Sitting of 17 August 1991

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

    LONDON UNDERGROUND (SAFETY MEASURES) BILL [Lords] (By Order)
    Order for Third Reading read.
    To be read the Third time tomorrow.

    LLANELLI BOROUGH COUNCIL (BURRY PORT HARBOUR) BILL [Lords]
    Ordered,
    That the Promoters of the Llanelli Borough Council (Burry Port Harbour) Bill [Lords] shall have leave to suspend proceedings thereon in order to proceed with the Bill, if they think fit, in the next Session of Parliament, provided that the Agents for the Bill give notice to the Clerks in the Private Bill Office of their intention to suspend further proceedings not later than the day before the close of the present Session and that all Fees due on the Bill up to that date be paid;
    Ordered,
    That, if the Bill is brought from the Lords in the next Session, the Agents for the Bill shall deposit in the Private Bill Office a declaration signed by them stating that the Bill is the same, in every respect, as the Bill which was brought from the Lords in the present Session;
    Ordered,
    That, as soon as a certificate by one of the Clerks in the Private Bill Office, that such a declaration has been so deposited, has been laid upon the Table of the House, the Bill shall be deemed to have been read the first and shall be ordered to be read a second time;
    Ordered,
    That the Petitions against the Bill presented in the present Session which stand referred to the Committee on the Bill shall stand referred to the Committee on the Bill in the next Session;
    Ordered,
    That no Petitioners shall be heard before the Committee on the Bill, unless their Petition has been presented within the
    334
    time limited within the present Session or deposited pursuant to paragraph (b) of Standing Order 126 relating to Private Business;
    Ordered,
    That, in relation to the Bill, Standing Order 127 relating to Private Business shall have effect as if the words 'under Standing Order 126 (Reference to committee of petitions against Bill)' were omitted;
    Ordered,
    That no further Fees shall be charged in respect of any proceedings on the Bill in respect of which Fees have already been incurred during the present Session;
    Ordered,
    That these Orders be Standing Orders of the House.—[The First Deputy Chairman of Ways and Means.]
    Message to the Lords to acquaint them therewith.

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

Oral Answers to Questions
  SCOTLAND

    Housing Finance, Glasgow
    Mrs. Fyfe: To ask the Secretary of State for Scotland what is his total consent for Glasgow district council to meet capital expenses on the non-housing revenue account block of housing in 1991–92; how much of that total he requires the council to borrow, and at what anticipated rate of interest; and how much he expects to be raised from (a) the disposal of capital assets, (b) the repayment of principal on loans, (c) insurance claims, (d) leases in specified categories and (e) any other non-HRA receipts.
    The Parliamentary Under-Secretary of State for Scotland (Lord James Douglas-Hamilton): The gross non-H RA allocation issued to the City of Glasgow district council for capital investment in private housing in 1991–92 is £24·1 million. Estimated non-HRA capital receipts in 1991–92 are £766,000, all of which is expected to be generated by the repayment of principal on loans. Capital receipts from other sources are estimated to be nil. Details of the extent, terms and conditions of proposed borrowing by the council in 1991–92 are not held centrally.
    Mrs. Fyfe: Will the Minister explain why, when Glasgow district council, the housing associations and the co-operatives have been so successful in restoring Glasgow's tenements, the permission to borrow money is limited to £24 million this year when even four years ago it was £55 million? Does he realise that, as a result, no fewer than 1,500 tenement owners have been turned down by the council for repair grants this year and the housing associations' programmes are being held up irrevocably until the problem is solved? Will the Minister commit himself to improving those resources forthwith?
    Lord James Douglas-Hamilton: I am aware of the problems in Glasgow that the hon. Lady mentions. Similar problems arise in Edinburgh. They will be borne in mind and if there is a possibility of making supplementary allocations later in the year, the points that she made will be fully considered. About £500 million has been spent by housing associations in Glasgow, which is almost half the total for Scotland. That has made an enormous impact on the tenements in the hon. Lady's constituency as well as elsewhere in Glasgow. In addition, 40 per cent. of the housing support grant is spent in Glasgow, so Glasgow receives the lion's share of the funding.
    Mr. Nigel Griffiths: The Minister mentioned Edinburgh. Will he come clean with the House and the people of Edinburgh and admit that hundreds of homeowners are on the waiting list for repair grants? Why does not the Minister put his money where his mouth is and clear that backlog?
    Lord James Douglas-Hamilton: We allocated to Edinburgh district council £8·25 million for this year to enable the repairs grant backlog to be cleared. That was precisely the sum requested by the district council. We later discovered that the estimates were inaccurate, in contrast to those given by Glasgow officials. We shall bear in mind the points that the hon. Gentleman makes.

    Infertility Treatment
    Mr. Thurnham: To ask the Secretary of State for Scotland what are the in vitro fertilisation success rates in Scottish hospitals; and if he will make a statement.
    The Minister of State, Scottish Office (Mr. Michael Forsyth): The Interim Licensing Authority publishes information on a United Kingdom basis about the outcome of in vitro fertilisation treatment programmes in its annual reports.
    Mr. Ernie Ross: On a point of order, Mr. Speaker.
    Mr. Speaker: What has arisen as a result of what the Minister said?
    Mr. Ernie Ross: Can we honestly start Scottish questions without a single Scottish Tory Back-Bench Member being present?
    Mr. Speaker: That is not a matter for me.
    Mr. Forsyth: Perhaps I may repeat the answer. The Interim Licensing Authority publishes information on a United Kingdom basis about the outcome of in vitro fertilisation treatment programmes in its annual reports. That information is grouped according to the number of treatment cycles attempted by each clinic.
    Mr. Thurnham: I hope that the success rates will be published. We can all take pride in the fact that Britain leads the world in this area. Will my hon. Friend press for strict control of costs in the new licensing authority? Surely £1 million should be enough for the budget in the first year if clinics are paying half the costs.
    Mr. Forsyth: I agree with my hon. Friend about the quality of the work being done in this area in the United Kingdom. I will certainly ensure that his point about the publication of the information is drawn to the attention of the authority. I share his views that it is important that the costs of the authority are kept well under control, because, as he points out, half the costs will need to be met through licensing fees, which are raised by the authority.
    Dr. Godman: Will the Minister give the House an assurance that no married couples will be denied access to such treatment because of where they live in Scotland? Does he agree that there should be equality of access to such treatment?
    Mr. Forsyth: I hesitate to make too much of a habit of agreeing with the hon. Gentleman at Scottish questions. As he knows, provision is made according to health boards and the priorities that they set for this service, particularly IVF services. I think that the hon. Gentleman is pressing me to consider the need for an overall Scotland approach to the provision of these services and I am happy to undertake to look at that matter later this year, once I have had the results from an in-house working party which is considering the question.

    Strathclyde (Finance)
    Mr. Michael J. Martin: To ask the Secretary of State for Scotland when he will next meet Strathclyde region to discuss its financial situation; and if he will make a statement.
    Mr. McAvoy: To ask the Secretary of State for Scotland what plans he has to meet representatives of Strathclyde regional council to discuss the council's financial position.
    The Parliamentary Under-Secretary of State for Scotland (Mr. Allan Stewart): The leader of Strathclyde regional council was among representatives of the Convention of Scottish Local Authorities whom I met on 8 July to discuss local government finance issues.
    Mr. Martin: The Minister will know that at that meeting Strathclyde conveyed that it used to cost £8 million to collect the rates and that it collected 90 per cent. of them, whereas it is costing £28 million to collect the poll tax and there is a shortfall of £70 million. Does he agree that Strathclyde is a responsible local authority? It has embarked on advertising campaigns to try to get the revenue in. How will the Minister resolve the problem and assist Strathclyde to get the £70 million?
    Mr. Stewart: A slowdown in payment levels was inevitable while re-billing took place to reflect the £140 reduction in the headline community charge. Strathclyde issued its revised bills for 1991–92 [Interruption.] [HON. MEMBERS: "Hear, hear."] I am grateful to hon. Members for cheering this important information about Strathclyde regional council. I shall repeat it. Strathclyde issued its revised 1991–92 bills only in mid-June. I assure the hon. Gentleman that we have taken full account of the cash flow position and that Strathclyde regional council and the district councils in Strathclyde have received front-loaded grant payments of £125 million—that is extra grant that they would not otherwise have received until the end of June.
    Mr. McAvoy: Strathclyde is facing a financial crisis due to the administrative nightmare of collecting the poll tax. I remind the Under-Secretary of State that the Prime Minister himself said that the poll tax was uncollectable. Does the Under-Secretary accept that he and his Government are responsible for the crisis facing local authorities and will he at least try to ease the burden on councils and people by abolishing the 20 per cent. contribution?
    Mr. Stewart: The House has taken a view on this matter and the legislation stands. The authorities have a statutory duty to collect outstanding charges and they have a wide range of powers available to them to do so. I remind the hon. Gentleman that the report of the Public Accounts Commission confirmed the view that authorities have not made full and effective use of their powers.
    The House must ask why it is that some authorities, for example Grampian, Fife and Central—all Labour controlled—have collected more than 90 per cent. of their budgeted income for 1989 and more than 85 per cent. for 1991. Unfortunately, those figures have not been repeated by other councils.
    Mr. McKelvey: Nevertheless, will the Minister believe me when I tell him that I have just had a panic phone call from my secretary in Kilmarnock to tell me that she is inundated with people telephoning and sending letters because they are desperately worried about the poll tax and the new figures that have just been produced? That anxiety is particularly felt by the elderly. Can the Minister
    338
    advise the House and me, so that I can advise those people, about precisely what the formula means for the reduction scheme? For a single person household the formula is:

    B—(S+£52)

    For multiple persons it is:

    (B x C—(S+ [(C — 1) x £52])

    All that followed by the poll tax.
    Mr. Stewart: I am very sorry to learn that the hon. Gentleman is receiving panic phone calls, particularly over such a simple, straightforward formula. These are matters for the community charge registration officer, but if the hon. Gentleman is in any doubt about some of the details of the formula I shall be happy, of course, to arrange a meeting with him when I can explain it to him further.
    Mr. Maxton: When will the Minister accept that it was he and his Government who created the shambles of the poll tax and that it is he and his Government who have the responsibility to clear up the mess that they created? They should stop trying to pass the buck on to everyone else but themselves.
    Will the Minister take two immediate courses of action? First, will he now explain to the House why, if it is right to abolish the 20 per cent. payment for the new tax, it is wrong to abolish that payment now? Secondly, will he accept his own liabilities in terms of the tax by paying to Strathclyde region and other regional authorities £140 for every person eligible to pay the poll tax and not just £140 for those who have paid it?
    Mr. Stewart: On the hon. Gentleman's first point, the 20 per cent. rule will not apply to the new tax. I have told the House repeatedly that that is a new tax and that the existing legislation stands for the present tax. The hon. Gentleman should start asking why the collection levels vary so much throughout Scotland.
    On the hon. Gentleman's final point, I recognise that COSLA desires that the community charge grant should be based on an authority's original payment assumptions rather than on the actual collection rate. I assure the hon. Gentleman that we shall take that into account when we are considering the arrangements for finalising grant payments.

    Lanarkshire Economy
    Mr. Tom Clarke: To ask the Secretary of State for Scotland what specific objectives the Government have in mind for the regeneration of Lanarkshire's economy.
    The Secretary of State for Scotland (Mr. Ian Lang): Our objective for the regeneration of Lanarkshire's economy is the creation of new jobs in Lanarkshire. That will best be done by increasing private sector investment in the area.
    Mr. Clarke: Since not a word of that answer was new, will the Secretary of State tell us precisely what Scottish Enterprise is doing to encourage the establishment of the paper recycling plant at Gartcosh? What action is the Scottish Office taking on the great problem of derelict land in Monklands district? What is the Scottish Office doing about the need to reinvigorate land for industry and about training and transport links? In view of the devastation that we are witnessing in Monklands, Strathkelvin and Lanarkshire generally, will the right hon. Gentleman encourage the Prime Minister to respond to the request from my right hon. and learned Friend the Member for

    339
    Monklands, East (Mr. Smith) and agree to a meeting with my Lanarkshire colleagues, if necessary before the recess, so that we can establish urgently that Lanarkshire will see the difference between action and mere rhetoric?
    Mr. Lang: Action is precisely what Lanarkshire development agency is embarked on with the full support of, and resources provided by, the Government. Some 16 sites that have been identified for immediate action can now be proceeded with as a result of the working group report and the funds made available by central Government. This year, we have made available to district councils £4 million of capital consents for factory building, and £3·9 million, including allowances, for training—about which the hon. Gentleman also asked—has been added to Lanarkshire Development Agency's baseline budget. The hon. Gentleman will know that we are looking closely at the transport problems and have asked Strathclyde to carry out an urgent study of the A8–M8 arrangements with a view to improving the infrastructure in Lanarkshire.
    Mr. Speaker: I call Sir Nicholas Fairbairn.
    Hon. Members: Hear, hear.
    Sir Nicholas Fairbairn: I hope that I can ask as many questions as I have had cheers. I am grateful for those cheers.
    Before we get into the "fantasie" that Lanarkshire has suffered under this Government. I remind the House of the great advances that have been made at Hamilton with the great country park and at Chatelherault; the regeneration of the entire city centre of Glasgow; and the enormous investment that has been made in Lanarkshire by new as opposed to out-of-date industries.
    Mr. Lang: My hon. and learned Friend is absolutely right to draw attention to those important environmental improvements and he could have drawn attention to many more. The House might also like to know that one in five of the substantial number of inward investments brought to Scotland in the past decade has gone to Lanarkshire. More than 100 new manufacturing enterprises have started in Lanarkshire since the Government came to office.
    Mr. Worthington: When will the Government act to solve the growing crisis in youth training and employment in Lanarkshire and rest of Scotland? This year in Strathclyde, there has been a 62 per cent. fall in the number of job offers, and youth training places have been cut by 4,000. In almost all of Scotland there has been a similar fall. In Lanarkshire it is particularly severe. It is estimated that there will be between 1,300 and 1,500 fewer youth training places this year. There has been a massive fall in the number of youth training places. The Government cut the youth training budget by nearly 20 per cent. this year. When will they restore those cuts in youth training in Lanarkshire and elsewhere?
    Mr. Lang: I have already given the hon. Gentleman the figures for the Lanarkshire development agency's resources, which have been added to its baseline budget for training. As for youth training and employment training generally, the hon. Gentleman knows that we have created vast new resources and schemes for training which were unheard of under the last Labour Government. He also knows that there was a 20 per cent. underspend on the
    340
    employment training budget last year. We are spending about five times more than the last Labour Government on training.

    Dental Anaesthetics
    Mr. Canavan: To ask the Secretary of State for Scotland whether he will now take steps to ensure adequate safety standards for children who receive a general anaesthetic for dental surgery.
    Mr. Michael Forsyth: I share the hon. Gentleman's concern about the risks associated with general anaesthesia, especially in children's dentistry. I hope that we will be in a position to issue further guidance shortly.
    Mr. Canavan: In view of recent incidents, including the tragic case of four-year-old Jenna Smith, who died after receiving a general anaesthetic in a dental surgery in Falkirk, and the evidence at the fatal accident inquiry that the anaesthetic equipment and the drugs available were out of date, will the Minister bear in mind the reported comments of Dr. Donald Braid—Scotland's top specialist in anaesthesia—that too many dentists are trying to administer anaesthetics on the cheap? Will the Minister intervene to stop the practice of administering general anaesthetics without adequate equipment and training and provide facilities in general hospitals for the administration of general anaesthetics for dental patients who require it, especially young children?
    Mr. Forsyth: I understand that at the fatal accident inquiry the sheriff determined that Jenna's death was the result of a rare blood disorder and that no blame attached to either the dentist or the consultant anaesthetist. On the provision of facilities in hospital, I am sure that the hon. Gentleman will be delighted to know that it is proposed to have facilities in Falkirk by the turn of the year.
    Mr. Dickens: Does my hon. Friend agree that many children in Scotland, and indeed throughout the world, are nervous when they go to the dentist—welcome to the club, because I think that we all are? Does he agree that the days of gas, when parents sat in an anteroom listening to their children screaming next door, have gone and that anaesthetics are much more sophisticated these days? However, in the light of the sad tragedies that have happened throughout the United Kingdom—I am not referring to the one mentioned earlier—will my hon. Friend ensure that urgency is attached to issuing the new guidelines and ensuring that they are strictly adhered to?
    Mr. Forsyth: My right hon. Friend the Secretary of State for Health has taken the lead on that matter and I am sure that he will want to move as speedily as possible. My hon. Friend the Member for Littleborough and Saddleworth (Mr. Dickens) is right to draw attention to the importance of the matter. In dentistry, particularly children's dental health, we are trying to put more effort and resources into prevention. As a result of the new contract for dentists, I believe that children's dental health will improve and the need for extractions and treatment of the sort requiring anaesthesia will be much reduced.
    Mr. Harry Ewing: Is the Minister aware that the dental surgery in question was in my constituency? Will the Minister condemn the practice of using drugs and other materials which, in that case, were not just marginally out

    341
    of date, but years out of date? Will the Minister issue a circular to dentists to ensure that when a drug becomes out of date it is returned either to the health board or the manufacturer and in no circumstances is used on patients? If he did so, he would be doing a favour to everyone who uses dentists.
    Mr. Forsyth: It would not be right for me to comment on that case. There was a fatal accident inquiry, which concluded that the death was the result of a rare blood disorder; it would he wrong for me to go beyond that. I shall certainly draw the hon. Gentleman's general point about the use of time-expired drugs to the attention of officials in the Department and write to him.

    Sunday Trading
    Mr. John Marshall: To ask the Secretary of State for Scotland how many representations he has received in the last six months about the law in respect of Sunday trading in Scotland.
    Lord James Douglas-Hamilton: In the past six months, letters from two people have been received advocating the imposition of restrictions on Sunday trading in Scotland.
    Mr. Marshall: Does my hon. Friend accept that the fact that so few people have written in suggests that the vast majority of Scottish people are satisfied with the present law, under which there are no restrictions on Sunday trading? Does he agree that it is high time that the people of England enjoyed similar benefits? Is he aware that in 1986, 43 Scottish Labour, SNP and Liberal Members voted against the people of England enjoying benefits similar to those in Scotland? Does not it illustrate the humbug talked by those hon. Members?
    They object to English Members coming to Scottish Question Time, but are willing to vote on legislation that affects the people of England and Wales.
    Lord James Douglas-Hamilton: My hon. Friend is correct that the current arrangements in Scotland are operating satisfactorily. The hon. Member for Falkirk, East (Mr. Ewing) introduced the original Bill on licensing, the terms of which were warmly welcomed. It was supplemented with recent measures in the Law Reform (Miscellaneous Provisions) (Scotland)—Act 1990. There is one minor exception to the Sunday trading laws in Scotland which relates to hairdressers and barbers. The point made by my hon. Friend the Member for Hendon, South (Mr. Marshall) is, in the first instance, a matter for the Home Secretary and, ultimately, as far as it relates to England and Wales, for the House of Commons. The House will have noted what my hon. Friend said.
    Mr. Foulkes: I was one of the Members who voted against the wholesale extension of Sunday trading to England because at present Sunday trading in Scotland is fairly limited. If it were extended to England it is believed that all the multiples throughout the United Kingdom would open. If the retail trade presented a compromise proposal for limited opening—and such a proposal is being discussed—some Opposition Members and some Conservative Members might be willing to reconsider the issue.
    Lord James Douglas-Hamilton: Sunday trading in Scotland is limited to areas in which the communities have
    342
    made it clear that Sunday opening is welcome. There has been considerable sensitivity to the wishes of the communities concerned. I think that the majority of people take the view that collecting a bottle of milk or a newspaper on Sunday from the local shop does not impair the sanctity of the Sabbath.
    Miss Emma Nicholson: I am delighted to hear the Minister say that there are some sensitivities in Scotland on Sunday trading. As I have significant Scottish blood stretching back over 980 years, I am glad to have the opportunity to express the views of people in western Scotland. Does the Minister agree that the success of Sunday trading in areas of Scotland where people want it is due to the exceptional economic boom in Scotland under a Conservative Government?
    Lord James Douglas-Hamilton: I agree with my hon. Friend that we have brought substantial economic advantages to Scotland. I welcome her view, especially as a few days ago in Glasgow city chambers she made a good speech on behalf of ADAPT, access for disabled people to arts premises. These issues should be borne in mind, and I have no doubt that in due course the House will wish to consider them.

    Convention of Scottish Local Authorities
    Mr. Harry Ewing: To ask the Secretary of State for Scotland what plans he has to meet with COSLA to discuss the financial position of Scottish local authorities.
    Mr. Lang: My hon. Friend the Minister with responsibility for industry and local government in Scotland met the Convention of Scottish Local Authorities on 8 July, and I hope to meet the president later this month.
    Mr. Ewing: In a constructive vein, may I suggest to the Secretary of State a way in which he could help some Scottish local authorities to develop their spending programmes? He could ensure that funds from the European regional development fund for coal mining communities, which have suffered as a result of the demise of the coal industry, are released to areas such as Central region. Will he use his powers under the Local Government Acts to set aside the spending limits imposed on such authorities so that they may accept money from the ERDF and get on with their planned programmes?
    Mr. Lang: The hon. Gentleman was a member of a Government—a comparatively rare event nowadays for members of the Labour party—and therefore knows the importance of managing public expenditure in a way that ensures that there is no overspend giving rise to the danger of increasing inflation. The Government have been extremely successful in securing grants for Scotland from the various European funds. About £1·25 billion has been secured for Scotland over the years, and we shall continue to be as effective and successful as we can in taking advantage of all the funds that are available for Scotland.
    Sir David Steel: Has the Secretary of State yet made a total assessment of the cost to Scottish local authorities and, therefore, to the Scottish people of the poll tax fiasco—the introduction of the tax, the score or so of amendments and its abolition and replacement? If he has

    343
    made that assessment, will he produce the figure so that everybody will know the total cost of the Government's incompetence?
    Mr. Lang: As the right hon. Gentleman knows, the poll tax exists to raise resources for spending by local authorities. The fact that those authorities now have to raise more than they did a few years ago shows that local authorities have continued substantially to increase their spending, despite substantially increased grants from the Government. Let us hope that the council tax is more effective in controlling high spending.
    Mr. Bill Walker: Does my right hon. Friend find it astonishing that Scottish local authorities should claim that they are strapped for cash and are having to cut programmes while at the same time they are able to invest large sums? Does he agree that highly paid officials are responsible for investments, especially when they are bad investments?
    Mr. Lang: I certainly agree with my hon. Friend that local authorities should control their public expenditure programmes in accordance with the resources available to them. To some extent, that depends on their efficiency in using the powers that are available to them to collect local taxation.
    Mr. Macdonald: I understand that Scottish Office officials will be meeting the Western Isles council later this week to discuss the financial crisis in which that council finds itself. Notwithstanding the Government's general policy on the collapse of BCCI, will the Secretary of State instruct his officials to take as constructive and as positive approach as possible in discussions with the Western Isles council so that we can find some way of resolving the crisis without the full burden falling on ordinary people in the Western Isles who had no part in the decision which led to the crisis—the schoolchildren, the old folk and others who still have to rely on council services?
    Mr. Lang: Of course I understand the hon. Gentleman's great concern about the circumstances of the Western Isles council. My officials have been in touch with the council and they have also had meetings with the three other district councils affected by the closure of BCCI. We shall examine carefully any proposition put to us by the Western Isles council, but I must emphasise that the responsibility for what has happened lies with the council, not with the Government, and there can be no question of the Government stepping in to bail it out.
    Mr. Burns: Will my right hon. Friend reiterate, and make plain his views to English Ministers, that there can be no question of the Government's bailing out the foolish local authorities that invested their money in BCCI in order to make what they hoped would be a quick buck?
    Mr. Lang: I understand my hon. Friend's concern about the matter. He will have heard what I have said and what my right hon. Friend the Prime Minister said last week on the subject.
    Mr. Wilson: In spite of the rather unsubtle blandishments that the Secretary of State will receive from his hon. Friends, such as those from the hon. Member for Chelmsford (Mr. Burns), will he act in this matter with some social compassion and concern for the people who will ultimately be the victims of what has happened? Does
    344
    he accept that it is unreasonable to expect that if highly paid officials—as the hon. Member for Tayside, North (Mr. Walker) referred to them—of the Bank of England and the Department of the Environment cannot spot any rottenness in a financial institution when they are sitting in the heart of London, it is just a little more difficult for local authority officials in far-flung parts of Scotland to do so? Will he particularly bear in mind that single-tier authorities, by their nature, although covering small populations, have heavy financial burdens because they are responsible for social work, education and so on which would usually be the preserve of regions? In other contexts, that may be a good thing, but in this case it has exposed the council, and, more importantly the people of the Western Isles, to a disproportionate budget. In short, will the Minister not close any doors and deal with the matter as humanely, sympathetically and understandingly as is possible?
    Mr. Lang: The hon. Gentleman will be aware that the Bank of England's powers are based on statute. It acted at the appropriate time and at the earliest possible time that it could have acted. With regard to the Western Isles council, I have nothing to add to what I have already said in answer to the hon. Member for Western Isles (Mr. Macdonald).

    Employment Initiatives
    Mr. Ernie Ross: To ask the Secretary of State for Scotland what initiatives he intends taking to reduce unemployment in Scotland.
    Mr. Strang: To ask the Secretary of State for Scotland whether he plans any new measures to reduce unemployment.
    Mr. Allan Stewart: My right hon. Friend the Secretary of State recently announced a package of measures amounting to some £40 million to help unemployed people in Scotland back to work. That is on top of the substantial funding for Scottish Enterprise, Highlands and Islands Enterprise and the local enterprise companies, which is already more than £½billion in the current year. In the final analysis, it is a productive economy which provides new jobs and we are vigorously removing barriers to economic growth.
    Mr. Ross: As the Minister has identified the need for industry to be healthy and given the drubbing that he and the Secretary of State for Scotland took yesterday in the Scottish Grand Committee, I am sure that the House will think that they should have read the proceedings of that Committee and come forward with a better response. Will we have to wait until the Prime Minister comes to the House on Friday to report on the G7 meeting to see some stimulus for investment given Scotland's heavy reliance on capital goods?
    Mr. Stewart: I was not able to respond to all the points made by the hon. Gentleman in that debate because he did not sit down until about nine minutes to one. I am disappointed in his supplementary question. I thought that he would say how pleased he was that General Accident has invested £3·75 million in an office complex in the Dundee technology park in his constituency which will result in 350 locally recruited jobs. That is just one example of the health and dynamism of the Scottish economy.
    Mr. Strang: Is the Minister aware that the Secretary of State's recitation in the Scottish Grand Committee yesterday of selective, spurious statistics about the Scottish economy demeans the debate about Scotland? Everyone who lives in Scotland knows that unemployment there is serious and getting worse. The Secretary of State partially excuses the run down in the steel industry on the ground that heavy engineering, shipbuilding, car manufacturing at Linwood, and vehicle production at Bathgate have all been closed—but that was done by the present Government. It is now wholly unacceptable for them to shut down the steel industry itself, because that will make it impossible to attract steel-using industries back to Scotland.
    Mr. Stewart: The Government do not propose to shut down the steel industry in Scotland and, as Labour does not propose to nationalise it, a Labour Government would have no power to intervene either. I draw the hon. Gentleman's attention to the fact that the number employed in business and financial services—which are of great importance to Edinburgh, where the hon. Gentleman himself represents a constituency—increased by 50 per cent. since 1979. Between 1986 and 1989 the Scottish economy grew by about 12 per cent., which contrasts markedly with the miserable average growth rate achieved under the last Labour Government of less than 1 per cent.
    Mr. Andy Stewart: Does my hon. Friend the Minister agree that if Labour's plans for a minimum wage were implemented, it would have a catastrophic effect on employment in Scotland?
    Mr. Allan Stewart: My hon. Friend is absolutely right, and a whole list of independent commentators agrees with him.
    Mr. Wilson indicated dissent.
    Mr. Stewart: Does the hon. Gentleman want me to read out the list, because it is quite long? Gavin Laird, who I understand is greatly respected by Labour Members, described Labour's proposals for a national minimum wage as "a nonsense". He said:
    "It has never worked in the past. There is no logic for it. It does not work in any other country, and it will certainly not work in Great Britain."
    Labour could do the unemployed a great service by heeding Gavin Laird's wise words.
    Mr. Dewar: How can the Minister ignore the fact that when the Conservatives came to power, unemployment in Scotland—comparing like with like—was 140,000, but is now 220,000 and rising? How can the Minister be so criminally complacent, when already this year another 20,000 Scots have joined the dole queue? In the last six months, bankruptcies in Scotland have risen by 80 per cent., and liquidations by more than 50 per cent. Has the hon. Gentleman forgotten the hammer blows dealt to the Scottish steel industry, and yesterday's grim news that 900 jobs are to go at Rosyth and that 1,000 naval personnel there are to be withdrawn? When will the Government learn that problems cannot be solved by pretending that they do not exist?
    Mr. Stewart: Over the past 10 years, the number of companies in Scotland has increased by 25,000, or by 68 per cent.—[Interruption.] Just listen. Every independent
    346
    commentator has pointed out that Scotland is coming through the present economic downturn—and yes, there is an economic downturn—relatively well.
    Mr. Dewar indicated dissent.
    Mr. Stewart: I refer the hon. Gentleman to Cambridge Econometrics and to the Fraser of Allander Institute, which have conveyed the same message. I am not suggesting that there are no problems—of course there are. However, they would be a great deal worse if there were a Labour Government, who would allow local authorities to spend as much as they liked at the expense of business ratepayers. They would also be a great deal worse off if the hon. Gentleman's plans for a Scottish Assembly with tax-raising powers were imposed on the Scottish people, and if Labour imposed a statutory national minimum wage. That could cost Scotland as many as 174,000 jobs.

    Greater Glasgow Health Board
    Mr. Watson: To ask the Secretary of State for Scotland when he intends to meet the Greater Glasgow health board to discuss the board's underspend on salaries for the year ending 31 March.
    Mr. Michael Forsyth: The Greater Glasgow health board is the best-funded health board in Scotland. Its record on patient care and financial management is excellent.
    Mr. Watson: According to the board's own figures, there was an underspend of more than £5 million in the salaries bill for the year ending 31 March 1991. How can the Minister reconcile that with the board's record of driving down staff costs by a variety of means—including delaying regrading exercises for technicians and nurses, and, when it gets round to regrading them, placing them on lower grades than other health boards would? The board has also delayed the filling of vacant posts, sometimes not filling them at all. As a result, the Richmond Park special needs school, which is in my constituency, does not have enough speech and occupational therapists to teach children with problems.
    Will the Minister remind the Greater Glasgow health board of its duty to deliver services efficiently to the people of Glasgow, and to ensure that it fully utilises its already inadequate resources to that end?
    Mr. Forsyth: The hon. Gentleman will recall that he was told in May about the background to the position that has arisen in the school. It has nothing to do with financial circumstances, and everything to do with circumstances resulting from—if I remember rightly—maternity leave.[Interruption.] I was talking about the school. As for the hon. Gentleman's point about speech therapists, he will know of the initiative that we have taken. That initiative—which affects all health boards, not just the Greater Glasgow health board—will provide for a system of contracts between health boards and education authorities.
    The hon. Gentleman mentioned a 5 per cent. underspend on salaries. He might also have mentioned the additional money committed by the board for services and supplies. Boards are allowed to carry over up to 1 per cent. of their total spending from one financial year into the next. That is what Greater Glasgow health board has

    347
    done, no doubt in order to fund some of the splendid improvements in service from which the Glasgow people will benefit in the coming year.
    Mr. David Marshall: Is it not an absolute scandal that the board should have such an underspend on salaries when, for example, the ophthalmic surgery waiting list for patients in the east end of Glasgow is in a sorry mess? In a letter sent to me only this week, the chairman of the board told me how long the three categories of patients were having to wait. Urgent cases must wait for up to three months, "soon" cases for 12 to 18 months and routine cases for 18 months to two years.
    Should not the board have used some of that underspend to employ additional ophthalmic surgeons to treat people with eyesight problems—or does the Minister feel that such problems do not deserve to be given priority by either the Government or the board?
    Mr. Forsyth: If the hon. Gentleman had been listening, he would have heard me say that the underspend was part of the money that is being carried forward into this year's budget. As the Government are setting targets on waiting times which are to be agreed with all health boards, including the Greater Glasgow health board, the board will be able to deploy the money to achieve the quality of service that we are determined to see.
    I agree with the hon. Gentleman: if the information that he has given is accurate, the position is unacceptable, and the board will certainly not meet the target set for it.
    Mr. Galbraith: Does the Minister not realise that the reason why the Greater Glasgow health board is having to carry over £5 million from last year's budget is the need partly to offset the £13 million cuts required in this year's budget? Is he aware that the board itself predicts that it will require cuts of £40 million in the next two years? That can lead only to a significant deterioration in patient care.
    The Minister's chief executive has already met the board, and dismissed its request for additional funds. Will the Minister himself now meet the board to discuss the crisis and avert further damage to the health service in Glasgow and the surrounding area?
    Mr. Forsyth: I am sure that everyone who lives in Paisley, Ayr and the surrounding areas of Glasgow will be interested to learn that Labour policy apparently does not support the idea that money should follow patients out to the new hospitals that we have built in those areas to reflect the movement of population. The hon. Gentleman knows full well that resources are being transferred to boards that have been population-gainers and that those boards have benefited from the brand-new hospitals that the Government have built. The Government believe that care should be available where people are and that money should follow the patient. The hon. Gentleman is making a debating point which is unworthy of anyone who seeks to sit on the Government Benches.

    British Steel
    Mr. Salmond: To ask the Secretary of State for Scotland what recent meetings he has had with the chairman of British Steel to discuss investment in Scottish plants.
    Mr. Lang: I last met the chairman of British Steel on 4 June this year.
    Mr. Salmond: Now that the Secretary of State for Scotland has finally come out to play on this question after dodging his responsibilities for the last two weeks, will he confirm the contents of the Scottish Office briefing note, which I have in my hand, which says that he was briefed to go to a meeting on 4 June, knowing of the anticipated closure of the Dalzell plate mill, and to say, in response to the chairman of British Steel, that it was entirely a matter for him, subject to competition law? All that was simultaneous with the Prime Minister's letter of support to the Dalzell shop stewards. How does the Secretary of State for Scotland reconcile that public posture of support with the private reality of sell out?
    Mr. Lang: Over the last two weeks the hon. Gentleman has repeatedly and authoritatively attributed to me words that I did not use and has based upon them a number of deeply offensive remarks. I have now ascertained that the words that the hon. Gentleman has attributed to me derive from a briefing for another Minister. The other Minister is a Minister in another Department. The words in question were not said by that Minister. The briefing in question was not submitted to that Minister. The meeting for which that briefing was prepared did not take place. I believe that the hon. Member for Banff and Buchan (Mr. Salmond) must have known that that was so. Therefore, he now stands exposed, caught out in a cheap and contemptible ruse. He was wrong about the briefing; he was wrong about the meeting; he was wrong about the Minister; he was wrong about the Department. I invite him to withdraw all the contemptible and unfounded allegations that he has made and to apologise.
    Dr. Bray: Is the Secretary of State aware that British Steel's plate mill strategy was to reject the cheaper option of developing the Dalzell works? Nevertheless, there are a few months during which British Steel will try to find the additional £300 million that is required for a new plate mill on Teesside before any contracts are placed. Will he therefore keep up the maximum pressure on British Steel, during the few months in which he will remain a member of the Government, to make sure that the cheaper and more effective option of developing the Dalzell works is fully considered? Will he extend his representations beyond the obviously lame duck chairman of British Steel, who only has a few months to go? Will he approach immediately the management of British Steel and discuss the issue?
    Mr. Lang: I do not know how right the hon. Gentleman is about the longevity of the chairman of British Steel's tenure of office, but he does not sound very confident about the likelihood of his own party's coming to office. He knows that British Steel will continue to need the products of Dalzell, subject to market conditions, for several years. It is likely that British Steel will continue to need the products of Dalzell beyond the present guarantee period—to the end of 1994. The hon. Gentleman also knows how hard my predecessor and I, and other Ministers in my Department, have sought to persuade British Steel of the desirability of locating their single plate mill at Dalzell. Furthermore, he knows that if any additional opportunities arise for us to put that case in an effective, successful and positive way, we shall take them.
    Mr. Dewar: Will the Secretary of State note that we are not interested in the endless pursuit of the unimportant, where the only aim appears to be to secure party political points at the expense of the industry? The Opposition expect him to continue to put every pressure that he can upon British Steel to reconsider its decision that the Scottish industry is not worthy of investment. We believe —and I understand that the Secretary of State for Scotland believes—that there is a very strong case for investment in Dalzell and Ravenscraig. In those circumstances, the Government should not throw in the towel and withdraw from the fight.
    May I also ask the Secretary of State to exert constant pressure regarding the offering for sale of redundant plant —redundant from the point of view of British Steel? He told the Select Committee on Trade and Industry that there had been expressions of interest in that plant. It would be a complete tragedy if people who might be interested in buying it were unable to pursue that interest.
    Finally, does the Secretary of State accept that we are particularly interested that there should be a decent, realistic and practical package to help the Lanarkshire economy to recover from its present troubles? The existing offer, totalling £29 million, does not meet that description.
    Mr. Lang: The hon. Gentleman will have heard my answer to the question asked by the hon. Member for Motherwell, South (Dr. Bray) which also answers his first point. As for the future of Lanarkshire, the hon. Gentleman will also be aware that the Lanarkshire working group produced a series of proposals to be developed over a period of years. We have already made substantial resources available sufficient to cover the immediate needs for the development of the working group's proposals. We have given an undertaking that Lanarkshire will feature highly in our priorities in the public expenditure round for the next financial year. I share the hon. Gentleman's wish for Lanarkshire's economy to be regenerated. It has already made considerable strides in the past few years towards diversification and a strengthening of its economic base. I should like that to continue and I have no doubt that the best chance for it to do so will be the return of a Conservative Government.

    Teachers
    Mrs. Margaret Ewing: To ask the Secretary. of State for Scotland what specific allocation of funding has been made to regional councils to increase the number and training of learning support teachers in the next academic session; and what was the position in the previous five years.
    Mr. Michael Forsyth: I have invited the Convention of Scottish Local Authorities to let me have its views on how we can improve learning support for the three Rs.
    Mrs. Ewing: Does the Minister recall that on at least three occasions in late February and in early March he made public statements to the effect that there would be an increase in learning support funding in the near future? Against the background of a rise in general reading standards does not the Minister think that it would now be appropriate before the start of the next academic year to state clearly what additional funding will be available in a much-needed and much-appreciated service?
    Mr. Forsyth: As I said to the hon. Lady, I have asked the Convention of Scottish Local Authorities to let me have its views on how we can best target resources for learning support. The hon. Lady said that she believed that there has been an improvement in reading standards. We are especially concerned about children who have difficulties with reading, writing and arithmetic, and I am ready to consider the proposals that the convention will make in the context of the proposals for primary testing on which we expect to make an announcement shortly.

    Government of Scotland
    Mrs. Ray Michie: To ask the Secretary of State for Scotland what representations he has received from the Campaign for a Scottish Assembly on the future government of Scotland.
    Mr. Lang: Representations on the future Government of Scotland from the Campaign for a Scottish Assembly are now reduced to a pre-printed postcard campaign.
    Mrs. Michie: As the majority of people in Scotland have made clear their demand for a Scottish Parliament, does not the Secretary of state demean his office by his reactionary attitude and does not he denigrate and insult the Scottish nation by implying that it is too poor and too stupid to look after its own affairs?
    Mr. Lang: I should never dream of making such a suggestion. The last time that the Scottish people were asked to pass judgment on whether they wanted an Assembly, they did not support the idea—only about one third voted in favour. As for the present opinion of the Scottish people, an authoritative Mori poll has shown that since June 1989 there has been a steady fall in support for a Scottish Assembly from 49 per cent. two years ago to 33 per cent. now. I hardly think that that is a ringing endorsement for a policy which happens to find favour with the hon. Lady.

    Local Government Finance
    Mr. Eadie: To ask the Secretary of State for Scotland what projections he has done of the estimated loss of revenue local authorities will suffer by uncollected poll tax; and if he will list his estimates for each regional council in Scotland.
    Mr. Allan Stewart: My right hon. Friend has made no estimates of the income which local authorities will lose through non-collection of the community charge. Charge collection is the responsibility of local authorities who have a wide range of recovery measures at their disposal.
    Mr. Eadie: The Government should make estimates of what is happening. The Minister must be aware that the Scottish Office is responsible for the absolute shambles of the poll tax in Scotland. More than 40 per cent. of the people who should pay it are not paying it and, despite what the Minister said, that will not change. Is not he aware that Scottish local government is reaching a crisis and that very soon councils might not be able to discharge their statutory obligations?
    Mr. Stewart: That is simply not the case. Local authorities have a statutory duty to collect outstanding charges. A wide range of powers are available to them. Again, I ask the hon. Gentleman and the House why some

    351
    authorities, such as Grampian, Fife and Central, have collected well over 90 per cent. of budget income for 1989–90 and more than 85 per cent. for 1990–91. The Convention of Scottish Local Authorities and the Scottish Office will jointly monitor the collection position in coming months.

    Aberdeen Royal Infirmary
    Mr. Doran: To ask the Secretary of State for Scotland what is the annual budget and total number of staff of the Aberdeen Royal infirmary.
    Mr. Michael Forsyth: Aberdeen Royal infirmary costs about £68 million a year to run and employs 2,346 staff.
    Mr. Doran: The Minister will be aware that the consultation period is under way. There is great apprehension because the consultation period is taking place during the local holidays and while Parliament is in recess. There are already signs of fundamental changes in the application that has been submitted to the Scottish
    352
    Office on the privatisation of the hyperbaric centre. Will the Minister consider an extension of the period of consultation to allow us to gather the facts on that change of plan? Failing that, will he give me an assurance today that factual questions will be answered by his Department and by the applicants?
    Mr. Forsyth: The hon. Gentleman is wrong to associate the decision in respect of the hyperbaric centre with the application for NHS trust status from Foresterhill. The decision on the hyperbaric centre was taken by the health board because it believed that it would result in more research and a better quality of care being available to divers in the North sea and to others.
    The consultation period has been set out clearly and the criteria by which the application will be judged are set out clearly. I am sure that Grampian health board will be happy to respond to requests for information from the hon. Gentleman. I have noticed that the hon. Gentleman's invitations to attend Labour party meetings have been circulating in the internal mail of the health board—a matter which I very much deprecate.

Naval Support (Changes)
3.31 pm
The Secretary of State for Defence (Mr. Tom King): With permission, Mr. Speaker, I should like to make a statement about the Government's intentions for rationalisation of the Royal Navy support arrangements. The Government—
Mr. Robert Hughes: Apologise for yesterday.
Mr. King: If anybody has to apologise—[HON. MEMBERS: "It is you."] Many hon. Members know that I have asked to make a statement. I was told that it was not for the convenience of the Opposition. I was ready to answer a private notice question. If anyone has to apologise, it is not me. I have to make the announcements, and if I cannot make them in the House, I will make them in the most convenient way. I make that clear. If the Opposition cannot sort out their act on whether they want a statement, I would be grateful if they would tell the truth in the House—[Interruption.]
Mr. Martin O'Neill: On a point of order, Mr. Speaker.
Mr. Speaker: Order. I can understand what the hon. Gentleman wants to say. He should make his submissions when he asks his question.
Hon. Members: No!
Mr. O'Neill: The House has been challenged. The Secretary of State has had 24 hours in which to get his facts correct, yet he is still carrying on the questioning that he raised yesterday. It was not substantial yesterday and it is not substantial now.
Mr. Speaker: I am not part of any discussions that go on through the usual channels. I am concerned with the way in which we proceed in the House. Let us proceed.
Mr. King: The Government have been examining all aspects of the armed forces' support to achieve the most efficient support infrastructure and to make savings in line with the front-line force level reductions confirmed in the "Statement on the Defence Estimates 1991", "Britain's Defence for the 90s".
The closure of the Royal Navy leadership school, HMS Royal Arthur, the Royal Navy diesel repair depot at Blackbrook Farm, and the accommodation and administrative headquarters, HMS St. Vincent, at Furse House, London, have already been announced in Hansard, 16 January 1991, at column 500.
Following a thorough review of basing arrangements, I have decided that when the new force structure is in place, ships of the Royal Navy will continue to be based at each of the naval bases at Portsmouth, Devonport, Rosyth and Faslane. Although Portland is not a base port but an operating base, I see a continuing need for a naval presence there also. We will now proceed to rationalise the support activities in each of those naval base areas and changes will also be made to the current arrangements for basing ships at Rosyth.
The Rosyth-based squadron of four type 42 destroyers, HMS York, Glasgow, Liverpool and Edinburgh, will be redeployed to Portsmouth, which will become their base
354
port. That will allow the support activity for type 42s to be concentrated in Portsmouth, with consequent economies. The move to Portsmouth will take place progressively from mid 1993 to late 1994. In addition, the four ships of the Northern Ireland squadron will move to Faslane in 1993.
Rosyth remains the base port for the 1st, 3rd and 4th mine counter-measures squadrons together with the fishery protection squadron.
As a result of the changes, about 1,100 service personnel will relocate to Portsmouth and 100 to Faslane. Some 900 civilian posts will also be affected, with a number moving to other establishments, but also with some inevitable redundancies. Employment at Rosyth will then number around 8,500 including employees at the dockyard.
Current plans to conduct major refits of submarines —including Vanguard class SSBNs—and surface vessels at Rosyth remain unchanged. The £500 million investment currently being made in the dockyard for new refit facilities for Trident submarines will itself provide a further significant number of construction industry jobs.
A range of other measures designed to rationalise support facilities elsewhere in the naval shore infrastructure have also been decided. They include the closure of the royal naval air station HMS Daedalus at Lee-onSolent and the relocation of the air engineering school and other units to other establishments in the Portsmouth area; the closure of the royal naval stores depots at Lathalmond in Scotland and Copenacre in Wiltshire—although some offices will remain in Copenacre—the closure of the royal naval armaments depot at Trecwn in Wales, and the partial closure of the armament depot at Ernesettle, Plymouth. They will also include the closure of the oil fuel depot at Invergordon and withdrawal of Royal Navy facilities at the Finnart oil fuel depot; and the sale of the Gunwharf site at HMS Nelson, Portsmouth.
Some 1,900 civilian posts will be affected, with some inevitable redundancies, but it is hoped about a third will be relocated to other establishments. The closures will take place progressively over the next five years.
The measures carry forward the policy already announced of making reductions in the support area proportional to those in the front line. They are an essential part of ensuring the best use of defence resources and providing a structure appropriate to the needs of our Navy in the 1990s and beyond.
Mr. O'Neill: I welcome the Secretary of State to the House, whatever the reason for his non-appearance yesterday. Today we have the opportunity to examine the substance of his statement rather than the circumstances surrounding the announcement.
I welcome the decision not to close the base at Rosyth. I leave others to decide who was most responsible for that decision, but the Opposition know that such an outcome would not have been achieved without the unique campaign led by the work force, the service men's wives and the local communities and their representatives at district, regional and parliamentary level—especially my hon. Friend the Member for Dunfermline, East (Mr. Brown). Those people were all critical in alerting Scottish public opinion.
No one in Scotland was unaware of the campaign led by the Labour movement, and such was the breadth of support for it that Conservative Back Benchers, too, gave

355
it their full backing. Even the Secretary of State for Scotland, when he eventually heard about the proposed closure, gave his support.
Does anyone believe that, if the campaign had not been waged, a statement such as we have just heard would have been made shortly after 28 March, when the original decision to close Rosyth was to have been approved by Ministers? Within 20 days—the minimum period allowed —the process of consulting those affected would have been completed.
Will the Secretary of State confirm that, as a result of the transfer of the four type 42 frigates, the Royal Navy, in the words of Admiral Livesay, could well be in danger of losing a large number of good people who will not be prepared to make the move, and that these craft, the type 42s, are "full of first choice preferences"? Does the right hon. Gentleman also recall that, in the words of the admiral, when he suggested a plan to save Rosyth, the number of jobs that were to have been lost was only 400, not the 900 at present suggested? Can he tell us the reason for the disparity between the Livesay figures and those that he has announced?
Can the right hon. Gentleman confirm that the decision to delay the order of a further seven Sandown class minehunters will not create a reduction in the size of the minehunting fleet in the near future, thereby undermining the cost-effectiveness of the Rosyth base by the mid-1990s? Can he further confirm that the Government have abandoned all plans to privatise the Scottish fishery protection squadron, and guarantee that there will be craft in Rosyth capable of undertaking work in the North sea oilfield in times of emergency?
As for the other naval bases, will the Secretary of State confirm that their capacity to accommodate the remaining Rosyth craft will be there in the near future in the event of Rosyth being closed? Will he also confirm the long-term plans for Rosyth within the general framework of Britain's and NATO's maritime strategy and, for the benefit of the House, can he tell us what he considers to be Britain's present part within that maritime strategy?
The whole House will recognise that the statement covers other facilities, too. I see that the Secretary of State for Wales is on the Front Bench. May I ask him what discussions have taken place about the future of Trecwn, Pembrokeshire, which is one of the few centres of industrial employment in a predominantly rural area whose economy is extremely fragile? It has been suggested that the depot could be used as a forward supply depot for United States rapid reaction capabilities into Europe.
Another idea which I believe has been canvassed—I should be interested to hear the Minister's view—is that a tri-service explosive disposal facility could perhaps be expanded at Trecwn. I understand that that is already taking place there, and when I had the opportunity, through the good offices of the Secretary of State, to visit the depot a few weeks ago, I was able to see some of that work being done.
Finally, can the Secretary of State describe what forms of assistance will be given to the areas affected, what resources will be made available and whether they will come from his budget or from the budgets of other Ministers?
Mr. King: I will deal first with the Welsh point that the hon. Gentleman raised, on the question of further steps to help to deal with what is obviously a serious matter in west Wales—I recognise that. The hon. Gentleman will know the time frame, which is helpful. I know that my right hon. Friend the Secretary of State for Wales is already taking action, with the Welsh Development Agency and the TEC, to become involved in these matters. What is proposed at Trecwn will not start before 1994–95, and the loss of jobs will be loaded slightly later, with the main concentration occurring nearer to 1995–96.
The purpose in making the announcements is to allow us to get ahead with our plans and with the consultations. I am sure that the House will support that principle. The right way to approach such changes is to give the best possible chance for the individuals concerned to prepare and for the Ministry of Defence and my right hon. Friend the Secretary of State for Wales to do all that they can to help over the change.
I do not know how Admiral Livesay worked out the earlier figures that he gave. The transfer of type 42s makes good sense, although he deprecated the approach, because it means that, at one base, Portsmouth, we have all the type 42s. There are four in Rosyth and eight in Portsmouth. That means that we can concentrate spares, and servicing and support capability, in one place. Those are the figures, and I do not know what validity the earlier figures that were worked out had. I suspect that they were not arrived at following a full examination of what was involved. The figures also involve—I would need to check whether this aspect was covered by Admiral Livesay—the transfer of the Northern Ireland squadron to Faslane, which I dealt with.
The hon. Member for Clackmannan (Mr. O'Neill) asked me several questions. As other hon. Members would not have a chance to contribute if I answered them all now, I shall write to him if I leave out the answers to any key questions. I should, however, like to deal with the central point. The hon. Gentleman has again sought to peddle at the Dispatch Box the story that has been peddled around Scotland that the decision had already been taken when, in fact, it had not. We were reviewing the options. Considerable alarm was caused in Scotland to many people—[Interruption.] Yes, I congratulate the hon. Member for Dunfermline, East (Mr. Brown) on achieving that scale of publicity, which caused huge alarm to many people who were led to believe that decisions had been taken when they had not.
I am sure that the Leader of the Opposition will be concerned about the way in which leaked documents can be used, and about the fact that somebody at the Rosyth site can be disloyal. I stress that that is a Ministry of Defence site for the refitting of nuclear submarines. The right hon. Gentleman must realise that these are grave matters. I am sure that he is concerned about the fact that those on his Front Bench have used leaked documents from such a source as though this was not a matter of considerable gravity. Anybody who purports to lead the future Government of our country must take seriously the point that he should not appear to be condoning the fact that people who might work for that Government in the future are free to leak any document that they like, whatever its nature.
While the hon. Member for Clackmannan stood at the Opposition Dispatch Box, anxiously inquiring about jobs for people in Scotland, many of whose main hope of

357
employment will be to work on the refitting of our nuclear deterrent—our Trident submarines—he was surrounded by those whose lapsed CND memberships are written all over their faces. Those people in Scotland have the certain knowledge that they could have no confidence in there being a job for any single one of them if the Opposition ever came to power. Their prospects of jobs in the future are vastly better under this Government than under any of the alternatives.
Mr. Michael Mates: Will my right hon. Friend accept that it is a very good thing that he has produced such a comprehensive answer to his survey of naval support before the recess, thus ending the uncertainty with which everyone has been having to cope? Is he in a position yet to tell us how much per annum will be saved once the changes are implemented and, if not, could he let us know as soon as possible? If one is a politician, it is difficult to blame the Opposition for using the publicity that they did, but is it not a fact that the man who leaked the confidential document has done the greatest disservice to his own organisation? Will my right hon. Friend issue a further reminder to all at the Ministry of Defence about where their loyalties lie?
Mr. King: I am grateful to my hon. Friend. The answer to his first detailed point is that the re-basing of the type 42s will save £70 million over the next five years, which is the biggest saving that could be achieved from any of the available options. That was an important consideration. As I have said, I do not have the details of the others, such as those at Trecwn and Copenacre, but in any case those closures are four or five years ahead.
My hon. Friend has raised a serious point. I hope that those on the Opposition Front Bench will recognise it as such. The use of leaked documents is a serious matter—[Interruption.] It is known to the House that one person has already lost employment at an alternative naval base over the leaking of the document. In the past week, two people have been in court because of a fairly amateur attempt to leak nuclear secrets to the Soviet Union—
Mr. Dennis Skinner: The Minister leaked the document to the press yesterday. What hypocrisy.
Mr. King: I can well understand the hon. Member for Bolsover (Mr. Skinner) trying to shout me down on this point. It is a serious matter. If the Opposition treat leaked documents from the Ministry of Defence and naval establishments as a matter of no consequence, they do no service to the nation and send a bad signal to the people who work in such establishments.
Mr. Menzies Campbell: In the light of yesterday's events, may I express the hope that the Secretary of State will find it possible in the future to consult a little more widely than with the official Opposition in determining whether a statement is necessary or desirable?
The Secretary of State's statement rightly acknowledged the importance to the dockyard of the refitting of the new class of Trident submarines. What guarantee can he give that the refitting will go to the dockyard? Does he care to say whether a four-boat, as opposed to a three-boat, fleet is likely to give rise to more opportunities for the dockyard?
Mr. King: I am grateful to the hon. and learned Gentleman for his first comment. I have certainly learnt a lesson in that respect. I entirely understand why he made that point.
It is our plan to go ahead with the nuclear refitting at Rosyth. The hon. and learned Gentleman will be aware that I referred to the £500 million investment plan. As he knows, the base work is already under way on the foundations and excavations. Actual construction is due to start next year. Only last week, we issued an invitation to tender for the fourth Trident submarine. I should like confirmation, from any Opposition Member who might choose to give it, that the Opposition support going ahead with that construction programme when it is drawn up at Barrow. That is certainly our programme.
Mr. Keith Speed: Will my right hon. Friend confirm that the important statements that he has made this afternoon will not inhibit the capability of the Royal Navy and Royal Marines to meet any threat within or outside the NATO area?
Mr King: I am grateful to my hon. Friend, whose interest in this matter I very much respect. He will be aware that, as we move from, for example, a destroyer-frigate force of about 50 to one of about 40, it is absolutely essential that we reduce support facilities proportionately. If we wasted money on support, that money would not be available for the front line. I know that my right hon. and hon. Friends attach great importance to that.
Mr. John McFall: The Secretary of State mentioned the panic that was caused. Was not it started by the Minister of State for Defence Procurement, the right hon. Member for Plymouth, Sutton (Mr. Clark), when he said on Plymouth Sound radio that it was evident that it is Rosyth that "we want to close"? That is what caused the panic and prompted the political response.
Following up the question of the hon. Member for East Hampshire (Mr. Mates), the naval support budget is £2·5 billion. Under "Options for Change", the Secretary of State said that he wanted to achieve a 20 per cent. Saving—about £500 million. What savings will he have achieved as a result of the statement?
Mr. King: I have just given the answer to that question. I said that £70 million would be saved over the next five years. The hon. Gentleman's remarks were an interesting rewriting of history. He appeared to write his hon. Friend the Member for Dunfermline, East (Mr. Brown) out of any responsibility for causing the alarm and confusion that he did among many people in his constituency.
Dame Janet Fookes: Will my right hon. Friend confirm, absolutely clearly and without leaving any doubt, that both the Devonport naval base and the Devonport royal dockyard have a continued and firm existence and future? Will he bear in mind the number of jobs that have been lost and will continue to be lost after today's announcement? What plans do the Government have to assist in that regard?
Mr. King: In respect of the naval base, my statement made it clear that, while we shall certainly wish to keep Plymouth, Devonport as a naval base—I give that clear statement to my hon. Friend—obviously in all defence establishments we shall seek to ensure that they do not

359
carry excess on the support side or have unused facilities. The cost of them is money which is therefore not available for our front-line capability.
I certainly hope that I can say that the dockyard will have a continued role. My hon. Friend will be well aware that there can be no blank cheque for the dockyards or guarantee that, irrespective of how competitive and efficient they are, they will have work in perpetuity. However, provided that they remain efficient and competitive, my hon. Friend will obtain the reassurance that she needs.
Dr. David Owen: In view of the loss of 5,000 jobs already from Devonport dockyard, the further 380 jobs lost from the armaments depot is serious. Can the Secretary of State give an assurance that HMS Illustrious's refit will go ahead within the next few weeks or months? Will he give some extra flexibility to encourage skilled workpeople to move, given the high cost of housing, particularly outside the areas? There needs to be more flexibility between redundancy payments and encouragement to move.
Mr. King: I well understand the right hon. Gentleman's last point, and particularly his point about the Ernesettle jobs. There is a little time to come on that. It will not start before 1993–94, so we shall have some time to see whether we can make adjustments there. If the terms can be agreed, the refit of HMS Illustrious can go ahead without loss of time. She is in Plymouth, and commercial negotiations are continuing. We hope that they will be satisfactorily resolved, in which case the refit will go ahead.
Mr. Ian Bruce: I am glad that my right hon. Friend has had the opportunity to come to the House and give this statement. I understand the confusion caused on the Opposition Benches by certain people not talking to those on their Front Bench.
Could my right hon. Friend expand on the one sentence about Portland? I assume that it means that there will be no job losses or worries for any of my constituents. Because the written answer yesterday had so little detail, there is a great deal of speculation. Can he confirm that the Lynx helicopter base, HMS Osprey, will stay open, that the Flag Officer Sea Training Board will continue to do its excellent work there, and that the royal naval dockyard will stay open? Can he say anything about moving other jobs into the area to use the excellent facilities which are somewhat underutilised in Portland harbour?
Mr. King: I understand my hon. Friend's concerns about Portland, but I cannot add to what I have said. I have given my response. We are looking at every base and I cannot give a guarantee that every job will stay at every base. That is why I cannot give my hon. Friend the assurance that he seeks. We are looking to see whether the bases operate efficiently. We have to make savings proportionate to the reductions in the front line.
Mr. John Home Robertson: After the Secretary of State's little outburst on loyalty, does he accept that the loyalty of service men should be to the Crown and Parliament rather than to any petty party politician such as he has shown himself to be during the past couple of days? Does he agree that the point made by his hon. Friend the Minister of State for the Armed Forces
360
to the Select Committee on Defence on 12 June, when he said that all the naval bases had been subjected to a similar review about their future, is less than convincing? Will he admit that only Rosyth was lined up for closure and that it was only the campaign led by my hon. Friend the Member for Dunfermline, East (Mr. Brown) that ensured Rosyth's future?
Mr. King: Rosyth was not lined up for closure. It was precisely the repetition of that sort of statement in the early months that caused so much alarm. That sort of statement has been quoted, as though it was proved, on the back of leaked documents which did not prove it in any sense. The truth is that we have reviewed all the naval bases. Rosyth was the only one that was studied in detail—[Laughter.] They are not simply three equal naval bases. In reality, both Portsmouth and Plymouth are three times the size of Rosyth. In addition, Portland is not a base port; it is an operating base, and bears no comparison to the other three. That is what happened. A great deal of mischief has been stirred up by people wishing to cause trouble who themselves, through their party policy, would be able to give the least guarantee to anybody of any jobs in any base in Britain.
Mr. David Martin: May I welcome the increased commitment to Portsmouth that the changes represent? Does my right hon. Friend agree that it is better to press one's case with reason and common sense than to resort constantly to counterproductive carping, criticism and scaremongering, which appeal to Opposition Members? Their policies would not bear scrutiny should they ever have responsibility for the defence of the country.
Mr. King: If I were living in Scotland and were concerned about my job, I would far rather that that concern was in the sensible and intelligent hands of my right hon. Friend the Secretary of State for Scotland, who has worked tirelessly on this matter with his colleagues. I would not want my concerns to be subject to the alarmist and deeply worrying approach that has been adopted by certain Opposition Members. That attitude has caused real problems in the handling of this difficult problem.
Mr. David Trimble: We note the relocation of the Northern Ireland squadron, which has now moved approximately 60 miles closer to Northern Ireland—some day it might get there. Is it not the case that the net effect of the changes has been to accentuate the geographical distortion in defence spending? Is it not the case that the bulk of the defence budget operates as a massive subsidy for the south-east of England?
Mr. King: I do not quite know how the hon. Gentleman works that out. However, I can see the point about the transfer of the destroyers. One can only make a comment about distortions in defence spending if one is prepared to ignore the massive investment that has been made in the facilities at Faslane and Rosyth, which represents a substantial transfer of resources to Scotland.
Mr. Peter Viggers: Can my right hon. Friend confirm that the net result of the announcements that he has made so far will be an increase in the number of uniformed posts in the Gosport-Portsmouth area and an increase in civilian posts? That will be welcomed by the

361
service personnel, many of whom have made their homes in south Hampshire, and by the civilian population, who greatly value their strong links with the Royal Navy.
My right hon. Friend will understand my keen sense of loss at the proposed closure of the royal naval air station, HMS Daedalus. If that base is closed, will my right hon. Friend confirm that there will be the closest consultation with local authorities so that some amenity value will accrue to the local population?
Mr. King: I certainly give my hon. Friend assurance on his latter point. He will know that the closure does not mean a loss of jobs so much as the transfer of activities, particularly those of the air engineering school.
On my hon. Friend's first point, the net effect of the announcements will be an increase in the number of uniformed and civilian posts in the Gosport-Portsmouth area. I should make it clear to my hon. Friend, as I have to other hon. Members, that it is important to ensure that the support side is organised on the most efficient, cost-effective basis. I know that my hon. Friend appreciates that. There will be some job losses in the support side to ensure that we have a lean and cost-effective support base suitable to the somewhat reduced level of our front line.
Mr. Tom Clarke: Is the Secretary of State solemnly telling the House that there was no Rosyth closure study? Is he solemnly telling the House that there was no timetable for closure? If the right hon. Gentleman is so worried about people peddling rumours, why yesterday did the Secretary of State for Scotland allow his lackeys to say that it was he who had saved Rosyth? If there was no fight, why was it necessary for the Secretary of State for Scotland to make that intervention?
The Secretary of State for Defence referred to the Admiral Livesay plan. Why did he not accept the recommendation about 400 jobs? Does he not accept that the loss of 900 jobs in central Scotland, with all its repercussions, is a great blow? Does the right hon. Gentleman accept that, but for the efforts of the work force and of my hon. Friend the Member for Dunfermline, East (Mr. Brown), matters would be a great deal worse? If he does not believe that, why does he not make a firm commitment today about the long-term future of the base?
Mr. King: I tried to make it clear to the hon. Gentleman exactly what the position was, and I am sorry that he does not appreciate or accept it. I made it clear that studies were done and that a number of options were considered. However, I also made it absolutely clear that decisions had not been taken and that we were considering a number of options. Nevertheless, stories continued to be peddled that those decisions had been taken.
The hon. Gentleman is standing up and expressing his concern again. If I can give a measure of assurance about the future of jobs, it would be much nicer for all concerned if those working in defence had some confidence that the whole House shared the determination to see those people continuing in employment. As a member of the Labour party, which has no defence policy at all—the prospect of a future Labour Government has caused great alarm in the defence industries—the hon. Gentleman should pay far greater attention to that issue.
Mr. Bill Walker: Is my right hon. Friend aware that Scottish Conservative Members, who
362
concentrated their arguments where it mattered and achieved maximum effect by doing so, are pleased with the outcome? We believe that my right hon. Friend and his colleagues have listened carefully to the representations made by the work force, and we commend the way in which they have done so. We understand the concern that is felt in the Ministry of Defence among uniformed officers and civil servants about some of the ghastly leaks that have occurred. We took no part in those leaks and are not associated with them. Consequently, on behalf of the Scottish people, we thank my right hon. Friend and his team for responding so well.
Mr. King: I am very grateful to my hon. Friend, whose assessment is precisely right. Attempts that were made to advertise the fact that there were leaks from Rosyth damaged the prospects for that base. They were extremely damaging to the good reputation of the overwhelmingly loyal work force there, and those concerned were singularly unwise.
Mr. Dick Douglas: Will the Secretary of State try to help us on one or two matters? If he thinks that he has won and those on the Opposition Front Bench think that they have won, why have 2,000 jobs been lost? If we add the 700 jobs that were lost at the dockyard, that makes 2,700 jobs that will be lost over a period in that area. What consultation has he had with the Secretary of State for Scotland to ensure that adequate investment is made in the area to take up the slack?
The right hon. Gentleman should not expect us to be so naive because I have visited the naval base and had discussions with Admiral Livesay. I shall not breach the confidential discussions that we had, but it was clear that Rosyth was the most vulnerable of the naval bases. The transfer of four type 42s to Portsmouth makes the naval base at Rosyth most vulnerable in the future. The Secretary of State must come clean on that. Everyone at Rosyth must know the position. To put it colloquially, their jackets are on a slack nail—[Interruption.] The hon. Gentleman can "haud his wheesht" over defence policy. I do not go round with a CND card in one hand and a Trident missile in the other. Will the Secretary of State make it extremely clear that those jobs are secure?
Mr. Speaker: Order. Questions should be to the Secretary of State.
Mr. Douglas rose—
Mr. King: I have already spoken to the hon. Gentleman about the studies and the review that have been carried out. Rosyth is the smallest of the "main" bases. The studies were examined, and the decisions that were taken have now been announced to the House.
I well understand the hon. Gentleman's outburst, because I find it pretty appalling to stand here and be challenged over the number of jobs that are being lost. We regret every job that is lost in that area, and are doing all we can to ensure that we maintain the country's defences. We then face Opposition Members who do not have a defence policy worth the name. They cannot guarantee to anyone in our armed forces—in naval or any other bases —or those supporting our nuclear deterrent, that there will be a single job for them in the future. The hypocrisy is absolutely mind-blowing.
Sir Geoffrey Johnson Smith: Is my right hon. Friend aware that we deeply appreciate the care, concern and detailed attention that he pays to making decisions of the sort announced today, which we know are in the great interests of the defence of this country? We cannot implement "Options for Change" unless savings are made in the support spheres, so that we can maintain strong front-line forces as well. Is he also aware that we were far more impressed by the care and attention that he gave to the problem at Rosyth and by the careful, reasoned, calm and cogent arguments put to us by representatives of the Rosyth management and work force than we were by the noisy clamour and misleading information put out by Opposition Members?
Mr. King: I think that my hon. Friend puts that point clearly and shares opinion on the stench of hypocrisy that reeks across the Chamber; I find it particularly nauseating.
Mr. Henry McLeish: I am sure that most people in Fife agree that the statement brings to an end one of the shabbiest and most disgraceful episodes of ministerial incompetence seen in the Chamber. More importantly, will the Secretary of State give us a rational explanation of why the Livesay plan of 400 has become the King plan of 900? If there is no prospect of further reviews to reduce that number, will the Secretary of State give an assurance to the people of Fife that steps will be taken and, along with his lackadaisical right hon. Friend the Secretary of State for Scotland, make serious efforts to tackle the problems of unemployment in Rosyth, and put people first? In view of the Secretary of State's performance this afternoon, will he tell the House who leaked the closure announcement to The Sunday Times on Christmas eve?
Mr. King: The hon. Member referred to the end of a shabby episode, and I agree with that entirely; I think that the episode has been incredibly shabby. The hon. Gentleman's intervention shows the sort of voices that exist in Fife and the surrounding districts, and the sort of abuse that the hon. Gentleman passes on to my right hon. Friend the Secretary of State for Scotland, who has worked extremely hard on the issues. I pay tribute to the sensible and balanced way in which he did so. Faced with the difficult issues that exist in some sectors, if I had to make a choice between arguing with Opposition Members such as the hon. Member for Fife, Central (Mr. McLeish) and discussing the matter rationally with my right hon. Friend the Secretary of State, there would be no question as to who would be most likely to help me get the right answer for the hon. Gentleman's constituents.
Sir Nicholas Fairbairn: Will my right hon. Friend remind those of my constituents who work in Rosyth that, had the Labour party policy proposed in the past three elections been adopted and the Labour party elected to power, more than 5,000 people who work at Rosyth would have been made redundant? Will my right hon. Friend help me with the puzzling trichotomy that we face this afternoon now that the CND lapse has occurred? How is it that CND members were against Rosyth in the past three elections because they wanted to abolish the Trident force, were against our fighting troops fighting—which is their purpose—in the Gulf war, and are now suddenly in favour of keeping all the employees at Rosyth, regardless of CND and Trident?
Mr. King: The Opposition operate a very clear defence policy in a sense. They want substantial cuts in public expenditure—they made that clear, and the proposal was overwhelmingly carried by a mandatory majority at Labour party conferences. They clearly want to question our nuclear deterrent and, also, to argue for every single job in every base, for every weapons programme and for every new piece of expenditure that they can possibly find to criticise us on.
That is a policy lacking in integrity and intellectual content. We see the Opposition spokesmen sinking further and further from view. I think that it was the hon. Member for Houghton and Washington (Mr. Boyes) who said on the subject of CND:
"I am still a member, but I don't think people want us to comment on this."
Mr. John McWilliam: Did the Secretary of State base his decision on the fact that, although a fifth of the ratings in the Royal Navy are recruited from Scotland and the north-east of England, only 12 per cent. of the officers are recruited from those areas, or did he base it on the fact that type 42s, which are forward air defence-dedicated destroyers, should be sent more than 24 hours steaming south of the main air threat, which would come from the north?
Mr. King: The hon. Gentleman seems to imagine that ships should be kept in harbour all the time. Ships are deployed occasionally. Under Labour's defence policy, they would not be able to afford the fuel and would probably be permanently tied up in the south of England. We intend to deploy our ships, and in that context the hon. Gentleman's fatuous question falls.
Several Hon. Members rose—
Mr. Speaker: Order. The House knows that I have to protect subsequent business on the Order Paper, which is a Plaid Cymru Supply day. I shall allow questions to continue for another 10 minutes, and then we have a ten-minute Bill. I hope that hon. Members will ask brief questions.
Sir Antony Buck: Will my right hon. Friend take note that there will be considerable relief that he has gone through this exercise? Will he confirm that his announcement will enable the Royal Navy to remain the third most powerful navy in the world, and far and away the world's best? Will he continue to point out the gross hypocrisy of the Opposition, who demand defence cuts in general but always seem to oppose rationalisation?
Mr. King: I am grateful to my hon. and learned Friend. Our objective is precisely to ensure that we maintain the best possible Royal Navy with the best possible support. It is my duty to see that we get the most efficient use of resources. That is a balanced and responsible approach, and it is the approach of integrity. We modestly claim that it is not reflected elsewhere in the House.
Mr. Frank Cook: I have enjoyed watching the Secretary of State trying to make smoke, and I am sorry to have to break through his screen. Will he take the opportunity afforded by his statement to answer the question determinedly evaded by his right hon. Friend the Minister of State for the Armed Forces whom I asked to scotch the idea of closing in October the royal naval detention quarters at Portsmouth? Will the Secretary of

365
State assure us that the RNDQ at Portsmouth will not be vacated until proper provision has been made for females at the military corrective training centre at Colchester? Or does the Department intend to turn the female institutions of the services into the same sorry state as our civilian establishments?
Mr. King: I am afraid that I cannot comment on that, but I shall look into the matter.
Mr. David Nicholson: I welcome my right hon. Friend's robust promotion of a powerful role for the Royal Navy and the British nuclear deterrent, which contrasts with the policies of ex-CND and continuing CND Opposition Members. Will he confirm that the Royal Navy and the mercantile marines of the international community will continue to benefit from the work of the Hydrographic Department in Taunton, and will that work be effectively resourced by his Department?
Mr. King: I certainly hope so. As my hon. Friend knows, under its new agency status, the department is making an encouraging start. I had the pleasure of opening it a short time ago with my hon. Friend, and I hear encouraging reports of some of its new freedoms. It is obviously a centre of excellence, and we recognise its significance.
Mr. Gavin Strang: Does the right hon. Gentleman acknowledge that one of the reasons why it would have been wrong to close Rosyth is that it would mean concentrating all these bases on England's south coast? Does he accept that that argument applies particularly to Rosyth, not just because of its geographical location but because of the Scottish people's proud history of participation in all Britain's armed services? That crucial argument will have as much force after the election as it has now, regardless of who is in government.
Mr. King: My decision was based on a consideration of what I thought were strategic grounds. It also made good sense, in that it achieved the savings that are necessary to maintain the most effective front line and, compared with the alternatives, it involved less disruption for the people concerned. We looked at a range of options, one of which, as the hon. Gentleman knows, was the possibility of closure. I chose the most sensible option on a range of considerations. My decision also took into account, as I made clear that it would, the overall impact and the economic impact on the area, which my right hon. Friend the Secretary of State for Scotland made sure that I recognised well. We also recognised the significant contribution that Scotland makes to the Royal Navy.
Dame Peggy Fenner: I am grateful to you, Mr. Speaker. You might well have expected it to be too late for me to be interested in what happens to the Royal Navy dockyards, having had in my constituency one of the first to close under an earlier peace dividend. Will my right hon. Friend accept that I share his anger at the hypocrisy of Opposition Members, who for weeks have been bleating about the peace dividend, but when it happens in a little rationalisation in their dockyards they want to know why. My dockyard, Nelson's dockyard, was the most famous in the country. Will he offer Opposition Members the consolation that, before the recession, unemployment in my constituency had been reduced to 3·7 per cent.?
Mr. King: I very much agree with my hon. Friend. I
366
entirely understand her preamble and her feelings at this moment. It is incredible that the Opposition—with respect to those on the Opposition Front Bench; I do not mean this personally—do not even think that defence justifies a seat in the shadow Cabinet.
Ms. Hilary Armstrong: Will the Secretary of State confirm the allegation that yesterday, en route to the naval base at Rosyth, a major convoy carrying nuclear warheads broke down in my constituency at Castleside? I understand that this is the second incident of that nature, and my constitutents—
Mr. Speaker: Order. With great respect, the question must be related to the statement. I think that this refers to a different matter.
Ms. Armstrong: The convoy was on its way to Rosyth. [Interruption.] I too have loyalty to my constituents, and they are concerned that they may have been prey to a terrorist attack because the convoy was not proceeding in a proper manner.
Mr. King: That question does not arise on the statement, but I will look into the hon. Lady's point.
Sir Ian Lloyd: Do not the vigour and concern expressed this afternoon convey a clear message to a distinguished visitor to our shores, President Gorbachev, who has come to the west seeking real resources which he would presumably describe as a peace dividend in Russia? Are the Government confident that the real resources released in the United Kingdom will not be devoted to the Soviet Union at a time when it is not releasing resources from a diminution of the Russian Navy? Is he confident that if the evidence about the strength of the Russian navy which is reaching the Government at all times disproves the allegations the policy will not be continued?
Mr. King: There seems to be some story that the Russian navy is increasing in size. That is not correct. A considerable scrapping programme is taking place. However, I accept that new vessels and new submarines that have been launched are highly capable and worthy of full respect. Having said that, I was told that about 50 per cent. of the present Soviet GNP was going into defence. Given the scale of the burden that it is carrying, it is unthinkable that we should engage in any economic support if that scale of military investment continues.
Mr. Harry Ewing: As a fellow Scot, Mr. Speaker, I apologise for the behaviour of the hon. Member for Dunfermline, West (Mr. Douglas) in complaining about people carrying cards.
Mr. Speaker: Order. I would prefer the hon. Member to ask a question.
Mr. Ewing: Over the past year, the hon. Member for Dunfermline, West has carried more cards than I have credit cards. He has never forgiven my hon. Friend the Member for Clackmannan (Mr. O'Neill) for winning back the safe Labour seat that he threw away.
The Secretary of State for Defence has just announced that 1,000 people will lose their jobs at Rosyth, making 2,500 jobless altogether. Is that not cause for alarm? Has the right hon. Gentleman become so blasé and

367
unconcerned about unemployment that the prospect of 2,500 people losing their jobs does not give him cause for alarm?
Mr. King: I said that I take any job losses very seriously, but the hon. Gentleman's question misrepresents the situation. He said that 900 people will lose their jobs, but I have made it clear that we hope that a significant number of them will be relocated in other Ministry of Defence posts. The hon. Gentleman will understand why I enter that caveat.
I hope that it will be of some reassurance to the hon. Gentleman to know that the Northern Ireland squadron will not move until 1993. The type 42s, which account for the bulk of the jobs, will not move until 1993–94, and then progressively. My right hon. Friend the Secretary of State for Scotland is concerned to see that every assistance is given. He is active in other parts of Scotland as well, to ensure that help is given to whatever number of people may lose their jobs.
Mr. Patrick Nicholls: Does not my right hon. Friend consider it grotesque that he should be criticised over job losses when the Labour party conference has twice voted by an overwhelming majority to reduce defence spending by £9 billion? How many jobs would such a cut cost? For Labour to criticise possible defence costs carries about as much conviction as if the devil were to come to the House to criticise a decline in virtue.
Mr. King: I regret having come to the House to announce that the changes made under our programme will affect 900 civilian jobs. However, I hope that a number of those affected will be relocated in other Ministry of Defence posts. There are arguably 50,000 jobs in Scotland alone that are totally connected with or affected by defence. Any independent assessment of Labour's defence policy—although we know little of it—must suggest that, under it, 25,000 of those jobs would go.
Mr. O'Neill: Will the Secretary of State confirm the authenticity of the allegedly leaked documents? Is it not sheer hypocrisy, when documents come to light showing the Government's intentions, that Ministers try to distort the issue by smearing hon. Members, rather than answering the questions that such documents raise? Will the right hon. Gentleman say, yes or no, whether the document to which he referred gave the timetable, the date, and the identity of the base as Rosyth? Does he deny that?
Mr. King: I made it absolutely clear to the hon. Gentleman that studies were made, and I repeatedly said that no decision was taken. I draw to the attention of the House that another member of the Opposition Front Bench shows no embarrassment about a leaked document from a naval base.
Mr. O'Neill: Take it—here.
Mr. King: I do not touch leaked documents, thank you very much. I explained to the hon. Gentleman that studies were undertaken, and that they contained possible timetables, and so on. A range of options were considered. They came before Ministers, and Ministers took decisions.

Points of Order
4.30 pm
Mr. Robert Hayward: On a point of order, Mr. Speaker. I do not want to take up Plaid Cymru's time, and I apologise for dashing in and out of the Chamber this afternoon. However, I have received news that Avon county council has lent £6 million to Western Isles county council. Clearly, the ramifications of the Bank of Credit and Commerce International affair are more extensive than previously thought. Would it be appropriate to raise the matter during next week's Consolidated Fund debate? Is there, indeed, any means of raising it sooner than that?
Mr. Speaker: The Consolidated Fund debate is a wide one. If the hon. Gentleman submitted a subject, I would consider it carefully.
Ms. Marjorie Mowlam: On a point of order, Mr. Speaker. The Financial Times and The Wall Street Journal report this morning that, in March and October last year, the Bank of England had prima facie evidence of fraudulent documentation at BCCI. On 8 and 15 July this year, the Economic Secretary to the Treasury told the House that the Treasury had known nothing until June. Should he not return to the Chamber immediately to clarify that statement?
Mr. Speaker: I cannot be expected to adjudicate on what Ministers say at the Dispatch Box. There are other methods of raising the matter—possibly during the Consolidated Fund debate.
Mr. Graham Riddick: On a point of order, Mr. Speaker. Are you aware that the parliamentary Labour party voted this morning for the House not to sit on Fridays? Labour Members voted for a four-day week: they voted to become part-time Members of Parliament. [Interruption.]
Mr. Speaker: Order.
Mr. Riddick: I am just coming to my point of order, Mr. Speaker.
Mr. Speaker: Order. We are under great pressure today, and I am not a member of any party.
Mr. Riddick: May I just ask you to assure me, Mr. Speaker, that you will do all in your power to protect the interests of Back Benchers, so that we do not lose time and business on Fridays?
Mr. Speaker: I will give the hon. Gentleman that guarantee. It is my constant desire to protect Back Benchers' interests, and that is what I am anxious to do this afternoon—to protect the interests of Plaid Cymru Back Benchers, whose debate is to follow.
Mr. Tam Dalyell: On a point of order, Mr. Speaker. Yesterday, with the widespread approval of hon. Members, you made very clear your view about ministerial statements in the House, which is reported fully in this morning's press. Can you persuade the Foreign Secretary —who made a speech yesterday about some very important matters relating to this country's participation

369
in military action—to come to the House, possibly on Friday, when I understand that the Prime Minister is coming?
This is especially important in the light of the frantic appeals from the United Nations Children's Fund and Robert Smith, and those of Prince Sadruddin Aga Khan on behalf of the United Nations High Commissioner for Refugees, about the position in Iraq, where people who have been bombed into the stone age in certain areas may simply be eliminated.
Mr. Speaker: I am sure that the Leader of the House, who is sitting on the Front Bench, has heard what the hon. Gentleman has said. It is not for me to require Ministers to come here; yesterday was a rather special case. There will be other opportunities for the hon. Gentleman to raise the matter next week, such as the summer Adjournment debate, the Consolidated Fund debate and the last day of the Session, next Thursday. There is plenty of scope.
Mr. John Home Robertson: On a point of order, Mr. Speaker. May I ask you to examine the rather injudicious words used by the Secretary of State for Defence at the beginning of his statement, when he was explaining why he did not make that statement yesterday? As a humble and simple Back Bencher, I have no idea what went on within the usual channels or what led to the planted question that was asked yesterday. I find it surprising, however, that the Secretary of State should say today that he was effectively prevented by the Opposition from making an oral statement. Can you confirm, Mr. Speaker, that any Minister of the Crown has the right to apply to you to make an oral statement in the House, and that that is what should have happened yesterday?
Mr. Speaker: That is true. Ministers sometimes come to me to ask whether they may make statements, but the lesson of yesterday is that I, too, was left out of this equation. I think that things might have been very different if I had been brought into it.
Mr. D. N. Campbell-Savours: On a point of order, Mr. Speaker.
Mr. Speaker: Well, finally.
Mr. Campbell-Savours: I am sorry, but I have just heard my hon. Friend the Member for Linlithgow (Mr. Dalyell) say that the Prime Minister intends to make a statement on Friday on the G7 summit. Can I put it to you that you should protest on behalf of many hon. Members, who find it extremely difficult to be here on a Friday? It can take as
370
long as six hours for us to return to our constituencies. It completely destroys Friday as a day in our constituencies. It is wrong that important business should be—
Mr. Speaker: Order. I really do not think that the House of Commons can be run for the convenience of some hon. Members. If the discussions end on Thursday, perhaps the Prime Minister should come here at the first opportunity to make a statement. I have not previously heard that he intended to do so. It has not so far been communicated to me officially.
Mr. Campbell-Savours: Further to that point of order, Mr. Speaker.
Mr. Speaker: Order. I cannot take it.
Mr. Campbell-Savours: But you let—
Mr. Speaker: Order. The hon. Gentleman must ask about it tomorrow during business questions.
Mr. Campbell-Savours rose—
Mr. Speaker: It is not a matter for me. Ask about it, please, during business questions tomorrow.
Mr. Campbell-Savours: You have repeatedly, Mr. Speaker—
Mr. Speaker: Order. I repeat that the hon. Gentleman should ask about it at business questions tomorrow. It is not a matter for me.
Mr. Campbell-Savours: On a point of order, Mr. Speaker.
Mr. Speaker: No, please sit down.
Mr. Campbell-Savours: You have repeatedly said to the House—
Mr. Speaker: Please sit down. The hon. Gentleman is taking time away from other hon. Members.
Mr. Campbell-Savours rose—
Mr. Speaker: Sit down, please! There are plenty of other opportunties to raise this matter. It is not a matter for me.
Mr. Campbell-Savours: It is all right having a constituency in Croydon. Mine is in Workington.
Mr. Speaker: Order. Ten-minute Bill—Mr. Phillip Oppenheim.

Restraint of Trade (Trading in Motor Vehicles)
4.36 pm
Mr. Phillip Oppenheim: I beg to move,
That leave be given to bring in a Bill to abolish restrictive practices and cartels in the trading of motor vehicles.
Consumers in Britain are being ripped off by having to pay far more for their cars than is the case in many other European countries. A Consumers' Association report shows that a Peugeot 405 costs £2,000 more in Britain than in Belgium, while a Ford Orion 1·4 litre costs nearly £3,000 more.
I accept that some surveys have exaggerated the differences in some respects by not taking special factors such as discounts into account, but even when they are taken into account there is still a massive difference. The price variations, with the fairly free markets in America and Japan, are even more startling. [Interruption.]
Mr. Speaker: Order. Can I just say to the hon. Member for Workington (Mr. Campbell-Savours), who is mouthing things from a sedentary position, that they looked suspiciously like threats aimed in my direction.
Mr. Campbell-Savours rose—
Mr. Speaker: The best thing that the hon. Gentleman could do would be for him to go to his constituency now.
Mr. Oppenheim: Car buyers in Japan and the United States consistently pay 30 per cent. less for their cars, ex-tax, than they do in the United Kingdom. The main reason for that is the trade barrier, known, somewhat ironically, as the gentleman's agreement which restricts trade in vehicles.
However, from the end of next year that is due to be superseded by a European Community-wide trade barrier which will cover not just markets like Britain, France, Spain and Italy—which already have national trade barriers on cars—but also the free-trading European nations, such as Germany, Holland, Belgium and Denmark.
The Commission has also been proposing that cars made in Japanese-owned United Kingdom plants should be classed as Japanese and therefore be subject to quota limits, even though they have well over a 60 per cent. European content. That is one of the daftest suggestions ever to come out of the European Commission. It would mean that cars made in American-owned Ford and General Motors plants in Europe would be counted as European and have free circulation within the Community, but that cars made in Japanese-owned plants in Europe would not, even though cars made in Honda's American plants would be counted as American and would, therefore, be subject to no import quotas.
The Commission sometimes says that this is not meant to be taken seriously—that it is just intended as a bargaining counter in its talks with the Japanese—but history has shown how capable the Commission is of concluding covert trade deals. I have no doubt that most of the Commissioners hope that, while on the face of it there will be import quotas only on Japanese-produced cars, surreptitiously this will include limits on the number of cars made in Japanese-owned plants in Britain. The implications for job creation in the United Kingdom are
372
serious, unless cars produced at the Honda, Nissan and Toyota plants in Britain can be freely sold anywhere within the Community, just like the cars of any other European producer.
The problem with trade barriers is not only that they raise prices for consumers, but that they restrict choice. That is especially damaging in the case of the gentleman's agreement and other car trade quotas. In Japan there is a class of car called the microcar—small high-tech hatchbacks with engines below 550 cc. They typically cost between £2,000 and £4,000 ex-tax. British consumers do not have access to such cars because trade barriers compel Japanese producers to make up for low volume with high value by concentrating on large and more expensive cars. The microcar would be a boon in our traffic-choked cities. It is less environmentally damaging than larger cars and it would offer low-cost, high-tech motoring to people whose income now gives them the choice to buy only second hand cars or geriatric eastern bloc models, but such people are being denied the opportunity to buy the microcar.
Behind the gentleman's agreement and other such quotas lies pressure on the Commission to introduce an EC-wide quota from a cartel of large European and American car manufacturers who are afraid of what open competition would do to their profit margin.
Of course, they would not put it quite like that. They say that they need to protect jobs. I understand that argument and I have some sympathy for it, but it is not new. Indeed, when 150 years ago almost to the day Richard Cobden was elected to this place as the hon. Member for Stockport on a free trade and anti-Corn Laws platform, the Stockport Advertiser, which had supported the Tory candidate, who, I am ashamed to say, backed the retention of the Corn Laws, bemoaned the result as follows:
"To the working classes must the shopkeepers look for support and if they have little or no money as a result of this measure after the purchase of their cheap loaves where will you sell your cottons, your silks, your teas and your sugars?"
The idea that consumers are also producers and that they need protection to be able to afford to buy goods from other producers is superficially alluring but wholly spurious. First, those with the greatest lobbying power inevitably receive the most protection and subsidies. At best, trade barriers shelter jobs in protected industries in the short term, but they compound inefficiency and put off the evil day when the industry must sort out its fundamental problems. Meanwhile, many jobs are lost elsewhere as people pay over the odds for goods, and resources are diverted from efficient to inefficient producers.
In the case of cars, according to a survey by the Organisation for Economic Co-operation and Development, import quotas add about £4 billion to the cost for British consumers. What could all those resources have achieved and how many other jobs could have been created in other industries if that money had been freely directed by the choice of consumers?
One of the main arguments used by those who want trade barriers is that Japan itself is a closed market, and I shall deal briefly with that issue. It is interesting that as Madame Cresson was saying that Japan was an "hermetically sealed market", Peugeot—the most virulent of the lobbyists for tougher trade barriers in Europe—was on target to increase its sales in Japan by 21 per cent. despite a 13 per cent. fall in the Japanese market. Of

373
course, other European manufacturers have not tried even to get into the Japanese market. For example, Renault's chairman, Raymond Levy, is quoted as saying that he was not bothered about Japan because it was not an important enough market. However, the prize for hypocrisy must go to Volkswagen whose chief executive, shortly after announcing that his company had created 750 new jobs to boost production for the Japanese market where its sales were booming, warned that the Community should limit access to Europe for Japanese cars. Incidentally, German car sales to Japan exceed in value Japanese exports to Germany.
The argument is that Europe must close its market because the Japanese trade unfairly represents the worst type of self-serving special pleading by European car manufacturers. The truth is that it has been far too easy for far too long for European and American industrialists to make exaggerated claims about trade barriers in order to excuse their own failure to market competitive models domestically and in Japan. However, the insincerity of car producers can be illustrated by the fact that the American producers, who are part of the lobbying effort for trade barriers in the EC, sell literally millions of Japanese-made vehicles under their own names in Asia and in the United States.
The problem is not that the Japanese market is closed, but that Japanese producers are more efficient. Toyota's lead time for a brand new model is three-and-a-half years compared to Volkswagen's six years. While Toyota assembles a Corolla in 13 hours, it takes Volkswagen 20 hours to bolt together a Golf. We should learn from their processes instead of taking the easy option of erecting trade barriers because the cost of those barriers is huge. According to an EC Commission report, the removal of all internal EC barriers would result in a gain of £50 billion to the EC economy, and intensified competition would reduce monopoly profits, creating 5 million new jobs and cutting prices to the consumer by an overall 6 per cent. If the EC Commission can see such huge advantages to free trade within the EC, why is it so blind to the wider benefits of freer external trade?
There is a broader issue. We are now in danger of seeing the global economy break into competing trade blocs as happened in the 1930s. According to an OECD report, only four of the OECD's 24 industrialised member states ended the 1980s with freer and more liberal trade regimes than they had at the beginning. Covert trade restraints such as quotas and spurious anti-dumping duties have multiplied and bypassed the general agreement on tariffs and trade, covering everything from semiconductors to steel, and televisions to photocopiers.
The danger is not merely that of a trade war between the three trading blocs based on north America, Europe and east Asia, but of tensions with other areas. Goods from the Soviet Union and other eastern bloc countries are being restricted by the European Community. Thus, as they grope towards a free market system, we appear to be telling them that our espousal of the free market ends when it comes to the very goods that those countries are able to produce competitively, such as steel, food and textiles.
According to a recent World bank report, the trade barriers of wealthy countries against third world nations cost the poorer nations more than the total of the aid that we send them. Therefore, trade barriers impoverish not only us, but hit those that are far less well off. They do not even help protected industries; they merely ensure that
374
they become ever less competitive. It is time that we took a long-term view and rejected the craven entreaties of the cartel of European and American car manufacturers and ended the great rip off of our consumers by abolishing all trade restraints on cars at home and in Europe. In doing so, we would help not only consumers, but the European industry by making it face the need to tackle the underlying uncompetitiveness which is at the root of its problems.
Sir Hal Miller rose—
Madam Deputy Speaker (Miss Betty Boothroyd): Does the hon. Gentleman wish to oppose the Bill? If so, when I put the Question at the end of his speech he must voice his opposition. Is that understood?
Sir Hal Miller: Although I agree with much of what I think that my hon. Friend is aiming for in the last part of his speech, I must point out that it was only because of the voluntary restraint agreement—negotiated under Government auspices, let us make no mistake about that —between British and Japanese manufacturers that he and my hon. Friend the Member for Derbyshire, South (Mrs. Curry) are about to benefit from the creation of a Toyota plant in their area. There is no prospect that Japanese manufacturers would have been encouraged to set up the manufacturing centres which are providing for our indigenous manufacturers the excellence in standards of training, of employment and of quality and which are teaching us how to compete more effectively and no possibility that the Toyota, Nissan and Honda plants would have come to this country but for the voluntary restraint arrangement.
Therefore, although I agree that the arrangement has a limited usefulness, it has proved most beneficial for this country and for all hon. Members who have constituencies that contain car plants and component-making plants. The result of the introduction of new manufacturing methods and new purchasing methods such as we have seen at the Nissan plant in Sunderland and such as we are beginning to experience with Toyota—I declare an interest because I hope to be a supplier to Toyota—and the standards that they demand of our component plants are uplifting our whole industrial effort and our employment attitudes in much of our industry.
I take exception to the rather cheap jibes about the Consumers' Association report at the beginning of my hon. Friend's remarks. On the basis of a little further research, he will find that the report was based on a comparison of list prices and took no account of the discounts available, of the differences in specification, of exchange rate movements or of differences in inflation rates. Those same mistakes were perpetuated in the consultant's report by Karl Ludwigsen for the Monopolies and Mergers Commission.
I draw the attention of the House and of my hon. Friend to the report in the Financial Times earlier this week on the research conducted by the firm A. T. Kearney on behalf of General Motors. It examined 98,000 invoices and demonstrated that in many of the areas of purchase of volume cars, the on-the-road price in this country was lower than that elsewhere on the continent. Before we jump to easy conclusions, we should bear in mind the commercial facts and the efforts being made to provide not only jobs in this country, but better jobs, better terms of

375
employment, better skills, better quality and more competitive products. On those grounds, I feel obliged to oppose the Bill.
Question put, pursuant to Standing Order No. 19 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business ):—
The House proceeded to a Division; but no Member being willing to act as teller for the Noes, MADAM DEPUTY SPEAKER declared that the Ayes had it.
Bill ordered to be brought in by Mr. Phillip Oppenheim, Mr. Patrick Nicholls, Mr. Nigel Forman, Mr. Bowen Wells, Mr. Dudley Fishburn, Mr. Michael Brown, Mr. Anthony Coombs, Mr. Donald Thompson, Mrs. Edwina Currie, Mr. William Hague, Mr. John Watts and Mr. Nicholas Ridley.

RESTRAINT OF TRADE (TRADING IN MOTOR VEHICLES)
Mr. Phillip Oppenheim accordingly presented a Bill to abolish restrictive practices and cartels in the trading of motor vehicles; And the same was read the First time; and ordered to be read a Second time upon Friday 18 October and to be printed. [Bill 216.]
Opposition Day
[I8TH ALLOTTED DAY]
Opposition Day

  Wales (Structures of Government)
  Madam Deputy Speaker (Miss Betty Boothroyd): I have to announce to the House that Mr. Speaker has selected the amendment in the name of the Prime Minister.
  4.55 pm
  Dr. Dafydd Elis Thomas: I beg to move,
  That this House condemns this Government's failure, in its Green Paper 'The Structure of Local Government in Wales, a Consultation Paper' to respond adequately to the wishes of the people of Wales to secure a more sensitive and efficient structure of local government, to establish, on an all-Wales level, elected democratic control over the existing tier of Government currently administered by the Welsh office and nominated bodies, and to provide direct links between Wales and the emerging institutions of the European Community; further notes the political danger that other areas comparable with Wales in the rest of Europe all have directly elected government structures, while Wales does not; asserts that, in order to create coherent and lasting structures of government, all three dimensions need to be considered together and that a prerequisite must be the determination of the appropriate level and mechanism of democratic control over each function of government, in accordance with the European Community principle of subsidiarity; that thereafter methods of funding should be established and only then can sensible propositions be made for boundaries, which should reflect communities of interest; and calls on the Secretary of State to launch the fullest consultation in Wales in order to bring before the House, at an early date, proposals for the future structures of government in Wales which reflect the aspirations of the majority of the Welsh nation.
  I have to make a confession. I was a Member of the House for many years before I discovered what my problem was. Whenever I got up to speak in the Chamber, I felt distinctly uncomfortable. On reflection, I realised that I had to stand up without having anywhere to put my papers. If one is a Government or Opposition Front-Bench Member, it is possible to hide oneself behind one's papers. Speaking from these Benches, one has to jump up and down to pick up papers and to refer to them. That is especially disconcerting now that we are on television.
  I have here, as I have had for many weeks, my own draft copy of the European treaty of union, to which I want to refer. I say that to give the Secretary of State early warning of what I shall talk about. As I am unlikely to speak from the Dispatch Box in this House, I shall have to make do with jumping up and down when I refer to my papers.
  The title of our debate refers to the plural—"structures" of government in Wales. That is because we take a plural and, dare I say it, pluralistic approach to the government of Wales. In that, we are at one with the Secretary of State for the Environment. When opening the original debate on the reorganisation of local government and the community charge, he made the clear statement that, from the point of view of his political theory, he was a pluralist. I do not know whether his right hon. Friend the Secretary of State for Wales is a pluralist. I am not sure whether his

  377
  recent behaviour and the way in which he has treated local government reform proposals for Wales smell of pluralism or of autocracy. We shall see as the debate progresses.
  We take a pluralistic view not only of the way in which politics in Wales should be conducted, but of how government in Wales should function. There can be no unitary authorities applying to government. I know that the Welsh Office uses the phrase "unitary authorities" in reference to local government, but to conceive of government as something that happens at one level alone or, to mix metaphors, in one place alone controlling one space, is a total misunderstanding of the complexity of modern government. No hon. Member who has any knowledge of the administration of the education service, of the social services, of the planning service, or of industrial or economic policy would imagine for one moment that the idea of a unitary form of decision making —a unitary form of controlling space—is acceptable.
  We regard the relationship between power, government and society as inherently pluralistic and non-unitary. There are places in which one does certain things for other places and there are certain places in which one does other things.
  The United Kingdom has suffered for too long from the problems caused by operating within the straitjacket of a unitary state. It is significant that, during the fateful week when federalism was the F-word and the Welsh Assembly was the A-word—or perhaps the other way round—a United Kingdom Minister was rejecting federalism in the European Community while, in the Chamber, a Welsh Office Minister rejected federalism, too.
  Accountability, answerability and the problem of the democratic deficit were not addressed at either level. At European Community level, United Kingdom Ministers said that there could not be an ever closer union, which must mean federalism—although they could not speak the word "federalism". Similarly, Ministers said that we could not have an elected Welsh Assembly, making that level of government accountable, because it would undermine the operation of the unitary state.
  The Secretary of State made the startling announcement that scores of Minister Presidents throughout the European regions wanted to be members of the United Kingdom Cabinet. Perhaps I have got that wrong; perhaps he meant that they wanted to be members of their federal state Cabinets, or of their state Cabinets. I ask the right hon. Gentleman to confirm—I am sure that he will tell me this again, as he has told me before, both privately and publicly—that he really meant that the Minister Presidents wanted access to his own level of decision making. But I do not think that any of them would trade in the level of representation enjoyed by a Secretary of State in the Cabinet of a member state if it meant losing the elected regional authorities that they all have—I know that they would not do so, because some of them have told me so. That is why our motion deliberately refers not only to the reorganisation of what is called local government in Wales but to the European dimension, too. As I have already said, we see all those levels of government as interrelated.
  The Secretary of State's arguments are set out in a nicely designed document—it is more pleasantly designed than the Scottish document—
  Mr. Ted Rowlands: It is empty of content.
  Dr. Thomas: I was talking about the design features, not the content. This is a post-modern political document; it is all up-front, in the design.
  I must correct an error in the document. I was deeply agitated when I saw that the first map—I do not know whether it was drawn by the officials or by the Under-Secretary of State himself—portrays the old and dearly beloved Meirionnydd county in 1974 with at least a third of its electorate missing. I speak with affection, because for many years I represented that extra bit. My area stretched closer to the English border than appears on the map. That small error of cartography is only one of the up-front errors in the document.
  In paragraph 1.6 of the Green Paper, the Secretary of State sets out the arguments on the fundamental principles for local authorities. Those arguments apply equally on an all-Wales level. I am deeply interested in semantics and the meaning of words, because that is how I was trained, but for the purpose of the debate, we accept, as we do in our motion, that Wales is an historic nation but also a European region. Its political function and structure has to approach that of a European region. I shall therefore use the word "regional" with reference to Wales, although some of my colleagues outside the House might not be happy to hear me do so.
  I shall apply the term "regional" to the fundamental principles of local government set out in paragraph 1.6 of the Green Paper, where the Secretary of State says that local authorities should be
  "democratically accountable to their electorates".
  We say that regional authorities, too, should be accountable. The Secretary of State argues:
  "local public services should be responsible to the wishes, needs and circumstances of local communities".
  The same principles should also apply to regional public services—by which I mean primarily the £5 billion spent by the Welsh Office and its 4,000 civil servants.
  The Green Paper goes on to refer to the need for local authorities' responsibilities for service delivery to be
  "clearly understood by local people".
  Clearly, the same argument on fundamental principles applies to the all-Wales regional level. The document also speaks of "community loyalties" and the
  "high quality and efficiency of public services".
  That, too, applies more widely.
  The Secretary of State may intend to deploy the argument that a regional assembly for Wales would cost too much, as he apparently said this morning elsewhere in the House. I should reply that the Welsh Office already has expenditure of £5 billion and that the right hon. Gentleman's estimate of £50 million—that was the old estimate of the Leader of the Opposition, updated by the Welsh Office—represents I per cent. of that expenditure. One per cent. of the total would be spent on scrutinising that expenditure, and we must consider that cost in terms of value for money and democratic accountability.
  There is an argument within Wales for democratic scrutiny and accountability of the non-elected tier of regional government. There is also an argument that the Welsh Office should review local government, or sub-regional government, in Wales. My hon. Friends will pursue that idea in greater detail later if they catch your eye, Mr. Deputy Speaker. There is a clear argument that the sub-regional level of government should be

  379
  comprehensively reviewed. The problem that faces us as we consider the Green Paper is that there is no fundamental review.
  I shall mention three or four areas of concern. First, there is the question of sub-regional, or indeed all-Wales, strategic planning. If there are to be unitary planning authorities, even within the present overall Welsh Office guidelines that are only now being developed, will they be able to deliver effective strategic planning and land use functions? Secondly, now that we are to have unitary small authorities, are we to have national park boards? I should welcome that, and if that is the Government's view it should be made known.
  The third area is the delivery of education and social services. Is the implication of the Welsh Office's taking on further education and of organising higher education through another new funding body that local authorities will care for education policy only for the under-16s? If that is Government policy, we should be told.
  Mr. Alex Carlile: I agree with everything that the hon. Gentleman has said so far. Does he share my hope that the Secretary of State will tell us today that local government in Wales, when reorganised, will retain almost all its present functions? Perhaps the Secretary of State should have saved his comments for the House rather than making them elsewhere before his speech in the debate. If all the functions of local government in Wales were retained, we should not have to face the prospect of yet more nominated boards, which have become something of a disease in Wales.
  Dr. Thomas: I am grateful to my hon. neighbour. The Secretary of State has heard what he said and no doubt will answer him, either inside or outside the House.
  Social services functions need to be integrated in terms of all-Wales priorities. As a result of the creation of so-called unitary authorities at approximately the level of the present districts, will policies on all the aspects that I have mentioned be concentrated in the Welsh Office? Will there be a proliferation of the quangos referred to by the hon. and learned Member for Montgomery (Mr. Carlile)? If so, how will the Secretary of State's fundamental principles on accountability in local government apply at the all-Wales regional level?
  That is the democratic deficit that stares us full in the face, including hon. Members who are members of quangos, or might hope to be. Some of my hon. Friends might want to be members of quangos—[HON. MEMBERS: "Are you volunteering?"] No, I am not putting my name forward for anything. Clearly, I would be unacceptable because of my political tendencies.
  The Secretary of State for Wales (Mr. David Hunt)indicated dissent.
  Dr. Thomas: The Secretary of State dissents, and I am grateful to him.
  The democratic deficit at the all-Wales level stares us in the face, as does the democratic deficit at the European level, not least because of the relationship between the European Parliament, the Commission and the Council of Ministers, although that is not the issue on which I wish to
  380
  concentrate. I propose instead to discuss the nature of the government of Wales in relation to comparable authorities or areas in the rest of Europe.
  The structure of regions in the rest of Europe is defined in the constitution of the Assembly of European Regions, set up in 1985. In that context, the term "regions" refers to
  "the level of government immediately below the central government with political representativeness"—
  it is obviously a translation from the French—
  "guaranteed by the existence of an elected Regional Council, or failing this"—
  this was underlined for the benefit of Wales—
  "by an association or body constituted at Regional level by the local authorities at the level immediately below."
  That is what we have now. The whole of Wales is represented in that regional body through the Assembly of Welsh Counties. But all the other members of the Assembly of European Regions are themselves representatives of directly elected regional authorities. It is at that level—despite the existence of the Secretary of State and the United Kingdom Cabinet, and the arguments that we have heard both inside and outside the House—that Wales is missing out in terms of its political structure.
  This is not some nationalist fantasy—the pipedream of someone who imagines a Welsh nation state. I never imagined a Welsh nation state, but I certainly imagined an elected Welsh polity, and I certainly imagined a Welsh democracy related to other comparable levels of democracy throughout Europe. The danger now is that we are moving into the 21st century with that vital part of our national life as a European region not in place.— [Interruption.] The Under-Secretary of State is muttering. Would he like to intervene?
  The Parliamentary Under-Secretary of State for Wales (Mr. Nicholas Bennett): No.
  Dr. Thomas: He must be preparing his reply, then.
  That dimension of our political life is missing. It is in that context that we need to consider the debates within the Assembly of European Regions and, indeed, the draft treaty of union, which now recognises far more scope for the role of regions.
  The principle of subsidiarity is argued for strongly in European Community discussions these days. Here, it tends to be applied to the relationship between Community institutions and member states. I see that the Secretary of State is nodding. But for the overwhelming majority of other member states, the principle also applies across or down—or whatever spatial metaphor one wants to choose.
  Mr. Keith Raffan: Hear, hear.
  Sir Anthony Meyer: Hear, hear.
  Dr. Thomas: I am grateful for the support that I have received for many years from my Clwyd colleagues on this issue.
  Mr. Alex Carlile: They are all leaving.
  Dr. Thomas: Yes, we are all retiring. The hon. and learned Member for Montgomery may also be retiring, for all I know.
  In other member states, the principle of subsidiarity applies throughout the structure of government. It means that nothing is done in Brussels that could not better be done in Westminster—although I have some difficulty in imagining what that might be. I have no difficulty,

  381
  however, in imagining what might be done better in Cardiff than in Westminster, and certainly no difficulty in imagining what might be done better in Newtown—the great capital of mid-Wales—than in Cardiff or in the community of Llanelltyd than in Dolgellau or Caernarfon.
  The principle of subsidiarity is regarded as a thorough-going, wholesale approach, involving the devolving, decentralising or federalising of political power. That is precisely what the European regions are aiming for. They are also aiming for representation within the Council of Ministers on relevant points, and they have achieved that in the draft treaty of union, article 146 of which states that representatives of each member state at ministerial level are authorised to take binding decisions. That includes representatives from the regions if they are recognised as Ministers within their regions and within the member states. I look forward to the day when the Secretary of State, his Minister of State or even his Under-Secretary can take binding decisions for the United Kingdom within the Council of Ministers.
  Mr. Alun Michael: Or a Minister of another Government.
  Dr. Thomas: Or a Minister of another Government.
  The other important part of the draft treaty of union is the amendment of article 198a, which sets up the Committee of the Regions. As the Secretary of State and the House will know, that committee will be parallel to the Economic and Social Committee and will include 24 members from the United Kingdom. That body will be a much strengthened successor to the previous consultative regional body, and its establishment therefore represents a clear attempt by the EC to provide for the regional level of government throughout Europe in its draft treaty.
  From our point of view, it is important that Wales is seen as an active region, not as a passive part of the United Kingdom structure. This is not just a matter of structure or theory: it has specific implications for funding. I know that the Secretary of State referred to this matter earlier in the Select Committee. The big block to the relationship between the funding mechanism of the Commission and the regions within the United Kingdom is the additionality policy as applied by the United Kingdom Government. It is high time that the Secretary of State and Welsh authorities recognised the implications of the Treasury block on public spending in Wales and on direct relationships between European Community programmes within Wales. The additionality principle operated by the Government creates a block.
  Under the current capital finance rules of local authorities, additionality at the local level is denied, whatever the Secretary of State may say. If local authorities wish to proceed with European Community grant-aided schemes, they must first find credit approval cover from other sources for the full project. The position of local authorities in Wales is being undermined by the fact that the member state Government—the United Kingdom Government—is operating a system of allocating regional funds from the Community which is preventing regions from actively taking part in their own development projects and from setting their own priorities.
  We see the structure of government in Wales as pluralistic. We see areas of decision making and centres of
  382
  powers servicing Wales from within the country but, as a European region, we see Wales relating to a whole range of similar regions throughout Europe.
  That is not to deny the validity of the United Kingdom's role in the history and politics of Wales over many years, but circumstances have changed. If we are to be a European region, we must participate directly at that level. As long as we are merely represented by nominated bodies or non-elected, non-democratic levels of government, we cannot possibly take advantage of our full potential within Europe.
  5.18 pm
  The Secretary of State for Wales (Mr. David Hunt): I beg to move, to leave out from "House" to the end of the Question, and to add instead thereof:
  'welcomes the publication of the Consultation Paper on The Structure of Local Government in Wales; considers that it provides a sound basis for further public debate on local government structure in Wales; approves of the continuing development of the partnership between Wales and regions of Europe under the present constitutional arrangements of the United Kingdom; reaffirms the position of Wales as an integral part of the United Kingdom; and therefore rejects arguments for an elected Welsh Assembly, the creation of which would undermine the present arrangements for the direct representation of Wales in the Government of the United Kingdom.'.
  I pay tribute to the hon. Member for Meirionnydd Nant Conwy (Dr. Thomas) for his most interesting speech and for giving the House the opportunity to consider the future structures of government in Wales.
  Hidden from the House and the world outside is any mention in the motion of the Welsh Assembly. Although the hon. Gentleman referred to it several times in his speech, it finds no place in the motion. I wonder whether that is, indeed, the hidden agenda and whether we shall now perhaps hear of some other idea from his party. I welcome its move in that direction.
  There can hardly be a subject of more importance to the people of Wales than the structure of the government of Wales, so I welcome this opportunity to outline the Government's views. I also look forward to learning, in rather greater detail than has been available so far, exactly what the official Opposition are proposing. So far, silence has reigned supreme.
  Mr. Dafydd Wigley rose—
  Mr. Hunt: I shall give way to the hon. Gentleman in a moment.
  As I understand it, the motion invites the House to condemn the Government's opposition to a regional executive assembly for Wales, on the grounds that it would weaken Wales's voice in Europe and that the lack of such a tier of government offends against the principle of subsidiarity. The motion concludes that all the dimensions of local government should be considered together, and calls on us
  "to launch the fullest consultation in Wales"
  on proposals for the future structures of government in the Principality.
  Our amendment, on the other hand, points out that I have already launched a full-scale consultation on local government structure in Wales; that Wales's links with Europe are developing apace and that the proposed assembly would weaken Wales's position within the United Kingdom.
  Mr. Wigley: In case there is any misunderstanding, I rise to clarify the fact that our motion refers to the need
  "to establish, on an all-Wales level, elected democratic control over the existing tier of Government".
  Let there be no question of the fact that we are pressing for an elected all-Wales body, although the word "Assembly" does not appear in the motion.
  Mr. Hunt: I should have thought that if this is a serious debate and the hon. Gentleman's party is seriously proposing a Welsh Assembly, that word should appear in what is a lengthy motion.
  I welcome the pro-Europe stance of the hon. Member for Meirionnydd Nant Conwy. It is not all that long since I used to stand on platforms on which members of Plaid Cymru would argue strongly against membership of the European Community. The fact that they are now so effusively in favour is a great testimony to the Conservative Government who took us into the Community and to the fact that it was a Conservative Prime Minister who signed the Single European Act.
  Although the hon. Gentleman said that he was deeply interested in semantics, that did not show through in his speech, which was an interesting academic analysis of some of the arguments with which I should now like to deal. Deeply entrenched in all this is the question whether our existing structure, and especially the role of the Secretary of State, should continue. I have never been quite sure—it has not been clarified beyond all doubt—about Plaid Cymru's proposals for the role of the Secretary of State for Wales in the United Kingdom Cabinet.
  On 17 June I told the House that I could not accept the proposals for a Welsh Assembly, which are being advanced with decreasing enthusiasm by the Assembly of Welsh Counties and the Council of Welsh Districts, but with increasing enthusiasm by the Labour party and by my hon. Friend the Member for Delyn (Mr. Raffan). I believe that the establishment of an assembly is incompatible with the maintenance of the office of Secretary of State for Wales, who has a broad range of functions and a seat in the Cabinet. As I have said again and again, the interests of the people of Wales are best served if they are directly represented at the table at which the important decisions are made.
  Mr. Raffan: Is my right hon. Friend enunciating official Conservative party policy and saying that, in the event of there being an Assembly in Wales or a Welsh senate—call it what one will—as a party we would be against having a Secretary of State for Wales? If so, that would not be in keeping with our previous devolution policy for Scotland, which the present Secretary of State for Scotland supported at the time, although he has done a volte face since. Is my right hon. Friend stating official policy? If so, where was it passed and when was it decided—democratically, I hope?
  Mr. Hunt: I have not yet explained why the position of Secretary of State is so crucial in the present circumstances, but I shall do so now. The hon. Member for Alyn and Deeside (Mr. Jones), who was in the Chamber a few moments ago but who is no longer in his place, has said that under his proposals there would continue to be a Secretary of State for Wales, even though the Welsh Assembly would have assumed all his executive powers. According to the Labour party's policy document, which
  384
  I have read carefully, that person is to speak for Wales in the Cabinet, to arrange for modification of parliamentary legislation where appropriate, and to promote Welsh interests outside the United Kingdom. That does not sound to me like a job description for a member of the Cabinet, so let us examine it a little further and suppose that that amounted to a significant role.
  Ministers with important roles to perform require advisers, civil servants and officials. However, under the hon. Gentleman's plans, Welsh Office civil servants would serve the Assembly. That leads me to wonder whether his plans would require the recruitment of a duplicate set of civil servants to assist the Secretary of State. If so, what would be the cost? If the hon. Gentleman does not envisage the recruitment of more civil servants to advise the Secretary of State, how powerful a voice would the Secretary of State have as he
  "speaks for Wales in the Cabinet"?
  I have another question. Under the present arrangements, the Secretary of State negotiates directly with the Treasury for resources for Wales for the policies that are being pursued. What would be the position under the hon. Gentleman's plans? Is it seriously suggested that, without any influence on the policies to be pursued by the Assembly and unable to account for the expenditure involved, the Secretary of State would still be able to negotiate a proper level of resources for Wales? If the resources obtained do not meet the Assembly's requirements, would not that create conflict between the Assembly and the Secretary of State? How could that be in the interests of the people of Wales? I very much hope that those questions will be answered during the debate.
  Mr. Rowlands rose—
  Mr. Geraint Howells rose—
  Mr. Hunt: I shall give way in a moment, after I have analysed the question of who decides. The potential conflict arises in the following way. An Assembly of one political persuasion or of a variety of political persuasions, which is without the power to levy funds—that is intrinsic to the proposals—would be ranged against a Secretary of State of another party who would have total control of the purse strings. That is the proposal. Where does legitimacy reside in that? Where is the accountability? Labour's fudge would not work.
  I am, however, deeply interested in one of the statements made by the hon. Member for Meirionnydd Nant Conwy. He said that there are 4,000 civil servants in Wales. In fact, there are 2,140. I wonder whether the hon. Gentleman made a Freudian slip. Even if I count all the civil servants in outlying offices, I have a total of 2,294 —not 4,000. I contend that the hon. Gentleman's proposals entail doubling the number of civil servants because his figure of 4,000 is almost a doubling of the present number of civil servants in Wales. Is that his intention?
  Dr. Thomas: My calculation included all the officials who service all the quangos and all the existing Departments of State, including the Department of Social Security, and all other official servants in Wales who are employed either directly or indirectly by central Government.
  Mr. Hunt: I am sorry. I thought that the hon. Gentleman was referring only to the Welsh Office. Now that he has clarified the position, does he accept that it is legitimate to say that, on my analysis, his proposals would result in a substantial increase in the number of civil servants? My favourite quotation is,
  "Words without thoughts never to heaven go."
  The Labour party should come clean. Either it means to have a powerful Assembly or a powerful Secretary of State. I am not prepared to countenance or endorse proposals that would mean that the Secretary of State became an empty suit in a non-job. I am not prepared to subscribe to that.
  Mr. Rowlands: The right hon. Gentleman is raising aunt Sallys only to knock them down, but that is up to him. Our point is that Westminster would remain the main legislative body—the main body for taxation, for determining general economic policy management and for determining benefits for the whole of the nation. The Secretary of State would have a powerful and important role in fighting for and defending the interests of Wales in a United Kingdom context. Perhaps the right hon. Gentleman does not do that now, but our future Secretary of State would.
  Mr. Hunt: The hon. Gentleman says that I am raising points to knock them down. But I am quoting from the Labour party document. In the previous debate I was told that 1 should read "The Future of Local Government in Wales" published by the Labour party and sold at a cost of £3. I have now studied it. I will quote it directly to the hon. Gentleman. In analysing the role of the Secretary of State, apart from fighting for resources for Wales—I have pointed out the potential conflict there—it says in paragraph 43:
  "We would thus recommend that the Secretary of State shall continue to scrutinise Parliamentary legislation, consider its relevance to Welsh interests and arrange for its modifications where it is appropriate."
  It suggests that that is a key role for the Secretary of State, but it is a third of the job. That is okay unless one reads on to paragraph 46, which says:
  "Often, of course, Parliamentary legislation and statutory regulation will require no modification in their application to Wales."
  I had a job for a minute and, whoops, it has gone.
  Mr. Michael: What about quoting the rest of the paragraph?
  Mr. Hunt: I am coming to that. I am not prepared to countenance making the position of the Secretary of State an empty suit in a non-job.
  The reality of the matter is that there is a choice. Either we have a powerful Secretary of State or we have a Welsh Assembly cut off from the real centre of power. I do not believe that it is possible to have both.
  Mr. Michael: May I give the Secretary of State the opportunity to admit that he is quoting partially and inaccurately from our good document on the future of Government in Wales? The paragraph to which he referred says that some
  "Parliamentary legislation and statutory regulation will require no modification in their application to Wales".
  It goes on to give an illustration. It says that we would assume, for example,
  386
  "that Social Security regulations and national agreements approved by Parliament for the salaries of teachers, the police and nurses should be the same as in England, and … regional government would be unlikely to wish to amend them."
  It seems that, as usual, the Secretary of State has shot himself in the foot.
  Mr. Hunt: No. It says:
  "The regional government would be unlikely to wish to amend them."
  One finds similar phraseology in the Labour party's proposals for regional government in England. The Labour party has said that it does not propose to introduce a Welsh Assembly as an early priority, but would introduce regional governments. It would introduce a regional government in Wales at the same time as a regional government in England. Labour party speakers have come to Merseyside and said that the Labour party would establish a regional government for Merseyside. They have been to the north-east and said that they would do it there at the same time as in Wales. I am not prepared to subscribe to a policy which places Wales in anything other than its rightful position as a Principality, proud of its heritage and tradition and in the unique position of having a Secretary of State for Wales in the Cabinet.
  The job of Secretary of State for Wales is either a non-job or a job for a political contortionist. I suppose that the hon. Member for Alyn and Deeside (Mr. Jones) should not so much call for a Houdini as call out for who did it to him—who dropped him in it and landed him with the non-job of defending a non-policy. Perhaps the hon. Member for Cardiff, South and Penarth (Mr. Michael) will put matters in more explicit terms. I hope that he will.
  The hon. Member for Meirionnydd Nant Conwy dealt largely with Europe. I was delighted about that. As a strong European who entered politics because I wanted to see Britain join Europe in a positive way, I recognise that the European concept is vital for Wales. It is sometimes alleged—the hon. Gentleman did so this afternoon—that Wales needs an assembly because it would enable Wales more easily to participate in Europe. I do not accept that argument for a moment.
  Our present constitutional arrangements enable us to enjoy the benefits of direct involvement with the key regions of Europe, such as the four motor regions of Baden-Wurttemberg, Catalonia, Lombardy and RhoneAlpes, and yet retain all the advantages of direct participation in the central Government of the United Kingdom. That is a particularly privileged position for Wales and one which we should do nothing to imperil.
  Mr. Geraint Howells: Let us forget detail for a moment and the policies advocated by the Labour party. Let us go back to principle. As a good Welshman, will the Secretary of State give his personal view? Is he in favour of the principle of giving home rule to the people of Wales—the nation to which he belongs? That is what the people of Wales want to know. Does he agree that Welshmen who believe that a Tory Government and Unionist party will ever give Wales its own government are living in cuckoo land?
  Mr. Hunt: As the hon. Gentleman has posed the specific question, I will tell him that I am against home rule for Wales. I make that absolutely clear. I have four proposals which strengthen the Principality. [Interruption.] It is no use Opposition Members shouting against me. I suppose that it is a fault on my part that I agree so fundamentally

  387
  with the approach of the Leader of the Opposition who, when he was on the Back Benches, wrote an article which said:
  "What a time to tear our nation apart!"
  I have no need to read on. The arguments were similar to the arguments that I am making here. They came from the hon. Member for Islwyn (Mr. Kinnock)—now the right hon. Member. He said on many occasions that devolution and a Welsh assembly would tear Wales apart.
  Mr. James Molyneaux: I am grateful to the Secretary of State for Wales for giving way. I noticed that he said that he personally felt that the United Kingdom should remain as one unit. I was struck by the words "and therefore" in line 7 of the Prime Minister's amendment to the motion. One must read that in the context of the previous sentence which moves that the House
  "reaffirms the position of Wales as an integral part of the United Kingdom; and therefore rejects arguments for an elected Welsh Assembly".
  My reason for seeking clarification of the attitude of the entire Government to the matter, leaving aside the desirability of an assembly for Wales, is to find out whether the Government feel that an elected assembly is inconsistent with membership of the United Kingdom. I ask that because it seems to me that the Government's policy has changed since last month when, with Cabinet approval, the Secretary of State for Northern Ireland said that Northern Ireland was an integral part of the United Kingdom and needed an elected assembly.
  Mr. Hunt: I do not intend to trespass into the politics of Northern Ireland. The right hon. Gentleman has made his point. I shall ask my right hon. Friend the Secretary of State for Northern Ireland to respond to the hon. Gentleman's point.
  To return to the point made by the hon. Member for Meirionnydd Nant Conwy, Wales has an active programme of intra-regional and inter-regional links based on the four motors group. Of the four, relations with Baden-Wurttemberg are ahead of the rest since the signing of the agreement in March last year. Although the work is largely long term, there have already been several practical results, including the university of Wales mission, which is leading to joint research projects in fields as diverse as micro-electronics, agriculture and health management. Staff and students will attend a four motors language course. Seminars have also been attended on social services, the environment and the motor industry. Several deals have been signed which involve some of the most innovative Welsh companies.
  All those results were achieved before a top-level recent bilateral which drew up an impressive list of joint activities in areas to which we are now committed. As for the other motors, letters of intent have been signed with Lombardy, talks are under way with Catalonia, and we are working with Rhone-Alpes in several other specific areas. I wish to see those relations develop very much along the lines of those with Baden-Wurttemberg. I know that the hon. Member for Meirionnydd Nant Conwy strongly supports that.
  Wales is playing a leading role on the European stage. Our success to date proves that there is no lack of focus in the Principality for those who seek to work with us.
  Mr. Donald Anderson: No matter what the Secretary of State says about the European dimension or what attempt he makes to demolish the problem of a Secretary of State in a devolved assembly, does he or does he not accept the proposition of the hon. Member for Meirionnydd Nant Conwy (Dr. Thomas) that there is a democratic deficit at the all-Wales level and a void which should be filled by either a corporate structure involving the Confederation of British Industry and the Trades Union Congress, an indirectly elected council of Welsh local authorities or an assembly? However the void is filled, there is a void at the all-Wales level at present.
  Mr. Hunt: I do not accept many of those arguments. They are misconceived. Why should it be suggested that the Secretary of State for Wales is peculiarly unaccountable? My presence in the Chamber today is proof that, like all my right hon. Friends, I am accountable to the House and the elected representatives of the people of Wales. Furthermore, the House has entirely adequate machinery to investigate the activities of agencies, such as the Welsh Development Agency and the Development Board for Rural Wales. This morning, I had the privilege of giving evidence to the Select Committee on Welsh Affairs on those agencies and of being interrogated on the affairs of Wales for two and a half hours.
  Mr. Ieuan Wyn Jones (Ynys Môn): Interrogated?
  Mr. Hunt: Interrogated means being asked questions. I was asked questions and I hope that I gave responses. The agencies are making an important contribution to the economic regeneration of Wales. I am accountable here, in the mother of Parliaments, for all that happens in Wales under my responsibility.
  Dr. Thomas: Just for the record, does the Secretary of State agree that he happens to be here this afternoon because there is an autonomous political party representing Wales in the House that had a Supply day?
  Mr. Hunt: I would not wish to interfere in that commercial break.
  I now come to the structure of local government in Wales. The consultation paper has been widely distributed and is being actively discussed. It is too soon to predict the outcome of the consultations, but the positive response from much of local government to my proposals reinforces my view that we are on the right lines.
  All parties in this House agree that the way forward lies with the creation of unitary authorities. I hope that I have been able to stimulate debate about the appropriate size and number of such authorities. The context of that debate is that the future of local government as an institution is secure. I fully intend that the present level of functions should continue. It is not a question of whether we should have local government; it is how that local government is to be organised.
  That is not to say that the service responsibilities and the techniques of service delivery should not be subject to reappraisal. We have made it clear that we are committed to the concept of the enabling authority, in which a clear distinction is to be drawn between those who plan, guide and stimulate local services and those who directly manage the delivery of services. That perspective will enable and increasingly require members to develop new skills of strategic planning of services for their areas, of award of contracts and of monitoring performance. That new way

  389
  of proceeding may require changes to the internal management of authorities. I shall shortly publish a further consultation paper for Wales on that topic.
  Mr. Denzil Davies: Many of us agree that the unitary authority idea is a good one. That means that county councils as well as district and borough councils will go. Where do the community councils fit into all that? If we are merely to have unitary authorities, they cannot and should not deal with everything. Yet the Secretary of State's document says little about community councils. Does he propose strengthening their powers and putting them on a better basis?
  Mr. Hunt: I do not know whether the right hon. Gentleman has read my document. Paragraph 6.6 is headed "Community and Town Councils" and sets out exactly that point. I say:
  "The Government believe that community and town councils can play an important role in the maintenance of a healthy local democracy."
  Proposals for a reorganisation must take into account the role of community and town councils. I go on to say:
  "It may well be that they could play an even greater role under the new structures."
  I hope that all those involved in community and town councils will consider the extent to which they would like to see progress in this area. Of course, I am willing to meet the Association of Community and Town Councils in Wales. I have already met the association and shall do so again to discuss how we can move forward.
  Mr. Denzil Davies: I accept that the Secretary of State says that in the document, but does he have any ideas on how power and responsibility will be divided between the new unitary authorities and the community councils? Is he putting forward proposals to that effect?
  Mr. Hunt: In my document on internal management I have to consider how matters are managed and organised within the unitary authorities. It may be, as a result of consultation, that I shall receive representations from the community and town councils on how they would like to proceed. I did not have detailed proposals before I issued the consultation paper, but I had received detailed proposals from the Assembly of Welsh Councils and the Council of Welsh Districts. I am perfectly willing to consider the matter. I have an open mind on how we should proceed. At the end of the day I should like to produce a local government structure or structures in Wales which better reflect the needs and aspirations of local communities.
  Mr. Carlile: I am grateful to the Secretary of State for reinforcing what I understand he said this morning in the Select Committee on Welsh Affairs. I am not a member of it, so I was not aware of his remarks. I am interested in what he said about requiring local authorities to change their management structures and attitudes. Can he go a little further? Is he expecting local authorities in the new structure to be required to combine with neighbouring local authorities to provide some of the functions which are now provided by local government? Is there not a danger that local authorities will be forced by economic considerations, particularly short funding by central Government, to take decisions to form what effectively would be management boards, rather than the Government taking those decisions?
  Mr. Hunt: I am a little nervous of going too far down that road because I want others to participate in the debate. By way of clarification, I said that the new way of proceeding may require such and such; I did not say that the Government would require it. I shall lay that out in the internal management consultation paper. I have decided that we should have a special paper in Wales which I shall publish as soon as possible. Obviously, I want to explore ways in which we can improve service delivery. The hon. and learned Gentleman is asking what funding may or may not produce. The local authorities never mince their words with me. I have an effective Wales consultative council on local government finance and we discuss the issues there. That is the appropriate forum.
  This is an important debate. Those who argue for a Welsh Assembly must now make it absolutely clear what role they envisage for the Secretary of State. Is he to be a member of the Cabinet with a broad range of functions, able to influence central Government and to secure resources for Wales? Or are we to have an Assembly cut off from the real centre of power and depending for resources on a broken-backed Secretary of State without any role? That is the choice.
  It is not so long ago that we had a publication, appropriately against a green background, called, "Keep Wales unified with Britain: Vote No to the Welsh Assembly". I am talking about the campaign in which the Leader of the Opposition played such a leading role. That document makes absolutely clear and contains many of the arguments why I am so wholly opposed to a Welsh Assembly.
  I recognise that in the 1960s public opinion polls in Wales showed a majority in favour of an Assembly. As late as May 1978 there were 40·8 per cent. in favour and 40·8 per cent. against an Assembly in a poll published on the BBC. Then, when we had the referendum, 243,000 voted for and 956,000 voted against a Welsh Assembly. They voted against it because of the arguments rehearsed in great detail in this pamphlet, "Vote No to the Welsh Assembly", and because they were worried about the costs which the Leader of the Opposition had estimated. He put the cumulative costs for an Assembly over 21 years at £1,000 million—that is the updated figure. I am not prepared to countenance such an expensive white elephant for Wales. I want Wales to endorse, enhance and strengthen its position within the United Kingdom and within the European Community.
  Several Hon. Members rose—
  Madam Deputy Speaker: Order. The Secretary of State is right in saying that there is a lot of pressure from hon. Members who want to speak in the debate. Short speeches from now on would be appreciated.
  5.49 pm
  Mr. Alun Michael: It is a pleasure to take part in a debate in which we learnt that the hon. Member for Meirionnydd Nant Conwy (Dr. Thomas) has discovered his problem. I hope that Hansard records that correctly because in the recent report of the Welsh. Grand Committee it quoted me as congratulating the hon. Gentleman on his knighthood. Today the hon. Gentleman showed more moderation in his normal habit

  391
  of praising the Conservative party, which is what might have led the editor of Hansard to believe it likely that he would have been so honoured. I welcome that moderation.
  The hon. Member for Meirionnydd Nant Conwy was right to say that government does not happen in just one place. We could well echo the words of Aneurin Bevan who described his search for the levers of power and the location of power within the United Kingdom.
  I wonder whether I can be partisan in respect of the party that has initiated the debate. In view of some of the remarks made, perhaps that party will rename itself the Welsh regional party. That does not have quite the same ring about it. I must chide that party gently for not recognising in its motion the leadership given by the Wales Labour party on this issue. [Laughter.] In view of that response, I shall show no further restraint. After Screaming Lord Sutch obtained more votes than the Welsh Nationalists combined with the Green party could achieve in Monmouth, it becomes clearer than ever that only the Labour party has any claim to be described as the party of Wales.
  The motion is right to criticise the Government and to say that the starting point for deciding the structure of local government should be communities of interest in each part of Wales. People recognise the communities in which they live and they know best what suits them whether they live in Port Talbot or Cardiff, Llanrhaeadr ym Mochnant or Penarth. We should recognise the sense of identity that suits local people when designing the local government that will represent them.
  It would be logical for the motion to go one stage further and to support the Labour party proposals. The amendment tabled by the Government is rather crass to suggest that the Government's consultation document, as it stands now, is the sound basis for further public debate, except that it is merely a debating document. The amendment suggests that the House
  "reaffirms the position of Wales as an integral part of the United Kingdom".
  It does not follow, however, that the Government should then reject the need for a regional Assembly.
  The Secretary of State was sunk by the honourable exocet, the hon. Member for Delyn (Mr. Raffan). The right hon. Gentleman had the cheek to refer to what he described as the silence of the Opposition, but he then read from our published document, which sets out the Labour party position. That was another example of the right hon. Gentleman shooting himself in the foot. The Labour party document is widely recognised as far more significant and substantial than the document published by the Secretary of State.
  Our document was published after real discussion and consultation throughout Wales. It is now in the hands of the public and is being treated to more serious consideration than that produced by the Secretary of State. The right hon. Gentleman would do well to re-read and study our document and he should accept the policies contained in it. In doing so the right hon. Gentleman would reflect the lemming-like speed with which the Prime Minister has accepted Labour party policy after Labour party policy in a desperate search for electoral popularity, without demonstrating any real commitment. We have that commitment to the document on which we have consulted and have now published.
  392
  The right hon. Gentleman also had the cheek to talk about the role of the Secretary of State for Wales. I suggest that he is not carrying out some of his functions in relation to some of his responsibilities when, on important policies such as education and health, his policies simply trail in the wake of those set by his English colleagues. His policies do not reflect the aspirations of the people throughout Wales. Perhaps to question our policies is the means by which he can cover the emptiness of his own proposals.
  The right hon. Gentleman has also indulged in scare-mongering on numbers and cost. He has misrepresented the case for a Welsh Assembly. The right hon. Gentleman referred to a hidden agenda, but his hidden agenda is dictated by the fact that the Tory party would never be able to control an elected Assembly in Wales—even at the time of its greatest popularity. He would not be able to control that Assembly in the way in which he now has powers to dictate policies for Wales. His criticisms of an elected Assembly and Labour party policy is an argument based on his own self-interest.
  We look for an effective Assembly—one that is accountable to the people of Wales for many functions. At the moment the Secretary of State is technically responsible for those functions, but neither he nor his non-elected quangos act in an accountable manner. That is the failure of the present system.
  References to regional government in England are appropriate. We do not believe that those regions should be deprived of the opportunity for accountability through regional government. However, it appears that that view is not shared by the Secretary of State. In Wales we have many of the mechanisms in place and ready for the work of an elected, regional Assembly. That gives us an advantage, so too does our sense of national identity in Wales. Those advantages make it appropriate for Wales to have such an elected Assembly.
  The Secretary of State read out the bits from the Labour party document that he wanted to criticise. I suggest that the right hon. Gentleman should pay attention to paragraph 42, which illustrates the shortcomings of the present position of the Secretary of State and the need for a Secretary of State to be free from administrative detail and responsibilities. He should
  "be able to apply himself more specifically to representing the general Welsh interest in Cabinet and Parliament, in the European Community, and through economic and other contacts worldwide."
  Mr. David Hunt: I am intrigued at that argument. The hon. Gentleman said that paragraph 42 of the Labour party document reveals some of the deficiencies of the Secretary of State's position, but that paragraph states:
  "At present the Secretary of State has a very difficult role, in that he has responsibility for a multiplicity of functions."
  Is the hon. Gentleman suggesting that I should give up some of those functions? I have spent most of my time securing more responsibilities because I believe that that is in the interest of Wales.
  Mr. Michael: No, of course not. The Secretary of State is simply seeking to misrepresent what I said. At the moment the Secretary of State not only has a multiplicity of functions, but he has responsibility for all the detail, from the top to the bottom. He has responsibility for matters on which he cannot and does not properly account to Parliament. The right hon. Gentleman may answer

  393
  questions, but that does not represent full accountability. At present, Wales does not enjoy such proper accountability.
  Is it the Secretary of State's intention to legislate in the coming Session? Is the Government's document meant to be his considered view on what should replace the present pattern of local government in Wales? His proposals for local government boundaries are a mockery and they show the depth of thought of a Jeffrey Archer novel. It appears that those proposals are intended more to divert attention and to create argument between the existing local authorities than to offer a real way forward for local government in Wales. The proposals are a recipe for competition of the worst sort—conflict between existing local authorities.
  In the case of Cardiff and South Glamorgan, there is an invitation to those local authorities to argue. We need a single tier authority that is appropriate to that area. It should not necessarily be formed according to the existing Cardiff boundaries or the existing South Glamorgan boundaries. That single authority should not be established as a result of a fight between two local authorities that now do their best to serve the interests of their people. The Secretary of State's proposals are a recipe for conflict as people seek survival in the present institutions.
  The second part of the right hon. Gentleman's hidden agenda is based on the fact that he wants the people of Wales and the local government bodies to tear each other apart rather than to have a constructive debate. He wants that because his document does not contain a vision of the role and function of future local government, but that is what we need. There is no real vision of accountability at local or Welsh level. After he has given his excuses for the Conservative party getting it wrong in the last reorganisation, paragraph 22 of the Secretary of State's document says:
  "the decrease in direct service provision has diminished the relevance of these arguments"—
  that is the arguments for the present structure—
  "and there has been considerable criticism of the present county and district structure."
  The Secretary of State also spoke of creating enabling authorities. The Labour party wants active, effective authorities rather than limited, enabling authorities, to represent the Welsh people. His hidden agenda includes stripping away local government activity. It is closer to the agenda of the No Turning Back group, which wants to strip away— [Interruption.] An exponent of that group is present and will take part in the debate later. It will be interesting to see whether the Parliamentary Under-Secretary of State will admit that his personal hidden agenda is to try to destroy the functions of local authorities in Wales.
  The Government want functions such as health to fall into the hands of their friends. They want to give unelected and unaccountable bodies responsibility for such important elements and services as education, housing and social services. That was implied by the Secretary of State's remarks, which were reported earlier today, that he will consider secure accommodation for young people in Wales being provided by private companies. He has not answered the real question whether he will provide local authorities in Wales with the resources to do a proper job in meeting the needs of young people and the communities. It costs £78,000 a year to place someone in a leading secure
  394
  accommodation establishment. Just think of the good use that a local authority could make of that money. It could be used in the public interest rather than put in one place, because local authorities can look at the whole picture in their areas.
  The problem for the Secretary of State for Wales and the Conservative party in general is that they do not believe in local government or local democracy any more than they believe in regional democracy or accountability.
  Mr. Rowlands: I apologise for interrupting my hon. Friend's flow. He is right to say that the Government do not believe in local democracy. The classic case, in terms of restriction, is local education and sixth form colleges. That essential provision for local students will now be governed by appointed governing bodies and funded by a quango appointed by the Secretary of State. If that is local or democratic—
  Mr. Michael: I commend my hon. Friend for pointing to an excellent example of the Government's policies. In my area we greatly resent the theft of Coleg Glan Hafren, which has successfully increased the participation of local youngsters in further education and training from 34 per cent. to 49 per cent. The college also resents the Secretary of State's attempt to thieve an institution that valuably serves the community in my constituency. He cannot claim that his attempt of theft is supported by the college, because it simply is not true.
  For the past 15 years, the Labour party has advocated the creation of a single tier of multi-purpose local authorities in Wales. We believe that the creation of multi-purpose authorities would yield enormous benefits in terms of integrated functions. They would be more identifiable and accountable to local people and would provide a more cost-effective method of delivering local services. The fear remains that, given the Government's past record and their current proposals to further weaken local government through such measures as the centralisation of education for 16 to 19 year-olds and, the extension of the CCT to white collar services, their attitude on the future structure of local government will be determined only by short-term electoral considerations. Little consideration is given in the Government's document to the function of those authorities or their relationship with other Welsh institutions. The consultation document is seriously flawed because it gives no clear description of the purposes and functions of the new authorities. It is impossible to discuss the structure of an organisation without prior agreement on its functions. The Labour party has addressed those issues in its document.
  In January 1991, the Secretary of State announced that he was inviting comments from Welsh local authority associations and others about the future finance, structure and functions of Welsh local government. He has now published a consultation paper on both finance and structure, but the question of functions appears to have been passed over. The consultation paper on structure makes only a veiled reference to other matters, such as the scope for improving the internal structure of local authorities, as being the subject of future consultation.
  The Labour party has made positive recommendations, such as our recommendation to introduce a quality commission to widen the scope of facilities to help all local government organisations to aspire to the highest

  395
  standards. The Government, especially the Under-Secretary of State, offer local government only insult, criticism and complaint. The Under-Secretary specialises in doing that, as exemplified by the irresponsible and outrageous way in which he dealt with secure accommodation reports recently.
  The Labour party wants a meaningful reform of local authority structures that does not extend to the sanctioning of a quick-fix solution or back-of-an-envelope redrawing of local authority boundaries, as indicated by the Government's thinly argued proposals.
  Like the Council of Welsh Districts and the Assembly of Welsh Counties, the Labour party is in favour of establishing democratic control over Government institutions at an all-Wales level. Consequently, we wish to establish an elected body for Wales to deal with certain Welsh Office functions and those functions that are presently carried out on an all-Wales basis by nominated bodies. The principle of such a reform would take power from Whitehall rather than from local government and would give a Welsh focus to the planning of housing, transport infrastructure and the economy. The transfer of many Welsh Office functions to a regional government and the multi-purpose authorities would free the Secretary of State for Wales to concentrate on representing Welsh interests in the Cabinet, Parliament and the wider world.
  The Secretary of State's refusal even to consider the establishment of some form of elected all-Wales authority as part of the present consultation process flies in the face of prevailing trends in Europe, as many of my hon. Friends have said. Every other EC nation has some form of regional government structure, as do the four motor regions of Europe to which the Secretary of State referred in his remarks. Those are Baden-Wurttemberg, Catalonia, Lombardy and the Rhone-Alpes regions, which the Secretary of State says he is keen for Wales to imitate in other respects.
  As my right hon. Friend the Leader of the Opposition said recently:
  "there can be little doubt that in the decade ahead we are going to see the national boundaries of Europe diminish in importance while regional and local identities and decisions grow in significance."
  That recognises the reality of the present position. The Labour party has made its constructive and positive proposals about the government of Wales and local government within Wales.
  The Welsh Office's consultation document contains at least four major flaws. First, it makes no analysis of the future role of local government or of the functions of the proposed unitary authorities. Secondly, the proposed number and size of the unitary authorities do not take full account of local identity, tradition, population density or topography. Thirdly, it makes no analysis of the cost of reorganisation or—this is extremely important—consideration of the need to maintain the morale and protect the interests of local authorities and their staff during the transition period. Fourthly, the Secretary of State rejects the concept of an elected all-Wales body out of hand, disregarding all the representations that have been made on that topic.
  We should not allow interest in local government reorganisation to deflect attention away from other Government policies that are harming local democracy,
  396
  such as the encouragement of primary and secondary schools to opt out of local education authority control, the transfer of 16 to 19 education to central Government, the extension of compulsory tendering, the extension of capping to all Welsh councils and the nationalisation of the business rate. More starkly than ever before, those policies demonstrate that the future of local government is no more safe in the hands of the Tories than is the future of the national health service. Real progress will have to await the election of a Labour Government, to which the Welsh people look forward with an ever-increasing sense of enthusiasm and urgency.
  6.9 pm
  Mr. Ian Grist: I welcome my right hon. Friend's consultation paper on local government. He will know that I believe that, in South Glamorgan, it is futile to try to divide the city from the rest of the county in the vale, and that there should be a single, unitary authority, perhaps called "Cardiff and County".
  This debate causes a remarkable feeling of deja vu as we traverse the barren land of devolution and constitutional crackpottery. The reason is simple—the Opposition are not fired by any seething public unrest about our constitution; Labour and Liberal policies on the issue are met with ill-disguised boredom. Denied office for so many years, and fearful that they could continue to be denied power, the Opposition parties have idly turned their hand to tinkering with the constitutional machine for want of anything better to do.
  The Opposition should have learnt their lesson in 1979, and listened to their constituents. It is a mark of how little they have learnt in opposition that they have returned to this issue, which brought them down last time, like a dog to its mess. Plaid Cymru, which initiated the debate, is of account only because the present system allows local disaffections or loyalties to be represented in this place, unlike a number of proportional representation methods, such as those involving the list, which would deny such representation. However, the rest of us are proud and pleased to represent our constituents in the Parliament of the United Kingdom.
  The two Opposition parties stand for policies that would weaken the House and, in the case of Labour, weaken the Welsh link to Westminster, as that would surely be the effect of the proposed Welsh Assembly. It is the awareness of that fact that is responsible for the less than enthusiastic endorsement of that policy by the Leader of the Opposition. In response to the then Mr. Cledwyn Hughes, who said that the devolution policy had been well ventilated, the Leader of the Opposition said that that policy had been shot as full of holes as a colander—one of his better quips. The Leader of the Opposition will know how impossible it will be to maintain a Secretary of State for Wales in the Cabinet if he is to be the lapdog of the Assembly, as proposed by the Welsh Labour party.
  Paragraph 44 of Labour's document on the future of local government in Wales states:
  "It will be important however for the regional government itself to have an opportunity to scrutinise any Parliamentary legislation and regulation with relevance to Wales so that it may make appropriate representations on them to the Secretary of State and the Government of the day. Equally, it shall be a duty of the Secretary of State to consult the regional government".
  The document states that the consultations

  397
  "must take place on a regular basis and that the Secretary of State"
  must give
  "particular attention to the view of the regional government."
  Of Welsh language the document states:
  "It will be the duty of the Secretary of State, after consultation with the regional government, to initiate any Parliamentary legislation or statutory regulation which it"—
  the regional government—
  "may consider necessary".
  If that is not the description of a lapdog, I do not know what is.
  Mr. Michael: Does the hon. Gentleman really think it so wrong that the Secretary of State for Wales should be required to consult those elected by the people of Wales? Does he think it wrong that an organisation elected by the people of Wales should expect to have its views considered by Parliament?
  Mr. Grist: The hon. Gentleman muddles legitimacy of election and accountability for a policy. We are talking about the legitimacy of an elected assembly, but the carrying out of the legislation would lie in another's hands. That person would not be responsible for the legislation that he introduced—a most extraordinary proposal.
  What sort of person would want to be placed in such a humiliating position? How would they be viewed by their Cabinet colleagues, and how would they be viewed in Wales? They might be seen as an outpost of the Treasury, because it is certain that they would have to deny some of the wilder demands of the Welsh Assembly. How could they be responsible for the central Government funds allocated to the Assembly? If the Secretary of State is not responsible for the allocation of those funds, who is to be responsible? Is the Welsh Assembly simply to be one among many in the United Kingdom? Is the United Kingdom to be split up into so many free-wheeling irresponsible, or only semi-responsible, organisations?
  We are told that the Assembly would organise itself on a council basis—by committee—rather than on a parliamentary method. But we are then told that those committees would take over the responsibility and functions of the Welsh Arts Council, the Welsh Sports Council and the Welsh Tourist Board. We are told that, on the basis of a committee of elected representatives, the Welsh Development Agency and the Development Board for Rural Wales will be accountable to the Assembly. Will they be funded by the Assembly, as they are responsible to it? I am sure that hon. Members agree that that is extraordinary.
  There will be 76 people in the regional government, but the document allocates 26 spheres of responsibility to that government. Therefore, there will be 26 chairmen out of 76 members; they will have a busy time spending the money raised by central Government. We will continue to have 38 Members of Parliament at Westminster. Are the English likely to put up with that any more than those north of the Scottish border will put up with the same representation for Scotland if they are given their own regional government? People north of the border should recognise that. What would we do when we were here? Who would we question about the expenditure of money in Wales? Who would be accountable—the Secretary of State? No, it would be the regional government—the poor son of a bitch.
  It can scarcely be thought that such an Opposition policy has been given any consideration by those with a
  398
  basic level of understanding of Parliament or representative government. The same applies to the Labour party's proposals for the Upper House and the so-called proportional representation row. We hear a lot of talk, but we are afraid that it will all end in tears at the end of the day.
  Were Labour Members to be sitting on the existing Government Benches following the next general election, between breaking the vast majority of their spending pledges and running to the International Monetary Fund to rescue the country from the inflationary explosion that they would have set in train, they would plunge this place and the country into a dog's dinner of constitutional argument, late nights, and wasted energy and time, as they did in the 1970s.
  If they do not junk that barrowload of rubbish smartish, they will find themselves spending even longer in opposition than they have already spent since they lost office on St. David's day in 1979. One mistake that they do not seem to want to repeat is to hold a democratic referendum, on which the Leader of the Opposition was so insistent from 1975 until 1979. It seems that, today, the Leader of the Opposition is not so minded to trust the judgment of the people of Wales.
  6.18 pm
  Mr. Richard Livsey: This is an historic opportunity for the House to consider constitutional reform for Wales. We are in danger of losing this opportunity, and shall not get another chance for a while. It is logical—each part of Government needs executive powers at a European, United Kingdom, Welsh, single-tier authority and community and town council level. That is entirely logical within a federal structure and should be welcomed. The position in which we find ourselves today, with two hours to discuss the entire reorganisation of local government in Wales, is an absolute disgrace.
  Mr. Raffan: Does the hon. Gentleman share my surprise that, in view of the comments of my right hon. Friend the Secretary of State on the importance of accountability to the House, this debate was not held in Government time over a full day? Is it not surprising that the Government did not do that in view of my right hon. Friend's great belief in the accountability of the Secretary of State to the House? That is particularly true as the document states that all consultation should be finished by 31 October. Should not Ministers tell us whether there will be a debate in the House after we return from the summer recess and before the end of October? There should be such a debate.
  Mr. Livsey: I entirely agree with the hon. Member for Delyn (Mr. Raffan), who is correct in his analysis. This is a totally inadequate way to debate the subject; we have not been given enough time.
  The 1974 reorganisation of local government was, at the time, thought to be a great strategic reform. It was thought to be more effective in terms of planning and that districts, and especially the counties, would be more viable as they would contain more people. At that time, natural geography was largely ignored. In the case of new counties it seemed that bigger would be better. The county of Powys runs from Llanfyllin to Ystradgynlais in the Swansea valley. That is 130 miles, which is equivalent to the distance from the Severn bridge to the Hammersmith

  399
  flyover. It does not make sense. Dyfed fared little better, with councillors in Llanelli trying to take decisions based on what was happening in Aberystwyth, and vice versa, and that did not make sense.
  It is necessary to return to single-tier authorities. The present structure leads to artificial splits between functions. Planning takes place at county and then again at district level. Education went to the counties and housing to the districts, thus splitting the means of integrated planning for communities. One result has been the closure of village schools. That happened because the lack of a proper structure for decision-making in local councils led to inadequate house building. That has resulted in the artificial aging of populations, especially in rural areas where populations are out of balance. For more than 20 years no houses have been built in many areas.
  Fortunately, this mid-20th century experiment in local government engineering is coming to a halt, and not before time. All parties agree that a single tier of local government in Wales is the best way to deliver services in rural and urban areas. All functions must reside under one roof and there must be much more co-ordination. I do not think that such a statement is controversial. The only questions remaining are what functions will the single-tier authorities perform, how many authorities will there be and what areas will they cover. We heard the expected answer from the Secretary of State for Wales concerning an Assembly because, of course, no Conservative Secretary of State would ever give us a Welsh Assembly.
  Mr. Grist: The hon. Gentleman speaks about rural unitary authorities. It has always worried me that in thinly populated areas it might be difficult to recruit enough local authority officers of the requisite quality. Does the hon. Gentleman share my concern about that?
  Mr. Livsey: I do not. Many small local authorities have high-quality officers who perform efficiently and effectively.
  The Secretary of State's document fails to spell out the functions of the unitary authorities. I am glad that he has confirmed that education will remain with local government. That is essential, and the Welsh Office should not attempt to centralise it. I take it from what the Secretary of State said that all the functions currently carried out by local authorities will remain with the new single-tier authorities. Elected representatives must have democratic control of all those functions.
  We certainly favour the proposals in map 4 for 24 local authorities rather than 20, which is the Secretary of State's option in his reorganisation proposals. That adheres more to natural local communities rather than to communities that are put together artificially. I am campaigning for separate local unitary authorities in Radnor and Brecon because two separate authorities there would be the best way to proceed.
  The Secretary of State, who has just returned to the Chamber, is wearing the tie of the Welsh Cricket Federation, presented to him by the president of that august body at the West Indies v. Wales match in Brecon on Monday. We both enjoyed that match. Is he prepared to visit Radnorshire to discuss with that authority the possibility of its becoming a separate unitary authority? I
  400
  should also like him to return to Brecon to discuss the possibility of a separate unitary authority, because support for that in the area is unanimous.
  A Welsh Assembly would be the true test of Welsh Office accountability. Without it, local government and the Secretary of State are diminished. It is rubbish for the Secretary of State to say that a Cabinet post would be lost. A Secretary of State for Wales will remain and could take and develop further powers from central Government. He could take powers from the Department of Employment and from the Home Office and could have other economic powers. His relationship with the Welsh Assembly would give him a more effective role. There would not necessarily be a clash of interests, even if the ruling party in a Welsh senate had a different political complexion from that of the Secretary of State. The Secretary of State works perfectly well with Welsh local authorities, which are certainly not of his political persuasion, and he is able to represent the interests of Wales in Cabinet without impediment.
  Mr. David Hunt: Welsh local authorities have revenue-raising powers. Therefore, they have the right to ask people to contribute to the cost of local services. The proposed Assembly would not have such powers and the Secretary of State would totally control the purse strings.
  Mr. Livsey: That may be the Labour party's proposal, but we certainly believe that there should be revenue-raising powers not only for local government but for a Welsh Assembly. It is a question of responsibility—no taxation without representation.
  There are more than 70 quangos in Wales and they must be made more accountable. The number of civil servants in the Welsh Office has been the subject of debate. I always thought that there were 3,000. However, there are many thousands of civil servants there and they must be made democratically accountable. There should be closer examination of the £5 billion that is spent by the Welsh Office. The setting up of a constitutional commission to consider these issues is a matter for legitimate debate.
  The principle of subsidiarity in the context of the European Community should also be subjected to wide-ranging debate. By keeping to himself the decision on local government reform, the Secretary of State has not indicated what objective tests he is applying before deciding on the preferred option. No costing is involved and we have not heard about a cost-benefit analysis of the alternative plans. That makes it difficult to judge which of his plans will be best from all points of view.
  The Secretary of State is currently removing powers from local government. He is taking away the careers service and considering the removal from local government of waste disposal functions. We have already had references to higher education being removed. Community and town councils must be strengthened by being given more powers, especially for looking after their local environments and for assuming responsibility for their areas.
  The ideal solution for Wales from grass roots level upwards is, first, strengthened community councils. Secondly, there must be 24 to 26 single-tier authorities which are largely based on the old councils. Thirdly, we need a Welsh senate with elections by proportional representation to give true accountability to the Welsh Office and to decide its priorities. Fourthly, we would still need a Secretary of State within the Cabinet; and, lastly,

  401
  there is the European dimension which is becoming increasingly important. Only in that way will Wales be properly and logically governed within the context of a democratic Europe.
  I congratulate Plaid Cymru on bringing this necessary subject forward for debate. We are in danger of having decisions thrust upon us by a party which is in the brake van of constitutional reform. It should throw that shackle off and get us into the 21st century as soon as possible.
  6.30 pm
  Mr. Ienen Wyn Jones (Ynys Môn): I have listened carefully to the debate and, at the expense of embarrassing my hon. Friend the Member for Meirionnydd Nant Conwy (Dr. Thomas), I would like to thank him for his outstanding contribution to the debate. His speech raised it to the appropriate level, looking at the structures of Government from the top to the bottom. That was in stark contrast to some of the later contributions, which returned to the old, sterile, futile debates of the 1970s which surely we must now put behind us.
  We are now talking about a new Wales; a new relationship that Wales has to have with the EC and with the House. The debate shows that at least one party in the House has moved on from 1979 and has recognised that we are now in a completely different ball game. That is another reason why parts of the debate about the government of Wales should not be taking place here but should have a Welsh dimension in Cardiff.
  Some of the arguments are completely outmoded in today's context—arguments such as the one about what a Secretary of State would do if there were a Welsh Parliament of a different political complexion. What does the Secretary of State now do if he has to deal with Cardiff city council or South Glamorgan council, which are Labour-controlled? What does he now do when he has to deal with so many other local authorities which are not Conservative-controlled? It is hard to find a local authority in Wales which is Conservative-controlled. Yet he says that Wales needs to have local authorities. He accepts that he has a relationship with local authorities which he now seeks to deny at an all-Wales level.
  That old sterile debate needs to be put way behind us. We must now look at the new relationship which is developing between Wales and the EC. The Secretary of State was gracious enough to say that he now welcomes Plaid Cymru's great contribution to the European debate, and he welcomes the new relationship that Wales has with the kind of regions that he mentions, such as Baden-Wurttemberg and Catalonia, which have their own regional governments. They are within the new framework of European regions about which we have been talking.
  Why would there be particular problems in Wales if the right lion. Gentleman sees none in Catalonia or Baden-Wurttemberg? Why does he think that the Government of Wales would be weaker, when some of the strongest economies in Europe are so decentralised? All the strong economies of Europe are based on the concept that all decisions that should be taken at the lowest level are taken at the lowest level. In all those regions, there is a regional level of government which is responsible for the region.
  Mr. David Hunt: In all those regions, whose leaders I have spoken to, there was general surprise that I, as Secretary of State for Wales, sat in the United Kingdom
  402
  Cabinet. The Prime Ministers of those regions said that they would give anything to have a similar position in their national Cabinets.
  Mr. Jones: They would not give up their Governments in order to have that facility.
  We in Plaid Cymru have recognised that Wales has a major contribution to make to the Europe of tomorrow, and we want that contribution to be made on an all-Wales basis. The whole European debate has given our policy such an outward-looking dimension that we want to build that new relationship with Europe to enable our business communities, situated as they are on the very edge of the EC, to be at the heart of the decision-making process. That can be accomplished only if we have the structures of government which allow a Welsh democracy on an all-Wales basis.
  6.35 pm
  Sir Anthony Meyer: After the massive discharge of fire by my right hon. Friend the Secretary of State and by my hon. Friend the Member for Cardiff, Central (Mr. Grist), the Welsh Assembly is about as full of holes as the proverbial colander. None the less, I still believe that it would be a mistake for the Conservative party to paint itself into a corner by refusing that proposal. In the first place, if we are to have 20 or more single-tier authorities in Wales, which I think is the right solution, there has to be some body which can debate their activities and the activities of the quangos at an all-Wales level. I do not believe that that body can be, as at present seems to be suggested, a partly or wholly nominated one.
  The second argument is the federalist one. I make no apology for using the F-word from the Conservative Benches. The fact is that, for the overwhelming majority of people on the continent of Europe and for a growing minority in Britain, federalism is seen not just as the most effective structure for combining close co-operation with the retention of local autonomy and national character, but also as the structure most favourable to the development of democratic and parliamentary control. Whatever the House may choose to believe, the EC will be a federal structure and Britain will be a part of it. The only alternative to that is that it will be a centralised bureaucracy. The logic of events dictates that, in due course, that federal structure will extend downwards within each individual country.
  There is one further argument. It is just possible, though I am sure unlikely, that the Welsh people at the next election will show themselves as ungrateful as the people of Monmouth were for the colossal efforts that my right hon. Friend the Secretary of State has made on their behalf. If that were so, and if the Conservative party in Wales, like the Conservative party in Scotland, were to fail to increase its representation in the House, it would be difficult for a British Government, dependent almost entirely on an overwhelming majority in England, to provide acceptable government for the United Kingdom. In those circumstances, they would find it hard to resist demands for devolution going as far as full federation. "Never" is a word better not. used in politics. I hope that my right hon. Friend will be careful not to use it.
  6.38 pm
  Mr. Denzil Davies: I do not agree with the hon. Member for Clwyd, North-West (Sir A. Meyer) on Europe, but he has summed up the matter admirably. I could not agree more with his analysis both in respect of the effect of Europe on the constitution of the United Kingdom and of the need to have some democratic control over nominated bodies in Wales.
  I am sorry that the Secretary of State did not make a serious speech. He usually does. Whatever the differences between us, he is a sincere Minister. However, he did not address the problem. I do not know whether the hon. Member for Pembroke (Mr. Bennett) is to reply, but if he is, that really is a sign that those on the Government Front Bench do not take the subject seriously.
  It is clear from history that the Conservative party has never instituted any institutional or constitutional changes in Wales. It opposed the creation of the Cabinet post of Secretary of State for Wales, in the form of my famous predecessor Jim Griffiths, but today the right hon. Gentleman defends that office down to the last trench, bayonet, and piece of barbed wire. The Conservatives opposed also the establishment of the Welsh Development Agency by my right hon. and learned Friend the Member for Aberavon (Mr. Morris). However, today that is an oasis of Keynesianism in a desert of monetarism.
  The Conservatives also opposed the establishment of the Land Authority for Wales, which was part of the betterment levy and the development land tax that, unfortunately, I had to take through the House. The Conservatives retained that as well, as another outpost of interventionism in the Welsh economy. When there is a Welsh Assembly—and there will be, one day—the Conservative party will eventually defend it to the last trench, bayonet, and piece of barbed wire. That is why one cannot take the Government seriously.
  The Secretary of State is concerned about the prospect of a Welsh Assembly that was not under Conservative control. The President of the United States does not seem too concerned that Congress is controlled by the Democrats. If he can cope with that situation, I fail to understand why the Secretary of State cannot entertain a comparable state of affairs.
  The views of the hon. Member for Cardiff, Central (Mr. Grist) on Europe are similar to those of the Secretary of State and of the hon. Member for Clwyd, North-West, who spoke about devolution. I voted against the original attempt to take the United Kingdom into the Common Market, and I will oppose also the union that is to follow. I will not use the word "devolution" but "subsidiarity". It is all right to use that word, because it was invented by a German theologian, so everyone is happy with it. Let us no longer use that terrible word "devolution", but speak of "subsidiarity" instead, with each tier deciding which level of government is best suited to perform certain functions.
  If the Secretary of State, who is in the vanguard of the Conservative European movement—or he was—is really concerned about the effect on the United Kingdom constitution of a little Assembly in Cardiff controlling the Arts Council of Wales, he ought to read the draft treaty on European economic and monetary union that the present Government, or perhaps even the next Labour Government, will have to sign soon, albeit with a few amendments. The Government are prepared to hand over the control of this country's monetary policy, interest
  404
  rates, and money supply to unelected bankers in Frankfurt, but that is not seen as threatening the British constitution.
  The right hon. Gentleman said that he did not want to be a Secretary of State without a suit—or perhaps he said he did not want to be just a suit without a Secretary of State inside it. If he reads the draft treaty, he will find that not only he but the Chancellor of the Exchequer and all the other members of the Cabinet will be without a suit. It is absurd to argue that the minor measure of setting up a Welsh Assembly in Cardiff to control funds will suborn the United Kingdom's constitution, especially when the Government are about to sign a draft treaty that will transfer chunks of power from the House to the Commission and a central bank. That really will affect this country's constitution.
  The time will come, because of what is happening in Europe now, when there will be Welsh evolution and subsidiarity, and I am sorry that the Secretary of State did not address himself to that aspect. Such a Welsh Assembly will fit into a proper system of governance for the United Kingdom.
  6.43 pm
  Mr. Dafydd Wigley: We have been enlightened by the views expressed by right hon. and hon. Members in all parts of the Chamber, including the hon. Member for Clwyd, North-West (Sir A. Meyer). If the hon. Member for Delyn (Mr. Raffan) had been called, I am sure that his contribution also would have been worth while.
  We must structure for the 21st century a form of government that is appropriate to all our needs, by deciding which decisions are best taken at what level. Some decisions may have to be taken at a European level—particularly those affecting the economy. The Secretary of State says that his primary role is to ensure that Wales has a voice when critical decisions are taken. If so, why does he not sit in European institutions on behalf of Wales, rather than concentrate entirely on his role in the British Cabinet?
  It is ironic that in the same week as the Green Paper on the future of local government was published, Mr. Bruce Millan in Brussels was presenting his ideas for a European regional council. That concept might develop into a second chamber of the European Parliament, to counterbalance the centralised forces of the European Parliament's directly elected first chamber.
  The Green Paper totally fails to address the functions appropriate to different levels of government, in respect of the bodies that the Government propose and others. How can anyone reach a judgment on boundaries if we do not know what are the functions within those boundaries? Are we to assume that everything now done by district and county councils will be undertaken without change by the new multipurpose authorities? The Secretary of State did not say that that would be the case.
  The Secretary of State introduced those proposals because there is something approaching a consensus between Welsh councils and districts on a change to all-purpose authorities. However, the apex of their proposals is a directly elected all-Wales democracy. Plaid Cymru supports in principle one main tier of local authorities—above a community council, which would have more powers, and below an all-Wales elected Government.

  405
  The Secretary of State made a weak contribution to today's debate. He should realise that the people of Wales are looking for a new form of democracy. He argued that an all-Wales body would cost £50 million a year. I do not know whether the right hon. Gentleman usually gets his figures from the Leader of the Opposition. It is interesting if he does so in other contexts. Is he unaware that the cost of running the Houses of Parliament in the vote that we approved a few months ago is put at £44 million" The Secretary of State claims that it will cost £6 million more than that to run a Welsh Assembly. We can do without that kind of nonsense.
  Government thinking is far from clear. A report in The Guardian on 29 March said:
  "The Government is actively considering setting up some form of national assemblies for Scotland and Wales as part of its reorganisation of local government … Sir Wyn Roberts, Minister of State for Wales, said plans to reorganise local government, including the possible establishment of unitary authorities, opened up the prospect of executive assemblies for both nations, but he refused to be drawn on details."
  It would be interesting to know why the Minister of State is not present for this debate.
  Mr. David Hunt: Unfortunately, my right hon. Friend the Minister of State was taken ill this afternoon, but I hope that he will recover quickly. He asked me, if his absence was mentioned, to apologise for his non-attendance.
  Mr. Wigley: If illness is the reason for the right hon. Gentleman's absence, we all hope that he will be much better soon.
  The report in The Guardian continues:
  "At the weekend, the Prime Minister spoke of the need for the party"—
  that is, the Conservative party—
  "to recover lost ground in Wales and Scotland, and said the promise of some form of national assembly, albeit without tax-raising powers, might lure back the voters."
  The Government have turned their backs on a Welsh Assembly because of the fear of their supporters in Wales that they could never win a majority in a directly elected all-Wales body. That is an indictment of a system of Government that allows a party to maintain undemocratic control because of its fear that it might lose power.
  The Secretary of State emphasised the possibility of seats being lost in the Cabinet. May I quote what was said some time ago by a Northern Ireland Minister of State?
  "Will a Secretary of State for Northern Ireland be retained after devolution? The answer is 'Yes'. The Secretary of State's responsibilities would be retained under both partial and complete devolution because he would continue to be responsible for excepted and reserved matters. The matters that are devolved will become the responsibility of the devolved Administration and Assembly."—[Official Report, 28 April 1982; Vol. 22, c. 933.]
  It was no surprise to read the comments of Mr. Roy Bradford in a Belfast newspaper on Monday. Mr. Bradford referred to
  "a brutal demolition job by one Cabinet Minister"—
  the Secretary of State for Wales—
  "on the stated policy of his colleague."
  The Government have got themselves into a complete tangle.
  We need to address the functions of local government. We must look beyond its current functions, many of which, in Wales, have been taken away: the old relationship between the medical officer of health and the county councils has gone; housing, to a large extent, has
  406
  gone to Tai Cymru; further education has been centralised and there is a possibility that refuse disposal services will be taken over by quangos. What is lacking is democratic answerability.
  We should also be considering broader issues. Many people in Wales believe that the health authorities should be more accountable. The same applies to the water companies; at present, there is taxation without representation. The police services, too, need to be more open and answerable, and the tourist industry should work more closely with local government, as well as with the quangos. All those services cry out not simply for a relationship with local government, but for a strategic, all-Wales approach. That also applies to economic planning and the development of a transport infrastructure.
  The Green Paper does not address the work load that will be imposed on individual councillors in the new all-purpose authorities. For a couple of years, I was a member of Merthyr Tydfil borough council, one of the old all-purpose authorities. I was on 22 committees: the only two committees of which I was not a member were the finance committee and the industry committee— the two subjects that I knew something about. The work load was enormous. We must bear in mind the ward sizes that will be appropriate if councillors who are not retired people are to undertake a reasonable work load.
  It is worth considering whether different councillors should be elected to perform different functions, such as education and social services, with a common secretariat serving the two, as happens in other countries. We must take a radical approach. Our ideas must be much clearer before we decide on the boundaries. We need democratic answerability on an all-Wales level, and we need a direct link with the European Community.
  The Tories have never had a parliamentary majority in Wales. That, I believe, is the basis for their fear of Welsh democracy. We are talking not about the creation of a new tier of government, but about the most appropriate division of functions between existing tiers. We want democratic answerability for the tier of government which, patently, already exists.
  6.53 pm
  The Parliamentary Under-Secretary of State for Wales (Mr. Nicholas Bennett): This has been an interesting and worth while debate and some important issues have been raised. It is worth noting how much agreement there has been about the move to unitary authorities in Wales. The great advantage of such authorities is that people know who is responsible for services. The confusion between county and district councils can be avoided. I strongly agree with the hon. Member for Brecon and Radnor (Mr. Livsey), who talks of the importance of bringing local government down to levels at which people can relate to what is happening.
  It is strange that, having supported the idea of unitary authorities, the Liberals, Labour and Plaid Cymru have asked for another tier of government. My hon. Friends and I want less government and real devolution. That is why, when we present our paper on the internal management of local authorities—as we shall do very shortly—we shall take into account some of the points made by the hon. Member for Caernarfon (Mr. Wigley) about the importance of streamlining local authority

  407
  work. There should not be 22 different committees; local authorities must become enabling authorities, tackling the important issues but not necessarily carrying out all the work themselves.
  Real devolution is very important, and the Government are committed to it. We have already seen it in education; schools have been given local management, and we have introduced grant-maintained status. We have given parents more information about exam results and about what schools offer. As for housing, we have sold some 80,000 council houses in Wales to the people who live in them, thus giving them direct financial control over their lives. The Government will soon present the citizens charter, which will give people still more direct control over their lives. Ownership of property and wealth is what gives people real control over not only their own lives, but those of their families.
  Labour Members have talked of quality commissions and other quangos. We know that the Labour party does not believe in giving people real control over their own lives. It has opposed every piece of legislation that the Government have presented in the past few years to give more power to the individual. It has been against every attempt at decentralisation—the sale of council houses, increased freedom for parents and schools and devolution of the health service through NHS trusts. Now, Labour wants another tier of government—costing some £50 million—which would mean more bureaucracy, more civil servants and more control over people's lives. We shall not hesitate to reject that proposal.
  It is interesting to note that, in the days when he opposed the idea of a Welsh Assembly, the Leader of the Opposition said:
  "For the price of an Assembly, we could have a new hospital or six miles of motorway or 10 comprehensive schools every year."
  When it comes to spending money, we should ask the people of Wales whether they want to spend £50 million on a useless added tier of bureaucracy, or whether they would rather spend it on improving their lives directly.
  We should also be concerned about the bias that the assembly might have. Let me quote the Leader of the Opposition again. He said:
  "I will tell the hon. Member what will happen in a Welsh Assembly which, even on a rough proportional basis, will be dominated by people representing the English-speaking industrial proletariat of South Wales."—[Official Report, 15 November 1977; Vol. 939, c. 472.]
  I would not use that phrase myself, but I see his point. We should not have a Welsh Assembly that would inevitably be dominated by south-east Wales, telling the people of rural Wales—the people of Pembrokeshire, Gwynedd and the like—what to do.
  My hon. Friend the Member for Cardiff, Central (Mr. Grist) spoke about the Secretary of State and the Cabinet. It cannot be right for the Secretary of State to lose all his powers, yet continue to sit in the Cabinet, forced to argue for more money for Wales but with no accountability for how that money is spent. That is not the job description of a Cabinet Minister; it is a job description for a shadow Secretary of State, such as the hon. Member for Alyn and Deeside (Mr. Jones). He would like such powers; he would like to be simply an empty voice, unable to do anything for Wales—merely going through the platitudes, pretending to have some power.
  408
  It is a recipe for conflict. According to paragraph 45 of Labour's document,
  "the Secretary of State will have the duty, after consultation, with regional government, to initiate any parliamentary legislation or statutory regulation which it may consider necessary for the execution of such responsibilities and for which it is prepared to provide the necessary funding."
  Are we to have a Conservative Secretary of State who is told, possibly by a Labour-dominated assembly, what he must do and how much money he must raise? The document has not been thought through; it is nonsense.
  What about the role of Members of Parliament in the House? I was elected by my constituents in Pembrokeshire to represent them in a national Parliament. I was not sent here as a mere delegate, unable to speak on important issues affecting my constituents because power had gone to Cardiff. Does anyone really believe that English Members would be prepared to allow Welsh and Scottish Members to decide legislation in England, without having the same power for their own countries? That was the West Lothian question that the hon. Member for Linlithgow (Mr. Dalyell) asked in 1978. We have had no reply, but that is the fundamental contradiction in Labour's proposals.
  We should heed the words of the Leader of the Opposition, who said in 1978 that we should—
  Mr. Ieuan Wyn Jones rose in his place and claimed to move, That the Question be now put.
  Question, That the Question be now put, put and agreed to.
  Question put accordingly, That the original words stand part of the Question:—
  The House divided: Ayes 32, Noes 200.

  Division No. 216]

  [6.59 pm

  AYES

  Ashdown, Rt Hon Paddy

  Livingstone, Ken

  Beggs, Roy

  Livsey, Richard

  Beith, A. J.

  Loyden, Eddie

  Brown, Ron (Edinburgh Leith)

  Maclennan, Robert

  Bruce, Malcolm (Gordon)

  Michie, Mrs Ray (Arg'l & Bute)

  Campbell, Menzies (Fife NE)

  Molyneaux, Rt Hon James

  Canavan, Dennis

  Ross, William (Londonderry E)

  Carlile, Alex (Mont'g)

  Salmond, Alex

  Corbyn, Jeremy

  Smyth, Rev Martin (Belfast S)

  Cox, Tom

  Steel, Rt Hon Sir David

  Cryer, Bob

  Taylor, Matthew (Truro)

  Godman, Dr Norman A.

  Thomas, Dr Dafydd Elis

  Howells, Geraint

  Wallace, James

  Hughes, John (Coventry NE)

  Wigley, Dafydd

  Hughes, Simon (Southwark)

  Johnston, Sir Russell

  Tellers for the Ayes:

  Jones, Ieuan (Ynys Môn)

  Mrs. Margaret Ewing and Mr. Andrew Welsh

  Leighton, Ron

  NOES

  Adley, Robert

  Boscawen, Hon Robert

  Alison, Rt Hon Michael

  Bottomley, Peter

  Allason, Rupert

  Bottomley, Mrs Virginia

  Amess, David

  Bowden, Gerald (Dulwich)

  Amos, Alan

  Bowis, John

  Arbuthnot, James

  Braine, Rt Hon Sir Bernard

  Arnold, Sir Thomas

  Brazier, Julian

  Ashby, David

  Bright, Graham

  Atkins, Robert

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

  Atkinson, David

  Bruce, Ian (Dorset South)

  Baker, Nicholas (Dorset N)

  Budgen, Nicholas

  Banks, Robert (Harrogate)

  Burt, Alistair

  Bellingham, Henry

  Carlisle, John, (Luton N)

  Bennett, Nicholas (Pembroke)

  Carttiss, Michael

  Benyon, W.

  Cash, William

  Bevan, David Gilroy

  Channon, Rt Hon Paul

  Blackburn, Dr John G.

  Chapman, Sydney

  Blaker, Rt Hon Sir Peter

  Clark, Dr Michael (Rochford)

  409

  Clark, Rt Hon Sir William

  McCrindle, Sir Robert

  Clarke, Rt Hon K. (Rushcliffe)

  Macfarlane, Sir Neil

  Conway, Derek

  MacGregor, Rt Hon John

  Coombs, Anthony (Wyre F'rest)

  MacKay, Andrew (E Berkshire)

  Coombs, Simon (Swindon)

  Maclean, David

  Couchman, James

  McLoughlin, Patrick

  Currie, Mrs Edwina

  McNair-Wilson, Sir Michael

  Davis, David (Boothferry)

  McNair-Wilson, Sir Patrick

  Dicks, Terry

  Malins, Humfrey

  Douglas-Hamilton, Lord James

  Mans, Keith

  Durant, Sir Anthony

  Marland, Paul

  Dykes, Hugh

  Martin, David (Portsmouth S)

  Emery, Sir Peter

  Mates, Michael

  Evans, David (Welwyn Hatf'd)

  Maxwell-Hyslop, Robin

  Evennett, David

  Meale, Alan

  Farr, Sir John

  Meyer, Sir Anthony

  Favell, Tony

  Miller, Sir Hal

  Fenner, Dame Peggy

  Miscampbell, Norman

  Field, Barry (Isle of Wight)

  Mitchell, Andrew (Gedling)

  Fishburn, John Dudley

  Mitchell, Sir David

  Fookes, Dame Janet

  Monro, Sir Hector

  Forman, Nigel

  Morrison, Rt Hon Sir Peter

  Forsyth, Michael (Stirling)

  Moss, Malcolm

  Forth, Eric

  Neale, Sir Gerrard

  Fowler, Rt Hon Sir Norman

  Neubert, Sir Michael

  Fox, Sir Marcus

  Nicholls, Patrick

  Franks, Cecil

  Norris, Steve

  Freeman, Roger

  Onslow, Rt Hon Cranley

  French, Douglas

  Oppenheim, Phillip

  Fry, Peter

  Paice, James

  Gale, Roger

  Patnick, Irvine

  Goodhart, Sir Philip

  Pattie, Rt Hon Sir Geoffrey

  Goodlad, Alastair

  Peacock, Mrs Elizabeth

  Gorst, John

  Porter, David (Waveney)

  Greenway, John (Ryedale)

  Powell, William (Corby)

  Gregory, Conal

  Price, Sir David

  Griffiths, Sir Eldon (Bury St E')

  Raison, Rt Hon Sir Timothy

  Griffiths, Peter (Portsmouth N)

  Rathbone, Tim

  Grist, Ian

  Rhodes James, Sir Robert

  Grylls, Michael

  Riddick, Graham

  Hague, William

  Ridsdale, Sir Julian

  Hanley, Jeremy

  Rifkind, Rt Hon Malcolm

  Hannam, John

  Rowe, Andrew

  Hargreaves, Ken (Hyndburn)

  Ryder, Rt Hon Richard

  Harris, David

  Sackville, Hon Tom

  Haselhurst, Alan

  Shaw, David (Dover)

  Hawkins, Christopher

  Shaw, Sir Giles (Pudsey)

  Hayes, Jerry

  Sims, Roger

  Hayhoe, Rt Hon Sir Barney

  Skeet, Sir Trevor

  Hayward, Robert

  Skinner, Dennis

  Heathcoat-Amory, David

  Smith, Sir Dudley (Warwick)

  Hill, James

  Speed, Keith

  Hind, Kenneth

  Spicer, Sir Jim (Dorset W)

  Howarth, G. (Cannock & B'wd)

  Spicer, Michael (S Worcs)

  Howe, Rt Hon Sir Geoffrey

  Stanley, Rt Hon Sir John

  Howell, Ralph (North Norfolk)

  Steen, Anthony

  Hughes, Robert G. (Harrow W)

  Stern, Michael

  Hunt, Rt Hon David

  Stevens, Lewis

  Hunt, Sir John (Ravensbourne)

  Stewart, Allan (Eastwood)

  Irvine, Michael

  Stewart, Andy (Sherwood)

  Jack, Michael

  Summerson, Hugo

  Janman, Tim

  Taylor, Ian (Esher)

  Johnson Smith, Sir Geoffrey

  Taylor, John M (Solihull)

  Jones, Gwilym (Cardiff N)

  Taylor, Sir Teddy

  Jones, Robert B (Herts W)

  Temple-Morris, Peter

  King, Roger (B'ham N'thfield)

  Thompson, D. (Calder Valley)

  Kirkhope, Timothy

  Thompson, Patrick (Norwich N)

  Knapman, Roger

  Thorne, Neil

  Knight, Greg (Derby North)

  Thornton, Malcolm

  Knight, Dame Jill (Edgbaston)

  Townend, John (Bridlington)

  Knowles, Michael

  Tredinnick, David

  Knox, David

  Trippier, David

  Latham, Michael

  Twinn, Dr Ian

  Lawrence, Ivan

  Viggers, Peter

  Lee, John (Pendle)

  Walden, George

  Lester, Jim (Broxtowe)

  Walker, Bill (T'side North)

  Lightbown, David

  Wardle, Charles (Bexhill)

  Lord, Michael

  Wells, Bowen

  Luce, Rt Hon Sir Richard

  Wheeler, Sir John

  Lyell, Rt Hon Sir Nicholas

  Whitney, Ray

  410

  Widdecombe, Ann

  Wilshire, David

  Tellers for the Noes:

  Winterton, Nicholas

  Mr. Timothy Wood and

  Yeo, Tim

  Mr. Tim Boswell

  Question accordingly negatived.
  Question, That the proposed words be there added, put forthwith pursuant to Standing Order No.30 (Questions on amendments):—
  The House divided: Ayes 197, Noes 102.

  Division No. 217]

  [7.12 pm

  AYES

  Adley, Robert

  Goodlad, Alastair

  Alison, Rt Hon Michael

  Gorst, John

  Allason, Rupert

  Greenway, John (Ryedale)

  Amess, David

  Gregory, Conal

  Amos, Alan

  Griffiths, Sir Eldon (Bury St E')

  Arbuthnot, James

  Griffiths, Peter (Portsmouth N)

  Arnold, Sir Thomas

  Grist, Ian

  Ashby, David

  Grylls, Michael

  Atkins, Robert

  Hague, William

  Atkinson, David

  Hamilton, Rt Hon Archie

  Baker, Nicholas (Dorset N)

  Hanley, Jeremy

  Banks, Robert (Harrogate)

  Hannam, John

  Bellingham, Henry

  Hargreaves, Ken (Hyndburn)

  Bennett, Nicholas (Pembroke)

  Harris, David

  Benyon, W.

  Haselhurst, Alan

  Bevan, David Gilroy

  Hawkins, Christopher

  Blackburn, Dr John G.

  Hayes, Jerry

  Blaker, Rt Hon Sir Peter

  Hayhoe, Rt Hon Sir Barney

  Boscawen, Hon Robert

  Hayward, Robert

  Bottomley, Peter

  Heathcoat-Amory, David

  Bottomley, Mrs Virginia

  Hill, James

  Bowden, Gerald (Dulwich)

  Hind, Kenneth

  Bowis, John

  Howarth, G. (Cannock & B'wd)

  Braine, Rt Hon Sir Bernard

  Howe, Rt Hon Sir Geoffrey

  Brazier, Julian

  Howell, Ralph (North Norfolk)

  Bright, Graham

  Hughes, Robert G. (Harrow W)

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

  Hunt, Rt Hon David

  Bruce, Ian (Dorset South)

  Hunt, Sir John (Ravensbourne)

  Budgen, Nicholas

  Irvine, Michael

  Burt, Alistair

  Jack, Michael

  Carlisle, John, (Luton N)

  Janman, Tim

  Carttiss, Michael

  Johnson Smith, Sir Geoffrey

  Cash, William

  Jones, Gwilym (Cardiff N)

  Channon, Rt Hon Paul

  Jones, Robert B (Herts W)

  Chapman, Sydney

  Kilfedder, James

  Clark, Dr Michael (Rochford)

  King, Roger (B'ham N'thfield)

  Clark, Rt Hon Sir William

  Kirkhope, Timothy

  Clarke, Rt Hon K. (Rushcliffe)

  Knapman, Roger

  Conway, Derek

  Knight, Greg (Derby North)

  Coombs, Simon (Swindon)

  Knight, Dame Jill (Edgbaston)

  Couchman, James

  Knowles, Michael

  Currie, Mrs Edwina

  Knox, David

  Davis, David (Boothferry)

  Lang, Rt Hon Ian

  Dicks, Terry

  Latham, Michael

  Douglas-Hamilton, Lord James

  Lawrence, Ivan

  Durant, Sir Anthony

  Lee, John (Pendle)

  Dykes, Hugh

  Lennox-Boyd, Hon Mark

  Emery, Sir Peter

  Lester, Jim (Broxtowe)

  Evans, David (Welwyn Hatf'd)

  Lightbown, David

  Evennett, David

  Lord, Michael

  Farr, Sir John

  Lyell, Rt Hon Sir Nicholas

  Favell, Tony

  McCrindle, Sir Robert

  Fenner, Dame Peggy

  MacGregor, Rt Hon John

  Field, Barry (Isle of Wight)

  MacKay, Andrew (E Berkshire)

  Fishburn, John Dudley

  Maclean, David

  Fookes, Dame Janet

  McLoughlin, Patrick

  Forman, Nigel

  McNair-Wilson, Sir Michael

  Forsyth, Michael (Stirling)

  McNair-Wilson, Sir Patrick

  Forth, Eric

  Malins, Humfrey

  Fowler, Rt Hon Sir Norman

  Mans, Keith

  Franks, Cecil

  Marland, Paul

  Freeman, Roger

  Martin, David (Portsmouth S)

  French, Douglas

  Mates, Michael

  Fry, Peter

  Maxwell-Hyslop, Robin

  Gale, Roger

  Meyer, Sir Anthony

  Goodhart, Sir Philip

  Miller, Sir Hal

  411

  Miscampbell, Norman

  Spicer, Sir Jim (Dorset W)

  Mitchell, Andrew (Gedling)

  Spicer, Michael (S Worcs)

  Mitchell, Sir David

  Stanley, Rt Hon Sir John

  Monro, Sir Hector

  Steen, Anthony

  Morrison, Rt Hon Sir Peter

  Stern, Michael

  Moss, Malcolm

  Stevens, Lewis

  Neale, Sir Gerrard

  Stewart, Allan (Eastwood)

  Neubert, Sir Michael

  Stewart, Andy (Sherwood)

  Nicholls, Patrick

  Summerson, Hugo

  Norris, Steve

  Taylor, Ian (Esher)

  Onslow, Rt Hon Cranley

  Taylor, John M (Solihull)

  Oppenheim, Phillip

  Taylor, Sir Teddy

  Page, Richard

  Temple-Morris, Peter

  Paice, James

  Thompson, D. (Calder Valley)

  Patnick, Irvine

  Thompson, Patrick (Norwich N)

  Pattie, Rt Hon Sir Geoffrey

  Thorne, Neil

  Peacock, Mrs Elizabeth

  Thornton, Malcolm

  Porter, David (Waveney)

  Townend, John (Bridlington)

  Powell, William (Corby)

  Twinn, Dr Ian

  Price, Sir David

  Viggers, Peter

  Raison, Rt Hon Sir Timothy

  Walden, George

  Rathbone, Tim

  Walker, Bill (T'side North)

  Rhodes James, Sir Robert

  Wardle, Charles (Bexhill)

  Riddick, Graham

  Wells, Bowen

  Ridsdale, Sir Julian

  Wheeler, Sir John

  Rifkind, Rt Hon Malcolm

  Whitney, Ray

  Roe, Mrs Marion

  Widdecombe, Ann

  Rowe, Andrew

  Wilshire, David

  Ryder, Rt Hon Richard

  Winterton, Nicholas

  Sackville, Hon Tom

  Yeo, Tim

  Shaw, David (Dover)

  Sims, Roger

  Tellers for the Ayes:

  Skeet, Sir Trevor

  Mr. Timotny Wood and

  Smith, Sir Dudley (Warwick)

  Mr. Tim Boswell.

  Speed, Keith

  NOES

  Adams, Mrs Irene (Paisley, N.)

  Canavan, Dennis

  Allen, Graham

  Carlile, Alex (Mont'g)

  Armstrong, Hilary

  Clwyd, Mrs Ann

  Ashdown, Rt Hon Paddy

  Cook, Frank (Stockton N)

  Banks, Tony (Newham NW)

  Corbyn, Jeremy

  Barnes, Harry (Derbyshire NE)

  Cox, Tom

  Barron, Kevin

  Cryer, Bob

  Beggs, Roy

  Darling, Alistair

  Beith, A. J.

  Davies, Rt Hon Denzil (Llanelli)

  Benn, Rt Hon Tony

  Dixon, Don

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

  Dunnachie, Jimmy

  Blunkett, David

  Eastham, Ken

  Boyes, Roland

  Edwards, Huw

  Brown, Gordon (D'mline E)

  Flynn, Paul

  Brown, Ron (Edinburgh Leith)

  Godman, Dr Norman A.

  Bruce, Malcolm (Gordon)

  Gordon, Mildred

  Campbell, Menzies (Fife NE)

  Grant, Bernie (Tottenham)

  Campbell-Savours, D. N.

  Griffiths, Nigel (Edinburgh S)

  412

  Griffiths, Win (Bridgend)

  Michael, Alun

  Hardy, Peter

  Michie, Mrs Ray (Arg'l & Bute)

  Hattersley, Rt Hon Roy

  Molyneaux, Rt Hon James

  Haynes, Frank

  Morley, Elliot

  Hogg, N. (C'nauld & Kilsyth)

  Orme, Rt Hon Stanley

  Home Robertson, John

  Patchett, Terry

  Hood, Jimmy

  Pike, Peter L.

  Howells, Geraint

  Powell, Ray (Ogmore)

  Hughes, John (Coventry NE)

  Primarolo, Dawn

  Hughes, Simon (Southwark)

  Quin, Ms Joyce

  Janner, Greville

  Redmond, Martin

  Johnston, Sir Russell

  Ross, William (Londonderry E)

  Jones, Barry (Alyn & Deeside)

  Rowlands, Ted

  Lambie, David

  Salmond, Alex

  Leighton, Ron

  Skinner, Dennis

  Lestor, Joan (Eccles)

  Smith, Andrew (Oxford E)

  Lewis, Terry

  Smyth, Rev Martin (Belfast S)

  Litherland, Robert

  Soley, Clive

  Livingstone, Ken

  Steel, Rt Hon Sir David

  Livsey, Richard

  Steinberg, Gerry

  Lofthouse, Geoffrey

  Strang, Gavin

  Loyden, Eddie

  Taylor, Matthew (Truro)

  McAvoy, Thomas

  Thomas, Dr Dafydd Elis

  McCartney, Ian

  Wallace, James

  McKay, Allen (Bamsley West)

  Walley, Joan

  Maclennan, Robert

  Wareing, Robert N.

  McWilliam, John

  Watson, Mike (Glasgow, C)

  Madden, Max

  Wigley, Dafydd

  Mahon, Mrs Alice

  Winnick, David

  Marek, Dr John

  Wise, Mrs Audrey

  Marshall, David (Shettleston)

  Young, David (Bolton SE)

  Martin, Michael J. (Springburn)

  Martlew, Eric

  Tellers for the Noes:

  Maxton, John

  Mrs. Margaret Ewing and

  Meale, Alan

  Mr. Andrew Welsh.

  Question accordingly agreed to.
  Mr. Deputy Speaker forthwith declared the main Question, as amended, to be agreed to.
  Resolved,
  That this House welcomes the publication of the Consultation Paper on The Structure of Local Government in Wales; considers that it provides a sound basis for further public debate on local government structure in Wales; approves of the continuing development of the partnership between Wales and regions of Europe under the present constitutional arrangements of the United Kingdom; reaffirms the position of Wales as an integral part of the United Kingdom; and therefore rejects arguments for an elected Welsh Assembly, the creation of which would undermine the present arrangements for the direct representation of Wales in the Government of the United Kingdom.

  Foreign Corporation Bill [Lords]
  Order for Second Reading read.
  7.22 pm
  The Solicitor-General (Sir Nicholas Lyell): I beg to move, That the Bill he now read a Second time.
  This is a short but important Bill. Its object is to ensure that corporations incorporated under the laws of territories that the United Kingdom does not recognise as states can be treated here as having legal personality. A decision by the Court of Appeal last year on the legal personality of an international organisation, since reversed by the House of Lords, led to consideration being given to other questions of legal personality. It was agreed that the law relating to the status of corporations from non-states should be clarified by legislation.
  If the Government do not recognise the territory of another part of the world as a state, it has been argued that our courts should not recognise its laws either, including those on the incorporation of companies. The result is that a company, although perhaps doing business here and well accepted as doing so, might not be able to sue or be sued in our courts. On the other hand, there are signs that the court will seek to avoid such a strict approach and will look at the commercial realities of such a case rather than at the political relations between the territory and this country from time to time. That is, of course, the view that the Government prefer.
  In the Government's view, such basic legal questions as, "Is this body a corporation?" and, "What does its constitution permit?" should not depend on questions of foreign policy. All that the Bill seeks to do is to say that companies are not to be denied legal personality here simply because the territories in which they are incorporated are not recognised as states.
  I should make it clear that the Bill does not change our policy or practice on the recognition of states in any way. The internationally accepted criteria according to which the Government do or do not recognise territories as states remain the same. The Bill will reassure not only foreign corporations that already operate in this country or which may wish to do so, but companies and individuals who do business with them. It will not be possible for either party to try to avoid its obligations, as happened in a recent case, by claiming that the corporation has no legal personality here because it comes from a non-state.
  Clause 1(1) provides that, if the laws of the territory are applied by a settled court system at the time when the question arises, the question whether a corporation has been incorporated or dissolved is to be determined as if the territory were a recognised state. Courts and legal advisers here will be able to look at and take account of the territory's laws in the same way that they would do if the corporation came from a recognised state.
  I should draw attention to clause 1(3), as it validates Acts, including Acts relating to registration which would have been valid when done if the Bill had then been in force. That retrospective element is justified and does not go further than is necessary. The provision relates in particular to obligations that have been entered into in good faith by a foreign corporation and another party on the basis that the corporation has legal personality under our law. Clause 1(3) means that it will not be possible for
  414
  either party to dishonour its obligations on the ground that the corporation had no legal personality when it entered into them.
  As those who have followed its legal history will understand, the Bill is needed. It is needed to remove doubts and uncertainties in the commercial and financial world. Without it, there would be a possibility that bona fide companies that operate here would be held not to have legal personality in the eyes of our law, leaving their clients, customers and creditors at risk. Those doubts may also dissuade foreign corporations from setting up business here. Such doubts, once raised, must be resolved rapidly.
  Dr. Norman A. Godman: Will the right hon. and learned Gentleman confirm that the concept of legal personality has equal validity for the Scottish legal system as well? It is an important question with regard to the number of foreign corporations setting up satellite subsidiaries in Scotland.
  The Solicitor-General: Yes. The concept is important wherever commercial activity is carried out: I can so confirm.
  Legislation in this area has been called for by City firms of solicitors, and the content of the Bill has been discussed with them. Similar legislation has recently been introduced in Australia. The Bill does not accord any recognition of any territory as a state, and should not be interpreted as doing so. It clarifies, in accordance with commercial reality, the law on the legal personality of corporations from non-states which come to this country. I commend it to the House.
  7.28 pm
  Mr. John Fraser: As the Solicitor-General has pointed out, the Bill has retrospective effect. It is relatively rare that Parliament passes retrospective legislation. I must not be critical, because I did the same when I was a Minister. When City solicitors and City of London bankers tell the Government that something is wrong, that they have found a legal technicality that might deprive them of the right to recover their money, legislation goes through the House in double quick time. Today the Bill will have its Second Reading, Committee stage, Report stage and Third Reading, all within a few minutes. That is all right for City bankers, but if there is a technicality affecting a tenant, or somebody's pension or social security claim, legislation does not go through quite so quickly—certainly not retrospective legislation such as the Bill before us.
  It is right, however, that the Bill should be retrospective, because it does no more than put the parties in the position in which they thought they were when they concluded their bargains. Both parties would have thought that they had the legal capacity to enter into a contract or other legal relationship, so we are doing no more than the parties intended should happen. I draw attention to the retrospective nature of the Bill but in this case it is right.
  The Bill is concerned with companies incorporated under the laws of states that we do not recognise. For example, we do not recognise Palestine or Taiwan as separate states. Another example is the Turkish Independent Republic of Northern Cyprus, with which my constituents in south London often deal. In the near

  415
  future, Eritrea, or part of Kurdistan, for instance, may assume the qualities of states that are not recognised by Her Majesty's Government.
  There is a list of territories which, although not recognised by the Government, may have settled systems of law and court systems that work on proper civilised lines. The Bill provides that a company incorporated in such a territory not recognised by the United Kingdom Government will nevertheless be accorded legal corporate personality when it comes to trade in the United Kingdom.
  Provided that the foreign territory has a settled legal and judicial system, and laws by which a corporation can be created, it would be wrong to deny customers and contracting parties the right to sue simply because the state under which incorporation took place is not recognised by the United Kingdom Government. Commercial laws should recognise the realities of trade, and should be as free as possible from technical traps.
  A company incorporated in northern Cyprus may supply fruit. There has been some discussion about Azil Nadir operating in Cyprus; this is not a theoretical matter. It is right that those who contract with a company incorporated in northern Cyprus should have rights against it, and the fruit traders of northern Cyprus should have rights against their customers here. The same is true of companies supplying clothes, materials or toys from Taiwan.
  The Bill is right to deal with those issues, but it leaves many unanswered questions and creates huge anomalies, which I shall talk about in a moment. I suggest that, as a condition of the Bill being given a rapid passage today, the Solicitor-General, on behalf of the Lord Chancellor, should give an undertaking to the House that the Lord Chancellor will ask the Law Commission to examine and report on the recognition of foreign and domestic independent legal personalities, including the question of corporate personality.
  I shall ask some of the questions that the Bill leaves unanswered. How is a customer to know how to determine the vires of an overseas corporation? Will it be treated as having the same general powers as a United Kingdom company, or the sort of limited freedom of contract possessed by Hammersmith and Fulham council? As the Solicitor-General knows, that council was found to have a corporate personality but not the ability to enter into certain contracts with banks. We are not sure whether the vires law will apply to the overseas corporations.
  How can a creditor wind up an overseas corporation, or extract a contribution or payment from the contributors? Will the concept of wrongful trading introduced in the most recent Companies Act apply to officers and directors of overseas corporations as it applies to officers and directors of United Kingdom companies? That is a question of some importance when an overseas company continues to trade knowing that it is insolvent, and there ought to be a personal liability on those who know that the company is conducting its affairs in that way. Those are several questions which should be answered.
  The Bill creates huge anomalies. That is not an argument against the Bill, but it is as well to recognise the anomalies. For instance, by virtue of the Bill, a partnership under the civil law system of a non-recognised foreign state will have a legal corporate personality in the United
  416
  Kingdom. For instance, in France—I know that the Bill does not apply to France, as we already recognise French domestic corporations—an organisation such as a partnership has a separate corporate individual personality.
  If a non-recognised state has a civil law system like that of France, whereby a partnership has a separate legal personality, by virtue of the Bill such an organisation will have a separate legal personality in this country, too. But a partnership set up inside this country—for instance, a large firm of solicitors employing, say, 2,500 people, with several hundred partners—is not recognised as having a separate, independent legal personality. It is ridiculous that, technically, one has to sue hundreds of people.
  It is not possible to sue a club; one has to sue the trustees because the club has no separate legal personality. Sometimes, difficulties have arisen concerning trade unions, and I have come across problems concerning Members of Parliament who say that they have been libelled by the Society for the Protection of Unborn Children. SPUC does not have a separate legal personality under British law. If SPUC libels somebody at the next general election—it is alleged to have done so in past elections—no proceedings can be taken against the organisation because it does not possess a separate, independent legal personality in Britain.
  By virtue of the Bill, however, if a similar organisation had been incorporated under the laws of Taiwan, and had a recognised, separate, independent legal personality there, it would have an advantage—or possibly a disadvantage—in this country compared with British clubs, trusts and other non-company organisations. That seems ridiculous.
  I shall illustrate what I regard as one of the most dangerous anomalies. I believe that the Solicitor-General referred to the case of the Arab Monetary Fund, which was decided earlier this year by the Judicial Committee of the House of Lords. The AMF was formed in 1976 by 20 rich, powerful, recognised Arab states together with Palestine, which is not recognised as a separate state by the United Kingdom. The AMF established an international banking organisation for those Arab states. It was formed by international treaty and recognised by public international law. But the AMF had not been accorded the status of a corporation by Order in Council under the International Organisations Act, 1968.
  It then alleged that a Dr. Hashim had stolen $50 million from it. It decided to sue in the British courts for the recovery of that money from Dr. Hashim. The Court of Appeal under Lord Donaldson—a man who does not always commend himself to some of my hon. Friends—decided that the AMF had no legal personality at all.
  If we had been left with the Court of Appeal decision, a two-person balloon manufacturing operation from Taiwan or a melon grower from northern Cyprus would be recognised in the United Kingdom as a corporate institution, notwithstanding the fact that the states concerned were not recognised by the British Government, but a joint organisation, set up under international treaty by 20 rich, powerful, prestigious Arab states enjoying friendly commercial relations with Britain, would not be recognised, even if it was alleged that $50 million has been stolen from it. If it had been left to Lord Donaldson and the Court of Appeal, that would have been the position.
  Luckily, as a result of a good deal of ingenuity on the part of the House of Lords, it was decided that, because

  417
  the AM F had been recognised by a decree of the United Arab Emirates, it should be recognised as having a separate independent personality in the United Kingdom. It was a pretty close shave, however, and the original decision represented a failure to recognise the reality of international commercial operations. Such decisions by the courts do Britain no good as a commercial and banking centre, just as the Hammersmith and Fulham decision will be bad, in the long run, for the reputation of this country.
  I do not expect the Solicitor-General to reply at any length to these matters. I merely wanted to draw attention to what I now regard as enormous anomalies in the treatment of one organisation as against another, and to ask the right hon. and learned Gentleman to undertake that these matters will now be referred to the Law Commission. They are not theoretical matters; they often go to the heart of Britain's commercial reputation.. We have acted in this case to save some people's commercial bacon, but I hope that we can have a much better system of law for foreign corporations. The Bill will not deal with the question in full, and we could well do with recommendations from the Law Commission.
  7.42 pm
  Mr. Bob Cryer: It looks as though the Government are rushing the Bill through because, as my hon. Friend the Member for Norwood (Mr. Fraser) said, what is at stake is a trading relationship. The Bill contains retrospective provisions. I can recall how the then Conservative Opposition treated a retrospective provision introduced to deal with the case of Clay Cross councillors who had been surcharged and faced disqualification. The Housing Finance (Special Provisions) Act 1975 simply restored those councillors' civic rights—civic rights that had already been restored to councillors in Scotland and in Wales—but because the Bill contained retrospective provisions, the Conservative Opposition said that it was an absolute and complete outrage.
  Sir Michael Havers, as he then was, led the assault on a handful of brave working-class councillors who had had the temerity to provide decent housing at low rents. The previous jackboot Conservative Government had tried to force them to raise rents, but they had decided that the people they represented should be entitled to low rents. Because of the Clay Cross councillors' principled stand, they were surcharged and disqualified. When we attempted to introduce a Bill to deal with the matter, we had an enormous row about retrospective legislation.
  I take the view that retrospective legislation is sometimes necessary. But the Government should recognise that, on their own previous criteria, a Bill containing retrospective provisions should be dealt with very charily by the House. I remember Dick Crawshaw, who was ostensibly a Labour Member, but who shortly afterwards joined the newly formed SDP, saying of the Bill that retrospective legislation was the top of the slippery slope to fascism—such was the tumult—
  Mr. Alan Meale: Where is he now?
  Mr. Cryer: He is dead, as a matter of fact.
  I caution the Government about rushing the Bill through. I assume that all its stages are to be dealt with in a matter of minutes. If we are to maintain the standards set in 1975 by the man who became Attorney-General in a
  418
  Conservative Government and who said that retrospective legislation should not be applied, we should consider the Bill carefully and take some time over it.
  As my hon. Friend the Member for Norwood so cogently argued, if there is pressure from the City or from a commercial trading organisation, the Government whip through Bills which contain loopholes, just to satisfy those people. But when it comes to the ordinary workers and a decent little urban district council trying to establish standards and provide good quality, low-rent housing, it is a different story.
  The Clay Cross councillors did not actually disobey the legislation introduced by the previous Conservative Government. They asked for a commissioner to be sent in, and that Government refused. As a consequence of the Government's refusal, they faced penalties. I repeat that the Conservative party opposed that legislation because of its retrospective elements. There seems to be a strong sniff of double standards weaving its way around the House tonight.
  7.46 pm
  The Solicitor-General: With the leave of the House, Madam Deputy Speaker. We have had useful contributions to this short debate. First, the matter of retrospection has been raised. As the hon. Member for Norwood (Mr. Fraser) rightly said, this is a case in which the retrospective elements are wholly acceptable. It is a matter for the Law Officers, in that independent capacity, to look at retrospection, and one of the criteria on the basis of which one accepts retrospection—Law Officers appointed by Governments of all complexions on behalf of the Crown have always accepted it—is where what is involved is the restoration of the law to the state in which everyone believed it to have been and on the basis of which everyone had acted in commercial dealings. That is a wholly acceptable form of retrospective legislation.
  The hon. Member for Norwood raised other aspects of the Bill, and mentioned what he described as unanswered questions and anomalies. He then linked those to the Arab Monetary Fund case. Some fairly remarkable arguments were advanced on behalf of those who sought to avoid financial liability in that case. It is an arcane area of the law, and those arguments found favour in the Court of Appeal. They did not, however, find favour in the House of Lords, and the House of Lords, adopting principles that are wholly consistent with the Bill, which states the matter clearly for the world in general, put the matter right. In so far as it is right for me to express an opinion on these difficult matters, I believe that the arguments that found favour in the House of Lords had a great deal of common sense to recommend them, as well as being the law of the land as held by our highest court.
  I do not think that the hon. Member for Norwood would expect me to give an undertaking in quite the form in which he asked for it. He asked for an undertaking that the Lord Chancellor will ask the Law Commission to look at the matters that he described as anomalies. Nevertheless, I shall refer his careful remarks to my noble and learned Friend, so that he may consider them. Obviously, I cannot give an undertaking on behalf of my noble and learned Friend, and perhaps, on reflection, it will anyway become clearer that what are thought to be anomalies are not so anomalous and that questions that are thought to have been unanswered in fact have sensible

  419
  answers. We will reflect on the points that the hon. Gentleman made when we have the opportunity to study them in print. I hope that that will satisfy him. I shall either write to him or ask my noble and learned Friend to write to him, so that these matters are not merely left in the air.
  I commend the Bill to the House.
  Question put, That the Bill be now read a Second time:—
  The House divided: Ayes 178, Noes 26.

  Division No. 218]

  [7.48 pm

  AYES

  Alison, Rt Hon Michael

  Gregory, Conal

  Allason, Rupert

  Griffiths, Sir Eldon (Bury St E')

  Amess, David

  Griffiths, Peter (Portsmouth N)

  Amos, Alan

  Grylls, Michael

  Arbuthnot, James

  Gummer, Rt Hon John Selwyn

  Ashby, David

  Hague, William

  Ashdown, Rt Hon Paddy

  Hampson, Dr Keith

  Atkins, Robert

  Hanley, Jeremy

  Atkinson, David

  Hargreaves, Ken (Hyndburn)

  Baker, Rt Hon K. (Mole Valley)

  Harris, David

  Banks, Robert (Harrogate)

  Haselhurst, Alan

  Beaumont-Dark, Anthony

  Hawkins, Christopher

  Beggs, Roy

  Hayes, Jerry

  Bellingham, Henry

  Hayward, Robert

  Bennett, Nicholas (Pembroke)

  Heathcoat-Amory, David

  Benyon, W.

  Hill, James

  Bevan, David Gilroy

  Hind, Kenneth

  Blackburn, Dr John G.

  Howarth, G. (Cannock & B'wd)

  Blaker, Rt Hon Sir Peter

  Howell, Ralph (North Norfolk)

  Boswell, Tim

  Hughes, Robert G. (Harrow W)

  Bowis, John

  Hughes, Simon (Southwark)

  Brazier, Julian

  Irvine, Michael

  Brooke, Rt Hon Peter

  Jack, Michael

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

  Janman, Tim

  Budgen, Nicholas

  Jones, Gwilym (Cardiff N)

  Burt, Alistair

  Jones, Robert B (Herts W)

  Butler, Chris

  Kilfedder, James

  Carlile, Alex (Mont'g)

  King, Roger (B'ham N'thfield)

  Carlisle, John, (Luton N)

  Kirkhope, Timothy

  Carttiss, Michael

  Knapman, Roger

  Cash, William

  Knight, Greg (Derby North)

  Channon, Rt Hon Paul

  Knowles, Michael

  Chapman, Sydney

  Knox, David

  Clark, Rt Hon Sir William

  Lang, Rt Hon Ian

  Clarke, Rt Hon K. (Rushcliffe)

  Latham, Michael

  Conway, Derek

  Lee, John (Pendle)

  Coombs, Anthony (Wyre F'rest)

  Lennox-Boyd, Hon Mark

  Coombs, Simon (Swindon)

  Lester, Jim (Broxtowe)

  Cormack, Patrick

  Livsey, Richard

  Couchman, James

  Lord, Michael

  Currie, Mrs Edwina

  Luce, Rt Hon Sir Richard

  Davis, David (Boothferry)

  Lyell, Rt Hon Sir Nicholas

  Dicks, Terry

  Maclean, David

  Durant, Sir Anthony

  Maclennan, Robert

  Dykes, Hugh

  McLoughlin, Patrick

  Emery, Sir Peter

  McNair-Wilson, Sir Michael

  Favell, Tony

  Malins, Humfrey

  Fenner, Dame Peggy

  Mans, Keith

  Fishburn, John Dudley

  Marland, Paul

  Fookes, Dame Janet

  Maxwell-Hyslop, Robin

  Forman, Nigel

  Meyer, Sir Anthony

  Forsyth, Michael (Stirling)

  Miscampbell, Norman

  Forth, Eric

  Mitchell, Andrew (Gedling)

  Fox, Sir Marcus

  Molyneaux, Rt Hon James

  Franks, Cecil

  Monro, Sir Hector

  Freeman, Roger

  Moss, Malcolm

  French, Douglas

  Neale, Sir Gerrard

  Fry, Peter

  Neubert, Sir Michael

  Gale, Roger

  Nicholls, Patrick

  Goodhart, Sir Philip

  Norris, Steve

  Goodlad, Alastair

  Oppenheim, Phillip

  Gorst, John

  Page, Richard

  Greenway, John (Ryedale)

  Paice, James

  420

  Peacock, Mrs Elizabeth

  Summerson, Hugo

  Porter, David (Waveney)

  Taylor, Ian (Esher)

  Price, Sir David

  Taylor, John M (Solihull)

  Raffan, Keith

  Taylor, Matthew (Truro)

  Raison, Rt Hon Sir Timothy

  Thomas, Dr Dafydd Elis

  Rhodes James, Sir Robert

  Thompson, D. (Calder Valley)

  Riddick, Graham

  Thompson, Patrick (Norwich N)

  Ridsdale, Sir Julian

  Thorne, Neil

  Rifkind, Rt Hon Malcolm

  Thornton, Malcolm

  Rowe, Andrew

  Trippier, David

  Sackville, Hon Tom

  Twinn, Dr Ian

  Shaw, David (Dover)

  Vaughan, Sir Gerard

  Shaw, Sir Giles (Pudsey)

  Viggers, Peter

  Shepherd, Colin (Hereford)

  Walden, George

  Sims, Roger

  Walker, Bill (T'side North)

  Skeet, Sir Trevor

  Wallace, James

  Smith, Sir Dudley (Warwick)

  Wardle, Charles (Bexhill)

  Speed, Keith

  Wells, Bowen

  Speller, Tony

  Wheeler, Sir John

  Spicer, Sir Jim (Dorset W)

  Whitney, Ray

  Spicer, Michael (S Worcs)

  Widdecombe, Ann

  Stanley, Rt Hon Sir John

  Wigley, Dafydd

  Steel, Rt Hon Sir David

  Winterton, Nicholas

  Steen, Anthony

  Yeo, Tim

  Stern, Michael

  Stevens, Lewis

  Tellers for the Ayes:

  Stewart, Allan (Eastwood)

  Mr. David Lightbown and

  Stewart, Andy (Sherwood)

  Mr. Timothy Wood.

  NOES

  Adams, Mrs Irene (Paisley, N.)

  Madden, Max

  Banks, Tony (Newham NW)

  Marshall, David (Shettleston)

  Barnes, Harry (Derbyshire NE)

  Martin, Michael J. (Springburn)

  Boyes, Roland

  Martlew, Eric

  Brown, Ron (Edinburgh Leith)

  Meale, Alan

  Canavan, Dennis

  Nellist, Dave

  Duffy, Sir A. E. P.

  Patchett, Terry

  Flynn, Paul

  Redmond, Martin

  Godman, Dr Norman A.

  Salmond, Alex

  Gordon, Mildred

  Sillars, Jim

  Home Robertson, John

  Skinner, Dennis

  Illsley, Eric

  Loyden, Eddie

  Tellers for the Noes:

  McAvoy, Thomas

  Mr. Bob Cryer and

  McWilliam, John

  Mr. Andrew F. Bennett.

  Question accordingly agreed to.
  Bill read a Second time.
  Motion made—[Mr. Chapman]—and Question put forthwith, pursuant to Standing Order No. 61 (Committal of Bills), That the Bill be committed to a Committee of the whole House:—
  The House divided: Ayes 163, Noes 28.

  Division No. 219]

  [8 pm

  AYES

  Alison, Rt Hon Michael

  Budgen, Nicholas

  Allason, Rupert

  Burt, Alistair

  Amess, David

  Butler, Chris

  Amos, Alan

  Carlile, Alex (Mont'g)

  Arbuthnot, James

  Carlisle, John, (Luton N)

  Ashby, David

  Carttiss, Michael

  Atkins, Robert

  Cash, William

  Atkinson, David

  Chapman, Sydney

  Baker, Nicholas (Dorset N)

  Clark, Rt Hon Sir William

  Banks, Robert (Harrogate)

  Clarke, Rt Hon K. (Rushcliffe)

  Beaumont-Dark, Anthony

  Conway, Derek

  Beggs, Roy

  Coombs, Simon (Swindon)

  Bellingham, Henry

  Couchman, James

  Bennett, Nicholas (Pembroke)

  Currie, Mrs Edwina

  Benyon, W.

  Davis, David (Boothferry)

  Bevan, David Gilroy

  Dicks, Terry

  Blackburn, Dr John G.

  Dykes, Hugh

  Blaker, Rt Hon Sir Peter

  Emery, Sir Peter

  Boswell, Tim

  Favell, Tony

  Bowis, John

  Fenner, Dame Peggy

  Brazier, Julian

  Fishburn, John Dudley

  Brooke, Rt Hon Peter

  Fookes, Dame Janet

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

  Forman, Nigel

  421

  Forth, Eric

  Monro, Sir Hector

  Fox, Sir Marcus

  Morrison, Sir Charles

  Franks, Cecil

  Moss, Malcolm

  Freeman, Roger

  Neale, Sir Gerrard

  French, Douglas

  Neubert, Sir Michael

  Fry, Peter

  Nicholls, Patrick

  Gale, Roger

  Norris, Steve

  Gilmour, Rt Hon Sir Ian

  Oppenheim, Phillip

  Goodhart, Sir Philip

  Page, Richard

  Goodlad, Alastair

  Paice, James

  Gorst, John

  Peacock, Mrs Elizabeth

  Greenway, John (Ryedale)

  Porter, David (Waveney)

  Gregory, Conal

  Price, Sir David

  Griffiths, Sir Eldon (Bury St E')

  Raffan, Keith

  Griffiths, Peter (Portsmouth N)

  Raison, Rt Hon Sir Timothy

  Hague, William

  Rhodes James, Sir Robert

  Hampson, Dr Keith

  Ridsdale, Sir Julian

  Hanley, Jeremy

  Rifkind, Rt Hon Malcolm

  Hargreaves, Ken (Hyndburn)

  Rowe, Andrew

  Harris, David

  Sackville, Hon Tom

  Haselhurst, Alan

  Shaw, David (Dover)

  Hawkins, Christopher

  Sims, Roger

  Hayes, Jerry

  Skeet, Sir Trevor

  Hayward, Robert

  Smith, Sir Dudley (Warwick)

  Hill, James

  Speed, Keith

  Hind, Kenneth

  Spicer, Michael (S Worcs)

  Howarth, G. (Cannock & B'wd)

  Steel, Rt Hon Sir David

  Howell, Ralph (North Norfolk)

  Steen, Anthony

  Hughes, Robert G. (Harrow W)

  Stern, Michael

  Hughes, Simon (Southwark)

  Stevens, Lewis

  Irvine, Michael

  Stewart, Allan (Eastwood)

  Jack, Michael

  Stewart, Andy (Sherwood)

  Janman, Tim

  Summerson, Hugo

  Jones, Gwilym (Cardiff N)

  Taylor, Ian (Esher)

  Jones, Robert B (Herts W)

  Taylor, John M (Solihull)

  Kilfedder, James

  Taylor, Matthew (Truro)

  King, Roger (B'ham N'thfield)

  Temple-Morris, Peter

  Knapman, Roger

  Thompson, D. (Calder Valley)

  Knowles, Michael

  Thompson, Patrick (Norwich N)

  Knox, David

  Thorne, Neil

  Lang, Rt Hon Ian

  Thornton, Malcolm

  Latham, Michael

  Trippier, David

  Lee, John (Pendle)

  Twinn, Dr Ian

  Lennox-Boyd, Hon Mark

  Vaughan, Sir Gerard

  Lightbown, David

  Walden, George

  Livsey, Richard

  Walker, Bill (T'side North)

  Lord, Michael

  Wallace, James

  Luce, Rt Hon Sir Richard

  Wardle, Charles (Bexhill)

  Lyell, Rt Hon Sir Nicholas

  Wells, Bowen

  Maclean, David

  Wheeler, Sir John

  McLoughlin, Patrick

  Whitney, Ray

  McNair-Wilson, Sir Michael

  Widdecombe, Ann

  Malins, Humfrey

  Wigley, Dafydd

  Mans, Keith

  Winterton, Nicholas

  Marland, Paul

  Wood, Timothy

  Maxwell-Hyslop, Robin

  Yeo, Tim

  Mayhew, Rt Hon Sir Patrick

  Meyer, Sir Anthony

  Tellers for the Ayes:

  Miscampbell, Norman

  Mr. Greg Knight and

  Mitchell, Andrew (Gedling)

  Mr. Timothy Kirkhope.

  Molyneaux, Rt Hon James

  NOES

  Adams, Mrs Irene (Paisley, N.)

  Martlew, Eric

  Banks, Tony (Newham NW)

  Meale, Alan

  Barnes, Harry (Derbyshire NE)

  Morley, Elliot

  Boyes, Roland

  Nellist, Dave

  Brown, Ron (Edinburgh Leith)

  Primarolo, Dawn

  Canavan, Dennis

  Salmond, Alex

  Corbyn, Jeremy

  Sillars, Jim

  Duffy, Sir A. E. P.

  Skinner, Dennis

  Flynn, Paul

  Strang, Gavin

  Godman, Dr Norman A.

  Turner, Dennis

  Gordon, Mildred

  Wise, Mrs Audrey

  Home Robertson, John

  Young, David (Bolton SE)

  McWilliam, John

  Mahon, Mrs Alice

  Tellers for the Noes:

  Marshall, David (Shettleston)

  Mr. Bob Cryer and

  Martin, Michael J. (Springburn)

  Mr. Andrew F. Bennett.

  Question accordingly agreed to.
  Bill immediately considered in Committee.

Clause 1

  RECOGNITION OF CORPORATE STATUS OF CERTAIN FOREIGN CORPORATIONS
  Question proposed, That the clause stand part of the Bill.
  8.10 pm
  Mr. Harry Barnes: Clause 1(1)(a) deals with states that are not recognised. In our discussions of the Bill the Government should provide a clear explanation of the scope of the clause. How many states are unrecognised by the British Government and how many states would be affected by this legislation? That could be important in determining our attitude to the clause.
  My main concern is with clause 1(3) which makes the legislation retrospective. Why is retrospective legislation appropriate? I am not producing an argument against it, but we should take the greatest care when it is suggested. We should consider its implications carefully. We should not propose retrospective legislation in a cavalier fashion.
  On Second Reading we heard of a case of some significance when retrospective legislation was introduced to try to cover the problems faced by councillors in Clay Cross. I know those councillors and former councillors well because I represent the constituency in which Clay Cross is situated. Why is the argument for retrospective legislation stronger in this instance than it was in their case?
  The Clay Cross councillors found the operation of the Housing Finance Act 1972 objectionable and against the interests of the people whom they represented. They stood out courageously against it, believing that their actions were entirely legal. The Act provided for a housing commissioner to be sent in to take over the council's affairs if it was not increasing its rents as it was required to do under the Act. That was the initial position, although it may have changed later. At least initially they believed that their actions were entirely consistent with the law.
  To that extent, the corporations covered by this legislation may be in a similar position. Presumably the corporations thought that their activities were legal, but now have discovered that they were not. Their ignorance of the law will be covered by this legislation. Likewise, in the case of Clay Cross, the councillors' misunderstanding of what became the interpretation of the law by the courts was at the front of their minds.
  8.15 pm
  The Clay Cross councillors were dealt with under the 1936 legislation on local government finance. The district auditor brought evidence against them, showing their failure to balance the accounts. They were surcharged by the district auditor for the shortfall under the Housing Finance Act. The legislation was reinterpreted, admittedly, because of the existence of the Housing Finance Act. Legally that is legitimate. It was argued in court that they believed that they were not doing anything that was constitutionally odd, therefore action should not have been taken against them. There is a similarity between that case and the corporations covered by this Bill.

  423
  Will the Solicitor-General explain why the principles behind this measure are held to be more important and significant than those in the case of the Clay Cross councillors? My constituents in particular and, certainly, the Clay Cross councillors and former councillors will be interested to know why one case is dealt with in one way and why arguments were used in this House to stop full and serious consideration of their particular concerns and interests. In 1975 effective legislation could have covered them and their problems. Many other councillors in the British Isles were covered by the measure, but the particular problem of the Clay Cross councillors was that they were caught earlier by that measure, so a retrospective element was needed to put them in line with others. Likewise, it seems that a retrospective measure is now required to put certain corporations in line with others.
  Mr. Andrew F. Bennett: I do not want to detain the House long. When the Solicitor-General replies, can he give me some information about the principles on which the Government are proposing retrospective legislation in this case?
  I see no objection to retrospective legislation provided that everyone gains as a result. It is particularly worrying if some people lose and if an action is regarded as a crime retrospectively. It is an important principle that people should know the law when they carry out actions. When we introduce the idea of retrospective legislation and make an action a crime when it was not a crime when the person performed it, we are on dangerous ground.
  So long as the Minister can assure me that there are only winners, no losers, I can see few problems with the Bill. It would be helpful if the Solicitor-General, on behalf of the Government and the Conservative party, spelt out the principles on which the Government operate. It appears that they consider that it is reasonable to have retrospective legislation in some areas, but totally unreasonable in others. Many of us heard that argument on Clay Cross.
  I hope that the Minister can set down the clear principles behind the Bill. I hope that he can tell us when retrospective legislation is reasonable and when it is not. I hope that he will not tell us that it is a question of temporary expedience; that is not a good principle to work on. If retrospective legislation is introduced to produce winners when people have been deemed to have done something wrong, which they and everyone else did not believe to be a crime, but which is found to be a crime technically, that is all to the good. I cannot possibly contemplate the circumstances in which we introduce retrospective legislation and someone who does something in good faith is penalised because that act has become a crime as a result of that legislation.
  Mr. Fraser: I do not know whether my hon. Friend the Member for Denton and Reddish (Mr. Bennett) was here on Second Reading.
  Mr. Bennett: Yes, I was.
  Mr. Fraser: Perhaps I can make our position on retrospection clear.
  I support the retrospective provisions of the Bill because they put the parties to a commercial relationship in exactly the same position that they thought they were in when they entered into their arrangements. In that way they are not deceived. My hon. Friend the Member for
  424
  Denton and Reddish should appreciate that there can be winners and losers. A case may proceed where parties think they have entered into a contract. However, if the foreign corporation realises that it is being sued and pleads that it has no legal personality and so cannot be sued, that foreign corporation would be the winner. It would have avoided its liabilities, but the person who had contracted with it in good faith would be the loser. I do not believe that is right and that is why I support the retrospective provisions.
  Mr. Bennett: Does my hon. Friend accept that foreign companies would not originally assume that they could use that loophole to get out of a contract? That loophole was discovered for them by the courts. It was not something that those companies originally took into account when they entered into agreements.
  Mr. Fraser: That is exactly what I am saying. There have always been cases where the law was believed to be in a particular state and where Parliament corrected a misapprehension that was discovered only later on. Such cases may be rare, but they are a proper reason for retrospection.
  Retrospection is never justified under any circumstances when one passes a law that makes criminal something done in the past which was not criminal at the time the act was committed. Such retrospective legislation would be a breach of international conventions on human rights. Such retrospective legislation is insupportable and I would not support it under any circumstances—I do not believe any party would do such a thing.
  My hon. Friends will be aware that I represented, without any charge, the Clay Cross councillors in the surcharge case. The Bill does not stand on all fours with that case. In that case it was argued that we should not have retrospective legislation that forgave those Clay Cross councillors. People argued that they knew what they were doing at the time.
  One can always justify that type of retrospective legislation because the state has the power to forgive. In the Clay Cross case individual rights had not been interfered with, rather it was the rights of the state versus the rights of individuals. If the state wants to be generous and to forgive, as it does with reprieves and pardons, the state is free to do so. That is the proper action. That has often been done for Members of Parliament because many retrospective acts of indemnity have been passed in the House. Dr. Winstanley was the beneficiary of retrospective legislation. He was elected as a Member of Parliament, but was disqualified in the same way as the Clay Cross councillors. However, the state, the House of Commons, forgave him for his minor infraction and he was able to take up his Crown appointment.
  It is always proper for the state to be forgiving and that is how I justify the Clay Cross case. I hope that I have drawn the distinction between the different types of retrospective legislation. I hope that I have made my view clear as to why the Bill should be supported.
  I want to ask the Solicitor-General about the operation of another part of clause 1, which relates to the recognition of companies incorporated under the laws of a state that is not recognised as a separate state by the United Kingdom. Will that apply to the Soviet Republics? There is no problem with a corporation incorporated under

  425
  Californian or New York law because all the incorporations in the American federal system are recognised by the Federal Government. What happens if, during a course of radicalism or privatisation, Soviet republics pass laws for which they do not have the vires to pass under the Soviet federal law? What happens if those laws establish private enterprise companies in the Baltic states or in Georgia? Will the United Kingdom courts recognise those Soviet incorporated entities if those republics have a settled legal system and a proper court system? Will the United Kingdom recognise those entities notwithstanding that the Government of the Soviet Union do not?
  Mr. Dennis Skinner: I am a bit worried about this Bill being rushed through. I know that Parliament wants to get finished for the hols on 25 July and when I looked at the agenda for today I spotted about 10 different items. That is unusual because normally we might discuss one or two items, sometimes three. Here we are with five different Bills. I thought that this one was not that contentious until I heard my hon. Friends the Members for Denton and Reddish (Mr. Bennett) and for Derbyshire, North-East (Mr. Barnes). I now realise that the Bill involves the words—dreaded by some—retrospec-tive legislation.
  I have heard many arguments about such legislation, especially when a Labour Government were in power. In those days the Tories sat on the Opposition Benches and they used to play merry hell about a Labour Government even daring to introduce retrospective legislation. Now we have the Solicitor-General creeping in here in the middle of the evening when all of his friends have gone to dinner. He is trying to slide the Bill through in the hope that Opposition Members have gone to dinner as well. Some of us have not because some of us have to keep an eye on things so that this parliamentary democracy is sustained, or brought down, as the case may be.
  They call this place the mother of Parliaments, but I do not know why, because, frankly, there are only 42 women in it. It should be called the father of Parliaments. We have been told that we should spread this wonderful system of democracy all around the world, to eastern Europe and all over the place. Yet this Bill has come from the other place, the House of Lords, where no one is elected. So we are going to spread this around eastern Europe saying, "Follow us down this wonderful road to democratic nirvana. You can have 1,100 peers for life." Christ almighty! So here we are with a Bill being rushed through when Mr. Speaker is having his dinner. I do not mean any disrespect, Miss Boothroyd, as you have—
  The Second Deputy Chairman of Ways and Means (Miss Betty Boothroyd): Order. I am sure that the hon. Gentleman realises that Mr. Speaker is never in the Chair when we are in Committee. I am sure that the hon. Gentleman is warming up to what he has to say on clause 1 as his comments are totally irrelevant at the moment.
  Mr. Skinner: I am trying to raise my voice sufficiently loud enough for Mr. Speaker to hear me. You are absolutely right, Miss Boothroyd, that we are in Committee, which means that it is a different kind of debate. For the people out there it is difficult to understand this mumbo-jumbo world, this quaint little gentleman's club. The people might think that this debate represents the House of Commons in action, but this is a Committee rushing through a Bill to introduce retrospective
  426
  legislation. The Government have introduced retrospective legislation before. The former Secretary of State for the Environment, the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley), introduced retrospective legislation four times because he had got the original Bill wrong.
  My hon. Friend the Member for Norwood (Mr. Fraser) said, quite properly, that retrospective legislation was all right provided that the guilty parties knew what they were doing at the time. Let us face it, we know that the right hon. Member for Cirencester and Tewkesbury did not quite understand what he was doing when he introduced those four Bills that had to be changed by retrospective legislation. Some Tory Members wish that that legislation had gone down then.
  8.30 pm
  My hon. Friend the Member for Norwood also referred to Lord Winstanley, who used to be a Member of Parliament. He came here in 1974 having been elected as the hon. Member for Hazel Grove. One day, I noticed that the annunciator was showing that a further little item of business was being taken. The Government had added it at the last minute, just like today, because they were trying to rush it through. I asked some of my hon. Friends what was going on and they told me that it was to rescue the hon. Member who is now called Lord Winstanley. A Labour Government were in office at the time and they wanted to ensure that that Liberal Member of Parliament, who had broken the rules, was saved. If someone stands for Parliament he should have an idea about whether he is fit for office. Lord Winstanley had an office of profit under the Crown and served on medical tribunals, so he must have known that he was breaking the rules. Another example is the Prime Minister, who was elected as a councillor in Lambeth and put down the wrong address. He would have been done for that in an election court. Just fancy, he is running an economic summit down the road and he does not even know where he lives. He has several different hyphenated names, which he keeps changing.
  Lord Winstanley was told to keep out of the road so that he would not be noticed. In this great democracy of ours he was told not to come here because he might spur someone on to talk about the issue, so I decided to talk about it. Here was a Member of Parliament who should not have been elected, and the Labour Government wanted to give him a chance to stay. I wondered what they were fighting for. The net result was that my former right hon. Friend, now Lord Glenamara in another place, moved the appropriate resolution and up jumped a Tory Opposition Member—oh yes, wonderful, let us get it through sharp before anyone notices—straight after Question Time. The Government could not get away with that now. I then moved in and said that I wanted to know a little more about it. Just imagine the hue and cry if Lord Winstanley had been a left-wing Labour Member. That would have been a different ball game altogether. However, the then Government slipped the matter through and I made my protest.
  I do not know where my hon. Friend the Member for Bradford, South (Mr. Cryer) was at that time. I am intrigued to know, because I have only just thought about it.
  The Second Deputy Chairman: Order. May I remind the hon. Gentleman where he is at the moment. He should be

  427
  dealing with clause 1, which is very narrow and technical. I am sure that the hon. Gentleman is ingenious enough to come back to order.
  Mr. Cryer: Will my hon. Friend give way?
  The Second Deputy Chairman: Order. The point may be amusing, but we should be discussing clause 1.
  Mr. Cryer: Will my hon. Friend give way on the question of retrospection contained in clause 1?
  Mr. Skinner: Yes, this is a retrospective argument about something that happened in 1974.
  Mr. Cryer: My hon. Friend will recall that I was one of the Labour Members who turned up to ensure that we voted the civic rights of the Clay Cross 11 back into operation, against the wishes of the Tories who said that retrospective legislation was a slippery slope that we should not go down. They are willing to go down it in clause 1. My hon. Friend will recall that we did not manage to get that legislation through in spite of my clear adherence to being here and voting for it because some of our hon. Friends, most of whom joined the Social Democratic party later, abstained in that vote to protect decent working class councillors at Clay Cross.
  Mr. Skinner: We have already dealt with that matter in which my hon. Friend played a significant role. We are now discussing the Liberal Member of Parliament who was here for a short period and is now called Lord Winstanley.
  The important question is, as my hon. Friend the Member for Norwood said, whether Lord Winstanley knew that he was breaking the rules. He was a medical doctor serving on a tribunal and picking up money from a Government quango. He was then elected and he broke the electoral law. That must have been a dodgy affair but it slipped through.
  What connection does clause 1 have with the Bank of Credit and Commerce International?
  The Second Deputy Chairman: Order. I can enlighten the hon. Gentleman there. It has nothing whatsoever to do with BCCI and I hope that the hon. Gentleman will now come back to order and deal with the technicalities of the clause.
  Mr. Skinner: Let us face it, you, Mrs. Boothroyd—I think that that is the correct title for the position that you presently hold—
  The Second Deputy Chairman: I have never been married.
  Mr. Skinner: Right. You are called Madam Deputy Speaker, but when you are chairing a Committee you are called Miss Boothroyd. People should know that you have changed your name in the past 10 minutes.
  We are discussing foreign countries that deal with trade and money. We know that BCCI was involved in laundering drug money—Noriega and all the rest. We also live in a world in which, by the push of a computer button, money can be transferred from one country to another. I am concerned about whether, if the Bill is enacted, there has been any laundering, because the Solicitor-General is involved in this drug laundering business. I think that he
  428
  was here last year—it may have been the Secretary of State for Trade and Industry—when the Government passed a law to ensure that drug money was under control and that those involved were brought to heel. I remember that the debate took place late at night and that my hon. Friend the Member for Bradford, South and I took part in it. We asked whether that was possible and I want to know whether, when money is transferred to different countries, we are completely in control of the drug money that is sloshing about. It should be used to write off the debts of third world countries—I just throw that in, en passant.
  Will the Bill affect immigrants? If so, my hon. Friend the Member for Norwood would probably have spotted it because he is very knowledgeable on that matter. My hon. Friend mentioned the Soviet republics—the 15 states within the Soviet Union—and asked whether there will be a problem. Six of those states are already saying to Gorbachev, "You can do business with the ex-Prime Minister of Britain if you like but we want to opt out". We could argue about whether it is a good idea for those six states to separate from the other nine in the Soviet Union. My hon. Friend made a good point when he asked whether, when we speak of the Soviet Union, it includes the six who want to break away. Does it include the Ukraine, Latvia, Lithuania and Estonia? Do those foreign countries include Yugoslavia? My guess is that they do. If so, should Croatia be considered separately? Will they be regarded separately under the terms of the Bill?
  Mr. Fraser: Separately.
  Mr. Skinner: My hon. Friend says that they will be catered for separately. The Government must have foreseen that. What about India? Kashmir is trying to break away. Is that catered for?
  Mr. Fraser: Yes.
  Mr. Skinner: It is quite remarkable. Are Iraq and Kurdistan catered for?
  Mr. Fraser: Yes.
  Mr. Skinner: That was mentioned earlier, and I wondered whether it was properly catered for under the Bill—on and on it goes.
  There was a discussion earlier about Clay Cross and retrospective legislation. I do not think that any of my hon. Friends were pulled up over that. I shall put the record straight. When Clay Cross councillors made their decision, they did so in the knowledge that, under the Tory legislation brought in by the then hard-nosed Prime Minister, the right hon. Member for Old Bexley and Sidcup (Mr. Heath)—he is now a wet—a housing commissioner was shifting power away from local authorities to central Government. One of the ways to do so was to tell local authorities, "You put up rents because we tell you." Clay Cross councillors said that they would not do so because they were fighting for an element of local authority control which central Government were trying to seize. The legislation contained the provision that, in the event of a local authority not collecting that extra 50p a week on the rents, a commissioner would be sent in.
  I well remember the case then argued, whereby a local authority could say, "If the Government have powers to collect their own money, let them get on with it." The commissioner got to Clay Cross and nobody paid him. That was not because the commissioner did not collect the

  429
  money—he tried—as my hon. Friend the Member for Derbyshire, North-East (Mr. Barnes) knows. The commissioner had an office in Clay Cross, but nobody went to see him. I suppose that it was like the poll tax in Liverpool, but on a grander scale because nobody went to see the commissioner and he had to come back empty handed.
  The question arose that if the commissioner could not do the job that central Government had told him to do under the terms of the 1972 legislation, why should the councillors be penalised? In retrospect, it would not be a bad idea if they were all given a pardon for the effort they made then to prevent central Government control. Lord Hailsham was outraged and the House of Lords threw out a section of the legislation, which returned to the House on 14 August 1975. My hon. Friend the Member for Bradford, South and other hon. Members voted to allow Clay Cross councillors to be reprieved so that they would avoid bankruptcy and the rest. But some of our colleagues did not vote that night. The Hansard report of those votes make interesting reading.
  Retrospective legislation has had a chequered career in the House. If someone is close to the establishment, he is in with a chance. If he is very close and part of the establishment—in its higher echelons—the chances are that he will be rescued by retrospective legislation and get away with it. But if he happens to be a local Labour councillor, the chances are that he will not be given the chance of retrospective legislation. The nearer people are to the top, the more chances they get because laws are passed on their behalf. If they make a mistake and do not realise, they can be saved by retrospective legislation. If they are part of the establishment, and do something that they know is wrong, the establishment will introduce retrospective legislation to rescue them. Those are roughly the double standards that operate in this place.
  Tonight, in this mini debate, which might continue—there will have to be votes on the important issues—we have been able to show that the Tory Government bring in retrospective legislation. They send Conservative Members to dinner and bring them back when the Division bells ring. There are shop stewards on the door saying, "We know that you have not listened to the debate, but go in here." They kick the Conservative Members into the Lobby to vote through the retrospective legislation. [Interruption.] Does my hon. Friend the Member for Derbyshire, North-East want to join in? He looks earnest.
  Mr. Harry Barnes: I want to talk about councillors and the debarments that affected the Clay Cross case. The debarment provision, which was elaborated in the 1936 legislation, dealt with a measure that has never been discussed in the House in the 20th century. It stated that councillors can be debarred if they are surcharged and go bankrupt. That 19th century provision has been drawn on for further good measure.
  Mr. Skinner: Surcharging is wide open to abuse. Some people, especially in local authorities, are surcharged if they spend too much money. A Tory, right-wing authority such as Wandsworth, which wants to cut and carve, and get rid of all the services, is not penalised for that. When Lady Porter at Westminster sold off cemeteries, she should have been surcharged but nobody got their collar felt there.
  The Second Deputy Chairman: Order. I am sure that the hon. Gentleman will return to the proposition before us.
  8.45 pm
  Mr. Skinner: I am not suggesting for a minute that we should have retrospective legislation to rescue the Tories on Westminster council. It is high time that somebody in the Government said that selling cemeteries for 15p and buying them back for £2 million and £3 million is a matter of public concern, and those involved should pay the penalty for it.
  I was talking about retrospective legislation in all its forms being used by Governments—mainly this Tory one —to rescue Ministers and people close to them in the City of London. When it comes to the ordinary man or woman in the street, and Labour councillors, there is a different set of rules. That is why we have to ask the Solicitor-General all those questions. I expect him to respond to the points raised tonight. I also want to know a bit about drug money.
  Mr. Cryer: The Solicitor-General should clarify some of the sloppy wording in the clause. It states that if
  "any question arises whether a body which purports to have or, as the case may be, which appears to have lost corporate status"
  it will be granted a legal personality.
  Corporate status is one of the prime means of crookery, fraud and milking money out of various organisations. Corporate status is granted as a convenience to allow capitalism to develop. It allows a fictional person to exist separate from the members of the organisation itself. That person has limited liability, does not become bankrupt and is not affected when the body corporate, with its separate and distinct legal personality, goes into liquidation. In that way, companies go into liquidation with their directors owing huge sums of money to them. Companies, with their separate, legal personality, lend money to the directors who form the company on extremely advantageous terms, sometimes without any repayment provisions.
  Mr. Fraser: That is illegal.
  Mr. Cryer: Yes, it is now, but I am talking about the history of corporate endeavour.
  We are dealing with a group of people who will be given corporate status, and who are from states which may not even be recognised, with legislation that will not be as comprehensive as United Kingdom legislation. These issues may apply to other states, and even United Kingdom legislation is not foolproof, is it?
  Will the legislation bring under the Banking Act 1987 all the bodies which purport to have lost corporate status or which have had that status under the laws of the territory concerned? If it does, that will ensure that the Bank of England will be able to scrutinise them. We know that under the Bank of England's powers there is no possibility of any bank in this country engaging in fraudulent practices—unless, of course, we turn to immediate history and look at the Bank of Credit and Commerce International. Despite all the legislation, the Bank of England has not been able to find out what happened in that case.
  Will the granting of corporate status to a bank which is based, let us say, in northern Cyprus and which wishes to trade in this country mean that it will be assumed to come within the terms of our legislation? Would we be

  431
  establishing corporate status simply for its own convenience, or for ours—it is not clear which it is—and will the bodies corporate be operating under the legislation of their parent state? The position is confused, but the matter is important because if the directors decide to put the company into liquidation, traders in this country who sued the company over a contract would find that the directors had decamped and gone to another state to which we are giving recognition.
  If we are not careful, this legislation could be a bonanza for the dubious company operator. Such people operate in northern Cyprus and move to Kashmir and then to some other state, leaving behind them a trail of companies with which they have traded and built up huge debts and then put into voluntary liquidation before decamping elsewhere. That is a possibility under the legislation. I caution the House against accepting the notion that a body corporate with its separate legal identity and personality is of necessity an advantage for traders in this country.
  For example, Polly Peck blossomed from northern Cyprus and built up a huge pack of cards which suddenly collapsed. As it happened, all the accounts were in northern Cyprus. The business took over some good United Kingdom companies and that was an example of the result of Government policy. Companies came here to invest and develop. Prestige, the cooking utensils firm, produced a range of well-manufactured kettles, electric toasters and so on. It got into the Polly Peck net and its future was placed in jeopardy because of all the financial machinations.
  Therefore, the matter can affect the ordinary man and woman in the street, the worker who spends his or her time in the factory working diligently, increasing productivity and turning out high-quality goods. Under capitalism there is investment elsewhere in a shell company in Outer Turkestan which subsequently collapses and draws all the assets of the properly operating companies in the United Kingdom through its northern Cyprus parent company. The assets of the company are sold to rescue the company from debt in some far-flung place of the sort that I have mentioned. That means that jobs in this country can be placed in jeopardy. Granting blanket corporate status may well disguise the information which people in this country deserve and need.
  Mr. Andrew F. Bennett: Does my hon. Friend agree that not just jobs but often the pension interests of the people who work for such companies are at risk? It is worrying for someone who has worked for a company for many years and who has accumulated a substantial pension to see a corporate raider coming in and clearing off with the pension funds.
  Mr. Cryer: My hon. Friend is absolutely right. That is one of the questions that the Minister should answer. If we grant corporate status to a body, will it be covered by this legislation or will such status be granted simply for our own tidy-mindedness towards these companies? If a firm is taken over by a limited liability company calling itself, say the Kashmir Development Corporation, what happens to the pension funds? The Bill, which is short, does not seem to contain any protection for such funds. The Bill provides only "legal personality" for the purposes of the law in the United Kingdom. I am not sure what that means and
  432
  clause 1 does not make it very clear. If a trading corporation takes over a United Kingdom company—buys the majority shareholding in it—will the pensions and the general trading position of the company be protected?
  Ordinary workers who simply aim to do a good job are placed in jeopardy by this world of high finance in which financiers who build up cardboard companies treat the people who work in them as pawns to be discarded when it is convenient. People can also be lured into jobs. My hon. Friend the Member for Bolsover (Mr. Skinner) knows of a concern which claimed to pay wages of £160 a week. When people who flocked to the company had worked there for four weeks the wages immediately dropped to £120 a week. Shortly after that the company went into liquidation. I think that the proprietor decamped to northern Cyprus.
  The matter is worrying and I hope that the Minister will be able to provide some answers before we give clause 1 the approval that the Government seeks.
  The Bill demonstrates how valuable Parliament is for debating these issues. It is nearly always true that probing during a debate in Parliament reveals more information and subjects matters to proper scrutiny. Therefore, I hope that the Solicitor-General will be able to provide all the answers to the questions that I and my hon. Friends have asked in this important debate.
  Although I have spoken ironically in the past, the fact is that the collapse of BCCI, with the consequent devastation of the personal lives of 200,000 people and small businesses facing the prospect of having to sack hundreds of employees, is extremely worrying. BCCI had corporate status. It is true that it did not come from one of the states mentioned in clause I, but it could be operating from such a state. In Bradford, many of my constituents have been affected by the collapse of BCCI. I have had telephone calls from many people—
  9 pm
  The Second Deputy Chairman: Order. The hon. Gentleman is as aware as I am that the Bill does not relate to the collapse of BCCI. Until now, he has been in interesting and good order, and I am sure that he will continue to be so.
  Mr. Cryer: I was simply suggesting that the collapse of BCCI has heightened our awareness of the need to scrutinise the Bill in great detail.
  Mr. Skinner: Would it not be a fair point to make that, a week after the collapse of BCCI, with many of my hon. Friend's constituents in Bradford and elsewhere saying that they want compensation for the money that they have lost—
  The Second Deputy Chairman: Order. The hon. Gentleman is completely out of order. His remarks would have been more appropriate on Second Reading.
  Mr. Skinner: The point is that those people say, "Look at that lot down there at Westminster passing retrospective legislation when they can't pass it in order to bail us out." That is the point.
  Mr. Cryer: My hon. Friend makes an important point. Clause 1(3) contains the extraordinary phrase:
  "Any registration or other thing done at a time before the coming into force of this section shall be regarded as valid if it would have been valid at that time".

  433
  That is quite a swingeing power of retrospection.
  People who are hammering on the door—almost literally in some cases—of BCCI asking where their money is will look askance at this retrospection when the Governor of the Bank of England and Touche Ross apparently cannot release their accounts to people who are pressing hard. However, I shall not pursue that. It is simply an example given in passing. I hope that I and others will have some answers from the Chancellor of the Exchequer when we meet him tomorrow morning to press him to take action on that important matter.
  I hope that the Solicitor-General will give the House some answers tonight to try to ensure the smoother passage of the Bill.
  The Solicitor-General: The debate has had an air of nostalgia about it. Light has come into eyes as old battles have been fought again to illustrate, wholly within the bounds of order, points that are relevant to clause 1 of this interesting Bill. They have focused on the question of retrospection and whether the retrospection that is provided for by clause 1(3) falls fairly and squarely within the principles that are well acknowledged and accepted.
  A number of hon. Members have joined the debate who, no doubt, had other pressing business earlier when we were discussing the same matters on Second Reading. We welcome the hon. Members for Derbyshire, North-East (Mr. Barnes) and for Denton and Reddish (Mr. Bennett).
  Mr. Andrew F. Bennett: I was here.
  The Solicitor-General: If the hon. Gentleman was here I have done him a grave injustice. I hope that I will not do him another injustice by wondering whether he failed to notice that we were discussing the same points on Second Reading.
  Mr. Harry Barnes: Will the Solicitor-General give way?
  The Solicitor-General: I shall give way in a moment.
  The question of retrospection was extremely well put by the hon. Member for Norwood (Mr. Fraser) when he accepted that it was appropriate in this case. Whether or not it was the case in Clay Cross—some contentions were put forward by the Clay Cross councillors and some found themselves in dispute—there is no dispute here that I he Bill seeks to put the law back into the state that everyone believed it to have been in until the matter was queried during recent litigation. Consequently, this is the type of retrospection which the House accepts and which Law Officers from parties of all colours which have governed the country have accepted in the past. That answers the questions asked by the hon. Members for Bradford, South (Mr. Cryer), for Bolsover (Mr. Skinner), for Denton and Reddish and for Derbyshire, North-East.
  The hon. Member for Norwood referred to the situation that might arise if certain Soviet socialist republics found themselves no longer part of the Soviet Union. The answer to his question is to be found in clause (1), which states:
  "(1) If at any time—

  (a) any question arises whether a body which purports to have or, as the case may be, which appears to have lost corporate status under the laws of a territory … should or should not be regarded as having legal personality … and

  (b) it appears that the laws of that territory are at that time applied by a settled court system in that territory".

  434
  That question of fact will be focused on in relation to the republic in question. Even if it were not recognised by this country, and found itself in a position similar to that of the countries to which the hon. Member for Norwood referred, such as Taiwan and northern Cyprus, the court would decide the question on fact—depending on whether, at that time, the territory had a settled court system.
  The question will be asked whether the territory had a court system that was settled and understood, and in good and sensible operation—notwithstanding that it was not recognised by this country at the time. It might be said, for example, that Taiwan or northern Cyprus—
  Mr. Skinner: Or Slovenia.
  The Solicitor-General: —or Slovenia have settled court systems. One can think of many other examples.
  Question put, That the clause stand part of the Bill:—
  The Committee divided: Ayes 167, Noes 39.

  Division No. 220]

  [9.06 pm

  AYES

  Alison, Rt Hon Michael

  Goodlad, Alastair

  Allason, Rupert

  Gorman, Mrs Teresa

  Amess, David

  Gorst, John

  Amos, Alan

  Greenway, John (Ryedale)

  Arbuthnot, James

  Gregory, Conal

  Ashby, David

  Griffiths, Sir Eldon (Bury St E')

  Atkins, Robert

  Griffiths, Peter (Portsmouth N)

  Atkinson, David

  Hague, William

  Banks, Robert (Harrogate)

  Hamilton, Neil (Tatton)

  Beaumont-Dark, Anthony

  Hanley, Jeremy

  Beggs, Roy

  Hannam, John

  Bellingham, Henry

  Hargreaves, Ken (Hyndburn)

  Bennett, Nicholas (Pembroke)

  Harris, David

  Bevan, David Gilroy

  Haselhurst, Alan

  Blackburn, Dr John G.

  Hayes, Jerry

  Blaker, Rt Hon Sir Peter

  Hayward, Robert

  Boscawen, Hon Robert

  Hicks, Robert (Cornwall SE)

  Boswell, Tim

  Hill, James

  Bottomley, Peter

  Hind, Kenneth

  Bottomley, Mrs Virginia

  Howarth, G. (Cannock & B'wd)

  Bowis, John

  Howell, Ralph (North Norfolk)

  Brandon-Bravo, Martin

  Hughes, Robert G. (Harrow W)

  Brazier, Julian

  Hunt, Sir John (Ravensbourne)

  Brooke, Rt Hon Peter

  Irvine, Michael

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

  Jack, Michael

  Budgen, Nicholas

  Janman, Tim

  Butler, Chris

  Jones, Gwilym (Cardiff N)

  Campbell, Menzies (Fife NE)

  Jones, Robert B (Herts W)

  Carlile, Alex (Mont'g)

  Kilfedder, James

  Carttiss, Michael

  King, Roger (B'ham N'thfield)

  Cash, William

  King, Rt Hon Tom (Bridgwater)

  Chapman, Sydney

  Kirkhope, Timothy

  Chope, Christopher

  Knapman, Roger

  Clarke, Rt Hon K. (Rushcliffe)

  Knight, Greg (Derby North)

  Conway, Derek

  Knowles, Michael

  Coombs, Simon (Swindon)

  Knox, David

  Couchman, James

  Lang, Rt Hon Ian

  Currie, Mrs Edwina

  Latham, Michael

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

  Lennox-Boyd, Hon Mark

  Davis, David (Boothferry)

  Lester, Jim (Broxtowe)

  Douglas-Hamilton, Lord James

  Lightbown, David

  Durant, Sir Anthony

  Livsey, Richard

  Dykes, Hugh

  Lord, Michael

  Emery, Sir Peter

  Lyell, Rt Hon Sir Nicholas

  Fallon, Michael

  Maclean, David

  Favell, Tony

  McLoughlin, Patrick

  Fenner, Dame Peggy

  McNair-Wilson, Sir Michael

  Fishburn, John Dudley

  Malins, Humfrey

  Forman, Nigel

  Mans, Keith

  Forth, Eric

  Meyer, Sir Anthony

  Franks, Cecil

  Miller, Sir Hal

  Freeman, Roger

  Miscampbell, Norman

  French, Douglas

  Mitchell, Andrew (Gedling)

  Fry, Peter

  Moate, Roger

  Gale, Roger

  Monro, Sir Hector

  435

  Morrison, Sir Charles

  Stern, Michael

  Moss, Malcolm

  Stevens, Lewis

  Neubert, Sir Michael

  Stewart, Allan (Eastwood)

  Nicholls, Patrick

  Stewart, Andy (Sherwood)

  Norris, Steve

  Summerson, Hugo

  Oppenheim, Phillip

  Taylor, Ian (Esher)

  Page, Richard

  Taylor, John M (Solihull)

  Paice, James

  Taylor, Matthew (Truro)

  Peacock, Mrs Elizabeth

  Temple-Morris, Peter

  Porter, David (Waveney)

  Thompson, D. (Calder Valley)

  Price, Sir David

  Thompson, Patrick (Norwich N)

  Raffan, Keith

  Thorne, Neil

  Raison, Rt Hon Sir Timothy

  Thornton, Malcolm

  Rhodes James, Sir Robert

  Trippier, David

  Riddick, Graham

  Twinn, Dr Ian

  Ridsdale, Sir Julian

  Walden, George

  Ross, William (Londonderry E)

  Walker, Bill (T'side North)

  Rowe, Andrew

  Wardle, Charles (Bexhill)

  Ryder, Rt Hon Richard

  Wells, Bowen

  Shaw, David (Dover)

  Wheeler, Sir John

  Shepherd, Colin (Hereford)

  Whitney, Ray

  Sims, Roger

  Widdecombe, Ann

  Skeet, Sir Trevor

  Winterton, Mrs Ann

  Smith, Sir Dudley (Warwick)

  Winterton, Nicholas

  Smyth, Rev Martin (Belfast S)

  Wood, Timothy

  Speed, Keith

  Yeo, Tim

  Speller, Tony

  Spicer, Sir Jim (Dorset W)

  Tellers for the Ayes:

  Spicer, Michael (S Worcs)

  Mr. Nicholas Baker and

  Steel, Rt Hon Sir David

  Mr. Tom Sackville.

  Steen, Anthony

  NOES

  Adams, Mrs Irene (Paisley, N.)

  McKay, Allen (Barnsley West)

  Armstrong, Hilary

  Madden, Max

  Banks, Tony (Newham NW)

  Mahon, Mrs Alice

  Battle, John

  Marshall, David (Shettleston)

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

  Martin, Michael J. (Springburn)

  Bermingham, Gerald

  Meale, Alan

  Brown, Gordon (D'mline E)

  Morley, Elliot

  Canavan, Dennis

  Nellist, Dave

  Cryer, Bob

  Pike, Peter L.

  Flannery, Martin

  Primarolo, Dawn

  Flynn, Paul

  Redmond, Martin

  Godman, Dr Norman A.

  Rogers, Allan

  Gordon, Mildred

  Salmond, Alex

  Griffiths, Nigel (Edinburgh S)

  Strang, Gavin

  Haynes, Frank

  Vaz, Keith

  Home Robertson, John

  Wise, Mrs Audrey

  Hughes, John (Coventry NE)

  Young, David (Bolton SE)

  Jones, Barry (Alyn & Deeside)

  Leighton, Ron

  Tellers for the Noes:

  Loyden, Eddie

  Mr. Harry Barnes and

  McAllion, John

  Mr. Dennis Skinner.

  McAvoy, Thomas

  Question accordingly agreed to.
  Clause 1 ordered to stand part of the Bill.

Clause 2

  CITATION, EXTENT AND COMMENCEMENT
  Question proposed, That the clause stand part of the Bill.
  9.15 pm
  Mr. Fraser: May I ask the Solicitor-General a question about subsection (3) of clause 2, which reads:
  "This Act shall come into force at the end of the period of two months beginning with the day on which it is passed."
  If the Bill intends that the law should be what everyone understood it to be, why the interval of two months? For a period of two months, foreign corporations that thought that they were foreign corporations before the Bill was introduced will no longer be foreign corporations. They will have a ghostly existence. Then they will return to the
  436
  existence that people thought that they had before this legislation was set in train. I cannot understand why it is necessary to have a gap of two months. Would not it be sensible to table a manuscript amendment on Report to delete subsection (3) from clause 2?
  Mr. Harry Barnes: First, I should like to point out to the Solicitor-General that I have been here for the entire proceedings and that the reason why I made the comments that I did during the stand part debate was issues raised during the Second Reading debate by my hon. Friend the Member for Bradford, South (Mr. Cryer). He alerted me to various issues which were wholly in order with reference to clause 1(3). I should have been brought to order if my comments had been irrelevant.
  Clause 2(2) extends the Bill's provisions to Northern Ireland and I should like an explanation of that. Northern Ireland is usually dealt with in a very peculiar way in the House. It is usually dealt with by Orders in Council and Northern Ireland Ministers are brought in. Under normal circumstances, clause 2 would have said that the Bill did not extend to Northern Ireland and an Order in Council would have been made at a later stage. For example, the issue could have been dealt with by the Northern Ireland Committee in which during a recent debate on electricity privatisation the Government were defeated by 17 votes to 12. That would have given an opportunity for a fuller debate and for deeper consideration of the Bill as it affects Northern Ireland.
  I realise that Northern Ireland Members have had the opportunity through the procedures of the House to table an amendment to clause 2(2) and also to raise the matter now if they are discontented. I believe that at least three Northern Ireland Members voted in support of clause 1, so I presume that they find little wrong with the measures as they affect Northern Ireland. The problem sometimes arises that hon. Members are alerted to matters by coming to the Chamber and listening to other hon. Members—as I did to my hon. Friend the Member for Bradford, South —and then becoming interested in the debate and aware of the possibilities. That has not occurred in this case with regard to Northern Ireland Members but that is not necessarily something for which to criticise them as there is a host of measures sweeping its way through the House.
  Mr. Andrew F. Bennett: More often than not legislation contains a regulation-making power which extends it to Northern Ireland. Often that regulation-making power extends to the Isle of Man and the Channel Islands. Can my hon. Friend explain how the Bill will be extended to such areas within the territorial waters of the United Kingdom and whether the Bill contains a regulatory power to allow the Bill to be extended in that way?
  Mr. Barnes: That is an appropriate question which I am sure the Solicitor-General will answer because we are discussing the Bill's application to tax havens. Therefore, the question whether the powers will apply to those areas is of considerable significance. Indeed, it might be one of the most important considerations in tonight's debate, although some important measures have already been discussed.
  The Bill emerged from another place where there are a number of peers who previously represented Northern Irish constituencies in the House. I do not know whether at any stage there was an input in another place regarding Northern Ireland, but this is the first mention of the Bill's

  437
  extension to Northern Ireland during tonight's debate. I can see that there may be some arguments in favour of such an extension and in favour of our talking about a United Kingdom measure rather than about a Great Britain measure because some of the corporations concerned may operate within both areas.
  It would also be interesting to know whether the legislation fits in with legislation in other countries. It is the general practice that the law operates in such a way that, even if states are not recognised, the corporations that operate there will be. That may have particular relevance to the position in Northern Ireland. The legislation in Ireland may have a connection with the Bill. Indeed, this might be a matter for the Anglo-Irish Agreement and may have already been discussed through such avenues. No Northern Ireland Minister is present tonight, but I am sure that the Solicitor-General will take up those points.
  The Solicitor-General: The Bill is receiving diligent scrutiny and I am happy to answer the questions. I apologise to the hon. Member for Derbyshire, North-East (Mr. Barnes). I am sorry that I did not notice him in the Chamber and I am glad to have been able to have answered his questions twice.
  As the hon. Member for Norwood (Mr. Fraser) may recall from his days as a Minister, two months is the normal period for the coming into effect of a Bill. However, the hon. Gentleman has a good point in that as the Bill is retrospective for the reasons discussed, there will be a ghost period in which we wait for it to come into force and then say that it has always been in force. It does no harm. As the hon. Gentleman will recall, the notion of the two-month period, which I sometimes think is rather unnecessary—but such settled conventions last a long time—is to allow the knowledge of the Bill to go round the United Kingdom before it comes into force.
  Mr. Andrew F. Bennett: Does the Solicitor-General accept that for a long time legislation came into force on Royal Assent? The practice of it coming into force later came when so much was done by secondary legislation, with the consequent need to prepare regulations. Surely if the legislation is to come into effect without having to have secondary legislation, there is no reason why there should be a two-month delay from Royal Assent. The fact that the legislation applies would be more likely to get publicity with Royal Assent than it would two months later, when people have lost track of it.
  The Solicitor-General: As so often, the hon. Gentleman makes points with which one is inclined to agree. This is a matter of convention. There are arguments both ways, and he has put the other argument. I understand it.
  The hon. Member for Derbyshire, North-East asked about Northern Ireland. He asked whether the legislation could not be introduced through the other method. The answer is that we are dealing with commercial relationships which were believed to be well established and are to be put back into the position in which they are as though they had always been well established. Consequently, it is unnecessary to leave it to a further legislative process. There is no dispute in the Committee that that is a wise thing to do, so the idea that it should be done under the one trouble is sensible.
  Points were made about other countries. Other countries may have to meet the problem if they have
  438
  common law systems. Australia has already met the problem and has legislated in a similar way. I hope that that is illuminating.
  Mr. Andrew F. Bennett: I had hoped that there would be a brief mention of the position of the Isle of Man and the Channel Islands. The way in which British legislation applies to those areas is complicated. As I understand it, more often than not it is applied through a regulating power, or on the face of the legislation. As we suffer somewhat from corporate bodies operating from the Isle of Man and the Channel Islands, the matter needs to be clear. Will the Solicitor-General clarify whether the legislation will apply to the Isle of Man and to the Channel Islands? If it will not apply, why is it not necessary for it to do so?
  Mr. Cryer: The Solicitor-General's response on the question of allowing two months before the Act comes into force is not adequate. On that basis, just because of a convention the delay could last months and months—not just two months, but six months. The Government would not mind because the retrospective provision would fill the gap. It is extraordinary that we are legislating on the basis that, as the Solicitor-General explained in his Second Reading speech, the Bill is necessary to clarify the legal position. Indeed, we are rushing through all the stages of the Bill tonight. There will be no mature consideration. We are having Second Reading, Committee stage, Report stage and Third Reading in one evening, along with several other Bills. That is an abuse of the House.
  Mr. Frank Haynes: They want to nod it through.
  9.30 pm
  Mr. Cryer: As my hon. Friend says, the Government are disgruntled because my hon. Friend the Member for Norwood (Mr. Fraser) and our Back Benchers are giving the Bill a searching examination. The Government had cleared the decks for a June election, but now that they are sinking in the opinion polls they have put off the election and are finding bits and bats of legislation that should have been carried out on a planned basis. They are having to trample on parliamentary rights with a junior Law Officer's jackbooted heel to force that legislation through. It is not good enough.
  The Solicitor-General's response is unsatisfactory. He said that the Bill was vital and urgently needed because the legal position was unclear. Given that, it is extraordinary that clause 2(3) allows two months' delay, apparently for the information to circulate. The Solicitor-General said that the two months was stipulated in order to allow people to find out about the Bill. How many companies will be involved? How many quasi-states are there which are not recognised by this country? Surely we should have some idea. Will there be 20 letters, 30 letters or 100 letters? Will the details be published in the London Gazette? That will not take two months. Indeed, the retrospective element shrewdly pointed out by my hon. Friend the Member for Norwood means that it will not matter whether the Government are efficient. The retrospective legislation will sweep it all through, no matter what period is specified.
  Mr. Andrew F. Bennett: My hon. Friend is the distinguished Chairman of the Select Committee on

  439
  Statutory Instruments, so he will be aware that one of the principles always put forward by that Committee is that, whenever possible, one should be able to find out what is happening by studying what appears on the face of legislation, whether primary or secondary. If the Bill was not to take effect from Royal Assent, would it not have been better if the Government had specified a date? Then, whoever picked up the Act could read that it would come into force on 1 September or 1 October, rather than having to check the parliamentary record to find out when it had received Royal Assent and then add two months to that date.
  Mr. Cryer: My hon. Friend is right. The timing is not clear. Often we do not know when Bills receive Royal Assent. At some stage, Mr. Speaker reads out a list of Bills that have received Royal Assent on a certain day, and that list is included in Hansard. That does not make the timing clear. People have to look up the date in Hansard and calculate two months from that date. Furthermore, the index to Hansard is not published for several weeks, if not several months, after the publication of the weekly edition. Almost certainly, by the time the index is published so that people will easily be able to look up the date of Royal Assent, the two months will have passed. The notion that two months' delay will give an easy opportunity for publicity is not true. People will not easily be able to find out the date of Royal Assent and calculate from that the date on which the Bill will come into operation. The procedure is curious; my hon. Friend the Member for Denton and Reddish (Mr. Bennett) has made a good point.
  Mr. Skinner: Does my hon. Friend want to speculate on whether there is a connection between the fact that the Bill will not come into force until two months after the date on which it is passed and a possible impending general election? Has this been done deliberately? Do the Government have plans afoot? After we pack in here on 25 July, they will have two months in which to put out their propaganda in the Tory media, and there will be no opposition in Parliament because Parliament will not be sitting. Is it not just conceivable that there is a connection with an early election? Does my hon. Friend have a comment to make on that?
  Mr. Cryer: The Bill may give some sort of status and legal personality to a number of dubious organisations that are about to erupt in scandal. Perhaps the Government want to be able to say, if that happens, that the Bill is not yet law because they were deliberately allowing a breathing space to that they could weed out such organisations. Of course, that is highly speculative and I would not want to go too far down that road.
  If the Minister wants to allow an opportunity for publicity as opposed to simply following the convention it would have been far better to issue a one-sheet statutory instrument saying that the Act, as it will then be, comes into force on a certain date. Such a document would be obtainable from HMSO and would be listed in the index of statutory instruments. People would know where to look for it, and the position would be clear and unequivocal. Not even this Government could charge a substantial sum for one sheet of paper; indeed, I should have thought that they could issue such a document free of
  440
  charge. Under the terms of general primary legislation giving that authority to Ministers, such statutory instruments do not even have to be laid before Parliament; they can simply be issued.
  If the Minister is serious about informing people about the Bill—incidentally, I am all for legislation, both primary and secondary, being known of and understood, and all for the date at which it will start to operate being made clear—that is the course that he should take. I do not think that the route that he has chosen in clause 2 is satisfactory.
  The Solicitor-General: It is nice to be able to give what I think will be a thoroughly helpful answer to the hon. Member for Bradford, South (Mr. Cryer). This may have escaped his attention, but there will not be too much difficulty, when he buys his copy of the Act, in knowing the date from which the two months run because the date of Royal Assent is on the front of the printed Act.
  In answer to the question that the hon. Member for Denton and Reddish (Mr. Bennett) asked about the Isle of Man and the Channel Islands, they are not covered because they are not in the United Kingdom.
  Mr. Haynes: I think that there is a bit of a fiddle going on here. That is why the Opposition need to scrutinise the Bill. It is all right for the Solicitor-General: when he stands up at the Dispatch Box, he represents the Government. Irrespective of all the arguments advanced by my hon. Friends tonight, he is the Government here tonight, and he knows exactly what is going on.
  There is another point about this. Look at the Conservative Benches. That is where the decisions are made—over on that side of the House, not here. We are the Opposition and we have to scrutinise legislation such as this. If we had not had a proper Committee stage, that lot over there would have just slipped it all through and nobody would have been any the wiser. The fact that the Opposition have challenged the Bill—particularly this clause and the previous one—means that we are now getting to know what is all about. What disturbs me is that when the Division is called, Conservative Members will come out of the woodwork or from the dinner table and go into the Lobby without knowing what they are voting for. That is what we are saying.
  Mr. Skinner: When I came into the House earlier, I saw gangs of Tory Members outside the Queen Elizabeth II conference centre. There were also about 20 cameras there and the Tory Members were clamouring and queuing, waiting to say what a wonderful conference the economic summit has been. They wanted to say what had been agreed previously—all those bland statements about apple pie and motherhood. That is why they are not in the Chamber. They do not care about democracy or about this place. All they are worried about is trying to get on the box to say that their grey Prime Minister has been able to chair a meeting—big deal. That is what they are up to and why they are not in here. But they will come in when there is a vote—which there will have to be—and the Tory Whips will be on the door, kicking them in, saying, "Get in here and vote for the Tory party"—and they call it democracy.
  The First Deputy Chairman of Ways and Means (Sir Paul Dean): I am sure that when the hon. Member for Ashfield (Mr. Haynes) replies to that intervention he will remember that we are debating clause 2 stand part.
  Mr. Haynes: I am surprised that you said that to me, Sir Paul. You know me, Sir Paul, and I know you. I have never abused the Chair yet. I would admit to it if this were the first time that I was abusing the Chair; but I am not, so I am surprised at you rising to challenge me in that way. I do not travel the road that my hon. Friend the Member for Bolsover (Mr. Skinner) is travelling tonight, although I agree with most of what he said. He made a first-class speech on retrospection before you took the Chair, Sir Paul. But this is a different ball game and I am seizing my opportunity because I have seen what is happening tonight and it happens far too often.
  Dr. Godman: Clause 2(2) states that the Act extends to Northern Ireland. As a Scottish Member, I think that it should read, "This Act extends to Scotland" also. I asked the Solicitor-General a question about this earlier. It is important in any Act that due consideration is given to the status of Scottish law.
  Mr. Haynes: I gave way to my hon. Friend many times in the Standing Committee that considered another Bill that also involved the Solicitor-General. I would give way any time to my hon. Friend because he is always bothered about the Scottish end of things. He is right—I did not hear the Solicitor-General mention Scotland, but, having heard my hon. Friend's intervention, perhaps the right hon. and learned Gentleman will rise to put him in the picture.
  Dr. Godman: The right hon. and learned Gentleman, with his characteristic courtesy, gave me the assurance earlier that the Bill, and especially its concept of legal personality, is wholly admissible in the Court of Session —in other words, in Scottish law.
  Mr. Haynes: I do not understand my hon. Friend because he always talks about the Solicitor-General like that—he is always saying nice things about him. I do not understand it because some of the things that the Solicitor-General does on behalf of the Government are awful, wicked things—and this is one tonight. There is no doubt about it. People outside do not know exactly what is going on in relation to clause 2, which is why we are having this debate to scrutinise the provisions properly—
  Mr. Skinner rose—
  Mr. Haynes: Here comes my hon. Friend the Member for Bolsover. I had better give way to him.
  Mr. Skinner: I have got an idea—[HON. MEMBERS: "No".] Perhaps it would be a good idea in June or mid-summer to transfer our debates on to the Terrace, which is where they are all boozing. Before I entered the Chamber, I did a check and there are about 200 Tory Members out there. They talk about speaking to the masses. We have about five or six Tory Back-Bench Members here in the Chamber. Quite a number of our people are here but others are engaged on different issues. Many Tory Members are down on the Terrace.
  9.45 pm
  We should put it to the appropriate Committee that the House of Commons Chamber should be shifted on to the Terrace. The debate there might be different. We could have semi-drunk people joining in. We could have television too. The whole thing could be a sort of elongated
  442
  "Spitting Image". When I think about it, there is a whole range of possibilities. Round about June, when the weather changes, we could shift the debate to the Terrace.
  Of course, the Speaker's House is on the end of the Terrace. So he would not need to bother about being in the Chair. He could poke his head out of his first-floor window and be in charge of the proceedings. It has endless possibilities. All those who want to booze could booze at the same time as they reckon to be listening to speeches. They could have a bookie's run because the Tories have a bookie's runner. They could take bets.
  Then the boats would come by and every so often we could change places. Just think of it. Obviously, no one has thought about it before. When the proceedings on Bills go late into the night, we could have all-night sittings on the Terrace. It is not for me, but obviously many people prefer the Terrace to coming here.
  Mr. Haynes: I shall not travel down that road, Sir Paul. One thing is for sure. My hon. Friend the Member for Bolsover has let me know where all the Tories are. They are out there on the Terrace when they should be in here. If Mr. Speaker poked his head out of the first-floor window, he would see them all there instead of in here. I hope that he takes that into consideration when he calls Members in the Chamber. They are swanning around out there instead of being in here.
  My hon. Friend the Member for Bolsover makes a good point. He could not stop himself laughing when he was making it, but it is important and it is true.
  Dr. Godman: When I referred to the clause and its failure to mention Scotland, I paid a compliment to the Solicitor-General. I took exception to my hon. Friend's response to my remarks about the right hon. and learned Gentleman. The right hon. and learned Gentleman has a comprehensive knowledge of Scots law. When I put questions to him about Scots law, I always receive a reasonable answer. I am anxious to put the record straight with regard to my hon. Friend's response.
  Mr. Haynes: Here we go, a bit more flannel for the Solicitor-General.
  Dr. Godman: It is not flannel.
  Mr. Haynes: It is. I want to make another point now. The right hon. and learned Gentleman is representing the Government. He is introducing a Bill in this House on behalf of the United Kingdom. He has not said that he is not doing it for Scotland. He is doing it for the United Kingdom in this place. My hon. Friend is challenging the Solicitor-General, if my hon. Friend only realises it.
  Dr. Godman: Will my hon. Friend give way?
  Mr. Haynes: Wait a minute. I have not finished yet. There is something else that I want to say. I remember when my hon. Friend was a real disciplinarian. I suggest that he is needed on the other side of the House to discipline that lot. He is an ex-red-cap. You know what a red-cap is, Sir Paul. He is a real disciplinarian. I have seen him in action. He appears to be nice and gentle in this place but I have seen him on the other job. He can be really vicious. We talk about the glasshouse and that kind of thing. That is where they had red-caps. But the point is that he is taking me away from my drift. I did not want to abuse the Chair.
  Dr. Godman: Will my hon. Friend give way?
  Mr. Haynes: He is at it again.
  Dr. Godman: May I point out to the youthful hon. Gentlemen in this House who have not done national service that a red-cap is someone serving with the corps of Royal Military police?
  Mr. Haynes: I think that hon. Gentlemen knew that.
  Dr. Godman: I am sure that they did not. The Royal Military police is made up of a fine group of people—decent, honourable and fair-minded. My question to my hon. Friend has nothing to do with the Royal Military police and the fact that I may or may not have put people into the glasshouse once upon a time. I have to put these questions to the Solicitor-General because we do not have his equivalent legal representative from the Scottish Office on the Government Front Bench. Occasionally, I have to ask him questions, as I have done on clause 2. We do not have a Law Officer sitting on the Treasury Bench representing the Scottish Office. That is a matter for serious regret.
  Mr. Haynes: My hon. Friend is correct, but the Solicitor-General is not in a great hurry to answer the point. I would give way to him willingly if he was prepared to answer the question. I remember all the questions that my hon. Friend asked him upstairs on the Children Bill, and the Solicitor-General answered them all. My hon. Friend was right to put them on behalf of Scotland. Today, it seems that the Solicitor-General is not prepared to come to the Dispatch Box to answer my hon. Friend's questions.
  Mr. Martin Redmond rose—
  Mr. Haynes: Now my hon. Friend is at it. I give way.
  Mr. Redmond: I am grateful to my hon. Friend. I am having a little difficulty following his drift, as it varies. It may well be that Scotland is not mentioned in the Bill because we are getting used to the idea that Scotland will drift away from England. The parliamentary draftsmen could well have started introducing legislation which will not need to be altered when Scotland gets devolution. The Government may well intend to spring that surprise on us. Perhaps the Solicitor-General will provide clarification.
  Will my hon. Friend comment on the issue of retrospection? I am a relatively new lad in parliamentary terms and one seeks knowledge all the time. Perhaps the Solicitor-General could comment on this, but I understand that there is great difficulty with retrospective legislation. I thought that implementation had to be from the date on which legislation became law and, obviously, got Royal Assent. I can think of many instances in the past when —[Interruption.] I am sorry, Sir Paul, I thought that you were calling me to order.
  The First Deputy Chairman: Order. I am so sorry, I did not intend to interrupt the hon. Gentleman.
  Mr. Redmond: I am so grateful, Sir Paul. Retrospection is important, especially when it brings benefits to the general public. When a glaring anomaly arises we are always told that retrospection cannot apply and that we must wait for legislation before it can be put right and benefit can be given, yet this is retrospective legislation. I have listened carefully to the comments made. Perhaps my
  444
  hon. Friend, from his great experience of the House, can tell us why it is important to include retrospection in this case when the Government have refused to do so in the past in respect of other cases.
  Mr. Haynes: I get the drift of my hon. Friend's question. My hon. Friend also witnessed how nice Sir Paul can be when he made his mistake just now. My hon. Friend must realise that the Government are at it again. They are looking after their friends—this is what it is all about. They want to introduce legislation that will enable them to go back to help their friends who pour money into the coffers of the Conservative party. It is retrospection in their interests—that is what it is all about.
  Mr. Redmond rose—
  Mr. Hayes: I am trying to answer my hon. Friend's question.
  My hon. Friend the Member for Bolsover made a first-class speech on retrospection that my hon. Friend the Member for Don Valley (Mr. Redmond) probably missed. He made it clear how the Government were looking after their rich Conservative friends at the expense of the ordinary working-class folk of this nation. My hon. Friend made a first-class contribution and I hung on every word he said. His speech is my response to my hon. Friend the Member for Don Valley and I am sorry that he missed it.
  Mr. Martin Flannery: My hon. Friend knows that I do not intervene often, but I believe that he has done a grave injustice to the Solicitor-General. I do not believe that my hon. Friend has taken into account that the Solicitor-General is probably grossly overworked. I do not want to do the right hon. and learned Gentleman an injustice, but there are only 10 Tory Members in the whole of Scotland. That is 10 out of 73 hon. Members. Instead of the Scots having their own Solicitor-General or equivalent advocate, the right hon. and learned Gentleman, poor man, is having to do two jobs. He must act as Solicitor-General in England and take on the equivalent post on someone's behalf in Scotland because the Tories just do not have enough Members in that country. My hon. Friend should take into account that after the next general election there probably will not even be those 10 Tories left.
  Mr. Haynes: My hon. Friend is quite correct. However, he must realise that the Solicitor-General was party to what happened in Scotland in the general election when they lost those Conservative seats. He supported the policy that they fought in that election and he was party to the campaign document. It is his own fault if he is having to do two jobs at the same time. However, my hon. Friend was right to raise that point.
  Mr. Skinner: The Minister for Sport has just come in.
  Mr. Hayes: Well, that makes a difference, but he is outside the Chamber as far as I can judge. He is on the other side of Sir Paul.
  Mr. Redmond: I asked my hon. Friend about retrospection in view of his great experience. Can he enlighten me why it is so desperately important in this legislation when the Government have argued in the past that retrospection cannot apply because it is not the sort of thing that one does? They have argued that one can legislate for the future only, not the past.

  445
  We used to have a different name for red-caps when I was in the Army and it was not as complimentary. The Government could be seeking to introduce this alteration to stop a trickle turning into a flood. After all, Lord King has announced that he is going to stop contributing to the Conservative party. This legislation may seek to rectify the balance. I hope that my hon. Friend can give me the benefit of his great experience and enlighten me as to why retrospection needs to apply in this case.
  Mr. Haynes: I have two things to say to my hon. Friend. First, on clause 1 we had a full debate on retrospection, but we were never given a satisfactory answer at the Dispatch Box. Secondly, as I said at the beginning of my contribution on this clause, the Government are rushing the Bill through in the interests of their friends. Indeed, they wanted to nod it through without a debate. We have forced them to debate it because we want to scrutinise it properly so that people understand what is going on.
  Mr. Redmond: I apologise for the fact that I was not here at the beginning of this debate. I can be in only one place at a time and I had previous meetings, but I am pleased that I have joined the debate. Given the tributes that have been paid to the Solicitor-General, by an hon. Member who was a red-cap, I am concerned—
  It being Ten o'clock, The CHAIRMAN left the Chair to report progress and ask leave to sit again.
  Committee report progress.

  BUSINESS OF THE HOUSE
  Motion made, and Question put,
  That, at this day's sitting, the Foreign Corporations Bill [Lords], the Water Industry Bill [Lords], the Water Resources Bill [Lords], the Statutory Water Companies Bill [Lords], the Land Drainage Bill [Lords], the Water Consolidation (Consequential Provisions) Bill [Lords], the Deer Bill [Lords], the Statute Law Revision (Isle of Man) Bill [Lords], the Agricultural Holdings (Scotland) Bill [Lords] and the Lords Amendments to the Coal Mining Subsidence Bill may be proceeded with, though opposed, until any hour.—[Mr. Wood.]
  The House divided: Ayes 171, Noes 50.

  Division No. 221]

  [10 pm

  AYES

  Alison, Rt Hon Michael

  Butler, Chris

  Allason, Rupert

  Campbell, Menzies (Fife NE)

  Amess, David

  Carlile, Alex (Mont'g)

  Amos, Alan

  Carr, Michael

  Arbuthnot, James

  Carttiss, Michael

  Arnold, Jacques (Gravesham)

  Cash, William

  Ashby, David

  Chapman, Sydney

  Atkins, Robert

  Clarke, Rt Hon K. (Rushcliffe)

  Atkinson, David

  Conway, Derek

  Baker, Nicholas (Dorset N)

  Coombs, Simon (Swindon)

  Beaumont-Dark, Anthony

  Cope, Rt Hon Sir John

  Beggs, Roy

  Cormack, Patrick

  Bellingham, Henry

  Currie, Mrs Edwina

  Bennett, Nicholas (Pembroke)

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

  Bevan, David Gilroy

  Davis, David (Boothferry)

  Blackburn, Dr John G.

  Durant, Sir Anthony

  Blaker, Rt Hon Sir Peter

  Dykes, Hugh

  Boscawen, Hon Robert

  Emery, Sir Peter

  Bottomley, Peter

  Evans, David (Welwyn Hatf'd)

  Bottomley, Mrs Virginia

  Fallon, Michael

  Bowis, John

  Fenner, Dame Peggy

  Brandon-Bravo, Martin

  Field, Barry (Isle of Wight)

  Brazier, Julian

  Fishburn, John Dudley

  Bright, Graham

  Fookes, Dame Janet

  Brooke, Rt Hon Peter

  Forman, Nigel

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

  Forsyth, Michael (Stirling)

  Budgen, Nicholas

  Forth, Eric

  446

  Franks, Cecil

  Moate, Roger

  Freeman, Roger

  Monro, Sir Hector

  French, Douglas

  Morrison, Sir Charles

  Fry, Peter

  Moss, Malcolm

  Gale, Roger

  Neale, Sir Gerrard

  Goodlad, Alastair

  Neubert, Sir Michael

  Gorst, John

  Nicholls, Patrick

  Greenway, Harry (Ealing N)

  Norris, Steve

  Greenway, John (Ryedale)

  Oppenheim, Phillip

  Gregory, Conal

  Page, Richard

  Griffiths, Sir Eldon (Bury St E')

  Paice, James

  Griffiths, Peter (Portsmouth N)

  Patnick, Irvine

  Gummer, Rt Hon John Selwyn

  Patten, Rt Hon John

  Hague, William

  Peacock, Mrs Elizabeth

  Hamilton, Neil (Tatton)

  Porter, David (Waveney)

  Hanley, Jeremy

  Price, Sir David

  Harris, David

  Raffan, Keith

  Haselhurst, Alan

  Raison, Rt Hon Sir Timothy

  Hayes, Jerry

  Ridsdale, Sir Julian

  Hayward, Robert

  Ross, William (Londonderry E)

  Hicks, Robert (Cornwall SE)

  Rowe, Andrew

  Hill, James

  Ryder, Rt Hon Richard

  Hind, Kenneth

  Sackville, Hon Tom

  Howarth, G. (Cannock & B'wd)

  Shaw, David (Dover)

  Howell, Ralph (North Norfolk)

  Shepherd, Colin (Hereford)

  Hughes, Robert G. (Harrow W)

  Skeet, Sir Trevor

  Hunt, Sir John (Ravensbourne)

  Smith, Sir Dudley (Warwick)

  Irvine, Michael

  Speed, Keith

  Jack, Michael

  Speller, Tony

  Janman, Tim

  Spicer, Sir Jim (Dorset W)

  Jones, Gwilym (Cardiff N)

  Spicer, Michael (S Worcs)

  Jones, Robert B (Herts W)

  Steel, Rt Hon Sir David

  Key, Robert

  Steen, Anthony

  Kilfedder, James

  Stern, Michael

  King, Roger (B'ham N'thfield)

  Stevens, Lewis

  King, Rt Hon Tom (Bridgwater)

  Stewart, Allan (Eastwood)

  Kirkhope, Timothy

  Stewart, Andy (Sherwood)

  Knapman, Roger

  Summerson, Hugo

  Knight, Greg (Derby North)

  Taylor, Ian (Esher)

  Knowles, Michael

  Taylor, John M (Solihull)

  Knox, David

  Temple-Morris, Peter

  Lang, Rt Hon Ian

  Thompson, D. (Calder Valley)

  Latham, Michael

  Thompson, Patrick (Norwich N)

  Lennox-Boyd, Hon Mark

  Thorne, Neil

  Lester, Jim (Broxtowe)

  Trippier, David

  Lightbown, David

  Twinn, Dr Ian

  Livsey, Richard

  Viggers, Peter

  Lord, Michael

  Walden, George

  Lyell, Rt Hon Sir Nicholas

  Walker, Bill (T'side North)

  Maclean, David

  Wardle, Charles (Bexhill)

  McLoughlin, Patrick

  Wells, Bowen

  McNair-Wilson, Sir Michael

  Wheeler, Sir John

  Malins, Humfrey

  Whitney, Ray

  Mans, Keith

  Widdecombe, Ann

  Maxwell-Hyslop, Robin

  Winterton, Mrs Ann

  Mayhew, Rt Hon Sir Patrick

  Yeo, Tim

  Meale, Alan

  Meyer, Sir Anthony

  Tellers for the Ayes:

  Miller, Sir Hal

  Mr. Timothy Wood and

  Miscampbell, Norman

  Mr. Tim Boswell.

  Mitchell, Andrew (Gedling)

  NOES

  Armstrong, Hilary

  Gordon, Mildred

  Banks, Tony (Newham NW)

  Griffiths, Win (Bridgend)

  Battle, John

  Haynes, Frank

  Bermingham, Gerald

  Home Robertson, John

  Brown, Nicholas (Newcastle E)

  Hood, Jimmy

  Callaghan, Jim

  Hughes, John (Coventry NE)

  Cousins, Jim

  Jones, Barry (Alyn & Deeside)

  Cryer, Bob

  Leighton, Ron

  Dixon, Don

  Lewis, Terry

  Duffy, Sir A. E. P.

  Loyden, Eddie

  Eastham, Ken

  McAvoy, Thomas

  Flannery, Martin

  McKay, Allen (Barnsley West)

  Flynn, Paul

  McWilliam, John

  Foster, Derek

  Madden, Max

  Fraser, John

  Mahon, Mrs Alice

  Galloway, George

  Marshall, David (Shettleston)

  Godman, Dr Norman A.

  Martin, Michael J. (Springburn)

  447

  Morley, Elliot

  Skinner, Dennis

  Nellist, Dave

  Smith, Andrew (Oxford E)

  O'Hara, Edward

  Spearing, Nigel

  Pike, Peter L.

  Strang, Gavin

  Powell, Ray (Ogmore)

  Wise, Mrs Audrey

  Primarolo, Dawn

  Young, David (Bolton SE)

  Quin, Ms Joyce

  Redmond, Martin

  Tellers for the Noes:

  Rogers, Allan

  Mr. Andrew F. Bennett and

  Salmond, Alex

  Mr. Harry Barnes.

  Question accordingly agreed to.

  Foreign Corporations Bill [Lords]
  Again considered in Committee.
  Question again proposed, That the clause stand part of the Bill.
  Mr. Redmond: On a point of order, Sir Paul. Prior to the Division I started to ask my hon. Friend the Member for Ashfield (Mr. Haynes) a question. May I be allowed to complete it?
  The First Deputy Chairman: The hon. Member for Ashfield (Mr. Haynes) has the Floor. It is a matter for him.
  Mr. Haynes: I have given way to my hon. Friend. [Interruption.]
  Mr. Redmond: On a point of order, Sir Paul. Is it in order for Conservative Members and for Ministers to make threats? Is that not intimidation?
  The First Deputy Chairman: No point of order arises.
  Mr. Redmond: This is an important point. Glorious tributes have been paid to the Solicitor-General about his capabilities. In view of all his experience and knowledge, why has he not clarified matters? Either my hon. Friend the Member for Ashfield or the Solicitor-General is correct, but they cannot both be correct. Will the Solicitor-General clarify the issue?
  Mr. Haynes: Before I come to what we are talking about, I want to say something. A lot of public school yobs have come in. I was referring to them not being here, but they are here now and just hark at them. We have had a nice quiet debate until now. It is high time that they went back to the Terrace where they came from instead of causing problems in here. You and I, Sir Paul, were doing all right until we had the Division. I see that my hon. Friend the Member for Bolsover agrees. My hon. Friend the Member for Don Valley (Mr. Redmond) keeps asking me the same question, but I have already told him that the Solicitor-General has not yet spoken from the Dispatch Box to answer that question. He asked me two questions. I cannot answer for my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman). He must answer for himself about the nice things that he said about the Solicitor-General.
  The Solicitor-General is putting the case for the Government. He has not done a good job tonight. I must repeat to my hon. Friend the Member for Don Valley because he keeps forgetting that we said right at the beginning that the Government were trying to slip the Bill through on the nod. But we have decided to scrutinise the Bill properly in the interests of those people outside who are being fiddled. I shall repeat what I said earlier. The Government are fiddling on this debate.
  Mr. Keith Speed: I for one, and perhaps others, would be happy for the House not to go into recess a week tomorrow but to go through until 1 August.
  10.15 pm
  Mr. Haynes: That is the best suggestion that I have heard from the Government Benches tonight. That would give us the opportunity to scrutinise things properly. The Government are always slipping things through on the nod. I said it earlier, and I shall say it again—even Conservative Members do not know what is going on. I said that there is a right old fiddle going on here by the Government and there bloomin' well is.
  Mr. Fraser: On a point of order, Sir Paul. Within the hearing of the Chair and certainly several other Members, the Under-Secretary of State for the Environment, the hon. Member for Salisbury (Mr. Key), from a sedentary position while my hon. Friend the Member for Don Valley was speaking said—
  Mr. Irvine Patnick: The hon Gentleman was not here.
  Mr. Fraser: I was sitting here.
  Within the hearing of the House, the Under-Secretary of State said, "I am judging his City Challenge in the morning." He clearly implied that his judgment about the City Challenge would be influenced not by the merits of the submission but by the conduct of my hon. Friend the Member for Don Valley during this debate. Is it proper to intimidate a fellow Member of Parliament who is exercising his right to speak in an important debate?
  The First Deputy Chairman: I am sure that no hon. Member is subject to intimidation. While I am on my feet I remind the Committee that we have had a good run on clause 2. I have been tolerant, allowing remarks which are not strictly in order. I am sure that the hon. Gentleman whom I am about to call will address his remarks clearly to clause 2 stand part.
  Mr. Cryer: On a point of order, Sir Paul. I share your view that it is difficult to intimidate hon. Members, but if an hon. Member was intimidated by a threat from a Minister to withhold money, depriving inner cities that are in urgent need, it would simply necessitate a letter to the Speaker to see whether a breach of privilege had taken place. That Minister would have to go before the Select Committee on Privileges to defend his attempted intimidation.
  The First Deputy Chairman: Sometimes it helps if the occupant of the Chair is a little deaf, and I am experiencing a little deafness at the moment.
  Mr. Andrew F. Bennett: Further to that point of order, Sir Paul. As there is a strong feeling that some local authorities will be losers, would it not be helpful if the Under-Secretary of State for the Environment went to the Dispatch Box to make it absolutely clear that he did not intend any threat? You may not have heard his remark, Sir Paul, but it was certainly audible on these Benches. It is important that it should be made clear that what is anyway a pretty unfair allocation of money will be dealt with extremely fairly, and that no account will be taken of the speech of my hon. Friend the Member for Don Valley (Mr. Redmond).
  The First Deputy Chairman: I think that it would be wise if the Committee continued with the debate.
  Mr. Redmond: On a point of order, Sir Paul. I accept entirely that you did not hear the remark made by the Under-Secretary of State, and I am sure that he made it in jest. If that is the case, one must accept also that there will be no penalty tomorrow in respect of the initiative.
  Mr. Tony Banks: On a point of order, Sir Paul. As you know, there is always a precedent, and I recall that when I addressed the House some years ago in regard to grants that the Greater London council was handing out, I mentioned that if any Conservative Members voted against the general powers Bill that the GLC was promoting, county hall would have to consider carefully grants and schemes relating to the constituencies that those Conservative Members represented.
  I thought that was a genuine point, but I then found myself the target of some fairly nasty comments from Conservative Members, and the matter was referred as a matter of privilege. I subsequently had to apologise to the House for suggesting that if hon. Members voted in a particular way, they might put their constituents at a disadvantage. My hon. Friend the Member for Don Valley (Mr. Redmond) appears to have been intimidated by the Under-Secretary of State for the Environment, in the same way that I allegedly intimidated Conservative Members on that previous occasion. It would help the progress of business if the Under-Secretary of State would make it clear to my hon. Friend the Member for Don Valley that no intimidation was meant.
  The First Deputy Chairman: If there is any suggestion of a breach of privilege, it is for the hon. Member concerned to write to Mr. Speaker, who will give the matter serious consideration.
  Dr. Godman: I will be grateful, Sir Paul, if you will rule out of order any further references to the fact that I was a red-cap. The fact that I served with the Royal Military police—honourably, I hope—has nothing to do with the clause stand part debate. I hope that will be the end of it. The hon. Member for Sheffield, Hallam (Mr. Patnick) can be a bit of a nuisance. The corps of military police is a fine body of service men and women, and it was an honour to serve in it.
  Mr. Tony Banks: Rubbish.
  Dr. Godman: That remark comes from someone who does not know one end of a parade ground from another, or what RSM means.
  Mr. Cryer: Will my hon. Friend allow me to intervene?
  Dr. Godman: Only if my hon. Friend's intervention relates to the Bill, not to red-caps.
  Mr. Cryer: Certainly not. Is my hon. Friend aware that during the last Environment questions the Under-Secretary of State for the Environment shouted across the Chamber at me that he was also examining the claim for Bradford in the City Challenge. My hon. Friend the Member for Worsley (Mr. Lewis) said that the City Challenge was nothing more than local authority bingo: 10 local authorities would be awarded some money, and 15 had been selected as local authorities in need. The comments of Ministers, which have caused concern in the House, have not gone unheeded elsewhere.
  The First Deputy Chairman: Order. I am sure that the hon. Member for Greenock and Port Glasgow (Dr. Godman) will not be led astray by his hon. Friend. He is nodding in confirmation.
  Dr. Godman: It is difficult to lead astray someone who has served two years in the Royal Military police.
  As we have no Scottish Solicitor-General, let me say very seriously to the right hon. and learned Gentleman—who always listens attentively to my comments, and who knows that, although I am not a lawyer, I strongly support our unique Scottish law and legal institutions—that I do not understand why the clause does not mention Scotland. Subsection (2) states:
  "This Act extends to Northern Ireland."
  I should like to see another subsection, stating: "This Act extends to Scotland."
  The Bill could have important consequences for the administration of Scottish law. English Members of Parliament seem anxious to ensure that English law has primacy over Scottish law, especially in relation to commercial affairs. I reject that view, but some Scottish lawyers have some sympathy with it, particularly when it is seen in the framework of European Community law as it impinges on commercial contracts and relationships. Let me plead with the Solicitor-General, if I can catch his ear—
  Mr. Skinner: While my hon. Friend is waiting for the Solicitor-General to get rid of his Parliamentary Private Secretary, who has been sent off to try to get some information to answer my hon. Friend's question, let me give my view.
  I think that one reason why Scotland is not included in clause 2 is the Government's nervousness about representations in connection with the Western Isles and its money. The Government do not want my hon. Friend, or anyone else in Scotland, to make retrospective representations—for this Bill is all about retrospection. They do not want my hon. Friend to use the clause to say, "What about some money, retrospectively, for local authorities that took the advice of the Bank of England and the Secretary of State for the Environment when the circular was issued, and, as a result, are up to their necks in debt?" They fear that my hon. Friend and others may say that what can apply to the City of London retrospectively—that is what the debate is all about—should apply to the Western Isles, and all the other local authorities that are in the same position.
  Northern Ireland is included because this is a "John De Lorean" clause, which takes account of everything that might happen in Northern Ireland so that, in future—retrospectively—the Government will be able to bail out some of the spivs they invite to build here and, supposedly, create jobs there. As a result, however, they rip off the Tory Government and put the money in their pockets. That is what it is all about.
  Dr. Godman: I want my hon. Friend the Member for Bolsover to listen attentively to my reply. I know the Western Isles extremely well. I have a great deal of affection for the people of the Western Isles. The director of finance, however, has—
  10.30pm
  Mr. Kenneth Hind: On a point of order, Sir Paul. With all due respect to the hon. Member for Greenock and Port Glasgow (Dr. Godman), the Bill deals with companies that are registered in countries that are not recognised by the United Kingdom. The Bank of Credit and Commerce International is registered in Luxembourg, which is a country that we recognise. The hon. Gentleman's comments relate to matters that are outside the scope of the Bill and are, therefore, irrelevant.
  Mr. Redmond: Further to that point of order, Sir Paul. The Bank of England was on the verge of allowing that bank to establish itself in this country. Therefore, the point made by my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) is correct. I hope that you will allow my hon. Friend to develop his argument.
  The First Deputy Chairman: That bank is certainly not relevant to the consideration of the Bill, or this clause. However, the hon. Member for Greenock and Port Glasgow (Dr. Godman) is doing his best to keep in order.
  Mr. Cryer: May I ask for your guidance, Sir Paul. My hon. Friend the Member for Bolsover (Mr. Skinner) referred to Mr. John Z. De Lorean. You may recall that Mr. De Lorean was persuaded to go to Northern Ireland, unfortunately, instead of investing in Puerto Rico, which is a state that may not be recognised by this Government. Therefore, it would surely fall within the scope of the Bill.
  The First Deputy Chairman: That is not in question at the moment. Let us listen to the hon. Member for Greenock and Port Glasgow, who has the Floor.
  Dr. Godman: Thank you, Sir Paul. During the eight and a half years that I have been a Member of Parliament, I have never encountered so many points of order during a speech. Despite the point of order raised by the hon. Member for Lancashire, West (Mr. Hind), what I was saying is very important: the Bill does not refer to Scotland. The hon. Gentleman is an English lawyer, and he does not give a damn for Scots law. I am concerned about the lack of wisdom shown by the director of finance for the Western Isles in investing such a huge sum of money in such a disreputable outfit, but I am deeply sorry for the people he is supposed to serve.
  I should be extremely grateful if the Solicitor-General extended the clause in the way I suggested. It would lead to the avoidance of doubt. Some of my constituents go to the public libraries in Greenock and Port Glasgow to examine Acts of Parliament. They may ask why this short measure, which mentions Northern Ireland, does not mention Scotland. During the proceedings on another Bill, the Solicitor-General gave me an assurance, which I was perfectly willing to accept, about the people of Scotland.
  A number of my hon. Friends have criticised the Solicitor-General concerning Scots law and, in doing so, have commented on the (act that there is no Solicitor-General for Scotland. With respect to my hon. Friends, I have to say that they display a perhaps understandable ignorance of the legal administration in Scotland. We have Mr. Alan Rodger, QC, some of whose mail, incidentally, is directed to my hon. Friend the Member for Rhondda (Mr. Rogers). I do not think that the initials QC appear after the name of my hon. Friend. Mr. Alan Rodger is a very fine gentleman, with a superb
  452
  legal mind in the best traditions of that ancient office. I have some support—if not from my hon. Friend the Member for Bradford, South (Mr. Cryer), from the Solicitor-General, who knows how serious the issue is.
  Mr. Hind: Will the hon. Gentleman give way?
  Dr. Godman: No; this is too important for facetious interventions.
  I have found Mr. Alan Rodger, QC, extremely helpful in all matters.
  Mr. Hind: Read the Bill.
  Dr. Godman: I have read the Bill. There is no mention of Scotland, but there is mention of Northern Ireland.
  Mr. Alan Rodger is extremely helpful to hon. Members from different Scottish parties, but he is not a member of the House. There are no Scottish Law Officers in the House, so we are denied the opportunity, which is given to all English Members, to cross-examine a Law Officer about administration. We do not have that privilege, and that is a matter of considerable concern.
  We are denied the opportunity on the Floor of the House and in the Scottish Grand Committee to question senior legal officers who represent the Crown. That is a major failure. I would even have accepted willingly the promotion of the hon. and learned Member for Perth and Kinross (Sir. N. Fairbairn) to the post which he once held. It is absolutely essential that the administration of Scottish justice is protected by a Scottish Law Officer from the Government Dispatch Box.
  Despite sedentary interventions from—I think—a solicitor who passed his examinations perhaps 30 years or 40 years ago, I tell the Solicitor-General that Scottish Members of Parliament should have the right to ensure that laws such as this—[Interruption.] I am not a lawyer, but if clause 2 were extended to read, "This Act extends to Scotland", the right hon. Gentleman would be doing my constituents a service.
  I welcome the numerous foreign companies who have invested in Scotland, and I only wish that more would come to Greenock and Port Glasgow instead of going elsewhere. No matter how fine and honourable Mr. Alan Rodger is—and he undoubtedly is—in the absence of a Solicitor-General for Scotland in the House we come to the Solicitor-General to ask questions.
  That has happened during the proceedings on the Child Support Bill, which is not an English Bill. It has provisions that are specific to the Scottish legal system, as the right hon. Gentleman readily acknowledged in Committee. There was no Scottish Law Officer to sit alongside him, so two officials from the Scottish Office were sent from St. Andrew's house to give him assistance, although I am not sure that he needed it.
  I believe that an amendment should be made to the Bill to extend it to Scotland. My constituents and people throughout Scotland deserve no less.
  The Solicitor-General: We have had an interesting debate, and I have replied once to part of it. It has been extended, and the hon. Member for Ashfield (Mr. Haynes), who is no longer in his place, made a long and interesting contribution. Now the hon. Member for Greenock and Port Glasgow (Dr. Godman) has asked a pertinent question about the extent of the Bill which raises an interesting question concerning our conventions.

  453
  As the hon. Gentleman knows, I am not a Scot, although I am half a Scot, my father having come south when he was 19. Our convention in relation to Scotland is that, if a Bill is silent on whether it mentions Scotland, it covers Scotland. If it is only to cover England and Wales, it has to state that specifically. Those who have Scottish pride in their hearts or ancestry may find that a satisfactory way in which to deal with matters. Likewise, it is our convention that, if the Bill is to extend to Northern Ireland, it expressly mentions the fact. I hope that that is of assistance to the hon. Gentleman.
  This has been a wide-ranging debate and we have focused on a number of questions relating to clause 2, which I commend to the House.
  Question put and agreed to.
  Clause 2 ordered to stand part of the Bill.
  Bill reported, without amendment; not amended, considered; read the Third time, and passed.

  WATER INDUSTRY BILL [LORDS]
  Order for Second Reading read.
  To be read a Second time tomorrow.

  WATER RESOURCES BILL [LORDS]
  Order for Second Reading read.
  To be read a Second time tomorrow.

  STATUTORY WATER COMPANIES BILL [Lords]
  Order for Second Reading read.
  To be read a Second time tomorrow.

  LAND DRAINAGE BILL [Lords]
  Order for Second Reading read.
  To be read a Second time tomorrow.

  WATER CONSOLIDATION (CONSEQUENTIAL PROVISIONS) BILL [Lords]
  Order for Second Reading read.
  To be read a Second time tomorrow.

  DEER BILL [Lords]
  Order for Second Reading read.
  To be read a Second time tomorrow.

  STATUTE LAW REVISION (ISLE OF MAN) BILL [Lords]
  Order for Second Reading read.
  To he read a Second time tomorrow.

  AGRICULTURAL HOLDINGS (SCOTLAND) BILL [LORDS]
  Order for Second Reading read.
  To be read a Second time tomorrow.

  Coal Mining Subsidence Bill
  Lords amendments considered.
Clause 28

  PAYMENTS FOR TENANT FARMERS
  Lords amendment: No. 1, in page 21, line 27, leave out ("Subject to subsection (2) below")
  Motion made, and Question proposed, That this House doth agree with the Lords in the said amendment.—[Mr. Heathcoat-Amory.]
  Mr. Deputy Speaker (Sir Paul Dean): With this we may take Lords amendments Nos. 2, 3, 4 and 10.
  Question put and agreed to.
  Subsequent Lords amendments agreed to.

Clause 38

  REIMBURSEMENT OF SUCCESSFUL CLAIMANTS' EXPENSES
  Lords amendment: No. 6, in page 32, line 23, leave out ("three") and insert ("four").
  Motion made, and Question proposed, That this House doth agree with the Lords in the said amendment.—[Mr. Heathcoat-Amory.]
  Mr. Deputy Speaker: With this we will take Lords amendment No. 7.
  Mr. Ted Rowlands: May I ask the Minister to explain the amendment to us, as I should like to develop my argument on it'?
  10.45 pm
  The Parliamentary Under-Secretary of State for Energy (Mr. David Heathcoat-Amory): By all means.
  I think that the hon. Gentleman will agree that the amendment is uncontroversial, but I shall certainly explain the thinking behind it. As the hon. Gentleman, who was on the Standing Committee, knows, the Bill that left the House provided that a claimant could recover only those costs incurred in the three years before the making of a claim. We have reflected further on that and we believe that, at least in respect of records of condition, three years may be considered inadequate.
  I said during earlier stages of our proceedings on the Bill that, because the standard of repair required in the Bill is to be to the claimant's reasonable satisfaction, rather than taking the property back to pre-damage condition, an accurate record of the pre-damage condition is certainly not essential. Nevertheless, we always recognised that a prudent householder may well commission such a survey of the pre-damaged property when he receives a section 46 notice and we now realise that, because of a possible delay in the damage occurring, under the three-year rule, such a householder may be unable to recover the costs.
  The amendment would therefore increase the period to four years. There has to be a time limit because, beyond a certain point, a record of condition will become too out of date to be useful in the resolution of a claim. I think that the proposal of four years strikes the right balance. Perhaps anticipating the hon. Gentleman's remarks, we have gone rather further, by enabling the Secretary of State, under Lords amendment No. 7, to extend the time

  455
  period if it proves necessary. That period can be extended if, in the light of experience, further time is deemed necessary.
  Mr. Rowlands: The amendment deals with the reimbursement of successful claimants' costs. Since the Bill left the House, I have corresponded with the Minister about a clutch of cases, one of them very closely concerned with the issue of costs. Before we let the Bill go, I want to take the opportunity to reveal to the House the nature and character of British Coal's treatment of people in our community. This clause deals with successful claimants' costs and the preceding clause deals with the avoidance of other claims and the possibility of previous cases being wrapped up and dealt with under the Bill.
  The basis of much of our agreement on the Bill was that British Coal would act in a positive spirit. On the basis of the correspondence, I have to tell the Minister that the leopard has not changed its spots. The way in which the issues that I presented to him in the correspondence between us—particularly concerning one costs application, which I hope will be successful—have been dealt with by British Coal show that that is not the case. I refer to the case of three constituents of mine living at 49, 50 and 51, High street, Trelewis, which has been the subject of a considerable amount of correspondence between us. The aim of my constituents and their solicitors was to transfer the case and to bring it within the procedures of the Bill. The spirit in which the Minister replied to so many of the debates was that British Coal would be in tune with the Bill and would be willing to anticipate its implementation.
  The solicitors' letter states that any financial decision will have to wait for the final Act, and that British Coal would be likely to be sensitive to my constituents' circumstances and allow them to proceed under the Act.
  We therefore wrote to British Coal, suggesting that the cases proceed under the new Act, when it comes into force, and not under common law because they involve a mixture of current and past damage to the properties.
  Under clause 37, which precedes the provisions with which we are dealing, despite having brought other claims for damages against the British Coal Corporation, a person may serve a notice under the new legislation and can elect which notice of claim he will then proceed with. However, British Coal has said that it will allow our clients to discontinue their common law action and to proceed with an action under the new legislation if they pay all British Coal's costs to the incurred date.
  We are considering provisions relating to the reimbursement of successful claimants' costs. I very much hope that my constituents will be successful claimants. We have conducted our debates in Committee and throughout the Bill's passage in the hope that British Coal would act in a new spirit, but everything that has happened between the Bill leaving the House and its final moments here and now has demonstrated that British Coal's mean spirit
  456
  remains. No doubt it is down to the solicitors, but I have written to both the chairman of British Coal and to the Minister.
  Before we agree to this Lords amendment about the reimbursement of successful claimants' costs, I must bring this appalling case to the Minister's attention. We are talking about three householders—and anybody who knows Trelewis knows that we are talking not about wealthy surburban citizens, but about the terrace communities of our areas which are suffering enormous problems with subsidence, some of which is historic while some is more recent. British Coal is saying to the Minister, to me and to my constituents that it will demand the full payment of its costs before we can even transfer the cases to the spirit and procedures of the new legislation. If nothing else, I hope that the debate will persuade the Minister to stamp on the feet of the chairman of British Coal or at least say to him, "For goodness sake, behave properly to people", such as those whom I represent in Trelewis. I hope that he does so.
  Mr. Allan Rogers: I am most disturbed by what my hon. Friend has said because I referred to him —I know that he brought this to the attention of the Committee—the case of one of my constituents who had a case against the coal board. Under the existing legislation—I am going back about 20 years—the coal board said that it would defer consideration of any submission until the subsidence had finished its geological course. As a result, my constituent waited, but when he later submitted another claim, he was told by British Coal that he was out of time. Since then, we have taken the case up again with British Coal, which has involved lengthy correspondence. My hon. Friend then drew the case to the attention of the Committee, as a result of which we took up the case with British Coal again which, as I understood it, was to act in a new spirit. As my hon. Friend said, if British Coal does not fulfil that obligation, many people in the south Wales valleys—I am not talking about Mansfield, Yorkshire or Nottingham—will continue to suffer from the extensive subsidence that has come to light since coal mining in the area finished. They will not be able to pursue claims in the courts against British Coal because it is using legislative devices to put these people outside the law. It is up to the Minister to ensure that British Coal acts not only within the law but within the spirit of the law, because that is important.
  10.54 pm
  Mr. Heathcoat-Amory: I know of the case mentioned by the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands). However, I do not have the details with me, so I cannot comment knowledgeably on it now. I will look at it again to ensure that British Coal is acting in a way that anticipates this Bill becoming an Act of Parliament. Nothing that he said makes a case against the Lords amendment, so I hope that the House will agree to it.
  Question put and agreed to.
  Subsequent Lords amendments agreed to.

  Assisted Places
  10.55 pm
  The Parliamentary Under-Secretary of State for Education and Science (Mr. Michael Fallon): I beg to move,
  That the draft Education (Assisted Places) (Amendment) Regulations 1991, which were laid before this House on 2nd July, be approved.
  The draft regulations provide for the uprating of the parental contribution tables, which set out how much parents must pay towards their child's assisted place and certain other amendments, which I will describe, to be made to the Education (Assisted Places) Regulations 1989.
  As the House will know, the assisted places scheme is now in its 10th year. It was established in 1981 for the prime purpose of opening up the education opportunities of able children from less well-off families. It provides their parents with assistance towards the fees at some of the best independent schools in the country. That assistance is on a sliding scale based on parental income and the principal changes embodied in the amending regulations are concerned with the annual revision of those scales.
  The other amendments are technical amendments to keep the definition of "total parental income" for the purposes of the scheme constant as tax legislation changes, and to take account of the position of any assisted place scheme parents who are eligible for relief on single gifts made by individuals to charities in pursuance of section 25 of the Finance Act 1990.
  I shall single out only two or three of the regulations for comment. Regulation 3 uprates the amount of the allowance that can be deducted from parents' total relevant income for each dependant, other than the assisted place holder, in the family. That amount is raised from £1,000 to £1,065; that is, by the same percentage which applies to the uprating of the income scales—to which I shall speak in a moment. This allowance is helpful to parents with large families and uprating it will ensure that their position is not worsened.
  Regulation 4 amends regulation 19 of the principal regulations, which is concerned with recruitment to assisted places. Regulation 19 requires schools to select at least 60 per cent. of their assisted pupils from publicly-maintained schools. This requirement lies at the heart of the scheme and reflects the main aim to give priority to those children from less well-off families who would otherwise have gone to maintained schools and would not have had the opportunity of an independent school education.
  The amendment will allow a pupil at the school who is initially not on an assisted place to have the benefit of an assisted place later in his school career, if that becomes necessary, provided that he or she originally came from a publicly-maintained school. That will help in those few cases of hardship which arise from time to time where parents have made considerable sacrifice to move their child to an independent school for secondary education.
  Regulation 6, the principal regulation of those with which we are dealing, sets out the income scale used for assessing parents' contributions towards fees. This year, the tables have been uprated to take account of the movement in the retail prices index to April this year. That figure is 6·4 per cent. In former years, in uprating these tables, we have looked to the retail prices index figure for
  458
  the June of the previous year. If we had done that again this year we would have uprated the parental contribution tables by 9·8 per cent. However, at a time of rapidly falling inflation, combined with the necessity for the Government's scheme to live within its means, we have decided that this year the parental contribution tables should be uplifted by the current level of inflation rather than the higher level prevailing in June of last year.
  The effect of that amendment will be to call for a slightly larger contribution from parents. It ensures that a proper balance is struck between the contributions that parents can reasonably be expected to afford and the need for taxpayers' money to be used prudently and with maximum effect. This revaluation of the income bands therefore represents an equitable measure to ensure that that balance is even. The threshold at or below which parents pay nothing towards fees is therefore raised from £8,200 to £8,714 and will mean that approximately one third of all parents will still qualify for full fee remission.
  It will also mean that some parents must find extra resources, but we have ensured that this will not be too burdensome for those on smaller incomes. For example, a parent earning £11,000 per annum will be required to pay an extra £45 in the coming academic year and a parent earning £18,000 per year will be required to pay an extra £129. The threshold is set deliberately low so that the least well-off benefit most. In cases where there are more than three assisted pupils in a family, provision is made for fees in respect of the fourth and subsequent child to be wholly remitted.
  We have also ensured that at a time when it is necessary to keep a close eye on public expenditure on education and to limit the resources which can be made available for this scheme, any burden occasioned by necessary economies is shared fairly between the schools and parents. We have decided for the first time that for this coming academic year the Department should not sanction fee increases exceeding 12 per cent. for assisted place pupils other than in very exceptional circumstances. Our objective is to secure an average increase for all schools not exceeding 12 per cent. in the academic year 1991–92.
  After 10 years, it should hardly be necessary to explain again to the House the value and benefit of the assisted places scheme, but as the hon. Member for Durham, North-West (Ms. Armstrong) is with us tonight, I will have to restate our belief in its value. The reason why we have supported the scheme from the outset is that we are interested in encouraging high standards of education wherever they are to be found. We want parents to be able to choose the education that they think best for their children, regardless of their income. Our best independent schools—
  Mr. Deputy Speaker (Sir Paul Dean): Order. In broadening matters somewhat, I am sure that the Minister will relate his remarks to the context of the regulations, which is comparatively narrow. It is not about the whole assisted places scheme.
  Mr. Fallon: Certainly, Mr. Deputy Speaker.
  The assisted places scheme, which we are amending tonight, helps to redress the balance for parents of humble means who would be denied the ability to choose from all the types of education that this country offers if they had to meet the full cost of their children's education at an independent school. I could give many examples of those

  459
  who have benefited in the past year and will benefit from the amended regulations which the House is being asked to approve tonight.
  The scheme as amended would be unreasonable to the House only if the cost involved was disproportionate to what is being achieved. I should like to say a word or two about the current cost of the scheme. Most people would find the cost rather surprising. In 1989–90, the last year for which we have figures, the average cost to the taxpayer of each assisted pupil was £2,364. The average cost of a pupil in the maintained sector for that year is estimated to be £2,135—a relatively small difference.
  But in considering even that small difference, we must take into account the fact that sixth form education is about 60 per cent. more expensive than 11 to 16 education. Whereas three quarters of children at independent schools stay on after 16, the corresponding figure for the maintained sector is only one quarter.
  That narrows even further the margin between the cost of an assisted place and that of a maintained place, and proves that there is no appreciable difference between the two systems. The value for money that is obtained from expenditure on the assisted places scheme is beyond question.
  I need hardly say that all the schools in the scheme, including those added to it in the past academic year, have been carefully selected on the basis of their proven records of academic achievement. The breadth and quality of the curriculum that each school offers is first rate, and their records of success in public examinations are outstanding. Last year, 90 per cent. of A-level entries by assisted-place pupils resulted in A to E pass grades. Of these, nearly 29 per cent. achieved grade A, and nearly 25 per cent. grade B. In addition, 90 per cent. of GCSE entries by assisted-place pupils resulted in A to C pass grades.
  Mr. Gerald Howarth: Given the small marginal cost of the scheme to the taxpayer, can my hon. Friend account for the Opposition's wish to destroy it? Can the explanation be only that they are not interested in helping children from poorer backgrounds to attain high standards and to fulfil their potential, an opportunity that the scheme has amply demonstrates it affords?
  Mr. Fallon rose—
  Mr. Deputy Speaker: Order. I remind the House that we are discussing not the merits of the assisted places scheme but comparatively narrow regulations that deal with only certain aspects of the scheme.
  Mr. Fallon: You are absolutely right, Mr. Deputy Speaker. We must wait for the hon. Member for Durham, North-West to explain the motivation behind the Opposition's decision to oppose the scheme and to phase it out, if they form a Government, for the 27,000 pupils and their parents who are currently taking advantage of it.
  Mr. Matthew Taylor: The Minister knows that the scheme and the regulations involve considerable cost to the public purse. He has said that assisted-place pupils achieve good results. Would he argue that those results were achieved only by enabling the pupils to go to private schools? If so, that is surely some condemnation of the
  460
  state system and the teachers within it. Does he believe that they cannot deliver the same education as that which is provided in private schools?
  Mr. Fallon: There are many excellent maintained schools in the state system. The important point, however, is that parents have the right to choose to send their children to independent schools and to be supported under the assisted places scheme.
  You have correctly restricted us, Mr. Deputy Speaker, to the amendments to the scheme that are set out in the regulations. Despite the limited resources that are available for the scheme and the need to keep it within budget, the Government firmly believe in the principle that parents in every part of the country should have access to the opportunities that such a scheme offers. We continue to support it by amending it as part of our policy of widening choice in education. Along with many parents throughout the country, we are immensely encouraged by the successes—in music, the arts and sport, as well as in academic subjects—that assisted pupils have recorded. Over the 10 years that we have been debating the scheme and amendments to it, 48,750 children have benefited from education at some of the best independent schools in the country, of whom 19,140 have benefited by enjoying entirely free education at schools in the scheme.
  Our vision has been, is and always will be to open up opportunity for as many as are able to benefit from excellence. This country has always had a long history of good independent schools, and we are committed to their continuity and to the principle that their doors should always be open to those of ability and merit if it is their wish to attend. That is a far cry from the policy of the Opposition, who would close those doors of opportunity. I commend the regulations to the House.
  11.9 pm
  Ms. Hilary Armstrong: As the Minister said, I have spoken on the previous regulations on this subject. This is the third year that I have opposed such regulations, but each time I have faced a different Minister. That says something about the Government's commitment, or lack of it, to continuity of excellence.
  The regulations are necessary for the Government to spend any money next year on the assisted places scheme, and that is why we oppose them. We feel that that leads the Government, as the right hon. Member for Brent, North (Sir R. Boyson) has said, into a blind alley, which does neither the Government nor the education system any credit. We will oppose the regulations specifically because of that.
  Ministers should read the research on the assisted places scheme that is put before them, because it all reveals that the arguments have not been fulfilled. It was argued that the scheme would offer opportunities to the children of parents who did not have the means. I must remind the Minister that more than 50 per cent. of those on the assisted places scheme come from professional or managerial backgrounds. Only 7 per cent. of the children come from a manual working background. Of the parents, 68 per cent. of mothers and 51 per cent. of fathers attended an independent or selective school. None of the criteria laid down by the Government 10 years ago has been met.
  The research has demonstrated the failure of the scheme. The poor take-up rate in some parts of the country shows that the Government have not won overall

  461
  support for the scheme. They have to come back continually to the House to amend the scheme, but they still face opposition to it. They also know that all the opposition parties intend to abolish the scheme. However, we are not vindictive and we will allow those children on the scheme to continue with it.
  We have made that clear every year, but the Minister has again tried to perpetuate the myth that that will not happen. The Minister cannot claim that we will harm the 27,000 children on the scheme. We are not vindictive, and we will allow them to continue their education under that scheme. However, we will not perpetuate a scheme that does not meet the criteria that the Government promised the House it would follow. In the past 10 years, the Government have refused to meet those criteria.
  Mr. George Walden rose—
  Ms. Armstrong: I shall not give way.
  I shall not say anything about fairness, except that the Government have abandoned that concept totally. It is 10 years since the introduction of the scheme, but the Government have still not won an educational consensus in favour of it. They have abandoned any semblance of fairness. The figures on the city technology college programme that my hon. Friend the Member for Leeds, Central (Mr. Fatchett) analysed and broke down this week reveal how far down the road of seedy discrimination the Government have travelled.
  We will oppose the regulations, because we believe that the continuation of the scheme represents the Government's recognition of the abject failure of the Education Reform Act 1988. That Act spelled out how the Government thought that education was going. Since the Act gave the Secretary of State 415 new powers, he has run away from his repsonsibility for the state sector. The Prime Minister is now joining in and saying that the only way forward for those parents who want a decent education system is to opt out of the state system. Money is therefore being given to assisted places—
  Mr. Gerald Howarth: On a point of order, Mr. Deputy Speaker. I thought that we were debating the amending regulations rather than the Education Reform Act, excellent though that Act is and widely welcomed though it is in my constituency.
  Mr. Deputy Speaker: I was becoming a little anxious myself. I am sure that the hon. Lady will realise that, as I had to call the Minister to order, I must also call her to order. We are dealing not with the broad issues of the scheme but with the aspects of the regulations before us.
  Mr. Martin Flannery: Further to that point of order, Mr. Deputy Speaker. The long experience that many of us have had in this Chamber teaches us that it is impossible to discuss in isolation what is happening in, for instance, an order. I have been involved in countless debates on Northern Ireland orders and other debates of that nature. It is fundamentally impossible to debate narrowly without referring to the background that makes these regulations necessary, so I hope that you will be a little more tolerant with us about it.
  Mr. Deputy Speaker: Those on both Front Benches have responded to advice from the Chair. I am grateful to them for doing so, and I am sure that the hon. Gentleman will do likewise if he catches my eye.
  Ms. Armstrong: I understand why Conservative Members do not want me to broaden the debate, but I also want to keep within your strictures, Mr. Deputy Speaker, as I always attempt to do.
  I understand that, if we reject the regulations tonight, the scheme will not be funded next year. If my supposition is right, the reasons for the Government wishing to continue the scheme need to be clarified. It is amazing that they want to put so much faith in providing "excellence" for youngsters but say that that cannot happen within the state system. They are really saying that any sensible parents who really care about their children would not seek to have them educated within the main stream of the state education system but would take them out of it.
  Mr. Walden: Would the hon. Lady mind if I harked back for a moment to something she said which was new to me, although perhaps not to my hon. Friend the Minister? She said that a Labour Government would graciously allow children already receiving such education to finish their education before closing that door. But the Labour party plans to close many other doors, such as grant-maintained schools, city technology colleges and grammar schools. Would she extend her beneficence and allow children in grant-maintained schools, city technology colleges and grammar schools at least to finish their education before she closes the door on all those opportunities, which are open to people from more humble backgrounds than many in this country?
  Ms. Armstrong: I hope that you, Mr. Deputy Speaker, will allow me to answer that point, although it falls outside the remit of the regulations. We shall not close those schools, but will return them to local authority organisations, which is different. Far from closing doors, we will be opening them. We are determined to ensure that the state system should be able and effective to offer the highest standards to every child—that is where I think that the hon. Member for Buckingham (Mr. Walden) and I are not so far apart. As long as the Government are determined to say that the only way to achieve excellence is by opting out, nobody will believe that the Government have any faith in the state system. How can we expect parents to have faith in that system?
  We wish to ensure that every child, whatever his or her background, gets the best opportunity. The Government have abandoned those youngsters. The Secretary of State told the Select Committee that he did not have responsibility for what went on in schools. He told Woman magazine that parents misunderstood when they came to him expecting him to be the one who knew what was going on in schools.
  The Labour party will accept responsibility. We are so serious about making education work that we want everyone to want every child to suceed, and will put the resources and commitment into that. I think that some Conservative Members also want that. As long as we have a system that advocates that it is all right to invest a lot of money in a few youngsters and let the rest manage with crumbling schools, rotting buildings and demoralised

  463
  teachers, parents will ask, "Who cares about our child? Who cares about our school? The Government certainly do not care."
  Mr. Christopher Hawkins: On a point of order, Mr. Deputy Speaker. I have been listening carefully to the debate on this subject, in which I take a considerable interest. I have not yet heard one line of the hon. Lady's speech which relates to the regulations.
  Mr. Deputy Speaker: I have already told the Minister and the Opposition spokesmen and women that the regulations are comparatively narrow. We cannot discuss all the merits or demerits of the assisted places scheme.
  Ms. Armstrong rose—
  Mr. Andrew Rowe (Mid-Kent): Before the hon. Lady was interrupted by my hon. Friend the Member for High Peak (Mr. Hawkins), she suggested that the Secretary of State should take responsibility for everything that goes on in schools. Would a Labour Secretary of State take responsibility for—for example—the picketing of a school for children with special learning difficulties, as happened in Liverpool recently?
  Ms. Armstrong: As I understand it, that has not happened, and we certainly would not condone or support anything like that. The hon. Gentleman has been watching the fiction—and good fiction it is too.
  The Minister said that the system was giving us value for money and the Government were selecting only schools with a proven record.
  Mr. Gerald Howarth: I am grateful to the hon. Lady, and I am sure that our debate has been enhanced by the little forays that have taken place.
  The hon. Lady said that a Labour Government would take complete responsibility for education, which is interesting. What responsibility will parents be left with?
  Ms. Armstrong: Yet again, Conservative Members show their paucity of knowledge of the education system. We want a partnership between parents, local authorities, teachers and schools. One cannot pursue a partnership by saying, "I do not have any responsibility." The difference between the Government and the Opposition is that we accept that we have a responsibility. We shall not have full responsibility, but we shall not duck that which we have.
  The Minister led us to believe that the Government knew enough about schools to support only those with a proven record. How were those schools monitored? How many inspections have taken place in the past year of schools that have assisted places? Has the Minister made sure that every child in those schools has had entitlement to the national curriculum laid down in the Education Reform Act 1988 as necessary for all schoolchildren? How does the Minister know about a school's proven record or that such schools would flourish without the assisted places scheme?
  The Minister's answer to me yesterday shows that almost a third of the intake of many schools is being paid for by the taxpayer through the assisted places scheme. Those schools would probably not be viable if the scheme was removed. Those schools cannot prove that they are open and that they would maintain standards if they did not have assisted places.
  Mr. Patrick Thompson: I am not quite clear about the trend of the hon. Lady's argument. She seems to be saying that the maintained system is better than independent schools with assisted places. That is a travesty of the truth. I and others who have taught assisted place pupils know that the quality of teaching in the scheme is excellent. If the hon. Lady is saying that the maintained system is better, that destroys her argument. Will she explain why her party will vote against this measure, because the reason is not clear?
  Ms. Armstrong: I am sorry that the hon. Gentleman has not understood my argument. I have said throughout my speech that I have faith in the state system. I want to put all my faith and resources into making sure that that system is as good as possible for every child, and I want to ensure that all children can get what they need within the system. As long as the Government maintain escape routes, they will not put their faith in the state system. They make sure that they do not send their children to the state system and have no investment in it. That does none of us any good.
  I am concerned to ensure that state education is such that everyone will fight for it tooth and nail. The Government have shown that they are not prepared to do that by trying to perpetuate the get-out route of the assisted places scheme. They do not effectively monitor what is happening in assisted places schools. I accept that many of those schools may provide good, albeit often narrow, education for many of their youngsters.
  The assisted places scheme will not uplift the education system and show people that Parliament is committed to seeing that the state system works—which would encourage people to put their all into it. The Government have shown at every stage that they run from the state system as quickly as possible. Britain needs a Government who will work for and with the state system, and who believe in it. The only salvation for the education system is a Labour Government.
  11.28 pm
  Mr. Martin Flannery: In defending the regulations, the Minister touched on the essence of the problem when he said that the money involved was being well spent. Therefore, one needs to know something which the general public and Conservative Members do not seem to know, and that is the cost of the scheme, which is detailed in a Government publication.
  Let us consider what we are in the process of amending. The scheme began in 1984–85 at a cost of £22 million. In the next year it received another £30 million, then another £38 million, then £46 million, then £51 million, then £59 million, then £62 million, then £60 million and then £70 million. That comes to £438 million. It is heading towards half a billion pounds. That is how much the scheme is costing. When I have given those figures in various statements that I have made, many people are appalled at the amount of money that the scheme is costing.
  Amending the regulations will deepen and intensify the amount of money that is being spent on the scheme. That amount of money is being taken from the state sector which is in urgent need of money. If one were to add to that sum the £60 million spent on grant-maintained

  465
  schools and the £187 million spent on city technology colleges, the total comes to £685 million—more than half a billion is being spent on these privatisation schemes.
  Ministers go up and down the country telling various sections of the community in the big cities that they can have £5 million or £6 million, yet many of the schools which have assisted places are getting more than £1 million each, and there are 240 of them. The amounts of money are getting bigger and bigger and whole families are receiving such assistance.
  Let us be clear that we are amending the regulations in the interests of those people who come not from the schools where there is poverty, but from middle-class areas. They are spawning on the public purse and taking money that should go to all our children in the state education system. That is what the Government are defending tonight.
  Just think what could he done with that vast amount of money. Major debates have taken place in the Chamber about far less money than the amount being spent on this scheme. Conservative Members know that the figures that I have just read out are from the Government's expenditure plans for education for this year and next year. They are not our figures.
  Our crumbling schools, short of books, teachers and equipment, could do with that money. That money is being taken away from needy children and given to children who do not need it. I hear the Minister telling us that it is money well spent, but well spent on whom? It is being reft from those who really need it who are in terrible crumbling schools. When the Minister visited Sheffield he himself described the schools are crumbling.
  Most people have no knowledge of the vast amounts of public money that are being spent, and throughout his defence of the regulations the Minister never mentioned it; he merely used generalisations. I know that Conservative Members will he surprised at the amounts involved.
  The assisted places scheme is now a flourishing and fundamental part of the private system. Whole schools rely on it and hundreds of children in those schools are being paid for by money taken from the children who need it.
  Sir Dudley Smith: My hon. Friend the Minister quoted a number of modest salaries, where the parents will have to pay. Is the hon. Gentleman suggesting that affluent, middle-class people will benefit?
  Mr. Flannery: I am saying that payment should not be made and that the children should attend ordinary schools. The Minister mentioned a figure of 60 per cent. in some cases. The regulations make such a tiny change that they appear to mean little or nothing, but now we have learnt for the first time that two, three, or four children from one family can be favoured by attending a school that has smaller classes and better equipment than other children enjoy. The poor children are not given a chance. Conservative Members laugh.
  My hon. Friend the Member for Blackburn (Mr. Straw) wrote to the former Secretary of State for Education, the right hon. Member for Norfolk, South (Mr. MacGregor):
  "I am writing to ask you whether you will cut the level of state subsidy to private schools to the levels of spending which you and the Environment Secretary have dictated are enough to run maintained schools."
  He went on to illustrate that in a rate-capped area two or three times more money was being allocated to children in private schools.
  466
  The amount of money involved in respect of city technology colleges is now vast and has already reached more than £700 million.
  Mr. Andy Stewart: Is the hon. Gentleman aware that, when Nottingham city technology college was started, Nottinghamshire was asked whether it expected any closures because of falling rolls? It replied in the negative, but the moment that the contract for the CTC was signed, the closure of three schools was announced. One of them could have been given to the CTC at a cost of £4 million, which could have been used to benefit the children of Nottingham.
  Madam Deputy Speaker (Miss Betty Boothroyd): Order. The hon. Gentleman's intervention is rather wide of the subject for debate. I am sure that the hon. Member for Sheffield, Hillsborough (Mr. Flannery) will not stray down that path.
  Mr. Flannery: I would love to do so, Madam Deputy Speaker, but I know that I must not. However, I may point out that all the other schools combined received only as much money as that college, so I would keep quiet about that subject, if I were the hon. Member for Sherwood (Mr. Stewart).
  The list of schools for which the regulations are being amended was published this morning. It runs to page after page of small print, and hundreds of millions of pounds are involved. It is clear from that list how dependent the private sector has become on that source of money. That is drastically wrong, but the Minister tries to convey the impression that he is doing the country a favour.
  Only a few children will benefit from the changes. Should we entertain, at a time of slump and crisis, regulations that siphon off money from ordinary people—3 million are out of work and no doubt that figure will be shown tomorrow morning to have increased—to give a tiny group a special education? Is that the Minister's idea of fairness? How can anyone in all conscience support, especially at a time of slump and crisis, a rip-off that will affect 95 per cent. of children? That money is being siphoned into the private sector.
  Mr. Jim Lester: The bonus is that the 95 per cent. of children who are of concern to the hon. Gentleman will have an opportunity to take advantage of the scheme and the schooling that it makes available. It is the 95 per cent. of pupils whom we are trying to support—not the 5 per cent. to whom the hon. Gentleman refers.
  Mr. Flannery: The hon. Gentleman's thought processes are very convoluted. He seems to be saying that the Government are trying to help the children—95 per cent.—who attend terrible, crumbling schools, which are short of equipment and so short of teachers that they are bringing in foreigners to teach. If he thinks that that is a good thing, heaven help us: he will probably support anything in the regulations.
  This is an evil measure, which grants special favours to a tiny group of children. If Conservative Members do not think that our wish for them to be taught along with others is honourable, I do not know what they want from education. We shall develop our philosophy shortly, when we have thrown out the Conservative Government.
  11.40 pm
  Mr. Gerald Howarth: This has been an instructive debate for the House, and, I hope, for those outside.
  As we have heard, the marginal cost of the scheme is infinitesimal. The interesting display that we witnessed from Opposition Members clearly demonstrates that their purpose in opposing the regulations is motivated by spite and malice. As my hon. Friend the Member for Broxtowe (Mr. Lester) pointed out, they want to deny choice to 93 per cent. of children who would then have no access to the private sector.
  Ms. Armstrong: Is the hon. Gentleman saying that the Government's answer is for every child in the country to obtain an assisted place?
  Mr. Howarth: I am supporting my hon. Friend the Minister's wish to upgrade a scheme that extends choice. The Opposition would deny that choice to the children who will benefit from the scheme.
  The Opposition's spite is directed particularly towards those who come from poorer homes: it is they who would otherwise not have access to such education. I hope that this message will go out to the country. What Opposition Members offer is a denial of choice, and the same "take it or leave it" approach that they adopted in the 1970s, when they rammed compulsory comprehensive education down people's throats.
  Let me give Opposition Members a warning. A recent opinion poll showed that 57 per cent. of Labour voters supported the assisted places scheme. If I were an Opposition Member, I would be very cautious about imagining that there was any electoral advantage in the Opposition's view.
  Mr. Richard Page: I support everything that my hon. Friend has said. Is the scheme not, however, merely the precursor of another—the voucher scheme, which will allow all parents to choose how their children are educated?
  Mr. Howarth: That is a subject for future debate.
  I believe that the regulations will be popular throughout the country—
  Mr. Derek Fatchett: Will the hon. Gentleman give way?
  Mr. Howarth: No, I will not.
  Mr. Fatchett rose—
  Madam Deputy Speaker: Order. The hon. Member for Cannock and Burntwood (Mr. Howarth) is not giving way.
  Mr. Howarth: No, I will not give way: the hour is late. [Interruption.] I assure Opposition Members that my hon. Friend's policy will result in Cannock and Burntwood being not only held by the Tories, but held with a larger majority.
  11.43 pm
  Mr. Fallon: With the leave of the House, Madam Deputy Speaker, I shall reply briefly to the debate. I sense that the House wishes to come to a decision on this matter.
  To answer the hon. Member for Sheffield, Hillsborough (Mr. Flannery), the scheme was inaugurated in 1981, not
  468
  1984. There are just 295 schools in the scheme. Many schools would like to participate in the scheme and have applied to participate. So far, however, only 295 are in it.
  Mr. Conal Gregory: Will my hon. Friend confirm that in the north of England, particularly in the north-east, the take-up is less? Will he look into that carefully so that parents in that part of the country have the opportunity to send their children to schools that participate in this excellent scheme?
  Mr. Fallon: The matter has been reviewed. When the scheme was expanded slightly last May we were able to redress the regional imbalance in both the midlands and the north-east by adding some schools from those areas to the scheme.
  May I point out to the hon. Member for Hillsborough that the amount involved in running the scheme is not money taken away from the state sector. The hon. Gentleman asked me for the total amount of money spent on the scheme. It is to be about £70 million. The £70 million will be spent on educating the same number of pupils in the maintained sector. The hon. Gentleman gave the game away. We heard him say clearly that these pupils should go to their local schools. That is compulsion, not choice. That is the Labour party's policy.
  My hon. Friend the Member for Cannock and Burntwood (Mr. Howarth) answered very effectively the question asked earlier in the debate by the hon. Member for Hillsborough. The Opposition want to rub out the scheme not because they want to save money—no money would be saved—but because of sheer, unadulterated, ideological spite. They want to take it out on the least well off in our society.
  Mr. Matthew Taylor: Will the Minister give way?
  Mr. Fallon: No. I said that I would be brief.
  The hon. Member for Durham, North-West (Ms. Armstrong) began by complaining that she had had to face three different Ministers in our last three annual debates on these regulations. Perhaps that says something for job mobility and career prospects on this side of the House, as opposed to the Opposition side. What the hon. Lady did not tell the House, which I intend to do, is that she quoted large chunks of the speech that she made last year, on 18 July. She quoted exactly the same research that she quoted last year from a publication that is now over two years old.
  The hon. Lady specifically asked me whether these schools are regularly inspected. Yes, they are regularly inspected. Many schools applied to be on the assisted places scheme. We turn down applications from schools whose academic record is not good enough to satisfy our criteria. Every year the schools on this scheme have to send us their examination results. We check constantly the academic standards of the schools on the assisted places scheme.
  Ms. Armstrong: Will the Minister give way?
  Mr. Fallon: I am just about to conclude my speech.
  The real difference between the two sides of the House is that the hon. Member for Durham, North-West believes that the only way to excellence is through the uniform, monolithic monopoly of council schooling that we have seen since the war. We believe that the best way to promote excellence is to give choice. In the end it is choice that

  469
  drives up standards—parents' choice, not that of education directors, or bureaucrats, or Ministers. We want parents to be able freely to choose.
  The assisted places scheme that we are amending tonight is not the only way in which we have widened choice. Since 1981 we have encouraged a variety of different schools: city technology colleges, grant-maintained schools, council schools with fully delegated local budgets. We have widened choice in all sorts of ways, but this scheme remains good value for money and a guarantee of access to excellence for those few pupils who deserve to benefit from it. I commend the regulations to the House.
  Question put:—
  The House divided: Ayes 143, Noes 52.

  Division No. 222]

  [11.48 pm

  AYES

  Alison, Rt Hon Michael

  Garel-Jones, Tristan

  Amess, David

  Goodlad, Alastair

  Amos, Alan

  Gorst, John

  Arbuthnot, James

  Greenway, Harry (Ealing N)

  Arnold, Jacques (Gravesham)

  Greenway, John (Ryedale)

  Ashby, David

  Gregory, Conal

  Atkinson, David

  Griffiths, Peter (Portsmouth N)

  Baldry, Tony

  Gummer, Rt Hon John Selwyn

  Banks, Robert (Harrogate)

  Hague, William

  Bellingham, Henry

  Hamilton, Neil (Tatton)

  Bennett, Nicholas (Pembroke)

  Hanley, Jeremy

  Bevan, David Gilroy

  Hargreaves, Ken (Hyndburn)

  Blackburn, Dr John G.

  Harris, David

  Blaker, Rt Hon Sir Peter

  Hawkins, Christopher

  Boswell, Tim

  Hayes, Jerry

  Bottomley, Peter

  Hayward, Robert

  Bottomley, Mrs Virginia

  Heathcoat-Amory, David

  Bowden, Gerald (Dulwich)

  Hind, Kenneth

  Bowis, John

  Howarth, G. (Cannock & B'wd)

  Brazier, Julian

  Howell, Ralph (North Norfolk)

  Bright, Graham

  Hughes, Robert G. (Harrow W)

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

  Hunt, Sir John (Ravensbourne)

  Budgen, Nicholas

  Irvine, Michael

  Carttiss, Michael

  Jack, Michael

  Cash, William

  Janman, Tim

  Chapman, Sydney

  Jones, Gwilym (Cardiff N)

  Clarke, Rt Hon K. (Rushcliffe)

  Jones, Robert B (Herts W)

  Coombs, Simon (Swindon)

  Key, Robert

  Couchman, James

  King, Roger (B'ham N'thfield)

  Currie, Mrs Edwina

  Kirkhope, Timothy

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

  Knight, Greg (Derby North)

  Davis, David (Boothferry)

  Knowles, Michael

  Dykes, Hugh

  Lawrence, Ivan

  Emery, Sir Peter

  Lennox-Boyd, Hon Mark

  Fallon, Michael

  Lester, Jim (Broxtowe)

  Favell, Tony

  Lightbown, David

  Fenner, Dame Peggy

  Lloyd, Peter (Fareham)

  Fishburn, John Dudley

  Lord, Michael

  Fookes, Dame Janet

  Luce, Rt Hon Sir Richard

  Forman, Nigel

  Lyell, Rt Hon Sir Nicholas

  Forsyth, Michael (Stirling)

  Maclean, David

  Freeman, Roger

  McLoughlin, Patrick

  French, Douglas

  Malins, Humfrey

  Gale, Roger

  Mans, Keith

  470

  Maxwell-Hyslop, Robin

  Stern, Michael

  Meyer, Sir Anthony

  Stevens, Lewis

  Miller, Sir Hal

  Stewart, Allan (Eastwood)

  Mitchell, Andrew (Gedling)

  Stewart, Andy (Sherwood)

  Moate, Roger

  Summerson, Hugo

  Monro, Sir Hector

  Taylor, Ian (Esher)

  Morrison, Sir Charles

  Taylor, John M (Solihull)

  Moss, Malcolm

  Taylor, Sir Teddy

  Neale, Sir Gerrard

  Temple-Morris, Peter

  Neubert, Sir Michael

  Thompson, D. (Calder Valley)

  Nicholls, Patrick

  Thompson, Patrick (Norwich N)

  Norris, Steve

  Tredinnick, David

  Oppenheim, Phillip

  Trippier, David

  Page, Richard

  Twinn, Dr Ian

  Paice, James

  Viggers, Peter

  Patten, Rt Hon John

  Walden, George

  Peacock, Mrs Elizabeth

  Walker, Bill (T'side North)

  Porter, David (Waveney)

  Wardle, Charles (Bexhill)

  Price, Sir David

  Wells, Bowen

  Raffan, Keith

  Wheeler, Sir John

  Raison, Rt Hon Sir Timothy

  Whitney, Ray

  Rowe, Andrew

  Widdecombe, Ann

  Ryder, Rt Hon Richard

  Winterton, Mrs Ann

  Sackville, Hon Tom

  Wood, Timothy

  Shaw, David (Dover)

  Yeo, Tim

  Smith, Sir Dudley (Warwick)

  Speed, Keith

  Tellers for the Ayes:

  Speller, Tony

  Mr. Irvine Patrick and

  Spicer, Sir Jim (Dorset W)

  Mr. Nicholas Baker.

  Steen, Anthony

  NOES

  Armstrong, Hilary

  McWilliam, John

  Barnes, Harry (Derbyshire NE)

  Mahon, Mrs Alice

  Barron, Kevin

  Marshall, David (Shettleston)

  Beggs, Roy

  Martin, Michael J. (Springburn)

  Bermingham, Gerald

  Meale, Alan

  Brown, Nicholas (Newcastle E)

  Michael, Alun

  Campbell, Menzies (Fife NE)

  Morley, Elliot

  Carlile, Alex (Mont'g)

  Nellist, Dave

  Clelland, David

  O'Hara, Edward

  Cox, Tom

  Pike, Peter L.

  Cryer, Bob

  Powell, Ray (Ogmore)

  Dixon, Don

  Primarolo, Dawn

  Dunnachie, Jimmy

  Rogers, Allan

  Fatchett, Derek

  Ross, William (Londonderry E)

  Flannery, Martin

  Rowlands, Ted

  Foster, Derek

  Salmond, Alex

  Galloway, George

  Skinner, Dennis

  Godman, Dr Norman A.

  Smith, Andrew (Oxford E)

  Home Robertson, John

  Spearing, Nigel

  Howarth, George (Knowsley N)

  Steel, Rt Hon Sir David

  Hughes, Simon (Southwark)

  Taylor, Matthew (Truro)

  Illsley, Eric

  Thompson, Jack (Wansbeck)

  Jones, Barry (Alyn & Deeside)

  Turner, Dennis

  Leadbitter, Ted

  Wise, Mrs Audrey

  Lewis, Terry

  Livsey, Richard

  Tellers for the Noes:

  Loyden, Eddie

  Mr. Alien McKay and

  McAvoy, Thomas

  Mr. Frank Haynes.

  Question accordingly agreed to.
  Resolved,
  That the draft Education (Assisted Places) (Amendment) Regulations 1991, which were laid before this House on 2nd July, be approved.

  East Newcastle Quayside Development
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. John M. Taylor.]
  11.59 pm
  Mr. Nicholas Brown: At one point this evening, I thought that we would be discussing the East Newcastle quayside development at one of the breakfast meetings of which the urban development corporation is so fond. I am pleased, therefore, that we are able to have the debate at a relatively reasonable hour of the night.
  I have substantially rewritten the speech that I had intended to make when I was first lucky enough to draw a place and to secure an Adjournment debate. I had not realised how powerful Adjournment debates can be. The Government first suggested that some matters were sub judice and that the debate could not therefore take place. I am grateful for the fact that it was decided that the debate could be held despite there being some matters before the court. I shall not trespass on those matters. It is perfectly possible for me to make my points without doing so. I know that the Minister will understand why, when I approach those matters, I deal with them in a more general way than I might otherwise have done.
  The changes that have taken place over the past few days have been quite surprising. First, the parliamentary questions that I had tabled, which the Minister orginally told me could not be answered because the matter was sub judice, have now miraculously been answered—or the majority of them answered—in letters to me from the Minister. I suspect that that happened solely because I had secured an Adjournment debate. The replies are perfectly reasonable and satisfactory, and I have no quarrel with the points that the Minister makes, although I wonder why he could not simply have answered my questions in a sensible, reasoned way in the first place.
  Secondly, my tabling of those questions and the prospect of the debate have prompted vigorous public debate in the local newspapers on Tyneside. I suspect that it was the prospect of this debate that compelled the chairman of the urban development corporation, the Economic League's Mr. Paul Nicholson, to issue the justification of his behaviour that appeared in The Journal today.
  The third reason that has led me in some respects to adjust what I proposed to say is a disappointing one for me. I have heard from the Audit Commission that it cannot investigate the financial arrangements of the urban development corporation because it has no competence in these matters. However, I have had a meeting with my hon. Friend the Member for Dagenham (Mr. Gould), the shadow Secretary of State for the Environment, and I am satisfied with the assurances that he has given me concerning the disclosure of information relating to the financial affairs of urban development corporations. I think that Labour will come to power before we get any investigations from this Government, but I am quite content to wait, because a Labour Government can only be less than a year away.
  Although I am grateful to the Minister for the information that he has divulged, it reflects no credit on him, the Department of the Environment or the urban development corporation that that information has had to be dragged out of the Department through the mechanism
  472
  of an Adjournment debate. There was nothing contentious about the information; it should have been provided voluntarily.
  I propose to do two things in the debate. First, I shall say a little about what is wrong with the present development and the way in which the developers are proceeding and then I shall suggest a series of initiatives—I hope constructive—which I hope will provide a solution, break the present deadlock and perhaps even diminish some of the animosity that has surrounded this affair.
  Let me make this absolutely clear: I do not oppose the redevelopment of the quayside area—far from it; I welcome that redevelopment. What I oppose is the existing development and the way in which it was arrived at. I am opposed to the bullish way in which the urban development corporation on Tyneside went about the preparation of the development. The Newcastle quayside development affair encapsulates all that is worst about the urban development corporation structure. I cannot understand why the urban development corporation decided to choose a developer first and then set out to try to acquire all the land from others who were told that they were being kept out of the development consortia. In those circumstances, why on earth should those who are not part of the development consortia voluntarily agree to being kicked off their land?
  It is not my view that everyone who supports the urban development corporation is ill-motivated. There are those who genuinely believe that using the planning and compulsory purchase powers of the urban development corporation to push Mr. Godfrey Bradman's business interests is in east Newcastle's best interests. There are others who are less honourably motivated. It strikes many in the Labour party as a remarkable coincidence that the different developers on three separate sites north of the River Tyne have three things in common. I am referring to the Closegate site, the separate east quayside site and the Cosalt development in north Tyneside. The three things that they have in common are, first, that their proposed developments are hideously ugly; secondly, that they cost the public purse an awful lot of money in subsidies; and, thirdly, that the favoured developers are all staunch supporters of the Conservative party. Indeed, in north Tyneside, the favoured developer is a Member of the House.
  These issues are highly political in the north. Both sides will make the urban development corporation an election issue. It will be an issue of Labour v. Conservative. In the Northern region, there is Labour resistance to the urban development corporation. There are also regional quislings. I regret that the debate on such important issues has been conducted in this manner because on economic development issues generally there is, in the Northern region, as bipartisan an approach as it is possible to find anywhere in the country. No region has done more to help itself through difficult times. That has involved co-operation at regional level between the Confederation of British Industry and the Trades Union Congress, and between private industry and developers and the public sector, including Labour-controlled local authorities. I very much welcome that way of doing things in the region and regret the fact that what has happened over the quayside scheme does not resemble the way in which we normally conduct our affairs.

  473
  I was told at the outset by the chief executive of the urban development corporation that I could make my views known on the development, just like any other member of the public. He has said publicly—I have the press cutting with me—
  "The Member of Parliament for East Newcastle seems to work assiduously to chase jobs away from his constituency."
  That is a very political remark, which I very much resent. Apart from my work on the Labour Front Bench in this place, I spend more of my time on economic development matters in my constituency than on any other issue. If the Conservatives wish to say, "The Member of Parliament for East Newcastle chases jobs away from his constituency", I suggest that they go to the real industrialists in east Newcastle—the real employers there—such as NEI Parsons or Swan Hunter, the shipbuilders, and ask their management and work forces whether they believe that to be true. I know what the response would be—the management and work force would show those Conservative politicians the gate.
  I said that I would say a little about the problems and then suggest some solutions. The overriding problem for the site—this is not the fault of the urban development corporation—is the traffic. The site is difficult, and whoever had been the economic development authority would have found the problem intractable and the site expensive to prepare for development. The site contains what has become a well-established traffic route from east to west, but it is an extraordinarily difficult route for traffic. I have here a report of the city engineers dealing with traffic issues which is dated June 1989. Since then the situation has deteriorated. The report says:
  "The quayside route operates at the limits of its capacity, at peak times particularly. Its route experiences congestion and queues, mainly associated with the Guildhall roundabout … Traffic has little opportunity for transferring to other routes, the cathedral route being equally congested. Clearly, both routes are essential for east-west movement, and neither can carry the traffic off the other. What is also clear is that neither route can accommodate more traffic under current circumstances."
  Those circumstances will be familiar to everybody who knows Newcastle, so it was always going to be a priority to sort out the highways issues before determining the nature of the development that would sit alongside it, or before determining who the developer would be. The development corporation chose to put the cart before the horse. It chose first the developer, then the development that he proposed, and has said that it will not be altered. Then it set about solving the traffic problems. Things cannot be done that way round.
  A number of other issues will have to be addressed before any solution to the impasse is arrived at. I do not like the shape of the development. The scheme is wrong, not just because of the traffic issues, although they are of paramount importance, but because there is too much of it. The Bradman proposal is substantially to overdevelop the site, and to do so in a way that is not redolent of Tyneside in any way. The Fine Art Commission has made this point and has also said that the development does nothing to parallel the natural and impressive sweep of the river. Its view should have been respected rather than being sneered at by supporters of the Godfrey Bradman scheme. They sneered because they know that they can use the powers of the development corporation to bulldoze all opposition and criticisms out of the way, regardless of the merit of those criticisms.
  474
  The Minister may find my next point a little more welcome. I am not opposed to bulk in the buildings that will eventually go up on the site. The buildings that have traditionally dominated the quayside area have always been of a considerable size, and as long as the chosen solution is not to put the skyline of Manhattan on the north bank of the Tyne, it will be possible to have reasonably sized buildings on the site. However, it depends on their function, particularly if that is to draw traffic-borne personnel on to the site at peak hours.
  As the Member of Parliament, I have to insist that the relationship of that development to the two communities which neighbour it—St. Anne's and the much larger community of Byker—is handled sympathetically. There is no evidence that that has yet been addressed, and I pay tribute to two local councillors, Rick Anderson and Geordie Allison, for the important and constructive interest that they have taken in these matters. I pay tribute to the local community groups, and in particular the local clergy, for having tried to address some of these important questions. My corporate constituent, Procter and Gamble, is being treated roughly and has done nothing to deserve the rough handling that it is getting from the urban development corporation. I want to put that point on record.
  I suppose that it is also right that I declare a pretty distant interest in the matter. I worked for Procter and Gamble in 1974 and 1975. I still have an enormous affection for it as a company, although if I thought that it was wrong, I would stand up and say so. It knows that. I cannot go any further on the Procter and Gamble issue, except to state general sympathy, because the other matters are before the courts.
  Although the fight over the landholdings arises inevitably from the approach that the urban development corporation has adopted, it is destructive of the best interests of Newcastle and Tyneside. It has also obscured the real merits in the idea of business apartments that Mr. Lesser Landau has proposed. The idea should have been explored more thoroughly, because Newcastle is trying to develop a service base and get away from the perhaps too narrow industrial base that Tyneside has had to date.
  The site is right for a project of business apartments because it has a central location. The idea is also right for the site because it would not—perhaps it is dangerous to say that it would not; it would be less likely to—generate the traffic flows about which I am so worried.
  To suggest a way forward, I believe that the agreement that has been made with Bradman cannot endure. It is not a tenable basis on which to proceed. It is incomprehensible that a few influential figures in the Northern region defend it so passionately in the face of the pretty obvious evidence to the contrary. My view is that the legitimate private sector interests—I include Procter and Gamble and separately the Laing, Dysart, Landau consortium and Amec—must sit down and discuss some solution that is acceptable to them. They should then go to the public authorities—the city council and, while it is still there, the urban development corporation—with a solution that they have agreed and which takes into account the points that I listed earlier.
  In that context, I welcome the arrival of Amec on the scene. It is a known quantity on Tyneside, through its subsidiary William Press, the offshore oil firm. It is a large employer. I have met representatives of it on two occasions and have been impressed by both their calibre and their

  475
  sincerity. But Amec was not a party to the original competition. It is only natural that other developers who feel badly enough about the way in which they have been treated by the urban development corporation think that it is unfair that Amec should be able to buy into the development now.
  There is a need to arrive at a consensus and make progress. The Bonapartist approach that the urban development corporation is adopting, especially the politically contentious approach, will not help. Consensus and compromise are the only viable way forward. It is the way in which we have normally handled our affairs in the Northern region. It is firmly my view that the Thatcherite solutions to such problems are not on. The Northern region will not have them and after the next general election we shall not have to do so.
  12.17 am
  The Parliamentary Under-Secretary of State for the Environment (Mr. Robert Key): It is my privilege and my challenge, as an inner cities Minister, to travel the length and breadth of Britain seeing for myself what is going on in our vibrant great cities, whether the cities of Merseyside, Salford and Manchester or, as in the past day and a half, the astonishing communities that I have found in Newcastle, Sunderland, Stockton and Middlesbrough, where there is all-party support for so much that is going on. Therefore, I find it a serious anti-climax to come back. from Newcastle tonight for this debate to find the hon. Member for Newcastle upon Tyne, East (Mr. Brown) seeking to justify his luddite tendencies, representing, as he does, prehistoric socialism. That seems quite out of character with what I have found in the north-east of England.
  I acknowledge the presence for the debate tonight of the hon. Member for Middlesbrough (Mr. Bell). I have enjoyed the hospitality of his constituents very recently. I welcome the opportunity to talk about the highly successful urban regeneration achievements of the Tyne and Wear development corporation. The hon. Gentlemen may recall that, when it was set up in 1987, the riverside areas of Tyne and Wear were suffering the legacy of the decline in the traditional industries which had once lined the banks of those famous rivers.
  The long-standing industries of the area had left behind derelict, contaminated sites, which were extremely unsightly and which required a determined and single-minded effort to transform them into assets rather than liabilities. The Government saw areas such as this as requiring the purposeful attention of bodies whose main aim was the regeneration of their areas, and local people would have expected nothing less. I shall never forget meeting a delegation of local residents on the Scotswood estate in west Newcastle. Its members had a spirit of determination to overcome the problems left behind by history that I have found nowhere else.
  Against that background, urban development corporations were set up. I acknowledge the muted presence of my hon. Friend the Member for Leeds, North-East (Mr. Kirkhope), who has been a long-standing supporter of UDCs. It would be wrong also if I did not mention the
  476
  strong support of and work done for the Tyne communities by my hon. Friend the Member for Tynemouth (Mr. Trotter).
  The Tyne and Wear development corporation has been extremely successful in its activities to date, not least because of its substantial local expertise. The majority of board members of the corporation are either born and bred in the north-east or have long connections with the area, unlike the hon. Member for Newcastle upon Tyne, East. Those local connections have been invaluable.
  So far, the development corporation has been responsible for the creation of 2,500 jobs on Tyneside and Wearside, and there are commitments to provide a further 4,700. Over 350 housing units have been completed and 112,000 sq m of industrial and commercial floor space have been provided through developments promoted by the development corporation. In addition, private sector investment of £250 million has already been secured, with a further £500 million committed.
  These achievements have not gone unnoticed. The Estates Times of 1 February reports:
  "There is an unmistakable air of confidence and optimism in the region. The myth of Tyneside and Wearside being rundown backwaters of ailing traditional industries beset by rampant unemployment is slowly being eroded by the remarkable achievements seen in recent years. Without a doubt, the catalyst for this change has been the UDC".
  The hon. Member for Newcastle upon Tyne, East said that he felt that these would be general election issues. They certainly will be. It seems to me that the hon. Gentleman will be. It seems to me that the hon. Gentleman had better start packing his bags. I suspect that he is at odds with the leader of his council and with most of the elected members of his constituency party. It has been represented to me from the north-east that people are exasperated by the hon. Gentleman, but dare not speak out.
  Mr. Nicholas Brown: Dare not speak out—gosh!
  A motion setting out the views that I have expressed was recently carried by my constituency party. I asked for it to be carried so that I knew that my views had its support. The motion was carried unanimously. There were no abstentions.
  Mr. Key: What a pity that the hon. Gentleman did not have a word with the leader of the city council. He has told me:
  "We have always regarded the relationship between the City Council and Tyne and Wear Development Corporation as a constructive one both on this scheme and generally."
  Councillor Beecham continued:
  "At the time of selection of the preferred developer, the local authority was consulted and we stated that we could live with the choice of either NQD plc or Laing plc."
  He added:
  "The local authority was also consulted on the NQD plc planning application which it was able to support. It has also taken a view strongly recommending rejection of a planning application of the alternative scheme."
  It seems that the hon. Gentleman has his wires crossed.
  In the few minutes that are available to me, I shall deal with what is happening at east quayside. The east quayside project is the principal flagship of the development corporation. The site—about 25 acres of derelict and unsightly riverside—has been widely accepted as having outstanding potential because of its dramatic location and proximity to the city centre. Despite those locational advantages, it has remained undeveloped and derelict for more than 20 years, mainly because of the combined

  477
  factors of land assembly problems and infrastructure. The development corporation was set up in May 1987 to deal with such sites, and the east quayside site has always had a high priority in the corporation's strategy.
  In November 1987, the corporation invited three developers to prepare options for the site: Newcastle Quayside Developments—NQD—John Laing plc and Brookmount plc. Initial submissions were considered by the board in January 1988, but they did not contain sufficient detail. Therefore, each developer was given a further six months to prepare more detailed proposals and allowed up to £30,000 towards the cost of the exercise. Those more detailed proposals were received in June 1988 and were incorporated into a week-long exhibition, open to the public, in July 1988 that was held in the Guildhall on the Newcastle quayside.
  Each proposal was examined to assess its outputs—jobs, houses, land reclaimed, office space and so on. Each was judged qualitatively on its ability to encourage regeneration of a wider area and careful thought was given to the need to maximise private investment.
  NQD was selected as the preferred developer and I understand that the TWDC has entered into an agreement with it not to negotiate with any developer other than NQD until three months after legal proceedings connected with the compulsory purchase order have been concluded.
  Mr. Nicholas Brown rose—
  Mr. Key: I would rather make progress to get to the substance of the hon. Gentleman's complaint.
  The compulsory purchase order was confirmed in July 1990 following a public inquiry, but two of the original objectors to that order challenged the decision in the High Court and have now lodged further appeals with the Court of Appeal. I must be careful, therefore, not to say anything which might prejudice those legal proceedings.
  I have already replied in writing to the hon. Member for Newcastle upon Tyne, East, and I am delighted that he then found that he could rewrite parts of his speech. The hon. Member made much in his local press about the fact that he had persuaded his hon. Friend the Member for Dagenham (Mr. Gould), the shadow Secretary of State for the Environment,
  gG 478
  "that a Labour Government would publish the financial dealings of the TWDC."
  That is pretty good, given that they are published anyway.
  Each corporation has to prepare, in respect of each financial year, a statement of accounts complying with certain requirements of the Secretary of State. Those requirements are notified at the outset and remain in force from year to year unless changed. Each corporation is also required to produce annually a report to the Secretary of State on its activities in the preceding financial year. The report must include a copy of the audited statement of accounts. The Secretary of State lays this report before each House immediately before the summer recess.
  Each urban development corporation must have an effective internal audit section to provide an independent appraisal of its system of financial control—a safeguard against fraud—and to ensure that the corporation operates with due regard to efficiency, effectiveness, and economy. The corporation's accounts and statement of accounts must be audited annually by external auditors appointed by the Secretary of State. Those auditors are expected, among other things, to examine value-for-money issues, and to draw the attention of the board and the Department to major issues, as well as submitting detailed points to management.
  I must stress that there has been a close, consistent and friendly working relationship with the local authorities—all Labour-controlled. The willingness of those authorities to work alongside the corporation is quite unlike the stance and attitudes adopted by the hon. Member for Newcastle upon Tyne, East. He has attacked the TWDC for a number of years, sometimes from opposing viewpoints. What are his motives? Is he engaged in a vendetta against the development corporation, or is it just prejudice? I hope that it is neither. Up and down the country, local authorities of all persuasions are now working in a spirit of co-operation, and the hon. Member's stance is at odds with this spirit. I believe that it is time to bury the hatchet.
  Question put and agreed to.
  Adjourned accordingly at twenty-eight minutes past Twelve o'clock.