of any country are its language, its ideas of government and democracy and its religious base. Surely, therefore, we are profoundly European in this country.
Even in today's debate some speakers have spoken almost as though they saw Europe as being over there and we as inhabitants of these offshore islands

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as not being truly European. However, it is because we are so truly European that we here —at any rate, those of us in this party—believe that we have a special contribution to make at present to the developments which are taking place in Europe. As other speakers have said, the dangers of that development going wrong in Europe are very real. There are spectres present which we would ignore at our peril. There is the spectre of anarchism. In many places the resistance against a totalitarian government has undoubtedly led to a great suspicion of any government in any shape or form. There is the real danger of a revival of the nastiest kinds of nationalism.
After all the oppression and indoctrination which has taken place over the past 70 years, is it not remarkable to see that as soon as the cloud is lifted nationalism raises its head and that it has obviously always been there just beneath the surface? Of course, there is a good side to it; but there is also an extremely dangerous side. Other speakers have spoken of the danger of a revival of anti-semitism. We have seen this emerge in places where we fearfully expected it might show its head, and we have also seen it in places where it was hoped it was dead for ever.
There are also the dangers of a crude materialism which can undermine so many of those old values by which we stand and which will not in fact satisfy people for very long. A dangerous vacuum could be left. There is the further danger of a fortress Europe approach, deliberately ignoring the developments and the needs of countries outside Europe.
There is a massive amount of work to be carried out and there are hideously difficult challenges to be met. However, on the other side, there is also the possibility of a second European renaissance. It can happen if, together, we are determined to see that it will happen. There is a great deal to be done on all fronts that have been mentioned in this debate; namely, the cultural, the humanitarian and the spiritual fronts. Those factors interlock with all the other concerns.
I hope that the right reverend Prelate will forgive me for putting the argument this way. I am sure that he would not cut off these issues from the more humdrum issues of trade, economic development and what happens in industries. They all interlock. Moreover, the problems are those of the whole development of Europe, of which the European Community, to which we have given so much thought in this House, is a most important part. Unless that Community is safe, united and strong it is in no position to make the contribution which is needed in order to tackle the problems of the new emerging Europe. That is where we need to be.
I believe that there are Members in this House from all parties who are as enthusiastically European as we are on these Benches. I should like especially to mention someone who is probably the most significant European in your Lordships' House today, in terms of the contributions which he has made to the development of the Community. I suppose that most of us—I am sure he will not mind my saying this—do not think of the noble Lord,
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Lord Cockfield, as someone who indulges purple patches of oratory. He spoke about the development of the Community at a meeting of the European Economic League two years ago. What he said about the Community on that occasion applies equally, in my view, to the wider question of Europe today. He said:
"If you belong to a community, you have to accept that at the end of the day it is the community interest which must prevail. We are far from accepting this. We are not alone in this, but that is not the company we ought to be keeping. The leadership of the Community is passing into other hands. There are many people in this country who will view that with indifference. I do not. I am sure you do not. Our history shows that we have both valour and vision. The time to exercise them is here and now".
4.39 p.m.
Lord Cledwyn of Penrhos: My Lords, we are all grateful to the right reverend Prelate the Bishop of Worcester for his interesting Motion and the thoughtful speech with which he opened our debate. He spoke of the need for co-operation in Europe, and his plea could not have come at a more opportune time. He pointed to the importance of high standards of morality and of humanitarian policies. As we would expect from the right reverend Prelate, he also pointed to the significance of spiritual values.
Here in the West we are all conscious these days that great changes are afoot not only in the European Community but in Eastern Europe where a revolution with profound implications is taking place. I think that we would all agree that it is Britain's duty to play a full part in the development of the Community and, with our partners and allies, to do all in our power to help establish stable democracies and healthy economies in the countries of Eastern Europe.
Perhaps I may say how much I enjoyed and appreciated the stimulating speeches of the right reverend Prelate the Bishop of Lichfield and the noble Marquess, Lord Exeter, who brought a new dimension to the House—a very large one, the Canadian dimension. We enjoyed both those speeches and look forward to hearing the right reverend Prelate and the noble Marquess often in our debates. I hope that the latter will not regard the distance between his home in Canada and this Chamber as so daunting as to prevent him coming here as often as we should wish. We are grateful to him for bringing a breath of fresh air to our proceedings.
Here in Britain we are conscious that over several centuries we have built a society of which we have a right to be proud. The creation of this society has involved bitter struggle, civil war and—not least—great world wars. What has emerged is not perfect, but we have a free society in Britain with freedom under the law and a parliamentary democracy.
It is against that background that we must look at the right reverend Prelate's Motion. We must also ask the difficult question: is Britain, with all its experience, playing a full part in the great events that are now taking place? After all, the English Channel does make a difference. There is a tendency to be isolationist in these islands and a genuine fear

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is held by many people that if we are not careful we shall lose the institutions and values that we cherish. There are people in all political parties who reflect this attitude, not excluding the Prime Minister herself and some distinguished members of my own party. I respect their views, even if I do not always agree w th them.
However, we must all realise that our base is now in the European Community and that if we fail to play our full part in co-operating—to use the words of the right reverend Prelate's Motion —we shall find ourselves wallowing in the shallows of history. The fact is that, notwithstanding the claims made by the Government, we have not made the social and economic progress that our partners in the Community have achieved.
Let us also be frank and admit that we have not taken advantage of many valuable European directives and that this has left the workers of this country more vulnerable than at any time since the end of the last war. If we are looking at the humanitarian side, we must accept that British workers have fewer rights than their counterparts in Europe today and that our employment record compares unfavourably with that of our European partners.
One of the most disturbing developments, however, in our view has been the Government's reaction to the Community social charter. The House will recall that at the Madrid Summit last June Britain was the only country to reject the charter. I concede at once that the British Government have the right to debate and to amend Community proposals. We do not have to swallow everything that comes out of Brussels. However, the Prime Minister rejected the charter, calling it Marxist. It was a curious outburst, given the varied political complexion of the Community. It seemed to me that the charter's general principles are enlightened and liberal. We shall be most grateful to the Minister if he will tell us what is the Government's latest view of the amended charter when he comes to wind up.
We also take the view that the principles enshrined in the Treaty of Rome and the Single European Act underline the significance of building a true community, as conceived by the right reverend Prelate, and not merely a common market. The objectives must include assisting poorer nations and regions and a general concern about the environment and the social dimension.
The truth is that there has never been a more urgent need to develop rather than to frustrate co-operation in the broad sense. As the right revererd Prelate emphasised, the emerging democracies of Eastern Europe, the EFTA countries, the Lome countries need an effective, efficient, and socially just European Community, both as partners and also as an example.
I find it strange that the Government —who after all are committed to the Community, as we all are —should set about deliberately attacking one of the man pillars of the structure—namely, the social dimension—and seek to insist that virtually all environmental legislation should be based on Article 130 (s), that is "unanimity" rather than Article
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100 (a), "majority voting". In my submission, cohesion cannot be developed or achieved in this way.
I do not have the time to deal in any detail with the major principles in the charter but noble Lords will know that the Commission's Action Programme lists the regulations flowing from the charter and suggests a timetable for their implementation. This is not as comprehensive as was intended in the charter, but if it is carried out it will bring great benefits to this country. I hope that the noble Lord, Lord Trefgarne, can inform us of the progress being made by the Government to put these limited proposals into effect.
On the humanitarian front—which is another pillar of the right reverend Prelate's Motion —we must take care lest we become an open market for goods and services, but a Europe out of sympathy with refugees. Some recent events—and the noble Lord, Lord Beloff, mentioned one—fill me with foreboding. There is also an urgent need for co-operation between the countries of the West to give help and succour to the world's estimated 12 to 14 million refugees and asylum seekers.
The noble Lord, Lord Mackie of Benshie, spoke of the important work on which the Committee of the Council of Europe on refugees, of which he is chairman, is engaged. I agree with everything he said and about the important work done by the Council of Europe which is too often underestimated. We are grateful to him and other noble Lords in the House—including my noble friend Lord Kirkhill—for the effective way in which they conduct their work in the Council on our behalf
The noble Lord, Lord Beloff, referred in his speech to the Trevi Group, on which we are represented by the Home Secretary. There is another committee, the Schengen Group which performs important work. I do not know whether the noble Lord, Lord Beloff, agrees with me but there is an aura of mystery about the work of the Trevi Group which the noble Lord, Lord Trefgarne, may wish to dispel in his speech. Britain is not represented on the Schengen Group, although I understand that if refugees or seekers of asylum are refused entry into one of the states of that group they would automatically be refused entry into the Community.
This matter requires clarification. I further believe that there is need for greater openness in discussions about the freedom of movement of people within the European Community. This is essential in the efforts to protect human rights. Britain should also encourage the promotion of more liberal and humanitarian policies towards refugees and asylum seekers in accord with the spirit of a people's Europe. The United Nations High Commission for Refugees makes a contribution, as we know, but the problem of refugees and of human rights generally should be high on the agenda of summit meetings which are held from time to time.
On the cultural side to which the right reverend Prelate referred, the Community could certainly co-operate in promoting matters of cultural significance in the Community as a whole. I wonder, for example, whether the Globe Theatre project
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which is clearly important to Europe as a whole might involve, with government initiative, the deployment of Community funds. The reference in the Motion to cultural matters is also timely because of the meeting of Community cultural ministers on Friday. The position of the arts in the Community is not crystal clear. While the Treaty of Rome does not cover the arts it has a provision to the effect that every nation may protect its own culture. The difficulty here is that national culture is not precisely defined. Does it, for example, apply to the whole range of state support for the arts? If it does not, it seems to me that we are in real difficulty because different countries may apply different rules. I hope that the Minister will be able to give some guidance. Is the objective, as The Times suggested on 15th May, a forum in the Community which will resolve the problems and set down a binding code of practice to which all Community partners can refer? That seems to me to be the road along which we might travel with profit to all countries involved.
What the noble Baroness, Lady Seear, said in her interesting speech about the English language is something with which we all agree. However, if I may put on another hat, I should say that we in Wales are also deeply concerned to sustain our own language and our culture. The Normans built Caernarvon Castle and the other great fortresses in Wales. As the House knows, we have some interesting Roman remains too. We are concerned to ensure that their descendants see them maintained in proper repair!
Finally, like the right reverend Prelate, I must confess that one of the things which has impressed me most in the thrilling turmoil of recent months is the way in which the Churches of Eastern Europe have risen from the dark suppression of many decades. Whatever our views on religion, to witness this has been an inspiring experience. I hope that my noble friend Lord Houghton agrees. The Churches can give guidance and strength to the movement towards freedom and peace. The Churches in the West should combine with those in the East to help build a new and better Europe. If they fail they will be failing their founder. This, I think, is the message of the right reverend Prelate, and we are grateful to him for it.
4.54 p.m.
The Minister of State, Department of Trade and Industry (Lord Trefgarne): My Lords, in rising to pull the threads of this debate together, I must first congratulate the right reverend Prelate the Bishop of Worcester upon raising this matter. The debate has been a most interesting, and indeed a fascinating one. If I may say so, it was illuminated even further by the maiden speeches of the noble Marquess and the right reverend Prelate the Bishop of Lichfield. I hope both the noble Marquess and the right reverend Prelate will speak again and often in your Lordships' House. Like the noble Lord, Lord Cledwyn, I hope that the Atlantic will not form too much of a barrier to the noble Marquess.
The events of the past 10 months in Europe have given us all new hope. Television brought the live
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testimony of a change of spirit with vividness and immediacy into our homes. We saw with our own eyes the opening of Hungary's borders, the tearing down of the wall that divided Europe and the emergence of Vaclav Havel from the shadows of the constant threat of incarceration to the elegant presidential apartments of Prague Castle. I share the view of the right reverend Prelate the Bishop of Lichfield about President Havel. He has made himself known to us in this country and we were very pleased to receive him when he came here recently.
We have seen, too, the filling of churches all over Eastern and Central Europe with worshippers so long denied them bearing candles of new hope. We saw people sweep aside more than 40 years of despair, as it were in a single day.
We can now again come together on human terms and get to know one another as friends without the impediment of ideological conflict. The Iron Curtain, the Cold War, the Berlin Wall and all that drab, dreary, suffocating and threatening inheritance has been lifted. We do well to proclaim it and to affirm the common heritage of cultural, humanitarian and spiritual links that bind us together in Europe, East and West. As my right honourable friend the Prime Minister said in Bruges in 1988, Warsaw, Budapest and Prague are as much European cities as London and Paris. Europe is now at last putting into practice the principles that underlie the CSCE documents of the 'seventies and 'eighties.
We should not be shy of these dimensions. I think television has made the point for us—if indeed it needed making—that it is at the human level that change has been achieved and that there has been a spiritual thrust behind that achievement. Indeed, the real message from all that has happened recently in Eastern and Central Europe is that human values and dignity count for more than material advantage.
With the return of freedom of expression in Eastern and Central Europe, there can also be a return of truth and honesty in the discussion of problems facing the societies which are undergoing a difficult process of transition, and in the sphere of creative endeavour. Our aim now is to take the great opportunity presented by these changes—the result of popular pressure in which church representatives were often strikingly active (as in the GDR and Poland) —to transform Europe. We should aim to make democracy, respect for human rights and the rule of law secure and permanent throughout Europe so as to allow the individual the chance to fulfil his or her potential and to create conditions for greater prosperity.
Cultural co-operation is a vital element in this process of drawing together, of helping to consolidate the constructive changes that have taken place in Europe, and of getting to know and appreciate what is best in each others' traditions. Cultural diplomacy is not just about exchanges of university professors and artistic events, important though these are. It is also about bringing ordinary people closer together across the old barriers. We must rebuild Europe at the level of the individual.

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Here I want to pay tribute to two organisations in particular—the British Council and the BBC World Service. In any discussion of East/West cultural co-operation—at least as observed from these shores—they deserve special mention. Both have been hindered and harassed for more than 40 years in Eastern and Central Europe. Yet both have been lifelines tc peoples drifting further and further away from the shores of democratic Europe.
The BBC World Service's record is surely remarkable. It has reached individuals in their own languages as well as in English with unbiased, objective reporting despite countless barriers erected against it. Indeed I remember well, during my own time in the Foreign Office, summoning the Soviet Ambassador to complain about jamming. Through its programmes, the World Service has consistently communicated the cultural humanitarian and spiritual values we hold dear to those in Eastern and Central Europe who for more than 40 years have been denied the right to uphold them.
The British Council's work in eastern and central Europe, too, has been crucial in maintaining flows of visitors in both directions between Britain and Eastern and Central Europe; in keeping libraries and information centres going, which were truly windows on another world: in promoting educational and arts exchanges; and, perhaps most important of all, in teaching English, a key to understanding and communication with the wider world.
The huge demand for English language teaching, which the British Council among others is set to meet, is an indication of the task still to be accomplished in European co-operation. The British Council remains a vital agent for cultural co-operation in Europe. History will record the value of the many links which it has forged between East and West.
The scope of East-West exchanges is growing rapidly, and the Government welcome this. There are organisations which will help us in this endeavour, providing a structural framework for our common commitments. These are the European Community, which is engaged in negotiating association agreements with eastern and central European countries, and the Council of Europe, with its special commitment to human rights, which is already providing a forum for cultural co-operation with eastern and central European countries and in which the noble Lord, Lord Mackie of Benshie, plays such a distinguished part.
There are now successful programmes, promoted by the European Community and the Council of Europe, in the fields of academic exchanges, student mobility, vocational training, young workers' exchanges, co-operation between libraries and much else. I would mention three areas which offer particular opportunities.
The first is youth exchanges. The Government support this activity by funding the Youth Exchange Centre. In the past three years the centre has arranged far 27,000 young people to come here and for a similar number of young Britons to go abroad in groups. Some 17 per cent. of those exchanges are with eastern and central Europe, and the per centage
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is rising. The emphasis throughout is on disadvantaged youth. Very many of the groups involved are based on church or religious groups or associations.
Sport can be another means of promoting real co-operation at grass roots level in Europe. Active participation in amateur sport creates bonds of friendship that often last a lifetime.
The value of cultural diplomacy, in its widest sense, is well proven. We are now in a position to exploit it to the full, to the benefit of all the people of Europe.
In his important speech in Budapest on 8th May, His Royal Highness the Prince of Wales said:
"We need to rediscover our common heritage of culture and shared religious roots in order to build a Europe which is based on more than material considerations while at the same time recognising that our diversity is an asset and a strength"
Your Lordships will very much agree with that sentiment.
In the coming renaissance of a Europe no longer divided by barbed wire and walls, the Churches have more than earned the right to play a leading role. The brave, not always silent, witness of numerous congregations in churches of differing traditions when faced with Marxist persecution has filled us with admiration. None can question the contribution in recent years and months, to these events in the East, of the Roman Catholics in Poland, particularly Father Popieluszko, the Lutherans in East Germany, the Brethren and others in Czechoslovakia and, most notably, of Pastor Tokes in Timisoara. By contrast, the deplorable record of a relative handful of political priests, compromised bishops and, most notoriously, of Moscow's puppet Christian Peace Movement based in Prague, may now mercifully be largely forgotten. The Churches as a whole have emerged from their dark night immeasurably strengthened.
One of the effects of persecution is a greater appreciation of shared values by those persecuted. We must all now build on this growing understanding. We all, not least British Christians, have a role to play in encouraging the ecumenical spirit which is increasingly bringing together Anglicans and Roman Catholics, the Lutherans and the Orthodox, and all other Christian groups in Europe. Indeed, this goes beyond Christianity: we must not forget the contribution of Judaism and all the persecution that Jews, too, have suffered. All this gives the peoples of Europe as a whole a deeper consciousness of their common inheritance, of spiritual values and of their place in the world.
I turn now to some of the specific points that have been raised this afternoon. The right reverend Prelate the Bishop of Worcester said that he hoped that the Council of Europe would recognise the emerging awareness of Eastern Europe and the Soviet Union by welcoming those countries as members. The Government look forward to that as much as the right reverend Prelate. Several of the countries have started the process of becoming involved with the Council of Europe. However, I would sound one word of caution. The Council of Europe has high standards, particularly as regards human rights, and we must not allow those standards

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to be lowered. I am certain that the noble Lord, Lord Mackie, would echo that sentiment.
My noble friend Lord Beloff referred to the Trevi agreement on terrorism, which was also referred to by the noble Lord, Lord Cledwyn. It is indeed a good example of co-operation within Europe. It provides for the closest possible exchanges of information and co-ordination of policies with the aim of strengthening our common resolve to defeat international terrorism. The noble Lord, Lord Cledwyn, said that he had not heard much about what was going on. I hope that he will understand that the proceedings of such a group must inevitably be conducted fairly discreetly if they are to be as effective as we all would wish.
The noble Lord may also wish to know about a similarly successful co-operation against the scourge of drug abuse which is carried out through the Council of Europe's Pompidou Group, which has likewise been particularly effective. The noble Lord, Lord Cledwyn, referred to another group connected with refugees. If I may, I shall write to him on that subject.
The noble Lord, Lord Bonham-Carter, and I think one other noble Lord—or perhaps it was a right reverend Prelate—referred to the Lingua programme. This is a European Community programme of practical benefit to thousands of Europe's citizens. Its aim is to improve foreign language competence. It is just getting under way. The Government welcome the programme, which will have a budget of some 200 million ecus over five years. Lingua will provide support for member states' own actions and will make an early contribution to the quality of the teaching of languages in our schools and colleges. It will benefit all levels of education and the working population.
The noble Lord, Lord Bonham-Carter, asked why we did not put the same resources into youth exchanges as the FRG and France, for example. I have referred already to some of the steps we have taken in that area. However, it is true that the officially-backed British youth exchanges are relatively small in number in comparison with the French and German exchanges. Nevertheless, in 1989 some 6,000 young people took part in youth exchanges with the FRG and 2,000 in exchanges with France. The Youth Exchange Centre focuses on high-quality exchanges and specialised areas of activity. The centre will be considering carefully in the coming months whether the level of exchanges can be increased. I should add that a great many exchanges take place without assistance from public funds, including those in which my own children take part from time to time.
Turning again to the speech of the noble Lord, Lord Mackie of Benshie, and particularly the question of the work of the Council of Europe regarding the plight of refugees, I took note of all the points which the noble Lord made. I took special note of his points about the Kurdish refugees from Iraq in Turkey, Turkish refugees from Bulgaria and also new immigrants. Those are all subjects which his committee in the Council of Europe is
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considering. We can all agree on the importance of the council's work in that area. I wish the noble Lord every success in his contribution to that work.
The noble Baroness, Lady Seear, and several other noble Lords referred to the dangers of nationalism and anti-semitism, of which we have sadly seen some recurrence lately. We are all too aware of the very real dangers of nationalism. We have seen it all too often in our own lifetimes and we see ominous signs of it again in eastern and central Europe. Europe ignores those signs at its peril. If nationalism and anti-semitism are allowed to run rampant, all the precious advances made in the past few months and years will be for nothing. It is right that these matters should be raised here today.
The noble Lord, Lord Cledwyn, asked me about the Social Charter. The Government's view on the Social Charter is well known. The noble Lord is entitled to criticise me if he disagrees, as I dare say he does, but we take the view that a number of aspects of the Social Charter cut across matters such as the creation of job opportunities to which we attach great importance. That is why we were not able to give the charter the support which other countries felt able to offer.
As for the social action programme, the United Kingdom will take a full part in the negotiations on individual proposals in the action programme. On the limited information available so far, we expect to be able to accept rather more than one-third of the proposals, but another one-third at least are likely to cause us fundamental difficulties.
I believe that it was also the noble Lord, Lord Cledwyn, who referred to the importance of European cultural co-operation, particularly as regards the competence of the European Community and Commission in that area. Although the Treaty of Rome does not formally cover culture, European cultural Ministers meet regularly. In Article 36, the Treaty of Rome refers to the protection of national treasures and there are certain cultural industries, such as film production and library technology, which, it could be argued, are covered by the treaty. However, it would not be right to say that there is some formal competence in that area. The main achievements have been in fields of collaboration between libraries on, for example, data processing and, as I said earlier, the Youth for Europe exchange programme. I do not want to go further at this stage, but I certainly do not wish to dismiss the importance of the matter to which the noble Lord referred.
Europe is now entering a new stage of opportunity. We should vigorously pursue our ideals as we develop relations with our eastern and central European neighbours in a pragmatic, step-by-step way, widening our horizons as each hurdle is crossed. We are working from a cultural, humanitarian and spiritual heritage which we all share to a future that we can build together.
5.12 p.m.
The Lord Bishop of Worcester: My Lords, I thank the noble Lord, Lord Trefgarne, for his full and comprehensive reply. I am grateful that the debate has been so interesting and has elicited so many

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excellent speeches, not least the maiden speeches of the noble Marquess, Lord Exeter, to whom we are deeply grateful, and of my noble friend the Bishop of Lichfield. There are those who would have liked to take part in the debate but were unable to do so, perhaps because it was arranged at fairly short notice as a result of the ballot. For example, the most reverend Primate Dr. Runcie who hoped to speak in the debate has been precluded from doing so: he is granting Lambeth degrees this afternoon. There is so much that one could say. I believe, and hope, that there will be many more debates on these issues.
As the noble Lord, Lord Cledwyn, was so supportive of the debate, I should say in reply to the noble Baroness, Lady Seear, that, along with Rome, Germany, Lutheranism and the English, we must include the Celts. They played an enormous part in the formation of this country and of this country's faith which raises a particular point; namely, that one of the matters about which I hope we shall be vigilant is the marginalisation of some parts of the European Community and the possibility that the North of England will become more northern and that certain other parts, such as the Principality of Wales, will be left on the fringe. I hope that that will not be so.
Suffice to say that perhaps the most important and awesome point raised in the debate—so many good things which I did not mention have been said by other speakers—is that there must be eternal vigilance and immediate action in the face of the ugly and hateful resurgence of anti-Semitism which we have witnessed recently.
As a schoolboy I lived through the dark years of the war. Many friends older than myself died in the pursuit of the cause of freedom. I cannot bear to think that we should see those heinous matters raise their head. again. I must not say more. In view of the hopeful debate, I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Nuclear Disarmament
5.15 p.m.
Lord Monkswell Lord Monkswell rose to call attention to the case for eliminating all nuclear weapons by the year 2000; and to move for Papers.
The noble Lord said: My Lords, perhaps I should say a few words of clarification at the start. When I say "eliminating" nuclear weapons, I mean just that—not putting such weapons in cold storage or mothballing them, but getting rid of them totally. When I say "all", I mean all in the total global context. I define nuclear weapon as any device that goes bang and generates nuclear radiation.
The reason for holding the debate at this time is to start the last decade of the 20th century on the right note and to highlight the importance of the subject. I contend that there are no military or defence reasons for having nuclear weapons and, because of the risk of accidents, there are powerful reasons why they should not exist at all.
My interest in nuclear weapons started in 1962 at the time of the Cuban missile crisis. The whole
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world was scared that both sides would rain nuclear weapons on each other. I wanted to do something to prevent our destruction by nuclear weapons, so I joined the Campaign for Nuclear Disarmament. I should like to pay tribute here to CND. Although it has not yet achieved its objective of securing nuclear disarmament, the public awareness that CND has generated has meant that nuclear weapons have not been used in any of the conflicts that have erupted around the world since 1945.
I have also taken an interest in defence matters and have studied some military and general history as it pertains to periods of war. It is interesting to see how history repeats itself The weapon of mass destruction in the First World War was gas which caused a great deal of pain and suffering to both sides but produced little military advantage. It was not used in the second world war because military tacticians and strategists appreciated that it would confer no military advantage.
I have listened to my fellow engineering workers who worked through the bombing of Coventry and Manchester, and of Hanover in Germany, during the last war. It was interesting to learn from them that war production was not affected very much by the bombing. That admittedly anecdotal evidence was confirmed when I studied the trends of military production during the second world war. If we consider the effects of the bombing of civilian targets, we see that from Guernica in Spain to Coventry in England and from Dresden in Germany to Hanoi in Vietnam, the result has, if anything, been to strengthen the resolve of the civilian population to fight on.
So what was all the bombing in aid of? My belief is that it was a response to the politicians' urge to do something immediately, anything that was visible, rather than take some alternative course of action, which in some cases might have been to do nothing. It is very difficult for politicians to do nothing in the face of a crisis or problem. Another argument is that it was a technological fix—war at long range—which, following the horrors of the first world war appeared to be a way out for the politicians who, as younger men, had seen those horrors.
Having expended so much by way of resources, men, materials and energy, the course of action has to be justified, especially in view of the physical destruction, carnage and loss of life that result. Unfortunately, until fairly recently most of the world's senior politicians served, or were involved in some capacity, in the last war and therefore were fairly keen to justify the actions of that war.
Another argument that is used to justify nuclear weapons is that they deter aggression. However, it is clear from the evidence that in virtually every year since the end of the last war British servicemen have been killed in military conflicts. From Korea to Northern Ireland and from Kenya to the Falklands, our men have died even though we had nuclear weapons. The same can be said for American, French, Russian, Chinese and Indian servicemen. Their nuclear weapons have not protected them. I hope that this debate will spread the message that the possession and possible use of nuclear weapons confers no military advantage.
At this time in history we have a window of opportunity. There is a new generation of politicians who were born after the Second World War and who have no need to justify past actions. There is a new generation of citizens who are better educated than were their parents. Through the actions and campaigns of bodies such as CND and with the advent of world-wide communications media and television pictures that go around the world in a matter of seconds, the peoples of the world have a far greater understanding of the possible effects of the use of nuclear weapons than was the case 30 or 40 years ago. There is also the declared aspiration of two of the major super powers, signified by Reagan and Gorbachev, to rid the world of nuclear weapons by the end of the century. Sensible military strategists realise that nuclear devices are of no military use.
We must remember the reasoning behind the development and deployment of nuclear weapons. If we look at some of the countries involved, we can see similarities and differences. The nuclear bomb was developed by the British and Americans initially to prevent the Nazi regime in Germany stealing a march on the Allies. The testing and use of the bomb were justified as helping to bring the Japanese to the point of surrender. However, if we look carefully at the history of that period, we see that the Japanese were going to surrender anyway. The atomic bombs had virtually nothing to do with the end of the war. It was the entry of the Russian army into Berlin that finished the war in Europe and it was the American marines taking Okinawa that brought an end to the war in the Pacific. In more recent times it was the British infantry men marching into Port Stanley that ended the Falklands conflict.
In Britain the activities of Bomber Command had to be justified—not only the destruction of Dresden but more significantly the delay in opening up the second front to take pressure off the Russians. It is interesting that to this day the achievements of Hugh Dowding in leading Fighter Command are consistently downgraded in comparison with the achievements of Bomber Harris. The result was that British politicians and the military hierarchy welcomed the atomic bomb as a bigger and better addition to their arsenal.
With the advent of the Cold War, the Russians needed a weapon that could affect America across the Atlantic. They had been conned, I suspect, by British propaganda that the bombing of Germany from Britain was a major factor in weakening the German war effort and a valid reason for delaying the second front. France, for reasons of national prestige as well as fear of a German attack, also had to have the bomb. Unfortunately for the people of France the evidence now shows that their nuclear weapons are unusable against the Germans because they would cause almost as much damage to France as to Germany.
China, following the schism with the USSR, appeared to need the bomb for national defence. I suspect that for reasons of national pride it had to demonstrate its ability to use and harness advanced technology. India also had a need to demonstrate its technological achievement. In terms of the perennial
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antagonism between India and Pakistan, it probably appeared to do no harm to demonstrate India's nuclear capability.
As we seek to develop a strategy to get rid of nuclear weapons, those factors need to be taken into account. We also need to recognise that the actions that we take will send messages to others and we must be careful to send the right message. Specifically, the commitment to get rid of nuclear weapons must be recognised as a commitment to effective defence and not a commitment to pacifism or a surrender. We saw how the decision to scrap a survey vessel in the South Atlantic led the Argentinians to think that the British were not interested in defending the Falklands. Such a message must never be sent again.
Yes, we want peace. Yes, we recognise the lowering of international tension. But those are not the reasons why we seek to get rid of nuclear weapons. We must get rid of nuclear weapons because they are of no use for military defence. In fact they are a threat to our environment because of the environmental damage that would be caused were a nuclear accident to occur or, heaven forbid, were nuclear weapons to be used intentionally.
Significantly, we had the experience of Chernobyl. We must continue to make clear the message of Chernobyl. The release of radioactivity from that accident, although small in comparison with the release of radioactivity from a nuclear weapons explosion, nevertheless contaminated countries right across Europe. To this day, several years after the event, there are still areas of our country where grazing livestock becomes unfit for human consumption.
Another interesting lesson of Chernobyl is that it is not just totalitarian regimes which doctor information. It was interesting to see a map, generated from information provided by different nation states, showing the nuclear fallout. Virtually every country in Europe was affected to a greater or less extent depending on wind patterns and rainfall. For some inexplicable reason the fallout seemed to stop at the frontiers of France. The map showed fallout all across Europe except in France. Noble Lords will appreciate that the reason was not that fallout did not occur in France but that the French authorities did not want to publish that information.
At each stage of the development and expansion of nuclear weapons the world has held its breath. A new source of instability has been added to the world scene and the Pugwash clock has ticked closer to the armageddon of nuclear midnight. We must recognise that change brings with it the risk of instability and that instability can be threatening if wrongly interpreted.
To minimise the threat of instability leading to conflict, we must all be prepared to be open in our negotiations. We must recognise that nuclear weapons for the most part are deployed as part of wider defence strategies and scenarios. To change those will take time. Some nuclear weapons are deployed by international groups of nations and the agreement of all the members of the group must be obtained to attain meaningful nuclear weapon elimination.
There are several advantages to be gained from setting the deadline of the year 2000 for the elimination of nuclear weapons. First, it gives ample time to achieve the understanding and changes to defence strategies that will be needed. Secondly, it sets a target deadline—effectively an end point to the massive changes that need to occur. Finally it gives a significant date for that which in the history of the world will be a truly historic occasion. I beg to move for Papers.
5.31 p.m.
Lord Rea: My Lords, my noble friend Lord Monkswell is to be congratulated for raising the issue and for the very clear and moderate tone that he used in doing so. His good fortune in winning a slot for this topic has been very timely; and it is our good fortune too.
The debate is, sadly, necessary because the hoped-for rapid progress in eliminating nuclear weapons after the changes in eastern Europe has not occurred. With communist parties on the defensive or in full retreat, and the Warsaw Pact in disarray, the danger of a conventional attack from the East has virtually disappeared. It was in order to deter that attack that the nuclear structure of NATO was created.
The proponents of the "flexible response" held that if an attack from the East seemed to be succeeding it should be countered, first, by tactical, then possibly by intermediate or strategic nuclear retaliation. The supposition was, I gather, that the Warsaw Pact military command might think again and cease its attack, and possibly not retaliate with nuclear weapons. It has always been an incredibly dangerous strategy and not accepted by many military thinkers as a plausible stance. The danger now of an attack from the East—which in the minds of many of us was always an unlikely event—is virtually over. The talks at all levels on nuclear and conventional weapons should start to move forward at a faster pace.
Noble Lords opposite may well say that the situation in the Soviet Union and in eastern Europe is still very unsettled. That is certainly true. But now ordinary people have a bigger say in government. I believe that no party or faction even within the Communist Party which supports a military build up would get far in the present mood, especially in the USSR after the Afghanistan experience.
A military coup by the Red Army —by the military in the Soviet Union—is pretty unlikely despite recent rumours that we have read and which were then scotched about certain events that happened in Moscow. The likelihood of the military starting a foreign adventure on its own is remote in the extreme.
I suppose to stretch the imagination it would be possible to postulate that a mad or maverick senior military person or group might take over and threater a nuclear war to gain its end. But if that occurred, would it not be much better for nuclear weapons by then to be well on the way to being eliminated, as President Reagan and Mr. Gorbachev agreed at Reykjavik?
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As a doctor I am tempted to remind noble Lords of the medical effects of nuclear weapons and the destruction of civilisation which could ensue. However, I shall forbear. The size of the catastrophe, both immediate, latent, and widespread geographically, is hard to imagine, even after an explosion of a smaller device than that which exploded over Hiroshima. Noble Lords who saw the television screening of Raymond Briggs' moving account in "When the Wind Blows" of the slow death of the retired couple from radiation after an attack will have got the message.
My main anxiety is not that a nuclear war would occur as a result of a Warsaw Pact-NATO conflict but that the possession of nuclear weapons will spread to other countries which may use them irresponsibly to gain their own ends or even to turn them on us. We are a signatory to the Treaty on the Non-Proliferation of Nuclear Weapons of 1968. Article VI states the following:
"Each of the Parties to the Treaty undertakes to pursue negotiations in good faith on effective measures relating to cessation of the nuclear arms race at an early date and to nuclear disarmament, and on a treaty on general and complete disarmament under strict and effective international control".
It is my contention that if the nuclear weapon states now seriously follow the intent of that article, rather than merely going through the motions, of making reductions in one category of weapon, for example, cruise, but replacing it with another air-launched cruise missile or tactical air to surface missiles (TASM), then the treaty will have much more force in controlling the spreading of the ownership of nuclear weapons to other countries.
By intercepting at Heathrow a few weeks ago the nuclear detonating devices which were on their way to Iraq, this country was acting under Article I of the Treaty on the Non-Proliferation of Nuclear Weapons (although I believe that the reason for intercepting those was because of contravention of another regulation.) Article I requires signatories to the nuclear weapons treaty not to transfer nuclear devices or control over such weapons to any non-nuclear weapon states.
The supergun affair shows that certain states are in deadly earnest in building up a threatening power by which they may influence other states. Because of that I am sometimes rather alarmed when I see large lorries going by with heavy calibre pipes. The other day I saw a lorry which had three huge pipes balanced at an angle of about 30 degrees on the back of the cab. It looked a little like a Russian Katyusha rocket launcher. I wondered where the trajectory of those missile pipes was going to be pointed.
Finally, I hope that the noble Earl who will answer can agree that the time has now come finally to end the nightmare presence on earth of nuclear weapons. It is something that this country could do very effectively, if we were to take a leading role rather than a trailing role in that exercise.
5.40 p.m.
Lord Orr-Ewing: My Lords, we owe a debt of gratitude to the noble Lord, Lord Monkswell, for introducing the subject. I do not agree with everything that he said, but believe that he represents

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a view that exists in this country and which needs to be answered. For that reason, I am taking part in the debate. Wherever we sit in this House, we are united in our desire to ensure a balanced and steady reduction of all kinds of armaments—that is, conventional, chemical and nuclear. Since the Second World War the window of opportunity for that has never been open more wide.
My second reason for speaking in the debate is that I detect some of the wishful thinking which existed in this country during the 1930s. Why were we not ready and armed at that time? It was because too many people had not faced the fact that Hitler was a real threat and was building up a big armament force in every direction. I well remember the rumours that all his tanks were made of cardboard. There was an enormous faith in the League of Nations. There were all kinds of reasons for saying, "Do we have to do it? Don't let's do anything that will bring us closer to a war. The League of Nations will put everything right and it will interfere". I remind noble Lords that 11 million people in this country signed the Peace Pledge Union believing that somehow it would avoid a war. The BBC, which was then a monopoly, did not allow Winston Churchill on television. He was banned from broadcasting a warning about what was happening and describing the arms that were being manufactured under Hitler's regime.
I wish to summarise the case for maintaining our nuclear capability at least until other forces have been seriously run down. I do not know whether noble Lords have read the recent statement on defence. It is extremely revealing. The nuclear position is summarised on page 15. It makes clear the fact that at the moment the balance of nuclear forces between NATO and Soviet Russia is between two and four to one in favour of Russia. There is a huge preponderance in all types of nuclear weapons.
As regards conventional weapons, there is nothing more startling than the difference in the number of tanks. Page 11 gives the stark facts. The NATO forces are producing about 500 main battle tanks per year while the Warsaw Pact is producing 2,000 per year. Mr. Gorbachev has been in office for five years, but only in the past six months has Russia's production rate on battle tanks been turned back. Approximately 1,750 are being produced each year, but that is twice the number produced by NATO. Last year the Soviet Union had 51,000 battle tanks but we had 16,500; that is a ratio of three to one. It is disturbing to note that Russia has not turned down the wick in the conventional field. Last year it built 10 nuclear submarines to join the forces, 50 long-range bomber planes and 500 fighter planes. That is five years after the Gorbachev doctrine of peace and a more liberal regime.
It is encouraging to look at page 9. It states that we are now negotiating in Vienna and elsewhere to reduce the total number of battle tanks to 20,000. We must build up our strength, but Russia must get rid of almost 40,000 tanks. The agreement ensures that all the stockpiles are to be destroyed. That is a slow and laborious process and we are negotiating for a seven-year period. After two years there will
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be verification of the progress made in all fields. There will be further verifications after four and six years to measure progress and ensure that agreements are honoured.
Compared with those of the past, there is now a liberal dictatorship in the Soviet Union. However, during the 70 years that the party has been in power, it has never kept to any peace agreement, the most recent being made at Helsinki. It has always cheated and been able to keep that quieter than would be the case in a democracy. We must also remember that the situation in the Soviet Union can change quickly. With modern satellites it will be more difficult for Russia to build up its forces in a clandestine way—that is, conventional forces which could make a sudden attack—and that is an improvement. However, it can switch as it did in the 1930s when to us it was unthinkable that the black socialists would join with the red socialists in the partition of Poland and the start of World War Two. That was done when we were trying to negotiate a peace agreement with Russia. Within a few weeks it changed and became allied with Germany. That remained the case for two years before Germany attacked Russia. It had neglected all our warnings of attack and said that they were part of our propaganda. For that reason, it was caught off-side and Hitler's forces made such progress.
One must face the fact that the nuclear deterrent has been a considerable force in the background. It has discouraged an adventure or a nibble along the Iron Curtain. Despite non-proliferation agreements, several small countries such as Libya, Israel and Iraq have a small stockpile of nuclear weapons. Despite other agreements, China and India also have nuclear weapons. We made a gesture when we destroyed all our stocks of weapons for biological warfare. However, that did not deter others from carrying out the research, development and production of chemical and biological weapons. Therefore, I cannot accept the argument put forward by the noble Lord, Lord Rea, that again we should make a gesture and lead the way by abolishing nuclear weapons. It would be folly to throw away our nuclear deterrent at a time when the future is desperately uncertain and during negotiations when a flexible response is especially important.
Lord Rea: My Lords, before the noble Lord sits down I wish to point out that he did not hear me correctly. When I said that this country should lead the way I implied that it should do so by multi-lateral negotiations. I did not mean that we should throw away our weapons unilaterally but that we should initiate and facilitate continuing negotiations.
Lord Orr-Ewing: My Lords, we are trying to do that and we are doing our best in Vienna. I hope that the interruption means a drawing back from and an opposition to the proposals put forward by the NATO countries, particularly the USA. It was reported yesterday that its military personnel appear to be less enthusiastic about pressing ahead on all fronts than it was a few months ago.
5.50 p.m.
Lord Kennet: My Lords, it would be tempting to take a few minutes commenting on the speech of the

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noble Lord, Lord Orr-Ewing, particularly his account of the supposed continuing Soviet conventional superiority, the scale of it, and his allegation that the Soviets are notorious treaty breakers in that field. The House will know well that both those points are open to serious criticism, but now is not the time for that.
I believe that the Motion of my noble friend Lord Monkswell is very reasonable if only because it applies to nuclear weapons in exactly the same way as the whole world, without any exceptions, proposes to proceed in the case of chemical and biological weapons. We have long been trying to secure their total abolition throughout the world as weapons of especial horror. Nuclear weapons are of no less horror than the other kinds, and what applies to the fomer should also apply to nuclear weapons. Moreover, as my noble friend Lord Monkswell said, it is merely to remind this House of the agreement of Presidents Gorbachev and Reagan that this should be attempted.
That would be reasonable so long as the political aims and structures within which such a move is carried out are reasonable in themselves. What would they be? We must ask ourselves what is to be NATO's next strategy and when it is to be adopted. Is it to be adopted in June or are preparations only to be commenced in June? What kind of discussions are there to be and with whom? How will those discussions fit in with the CSCE discussions which are bilk d for later this year? That is a complex field and I hope that the noble Earl, Lord Arran, will be able to expound on it later. Given that public support is important, is it sensible to develop Britain's contribution to those talks behind the new fortifications in Downing Street? What decisions have been taken so far?
My noble friend Lord Rea raised the problem of the new proliferation treaty. Israeli nuclear weapons have now, as was always to be expected, conjured up whatever it is that the President of Iraq is trying to obtain. Israel has also been developing anti-ballistic missile defences in the star wars manner, and the United States has been helping it to do so. That makes a regional settlement more difficul; just as President Reagan's own star wars made a world settlement more difficult at that time.
Mr. Slhamir has also spoken about a Middle East disarmament settlement, but he complains that he can find no one among his neighbours to speak to about that. However, Sadam Hussein has now proposed nuclear, biological and chemical disarmament throughout the Middle East. Perhaps the Government could introduce them to each other.
We should look also at the two Koreas and Taiwan where the United States and Soviet Union are gradually withdrawing their nuclear guarantees, with consequent domestic pressure there to go nuclear in the familiar pattern. In the southern part of South America the World Bank continues to turn a blind eye to nuclear weapons development. Western governments control the World Bank but continue to turn a blind eye. As the Minister of State for the Armed Forces, Mr. Archie Hamilton, said in the other place yesterday:
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"It is a tragedy that the nuclear non-proliferation treaty has not been so successful as it might have been".
I echo what my noble friend Lord Rea, said. It is time we faced up to the fact that the United States' complacency and even connivance with Israel's nuclear weapon programme has much to do with the situation in the Middle East, and the complacency which has allowed all the nuclear powers to break their undertaking in the NPT to get on with disarmament has a lot to do with the situation worldwide.
In Europe our enemy has been taken away from us. We tend, some more than others, to act like a child whose toy has been taken away. However, it is not a toy but a great danger and we should rejoice. We should not go shopping for another toy. We must take peace when we are offered it and we must avoid switching our arms budgets into new military expenditure.
We must note the first reaction of the Pentagon to the new world. That is a passionate desire to switch to something called Special Operations and Low Intensity Conflict—SOLIC. That is not the name of a new under secretary at the department of defence with a Croatian name, but is an acronym with which we may become unpleasantly familiar. It means more Vietnams. The next is already booked for Peru. Even Senator Nunn (who is no fool) is salivating about American low intensity activities in the Middle East, complete with "pre-positioned" weapons. The opening to a nuclear war is also through that door, and I hope that Her Majesty's Government are reminding the United States' administration about that.
The immediate precondition of nuclear disarmament is the political settlement in Europe. Rational aims cannot include a reunited and heavily-armed Germany in NATO. When one side of a military confrontation collapses, golden bridges become necessary. The golden bridge is a piece of traditional Chinese wisdom. When your enemy is retreating, you must do what you can to build a golden bridge behind him. A Germany such as I have described is not compatible with a golden bridge policy, and to go for it is simply to say to the East, "Thank you for your kind collapse. I think I shall take that bit". That would be unjust and must therefore be rejected, since injustice breeds disaster.
What about a united Germany in NATO, but having Western troops and nuclear weapons in one half and Eastern troops and presumably nuclear weapons in the other? What does that make of Germany? That would reduce Germany from a society of thinking people who can freely choose their own condition into a piece of territory, a mere piece of map, on which outsiders choose to draw an ideogram of forgotten conflict. The proposal is for collusive hegemony, colluding to prolong conflict, and should therefore be rejected.
The Soviet idea is that an armed single Germany should belong to both alliances at once. But, both alliances are solemnly sworn by the text of their constituting treaties to exist solely for collective defence against an attack on any of their members. Let us follow that through. Germany would be bound to rush to the defence of the Soviet Union if it was

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attacked by the United States, and vice versa. If war continued between the two alliances, it would be expected to fight on both sides. Equally, the United States and the Soviet Union would be each bound to rush to the defence of Germany if it was attacked by the other and to fight to the death on German soil, no doubt ending up once more on the Elbe and wondering what to do next. And Germany would presumably be bound to rush fastest of all to its own defence if it attacked itself. That proposal is neither unjust nor hegemonistic but is simply absurd. We must do better. And of course we can.
The idea of a united, disarmed and neutral Germany has long been resisted in the West on the grounds that it would be militarily dangerous for us to do without the strength of its prosperous and determined Western part. But, that ground is no longer as conclusive as it was. The prospect of major arms reductions and troop withdrawals is now good, and it would no longer be right to reject that idea out of hand. A military vacuum in the centre of Europe, as it is called, need no longer appal us so long as we are thinking of a continent all of which is subject to careful arms reduction. Into such a continent a substantially disarmed Germany will fit safely.
There is then our fear that a peaceful and united Germany might increase its economic advantage over the rest of us by releasing a large peace dividend and using it intelligently. That depends upon our own willingness to give ourselves the same advantage. It would not be necessary to leave a disarmed Germany alone in the middle of a European arms dump. We should all get down to an arms level which would allow us the same economic benefits.
Now, what are the preoccupations of our own Ministry of Defence at this extraordinary and historic moment? Mr. Archie Hamilton was saying yesterday that he "sincerely hoped that a tactical air-to-surface missile would be introduced" —presumably here. Mrs. Thatcher was the last to give up on Lance replacement. She will no doubt be the last to give up on short-range nuclear weapons, and will no doubt be alone in offering house room for TASM, or whatever the US military-industrial complex next proposes.
What a bitter and stupid thing it would be if our Government were to hang around the door of this new Europe too, whining for the great destructive capacities of the past, while all the others are competing to find ways of safely divesting themselves of those capacities. Our ingenuity should not be wasted in that way. A kind of goodwill has been forced on us by the revulsion from Communism in eastern and central Europe, and by the US internal deficit and external debt. But the technicalities of arms reduction are intrinsically as complicated as they ever were and thus a few countries, or even one country alone, can block progress as easily as ever. That must not be us.
On the contrary, we must do many things that we are among the best placed to do. We must start by agreeing to naval arms control and by urging the United States to do the same. That would be in the
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interest of western Europe, and according to the current US Chief of Naval Operations, Admiral Trost, it could also be in the interest of the US, even in brute military terms. We should then mount a diplomatic network exercise to ensure that the forthcoming arms reduction negotiations, both nuclear and conventional, on both long- and short-range weapons are related to the world situation: that means China, the Middle East, Korea and Argentina. Then on the political level we must quickly join the imaginative interchanges which are now going on between for instance, the presidents of France and the Soviet Union. Mr. Gorbachev proposes a European security structure. How do we see that? Do we accept the phrase? Can we suggest flesh for the bones? Mr. Mitterrand proposes a European confederation, and Mr. Gorbachev accepts the proposal. Do we? And can we find practical suggestions to make about it?
The Government are now enacting a terminal parody of practical British common sense. These foreign ideas are not bombast now. They have become practical, and that is the true measure of the events of last winter. To keep carping does not suggest caution; it suggests sleep.
6.3 p.m.
Viscount Hanworth: My Lords, some people would wish that our nuclear capability had never been invented. I disagree, because I believe that it has rendered conventional war in Europe impossible for the past 40 years.
None of us likes the vast nuclear capability that now exists. If we are lucky it could be greatly decreased in Europe, certainly on a tactical basis. However well and sensibly we may deal with the situation in Europe, it is now only a part of a worldwide problem. It is on that larger scale that I wish to speak tonight. I believe that in the future nuclear proliferation may prevent complete nuclear disarmament.
Already there are probably eight countries with nuclear capability. Never mind how they could deliver a nuclear bomb; one remote controlled bomb planted in a European capital could be devastating. There are three routes by which the smaller countries can develop nuclear capability. One is by separating out uranium 235 from the bulk uranium 238. In the last war that was done by gaseous diffusion. It required quite a major engineering project. Now separation is made by high-speed centrifuges which can be hidden relatively effectively. On the horizon is the possibility of separation by lasers, which might make the process much easier.
At present the second and most likely approach is obtaining plutonium from a nuclear reactor. Normally such plutonium is not of weapon grade, but could produce a very dirty fizzle bomb. However, if the time which the fuel rods remain in the reactor is shortened, that difficulty is overcome. The next step is to separate the plutonium from the remaining uranium and other products in the fuel rods. There is plenty of published information on how that can be done. Admittedly there is also a know-how about doing that safely, but it is not too difficult if the risks are accepted —as they would be by some countries.

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To me the frightening statistic—albeit fairly rough—is that a 1,000 megawatt electrical reactor, which is the size we have in this country, could produce around 800 kilogrammes of plutonium in one year. It is generally accepted that eight kilogrammes of plutonium is a reasonable figure for an atomic weapon. On that basis the large reactor that I mentioned could provide enough plutonium for 100 bombs a year. Those figures can be scaled down correspondingly for smaller reactors.
The third route towards an atom bomb would be stealing plutonium from storage or in transit. Efforts have been made internationally to account for the plutonium being produced in nuclear reactors and to prevent weapon grade plutonium being produced. Those measures may have helped, but have clearly not prevented the considerable growth in nuclear capability. I do not believe that in the future effective enforcement is likely. Only Isreal has achieved that by bombing the Syrian nuclear reactor.
First, I conclude that in the future nuclear proliferation will be the biggest threat to be faced. Secondly, unless we can—in the unlikely event—control nuclear proliferation, it will be absolute folly for Europe not to retain an effective deterrent against a nuclear threat from elsewhere. If the very worst happened one must be capable of replying in kind.
6.8 p.m.
Lord Jenkins of Putney: My Lords, I join those who thanked my noble friend Lord Monkswell for introducing this perhaps most important of all subjects. As is not unusual, attendance is in inverse ratio to the importance of the subject. I look forward to the occasion when we shall have a full-scale debate on this subject in which our two Front Benches may becone engaged. We shall perhaps, in a longer period of time, be able to deal more fully with some of the points raised than we are able to do in the short debate this afternoon.
I an tempted to reply to the noble Lord, Lord Orr-Ewing. He and I are both yesterday's men. But I intend to concentrate on today rather than to exchange statements and mis-statements with him on what did or did not happen in the past. It will be more useful to try to see where this country stands internationally at this moment rather than to rake over the still disagreeable ashes of what took place in times in which, I think, both of us played some minor role.
I should like to ask, therefore, what is the position? It would be useful if we remind ourselves where we stand. In order to do that perhaps one might say that proliferation is the general term used to describe the spread of nuclear weapons, as the noble Viscount, Lord Hanworth, pointed out; but it is also used to describe the increase in the number of weapons produced by those who already possess them. It is that type of proliferation —vertical proliferation as it is called —which tends to stir up and encourage non-nuclear states to indulge in the horizontal proliferation —as the alternative is called—by spreading nuclear weapons to more and more countries.
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If those countries which possess nuclear weapons regard them as so valuable that far from getting rid of them they continue to increase or modify them, as the phrase goes, then the non-nuclear states not unnaturally say, "If it is good for them and they are not prepared to reduce capacity in any way; if they want to increase; if Trident must come; for what reason are they not good for us? Can we not have a little of what they so enjoy having?"
It is useless for us, a country which takes the lead in retaining nuclear weapons—though we are in theory devoted to getting rid of them—to try effectively to prevent proliferation all over the world if in practice we retain them. The two stances are incompatible.
What is this non-proliferation treaty? My noble friend Lord Rea quoted from it, but perhaps I may repeat one or two phrases:
"Each of the parties to the Treaty undertakes to pursue negotiations in good faith on effective measures relating to cessation of the nuclear arms race at an early date and to nuclear disarmament".
That is an extract from the treaty of 1968. It became operational, if I may remind your Lordships, in March 1970. It has now been signed by 141 nations. It is the most extensive arms control treaty in the world and it attempts to stop non-nuclear countries from acquiring nuclear weapons. The International Atomic Energy Agency carries out technical inspections of nuclear facilities with a view to enforcing the treaty. As we have seen, it has not been exactly successful.
I should like to examine briefly why that is so and what I think we should do about it. The main problem, as I have said, is that vertical proliferation continues, which undermines the credibility of the NPT. It is not true to say that we have broken the letter of the treaty by our vertical proliferation —I do not make that accusation—but it is fair to say that developing new nuclear weapons (described as "modernisation") is against the spirit of the treaty. I am sure everybody will agree with that. Whether one argues one way or the other as to whether we are in breach of the letter of the treaty, it is not surprising that the non-nuclear states regard us as being not only in breach of the spirit but also of the letter of the treaty. Of course, the Government deny that.
Nuclear testing is an essential part of the modernisation process. It enables those countries that already have nuclear weapons to develop new, more powerful and more accurate weapons. Currently, we as a country—the voice of the present Government, of course —insist on the right to order more modern, more dangerous and more accurate nuclear weapons.
In August this year, the non-proliferation treaty comes up for review. In Iraq —hitting the headlines at the moment—fears are being raised about the enforcement of the treaty. Given the modernisation of European nuclear weapons, the non-nuclear nations point out with some justification that the nuclear states have exploited the treaty simply to consolidate their own military power while seeking to limit that of smaller states.

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One way to stop nuclear weapons proliferation would be a complete ban on testing. We have at the present time a partial testing treaty which prohibits atmospheric testing. If I am referring to facts which noble Lords recognise as perhaps unnecessary to repeat because they are generally known, I beg forgiveness; it is sometimes useful to remind ourselves exactly what is the position. A conference has been arranged for next January in New York to vote on an amendment to ban nuclear testing as such. Forty states have signed a call for the treaty to be converted into a comprehensive test ban treaty which would end all nuclear testing. At present this country is wholly opposed to that. If we retain that position we can give up all idea of preventing proliferation not only vertically but also horizontally. As I said, the two attitudes are incompatible.
A comprehensive test ban treaty would bind those countries which are close to producing weapons—there are about eight, as the noble Viscount, Lord Hanworth, said—to a no-testing policy which could be verified by an independent international body, thus halting the spread of nuclear weapons. Argentina, Brazil, India, Iraq, Iran, Israel and Pakistan have all signed the partial test ban treaty. Therefore, if that treaty can be brought effectively into being next January we have the only possibility left to us of bringing proliferation to an end. To do that, we must also halt nuclear modernisation. Without testing, the new silo-penetrating systems—Trident and other weapons—cannot be developed further. Therefore, a complete ban would put an end to both horizontal and vertical proliferation.
Verification of a comprehensive test ban treaty is now possible. After the success of the INF treaty and various joint US/Soviet experiments, a verification regime that consists of seismic satellites and on-site monitoring is now possible. The Verification Technology Information Centre—an independent body—is currently devising such a regime. This is a real opportunity. It may be the last opportunity for nuclear disarmament. Both the Soviet and the French authorities are prepared to abide by a comprehensive test ban treaty if the United States and Britain agree to do so. If the United States and Britain choose to exercise their right of veto they will stop the comprehensive test ban going ahead. If they do, it could pave the way for a huge growth in the number of nations seeking to acquire nuclear technology. The situation would become totally out of hand and that bodes ill for the future of mankind.
British support is absolutely crucial. In November, together with the United States of America, we voted against such a comprehensive test ban treaty amendment to the partial test ban treaty at the United Nations. The vote went against us and America by 108 votes to two. That is the position we are in. We and the Americans are holding up the possibility of the disappearance of the nuclear weapon. If we do not change our attitude not only shall we not get rid of it by the year 2000, but the real question will be whether we shall reach the year 2000. That is the situation we shall be in unless we
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seize the opportunity that is now before us to bring this business to a halt.
The Prime Minister and the Foreign Office must be pressed to make Britain vote "yes" to a comprehensive test ban amendment in January 1991 as a safeguard against proliferation. I wish to add one further point. Recently I read a book by Frank Barnaby who is a man widely respected on this subject. The book is called The Invisible Bomb—The Nuclear Arms Race in the Middle East. In that book he says,
"if large-scale reprocessing takes place, there will, to say the least, be a considerable risk that sub-national groups will get hold of enough plutonium to make nuclear weapons".
I believe that the noble Viscount, Lord Hanworth, pointed out that only eight kilogrammes of plutonium are needed to make a nuclear explosive. He is probably right. By the year 2000 there will be about 160,000 kilogrammes produced each year. It is a gravely dangerous situation which we are in. Unless we take the actions that I have just described there is no way out. We are within range of bodies such as the IRA possessing the capacity of making the nuclear weapon. We are within the range of irresponsible dictatorships all over the world having the power to create and use the nuclear weapon.
We are living in a state of illusion. Because there is peace in Europe and we feel more comfortable that the United States and the Soviet Union are talking to each other, we are living with the idea that everything is now all right and that we need not bother. We are gravely not all right. I hope that the Government will take the situation very seriously and say to themselves that we have to do something about this problem for the sake of the future of mankind.
6.23 p.m.
Lord Hatch of Lusby: My Lords, unlike my noble friend Lord Jenkins of Putney, I cannot resist briefly replying to the speech of the noble Lord, Lord Orr-Ewing. I do so because I was one of the 11 million signatories to the Peace Pledge Union. I do not regret that. That pledge was made in about 1932 at a time when Hitler was a small despot. It was not the signatories to the Peace Pledge Union who made him into the powerful monster that he became. I would like to take the opportunity at some other time and in some other forum to debate the subject with the noble Lord, Lord Orr-Ewing. It was certainly with the active connivance of both the British and French that during the 1930s Hitler and Nazism, and Mussolini and Fascism, became the danger to the rest of Europe. They were not so at the time when Dick Sheppard initiated the Peace Pledge Union.
But a more relevant issue was raised by the noble Lord, Lord Orr-Ewing. It is on that subject that I want to spend the time available to me. The speech of the noble Lord would be echoed by the vast majority of spokesmen all over this country and the world placed in the same situation as we are tonight. We are living in revolutionary times: situations are changing very rapidly and fundamentally.
However, there is still a widespread war psychosis which goes into every corner of the public consciousness. It is based on what we have been

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brought up to believe from infancy—that there is always an external threat. We have been educated to believe in the permanent possibility of war. The economic system of the world is based on military confrontation. There is constant massive military expenditure. Those who criticise and who ask for cuts in military expenditure are frequently the victims of the electorate.
A vast industry is devoted solely to the production of machines of destruction. Millions are employed in that industry in order to produce what are essentially unproductive products and machines. That fact represents the popular mood not only in this country but virtually in all countries. It is backed by the media and by politicians.
The past is debatable. The effect of atomic weapons since the disaster of 1945 is debatable. I do not p:"opose to debate that. I simply say that, on the one hand, there are those who have argued that the presence of atomic weapons has brought peace; there are others, with whom I associate myself, who say that atomic weapons have been a waste of resources and a threat to humankind.
Much more important than debating what has happened over the past 40 to 50 years is looking to the future. There is a new danger in this new future; this new kind of world and the new relations within which we are all living. There is a very great danger that the phantom enemy is distracting the real one which is the national mentality based on the concept of defence. The sanctity of defence is blinding people to other and more dangerous threats to ourselves and to the whole of humanity. Countries are destroying themselves. And they are combining to destroy our planet on which the human race depends.
It is much more difficult and challenging to argue about issues concerning the environment such as roads, housing, education, dangerous emissions, the ozone layer and the destruction of tropical forests. It is much more difficult and challenging to debate those matters and the dangers that they create than the very simplistic notion of the dangers of war. When we argue on these grounds we are arguing against vested interests. We are arguing in the public interest. We are arguing for short-term costs for long-term gains.
One of the major tasks facing the politicians of this and the other countries is to find the means of transforming the manufacture of arms into the manufacture of civil products. There are opportunities for new markets and for retraining those who have been engaged until now in the production of destructive machines. I am glad to say that the Labour Party is researching this issue and is seeking the means by which this essential transformation can be achieved not only here but in other countries. In addition, a conference is to be held in Moscow this summer on the problems of converting arms factories to peaceful production.
It is not only those who have been in, one might say, the peace lobby for so many years who are seeing this new opportunity, this new necessity and this new challenge for mankind which has so suddenly come upon us. I quote Robert McNamara, a former United States Defence Secretary and a former
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president of the World Bank. At a North-South round table conference in Costa Rica at the beginning of this year he stated that the United States could reduce its military expenditure from 6 per cent. of gross national product to 3 per cent. over the next six to eight years. If Britain were to reduce its military expenditure to the same proportion of national wealth as our allies, we would save £8 billion annually.
What is to be put in the place of what so far has been assumed to be the essential military machine? I suggest that we work out a system of collective security depending not on national armies but on offering to the peoples of Europe and to the peoples of other continents a safety and a protection which certainly no atomic weapons ever have done or ever could do. They have offered only the alternative of suicide. What I suggest is not easy. It is an international challenge.
I can quote from other sources outside the conventional peace lobby. Perhaps noble Lords have read the statements of General Powell, the chairman of the United States Joint Chief of Staff. General Powell, a military man, has seen the new situation. General Powell has told the military forces in the United States that they have to learn to adjust to a world in which the Soviet Union is no longer considered an enemy. That is the context and perspective in which the debate should be taking place. It is the context in which all politicians should recognise the new challenges, opportunities and responsibilities facing us.
As my noble friend Lord Rea said, the conventional strategy of flexible response is anachronistic. The Soviet Union is no longer capable of mounting a conventional attack on Western Europe. It is impossible to visualise. It could not happen in the circumstances of today or in the circumstances of any possible successor to Mr. Gorbachev in the foreseeable future. It could not happen because the Warsaw Pact has disintegrated. Who can imagine Soviet tanks sweeping into Western Europe? That is an anachronism. And so the argument that nuclear weapons are necessary to counter Soviet superiority in conventional forces no longer holds. Those nuclear weapons are expendable. As they are expendable, as nobody claims that they are safe and as everyone recognises the danger that they present to humanity, it should be clear that every effort must be made to get rid of nuclear weapons wherever they exist.
This requires a tremendous effort of imagination and willpower. I hope that we shall hear tonight from the noble Earl who is to reply where the British Government stand in this new situation. What are their visions? Where do they believe they should be leading the people of this country? Our task is to change the consciousness of peoples about the real threat to their existence. That requires all the efforts of educators. It requires the efforts of all forms of the media, of the Churches, of voluntary organisations, of trade unions, and above all —this is essential—of politicians. Unless we are prepared to give a lead we shall not measure up to our responsibilities.

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In the United States people now talk about the existence of a peace dividend. There could be a peace dividend with disarmament. There could be a peace dividend if we rid ourselves of nuclear weapons. That dividend could be used for world development. It could be used to protect our planet. It could be used to remove world poverty. Not least, it could be used to remove what has already been referred to by a number of noble Lords—the danger of nuclear proliferation and the spread of the arms race in the third world, where it can least be afforded. It could be used to remove the danger that comes from the proliferation of nuclear weapons among third world countries, where, as we have heard from the noble Viscount, it is so easy today to build nuclear weapons. That demands from all of us a depth of imagination and of willpower. It demands that we recognise that we are living in a totally different environment from that of this time last year.
6.39 p.m.
Lord Mayhew: My Lords, we should all be grateful to the noble Lord, Lord Monkswell, for introducing this debate. Some of us may have felt that his tribute to the influence and achievements of CND was a trifle over-generous, but at least it reminded us that the organisation continues to exist—a fact of which, otherwise, not all of us might have been aware.
The noble Lord asked us to treat his Motion literally: The total elimination of all nuclear weapons by the year 2000. Even if I am setting a precedent, I should like to speak to the Motion and try to explain why I think that this is wholly impracticable and outline what I believe we should be doing instead.
Is this to be a watertight, verified elimination? Plainly it must be. If not, it would be absurd to expect Western democracies to divest themselves of all their nuclear weapons while, let us say, Saddam Hussein or Colonel Gaddafi maintain theirs. That situation is unthinkable. Further, is it possible to verify the total absence of nuclear weapons and the inability to build them? My noble friend Lord Hanworth made perfectly plain how easy it is now to conceal the possession and the ability to manufacture nuclear weapons.
I concede to the noble Lord, Lord Monkswell, that in a genuinely open democratic society it would be very difficult to possess nuclear weapons secretly. I cannot see the French or British Cabinet declaring that it agrees to divest itself of nuclear weapons and its means of manufacturing them, and making a declaration to that effect, while secretly maintaining a horde of such weapons. That is not practicable; nor would it be practicable for the British Prime Minister or the French President to do the same without informing the Cabinet. Indeed, too many people would be involved in keeping such a monstrous fraud secret.
In Israel, where there is considerable freedom of speech and freedom for the media, the authorities tried for a long time to keep secret their possession of a nuclear capability. But, of course, that proved to be impossible. Therefore one can concede that
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point. But, so far as concerns dictatorships where there is no freedom of speech and no freedom for the media and where there is centralised power in a dictator, concealment is positively easy. The problem which would then arise is: should the Western democracies totally disarm themselves, while they suspect that other countries still keep their nuclear weapons? It may be that Saddam Hussein had no nuclear weapons and declared that fact. But many people would not believe this and would not trust such a declaration. That also applies in respect of many other dictatorships. Thus we would never get the situation demanded by the Motion of the total elimination of all nuclear weapons.
Let us suppose, and concede again to the noble Lord, that all the countries in the world became open democracies and that they all agreed to eliminate their nuclear weapons and trusted each other to do so. A great problem would remain: what about the other weapons of mass destruction; for example, chemical and biological weapons? Is it suggested that nuclear weapons should be eliminated in the Middle East but not biological or chemical weapons? One could ask the Israelis to agree to that; or, conversely, ask the Arabs to agree to the elimination of chemical and biological weapons, but not nuclear weapons. There is a point I should like the noble Lord to clarify in this respect. Indeed, I think that the noble Lord, Lord Kennet, asked him to do so. The Egyptians have suggested the elimination of all weapons of mass destruction in the Middle East. That is the only possible way to go about the matter. I should like to know whether the Government support that Egyptian initiative.
The first conclusion has to be that we cannot achieve elimination of all nuclear weapons while other weapons of mass destruction still remain and while parts of the world are dictatorships capable of hiding the possession of and the ability to manufacture nuclear weapons. The aim of this project, which I understand is the official policy of CND, is to eliminate all nuclear weapons by the year 2000. The noble Lord, Lord Monkswell, said that there was ample time for the whole world to become democratic and ample time for the destruction of all weapons of the nuclear, chemical and biological kind. Obviously, there is not enough time.
What then should we look for? We must look for drastic, agreed and verified disarmament not only of nuclear weapons but also of biological, chemical and conventional weapons. The outlook for this is more promising today than it has ever been. That is a policy with which we can and must press ahead. We can also look forward with greater hope than ever before to the spreading and strengthening of democracy worldwide, which we see more clearly than ever before as the instrument of international understanding and of peace.
Finally, we can look forward—and here the European Community is the great example to the world —to a greater degree of political and economic interdependence worldwide which, as the European Community has proved, can make the countries that achieve that psychologically and physically incapable of making war with each other. Those are

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the roads ahead which I believe are attainable targets for the year 2000. My noble friends and I support them and, as I said, they are attainable.
6.46 p.m.
Lord Graham of Edmonton: My Lords, I join with all other speakers in acknowledging that we have been well served by the inclusion of this item on the agenda today. I congratulate my noble friend Lord Monkswell not only on his timing but also on—and I ask the House to accept this—the reasonable way in which he put forward his views.
We can all have ideas about what is relevant at any one time. In my view, because the world situation is changing so swiftly and because technological advance is moving so rapidly, to review the situation is never a waste of an opportunity. Indeed, that is what we are doing today: we are reviewing the situation and we are looking at a proposition. I believe that all speakers in the debate are what I call members of the disarmament and nuclear club of the House. We are all old lags; we have all served time; and we have all taken part in many debates.
I can sense that there has been a remarkable change in the House over the past six years. Sometimes that causes embarrassement to my party and sometimes it causes embarrassment to the Government. But it also encourages reflection and reassessment of the situation. We arc all grateful to my noble friend for putting Forward the Motion.
Reference was made to the remarks of the noble Lord, Lord Orr-Ewing. I believe that his contribution was just as valuable as any other. It demonstrated that not only is there as difference in thought but there is also a difference in attitude of mind. The noble Lord brought to this House—as, indeed, everyone is entitled to do—his experiences, his history and his assessment of what is required.
In my view we need to pay particular attention to one of the concluding paragraphs of the speech of the noble Lord, Lord Monkswell. He said:
"We must recognise that nuclear weapons for the most part are deployed as part of wider defence strategies and scenarios. To change these will take time. Some nuclear weapons are deployed by international groups of nations and the agreement of all"—
I stress that phrase—
"the members of the group must be obtained to attain meaningful nuclear weapon elimination".
I accept not only the sense but every word of that paragraph. I believe that it is the core and the kernel of what the noble Lord, Lord Monkswell, sought to persuade the House to accept.
The noble Lord, Lord Monkswell, mentioned a date. The noble Lord, Lord Mayhew, is entitled and is right to be sceptical about the ability to keep to a timetable as precise and definite as this. However, I remind the House that reference has been made more than once during the debate to the most significant background against which we are discussing the subject. There was a statement by Mr. Gorbachev in January 1986 concerning the attempt to speed up the process of ridding the world of nuclear weapons. It would be helpful if I reminded the House of the significance of the declaration that was made by Mr. Gorbachev five years ago. He said:
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"the Politburo of the CPSU Central Committee and the Soviet government adopted a resolution on a number of major and fundamental foreign policy actions. Their point is to promote to the maximum extent the improvement of the international situation. They are dictated by the need to overcome the negative and confrontational tendencies that have built up in recent years and clear the way for the curtailing of the nuclear arms race on Earth and its prevention in space, a general reduction in the change of war, and the establishment of trust as an inalienable component of relations between states".
He went on to say:
"The Soviet Union proposes, acting gradually and consistently, the implementation and completion of the process of freeing the world of nuclear weapons within the next 15 years, before the end of the present century".
That is the timescale Mr. Gorbachev set as an objective—laudable, I believe. It is reinforced by the words of the noble Lord, Lord Monkswell. Mr. Gorbachev continued:
"The 20th century has given mankind the energy of the atom. But this great achievement of the mind cannot become an instrument of suicide for people.
"Can this contradiction be resolved? We are convinced that it can. Finding effective ways to eliminate nuclear weapons is a feasible task if its solution is tackled without delay".
Mr. Gorbachev went on to take his objective in three stages. Five years ago, he said, the first stage was this:
"Over a period of five to eight years the USSR and the USA will halve the nuclear weapons which can reach each other's territory. No more than 6,000 charges will be retained on the delivery vehicles of this kind which they are left with …
"The second stage: during this stage which must begin no later than 1990 and last five to seven years, the other nuclear powers will begin to join in nuclear disarmament. They would first adopt a pledge to freeze all their own nuclear arms and also not to have them on the territory of other countries …
"The third stage will begin no later than 1995, during which the elimination of all remaining nuclear arms will be completed. By the end of 1999 no more nuclear weapons will be left on Earth. A universal accord on ensuring that these weapons are never revived again will be elaborated".
I believe that when the history of the past five years and the next 10 years is written, recorded and re-assessed, it will be shown that Mr. Gorbachev is a remarkable man. He has vision, ambition and also the imperative.
In this short debate we are attempting to nudge those whom we can influence on the margins—that is, in this House, our Government and public opinion —towards that aspiration. We remember the words of the noble Lord, Lord Mayhew, that all kinds of things can happen; we are not masters of our own domain. We are only masters to the limited extent of what the British Government and British people are prepared to tolerate.
The Government have great responsibilities. I say to the Minister—but not in a cavalier way—that I appreciate the enormous responsibility that lies upon any government in 1990 to protect the interests and defend the realm, as this Government must.
The Minister will be privy to far more information about realities than we who are not in government. Nevertheless it is our job to ask the Government a number of pertinent questions. The Defence White Paper which was published last month should have addressed the challenge of the new Europe and examined the opportunities that disarmament will bring. Having read it, we believe that it entirely failed to do so. Over the past few months we have

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seen the complete redrawing of the European political map. The opportunities for disarmament have never been greater and Britain must take as much advantage of them as possible.
What we should do is to set the likely timetable for disarmament over the next few years and what Britain's contribution should be. Many noble Lords behind me—in more senses than one, I hope—have asked the Minister to be precise as to the plans, programmes and schedules that the Minister and his colleagues have.
By the end of this year the cuts in the Soviet armed forces will reach 500,000 troops. The noble Lord, Lord Orr-Ewing, was quite right: we can take a range of statistics and pick the ones that suit the argument on the imbalance and the disparity. But one must look at the reality too. The Soviet Union certainly wishes to reduce its armament capability and the terrible drain on its resources. It wants to get on with the proper job of a government and nation: to provide for the wellbeing and welfare of its people. I believe that the Russian people are as sick as any other nation of the drain on their resources. Obviously the reduction of 500,000 troops will go a long way in that direction.
The CFE treaty, which aims to reduce Soviet and NATO forces to a common ceiling of 195,000 and limit the number of tanks in Europe to 20,000 on each side—the figure of which the noble Lord, Lord Orr-Ewing, reminded us earlier—will probably be signed by the end of this year. Implementation will start shortly afterwards. The political pressure for disarmament means that negotiations on further cuts in conventional forces are likely to begin in the late autumn of this year.
In brief, therefore, the 10 to 15 per cent. cuts in CFE I will not start for another 12 months and then will probably be overtaken before the end of 1992 by opportunities for more radical and deeper cuts within agreed guidelines.
The departure of troops from Czechoslovakia and Hungary will be completed by the middle of 1991, although for a number of reasons the Poles have less desire to see Soviet troop reductions. I believe—the Minister may say that I am wrong—that at present the situation is not clear. The Warsaw Pact is dead but has not yet been interred. There is still a continuing need for NATO. The emerging democracies in central Europe want a continuing NATO military presence in the Federal Republic of Germany. None of the West German political parties is now advocating neutralism. So long as there are NATO troops in West Germany it is essential that West Germany should continue to participate in both the military and political committees of the NATO structure.
The collapse of the East German army has led to an urgent reappraisal of the need for a new type of military presence in the former East German "Lander". After unification, it is hoped that this area will have a conscript militia, responsible only for border patrols and local defence. Whatever security arrangements are finally made for a unified Germany, it is clear that the NATO strategies of
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flexible response and forward defence will have to be renounced. It is not possible to have a flexible response strategy that is dependent upon nuclear weapons that are politically unacceptable to most NATO governments.
The noble Lord, Lord Hatch, reminded us of an important problem. The elimination of nuclear weapons and the withdrawal of troops pose the problems of how one retools and brings people back into civilian life. The noble Lord reminded us that this is not just a problem for those in the West but that in Moscow there is perhaps an even greater problem. I am indebted to the noble Lord for raising that point. I believe it is naive to expect instant benefits from savings on defence expenditure.
The noble Lord, Lord Hatch, also reminded us of a remarkable change in attitude, tone and words emanating from the United States. General Colin Powell has said in respect of the Soviet Union,
"I don't have to think of them as my enemy … as a clear and present danger who is coming at me tomorrow".
The problem we have now is that everyone wearing a uniform has spent the past 35 years up to last year thinking about this matter in a different context. We want to hear the Minister explain the Government's thinking in respect of these matters over the past five or perhaps even two years.
The noble Lord, Lord Jenkins of Putney, emphasised a crucial element here, which is adherence to the non-proliferation treaty and the comprehensive test ban nexus. It is a nonsense for this Government or any other government—our Government did this as far back as 1946—to be signatories to the original nuclear non-proliferation treaties and yet be a party to replacing outmoded and obsolete nuclear weapons with other weapons. The noble Lord used a telling phrase when he said that the weapons were described not as being upgraded but as being modernised. That is a nonsense of course. I hope the Minister can tell us to what extent the Government attach importance to the nuclear non-proliferation treaty.
It would be helpful to the House and to the cause of nuclear non-proliferation if the Government were to cancel the fourth Trident boat. A Labour Government would not have a great deal of room to manoeuvre in terms of cancellation in that respect. However, the Labour Party has recognised the principle of negotiated disarmament. We would enter negotiations along those lines as quickly as possible.
I am conscious of the conventions of this House. I, like every other speaker, could cheerfully—that is not perhaps the best word—spend a long time on this matter. By the end of the debate 10 speakers will have spoken. Of those, six will have come from the Labour Benches, two from the Government Benches, one from the SDP and one from the Liberals. That indicates the strength of feeling and concern on these Benches. We are anxious to ensure not that the Government should become angry or dismayed but that they are reminded that the greatest prize of all lies ahead of them. That is peace and security not only for the people of this country but also for the world. In the context of this Motion,

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which explores the policy for the remaining 10 years of this century, we ask the Government what they intend to do in this matter.
7.4 p.m.
The Parliamentary Under-Secretary of State, Ministry of Defence (The Earl of Arran): My Lords, like many other noble Lords, I wish to say straight away that this has been a useful and timely debate. All of us look forward to the conclusion of a number of major arms control agreements this year and to the prospect of further negotiations in order to reduce both conventional and nuclear weapons. I give thanks to the noble Lord, Lord Graham, for his understanding of the complexities and the responsibility that the British Government face at this time from the point of view of the defence of the ream.
In the nuclear field, we have seen the continued implementation of the provisions of the treaty eliminating intermediate range nuclear weapons. In the strategic field we hope that the United States and the Soviet Union will be able to achieve their objective of reaching an agreement by the end of this year to reduce their strategic nuclear arsenals. If the Soviet Union accepts the offer by President Bush a fortnight ago, we can look forward to negotiations to achieve reductions in the number of short-range nuclear weapons deployed in Europe shortly after the signature of a treaty limiting conventional forces in Europe. It is therefore clearly right that we should pause for a moment, as the noble Lord. Lord Graham, has said, to reflect upon the way in which we might most effectively continue the process of reducing tensions and securing peace at lower levels of arms in the light of the achievements of previous negotiations and the dramatic changes that have taken place in Europe over the past year. However, I am sure that it will come as no surprise if I make clear now that we believe that nuclear weapons will continue to form an essential part of NATO's strategy of deterrence. That strategy has helped to preserve the peace in Europe for the past 40 years.
I would say to the noble Lord, Lord Hatch of Lusby, that the comprehensive concept, endorsed by NATO heads of government at their meeting in May last yea r, sets out clearly the grounds for this belief. The fundamental purpose of the strategy of deterrence is to deter war by demonstrating that NATO has the military capability and the political will to use all the forces at its disposal in response to any aggression, with the aim of inducing an aggressor to terminate his attack and to withdraw.
It has been suggested that the conclusion later this year of a treaty limiting conventional forces in Europe might remove the need for NATO to rely upon nuclear weapons for its defence. A CFE treaty on the lines of that now under negotiation in Vienna will have the effect of eliminating the considerable advantage which the Soviet Union has long held in key areas—in tanks, artillery and aircraft. And it will, through treaty limitations, help to ensure that this advantage cannot be restored. By any measure, an agreement on these lines will be a major gain for security and stability in Europe. My noble friend
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Lord Orr-Ewing has now had to leave the House, and he has made his apologies for that. He spoke eloquently about the dangers of dropping our guard and on the need to maintain the strategy of deterrence to prevent all war.
But the sad fact is that history has taught us that conventional forces alone do not deter aggression. Of course we need effective and up-to-date conventional forces to prevent a potential aggressor concluding that he might be able to achieve a limited territorial objective quickly and easily. But reliance on conventional weapons alone might prompt him to calculate that he could achieve those gains at acceptable cost. Only the possession of nuclear forces, with their immense destructive potential, coupled with the clear expression of the willingness to use them if necessary, demonstrates to a potential aggressor that he faces unacceptable risk in launching an attack. The subject that we are debating this evening springs from a challenging proposal made by President Gorbachev as long ago as January 1986.
Lord Kennet: My Lords, before the noble Earl leaves his last point when he said that only nuclear weapons can deter any aggressor from an attack, does he agree that if that applies to this country and to other NATO countries, it must apply equally to every country in the world, and is it not in that case a recipe for proliferation?
The Earl of Arran: My Lords, I am talking about nuclear deterrence from the point of view of preventing war across the world. The Government's position, which I have just outlined, is well known.
The noble Lord, Lord Graham, outlined comprehensively in his speech the challenge made by President Gorbachev in 1981.
Perhaps there are indications that the Soviet Union is beginning to come round to our way of thinking. Over the past two years we have seen the development within the Soviet Union of an interesting debate on the concept of "minimum deterrence". Your Lordships will recall that President Gorbachev spoke on this subject in his speech to the Council of Europe in July last year. The theme was taken up again by Foreign Secretary Shevardnadze in his address to the United Nations General Assembly in September.
At the moment, Soviet spokesmen present the concept as a half-way house on the way to a nuclear-free world or as a means of reconciling the differing strategic concepts of NATO and the Soviet Union. Perhaps we may see the further development of Soviet thinking over the next few months. We certainly look forward to hearing a fuller exposition of Soviet views in due course. However, welcome as a move in Soviet doctrine in that direction would be, it would represent no more than a recognition of the validity of our own policies. Our aim has always been to maintain only the minimum level of forces necessary to fulfil the strategy of deterrence.
While the Soviet Union has made great play of the unilateral reductions it has made in the past in its conventional and nuclear forces, it is worth stating again that NATO has already unilaterally withdrawn

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2,400 nuclear warheads from Europe without replacement over the last decade, reducing the number deployed by over one third in that period. NATO's nuclear stockpile in Europe is now at its lowest level for over 20 years. Of course we welcome the Soviet withdrawals, but we challenge the Soviet Union to go further and match the reductions that NATO has already made.
The full implementation of the INF treaty will add to the number of nuclear weapons which have been removed. Within the United Kingdom, RAF Molesworth has already been closed as a base for US ground-launched cruise missiles and half the missiles at RAF Greenham Common have been withdrawn. The remaining missiles will return to the United States by the end of May next year, by which time the removal of all US and Soviet intermediate-range missiles from Europe should be complete. Their return is, of course, prohibited by the provisions of the treaty.
Furthermore, the political and military changes now taking place in Europe, together with the prospect of the conclusion of a CFE agreement, will provide NATO with the opportunity to adjust its force structure in Europe. It may be possible, with those developments, to reduce the number of our stationed forces in Europe, although of course we would only do so in full consultation with our allies.
The changes will also provide NATO with the opportunity to reduce further its short-range nuclear forces. Indeed, as a first step, President Bush announced only a fortnight ago that the United States would not be continuing with its programme to develop a successor for the Lance missile, nor would it be modernising any more nuclear artillery shells. He also proposed an early start to preparations for new nuclear arms control negotiations between the United States and the Soviet Union and that those negotiations should start shortly after a CFE treaty had been signed.
We warmly welcome the content of President Bush's speech, on which we were consulted beforehand, and fully support his decisions, as do our alliance partners. His proposals show that NATO recognises that the dramatic and welcome spread of democracy in Eastern Europe radically affects the numbers and types of weapons needed for nuclear deterrence. They provide a robust response to those who have hitherto criticised the alliance on that point.
We look forward to the prospect of further negotiated reductions. However, we should not let recent developments lull us into a false sense of security. An effective US nuclear capability in Europe will remain vital for NATO's security.
Lord Jenkins of Putney: My Lords, before the noble Earl leaves that point perhaps I may ask him this question. If the Government are so completely wedded to the nuclear weapon as he suggested, why do they not withdraw honestly from the nuclear non-proliferation treaty, denounce it and say that they are no longer a party to it? Why do they pretend internationally to be anti-nuclear and here to be pro-nuclear?
The Earl of Arran: My Lords, if the noble Lord, Lord Jenkins, will permit, I shall come to that point.
Coming closer to home, it has been suggested that in the light of recent changes in Europe the United Kingdom should not order a fourth Trident submarine and that a three-boat deterrent force will suffice. That is a point which the noble Lord, Lord Graham, made. Indeed, some have gone further and argued that we should cancel the Trident programme altogether.
Like Polaris, Trident is planned to be a four-boat force, providing us with the guarantee that one boat could be kept on patrol at all times, whatever might happen in the future. Trident is designed to provide a minimum independent UK deterrent and, as such, is the ultimate guarantee of our security. It would make no sense to cancel the programme or take chances with the effectiveness of that deterrent.
Our independent strategic nuclear force makes a vital contribution to the security of NATO and is the ultimate guarantee of our own security. The Polaris force continues to give us good service, but it is ageing and cannot last indefinitely. That is why we are introducing Trident, to provide a force that will sustain deterrence into the next century. We believe that no other use of the resources to be spent on Trident could contribute so significantly to deterrence.
Lord Graham of Edmonton: My Lords, will the noble Earl allow me one question? Given that it was the aspiration of President Reagan and Mr. Gorbachev at Reykjavik to eliminate nuclear weapons by the end of this century, and given—as I reminded the House —the intentions of the Russian leaders and the moves that President Bush is now making, will the Minister accept at least the possibility that, if not by the end of the century then shortly afterwards, a position could be reached in which nuclear weapons could be totally eliminated? Is the Minister really saying that despite that it would be the Government's intention to continue to be one nation, if not the only nation, which retains nuclear weapons?
The Earl of Arran: My Lords, I believe that the noble Lord, Lord Graham of Edmonton, knows the answer to that question. The Government believe in the facts at this moment. We do not cater for future possibilities. We do not speculate. That is our policy on Trident.
We have never ruled out the possibility that the Government might wish in due course to consider including our deterrent force in arms control negotiations.
The introduction of Trident will provide us with the minimum necessary capability to maintain an effective independent deterrent into the 21st century. It bears repeating that, even after implementation of reductions in US and Soviet arsenals of the size now being discussed in Geneva, our Trident force would still represent a smaller proportion of Soviet strategic nuclear warheads than did Polaris when it entered service.
However, if US and Soviet arsenals were to be reduced very substantially, and if there had been no

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significant improvements in Soviet defensive capabilities, we would consider how best we might contribute to the arms control process in the light of the changed circumstances. Reductions in US and Soviet arsenals would, however, have to go very much further before we could consider including our deterrent in any future negotiations on strategic offensive weapons.
In my remarks so far I have concentrated on the balance of forces in Europe. However, we should not, as a number of noble Lords have reminded us, overlook developments elsewhere in the world. The recent evidence of attempts to contravene our export laws has demonstrated all too clearly the dangerous nature of that world and the need to maintain our guard. We must face the fact that, despite the efforts of the international community, some countries may be tempted to develop their own nuclear capabilities. We shall therefore continue to support fully the nuclear non-proliferation treaty, and the practical measures it contains to prevent nuclear proliferation.
Several noble Lords have raised the question of the NPT. Regarding the point of the noble Lord, Lord Pea, we share the concern to limit the spread of nuclear weapons. That is why we have worked so hard to support the provisions of the NPT.
With regard to the provisions of Article 6, clearly, as the US and the Soviet Union possess by far the largest proportion of the world's nuclear stockpiles, it is for them to make the greatest reductions. That is why we fully support their efforts to reduce their stockpiles in the strategic arms reduction talks in Geneva.
The noble Lord, Lord Jenkins of Putney, suggested that we were setting bad examples. Evidence to the contrary abounds—unilateral reduction of over one-third of NATO's nuclear stockpile; the INF treaty; talks on strategic arms between the US and the Soviet Union which, we hope, will soon come to fruition; and, we hope, talks on short-range nuclear forces once the treaty on conventional forces is signed.
As a depository power of the treaty, the United Kingdom has always worked to strengthen it and to secure the adherence to it of the maximum possible number of states. Several countries still have nuclear programmes that are not within the safeguards regime of the International Atomic Energy Agency. We shall continue to call on them to adhere to the treaty and to place their programmes under IAEA safeguards. We also intend to play an active role in arrangements for the review conference which takes place later this summer and in its proceedings.
We look forward to the conclusion of arms control agreements that enable us to achieve the goal of ensuring peace with freedom at lower levels of arms, but those hopes should not blind us to the enduring realities which were well illustrated by the noble Lord, Lord Mayhew.
Nuclear weapons cannot be disinvented; we simply cannot put the nuclear genie back into the bottle. Sadly, history shows us that, until now, mankind has never retreated from the technical advances that have given him tactical superiority on the batlefield: from the invention of the stirrup,
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which revolutionised the use of cavalry over a thousand years ago; to the enormous advantage offered by the use of the bow and arrow to English archers at Crecy; and, more recently, the dramatic use made of tanks and aircraft in the Second World War.
The complete elimination of nuclear weapons by the year 2000 is simply not achievable. Proposals for a Europe free of nuclear weapons would not reduce, still less remove, the risk of military conflict. Indeed, by removing the very weapons which have been such a key factor in keeping the peace for more than 40 years, we would be making Europe more vulnerable to the kind of conflict that has scarred the continent to such devastating effect twice already this century.
The noble Lord, Lord Monkswell, spoke of the horrors of war, including the loss of life of British servicemen in the conflicts since the Second World War. The possession of nuclear weapons had made a fundamental contribution to the deterrence of war in Europe and thus spared us those horrors. Nor could we hope to isolate a nuclear-free Europe from the rest of the world, for there can be no guarantee that Europe could not be targeted and placed under threat from nuclear weapons based elsewhere.
Proposals such as these simply do not make practical sense; and worse, they divert attention from the real priority: to ensure that Europe is kept free from war. If we were to trade a war-free Europe for a nuclear-free Europe, we would have struck a most unsatisfactory deal.
Although strong conventional forces in Europe are an indispensable element of the strategy of deterrence, they cannot be relied upon to prevent aggression. It is only through the possession of nuclear weapons that we can present anyone who might consider aggression against the West with the degree of risk out of all proportion to any possible gain that he might hope to make.
In the nuclear age, we cannot simply jettison the essential element of our defence strategy which, as I have reminded noble Lords, has so successfully kept the peace for the past 40 years. The contribution of nuclear weapons to the effectiveness of the strategy of deterrence will be of equal importance in the world of tomorrow as it is today. There is no alternative strategy that offers us equal assurance of meeting our aim of preventing war, in whatever form it might arise.
7.25 p.m.
Lord Monkswell: My Lords, in concluding the debate, I must thank very warmly all those noble Lords who have contributed. You might think that I would want to take exception to the contributions of various noble Lords, but I do not think that that is my job. It is important that we learn from each other. Everyone who has contributed to the debate has a point of view which is valid from his or her perspective. Although I believe that those who have argued that there has been peace in Europe for the past 40 years because we have had nuclear weapons are wrong, that does not mean to say that it is not a valid point of view. It is held by many people. We

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need the 10-year window of opportunity to persuade people of the reality of the situation.
When I tabled the Motion at the beginning of the year after seeing the immense political changes that had occurred in the previous six months, I wondered whether 10 years was too long a timescale. However, unfortunately, given the nature of the contribution from the Conservative, Liberal and SDP sides, I must conclude that 10 years is probably about right. We shall need all the time we have. When I say "We", I mean that generation which has come on to the planet since the end of the Second World War and which sees the threat not from the Americans, Russians, Indians, Pakistanis, Israelis, Arabs, North Koreans or South Koreans, but the threat to our environment and our living space on this planet. We must tackle and counteract that threat. I hope that over the next 10 years we can make some progress in tackling that threat. My Lords, I beg leave to withdraw the Motion for Papers.
Motion for Papers, by leave, withdrawn.

Consumer Guarantees Bill
7.27 p.m.
Baroness Ewart-Biggs: My Lords, I beg to move that the Bill be now read a second time.
The Bill was introduced into the other place by my honourable friend Mr. Martyn Jones, the Member for Clwyd, South-West, following his success in the Private Members' Ballot. It has had a rather unusual history and, for that reason, before I go into the details of the Bill, perhaps your Lordships will allow me to go briefly into its background.
I shall do that because there is one anomaly which would strike any noble Lord who did not know the history of the Bill. Both the Short and Long Titles of the Bill refer to consumer guarantees, yet no provision among the clauses relates to guarantees. It is therefore appropriate for me to remind your Lordships that, when the Bill was introduced in another place, it contained 15 clauses relating to guarantees. They sought to implement the recommendations of the National Consumer Council which had been set out in its report, The Consumer Guarantee. I understand that that report was the result of a two-year review led by the noble Baroness, Lady Oppenheim-Barnes. I am happy to see that she has now joined us and will take part in the debate. I shall look forward to what she has to say and any suggestions that she might have to improve the Bill.
Without wishing to pre-empt anything that the noble Baroness might wish to say, I should like briefly to cover the proposals on guarantees contained in the original Bill, which sought to make guarantees legally enforceable, to control unfair terms in guarantees and, most centrally, to defend the terms of a consumer guarantee. That consumer guarantee would contain clear rights and simple remedies to ensure that, if a guaranteed project broke down, the loss would be the producer's and not the consumer's. The consumer guarantee was to be not
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mandatory but voluntary. To ensure that consumers knew at the point of sale which businesses stood by their products, with new cars and major household appliances it would have to be stated whether or not they came with the guarantee.
This very simple idea commanded widespread support. It had a great deal of support from consumers and the public. In fact as many as 96 per cent. of people said that they wanted their MP to support the Bill. There was support not only from regulatory bodies and the media but also from retailers and manufacturers. I received a letter from the Retail Consortium which reiterated its support for the principle of meaningful guarantees and the aims behind my honourable friend's Bill as it then was. Moreover, my honourable friend, in an effort to work with the Minister for Consumer Affairs in another place, agreed that in addition to the provisions on guarantees, he would include in his Bill seven clauses given to him by the department to implement a 1987 report of the Law Commissions.
The passage of the Bill through another place commenced with an unopposed Second Reading on 26th January after a five hour debate. It was recognised that the principle to be considered was the need to legislate on guarantees. The Bill was in Committee for three sessions, when a number of amendments were made to the provisions on guarantees. Although the Minister for Consumer Affairs did not table any amendments, he expressed his concern about the clause which provided for negative indications. Nevertheless, it appears from Hansard that as the discussion in Committee continued he seemed to withdraw many of his objections.
Shortly before Report stage the Government considered that the provisions on consumer guarantees should have the benefit of public expenditure of some £1 million. That necessitated recommittal, which was taken on the Floor of the House on 30th March, immediately before the Bill's Report stage. The recommittal was drawn out by procedural wrangling and therefore hardly any time was available to consider the Bill on Report although a number of amendments had already been listed.
In those circumstances my honourable friend Martyn Jones in the final 10 minutes of the Bill's passage through the Commons withdrew the clauses on the consumer guarantee. I should like to make quite clear that that decision was forced on the Bill's sponsor. He is on record in the Official Report of another place as saying that he had no choice but to take that line in order to retain at least part of the Bill for consideration in your Lordships' House. He hoped that that would provide some scope for legislation to protect consumers to be developed in this House.
That only left clauses dealing with the Law Commissions' report. As if to reflect the unclear view of the other place, no attempt was made to amend either the Short Title or the Long Title of the Bill, nor to ensure that the commencement provisions fitted the detailed clauses.
I am sorry to have taken up the time of the House in detailing that background. However, I thought it

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necessary because the background is an unusual one and it would be difficult to understand the Bill before us tonight without it.
The clauses of the Bill concern the existing law on the supply and sale of goods. As such they relate to 19th century judge-made rules which were codified in the Sale of Goods Act. They apply to transactions between the Government and a multinational as much as they do to a consumer who buys a newspaper. It was against that background that in 1979 the Law Commissions were asked to consider certain aspects of the Act and in particular the defmition of "merchantable quality".
Clause I contains the Law Commissions' recommendations on the implied terms of quality. It contains a revised definition for Sections 14 (2) and 14 (6) of the 1979 Sale of Goods Act and clarifies the relationship between Sections 14 (2) and 15 (2) (c). Those changes make clear that, where appropriate, a court may consider all aspects of the goods when deciding whether they comply with the terms of quality. Those changes are seen by many experts as changes of form rather than substance. Nevertheless, I commend them to your Lordships because they make it clear to the layman that if he or she does not find the goods satisfactory then he or she may have a claim. After all, that is far better than the existing term "merchantability", which clearly means the ability of a merchant to resell and which could not be less appropriate for consumers.
Clause 2 makes changes to the remedies available to buyers when their rights have been infringed. It makes it crystal clear that the buyer may lose his right to reject the goods or get a refund, even though he has not had a reasonable chance to test the goods. I know that some noble Lords may wish to comment on that provision. I am very well aware that it was not properly considered in another place. As a starting point, however, we have a certainty. Let us not dismiss the merits of certainty.
Clause 3 is also concerned with circumstances in which a buyer may reject goods. It deals with partial rejection, or the situation where part of a consignment is defective. As noble Lords will be aware, the clause is aimed at commercial and not consumer transactions.
Clauses 4 and 5 address the same problem. One clause looks at it in England and Wales and the other clause covers it in Scotland. The policy behind the clause is very bold. It concerns the case where the buyer has yet to lose his right to a refund and so addresses the days immediately following the purchase. The clause ensures that commercial buyers are not allowed to be unreasonable when they reject faulty goods. If the breach is slight and can, for instance, easily be remedied, the commercial buyer cannot reject the goods but must content himself with the other remedy of a claim for compensation.
However, the consumer is not to be bound by such constraints. The intention is that, should anything at all be wrong with, say, a new car, the consumer should and will be entitled to demand a refund. That is because of the new definition of quality in Clause 1. For example, if a new car is defective because of a faulty connection to the windscreen wiper, the Law
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Commissions' view and that of the Government is that the consumer should not have to put up with the inconvenience and frustration of a repair but should be given back his money. That is how those clauses will better the position for consumers. They will penalise the shopkeeper or garage who sells the product which has or quickly develops minor faults or cosmetic blemishes.
Clause 6 will be very welcome north of the Border because it extends to Scotland that part of the Supply of Goods and Services Act 1982 which deals with goods. Clause 7 and Schedule 2 set out minor and consequential amendments. Clause 8 deals with commencement and is at present out of sync. with the rest of the Bill, as noble Lords will have noticed. It is the unamended commencement provision from the 22-clause Bill to which the other place gave an unopposed Second Reading.
I conclude by affirming that undoubtedly this Bill contains some welcome provisions. The three major provisions are the revised quality term to be known as "satisfactory quality"; the provisions on the supply of goods in Scotland; and the strong message to those who sell faulty goods. However, it would be entirely unrealistic on my part were I not to accept that the Bill contains some serious anomalies.
Either the titles and Clause 8 must be changed or the House must make some provision about guarantees. It is for that reason that I look forward to the Committee stage. I shall be very happy to consider any suggestions from noble Lords who may wish to put forward ideas and amendments to remedy those contradictions, and amendments that will produce the safeguards and the justice that consumers so obviously desire. In the meantime, I beg to move.
Moved, that the Bill be now read a second time—(Baroness Ewart-Biggs).
7.40 p.m.
Lord Meston: My Lords, we are grateful to the noble Baroness for her explanation of the Bill and its somewhat chequered history. It has indeed become a rather difficult and confusing Bill. Reading it as it has come to this House, one realises that it no longer lives up to its Long or Short Title because it was truncated towards the end of its passage through another place. On reading the Law Commissions' report one realises that what is now left is the Law Commissions' draft Bill. As always the Law Commissions' recommendations are the product of thorough consultation and careful reasoning. On reading the briefing material of the National Consumer Council and Consumers' Association, one realises that they disagree with the Law Commissions on one important point about the right to reject goods, and that they disagree with each other about the usefulness of enforceable consumer guarantees as originally proposed in the Bill.
Finally one looks at the debate in another place for some enlightenment. The debate—if one can call it that—on 30th March has to be read to be believed and raises serious questions about which House of Parliament is more in need of reform.

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Clause I of the Bill provides welcome modernisation of the concept of merchantable quality, now a somewhat arcane expression. It also provides a focus on the characteristics of the article sold which make it of satisfactory or unsatisfactory quality. Those include durability. No one will have any criticism of Clause 1.
Clause 2 is the controversial clause. It concerns the rights to reject goods and to claim a refund. Whatever else happens to the clause, and indeed to the Bill, one must not lose sight of the fact that much of Clause 2 provides valuable rationalisation of the law for the benefit of the consumer and that the law would be improved even if Clause 2 is not amended.
Therefore by the new subsections (2) and (3) a purchaser is not deemed to have accepted goods until he has had a reasonable opportunity to examine them. A purchaser cannot have his rights taken away prematurely by so-called acceptance notes. The new subsection (6) means that a request for repairs does not prevent rejection. That, too, is valuable.
The difficulties are posed by the new subsections (4) and (5). The arguments for and against those proposals for a status quo are finely balanced. The new subsection (4), which restates existing law, provides that,
"The buyer is also deemed to have accepted the goods when after the lapse of a reasonable time he retains the goods without intimating to the seller that he has rejected them".
Thus, despite the proposed subsection (5), the right to reject goods, and the right to a refund, may be lost irrespective of the opportunity to examine those goods. It may well be in practice that the lapse of a reasonable time, and lapse of reasonable opportunity to examine the goods, may occur at the same time. That point can be used for or against the proposed provisions. However, I am persuaded that we should see it clearly stated that in ordinary circumstances a purchaser should not lose by mere lapse of time the right to reject and the right to a refund for defective goods, even if that may mean that in exceptional circumstances the purchaser should give credit for the use and benefit which he has had from the goods.
Whatever improvements to the law we make, one can see that difficult cases will continue to emerge. But the removal of the proposed subsection (4) should not be a great hardship to those who are responsible suppliers of goods and should be a hardship only to those who provide shoddy goods. It may assist those who buy in haste and repent at leisure. It may protect those who are remarkably stupid. I have represented a couple who managed to buy a motor car without a test drive and after dark. They got it home—just. Home was a mile and half down the road, but the car never did more than five miles in its life in their hands and was a rich source of litigation, I am glad to say.
Normally neither the Government nor any of us has to think very hard when presented with an authoritative Law Commission report. I suspect that this is the exception. The difficulties of the Bill, and the arguments which surround it, suggest that there will be an onus on the Government to rethink their position so that the effort and the time which have
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so far been extended on the Bill and alt that has led up to it are not wasted.
As the noble Baroness explained, the concept of the enforceable consumer guarantee has been dropped from the Bill. I understand that the National Consumer Council has lowered its sight, if it has not altogether dropped its guns. Indeed there may well be merit in a modified version of the NCC proposal, if only as a back-up to the remedies that I hope the Bill will provide with an improved version of what is presently before us. Accordingly I hope that the opportunity will be taken in the course of the Bill to breathe some life back into the concept of consumer guarantees.
The noble Baroness explained that much of the Bill extends to Scotland. That appears to be a welcome variant of the view that what is good for Scotland is also good for England. The commencement provisions of the Bill puzzle me slightly. I wonder why part of the provision is to start on 1st March 1991 and part on 1st October 1991, in particular when the Law Commissions proposed a simple two-month gap before the Bill came into force.
I support the Bill so far as it goes. There is a lot to be said for half a loaf But the question that will arise is whether it goes far enough.
7.48 p.m.
Lord Allen of Abeydale: My Lords, the noble Baroness has explained very clearly the curious position in which we find an opposition spokeswoman introducing a Bill drafted by the Government's Law Commission which has a title that bears no relation to its contents and which omits altogether provisions suggested by the National Consumer Council that, for her part, she would have liked to see enacted.
I can well understand the frustration of the National Consumer Council and those who agree with it over the fact that the proposals for some form of consumer guarantee—on which it has worked so hard and consulted so widely—have not prospered. The NCC is clearly right in thinking that the present protection proposed by the law for the consumer is unsatisfactory and it has made a brave attempt to improve the consumer's legal rights. The story of what happened to that attempt must be grievously disappointing. I do not know how far it will be possible to recover the ground.
I should like to limit myself—as rather foreshadowed by the noble Baroness when she opened the debate—by touching on a point to which the noble Lord, Lord Meston, has already referred. I should like to draw attention to one aspect of what I might describe as the "Law Commission Bill" that is before us.
Although it took the commission eight years to produce its report, I cannot say that it is the most persuasive document I have ever read. I have taken against its habit of putting relevant arguments into the footnotes. My main criticism is that, after all this time, Part 5 of the report fails to come forward with any new suggestion to improve the right of the buyer to recoup the purchase price of goods which prove to be defective. I am no lawyer, but I

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understand that the existing law confers on the buyer the right to reject goods which are not of merchantable quality. In practice, it then takes away much of that right by saying that the buyer cannot reject the goods and recoup his money once he has accepted them. The courts have held that the buyer accepts the goods when he takes delivery or so soon thereafter as to make little difference. That means that if a defect which is present when the goods are brought comes to light only after an interval it is probably too late.
Many noble Lords will have in mind the decision of the courts in the case of Mr. Bernstein, in which he took delivery of a new Nissan car. It is strange that the name of the car featured in the case is, on the whole, a byword for reliability. The car suffered a catast-ophic breakdown three weeks and 140 miles after delivery. However, as a matter of law the judge held that it was too late for Mr. Bernstein to recover his money. Surprisingly, the Law Commission thought that perfectly all right. Its reasoning appeared to be that it was more important that there should be finality in commercial terms from the seller's point of view than that the interests of the consumer should be looked after. Therefore, in reformulating the existing law, Clause 2 rubs in what I might describe as the "Bernstein limitations" on the buyer's rights. I have in mind subsection (4), which provides that a buyer is deemed to have accepted goods when, after the lapse of a reasonable time, he retains the goods without intimating to the seller that he has rejected them. There are no prizes for guessing that "a reasonable time" will not be prolonged.
The result will be that a buyer may lose his right to reject defective goods before he has even discovered that they are defective. There is an indication to suggest that the Law Commission's report and perhaps the Bill have made matters worse. I have the impression that if, after buying an expensive new video which breaks down, one takes it back a week later one will be told that it is too late. It will be repaired but the seller will not take it back.
The buyer is better off if he buys his car or goods on hire purchase. In that case there is no similar principle of acceptance and he retains a continuing right to reject. Again, the Law Commission appears to be perfectly happy to endorse that difference. It does so for reasons which will carry conviction to some but not to all.
I should make it clear that I am speaking about goods which clearly had a defect in them at the start although that may be revealed only after a period of time. It is obvious that the longer the buyer has the goods before the defect appears the more difficult it will be for him to show, as he rightly must, that the defect was there originally. I wonder whether there is not something to be said for getting rid of the doctrine of acceptance altogether as regards dealings by consumers. Or it might be possible to provide that the period for rejecting defective goods starts to run only from the time the buyer discovered, or could reasonably have discovered, the defect which was present in the goods at the start.
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The last examination of this topic took eight years and, therefore, I am not optimistic enough to suppose that the problem can be solved before the next stage of the Bill. I do not wish to stand in the way of the other comparatively minor improvements effected in the Bill as it stands or of attempts by others to improve it. However, the Government should be made fully aware of the continuing disquiet in respect of the problem that I have discussed and of the widely felt disappointment at the failure of the Law Commission to do better so that, for the reasons that I have explained, it managed to make the situation even worse. It is a strange and somewhat disquieting story. If this evening the Government can offer words of comfort, I shall be glad to hear them.
7.56 p.m.
Baroness Oppenheim-Barnes: My Lords, I am grateful to the noble Baroness, Lady Ewart-Biggs, for introducing the Bill. I am also grateful to all noble Lords who have taken part in the debate for supplying some of the background to the story of why we are debating the measure this evening. The noble Lord, Lord Meston, has described it as "half a loaf. I should not describe it as such; I should describe it as a pathetic remnant. That is no disrespect to the noble Baroness, Lady Ewart-Biggs.
When I became chairman of the National Consumer Council it was patently obvious to me, to my council and to everyone who worked there that as a result of the Bernstein case consumers had no proper protection under the Sale of Goods Act. We were determined that that would be the central theme of our consumer reform. When we looked at the Law Commission's report, which is enshrined in the Bill before us, we believed—and I still believe—that it left consumers worse off. Their right to reject is not enshrined in the law and that lack of right is being perpetuated in this new legislation.
Worst of all, the Law Commission stated in its recommendations that it was doubtful about how far the process of patching up the Sale of Goods Act could go. In other words, we need a new Sale of Goods Act which is enforceable and easily understood by consumers. Clearly, the Government did not have room for such a large piece of legislation in their timetable. But we at the National Consumer Council were not daunted. We said, "How can we help consumers? What can we do to help them to enforce their rights and give them the power to reject? What is the biggest area of complaint?" It is the motor car industry where competition is completely distorted. The issue was raised only last week in the referral to the Monopolies and Mergers Commission. Attention was drawn to the price of cars in Britain compared to other countries. That results from distorted competition and the fact that 50 per cent. of all cars sold in this country go to company fleets.
We undertook a review of guarantees and consumer rights. We consulted over 100 bodies and visited the United States to see how consumers there fared and how the law was upheld. We discovered that, because of greatly enhanced competition, not only were consumers able to buy motor cars far more

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cheaply but they were given greater rights under the warranties they received with the cars that they bought. Indeed, some warranties were for parts and services lasting up to eight years. We were told that this had come about because of the Magnusson Moss Act which started a warranty war and stimulated competition. That is the lesson. It is most important in an area where competition is very distorted. Once one motor car manufacturer offered a firm warranty, others were forced to follow suit. I felt that that was an ideal way of bringing about a better climate for consumers.
I thought that a Conservative Government would welcome that sort of approach from the National Consumer Council. Accordingly, we drafted a Bill. When we first consulted the Consumers' Association it expressed a degree of support for the work we were doing. That support appears to have been withdrawn in the brief circulated to noble Lords which looks as though it may have been drafted by departmental officials. It is totally incomprehensible; it seems to contradict itself all the way through.
However, as has been said, we consulted 100 bodies and received tremendous support for the principle of a standard guarantee for consumers which could be introduced as a consumer guarantee giving to consumers rights which were enforceable in the courts. In order to be completely reasonable we said that that should be only permissive. Companies may or may not introduce such guarantees, but if they did not do so then they must state the fact. We thought that that would stimulate the kind of competition which we had seen in the United States. It would give to consumers easily understandable rights and a means of enforcing them. We felt that that was a simple answer rather than the complicated and, I believe, useless answer which has been provided by the Law Commission.
In another place Martyn Jones took on the Bill. There were a great many Members competing for the Bill. However, as Mr. Jones was first in the ballot, we decided it was right that he should have the Bill. He was supported by all-party sponsorship and at Second Reading in the other place over 22 Conservative Members voted in favour of it. On a Friday that is a very high number of votes to command. Clearly, the Bill had all-party support.
The Minister for consumer affairs did not move a single amendment to the Bill in Committee. He has been blamed by many people for destroying what, I believe, was a very good Bill without in any way attempting to amend it or to seek agreement upon it. I do not level those accusations against him. I feel rather sorry for him and I can understand his position. Officials in his department probably said, "Look, Minister, this is not practical. It cannot be because we did not think of it. We cannot possibly advise you to accept this Bill and therefore we must find a way of defeating it".
I understand that because I was in that position when I was Minister for consumer affairs in 1982. At that time the same thing happened. There was a Private Member's Bill—and it was first in the ballot —called the Supply of Goods and Services Bill. My officials said more or less the same thing to me,
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but I said, "Wait a moment. I believe that there is some good in this Bill. It may not be perfectly drafted and may have some defects, but you find a way of rectifying those defects and provide me with the amendments which are needed so that we can accept the Bill". That is what we did and the Bill helped consumers. I am sorry that the present Minister for consumer affairs was overpowered by his officials. I was not prepared to be so overpowered in my day.
What subsequently happened in another place is also very sad. A great deal of work had taken place on something which we at the National Consumer Council believed would not impose a great burden on industry and would not cost anything. We believed that it would stimulate competition and, most importantly, would give consumers stronger rights which could be enforced in a court of law.
I find the Bill before us quite unacceptable. I have made my views known to the noble Baroness, Lady Ewart-Biggs. However, in Committee I propose to move amendments of such a modest nature that they will be irresistible to the Government. I shall do that in full consultation with the Government. I should like to see a modified version of what was originally proposed in the Bill in another place. That would give to consumers enforceable rights and write into the Bill a standard form of guarantee which manufacturers could, or could not offer, as they chose. If the Government felt able to accept that very modest form of amendment I should be happy to support the Bill, if not, I shall feel bound to oppose it.
8.6 p.m.
Lord Williams of Elvel: My Lords, the House is grateful to my noble friend Lady Ewart-Biggs for introducing the Bill. As a number of noble Lords have said, it raises a very important issue, and I shall come to that basic issue in a few moments. However, thanks to the intervention of the noble Baroness, Lady Oppenheim-Barnes, we have had a full history as to how the original Bill came about. That was due to the efforts of herself and the National Consumer Council to meet certain problems which are certainly extremely important. That is the first point that I wish to make. We have a major problem in respect of consumers and their rights because there is no genuinely enforceable guarantee. That is the first problem which must be dealt with in some form or another.
It is also surprising to me—and I join with the noble Lord, Lord Meston, in this—to be speaking to a Bill on Second Reading, the Short Title of which has nothing to do with the text of the Bill and the Long Title of which has provisions to do with the text of the Bill but leaves a great gap where it allows the Act to provide for consumer guarantees. I am bound to say that it is the first time that I have spoken to a Bill the text of which has very little to do with the Short Title.
The Bill contains amendments to the Sale of Goods Act 1979, an extension of the Supply of Goods and Services Act 1982 to Scotland and consequential amendments to various pieces of legislation. The noble Lord, Lord Allen of Abbeydale, commented on that. I join with him in

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believing that the Law Commission is not necessarily infallible in producing the right solutions for legislation. There are times when people at the Law Commission could be slightly more perceptive in what is required in the real world. Nevertheless, the Law Commission has produced the Bill, so for what it is worth, subject to any amendments which the noble Lord, Lord Allen, may wish to move in Committee, I do not propose to challenge my noble friend's Bill.
I do not propose to follow the noble Lord, Lord Meston, in his interesting comment on the provisions of the Bill because I want to get on to what I regard as a more important subject. However, I was very interested to hear what the noble Lord, Lord Meston, said, and I look forward to any discussions which may take place in Committee.
The question we have to face is what should have been in the Bill and not what is in the Bill. There should have been a consumer guarantee. That is what the Bill says. That should substantially be in the form which my honourable friend Mr. Martyn Jones in another place introduced it after, as the noble Baroness, Lady Oppenheim-Barnes, said, consultation and with the support of all parties and with the support of a number of organisations such as the Retail Consortium. That is what should have been said in the Bill.
The problem of a Consumer Guarantees Bill, which is what the Bill is called, relates to consumer guarantees. After the Bernstein case, there can be no doubt whatever—as the noble Baroness, Lady Oppenhe m-Barnes, very persuasively argued —that there is a gap in our legislation. No possible amendment in the Sale of Goods Act can deal with that. We must have proper legislation of a new sort. For the solution, I looked at what the National Consumer Council provided in the way of briefs and in the way of history; I looked at what the Consumer Association provided. I looked at what my honourable friend in another place said and at what other pecple in the other place said. I am bound to say that I cannot find any fault whatever with the basic formula that the NCC produced, subject to modifications which may take place and may be adopted in Committee. I am perfectly clear on this matter; I think that that should be in this Bill.
As the noble Baroness, Lady Oppenheim-Barnes, said—I am embarrassed to continue citing her because I believed almost every word that she said—competition is not just about price. Competition is also concerned with quality and services. There is no point saying that if the price competition is right, then everything else will be right. Consumers have an absolute right to know on what basis they are buying something, a motor car, a video or whatever it may be. It may be on the basis of quality, guarantees, what the follow-up will be, the service and on the basis of price. That is what the whole; business is about.
I am astonished that the Government have not seen that and adopted it. I recognise that there are ways in which the other place deals with Private Members' Bills. I have not been a Member of the other place. Their procedures have been decided by
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them and I cannot comment on that. However, in your Lordships' House we have ample time to develop these themes and to amend the Bill as it comes before us.
I shall support the noble Baroness, Lady Oppenheim-Barnes, if, in Committee, she moves the amendments that she described. I very much hope that the Government will also support those amendments. I have to say to the Government in the starkest possible terms that they are either in favour of a consumer guarantee or against it. If they are against it, then they will have to fight for their position in this House. If they are in favour, let them join with us and try to amend the Bill in a satisfactory manner which, as the noble Baroness said, would be acceptable to the Conservative Party and should be part of the Conservative Party platform. Let them reverse the position that they held in another place, when they persuaded my honourable friend Mr. Jones to withdraw that part of the Bill which contained the guarantee.
If the Government are against the Bill, and if they persist in the view that they will not accommodate any amendment which the noble Baroness, Lady Oppenheim-Barnes, moves, then I am bound to say that we do not accept that position. We shall fight it in this House and, if necessary, my party will fight it in front of the electorate.
8.15 p.m.
Viscount Ullswater: My Lords, I must begin by congratulating the noble Baroness, Lady Ewart-Biggs, on her sponsorship of this Bill. This Government are committed to the consumer interest and we therefore welcome a measure which will both clarify and strengthen consumers' rights. The Bill has the full support of the Government but some minor tidying amendments will be needed as a consequence of the changes made in another place. If this House grants the Bill a Second Reading, the Government will table the appropriate amendments in Committee.
There is already an extensive body of legislation which exists to protect consumers of which the Sale of Goods Act 1979 forms an important part. It covers the sale of everything from a packet of butter to a luxury yacht. Among other provisions it states that there is an implied condition, on the part of a person who sells in the course of business, that the goods in the sale transaction are of "merchantable quality"; correspond to their description and are reasonably fit for the purpose. Traders cannot avoid these obligations in their contracts with consumers. It also allows the buyer to reject goods that are not of merchantable quality and receive back the purchase price. He may reject the goods provided that he has not intimated to the seller that he has accepted them, or has not acted in relation to them in a way which is inconsistent with the ownership of the seller or, after the lapse of a reasonable time, he has not retained the goods without intimating to the seller than he has rejected them.
The noble Baroness, Lady Ewart-Biggs, summarised the background to the Law Commissions' proposals. In 1987 the Law

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Commission and the Scottish Law Commission carried out a review of certain aspects of the law governing the sale and supply of the goods. They examined the present statutory provisions for implied terms in contracts for sale, the remedies for breach of those terms and the rules governing the loss of the right to reject non-conforming goods.
They recommended that the old term "merchantable quality" should be replaced by a clearer, more up-to-date definition, and that the amended Act should state explicitly that relevant aspects in determining quality include fitness for all the purposes for which goods of the kind in question are commonly supplied, the appearance and finish of the goods, their freedom from minor defects, their safety and their durability. They also recommended that a number of other minor changes to the 1979 Act should be made but that the basic rules governing acceptance should not be changed.
The changes which the Law Commissions proposed attracted very widespread support on consultation by the DTI. I believe that there is a good case for enacting the Bill which is based on their conclusions. This is a fundamental area of law and it is sensible that the provisions should be kept under review and updated when necessary. The new provisions on merchantable quality will make the law more easily understandable to consumers, traders, the courts and everybody else concerned.
Other new provisions will usefully correct minor unfairness in the present law and give a statutory basis to certain case law. I am thinking of the provision that signature of a so-called acceptance note would not deprive a buyer of his rights to a reasonable opportunity to examine goods and subsequently to reject them if they are defective. Another example is the explicit provision that a buyer would not be deemed to have accepted goods within the meaning of the Act merely because he asks for, or agrees to, their repair. Overall, the measures should serve to promote the effective operation of the market and a fair trading environment.
The noble Lords, Lord Meston and Lord Allen of Abbeydale, argued that legislation on the sale and supply of goods should be amended to allow for a long-term right to reject faulty goods. I think that it is worth spending a little time on explaining the Government's position on this issue which was one of the main questions considered by the Law Commissions in their review. The Sale of Goods Act 1979 does not allow the buyer a long-term right of rejection: the buyer is allowed a "reasonable opportunity" of examining the goods but once a "reasonable time" has expired, he is deemed to have "accepted" them. In other words, he cannot reject the goods and get his money back if a latent defect comes to light after they have been in use for some time. But he does have the remedy of damages in these circumstances. The basic principle was expressed by a judge in 1823 ruling that a purchaser could not reject a chandelier after a lapse of six months. He said:
"If a man takes an article, and keeps it, and uses it as his own, though it were not according to contract, he is bound to keep it and pay for it".
Baroness Oppenheim-Barnes: My Lords, on that point, does my noble friend therefore agree that three weeks was a reasonable time for Mr. Bernstein to have had his car and to have lost his right to reject it under the law that my noble friend is commending to us?
Viscount Ullswater: My Lords, I shall turn to the Bernstein case in a moment.
Section 35 of the Sale of Goods Act 1979 provides as one of the tests of acceptance that a buyer is deemed to have accepted goods when, after the lapse of a reasonable time, he retains them without intimating to the seller that he has rejected them. The Law Commissions recommended retention of the existing rules governing acceptance but acknowledged that the concept of a "reasonable time" did not provide a certain answer which could be applied in every case. They commented that no one on consultation was able to provide a better solution than at present; nor were they aware of any common law system which provided a better answer. They said that,
"The search for a formula which will achieve certainty is, we are forced to conclude, a search for something which is not there to be found".
The new Section 35 (5) in the Bill now provides that among the questions that are material in determining whether a reasonable time has elapsed for the purpose of deciding whether the buyer has accepted the goods is the question of whether the buyer has had a reasonable opportunity of examining the goods. This provision permits a wide flexibility in taking into account all the circumstances, but ensures that one of the questions which will be taken into account is whether the buyer had a reasonable opportunity to examine the goods. A more rigid provision, if intended to apply to all types of goods, would inevitably create certainty at the expense of justice.
To answer the question put to me by both the noble Lord, Lord Allen of Abbeydale, and my noble friend, it would be wholly wrong and misleading to imply that the detailed circumstances of the Bernstein case are a definitive statement of consumers' rights of rejection under the Sale of Goods Act. Other plaintiffs in different cases have sought to exercise their right of rejection under the Sale of Goods Act with different conclusions. In Rogers v. Parish, a claim to reject was upheld after 5,000 miles and a period of six months, during which several attempts to remedy defects had been made, but without total success.
The Law Commissions recommended against creating a long-term right of rejection, arguing that such a right would be extremely unfair to sellers. Consumers who bought a defective product would in effect be entitled to free use of it until the defect emerged. The seller would then be obliged to take back a used product and refund the full purchase price. Such a regime would simply be too biased in the consumer's favour. It would also be inflationary as manufacturers would seek to recover the higher costs by increased prices.
It would be possible to make a long-term right of rejection less unfavourable to sellers by allowing the

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seller to deduct an element from the purchase price for use and enjoyment of the goods before rejection; but the Law Commissions did not believe that any meaningful principles or formulae could be devised in relation to a credit for use which did not depend upon criteria so uncertain "as almost to invite dispute". It would greatly complicate the law and would substantially reduce the attraction of the rejection remedy from the consumer's point of view.
The Law Commissions concluded that it would be preferable to retain a relatively short-lived right to reject, with a corresponding automatic right to a full refund. Their report noted that this whole issue attracted considerable comment upon consultation and that their conclusion was generally—though not universally—supported. On this question, I very much agree with the Law Commissions' view that the law should not be changed.
The issue of legal redress in consumer disputes and the problems associated with seeking redress in some circumstances is one which is often raised. Following the Civil Justice Review, the Lord Chancellor last year announced the introduction of a programme of reforms under the Courts and Legal Services Bill designed to improve access to justice by speeding up, simplifying and reducing the cost of civil proceedings. This will enable more cases of higher value to be handled and tried in the county courts which should assist smaller plaintiffs to pursue claims more effectively.
A further change which the Lord Chancellor plans to introduce next year is the raising of the upper limit for small claims proceedings from £500 to £1,000. This will bring about a substantial increase in the number of consumers able to benefit from the simplified proceedings.
I now turn to the consumer guarantees provisions referred to by the noble Baroness, Lady Ewart-Biggs, my noble friend Lady Oppenheim-Barnes and, of course, the noble Lord, Lord Williams of Elvel. The Government have made clear their concerns about the former provisions of the Bill on consumer guarantees which were deleted at Report stage in another place. Our main areas of difficulty are on record. In UK law, liability under contract is, in general, restricted to the parties to that contract and the buyer s remedies are against the seller and not the manufacturer or importer. This is an important principle with considerable practical advantages. The consumer guarantees provisions would have created different remedies against different persons in different circumstances; and contrary to the Law Commissions' recommendations, they would have created a long-term right of rejection.
The Bill was presented as introducing a purely voluntary regime. However, it would have required producers of specified products to label them with a statement as to whether or not the product was covered by a consumer guarantee. This would have exerted undue pressure on such producers to provide the guarantee and would have created a barrier to trade within the EC and with other countries.
The Bill prohibited an additional charge for the consumer guarantee. The associated increases in
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costs would therefore have been reflected in prices across the Board. The Bill also contained many legal and technical problems. The Government did not believe that, even on the basis of the sponsor's own policy, a coherent and legally sound Bill could have been produced within the necessary time.
Although the Government cannot accept the approach of the consumer guarantees provisions which were formerly a part of the Bill, we believe that the subject of guarantees and the remedies they provide is worthy of further consideration. However, I must tell my noble friend that any new proposals should be based on a comprehensive analysis of the extent of the problem and indentification of particular areas where reform is needed, in the light of full public consultation. As my honourable friend the Minister for Industry and Consumer Affairs has indicated, the Department of Trade and Industry will conduct a review into the general issue of guarantees once the consideration of this Bill has been completed.
Finally, I shall end by congratulating the noble Baroness, Lady Ewart-Biggs, once again on her sponsorship of the Bill. The Sale of Goods Act was never intended to be a complete code. It was essentially a statement in statutory form of the principles of law derived from decided cases. Indeed, one reason for the longevity of the provisions of the original 1895 Act may have been that in many instances it was not necessary in practice for buyers to rely on the Act. For example, there are shops which will always allow customers to return recently purchased goods, whether or not they are defective. Whatever the reasons, the Act has given rise to comparatively little litigation over the meaning of its terms. Nevertheless, it is important that it should be kept under review so that disputes are kept to a minimum. The reforms which the Law Commissions have proposed are not revolutionary but they do represent an increase in protection for consumers which is very welcome. They will also make the law more easily intelligible to all concerned.
Lord Williams of Elvel: My Lords, before the noble Viscount sits down, can he help me on one point? He said that the Government were favourably disposed in principle to consumer guarantees but that the DTI was conducting its own inquiry into the facts. Does he not recognise, first, that the National Consumer Council conducted a very detailed inquiry into the facts and that they are already established? Secondly, in order to assist our future deliberations, can the noble Viscount tell the House how long the DTI inquiry will take? Will it be another 10 years before it does anything?
Viscount Ullswater: My Lords, I accept that the NCC has undertaken a review. The DTI is undertaking its own review. I cannot indicate to the noble Lord when that review will be complete. It is useful now that the Bill has arrived and further consideration will take place soon.
8.30 p.m.
Baroness Ewart-Biggs: My Lords, I am very grateful to noble Lords who have taken part in this debate. I find myself in a very unusual position, which I hope I shall not occupy too often again. I am proposing a Bill which is heartily endorsed by the Minister and which is very strongly slated by my noble friend on my own Front Bench. The noble Lord, Lord Allen, has pointed out the anomaly of an Opposition spokesperson introducing a Bill which contains the Law Commission's recommendations which were asked for by the Government in the first place. That again puts me into a very unusual position.
However, I am grateful to the noble Lord, Lord Meston, who gave serious study to the Bill which is before us. He made some very useful comments about it. I understand that he felt that there was very little left of the original Bill. He hoped that the Bill before us would be improved in Committee. I am also grateful to the noble Lord, Lord Allen, for pointing out very clearly what he finds lacking in the Bill before us because of his feelings about the Law Commission's recommendations, which, he believes, have not advantaged the consumer in any way.
The noble Baroness, Lady Oppenheim-Barnes, was in a very strong position to give the history of the Consumer Guarantees Bill in a fuller way than I could because she played a central part in it as chairman of the National Consumer Council. The points she made were absolutely unarguable. I am very grateful to her for saying that, at Committee, she will move a very modest version of the original Bill which will give consumers enforceable rights and a standard form of guarantee. I believe that is what she said. I very much look forward to Committee stage when she will be doing that.
I suppose I have to be grateful to the Minister for welcoming the Bill which I am moving tonight. I am happy at what everybody has said. The Minister was very content with the Sale of Goods Act, which he felt gave good protection to the consumer. However, as I understand it that Act was a consolidation measure. That being so, it did not create new law. Part of the justification for this Bill rests on the fact that the existing law is dated. Perhaps the Minister was not quite right on that matter.
I am worried about what he has said concerning Committee stage and the proposals put forward by noble Lords that they wish to amend this Bill to bring back a very modest version of the original one moved by my honourable friend in another place. I am also worried that he feels that it is better to discard the very long and profound inquiry made by the National Consumer Council, which, as I said in my opening speech, received an enormous amount of support not only from all the regulatory bodies and the media but also from consumers. That puts the Government in rather a weak position, as, though they consider themselves such strong supporters of the consumer, they go against something which had very obvious support from ordinary people who have very often suffered from buying goods which subsequently proved to be defective and which have left the buyers in a very serious situation.
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I am grateful for all the useful contributions made by noble Lords to this debate. I eagerly look forward to Committee stage. By that time I hope that the Minister will have changed his mind and will be a little more receptive to the idea of bringing back a consumer guarantee. In the meantime, 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.

Agricultural Holdings (Amendment) Bill
8.36 p.m.
Lord Mackie of Benshie: My Lords, I beg to move that this Bill be now read a second time. The Bill deals with resumption of tenanted land in the agricultural sector. It was introduced into another place by my honourable friend Mr. Alex Carlile and amended with the co-operation of the Ministry and the support of the Government.
The facts are as follows. Case B of Schedule 3 of the Agricultural Holdings Act 1986 states that a landlord can give notice to quit if the land is required for non-agricultural use, either where planning permission has been granted, or where it is not required other than by virtue of the town and country planning legislation.
Until July last year the consensus of legal opinion was that the second provision referred only to the Crown being exempt from the requirement of planning consent and that any private landlord wishing to resume possession of tenanted land for normal agricultural use could not do so without having first obtained planning permission.
Then we come to the case of Bell v. McCubbin. In that case the landlord wanted to resume possession of a farmhouse that was being sublet as a residential dwelling. He also wished to let it as a residential dwelling; thus no change of use was involved, and planning permission was not required. The court upheld the landlord in that case.
That is contrary to the thinking on agricultural security of tenure which has been held for the past 40 years. The Bill was then introduced in the other place by my honourable friend. As I have said, it was amended. I do not think I can do better than quote what was said by the Parliamentary Secretary of the Ministry, Mr. David Maclean, at Third Reading:
"The amended Bill before the House will, it is hoped, make absolutely clear the circumstances when an incontestable notice to quit can be served where land is to go for use other than agriculture. In effect, the Bill provides three circumstances where an incontestable notice to quit can be served under case B. The first is where planning permission has been obtained. That is the same as under existing legislation. The second deals with cases where Parliament has given an effective permission for a particular development. It seems clear that the current Agricultural Holdings Act 1986 also covers the use of land for which an Act of Parliament not dealing generally with town and country planning grants planning permission. That is where the developer does not have to obtain planning permission from the local authority. Those circumstances, together with Crown immunity, are covered by the 1986 Act.
The Bill therefore covers circumstances in which an Act gives planning permission. It provides for private and local Acts as well as the various ways in which Parliament may, in Acts or parliamentary orders not forming part of the general town and

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country planning legislation, remove the need for a planning application. As I have already said, we wish the Bill a fair wind. I am glad that my officials have been able to co-operate with the hon. and learned Gentleman in the measure. I hope that the Bill will reassure tenants, and I commend it to the House". — [Official Report, Conmons, 27/4/90; col. 664.]
As I have said, the Bill deals with a fairly simple circumstance. I trust that the House will commend it.
Perhaps I may make one or two remarks about security of tenure and notice to quit for resumption. It was traditionally the practice —and it was certainly so in Scotland—for the landlord to insert into the lease a clause which allowed for resumption for forestry or for building. This was accepted up to a certain amount of the holding by the tenant. In those days land was easy to acquire and there was a good deal of land to let; but land is now extremely scarce. As the provision for compensation allows for only up to six times the rent, it is an extreme hardship for the tenant if a part —a large part or even a small part—of his holding is resumed. This has been accepted by the Government and is accepted generally in agriculture.
It is true that in our system of tenanted land we need more manoeuvre and an alteration to the law. However, the Bill does not deal with new land to let. It deals with agreements made under previous legislation. It has nothing to do with any sensible arrangement which might be arrived at between the NFU and the CLA and backed by the Government. It has to do with past legislation. It is righting a situation which was previously held to be correct in regard to security for the tenant. I commend the Bill to the House.
Moved, That the Bill, be now read a second time.—(Lord Mackie of Benshie.)
8.42 p.m.
Lord Stanley of Alderley: My Lords, I should like to thank the noble Lord for presenting the case for the Bill so well. This is a modest measure. It merely makes quite clear the intentions of the 1986 Act which, as the noble Lord said, have been thrown into doubt by the Court of Appeal ruling. Doubt and uncertainty in any area can cause chaos, expense and, much worse, hardship. It is surely one of the main functions of this House to try to make legislation as clear as possible. That is what the noble Lord seeks to do in the Bill.
I therefore hope that noble Lords will give the Bill a speedy passage and will resist the temptation to amend it even though many noble Lords—and perhaps the noble Lord himself—would like to see more radical changes to agricultural holdings. This is not the place to do it. I wish the Bill a speedy passage.
8.44 p.m
Lord Gallacher: My Lords, on this side of the House we welcome the Bill, which, as the noble Lord, Lord Mackie of Benshie, said, had all party support in another place. We are grateful to the noble Lord for the manner in which he introduced the Bill. It may seem a somewhat lengthy process to introduce a Bill to rectify an unexpected Court of
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Appeal decision on the Agricultural Holdings Act 1986, but the case in question is of immediate importance to tenant farmers, and more especially so in the present context of change of activity on farms, including alternatives to agriculture.
The position of tenant farmers in general was well aired in a debate in the House on 18th April last. I quoted then from the speech made by the Minister during the Second Reading of the Bill in another place, a speech to which the noble Lord, Lord Mackie, also made reference. Part of the speech, however, expressed the Government's willingness to see changes in landlord/tenant legislation, subject to finding parliamentary time for such legislation, and change even in the absence of a consensus among interested parties. I hope that, when the noble Baroness replies, she may find time to say whether the view expressed by the Minister in another place still represents the Government's position.
The question in general is one of growing importance in the light not only of the Bill's provisions but also of pending changes in landlord/tenant relationships, especially where local authorities are landlords. A recent BBC "Country File" programme dealt with a change of policy by Cambridgeshire County Council affecting tenant farmers in the southern part of that county. The county council favours alternative use of farmland and is reputedly giving notice to certain tenant farmers. I am not au fait with the nature of the leases concerned —I have no doubt that the terms of the leases have been complied with—but the length of notice in reported cases appears to have been very short indeed. Thus it may be necessary to go for a wider measure of reform than that contained in this modest Bill.
In the meantime, we warmly support it. I give the noble Lord, Lord Mackie, the glad tidings that we shall not be seeking to amend it in Committee.
8.47 p.m.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Baroness Trumpington): My Lords, perhaps I may say Amen and Hooray to that last remark. Noble Lords will recall the excellent debate on the tenanted sector in which some of us took part last month. It is with some trepidation that I once again venture into matters relating to this complex area of the law so soon after that discussion. But, with landlord/tenant issues very much to the fore at the present time, it is perhaps not surprising that we should be discussing it again today.
Before moving on to the Bill which is the subject of our debate tonight, it may be helpful if I take the opportunity to elaborate on some of my previous remarks about the future of the landlord/tenant system. I believe that an industry can thrive only if new blood can get in to promote active life. The agricultural industry is no exception. We shall always need good, healthy food at competitive prices, but now the industry needs farmers who can respond to market forces, contribute to diversity in rural economy and farm in an environmentally friendly way.

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The decline in the area of tenanted land from 90 per cent. in the early part of the century to 37 per cent. now is putting a tourniquet on the industry's essential blood supply. The shortage of land to rent forces up initial rents, making it difficult for new tenants to make ends meet. In turn that puts pressure on the rent review mechanism. It also means that, when a landowner has an opportunity to develop land with a sitting tenant, there is a major crisis for the tenant and his family. It is bad enough to lose some land or, worse, the whole farm, but the shortage of land to rent means a tenant cannot find new land. This leads to requests for changes to the compensation system, but such pressures are resented by landlords, who see them as a further disincentive to the letting of land.
We must find ways of increasing the amount of land and holdings available to rent if the sector is not to wither and die. Clearly the present position is unhealthy, but the question is: what changes will do the trick? We have an open mind at this stage on the specific approach and we welcome the wide-ranging industry debate. We want to hear the views of all sections of the industry. It is worth noting that increasing security of tenure over the years has made a significant contribution to the decline of the tenanted sector.
The Government have repeatedly stressed the need for effective measures; otherwise it is not worth burdening Parliament with the legislation. The CLA's landlord/tenant survey last year suggested that retirement tenancies would have only limited effect and, by definition, over a long period. It is, therefore, disappointing that a recent joint statement by NFU, TFA, FUW and the Association of County Councils went no further than recommending an optional retirement clause. We doubt very much whether this prescription will pass the effectiveness test and we believe that a more radical approach is needed.
Concern has been expressed in some quarters that the position of existing tenants should be protected. That is quite understandable and I should like to reiterate what I said in last month's debate: all existing tenants should be reassured that no one is suggesting that their tenancies under the 1986 Act will be affected by any new system which may be introduced.
It is also clear that we need to consider how to enable tenants to diversify. Increasingly, tenants want to take advantage of new business opportunities and it should be possible as the norm for tenancy agreements in the future to allow for this. In this connection, I understand that the TFA has some ideas about a fixed-term but renewable rural business lease. It would be available as an alternative to a tenancy under the Agricultural Holdings Act. This adds a new and encouraging element to the debate. We shall be interested to learn more about it and hear industry reactions.
I recognise that there will be great difficulty in achieving a consensus on the way forward and I do not think there is any point in waiting for it. We tried that approach in 1984 and it did not work. One
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possibility is to approach the problem the other way around by first finding an effective solution and then considering what safeguards need to be built in. These would be safeguards for the landowners, the tenants and the land. We could also see what can be learned from experiences outside agriculture, for instance, through the application of the Landlord and Tenant Act.
Smallholdings authorities have, since 1979, had the freedom—and here I hope that I am answering the point made by the noble Lord, Lord Gallacher—to retain or dispose of any interest in land which they own, including smallholdings. This is a freedom which they have exercised to varying degrees over the past few years in the light of their own assessment of the most efficient methods of managing their estates. In some cases the decision has been taken to sell some land in order to finance the upgrading of other parts of the estate; in other cases the money generated by such sales has been earmarked for projects which will benefit the rural community as a whole. In all such cases, I believe it is right that the decision should be made by the local authority, which is best placed to judge the implications, financial and otherwise, of its actions. Furthermore, those holdings which are sold will not necessarily go out of agriculture or be lost to the tenanted sector.
I think that I have said enough about that. Let me return to the legislative problems of today. The Bill presented by the noble Lord, Lord Mackie of Benshie, addresses a small but important aspect of the agricultural holdings legislation—one where everyone thought that there was no problem prior to the Bell v. McCubbin ruling in the Court of Appeal last July. The extent of the loophole revealed by the ruling has not been tested in the courts, but it has caused considerable concern to tenants. They fear it could have widespread implications and reduce their security of tenure. Although the repercussions of the ruling are likely to be much more limited than has been suggested, we understand the tenants' concerns and we recognise the spirit behind the Bill.
Like my honourable friend in another place I was, therefore, pleased that officials within my department and parliamentary counsel were able to help in defining the original text while the Bill went through its stages in another place. The amended Bill before your Lordships' House will, it is to be hoped, make absolutely clear the circumstances when an incontestable notice to quit can be served where land is to go for a use other than agriculture. I very much hope that this will reassure tenants. I wish the Bill a smooth passage through this House.
8.54 p.m.
Lord Mackie of Benshie: My Lords, I thank all speakers who have taken part in the debate. I also thank the Minister for wishing the Bill a fair wind. I should like to spend half an hour discussing the whole issue but, as the Minister is busy and I am hungry, I shall confine myself to saying that this is a sensible little Bill. The trouble with security of tenure arises when it turns into stagnation. To a large degree security of tenure is still necessary for

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good farming. Having said 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.
House adjourned at five minutes before nine o'clock.

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