Sitting of 12 February 1991

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

Royal Assent
Mr. Speaker: I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:

Development Board for Rural Wales Act 1991

Caravans (Standard Community Charge and Rating) Act 1991

Statutory Sick Pay Act 1991

PRIVATE BUSINESS
  SMITH KLINE & FRENCH LABORATORIES, AUSTRALIA, AND MENLEY & JAMES, AUSTRALIA BILL [Lords]
  Read the Third time, and passed.
Oral Answers to Questions
  EDUCATION AND SCIENCE

    Truancy
    Mr. Pawsey: To ask the Secretary of State for Education and Science what action is being taken to reduce rates of truancy.
    The Parliamentary Under-Secretary of State for Education and Science (Mr. Michael Fallon): My right hon. and learned Friend is providing grant of £ 6·5 million for projects in 31 local education authorities to improve attendance in designated schools. We shall shortly be issuing to local authorities and others guidance on education supervision orders which the Children Act 1989 will provide from October.
    We are considering whether further measures are necessary.
    Mr. Pawsey: I thank my hon. Friend for that detailed and helpful response. Does he think that local education authorities are playing their full part in ensuring that children attend school and, when they reach school, stay there? Will my hon. Friend consider publishing a table by local education authorities to show truancy levels?
    Mr. Fallon: I am grateful to my hon. Friend. Parents are responsible for ensuring that their children turn up at school. Local authorities have the power to prosecute, but not all of them appear to do so, although they should. I shall consider publishing a table. We need better information and parents and the public are supposed to know which local authorities are performing properly.
    Miss Lestor: Is the Minister aware that questions that I have tabled asking for a national assessment on truancy have not been answered, on the basis that the Government do not collect those statistics nationally, so there is no clear picture of the problem? Does he agree that one of the biggest problems is that many youngsters who play truant—it is estimated that there are about 100,000 at any one time—work illegally, often because of unemployment in the area or for other reasons? That problem needs urgent attention.
    Mr. Fallon: On the first part of the hon. Lady's question, we are considering whether we can collect and publish the figures on a national basis. At present, they are not collected or published uniformly by the local education authorities. On the second part of the hon. Lady's question, she is right that there is a link between truancy and criminality. It is, therefore, important to ensure that more pupils turn up at school.
    Mrs. Ann Winterton: Is my hon. Friend aware that some parents do not know that their children are playing truant from school? Will he ensure that everything possible is done by schools and others to ensure that parents are informed immediately absences are noted and are encouraged to do everything they can to take responsibility for their children's future attendance in education?
    Mr. Fallon: My hon. Friend makes a good case for further guidance, which should include reminding parents of their responsibilities and ensuring that the school informs them as quickly as possible.
    Mr. Skinner: Will the Minister confirm that he has no evidence of the pairing system operating in schools in Britain? Is he aware that if there were a pairing system called "organised truancy" and the rates were as bad as they are for voting in the House of Commons, the attendance rate in schools would be less than 50 per cent? The truth is that there is not a school in Britain with less than 80 per cent. attendance.
    Mr. Fallon: The hon. Gentleman makes an important point about the definition of truancy. We shall have to consider whether the regulations need to be clarified to distinguish between absence that is justified—the child may be sick or have a good reason for being absent—and the sort of unauthorised absence that the Patronage Secretary might recognise.

    Grant-maintained Schools
    Mr. Norris: To ask the Secretary of State for Education and Science how many schools have achieved grant-maintained status.
    Mr. Anthony Coombs: To ask the Secretary of State for Education and Science how many schools have become grant maintained since the passing of the Education Reform Act.
    The Secretary of State for Education and Science (Mr. Kenneth Clarke): Fifty schools are now operating as grant-maintained schools compared with 20 this time last year. My predecessor and I have approved a further 10 applications.
    Mr. Norris: I thank my right hon. and learned Friend for that reply. Does he agree that grant-maintained status is ideal for mature and well-managed schools that want and deserve greater control over their affairs and that local management of schools has proved to countless head teachers just how popular the concept is? Is not it extraordinary that the Opposition apparently want to deny that greater freedom of choice to schools, parents and pupils?
    Mr. Clarke: I agree with my hon. Friend. Mr. Simpson, the headmaster of Wilson's school, Sutton, has said that grant-maintained status is an unqualified success and he is happy with it. He and many other heads are finding that being in proper control of their schools is an exciting prospect. Grant-maintained status is popular with staff and parents and many of those schools are heavily over-subscribed with applicants. Following the success of the first grant-maintained schools, many more will apply for that status. I share my hon. Friend's belief that it is extraordinary that the Labour party should still be organising such persistent campaigns in defence of nothing more than local authority bureaucracy.
    Mr. Anthony Coombs: I welcome the expansion in grant-maintained schools, which is due to their popularity with parents, but will my right hon. and learned Friend reflect on the fact that in opposing grant-maintained schools and almost every other choice in education, including the independent sector, city technology colleges and grammar schools, the Labour party is really telling parents, "You will get what we deign to give you and, effectively, there will be no choice whatever"?
    Mr. Clarke: I agree with my hon. Friend. The Labour party has consistently opposed giving more autonomy and independence to the management of individual schools, thereby opposing schools becoming more responsive to parents and the local community. Its attitude towards the assisted places scheme and CTCs shows that envy overcomes all appreciation of academic excellence in our schools.
    Mr. O'Hara: Will the Secretary of State confirm that the countless numbers of head teachers who have been "delighted" by grant-maintained status is about 50 out of approximately 6,500 eligible in the first year of the scheme? Will he further confirm that it is easy to be delighted by grant-maintained status when one is bribed by the Government to the tune of three, four or in some cases even 10 times the capital expenditure allocation for state schools?
    Mr. Clarke: I am delighted to tell the hon. Gentleman that another 54 ballots are pending and applications are increasing rapidly. It is indicative of the hon. Gentleman's extraordinary bitterness towards the concept that he uses the term bribery for perfectly sensible funding arrangements. It is extraordinary that he and many of his political friends in local authorities continue to show such bitterness towards local control of schools.
    Mr. Simon Hughes: The Secretary of State must be honest about the matter. How can he answer the complaints of parents in local education authority achools who, in the Prime Minister's new classless Britain with education at the top of the agenda, know that their schools receive only one third or one quarter of the capital
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    resources of grant-maintained schools? Why do their schools have leaking roofs, unmaintained buildings and a lack of capital while grant-maintained schools get all the money? That is not a classless, equal, fair education system.
    Mr. Clarke: I am always honest in my replies here and elsewhere. I seek to maintain my George Washington record in these matters. I accept that often when we consider applications for grant-maintained status we find that the schools have been neglected for many years and we pay particlar attention to the capital applications from those schools. The proportion that results is not on the scale that the hon. Gentleman suggests, but when we set up a new, autonomous, grant-maintained school, we should put right the neglect of years and put capital into that school. All that is capital investment in state schools. The capital allocations to local authorities for their maintained schools have been dramatically increased as a result of my predecessor's settlement. There is nothing unfair in what we propose.
    Dame Elaine Kellett-Bowman: Does my right hon. and learned Friend accept that the two out of 50 schools in my constituency which have gone for grant-maintained status are delighted that they have done so? They have been able to appoint new staff and broaden their subject areas and they have got away from the dead hand of the bureaucratic Lancashire county council. They can now choose the courses that they want rather than have them foisted on them by bureaucrats.
    Mr. Clarke: I am grateful to my hon. Friend. She adds to the growing number of examples of schools where the transition has been a great success. It has given a boost in morale to teachers, parents and everybody associated with such schools and that has led to a big increase in applications from all over the country.
    Mr. Straw: Is not one reason why, after 12 years of Conservative rule, the British people have less faith in their education system than the people of any other country in Europe have in theirs, the intense and corrupt double standard that the Government operate on the education of the nation's children? Despite what the Secretary of State said, there is bribery to encourage schools to opt out. That is in complete breach of categorical undertakings given by the Secretary of State's predecessors that there would be financial neutrality between the funding of LEAs and grant-maintained schools. As long as this intense discrimination continues, is not it clear that the Prime Minister's conversion to the importance of education is a cynical and hollow sham?
    Mr. Clarke: I share fully the public's concern about educational standards and it is important that we improve them. I believe that the public's concern is based largely on their reaction to 20 years of the trendy, left-wing, misguided education policies with which the Labour party and its supporters have been closely associated and still are. We are now introducing a national, broad-based curriculum with a proper system of testing and reporting to parents and introducing local management for schools, which will give real authority to teachers and governors, thereby allowing them to put things right in their schools. The hon. Gentleman cheapens the debate by using words like bribery to describe the financial arrangements. He

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    does that to disguise the fact that he has nothing to offer to reverse some of the more unfortunate factors of the past 20 years.

    Education Policy
    Mr. Adley: To ask the Secretary of State for Education and Science what recent discussions he has had with the teaching unions about education policy.
    The Minister of States Department of Education and Science (Mr. Tim Eggar): My right hon. and learned Friend has frequent meetings with the teaching unions on a wide range of educational policy matters.
    Mr. Adley: The Secretary of State referred to the trendy left-wing policies emanating from the Labour party. When my hon. Friend contemplates the advice that his Department receives from the teacher unions about education policy and the weight and merit that he should attach to it, will he bear in mind the fact that 25 per cent. of those who are individual members of the Labour party are also members of teaching unions? Is not this an unhealthy relationship?
    Mr. Eggar: I am very interested in the information that my hon. Friend has made available. It goes a long way towards explaining the policies of the Labour party. I have some understanding of the considerable difficulties that the Opposition have, as I, too, am subject to conflicting strands of advice from different teacher unions. The Labour party must find it difficult to reconcile the advice that it has from its paymasters.
    Mr. Allen McKay: Does the Minister accept that, when he next goes to the teachers' organisations, he will have to discuss the statement by the Under-Secretary of State that there will be no state-funded schools in three years? Does he also agree that children have the right to have education when they are three years old and that this is what teachers advocate?
    Mr. Eggar: My hon. Friend rightly said that all schools will, in future, be able to benefit from control of budgets at local level. We know that there will be better value for money and better provision of education locally, as schools will not have to rely on the artificial levels of bureaucracy suggested by LEAs.

    "Management of the School Day"
    Mr. Evennett: To ask the Secretary of State for Education and Science what information he has regarding the action taken by school governing bodies to implement the DES circular "Management of the School Day".
    Mr. Fallon: The circular explained how governing bodies might alter the length of the school day and how they should provide adequate teaching time within the day. Some governing bodies have begun to take action on this—others should do so.
    Mr. Evennett: I thank my hon. Friend for his reply. Will he encourage governors to take even more action on this matter? Does he agree that governors have a responsibility to ensure that pupils in schools have options during the school day?
    Mr. Fallon: Yes. My hon. Friend will be interested to know that more than a quarter of all primary schools do
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    not yet provide the minimum teaching time. If necessary, we shall have to give statutory force to the circular published last year.
    Mr. Robert B. Jones: Can my hon. Friend confirm that there is no legal minimum for the length of the school week? Is not that an omission from current educational legislation? Would not it do a great deal more to ensure that poor standards in schools were tightened if he introduced legislation to deal with that?
    Mr. Fallon: At present primary school weeks can vary from 20 to 25 hours. Why should parents in one area get less teaching for their children than those in another? Unless schools are prepared to meet the new minimum targets we shall have to consider whether to give them statutory force.

    Manchester Council (Capital Allocations)
    Mr. Bradley: To ask the Secretary of State for Education and Science what representations he received from Manchester city council during 1990 regarding the 1990–91 and the 1991–92 capital allocations.
    Mr. Fallon: A delegation from Manchester local education authority and other representatives called on my predecessor on 4 April 1990 and the Department has also received representations in connection with individual projects submitted for the 1991–92 annual capital guideline.
    Mr. Bradley: In view of the detailed representations that he has received, how does the Minister justify making a paltry capital allocation to Manchester of £5 million, compared with its realistic bid of £33 million? That decision was described by the chief education officer as a disaster for the education service in Manchester. Does not he understand the anger of parents who cannot get their children into local schools because of lack of investment? Will he receive further representations from me and the education department in Manchester to ensure that in future the Government make a capital allocation which meets the needs of local children rather than at the whim of the Treasury or of Government?
    Mr. Fallon: No LEA gets all it asks for. Manchester will get £4·7 million next year, compared with £3 million this year. Manchester would have received more if it had not underestimated the number of sub-standard school places in its bid, if it had bothered to complete the required proposal forms for four further major education building projects when asked to do so and if it had published statutory proposals in respect of the Ducie high school project, which it was advised would be supported and which it has still not done.
    Sir Fergus Montgomery: Does my hon. Friend agree that Manchester has below-average education expenditure? Does he find that difficult to justify, considering its high community charge of £425, which is far above the national average?
    Mr. Fallon: Yes. It is rather odd that although Manchester's community charge is higher than the average for metropolitan districts, Manchester spends less than half its total budget on education.

    History
    Mr. Illsley: To ask the Secretary of State for Education and Science whether he has received any representations about the teaching of history in the national curriculum.
    Mr. Kenneth Clarke: I have received various representations on the draft order for history in the national curriculum. The statutory consultation process ends on 15 February and I shall take account of all the responses before publishing the final order.
    Mr. Illsley: Why has the Secretary of State interfered with the history content of the national curriculum and why has he chosen to focus on the first half of the 20th century? Why will children no longer be able to learn about events of the past 30 to 40 years? Does he accept that those events are of just as much historical importance as other events in history and will he reconsider his decision?
    Mr. Clarke: It has been decided that the Secretary of State will lay the orders that determine what should be legally required to be part of the history curriculum and what should, therefore, be the subject of testing when we reach that stage. Having considered the advice of the National Curriculum Council, I have proposed that we should regard the study of history as looking back on events with a reasonable amount of historical perspective and that a distinction should be drawn between history and current affairs. There is nothing to stop pupils talking about important current affairs, but I do not believe that the law should require the study of contemporary events and characters, and examination on those events, as though they were part of the history syllabus.
    Sir John Stokes: Is my right hon. and learned Friend aware that, unlike some other countries that either are so new that they have no history at all or, if they have any, are somewhat ashamed of it, we have a long and glorious history which we should offer to all young people?
    Mr. Clarke: Pupils will have the opportunity to study our long and glorious British history, together with European history and some aspects of world history. I believe, however, that their study of important events in the Soviet Union, the middle east and other places should end at a point where it is possible to form an historical judgment on events. I have no objection to pupils' talking in the classroom about current affairs, but I do not believe that the law should say that that is part of the history curriculum.
    Mr. Straw: Will the Secretary of State confirm that, following a question from me, he was unable to place in the Library evidence to suggest that any political or other bias had been involved in the teaching of modern history —history relating to the past 30 years or so? Does he accept that a good two thirds of GCSE history curricula deal in an historical way with the events of the past 30 years and that that is quite distinct from dealing with them in a current-affairs way? Does he realise that his impulsive decision to exclude that period may overturn two thirds of GCSE curricula and does he accept that people are unlikely to have faith in a national curiculum if they think that it has become simply the partisan plaything of a particular Secretary of State?
    Mr. Clarke: I did not give political bias as the reason for my decision; I gave as my reason the need to look at matters in their historical perspective. I believe that the judgments on current affairs that pupils should properly form will be more mature and carry more weight if they are based on a study of the historical background.
    For the purpose of history, what is called for is not an examination of the current Gulf war, but—as I suggested in the curriculum—a study of events from the end of the Ottoman empire, taking in the Balfour declaration and the creation of the Hashemite kingdoms, through to the unrest at the time of the mandate, the civil war in 1948 and, finally, the war in 1967. That is the proper subject of the history curriculum; this morning's news on the radio, and current events in the Gulf war, are not. A proper history curriculum with perspective, enabling pupils to view the past and form judgments on it, is the best way for schools to prepare people for making continuing judgments on current events.
    Mr. Gerald Bowden: Does my right hon. and learned Friend agree that it is important to teach children hard historical facts and to give them firm dates so that they can relate fact to historical perspective? Is not it time to move away from the child-centred subjective interpretations that we have seen in the classroom so often over the past few years?
    Mr. Clarke: I see no point in the study of history unless it is taught in a way that enables the pupil to acquire some knowledge of the factual sequence of events and the activities of the personalities involved. When we move on to the testing of ability and attainment in history, we should pointedly include the testing of historical knowledge. That is not the sole point of education, but it is the essential basis of the understanding of any important subject.

    University Education
    Mr. Morgan: To ask the Secretary of State for Education and Science when he next expects to meet the Committee of Vice-Chancellors and Principals regarding the future of university education.
    The Parliamentary Under-Secretary of State for Education (Mi. Alan Howarth): My right hon. and learned Friend and I met representatives of the CVCP on 4 February to discuss a range of matters. We expect to meet them again from time to time, when both immediate and longer-term issues will doubtless be on the agenda.
    Mr. Morgan: I thank the Minister for his reply. Can he explain the basis of the extraordinary decision to cut access funds for our higher education institutions to less than half their present level—from £23 million to £10 million in two years time? Does he accept that access funds have been much touted by his Government as a new and flexible instrument and have been extremely useful to the universities? They have been the eye of the needle, with the would-be British higher education student acting as the camel. Why, having built up the funds, does the Minister intend to take away more than half of them over the next two years?
    Mr. Howarth: We have introduced new access funds. They will be available for use at the discretion of higher education institutions to help students who may be in

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    financial difficulties. By convention, the figures for the later years of the public exependiture survey are rounded down to the nearest £10 million. Provision for 1993–94 will be settled following the three-year review that was promised in the 1988 White Paper.
    Mr. Rhodes James: Was the strategy of student finance discussed at that meeting and will it be discussed in future, in the spirit of consultation and recognising that this is one of the key problems that we face?
    Mr. Howarth: I take my hon. Friend's point about the importance of consultation on the basis of a rational understanding of the requirements of institutions I am pleased about the exciting and rapid rate of expansion in higher education, right across the board. The rate of expansion has been greater and more creative energy and innovation have been witnessed in recent years in the polytechnics. I have no doubt, however, that the universities will wish to respond. We wish to ensure that the amounts of funding and the funding methodologies are sensibly designed to take account of the needs of universities.
    Mr. Andrew Smith: When the Minister meets the Committee of Vice-Chancellors and Principals does he intend to discuss with it the Secretary of State's plans, reported in The Independent on Sunday, to abolish the distinction between universities and polytechnics? Will he confirm that the Government are considering that matter? Does he agree that in order to overcome the binary divide it will be necessary to establish a joint funding council, common quality assurance mechanisms and safeguards for the existing research commitments at universities?
    Mr. Howarth: As I said to my hon. Friend the Member for Cambridge (Mr. Rhodes James), some of the most vigorous expansion and some of the most creative innovation in higher education have occurred in the polytechnics in recent years. They are impatient to have the right to university status. My right hon. and learned Friend and I are following with great interest the debate which, as the hon. Member for Oxford, East (Mr. Smith) recognises, raises complex and far-reaching issues.
    Mr. Hannam: I congratulate my hon. Friend on the expansion that has taken place at the excellent university of Exeter and at other universities. When he considers future funding, may I ask him to pay particular attention to the need for funds for the repair and maintenance of the buildings of universities that were created in recent years?
    Mr. Howarth: I well understand why my hon. Friend takes such pride in the achievements of Exeter university. We have increased not inconsiderably the sums available for capital expenditure; about £200 million will be available for that purpose. Universities have been provided with considerable discretion and flexibility over borrowing, so Exeter university can look forward with some confidence to being able to provide the necessary facilities to support the expansion in student numbers to which undoubtedly it aspires.
    Mr. Molyneaux: Would it not be advisable for the Minister to meet the vice-chancellors in the near future—certainly before completion of the Committee stage of the British Technology Group Bill?
    Mr. Howarth: As I said in my answer to the hon. Member for Cardiff, West (Mr. Morgan), we meet the vice-chancellors from time to time. Among other important matters is the funding of research and how universities can enter into the most constructive and productive relationship with private sponsors of research. I am pleased that university income from industrial and other sources for research has increased fivefold during the time that this Government have been in power.

    Parental Interest
    Mr. Amess: To ask the Secretary of State for Education and Science what steps he has taken to increase the interest of parents in the education of their children.
    Mr. Eggar: The Government have introduced a wide range of measures to extend the part parents play in their children's education, notably by giving parents a much wider choice of schools, by enabling them to seek grant-maintained status for their schools and by increasing the information available to parents on their children's progress.
    Mr. Amess: Does my hon. Friend agree that education is very much a partnership between parents and schools and that it is quite wrong for some parents to expect the schools to take total responsibility for their children's education? Does he also agree that the time that parents spend with their children in the evenings and at weekends can in later years pay great educational dividends?
    Mr. Eggar: I entirely agree with my hon. Friend. Many parents spend long periods helping their children. Through our various reforms—including the national curriculum and the reporting mechanism for parents—we shall be assisting those parents. I regret that too many children get stuck in front of the television set as soon as they arrive home from school, that there is too little discussion in the home and that too few books are available. Even the very best teachers and the very best schools cannot effectively educate children in a vacuum.
    Mr. Cryer: Does the Minister accept that parents in Bradford are very interested in their children's education and often take part in campaigns in support of the local authority's requests for more money to restore the city's crumbling schools? Is he aware that there are more than 600 temporary classrooms in use there? Surely it cannot be conducive to the provision of good education that some of those classrooms have been in use for so long that they need radical repair or replacement with more temporary classrooms. Does the Minister agree that it is time the Government accepted the representations from both Conservative and Labour majorities that provision be made for a decent level of education expenditure so that Bradford's crumbling schools may be restored?
    Mr. Eggar: Yes, that is why, in this year's settlement, there is a 15 per cent. increase in the capital available to Bradford. That is why many parents in Bradford have voted with their feet, both by supporting grant-maintained status for Bingley grammar school and by making application for a Bradford CTC. They know where good education is to be found.

    Non-teaching Staff
    Mr. Patrick Thompson: To ask the Secretary of State for Education and Science if he will take steps to encourage local education authorities to reduce the number of non-teaching staff they employ.
    Mr. Fallon: In December we published proposals to require that, by April 1993, control of at least 85 per cent. of a local education authority's potential schools budget should be delegated to the school level. That is where the right decisions will be made.
    Mr. Thompson: Is not it a scandal that, out of every 10 education staff employed by local authorities four are in non-teaching jobs? Will my hon. Friend do more to ensure that resources intended for our schools reach their proper destination? Does he agree that local authorities, particularly Labour-controlled authorities, have a poor record in the education of our young people?
    Mr. Fallon: Yes. It is quite shocking that, out of their education budgets, authorities such as those in Cleveland and Coventry should make provision for almost as many non-teaching employees as teachers. We have set new requirements. All local education authorities could do more to delegate to the school level, and all should do so before April 1993.
    Mr. Spearing: Does the Minister agree that, however much is delegated to the school level, the main task is to help the teacher in the classroom? Does he agree that the employee ratio—people employed in classrooms, in education offices and in teacher back-up positions—is no measure of efficiency? Does he agree that what we want is proper back-up so that a professional job may be done in the classroom? We need adequate numbers of such people, and we need efficiency. Raw figures are not necessarily any measure of efficiency.
    Mr. Fallon: I do not agree. The best judge of the type of back-up that schools need are the heads, the teachers and the governors themselves. It is for them to decide what level, scope and scale of support services are necessary and for them, with their increased budgets, to decide where to purchase such services.

    Spelling
    Mr. Ian Bruce: To ask the Secretary of State for Education and Science what progress has been made over the introduction of his policy to improve spelling standards in educational establishments.
    Mr. Kenneth Clarke: We have made spelling a separate attainment target in English in the national curriculum. The systematic testing of spelling as part of the assessment arrangements for English will begin to be phased in from this summer. I am awaiting a response from the School Examinations and Assessment Council to my request that, in marking GCSE examinations, sensible account should be taken of bad spelling.
    Mr. Bruce: Does my right hon. and learned Friend agree that teachers who resist the correction of spelling in subjects other than English do their pupils a great deal of harm? Does he agree that this is indicative, in our teaching system, of educationalists setting the agenda, rather than employers and parents, who are very keen that children
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    should be good spellers? I am a convert—when I was at school I was a diabolical speller—and as an employer I would not take on a secretary who could not even fill in an application form using accurate spelling.
    Mr. Clarke: I agree with my hon. Friend. I hope that he is reassured by my experience, since spelling was raised again in my letter to the School Examinations and Assessment Council, that many teachers share his view and mine. The changes that we are making in the national curriculum and to the GCSE—when I get a response from the council—will lead to all schools realising the importance of spelling, which the public want to be part of the systematic teaching of all pupils.
    Ms. Armstrong: We welcome the Government's somewhat late conversion to the recognition of the importance of spelling.—[Interruption.] Perhaps since the Government have been in office for 12 years, they will discover numeracy next. Why is it that during the past 12 years there has been no research on how to teach spelling effectively and no support to teacher education institutions to ensure that teachers know how to teach youngsters how to spell? What a 12-year legacy.
    Mr. Clarke: I am not sure that the subjects of reading, spelling and grammar require much more research than they have already had. They require good practice. Through the national curriculum and the changes that I am proposing to the GCSE, I trust that that good practice will soon come about.
    Mr. Harry Greenway: Is my right hon. and learned Friend aware that many people believe that spelling was taught effectively in days gone by and that there is no need for more research on how to teach spelling and grammar? Will my right hon. and learned Friend look back a few years and see how it was done then, and remind teachers of the effectiveness of teaching in former times?
    Mr. Clarke: I do not usually join in arguments about whether standards have fallen. However, it is the experience of most of us that standards of spelling have dropped in most of the correspondence in which we engage. It is important to tell teachers not how to teach spelling but to underline the importance of it as we introduce the national curriculum and modify the examination system.

    Teachers' Pay
    Mr. Turner: To ask the Secretary of State for Education and Science whether he will make it his policy fully to fund the award by the Interim Advisory Committee on School Teachers' Pay and Conditions through central Government.
    Mr. Kenneth Clarke: The cost of the Government's proposals for implementing the Interim Advisory Committee's recommendations in 1991–92 has already been fully funded by the Government's decisions made last year on local government expenditure. The 1991–92 education standard spending totals announced last autumn allow for the full cost of these proposals, as well as for the follow-through cost of the 1990–91 teachers' pay award, and also include an element for the exercise of local pay discretions.
    Mr. Turner: Why are the Government watering down the award when the IAC—a Government-appointed body—has reported to them that teachers' morale is at rock bottom and that vacancy levels have deteriorated appreciably over the past four years? When will the Government recognise that there is a serious crisis in our education system?
    Mr. Clarke: We have accepted in full the recommendations of the Interim Advisory Committee and we are phasing them in. [Interruption.] The result will be that by this time next year teachers will have a 9·5 per cent. increase and head teachers will have an increase of over 12 per cent. at a time when inflation is expected by all commentators to be 6 per cent. or below. As a result of this award, teachers will receive a much greater increase in their annual income than other groups are likely to receive in the coming year. That is a good thing. It is especially good that the IAC has introduced new incentives and discretions to enable us to concentrate on classroom performance, shortage subjects and other aspects involved in creating a good career structure for the teachers in our schools.
    Mr. Thornton: Will my right hon. and learned Friend accept that this will do much to improve morale in the teaching profession? Will he look particularly at one of the recommendations of the Select Committee report, which urged that all teacher awards in future should keep pace with inflation and not allow us to return to a position in which we have to have the hikes such as we had under the Houghton and Clegg awards?
    Mr. Clarke: As I have already said, everybody expects inflation to fall to 6 or 5·5 per cent. by the end of next year. A general pay increase of 9·5 per cent., with 12·75 per cent. for heads and deputies, is far ahead of inflation. Teachers are already 30 per cent. ahead of inflation during the lifetime of this Government. They have already enjoyed an increase in their real living standards and that will obviously increase substantially as a result of the Government's decisions for next year.
    Mr. Fatchett: Can the Secretary of State explain to teachers why, when the Prime Minister says that education is such an important issue and when Conservative Members say that the country is enjoying some form of economic miracle, teachers' pay increases are being "phased", to use the Secretary of State's words? Is not that a further indication that the Government do not value education or teachers?
    Mr. Clarke: The Government have phased the increases to take into account the inflation assumptions for the relevant year—next year—and also the pay expectations of other groups in the population. The increase in real terms of teacher's income, which is already 30 per cent. ahead of inflation, will go up substantially next year. The money is being distributed in such a way as to reward especially the good classroom teachers, those in shortage subjects and those who take responsibilities in our education system. The pay award is far ahead of the pay awards likely to go to those in equivalent occupations and it is right that teachers should get that preferential treatment.

  PRIME MINISTER

    Engagements
    Mr. Maclennan: To ask the Prime Minister if he will list his official engagements for Tuesday 12 February 1991.
    The Prime Minister (Mr. John Major): This morning I had meetings with ministerial colleagues and others. I also called on Her Majesty Queen Elizabeth the Queen Mother and presented her with a gift from the Cabinet to mark her 90th year. In addition to my duties in the House, I will be having further meetings later today. This evening I hope to have an audience of Her Majesty the Queen.
    Mr. Skinner: It was a cold weather payment.
    Mr. Speaker: Order.
    Mr. Maclennan: While welcoming the Cabinet's recognition of my constituent, the Queen Mother, in that way [Interruption.]
    Mr. Speaker: Order.
    Mr. Maclennan: Would the Prime Minister say why, when he came to the House last week to announce the waiver of the exceptionally severe weather payment seven-day condition, he gave no inkling that it was to last 24 hours and that within four days, his Minister for Social Security and Disabled People would announce that things were to go back to where they are now. The "now you see it, now you don't" approach cannot be the way to look after those who are so heavily dependent upon that payment.
    The Prime Minister: If there is doubt about that point, let me seek to remove it beyond peradventure at the moment. As I said last week, given the exceptionally severe weather, we wanted to ensure that vulnerable groups would take appropriate steps to keep warm so we waived the seven-day qualifying period. Given the continuation of severe weather since then, we shall once again be waiving the seven-day period. Of course, we shall continue to monitor the situation carefully and if the cold weather continues we shall take similar measures.
    Mr. Evennett: To ask the Prime Minister if he will list his official engagements for Tuesday 12 February.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Evennett: While my right hon. Friend was enjoying his much publicised breakfast at the weekend, the people of Lithuania were voting in a referendum. Does he agree that the desire for independence by the Lithuanians, as expressed in the result of that referendum, should be heeded by the Soviet Union?
    The Prime Minister: I sympathise very much with my hon. Friend's point. I would like to see the Soviet authorities negotiate with the elected representatives of the Baltic authorities about their aspirations. That is a point I hope to be able to put to President Gorbachev when I meet him next month.
    Mr. Kinnock: Does the Prime Minister share our deep concern that unemployment, business bankruptcies and

    729
    factory gate prices are all up while investment and output are down? Whose policies does he blame for that—the current Chancellor's or the previous Chancellor's?
    The Prime Minister: I think that everyone shares the concern about bankruptcies and unemployment. We also share the considerable degree of pleasure at the growth that there has been in recent years, at the growth in the number of businesses—which, even last year, was running at more than 1,000 a week—and at the prospects that will continue to exist for this country as we increasingly drive inflation downwards.
    Mr. Kinnock: Does the Prime Minister understand that he has taken many of those new businesses—and longer-established businesses—straight into slump with his policies? Why will he not now cut interest rates, use a more sensible system of managing demand and try to stop the slump now, before the damage gets even worse and goes on for even longer?
    The Prime Minister: The right hon. Gentleman should know that the generalised slogans that he uses simply will not do. Let me quote to him what even The Guardian said of the alternatives:
    "As for the Opposition parties, their call for interest rate cuts with no accompanying recognition of the economic realities is politically opportunistic and economically naive."
    I agree with The Guardian.
    Mr. Kinnock: May I put it to the Prime Minister that, this very week, factory gate prices are up, unemployment will be up and bankruptcies are up? Is that what he intends to continue to do? If so, I put it to him that his policies are hurting just about everyone and working for just about no one.
    The Prime Minister: I think that the right hon. Gentleman will find that our policies are working. I believe that that will become increasingly apparent. The right hon. Gentleman referred to the rise in output prices. I must say that I think that that is a suspect figure. In any event, the January figure may well reflect the delayed and continued impact of the autumn increase in oil prices. Throughout this year, the right hon. Gentleman will see a continuing fall in the rise of inflation.
    Mr. Rowe: Although at this moment it may seem bizarre to imagine that there could be advantages in transferring from road to rail, will my right hon. Friend confirm that, in better times, when the Department of Transport appraises capital projects it allows for both freight and passenger savings on roads?
    The Prime Minister: In so far as I could hear the first part of my hon. Friend's question, I believe that I agree with him. British Rail has a substantial investment level at present; indeed, it is the highest level for 30 years. As the former chairman said not long ago:
    "the investment programme is about the maximum rate we can physically manage."
    Mr. Fisher: To ask the Prime Minister if he will list his official engagements for Tuesday 12 February.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Fisher: Is not the Prime Minister ashamed that an estimated 50 young homeless people are sleeping rough on
    730
    the streets of Stoke-on-Trent? They are not eligible for his severe weather payments or his emergency aid. What place is there for them in his classless society?
    The Prime Minister: As the hon. Gentleman knows, on a number of occasions I have expressed my concern and outlined the action that we are taking to deal with the position of young people who are sleeping rough. My hon. Friend the Minister for Housing and Planning set out some policies some time ago and explained that a considerable amount of resources would be devoted to implementing them. One of the problems that is recognised and acknowledged by the voluntary groups—if not, perhaps, by every hon. Member—is that some of those who sleep rough have every option to go into shelters but frequently do not exercise it.
    Mr. Janman: Is my right hon. Friend aware of press reports which speculate that the public sector borrowing requirement for 1991–92 will be £9 billion? Does he agree that during the forthcoming 12 months it is important that the Government apply the same discipline to themselves as companies in the private sector are having to apply, and that Government spending should take into account prevailing economic conditions, not pretend that they do not exist?
    The Prime Minister: We must certainly always take into account the prevailing economic conditions in terms of public expenditure control. That is certainly what we shall do.
    Mr. Andrew F. Bennett: To ask the Prime Minister if he will list his official engagements for Tuesday 12 February.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Bennett: Does the Prime Minister recall one of his early votes in the House of Commons on 20 December 1979, when he voted to break the link between pensions and earnings? Does he realise that as a result of that, pensioners have not enjoyed increases in their standard of living through general improvements and that they are now worse off by £22 a week for a married couple and £13 a week for a single pensioner? Does he realise that if those links had not been broken, people would have had sufficient money to pay for fuel, make sure that they had enough to eat and put on warm clothing and so combat the cold weather? Does not the Prime Minister realise that against that background, the announcement that he has made today of the extra £1 heating allowance is extremely miserly?
    The Prime Minister: The hon. Gentleman is being very selective in the figures that he quotes. If he cares to examine the degree of net disposable income among all sectors of the community, including the elderly, he will find that it has risen substantially throughout the past decade.
    Mr. Lee: Given that our nation likes a modest flutter as much as it likes a traditional Happy Eater breakfast, does my right hon. Friend care to give some encouragement today to those of us who favour the concept of a national lottery designed to provide additional resources for sports, the arts and museums?
    The Prime Minister: My hon. Friend raises an intriguing question.

    Community Care
    Mr. Tom Clarke: To ask the Prime Minister what is Her Majesty's Government's present policy towards Sir Roy Griffiths's recommendation that local authorities should perform the lead role in the provision of community care.
    The Prime Minister: The Government's policy on community care remains as set out in the White Paper "Caring For People" and the National Health Service and Community Care Act 1990. Local authorities begin implementation of those policies in April this year.
    Mr. Clarke: What steps does the Prime Minister intend to take to deal with the increasing problems of many elderly people in residential care who have witnessed a growing number of closures of private and voluntary sector homes as a result of the care gap and inadequate income support? Will he absolutely insist that elderly people do not suffer, in spite of the need for social service and social work departments to reduce their expenditure in order to avoid poll tax capping, even though the real anxiety is to respond to elderly people's needs, which they recognise in their own communities?
    The Prime Minister: The concerns for elderly people that the hon. Gentleman sets out and which local authorities have are well understood and appreciated. He weakens his case by his remarks about community charge capping, not least because a large number of those authorities that face capping do so because of a flagrant and wilful abuse of their expenditure in many aspects.
    Mr. Nicholas Winterton: Does my right hon. Friend accept that there is considerable anxiety in local government, not least among the staff of part III residential homes and also, of course, the residents of those homes, that many local authorities feel obliged to put such homes into the private or charitable sector, thus creating considerable instability? Will my right hon. Friend take account of the anxiety, particularly among elderly people and their families, who are deeply upset by the instability that is being created?
    The Prime Minister: What we are seeking to do is to ensure the maximum availability of the appropriate sort of accommodation and to ensure that it is provided in the most cost-effective manner. That accommodation may, on occasion, be in the public or the private sector, but it is the quantum of assistance with which I know my hon. Friend is most concerned.

    Engagements
    Mr. Fraser: To ask the Prime Minister if he will list his official engagements for Tuesday 12 February.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Fraser: Does the Prime Minister recall that shortly before he became Prime Minister he said that the subject that he cares most about is education? He repeated those sentiments at the Young Conservatives' conference at the weekend. I have in my hand the sum total of all those speeches made by the right hon. Gentleman on education since 1979—it averages one line a year. Can the Prime Minister put in the Library any other speeches on this subject, which is so close to his heart?
    The Prime Minister: The hon. Gentleman is being uncharacteristically fatuous
    Hon. Members: Withdraw.
    Mr. Speaker: Order.
    The Prime Minister: If colleagues insist, I shall withdraw "uncharacteristically". For the bulk of the period in the House since 1979 I have either been in the Whips' Office, and thus unable to speak, or a Minister with other departmental responsibilities. If the hon. Gentleman had had what undoubtedly would have been an education to him from listening to the speeches that I have made outside the House he would not have asked that question.
    Mr. Squire: To ask the Prime Minister if he will list his official engagements for Tuesday 12 February.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Squire: Despite my right hon. Friend and I both having left state schols at 16 and therefore, perhaps being poor educational advertisements [Interruption.] I said perhaps. Would my right hon. Friend underline his determination that standards and diversity in our state schools are enhanced and improved, and above all, that the staying-on rate of students beyond 16 and 18 is increased?
    The Prime Minister: I am happy to endorse my hon. Friend's point. Education is undoubtedly the key in the future to opening new paths for people, not just people with high abilities, but, of course, people with much lesser abilities as well. We want an education system that rewards dedicated teachers and provides education in the state sector of which we can be proud. That is what we shall be increasingly reaching towards throughout the Conservative Governments of the 1990s.

    BILL PRESENTED
      MISUSE OF DRUGS (ANABOLIC STEROIDS)
      Mr. Menzies Campbell presented a Bill to extend the coverage of the Misuse of Drugs Act 1971 to include certain drugs which have been misused for the purpose of improving performance in sport: And the same was read the First time; and ordered to be read a Second time upon Friday 22 March and to be printed. [Bill 83.]

Coal Imports
3.32 pm
Mr. Geoffrey Lofthouse: I beg to move,
That leave be given to bring in a Bill to prohibit the import of coal into the United Kingdom; and for connected purposes.
The purpose of the Bill is to end inconsistency and to give British Coal a chance to hold its markets. We know that, when current contracts run out, the chairman of National Power, the largest coal user in the United Kingdom, is planning to import 50 per cent. of the coal needed to run its power stations.
On 14 January, The Daily Telegraph reported that Mr. Baker is planning to seek international tenders for all National Power's coal needs shortly after it is privatised. Another report in the Financial Times on 4 January suggested that National Power would be investing in three new coal import facilities on Teesside, Humberside and Milford Haven.
The special report published by the Committee considering the Associated British Ports (No. 2) Bill asked the Government to take whatever steps were necessary, in the overall national interest, to protect the coal industry. That has not happened, and the Government seem willing to overlook activities that are detrimental to the coal industry.
The Committee considered two private Bills—the Associated British Ports (No. 2) Bill and the North Killingholme Cargo Terminal Bill. The latter was withdrawn because it was amended by the Committee. The Chairman of the Committee, the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), said that, in the light of advice from Speaker's Counsel,
"We unanimously decided that we wished to see further provision made to regulate any possible future sale of the proposed North Killingholme facilities, over and above the provisions of the existing general law."
He went on:
"We therefore unanimously agree that clause 26 of the Bill should be amended with wording along the lines that the installation cannot be sold for 10 years after the passing of the Bill, and thereafter only with the express consent of the Secretary of State."
The issue was not addressed during the proceedings on the Associated British Ports (No. 2) Bill, for two possible reasons. First, in introducing the Bill to the Committee, Sir Frank Layfield indicated that the major improvements to the port at Immingham
"were not specifically designed in any sense of the word for coal purposes. They depend specifically upon general industrial and other consumers' current needs and the need to eliminate present existing wasteful difficulties and practices."
Secondly, Sir Keith Stuart, chairman of Associated British Ports, told the Committee that Associated British Ports did not intend to go to the capital markets to raise the finance for the Immingham project. He said:
"The company's ability to generate the cash required for its investment in its ports is such that for our foreseeable needs we are expecting the business itself to generate sufficient capital for investments of this kind in terms of the initial cash input."
It is hardly surprising, therefore, that it did not occur to the Committee that a company as profitable as Associated British Ports would seek finance for its proposed new
734
Humber terminal. But that is precisely what it has done. The Financial Times of 15 January reported that the terminal, with a capacity of 12 million tonnes of coal, is to be financed and run as a joint venture between PowerGen and National Power, and that the generating companies plan to take a 40 per cent. stake each in the company, with ABP holding the remaining 20 per cent. The Financial Times report pointed out that that was at the centre of the generating companies' plans to reduce dependence on supplies from British Coal.
There could have been nothing but sharp practice by the sponsors of the Associated British Ports Bill. The House should understand that the Committee, which was dealing with two Bills at the same time, threw the Killingholme Bill out because it included an amendment giving the right to sell. The Associated British Ports Bill was allowed to proceed because there was never any suggestion in Committee of an intention to sell; indeed, the contrary was the case. It is not beyond the bounds of possibility that the Committee would have taken the same decision on it had it included such an amendment. Now we find that National Power and PowerGen are to own 80 per cent. of the company.
Following that, there is an announcement from Mr. Baker, chairman of National Power, that he intends to import 50 per cent. of his coal from abroad after the end of the 1993 contracts. What the company did in deceiving the Committee and, in effect, the House, was tantamount to sharp practice. Without that sharp practice, I am sure that it would not have received permission from the House to go ahead with the development.
My Bill would give the Secretary of State power, through the House, to control imports of coal. The Secretary of State would be required to base his or her judgment on the national interest and not on short-term commercial interest. The Secretary of State would control people in powerful positions, elected by no one, and prevent them from taking decisions which could destroy the country's reserves of coal for short-term benefit, resulting in the United Kingdom being at the mercy of foreign competitors in meeting the national demands over the medium and longer term.
No one outside the democratic forum of the House should be allowed to take major decisions to destroy a great industry that supplies the main source of our energy when, in years to come, we shall need that energy; otherwise, we shall be in the hands of foreign competitors. Therefore, I ask the House to support the Bill.
Question put and agreed to.
Bill ordered to be brought in by Mr. Geoffrey Lofthouse, Mr. Kevin Barron, Mr. Allen McKay, Mr. George J. Buckley, Mr. William O'Brien, Mr. Alan Meale, Mr. Peter Hardy, Mr. Alexander Eadie, Mr. Eric Illsley, Mr. Frank Haynes, Mr. Don Dixon and Mr. Joe Benton.

Coal Imports
  COAL IMPORTS
  Mr. Geoffrey Lofthouse accordingly presented a Bill to prohibit the import of coal into the United Kingdom; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 1 March and to be printed. [Bill 84.]

British Technology Group Bill
Order for Second Reading read.
3.42 pm
The Minister for Corporate Affairs (Mr. John Redwood): I beg to move, That the Bill be now read a Second time.
The Bill paves the way for the privatisation of the British Technology Group. BTG combined the National Research Development Corporation and the National Enterprise Board. Except for one remaining semi-dormant subsidiary, all the investments in the NEB portfolio have been sold, put into receivership or liquidated. Therefore, BTG's operations are now those of the NRDC, focusing on technology transfer.
BTG has 188 employees and a turnover of £30 million. It obtains new ideas and inventions from universities, Government research establishments, private companies and individuals. It funds their development to a stage where they can be globally patented. It licenses the resulting intellectual property rights to industry worldwide, gaining an income in the process. Its United Kingdom turnover is only £10 million, which puts its size into perspective in an economy of about £600,000 million. Its investments have included such international successes as cephalosporin antibiotics, pyrethrin insecticides and magnetic resonance imaging technology, used in hospital scanners.
Until 1985, BTG had the right of first refusal to exploit research in the public sector. Since 1985, universities and other public sector organisations have been able to exploit their own scientific advances, often through industrial companies. Despite that, the flow of inventions from universities to BTG has increased since 1985. Today, it is involved with 1,600 inventions, 8,500 patents and nearly 500 licences.
BTG's profits tend to depend on a few projects, making BTG's resulting profit trend uneven. But during the past five years, BTG's operating profits have averaged more than £4 million per year, rising to £6·8 million in 1989–90. BTG has been self-financing for almost 20 years. It has paid dividends to the Exchequer—a total of more than £18 million in the past six years. Transferring BTG to the private sector would rid it of restrictions on borrowing powers, obligations to submit investments for approval by the Department of Trade and Industry and remove the requirement that the salaries of its chairman and chief executive should be agreed with my Department and the Treasury.
BTG wants to develop its activities as an international organisation. It already derives 70 per cent. of its licensed income from outside the United Kingdom. Preliminary steps have been taken to expand overseas, with investments and agreements in the United States, India and several European universities. The original NRDC duties appear increasingly inappropriate for such international developments, and their removal would facilitate BTG's expansion.
Mr. Gordon Brown: The Minister of State mentioned that BTG supports the privatisation. Is he aware that the company has spent £75,000 on commissioning a public relations campaign to persuade
736
Members of Parliament? Is he aware that page 4 of the document that I have been given, "Communication Programme for British Technology Group" states:
"BTG has the opportunity to have a parliamentary friend on the Standing Committee of the Bill."
Will the Minister tell the House whether his Department has authorised the expenditure of £75,000 of our money to lobby Members of Parliament? Has any Minister, or anyone representing a Minister, informed BTG that it has
"an opportunity to have a parliamentary friend"
on the Committee discussing the Bill?
Mr. Redwood: BTG has many parliamentary friends, and I am sure that its case will be put strongly by those who support it and who think that the management's wish for privatisation is a good idea. I do not know whether any money has been spent in the way that the hon. Gentleman described. I shall look into that, and see whether it is true. I do not know where he has obtained that information.
Mr. Brown: Is the Minister telling the House that BTG has or has not been authorised to spend £75,000 to promote its activities in pursuit of privatisation among Members of Parliament? Does he deny that the Department of Trade and Industry or anyone representing it have given an assurance that BTG will have
"an opportunity to have a parliamentary friend on the … Committee"?
We need direct answers to those direct questions.
Mr. Redwood: I have already said that I will let the hon. Gentleman know when I have researched the matter. There is no point in me giving him a categorical denial before I am sure. That is not a question that I have asked. I shall ask it for him and let him know. My hon. Friend the Under-Secretary of State for Industry and Consumer Affairs will give him the answer at the end of the debate, when we have had a chance to go into the matter.
Mr. Simon Hughes: Having been a parliamentary candidate for Peckham in his earlier political existence, the Minister will know that BTG is based in Southwark. When he addresses the issue, will he recognise that there is no overwhelming view in favour of the privatisation of BTG, the majority of the staff are against it, its track record is good and, as far as I am aware, there has been no criticism of its activities in the past? Does he accept that it is perceived that the Government are adopting the view put forward by the management, which is a minority view in BTG, and that that is a dogmatic, not a sensible or rational, way forward for BTG? Has the Minister a closed mind, or does he still have an open mind for the best way forward for this well respected and reputable group?
Mr. Redwood: We have an open mind on the exact style and form of privatisation, and I and my hon. Friend the Under-Secretary of State wish to hear the views of the House on the subject. But we are strongly advised by the senior management of BTG that they believe that it would be in the best interests of the group to pass into the private sector, for the reasons that I have already set out. They are good reasons, which will be welcomed strongly by Conservative Members. The management of BTG are running a commercial enterprise. There are certain restrictions on the group's conduct by virtue of its public sector status which the management would rather be rid

737
of, because they believe that that would add to their success. I am happy to back that judgment. The Government back the BTG board's view.
Mr. Brown: Will the Minister confirm that 75 per cent. of the staff have expressed opposition to the proposal to privatise the group, and that severe doubts have been expressed by the Committee of Vice-Chancellors and Principals, which says it has not even been consulted about the proposal? Will he publish the Coopers and Lybrand study commissioned by his Department some time ago, which he has never brought to the House or put into the Library but which I understand says that the difficulties of privatising the organisation are far greater than anticipated, and recommends that privatisation should not be proceeded with?
Mr. Redwood: I do not intend to reveal that study, because it has much interesting information that could only help those who might wish to negotiate the purchase of the group. It contains a lot of sensitive information about prospective values, which could only help those who would wish to get a finer deal as a result. But it is not right for the hon. Gentleman to assume something about the thrust of a report that he has not read. He expresses an extraordinary clairvoyance which is unwarranted in the light of the intricate details in the report. One thing that the report does draw attention to is the fact that it could damage top management morale if its clearly expressed view in favour of privatisation were ignored. The hon. Gentleman might like to think about that.
We have consulted the universities widely, and it is interesting to note that only 12 per cent. of those that have responded wish to keep BTG as it is. All the others think that there is a strong case for change. Some believe that a more commercial approach in the private sector would be exactly right for BTG.
My right hon. Friend the Secretary of State has said that he is interested in the views of employees; that is something which I am sure will emerge from the debate and will be carefully read by my right hon. Friend and by my hon. Friend the Under-Secretary of State.
Dr. Keith Hampson: My question relates to the point raised by the hon. Member for Dunfermline, East (Mr. Brown) about the universities. Because the vice-chancellors feel that they were not consulted in the early stages of this process, they are in some doubt about existing arrangements, and I hope that my hon. Friend can now reassure them. BTG holds a large number of university patents, so may we have an assurance that those are not at risk and that the privatised company will offer the same opportunities for technology transfer and the use of university research?
Mr. Redwood: This is one of the important points that we wish to draw out from the debate. It is one of the important details surrounding the sale that have not yet been determined. That is why the Government have come to the House with an enabling Bill, and why we wish to sound out the opinion of the House.
Mr. Alex Carlile: So that we can understand the intellectual basis on which the Government are proceeding with privatisation, will the Minister answer this question? Did the Coopers and Lybrand study come
738
to the conclusion that it was advisable that this proposed privatisation should not be proceeded with? Will the Minister answer that question with yes or no?
Mr. Redwood: I have already made my comments on this complex study, which provided a lot of background information on the sale. There is no way that I shall be drawn further when there is a lot of price-sensitive information in that report, which could only help those who wish to buy the group more cheaply than they should.
Mr. Michael Grylls: Is it not a fact that one constituent part of the BTG, the National Research Development Corporation, has to get ministerial approval to borrow more than £250,000, which is peanuts in developing a business? Such restrictions stop BTG moving forward. It is a successful group, making good profits, and it could expand much more. I am sure that, if it were explained to the staff—perhaps better than it has been in the past—that when these embargos have been removed, the group can raise all the money it needs, provided that it has viable projects, and that its future will be much better in the private sector, they would be more enthusiastic.
Mr. Redwood: My hon. Friend is right. There is an investment limit above which it needs to refer to the Government. It would expedite matters if the group did not have that limit. The Opposition say that we should change all these rules, but this is a public sector body. It has to be accountable through the normal public sector devices all the time that it remains in the public sector. One cannot make one rule for the BTG and other rules for other bodies.
The House would rightly say that every penny of money going through BTG is a matter for public accountability, and there have to be rules. We say that there should be only commercial rules, because BTG is trying to be a commercial operation and therefore fit better in the private sector, in the way that BTG's senior management are suggesting.
Mr. Merlyn Rees: The Minister referred to the support of top management for this scheme. I have a question about integrity, independence and impartiality. I am informed that, two years ago, the council of BTG declared itself in favour of privatisation, subject to those three Is being guaranteed. Are they guaranteed?
Mr. Redwood: This is another matter that will be reviewed under the enabling powers in the Bill. I am grateful to the right hon. Gentleman for making those points. We wish to go away and to draw up, with our advisers, the detailed proposals for sale documentation, for whatever form of sale may be appropriate.
That is exactly the kind of issue, along with that raised by my hon. Friend the Member for Leeds, North-West (Dr. Hampson), that we shall have to work through, and the debate will be useful. The Opposition now say that they want a blueprint for every issue, but if we had that, there would be no point in the House debating the matter. We are bringing it to the House at an early stage so that we can take enabling powers to privatise BTG. There is an overwhelming case for privatising the enterprise, and we need to discuss the best way forward.
Mr. Gordon Brown: Will the hon. Gentleman give way?
Mr. Redwood: I must make progress. The hon. Gentleman has already asked many questions.
Clause 1 vests all the property, rights and liabilities of the corporation and the board in a newly created company. Clause 2 extinguishes the corporation's capital reserve and the board's public dividend capital, as these will be replaced by the Government's shareholding. Clause 3 provides for the creation of the initial Government shareholding in the successor company. Clause 4 enables the Government to acquire additional shares or securities in the successor company. This, for example, would enable the Government to maintain the proportionate level of their shareholding, if they retain one, in the event of new issues and rights issues.
Clause 6 limits the Government's shareholding as a proportion of ordinary voting rights to the level at which it stands after privatisation. Clause 7 provides for the creation of a statutory reserve and for continuity in the accounts. Clause 8 provides that the Government may make loans to the successor company after vesting has taken place, but before privatisation. That would allow money to be lent if privatisation were delayed for any reason.
Clause 9 provides that any power entitling the Government to restrict the borrowing of the successor company shall be exercisable in the national interest. Clause 10 provides for the continuation of the corporation and the board after the establishment of the successor company to assist with completion of the transfer of assets. Clause 11 deals with the tax liability of the successor company, and clauses 12 to 17 contain various supplementary provisions.
Schedule 1 provides for the corporation and the board to do everything necessary to facilitate the vesting of their property in the successor company. Schedule 2 provides for the repeal of legislation which currently regulates or refers to the corporation and to the board. That is important, because it includes repeal of parts of the Development of Inventions Act 1967 and of part I and schedules 1 and 2 of the Industry Act 1975.
My Department has appointed Price Waterhouse to advise on the options for sale. The choice of option will be influenced by the interest shown by prospective purchasers during the coming months. The Government have made no decision yet about the method of sale and will listen carefully to the views expressed within the House by management, employees and other interested parties before deciding on the final option. I hope that Opposition Members will participate constructively in this debate, rather than giving endless press conferences attacking the whole idea.
The British Technology Group is making money. It has backed some good projects and it now needs the self-reliance of the private sector to go about its business. The Bill abolishes the National Enterprise Board and removes from the statute book the power for more such Government meddling in business.
The hon. Member for Dunfermline, East (Mr. Brown) will doubtless launch a tirade against these changes, as he did earlier this morning in a press conference. He will stand and fall as an advocate of "back to the 1960s and 1970s" failure. He may have cast off his 1960s drainpipe trousers and cut his 1960s student hair, but his ideas are still fixed in 1960s mode. He will conjure up images of the great days of the National Enterprise Board, to be transformed by 1990s high tech and training. We will hear
740
the usual cascade of invective. He will say it, he will say it again and then he will bellow it. He will say it with repetition, with deviation—although not usually with hesitation.
I hear that the hon. Member for Dunfermline, East once wrote an original speech. Unfortunately, we have had to listen to dozens of versions of the same thing ever since.
I have three questions for the hon. Members opposite. Labour say that the Government need to intervene to increase investment in Britain. My first question to them is, how much taxpayers' money would they want to spend on such an enterprise? I shall happily give way to the hon. Member for Dunfermline, East if he wishes to give the House some real information for a change. But no—he does not seem to want to.
Are the Opposition aware that total investment in the United Kingdom now runs at £100,000 million each year, and that the BTG, by the way, invests just £11 million? Do they have a sense of the significance of those figures? To have any decent impact on the national total of investment, Labour must be planning for Government to spend at least an extra £10 billion, which the market does not provide—and that would still be less than 2 per cent. of GDP, although it is around 1,000 times the figure that the British Technology Group currently spends.
Will the hon. Member for Dunfermline, East confirm BTG would need at least as much as that in his scheme of things according to his analysis of the situation? Is he aware that many of his hon. Friends—I wish more of them were here today—believe that the last two Labour Governments' investment plans were ruined by a shortage of cash?
Ms. Marjorie Mowlam: Is this relevant?
Mr. Redwood: This is the key to the argument. The Bill will remove the damaging powers from the statute book which Labour used in the past and says that it would want to use again. The hon. Friends of the Member for Dunfermline, East feel that, if the Industrial Reorganisation Corporation and the NEB had had more money and made more investments, they would have done better. How does he answer them? Or is the shadow Treasury going to act as the bad nanny, by taking the Socialist toys away again?
My second question is this: why should we believe that the Opposition, with all the talents that are arrayed before us, will be able to spot investments that the private sector has missed? The hon. Member for Dunfermline, East is indeed a talented man—a temporary lecturer at Edinburgh university, a lecturer in politics at a college of technology and a journalist with Scottish Television—but he has never run a factory or made anything to sell in his entire life. And this is the hon. Gentleman who thinks that he could spot all the winners.
The hon. Member for Newcastle-upon-Tyne, North (Mr. Henderson) was a trade union official; the hon. Member for Gateshead, East (Ms. Quin) has lectured in French at two universities; the hon. Member for Kirkcaldy (Dr. Moonie) is a medic; and the hon. Member for Redcar (Ms. Mowlam) was an administrative officer at a college. Not one of them has ever managed a business or made a substantial investment, and none of them has had to rely on clients or customers to pay their wages. Where is the magic ingredient?
Mr. Alex Carlile: When has the Minister ever worked in a productive industry?
Mr. Redwood: For some time, I chaired an industrial company which was deeply involved in industrial life up and down the country. As a Minister behind a Government desk, I would not venture to spot winners, because I know from my business experience how difficult it is and how much it needs the commercial background of the private sector.
Mr. Carlile: Given all his experience as a banker, and his understanding of the City, can the Minister confirm that the most difficult thing for any entrepreneur or new business to obtain is free venture capital, and that the British Technology Group is one body from which it is possible to obtain such capital?
Mr. Redwood: I was trying to draw the House's attention to the sums involved. The hon. and learned Gentleman obviously was not watching last week, when the Department of Trade and Industry announced one part of a new programme of support for the type of investment that he is talking about. We shall be announcing expenditure of £30 million over three years for just such a purpose; that is more than the BTG is offering on its past annual figures. I agree that there is a need; the DTI is meeting it. Overall, the research and development allocation, and the other money available through the DTI, far exceeds what is available through the BTG.
My third question to the Opposition is this: why should the nation believe that the policies will be any different next time? It is not as though we were being offered anything new. The names may have changed, but the institutions proposed in Labour's documents look horribly familiar. Labour wants an NIB: that is one of the reasons for their opposition to the Bill. What does NIB stand for? "Normally Invested Badly"? "Nationalised Institution for Bankruptcy", perhaps? I think that those would be better characterisations than "National Investment Bank".
The National Enterprise Board, in its heyday, was a loss maker that hastened many of its investments to the liquidator. The House should remember the enthusiasm with which the NEB identified that "office of the future" market as one with boundless opportunities. It was right: many private-sector companies have done well by selling fax machines, xeroxes, electronic mail and the like. The final cost to the NEB and the taxpayer of those boundless opportunities in a high-growth, high-tech market were losses of £34 million.
The NEB also had to write off £6·8 million from its United States investment in software—a marketplace in which many others coined fortunes and supplied good products. So much for Labour's chant that next time it would be different, because it would concentrate on electronics and software. That was yesterday's story, and yesterday's disaster for the taxpayer.
Nor was the NEB much better in other sectors. Alfred Herbert, BTB (Engineering), Technalogics Computing Ltd., Microform Communications, Vicort, Mollart Engineering, Momex, QI (Europe), Gemspar, Sandiacre Electrics, Hilton Products, Preformed Road Markings, ASR Servotron and many others all went under. Holdings in Brown Boveri, Consine International, Negretti and Zambra and Energy Equipment, to name but a few, were sold at losses. The losses in tanning and clockmaking were
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as spectacular as they were predictable. The NIB, with branches in every major city, would be a sure-fire loser. There might be more noughts on the cheques, but they would go down the same old drain.
Labour also seeks a BTE. "Better Try Everything"? This morning, a sneak preview on the "Today" programme revealed a name change to BTC—"Britain Taking Chances", perhaps. In Labour's public bar all the investments would be on the rocks, and most of Labour's planned subsidies would be illegal under the treaty of Rome.
The British Technology Company could not do anything that the privatised British Technology Group cannot do. BTG has worked with companies pioneering new communications equipment, new farming systems, a more efficient combine harvester and a variable transmission system for cars. It is an important discipline that money should be committed only when there is a prospect of returns. That is the discipline which Labour still has not learnt, or cannot accept.
The hon. Member for Dunfermline, East is, I hear, having a few problems with his right hon. and learned Friend the Member for Monklands, East (Mr. Smith) and his hon. Friend the Member for Derby, South (Mrs. Beckett). Naturally, they do not like him always muscling in on the economy whenever there is a chance of media attention. He really should concentrate on the job he has now.
They are understandably even more worried about the hon. Gentleman's spending habits—thankfully, only shadow ones at the moment, and for a long time to come. There is his passion for regional investment—£10 billion?—and research and development—another £5 billion to make a splash? Perhaps the hon. Gentleman will tell the House how much money he wants to spend on regional investment and research and development. He tells us time and again in his speeches that the core of his proposals is that more money should be spent upon them, through the public sector. Why cannot he tell us how much he would spend and what he would spend it on?
Then there is training. That must be another £2 billion or £3 billion to have any impact. I hear that the shadow Treasury team has said that it would like the hon. Member for Dunfermline, East to be the Member for Duninvesting, Duntraining and Dunresearching as well, for the sums do not add up.
The British Technology Group needs a new future in the private sector. The United Kingdom taxpayer needs to be reassured that the power to back losers through the National Enterprise Board has been removed from the statute book. I commend the Bill to the House.
4.5 pm
Mr. Gordon Brown: I intend to deal with the substance and detail of the Bill. The Bill is ill-considered and irrelevant to the huge technology gap that Britain has to close with our competitors. It does nothing to achieve the Government's stated aims for privatization—to increase mass shareholdings, to create greater competition and to remove Government subsidies. The implications of the Bill are potentially destructive for the British Technology Group. The Bill provides no guarantee that BTG will remain British, at the forefront of technology, or even intact as a group. With no better

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explanation for it than that given today by the Minister, it is in the end, I am afraid to say, privatisation for privatisation's sake.
The first impression made on anyone listening to the debate and hearing the Minister's speech must be one of surprise—indeed, astonishment. Industry faces one of its worst recessions for years. Output has fallen faster than at any time, with the sole exception of 1980, during the past 60 years. There has been a record number of bankruptcies and closures, even of high technology companies. Nevertheless, the Department of Trade and Industry, with its wide responsibilities for both trade and industry, has introduced its second privatisation Bill in as many weeks. It has followed up its unwanted and unpopular privatisation of export credit insurance last month with this unnecessary proposal to privatise the British Technology Group.
Is it not the case that, as the public expenditure White Paper revealed on its publication only a few minutes ago, that the Government's withdrawal from the British Technology Group is the latest in a line of reductions in Government support for investment in technology? There has been a 25 per cent. underspend on regional innovation grants, a £42 million underspend on industrial research and development, a cut of 40 per cent. on research and development by 1991 and a cut of 34 per cent. on technology transfer by 1992.
Even with the addition of the SPUR scheme—support for products under research—which the Minister mentioned at the end of his speech, support for innovation will fall, in real terms, in the coming year, according to the White Paper. The total cuts in the DTI's budget over the next three years will be of the order of £370 million. I can think of no other Government in Europe who have simultaneously cut their training and industry budgets in the run-up to 1992 but have spent their time instead on privatising national assets that they can ill afford to put at risk.
Mr. Redwood: How can there have been a reduction in support for technology when the British Technology Group has been financing itself for 20 years and has paid dividends to the Government?
Mr. Brown: I am referring to the total technology budget the—budget for technology transfer and for research and development. I am also taking into account the much-publicised announcement—it has been announced five times during the last two months—of the SPUR scheme. At a time when recession faces industry, and when all our European competitors are preparing for 1992, this Government are cutting support for technology.
Let us be clear about the purpose of this Bill. Its main and most immediate effect is to wind up the National Research Development Corporation as a first step towards privatising the national technology organisation—a body that has enjoyed all-party support for four decades; was set up in 1949 to fill a gap in the market place; grew under the Conservative Government of the 1950s; expanded under the Development of Inventions Act 1967 in the 1960s and the 1970s; and developed yet again to suit the conditions of the 1980s. Now that body is to be abandoned to the vagaries of the marketplace, with—as the Minister confirmed today—not a single guarantee about who will run it or from where it will be run, or for the interests of
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whom and, as was confirmed in the Minister's answer earlier, not one guarantee about its integrity, about Its impartiality or even about its independence.
Mr. Patrick Nicholls: The hon. Gentleman speaks with great passion. Obviously he is totally against the principles of this Bill. Will he confirm that a Labour Government, should there ever be one, will renationalise BTG? If he is not prepared to give that commitment, there cannot be very much sincerity in what he is saying.
Mr. Brown: 1 can give an assurance that we shall not spend public money renationalising the British Technology Group. I have made it clear—if the hon. Gentleman had followed events, he would know this very well—that we shall set up a British technology enterprise and shall work with the universities and other organisations, many of which are directly opposed to this measure.
Mr. Nicholls: The hon. Gentleman, on behalf of the Labour party, has just announced another initiative. Can he tell us exactly how much money will be invested in it, and whether this will be another priority area?
Mr. Brown: The hon. Gentleman cannot have been listening to remarks made earlier by his Minister for Corporate Affairs. The British Technology Group actually makes a profit. What is being privatised is a profitable group. I have no reason to believe that, operating in the public sector, and working with the patents of universities, our British technology enterprise will not itself make a profit. The purpose is to fill a gap in the marketplace that would not otherwise be filled and to take a long-term view that a private-sector company might not take. I have no reason to believe that the universities will not want to work with us in this enterprise.
Dr. Hampson: The hon. Gentleman has said that the universities are against privatisation. Perhaps he would care to correct that statement. The university vice-chancellors asked for the sort of reassurances that I requested of my hon. Friend the Minister earlier. Does the hon. Gentleman recognise that, since this sort of group was founded, universities have been provided with many new means of expanding their opportunities in the market? They have found private sector companies, and quite often they have set up their own companies, to exploit their research. The needs that led to the setting up of this group no longer exist in the same form.
Mr. Brown: The hon. Gentleman makes a fair point. Indeed, technology transfer organisations and organisations such as BTG have been springing up in universities. However, I must refer to a statement issued by the Committee of Vice-Chancellors and Principals in connection with the Second Reading of the Bill. The vice-chancellors and individual universities complain that, contrary to what the Minister has said, they have never been properly consulted officially about the Government's plans or options for the privatisation of BTG. I should be very happy to give way if the Minister were prepared to explain why he has said that the universities have been consulted. I have reason to believe that many of the vice-chancellors are very dissatisfied with the proposal.
Dr. Hampson: They are not against it.
Mr. Brown: As I think the hon. Gentleman will agree, what they want is a series of assurances that the Minister has been singularly unprepared to give.
The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Edward Leigh): Perhaps I can help the hon. Gentleman. I am anxious to be of assistance to the House. A full survey of the universities was carried out in December 1988. I can give the exact results. The option of a sale to a commercial financial institution was favoured by 20 per cent.; 5 per cent. favoured a sale to BTG management; 50 per cent. wanted to establish BTG as a private foundation or trust, with objectives linked to university research; just on a quarter wanted to keep BTG as it is at present or wanted something akin to what the Labour party wants to set up.
Mr. Brown: What the Minister has just presented is evidence that I have certainly not had until now: that only 5 per cent. want the option that is favoured by management—a management buy-out—and only 20 per cent. want the trade sale, which is what is being pushed upon the Government. In other words, only 25 per cent. want the two main options that the Government are putting before us, and 75 per cent. are not in favour of those options.
Mr. Leigh rose—
Mr. Brown: I shall give way if the Minister wants to contradict my figures.
Mr. Leigh: One can look at figures in any way one likes. Perhaps the hon. Gentleman will confirm that only 25 per cent. of university vice-chancellors, when surveyed, want to keep BTG in its present state or in the state that the Labour party would like to see.
Mr. Brown: The Minister is misinterpreting what I have said. The survey shows that only 20 per cent. want the trade sale that the Department is looking at, only 5 per cent. want it to go to the management, which is the favoured option of many people, and another 50 per cent. want it to be a trust and not to be privatised in the way that the Minister is proposing. If I have got that wrong, perhaps the Minister will correct me.
Mr. Leigh: That is interesting. Does the hon. Gentleman accept that, contrary to what he said earlier, the vice-chancellors were properly surveyed?
Mr. Brown: No. The vice-chancellors—[Interruption.] Conservative Members should take care to listen to the views of vice-chancellors in universities up and down the country. Many vice-chancellors will feel that the mocking from the Tory Benches when their case has been mentioned is unacceptable.
Mr. Nicholls rose—
Mr. Brown: I do not intend to give way to the hon. Gentleman, since he is clearly not well versed in the issue.
Mr. Nicholls: Will the hon. Gentleman give way?
Mr. Brown: I have already said that I shall not give way.
The vice-chancellors make it clear that the Committee of Vice-Chancellors and Principals and individual universities have never been officially consulted about the
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Government's plans or options for privatisation of BTG. If the Minister wants to deny that, he should write immediately to every vice-chancellor in the country.
This is not an ordinary privatisation or, as the Minister tried to imply, the sale of a downstream company or the marketing of a run-of-the-mill business. It is the privatisation of 8,000 or more patents, involving 1,500 technologies. It includes patents such as those for anti-cancer and anti-depressant drugs and for inventions such as high-performance plastic fibres. Those ideas have been developed by BTG in the public sector; many of them came to BTG only because it was in the public sector, and some of them could be lost in their entirety if the company is transferred to the private sector as the Minister plans.
Our argument is clear. In Britain we need a body to facilitate and foster the development of inventions at the start of the technology chain. We need a body that is guaranteed its existence, which it could not be if it were a mere private sector company. We need a body with the flexibility to take a broader and more long-term view than the merely short-term interests of shareholders might allow. That requires a body run with the requirement to operate in the public interest. Our contention is that, for from public ownership being a hindrance to inventions being developed in Britain, BTG has offered the extra flexibility and scope without which long-term investments may not be given the consideration that they deserve.
Mr. Roger King: The Labour party is on record as saying that winners will be decided on commercial terms and that it will not just pick winners on the whim of somebody else's say-so. If that is so, why cannot it be done in a commercial way—or is it the Labour party's intention to go on stuffing dead ducks as it used to in the 1960s?
Mr. Brown: Is there any better example of a company that has operated commercially and successfully in the public sector than the British Technology Group? Because of its success and because it is next in line for privatisation, the Minister has brought forward today proposals to privatise it.
Let us look not at what Conservative Members say but at what has been said by some of the inventors who have benefited from BTG and believe that it benefits Britain. Magnetic resonance imaging is one of the major breakthroughs in medical diagnosis this century. The BTG said that it is comparable to the discovery of X-rays and is used routinely to generate detailed images of the tissue structure deep in the human body. In May 1990, the former Prime Minister, the right hon. Member for Finchley (Mrs. Thatcher) said that BTG had enjoyed outstanding success in managing the patent portfolio. She said:
"This invention will do much to generate further major British innovation and keep Britain at the forefront of rapidly advancing technology."
She went on:
"This would not have been possible without the pioneering work of Professor Mansfield of Nottingham University".
What does Professor Mansfield say in a letter that he sent to me in the past few days? He says:
"I am very much concerned about the proposed privatisation … I fear very much that were such a proposal to go forward the interests of research, research institutions in Britain and indeed, inventors would not be best served … BTG has in its present form served the scientific community very well over the years … had they been privatised I doubt

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very much whether the magnetic resonance imaging portfolio that they currently exploit would have earned very much at all".
What is his recommendation? He says:
"I feel that the patents on which my name appear cannot and should not be part of any privatisation deal since they were offered to BTG originally on the understanding that BTG was a government department, and on this basis I do not feel that they are free to dispose of them in any way whatsoever without prior consultation with me".
Here is a British inventor of international standing who is prepared to entrust his intellectual property to a body in the public domain and who states clearly that his invention would not have succeeded as well as it did without the activities of the public sector. He believes that the essential development of such inventions can and should be done in the public sector, and he feels so strongly about it that if the body ceases to exist in the public sector, he wants to have no dealings with it in the private sector.
It is no wonder that the Financial Times, one of many newspapers that have expressed doubts about the proposal since it was first mooted, said:
"instead of thinking about privatising the BTG the Department of Trade should be thinking how to improve it".
Pyrethrine is the technology applied to some of the world's most widely used insecticides. Did the Government consult the inventor who had entrusted his patent to BTG before they decided on the privatisation measure? The answer is no. Under privatisation, the patent is to be moved from the public to the private sector. The inventor himself, Mr. Michael Elliot, wrote to me saying:
"finance from NRDC allowed research to be developed and applied that the private sector had judged to be too speculative or long term."
Support such as this in the public sector can arise only if BTG is allowed to operate with its own structure and integrity. It is wrong to privatise BTG now without adequate guarantees to protect its role in supporting research in Britain.
Yet another scientist of international standing is opposed to the ill-considered privatisation proposal. Brian Oakley of Logica says:
"I can see no point in privatising it."
A former director of BTG who has written to me privately says:
"I believe it would be a disaster if BTG is sold off to private interests."
The vast majority of staff—three quarters of them—have come out today against the proposal. The Committee of Vice-Chancellors and Principals says, as I have reported, that it has not been properly consulted. The Coopers and Lybrand report, of which the Minister has refused to give details, expressed if not opposition, reservations about the proposals.
Who now supports the Bill? The only supporters of the Department of Trade and Industry are the Government's business machine and the senior management of the British Technology Group. However, I must tell the Minister that the document that I mentioned earlier reveals that he has problems with both those groups as well.
I have here the document that was commissioned by the British Technology Group at a cost of £75,000 for the media campaign and which was prepared by The Communication Group plc. It is now the subject of a communications campaign targeted on ourselves as the Bill goes through the House. A total of £75,000 of our money is to be used to persuade us to agree to the privatisation of BTG. Some £5,000 is to be used to cover
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press materials and the entertainment of journalists. Some £2,500 is to be used for a half-day session for the media training of Mr. Ian Hardy and two other senior executives to
"explore and develop the privatisation arguments".
There is money to deal with "potentially hostile awkward questions".
What else is in the document for the £75,000? It proposes the "privatisation commemorative gift". The document recommends:
"Looking further ahead, some thought should be given to a commemorative gift for the principal commercial partners to mark the occasion."
The gift in this privatisation is the 8,000 patents developed in the public sector which are now to be handed over to the private sector on a plate, commemorative or other.
Who supports the Bill? The document makes it absolutely clear that the Bill has engendered the hostility of the Government's business managers. It states clearly that the Bill
"is proceeding against the natural inclination of the party managers"
The document continues:
"Against this background, trenchant criticism"—
[HON. MEMBERS: "Come on."] I am quoting from a document commissioned by the British Technology Group, which says:
"Against this background, trenchant criticism may weaken the business managers' resolve to press ahead with any great speed … the business managers' priorities in all this are a quiet time with no banana skins and a light programme to allow Tory MPs plenty of time in their constituencies."
[Laughter.] Conservative Members have confirmed the problem that I have just identified. According to BTG's own document, there is no support for the measure from the Government's business managers.
What does the company itself want? Does it wholly support the Bill? The Minister said that it had given its assiduous—indeed, enthusiastic—support, although he had to recognise that three quarters of the staff were opposed to the Bill. The document says that BTG wants to make some major amendments to the Bill in Committee. The group will be seeking "firm commitments", which it wants to be "mostly extracted" during the Committee stage and possibly on Report. The document says:
"MPs may well be able to extract more from Ministers than the DTI would otherwise like to give."
What is the attitude of the Bill's principal supporters? The Government Whips and business managers say that their natural instinct is against the Bill, and BTG—cited by the Minister as the main supporter of the Bill—proposes to seek to make major changes to it.
The BTG document is worrying in another respect. It suggests that the Government have given the group the opportunity
"to have a parliamentary friend on the Committee."
The document continues:
"Much careful and extremely sensitive work must be done behind the scenes in the next few days."
If that is what is happening, it is a misuse of parliamentary procedure and it should stop now.
Who is left supporting the Bill? It is none other than the Secretary of State himself. Two days ago there appeared in The Observer an article entitled:
"Why I am privatising British technology".
Yet the Secretary of State cannot appear in the House to defend his own Bill. Perhaps he should have added to the title of his article, "Why I am insisting on the Bill being

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debated in the Commons when I cannot appear to defend the proposals." He is not so much a no-turning-back Minister as a no-turning-up Minister.
Mr. Redwood: That was most uncalled for. My right hon. Friend has been in India, working hard for Britain. He is travelling back today, as I think the hon. Gentleman knows. The Secretary of State is fully behind the Bill. He is allowing his fellow Ministers to see it through on this occasion because he is busy elsewhere. The hon. Gentleman should withdraw his slur.
Mr. Brown: As the Minister knows, we offered the Secretary of State plenty of opportunities to be here when we debated the Bill. We offered to change the Second Reading date so that he could be here to introduce it. We made the offer to the Department of Trade and Industry.
In the article in The Observer, the Secretary of State explained that he proposed to privatise BTG, first, because it was held back in many respects by its status as a public sector organisation; secondly, because bureaucratic restraints inevitably imposed themselves on statutory bodies; and, thirdly, because BTG will be able in the private sector to take up more opportunities and provide a comprehensive service.
Who is holding BTG back in the public sector? Who is imposing the bureaucratic constraints? Who is denying BTG the opportunity to provide a comprehensive service in the public sector? Who is to blame if BTG is suffering in those respects? If anyone is to blame, it is the Government, who have presided over BTG for the past 12 years. If anyone is holding BTG back it is the Secretary of State, and it is the right hon. Gentleman who imposes constraints. If there are problems—I do not believe that the problems are in any way serious—the Minister should set about solving them. Indeed, he should have solved them years ago. To let the problems persist and then to use them as a pretext for the simplistic measure that we have before us is doubly irresponsible.
The Minister was on the radio this morning and said of BTG's management that they did not think that the Department's involvement helped. I suppose that, if I were in BTG, I should be worried about the Ministers who came to see me.
Is the Minister really telling us that France, Germany and Japan, which have technology transfer organisations similar to BTG, can solve their problems within the public sector but that in Britain it is somehow beyond the imagination of the Department of Trade and Industry to do so? Let us consider what the Secretary of State had to admit in that article. He said:
We must ensure that a framework exists for the dissemination of new technology …
The benefit of the fine work that has been carried out in Britain and overseas research organisations will never be seen unless an effective network of technology transfer is in place."
Is not that the argument for BTG to remain in the public sector?
What guarantee is contained in the Bill that the technology transfer network will continue to exist in the private sector? As BTG has said of itself:
"involvement in technology is a natural continuation of, and not a substitute for, research which may have been funded by research councils or other organisations."
In Britain we need a body that bridges the gap between ideas and concepts and develops them to the point of
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commercial exploitation. The existence of such a body cannot be left to the vagaries of the marketplace, as the Bill seeks to do. Such a body must be sufficiently flexible and have enough scope to invest for the long term.
Mr. Redwood: Is the hon. Gentleman aware that the amount of research and development finaced by BTG is about 0·1 per cent. of total R and D? Does that mean that all the other R and D does not work or does not count because it is in the private sector? The hon. Gentleman has never answered that point.
Mr. Brown: The Minister has not answered the straight point that I put to him. BTG does a good job in the public sector. If it is thrown into the marketplace there will be no guarantee that it will continue to exist. It may not have the capacity or ability to take the long-term view that is necessary when supporting inventions. The weight of evidence is growing that other countries, such as France, which has ANVAR, Japan, which has its own research and development corporation, and Germany, where corporations and organisations work through the Lander, recognise the need for such a body. So why does the Minister persist in pursuing privatisation in Britain?
Mr. Philip Oppenheim: The hon. Gentleman referred to Japan as a country which has a state-run R and D body. Is he aware that the Japanese percentage of state support for civil R and D is one of the lowest in all the developed countries and has been consistently so for the past 20 or 30 years? Bearing in mind that Japan is indisputably the most successful economy in the world, does not that fact lead the hon. Gentleman to question some of the fundamental suggestions that underlie his beliefs?
Mr. Brown: The hon. Gentleman misunderstands the position. The issue is how the public and private sectors can work together to increase the amount of research and development and new technology that is stimulated in the economy. The hon. Gentleman would do better to consider some of the problems that have arisen in the British economy because of the lack of investment in technology, and to compare us with Japan, which has done far better. He might be more worried about the rise in unemployment in his constituency as a result of the Government's failures.
Why is the privatisation being imposed on us now? None of the traditional arguments for privatisation hold. The 1987 Conservative manifesto said that privatisation was about insisting that small investors and the employees of privatised companies should have a fair chance of buying shares. Yet the Bill contains no guarantee that any new shareholders will be individuals or employees. As the chairman of the company graphically put it:
"This will be no widows' and orphans' sale."
The Minister cannot claim that the sale will inevitably be an extension of popular capitalism. Nor will it inevitably increase competition because the Bill opens the way to BTG being taken over and perhaps asset-stripped by a competitor. There may even be less competition as a result of the measure.
Nor will privatisation of BTG reduce the burden on the state—the other argument for privatisation. The 1983 Tory manifesto said:
"The burden of financing the state's industries has kept taxes and Government borrowing higher than they need be."

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But, of course, BTG gives money to the Government. The Government do not give money to it. There is no argument for privatising it if the argument for privatisation is a desire to reduce state subsidy. Nor will the Government obtain proper value for money if BTG is sold to the private sector.
Does the Minister agree that BTG has £20 million or more in liquid assets, as stated in its accounts, that it has offices worth more than £10 million, investments that are worth nearly £30 million and other assets that could be liquidated for more than £50 million? The price of the sale, however, which has been quoted in the newspapers at the moment is little more than £35 million. When the Under-Secretary replies perhaps he will tell us what is being paid out to sell the company. What is the cost of the Coopers and Lybrand report? What is the cost of the Lazard's report? What is the cost of the Price Waterhouse appointment? What will be the cost of the time taken to change the patents? I understand that just to change the name on patents abroad will cost in excess of £1 million of taxpayers' money.
Far from costing the country money in the public sector, where it is required to break even, the company has made profits in successive years of £13 million, £11 million, £8 million, £10 million, £2 million, £5 million, £7 million, £7 million, £3 million, £6 million, £7 million and £9·5 million. In each year, that company has made profits for this country and paid dividends to the Government, and sometimes it has been required to give extra cash to the Government.
The taxpayer would be far better off with BTG making money for the country in the public sector than gaining limited proceeds from selling it at an undervalued price to the private sector.
Mr. James Paice: We now come to the nub of the hon. Gentleman's argument; it is his view that BTG would be better off in the public sector. Can we take it from that that a Labour Government would, as a priority, renationalise the BTG?
Mr. Brown: I sometimes wonder why I should give way to Conservative Members, because the hon. Gentleman was clearly not in the Chamber when I answered that very same question from one of his hon. Friends. No doubt the hon. Gentleman has had circulated to him a list of questions that he should put to me during the debate. I repeat that we have made it clear that we shall set up a new organisation, British Technology Enterprise, and we hope to be able to work with the universities to develop—
Mr. Paice rose—
Mr. Brown: I shall not give way again. We shall work with the universities to develop a technology transfer organisation for Britain.
Mr. Paice rose—
Mr. Brown: It would be an abuse of the House's time were I to give way to the hon. Gentleman again.
Once one strips away the old arguments for privatisation, which have no relevance to the sale, and realises that this could be a trade sale—not so much a case of tell Sid, as tell Lord Hanson and ICI—it is clear that this is privatisation for privatisation's sake. I have come to the conclusion that the only reason for privatising this company now is that it has not been privatised already.
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The company is not going because it is losing money, is a drain on public finances, is a big sale that could change the face of public finance, is a sprawling bureaucracy that needs private sector efficiency, or is a sale that will create millions of shareholders—it will not. It is simply going because it is next on the list of private sector enterprises that the Government feel, as a matter of ideology, that they must sell.
Worse than that, however, the same organisation will not just be denied a place in the public sector, but will be transferred to the private sector with no guarantee that it will ever again work in the public interest. The Bill makes that clear. Let us consider the public interest considerations that were part of the Development of Inventions Act 1967 and which will be waived aside as a result of the Bill. Under the 1967 Act, the NRDC had the job of
"acquiring, holding, disposing of and granting rights … where the public interests so requires".
In each section of the Act the public interest was mentioned as a reason why the company had to act. Now the Government are telling us that BTG should act purely as a commercial organisation. Viscount Ullswater, speaking for the Government, said that the Government considered that its activities were now of a commercial and training—I think that he meant trading—nature and that was not appropriate for the public sector.
To relegate BTG to the status of just another company surely mistakes its role. Do the Government agree that BTG fills a role that, if it did not exist in its present form, would be unfulfilled in the marketplace? Do the Government accept that, while the company is commercial, and should be as far as it can be, its purpose is not wholly commercial? Does the Minister accept that the public interest demands that an organisation exists for developing inventions and that it should work to a remit broader than merely the interests of shareholders? The public interest is served by having guaranteed the means of facilitating the progression from invention to production in circumstances where, because of the nature of investment, there is a danger that that might not happen.
The Secretary of State has not made up his mind whether any guarantees or other conditions should be written into the Bill. He should not be bringing forward a measure that he has not yet thought through. He is in the absurd position of having made up his mind to privatise even before he has considered the practical implications. The Bill is here because, regardless of other considerations, the Minister believes in privatisation at all costs.
What guarantee should have been written into the Bill? There should be a guarantee that the company will not be asset-stripped and split up. There is no guarantee that it will remain in British hands—not one guarantee that it might not be owned in Tokyo, Taiwan, Korea or Brazil. In past privatisations, a golden share has been invoked, even in the privatisation of ordinary companies like Britoil. Indeed, a limit has been set on foreign shareholdings in the past, but in this case there is nothing in the proposals to suggest that the company may not fall into foreign hands.
There is no guarantee either that the company will remain independent or able to act impartially. Are not the work force right to argue that BTG should not be in hock to another firm and that it should not run the risk of its principal assets—its patents—being auctioned off, frittered away or simply handed over to competitors? Is not

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it also right to argue that it must be able to give objective opinions, to be trusted by inventors as impartial, and to be free of influence from a large conglomerate?
There should not be a conflict of interest with shareholders. For example, BTG holds the patent for the next generation of anti-depressant drugs, a patent with a development licence with one company, which might lead in theory to that company capitalised in billions buying over the smaller BTG capitalised in millions. It might lead to another drugs company trying to buy BTG to eliminate that venture. Clearly, the Government measure the risk to the independence, the impartiality and the integrity of the company. If the company becomes a vested interest of one private sector or of one or two private sector organisations, it cannot work in the public interest to secure the independence of the inventor or the best benefit for the country as a whole.
Let us remember that BTG took on the Pentagon only recently over the hovercraft design. At a cost to itself it won the action in the American courts. Does the Minister seriously believe that a private technology company would take on the Pentagon in the interests of British science and technology and would be able to do so from the same vantage point that public status gives to BTG?
When we say that the British Technology Group should be independent, we mean that it should be free from the control of any one vested interest in the private sector. When we say that it should retain its integrity, we believe that it should not be dependent on calculations made purely on behalf of shareholders and purely about profits and dividends, but that the public interest should allow a wider set of considerations to be introduced. That requires a balance to be struck between the need to invest long term in further scientific advance and the need to weigh the commercial cost of doing so.
Mr. Leigh: I thought that the hon. Gentleman might be coming to the end of his speech. I hope that he will tell the House his attitude towards the abolition of the National Enterprise Board.
Mr. Brown: I have made it clear from the beginning that we oppose the Bill. We will oppose it root and branch in Committee, as has been made clear from the beginning of the debate. We have argued that the Bill is doctrinaire and likely to be self-defeating in its ultimate effects on British science, technology and industry.
The Bill has been pursued not because the Government believe in British science, technology or industry but because they believe in privatisation. It is the ultimate in short-term measures from a Government dominated by a short-term approach. To privatise the one Government agency with a key role in the early development of technology, and to abandon it to the short-term pursuits of the marketplace with no guarantee that it will work for the long-term, is short-termism in its worst aspect. When faced with a simple opportunity to show that they are more interested in the long term than the short term, the Government have decided to choose the short term.
BTG is a unique and special company with a distinct purpose. For 40 years, under successive Governments, it has worked to ensure that British ideas benefit British industry in Britain. The company has worked in the public interest for the long term. Now the Government have
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decided that it will work in the private interest, probably for the short term. They are not privatising it to create a market discipline, because there is a competitive environment already. They are not privatising it to issue shares, because it is doubtful whether many people will get shares as a result of the privatisation. They are not privatising it principally to raise more money, because they would be better off keeping it in the public sector, with the dividends that come from its work.
The main argument is that none of the arguments about privatisation applies. The privatisation is based on dogma and on nothing else. If anything, it indicates that, despite a change of leadership, the Government have not changed in fundamentals. They are exercising a dogmatic insistence on privatising a successful public enterprise, which is working successfully in the long-term interests of British industry. They would appease the vested interests of their friends in the private sector before advancing the public interest which it is their duty to uphold. Our argument is that we need in Britain a body to facilitate the development of inventions. We will ensure that the public interest is upheld.
4.45 pm
Mr. Michael Grylls: The synthetic nonsense and selective quotations from internal documents from the British Technology Group which the hon. Member for Dunfermline, East (Mr. Brown) produced are a smokescreen to cover the real thing that worries the Labour party about the Bill. The Labour party is not worried about the merits of what goes on in the British Technology Group; its only worry is that its chief toy is being taken away from it. The Labour party invented the toy in the 1970s; that was before the hon. Gentleman was here, but I am sure that he will have read about the disasters of the National Enterprise Board in the 1970s. That toy is being taken away from the Labour party in the Bill and will not be available to an incoming Labour Government, however unlikely that event may be; I think most people would consider it most unlikely. The hon. Gentleman is angry because the Labour party has lost that toy. That is why he quoted tittle-tattle from alleged statements by people within the BTG.
It is probably extremely boring to quote what happened many years ago, but there are still hon. Members here who can remember what went on when the National Enterprise Board was in being, and how it went round punting wiith taxpayers' money, trying to pick winners. My hon. Friend the Minister for Corporate Affairs made a good point about the doubt that ,most people would have as to whether the hon. Member for Dunfermline, East has the necessary experience in industry to ensure success in picking winners, whether it is done by himself or by civil servants.
Civil servants have an important role, but it is not to choose where investment should go. If the hon. Member for Dunfermline, East thinks that that is a doctrinaire statement, the fact is that we do not need to guess what might happen in the future because we can look back to what happened in the past. My hon. Friend the Minister quoted company after company that went bust under the auspices of the National Enterprise Board because it picked companies and put money into them for all the wrong reasons. Most of the companies ended in disaster.

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I have told the House why the Labour party is wound up about the Bill. It is not concerned about the merits of the British Technology Group, because, as both sides of the House agree, BTG is trading profitably and is a successful business. Actually, it is a small business. This is the first case that I can remember of a small business being privatised, but I welcome all forms of privatisation. Before the hon. Gentleman tells me that that is doctrinaire, let me explain why I welcome privatisation. Again, we do not need to look into a crystal ball because we can read the book.
I do not know whether I can get the hon. Gentleman to agree with me, but I am about to make a non-partisan point; Governments of all complexions have been bad owners of businesses, because they have a different perspective from business men. Business men make judgments on the return from investment. Politicians—the hon. Gentleman and myself—are different animals. We are looking for votes. When elections come, we have to collect votes; the hon. Gentleman has to do that and so do we. Therefore, what happens? When the Treasury has to decide between one investment and another, does it decide to put money into Amersham International—when that company was nationalised it was relatively unknown—or the British Technology Group? Naturally it does not, but it puts money into schools and hospitals, about which people feel passionately, and, collects votes at elections. It does not put money into the businesses that are worthy of investments on their own merits.
We have learnt during the 40 years since the second world war that all Governments have been bad owners and we do not want to return to that. The hon. Member for Dunfermline, East should consider the amazing transformation in the fortunes and fame of such companies—[Interruption.] I wish that the hon. Gentleman would listen for a moment, but perhaps he thinks that he knows it all. Will he raise his head and lend me an ear? Will he try to remember the success of Cable and Wireless, which was a disastrous nationalised industry? It could not even afford to pay enough to recruit a top-class financial director because the salaries of the board were controlled by the Department of Trade and Industry. It is now free to recruit the best brains, and the result is that Cable and Wireless is one of the finest businesses and is spread throughout the world. I could list many other successful privatised companies, such as British Airways, British Telecom and Amersham International which, although relatively unknown when it was nationalised, is now a world winner.
Ms. Hilary Armstrong: I am trying hard to follow the hon. Gentleman's argument but am finding it a little difficult. Is the hon. Gentleman saying that he is content with the amount of investment in, and commitment to, research and development in those areas where we can prosper in the manufacturing industry? Does he believe that we need no commitment from central Government to ensure that it is improved?
Mr. Grylls: The worst possibility would be if politicians were to try to judge the gross amount of investment that there should be in industry. That is a matter for businesses to decide.
Ms. Armstrong: Is the hon. Gentleman content with that?
Mr. Grylls: The hon. Lady asked a question and I shall do my best to answer it, unlike some Opposition Members. She may not like my answer, but I shall at least try to answer it. It is not good for politicians to make such a judgment. We are not very good at it and we embrace all people in the political process, in Whitehall and in Westminster. Our experience shows that such decisions are best left to the people who run the businesses, understand the ins and outs of business, and decide how much to allocate to research and development. It would be wrong for us to interfere. The hon. Lady and I must part company, because we do not agree.
The British Technology Group will have great opportunities in the future. Once it is out of the nest of state control and away from the heavy hand of state interference, it can spread around the world. It is already an international business so, once privatised, it can spread its wings and build its confidence in the knowledge that, if it has a good project, it will be able to raise money automatically through the City or in foreign financial markets. It does not matter where it raises the money. But, left in the public sector, it will be for ever constrained because it will always have to request Ministers' approval before making an investment. Even the salaries of its directors are controlled by Ministers because that is the way in which nationalised industries work. One reason why they have been such a disaster is that they have been unable to recruit the highest level of management.
Dr. Hampson: I agree with all of my hon. Friend's powerful arguments. Another aspect that needs further consideration is that, once the British Technology Group is in the private sector, there is a genuine risk that such a relatively small group could be swallowed up by a major industrial corporation. Although it could, conceivably, make a great deal of money, that could be to the detriment of the company's long-term interests and some of the projects being undertaken. For example, it could be disadvantageous if a major pharmaceutical company took it over as it is involved in so many aspects of the pharmaceutical world. Will my hon. Friend consider that argument and contemplate a golden share being held by the Government to prevent that from happening, at least in the short term?
Mr. Grylls: I do not agree totally with my hon. Friend. If we are to privatise a company, we should let it be free and keep a minimum of ties with it. Whether the Government should hold a golden share is for the Committee to decide. I am sure that those hon. Members fortunate enough to be on the Committee will enjoy doing that work. I hope that I shall not be one of them. It would not be my first contribution to the National Enterprise Board, but it would be my last, to the great relief of the House.
The House should welcome this privatisation, which follows a long path of successful privatisations. The Opposition have produced no arguments today to cause anyone, either inside or outside the House, to be concerned that we are not doing the right thing in freeing the British Technology Group from the dead hand of state interference, control and restrictions. I shall watch, with the greatest of interest, to see what happens to the British Technology Group. As my hon. Friend the Member for Leeds, North-West (Dr. Hampson) said, the group may

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change and some parts of it may be put into different hands, but they will not disappear. I wish the group well and support the Bill with great enthusiasm.
4.55 pm
Mr. Alex Carlile: There can be two reasons for privatising a company—on its merits, or on account of prejudice. The hon. Member for Surrey, North-West (Mr. Grylls) said, frankly, that he favours all privatisations, which is a straightforward way of expressing a prejudice—I use the word in a literal and not a pejorative sense—in favour of privatisation. The Government have had the opportunity to consider the proposed privatisation and to assess its merits for several years.
As the Minister for Corporate Affairs confirmed when he opened the debate—I am glad to see that he is still in the Chamber, albeit on the periphery—the Government have the advantage of a Coopers and Lybrand study commissioned in early 1988 and available since July 1988, which was just such a study of the merits of the proposed privatisation. We can be sure that that report has not been gathering dust for the past two and a half years, and that the Minister for Corporate Affairs—who has the reputation, justifiably or not, of being one of the cleverest people in the House—will have considered that report with great care.
The Minister will have considered not only the report's conclusions, but the wisdom of revealing those conclusions to the House. His study seems to come to one of two conclusions: either the rest of us are simply not fit to understand the conclusions reached by Coopers and Lybrand or the conclusions are so embarrassing that they should not be revealed to us because the embarrassment would be on the Government.
I asked the hon. Member for Surrey, North-West a straightforward question when he kindly allowed me to intervene in his speech. My question called for a yes or no answer: did Coopers and Lybrand express misgivings about the proposed privatisation and advise that, on balance, it should not proceed or did they not? Will the Parliamentary Under-Secretary of State for Industry and Consumer Affairs, when he responds to the debate—I am sure that he will do so in his customary robust and frank way—answer that question? His hon. Friend the Minister for Corporate Affairs inevitably raised suspicion, because he was fudging the issue and seemed incapable of answering any question with a direct yes or no answer.
Therefore, one is driven to the conclusion that the reason for the report's supression is that it advises against the privatisation. That leads us to the verdict that the privatisation is founded on prejudice. "Let us privatise what we can," says the Minister to himself, whether the merits favour it or not.
As a committed free marketeer, I am all in favour of privatising state-owned businesses when the merits are in favour; but equally, it does not serve the interests of the free market, and it certainly does not serve the interests of the privatised company, if the decision is based upon prejudice.
Mr. Andrew Hargreaves: Will the hon. and learned Gentleman develop his argument to the point where he explains why most of the
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board and the council of BTG appear to be in favour of such a move and the press have frequently offered BTG as a possible candidate for privatisation in order to allow it the international expansion which its natural role suggests?
Mr. Carlile: Unlike the Minister, I will answer the hon. Gentleman's question head on. There is a simple reason why the press has spoken of BTG as a candidate for privatisation. Any boring day of the news week when the press are looking around for something on which to comment, one of the first things that comes to mind is what the Government will think of privatising next. They look at the list of Government-owned businesses and, as BTG makes a profit and so, presumably, can be sold for a reasonable price, the press say that perhaps the Government will privatise BTG. The Government themselves have taken the same somewhat simplistic approach to the privatisation of BTG: because it makes a profit—because it moves, as it were—let us privatise it.
I shall answer the hon. Gentleman's first question as I proceed because, on the merits, there is no good case for privatising BTG. BTG has amassed quite a reputation for itself. It is a successful public sector company, albeit a small one. The Minister has asked rhetorically more than once today whether it matters if BTG is privatised, since the Government are increasing the amount of money that is being put into what he broadly describes as "this area", by which I presume he means the research and development of ideas. That is a fair point to make, but there is research and research, development and development, technology and technology.
As one university vice-chancellor has said, there is an acute gap in the market for relatively small, highly speculative investments. That is the type of highly speculative investment which almost every private finance house and private venture capital organisation would not consider. Yet that is precisely the type of project, and the small scale of funding involved is precisely the scale of funding, most often needed to take innovation from the experimental stage to a point at which its commercial potential can be seriously evaluated.
BTG has been almost alone in filling that gap. It is the only organisation which has made it its stock in trade, day by day, to be prepared to fill that gap. A reasonable concern is that a privatised BTG would be driven by short-term fimnancial objectives to withdraw from that area of the market. If it does so, it will be an entirely hit-or-miss operation for the inventor or entrepreneur as to whether he can develop and proceed with his invention.
Many entrepreneurs in the global village in which we live, certainly in the European village in which we live, would go elsewhere with their inventions because they might feel, with reasonable justification, that they were more likely to obtain the sort of venture capital and development support that they needed outside the United Kingdom than within the United Kingdom.
BTG has a valuable asset, but not in bricks and mortar; it is a portfolio which contains promising technologies, varying from voice recognition devices to combine harvesters. But many of them are still at the patenting stage, the early development stage, and are the intellectual property of their inventors, who have only laid the basic bricks of that property and still have a great deal more work to do.

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The Minister tells us that the Government have decided to proceed with the privatisation at a stage when they do not know what form it will take, have no idea to whom the company will be sold, and have not decided what safeguards should be put in place to ensure that investment continues. He says that they are open-minded, which means that they have not made up their mind about a golden share, guarantees or foreign involvement. All those matters are up in the air. It will not be possible for the House to amend the Bill to deal with such issues in Committee because of its nature and shape.
We may find that BTG is privatised successfully in a financial sense, with plenty of other companies prepared to pay large sums of money for it, but they will be paying for the portfolio, a list of tradeable assets—patents which can be sold off, and technologies which can be dispersed undeveloped. There is no guarantee from the Government at this stage that anything will be done to preserve the value of that portfolio.
I venture to suggest that little can be done to preserve the value of the portfolio once it is dispersed. If it were to be done, the Government would have to develop a new body of law to protect certain aspects of intellectual property which would be inconsistent with the thoroughgoing and needed review of intellectual property law which the Government have already carried through Parliament.
Mr. Simon Hughes: As my hon. and learned Friend knows, I represent the constituency with the largest part of the British Technology Group. It is feared—I say this seriously to the Minister—that the collective expertise of the people working as a team is at risk. The management may consider that the group could do well in the private sector, but that does not explain why there cannot be complementary activity, some in the private sector, as happens now, which is perfectly justifiable, and some in the public sector, to do what the private sector either is not doing or will not do, or what it can do best. It is the Government's failure to address that aspect which has caused most of the employees to have no confidence in the Government's proposal.
Mr. Carlile: I am grateful to my hon. Friend; he has taken a great interest in BTG, which is in his constituency. A great and broad body of expertise has been built up within the group. As my hon. Friend will confirm, we are talking not merely about a group of technologists but about scientists, patent agents, lawyers and other experts in intellectual property, and financiers, people who understand venture capital, that most difficult thing to obtain at reasonable rates of interest in what is essentially a fee-generating City of London. As the Minister well knows, there is no interest in the City of London in developing new ventures; the interest at the moment is in churning out fees.
BTG is a multi-disciplinary body which has been working for Britain, trying to secure a real place in the world for Britain's young and vital technology. It has been fighting to ensure that we do not have the fiasco that occurred after the last war, when the patents that could have been obtained for the British discovery of antibiotics were not taken out and all corners were able to move in and make trillions of dollars out of British invention.
The BTG should stand independent of Government, although publicly funded. It is open to that body to sell parts of its portfolio or to license others to manufacture
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products that are part of its expertise. That must be right. In the end, however, there must be a Government-funded agency. There has to be an agency that is able to pick up those inventions which have the imagination that floors the City of London, but which the Government, with their necessarily patriotic view, will be prepared to back a little way, and then perhaps a little way more and so on, until one turns into the successor to the light bulb or the antibiotic. This will not happen if the BTG is taken into the private sector and nothing remains in the public sector to act as a longstop for the great inventiveness of British scientists, technologists and engineers.
Perhaps, if the Government had come to the House with much clearer proposals, and had been able to say that, while they were privatising the BTG, they were also establishing a structure to pick up the residue that needs to be dealt with in the public sector, we might have been able to support the Bill. As it stands, its proposals are too diffuse, because they have been motivated by the Government's prejudice in favour of privatisation rather than by an argument on the merits.
5.11 pm
Sir Trevor Skeet: The hon. and learned Member for Montgomery (Mr. Carlile) raised an interesting point about the Coopers and Lybrand report. If he were a Minister, would he be prepared to release confidential information that could be of use to the pharmaceutical industry, especially if, by doing so, he would destroy the independence of the organisation?
Mr. Alex Carlile: I did not argue that all the confidential information about pharmaceuticals should be released. I asked a specific question: did Coopers and Lybrand come down in favour of privatisation or against it? The House would find that answer to theat question instructive.
Sir Trevor Skeet: The hon. Gentleman is asking for a little part of the report without the entire report. One may need to read the entire report before finding precisely the case that it makes.
The hon. and learned Gentleman also said that there was no case for privatisation. Let me give him some ideas. It is no longer appropriate for an international, commercially viable operation to be answerable to Ministers, civil servants and the Treasury. I agree that BTG grew up under an umbrella, that it was safeguarded and out of international competition. Now, we are moving into an era in which, if it is to expand, BTG will have to be privatised.
I have a second, compelling argument in favour of privatisation. Certain overseas Governments find the idea of a state-sponsored agency or company unacceptable. For example, when the French Government wanted some research to be handled by a United Kingdom agency, it refused to allow a Government-owned agency to carry it out. BTG did not get the contract. Is that of no significance? BTG proposed a joint venture with a Spanish firm. That required the approval of the Spanish Cabinet solely because the BTG had public sector status. Questions were not answered, and the whole project was abandoned. When BP was substantially nationalised, it tried to get certain licences in Turkey, but could not do so because it was a state enterprise with a large state investment. It will be hard for Opposition Members to deal with that point.
Mr. Simon Hughes: While there may be political reasons why another country does not wish to deal with a state-owned enterprise, no Opposition Member has argued that there should not be private sector activities developing British technology. There should be as much as there is now and more. We are arguing that there should also be a subsidiary state sector. Just as there is accountability for science and the arts, through funding from the Government, so such technology should have some Government link and direction.
Sir Trevor Skeet: I do not accept that. This is a viable company which has reached a point of maturity at which it should be put in the private sector because it is commercially oriented. If there were any other competitors, that would be the luck of the draw, but no specific provision should be made for that. We are told that the Labour party has its own ideas, but, like many of its other schemes, they will not work.
My third example concerns Government restraints. The size of group investments has to be scrutinised first by the Department of Trade and Industry, not by the board. Such matters should be decided at company level by BTG. Appointment to the top posts is settled by the Secretary of State for Trade and Industry. The Department monitors all BTG activities, as does the Treasury, and if the Treasury is short of cash, it can prune the group spending. BTG is required to pay a fixed percentage of profit to the Government. Operating profits after tax were £6·8 million and tax and dividends paid to the Government were £6·1 million. That is too heavy a burden for a new company, so it should be pared down in such a way as to leave sufficient resources for expansion. I should have thought that those points made it clear that it is essential that the company moves into the private sector.
I agree with the hon. and learned Member for Montgomery that the group has a valuable combination of professionals. No more than he does do I wish to see it broken up. I regard it as a centre of commercial excellence. I should not like to see it dismembered. There is a staff of 188, including six solicitors, two barristers, 18 patent agents plus two trainees, 15 financial managers, six of whom are on the venture capital side, and 60 specialists in technology transfer in the operating division, whether that is pharmaceuticals, engineering or anything else.
We must recognise that most large companies, such as ICI, Unilever, the Royal Dutch Petroleum and the Shell group, have a department through which they do their own patent and licensing business in-house. The big difference between BTG and these companies is that it specialises in dealing with all this expertise and sorts out patent and licence problems. I should not like to see it disintegrate, because it has an assembly of professionals. However, steps should be taken to release the enterprise from the restraints created by a too-close association with the state. I believe that many people will appreciate that point.
I have another reason for admiring the enterprise. It has an aggressive enforcement attitude to rights arising out of patents, particularly during the 1980s. Over the hovercraft, BTG filed an action in the United States and claimed compensation from the United States Government—the Pentagon—for infringement of the United States hovercraft patents. There was an out-of-court settlement,
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thanks to the persistence of the enterprise, of $6 million from the United States Government. That was an outstanding achievement, and I commend it.
Another case was nuclear magnetic resonance imaging. There was an out-of-court settlement by the United States health care group Johnson and Johnson for patent infringement. By taking aggressive action—as such a small company can—the group has built up its commercial reputation for independence and impartiality, and I should not like to see that destroyed. It has also used discretion in inter-corporation licensing.
The BTG has a broad network with universities—it has technical transfer agreements with 50 universities, plus one abroad, with 17 polytechnics, and with eight medical schools. The hon. Member for Dunfermline, East (Mr. Brown) said that there were no consultations, but that is extraordinary coming from him, because none of the nationalisation proposals put forward by the Labour party have included consultation with the industries involved. Surely it is up to the Government to decide whether this industry continues to identify commercially useful ideas and to search out solutions with academic institutions and private and public sector research establishments. In 1990, its new business was made up of 46 per cent. from academic institutions, 12 per cent. from Government research bodies and 42 per cent. from the private sector. The group is increasing its work in the private sector and should therefore be considered a private sector enterprise.
The group also has a broad network of contact with research councils, for example with the Science and Engineering Research Council, which carries out much of its own work, but I daresay that that collaboration could be extended in future, and with the Medical Research Council, which largely deals with its own work but perhaps should delegate it to a private enterprise like BTG. The group also does most of the work of the Agricultural and Food Research Council. When its monopoly of work from Government-funded research was terminated in 1985 it was probably a good thing, and BTG has now recognised that fact.
I have been singing the praises of the enterprise and have given a pretty clear indication of why it should be commercialised in the true sense of the word. It is a unique institution, with few competitors. One competitor is the American Research Corporation in the United States, but that is much smaller and BTG has an affiliate there, which makes sense because in 1990 40 per cent. of its income came from the United States, 20 per cent. from Japan and 10 per cent. elsewhere abroad, with the balance of 30 per cent. in the United Kingdom.
There are few competitors in the United Kingdom. Oxford university carries out its own work. Impel Ltd. carries out work for Imperial college and 3i. Those are the only competitors in the United Kingdom, except for a large amount of in-house work carried out by some of our larger enterprises. France and Germany are untapped fields for the company. It is associated with Eurotech and with the European institute of technology and, because it is well dug in there, I envisage there will be every opportunity for moving ahead.
I have mentioned several ideas for how privatisation should be effected, but impartiality and independence are paramount and should be protected. Without them, the company would not be able to do work in the United

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Kingdom and abroad. There is no reason why that work should not be continued if a suitable privatisation is carried out, which is what the Minister intends.
There must he some protection against asset stripping. Any industrialist would look at the group and think it was a good company to acquire. For example, it does a lot of work in pharmaceuticals and, if it were taken over, the company acquiring it would know all about its competitors and would have a long list of perhaps 8,000 patents, either in existence or being applied for. I suggest the following possible solutions. There could be a flotation through the stock exchange with the retention of a golden share, which would always be retained. There could be an allocation of shares to the staff and, as they would have an interest in the enterprise they would be loth to concede it to any foreign enterprise or to another company in the United Kingdom. The flotation could provide that no foreign company could take over a key industry to the United Kingdom. The allocation of shares could be limited to one shareholder, which would prevent sector domination, and I hope that the Minister will consider that. Also, the establishment of a trust has been mentioned and it is interesting to observe the analysis made in December 1988 that 50 per cent. of people interviewed were in favour of that. It would be for the Government to work out the type of trust.
The Government are wise to introduce the Bill in the way that they have done. They have set up a limited liability company, into which all the shares will go, and at a later date they will decide on one of the ideas that I have mentioned, or will perhaps select another. Then the company will be in the correct shape for privatisation.
Mr. Mike Watson: The hon. Gentleman was talking about the safeguards which he felt should be introduced. I hope that he will press them strongly on the Minister. However, he did not mention the patents held by BTG that have resulted from research in universities. Universities and individual academic inventors stand to receive royalties for many years to come. How does he propose to protect them?
Sir Trevor Skeet: They would be protected because they are subject to agreements at present. If inventions have been patented by BTG on behalf of universities or by the universities themselves the inventors will be safeguarded. I cannot see any great difficulty. The agreement could be transferred to another body that takes over the group.
There could be a case for an institutional purchase by a major finance house, which would maintain impartiality and the independence of its commercial operations. I suggest that the Minister might study that idea. Obviously there will have to be an independent show, which is not interested in any sector in particular. One could probably find the right solution along those lines.
Price Waterhouse is making a report on privatisation, which is probably the most advantageous way to proceed, and I shall be interested to read it.
Mr. Simon Hughes: The hon. Gentleman might not be allowed to read it if the precedent of the Coopers and Lybrand report is followed and it produces a conclusion but we never know what it is. Perhaps we shall all remain in the dark with the next report.
Sir Trevor Skeet: I think that the Government will release whatever information that they receive, provided
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that it is not confidential—[HON. MEMBERS: "Oh."] If the report is confidential the information cannot be released —it would injure not the Government but the companies concerned, and they have clients who may be involved. It would be a good idea if Members of Parliament could read at length a report on methods of privatisation and study the recommendations made, so that they could make an accurate assessment. I believe that that is precisely what the Government will ensure.
The group has been working for some years, is viable and has been paying a lot of tax to the Treasury. It has international credit not merely in the United States but in Japan, India, the United Kingdom and many other counties. We wish it to continue. Now that it has reached the end of the springboard, it must go for further competition, and the only way in which it can do that is to become part of the private sector. The public sector contains too many restrictions and limitations, and foreign Governments may refuse to deal with bodies simply because they are state agencies.
I wish that Opposition Members would recognise the merits of the Government's proposal. That applies to the Liberals as well as Labour, but it is Labour that is thinking back 20 years. If it continues to think in that way, we shall never get ahead. I welcome the Bill and hope that it will have a very successful Committee stage.
5.30 pm
Mr. Mike Watson: It is evident, especially from what the Minister and his colleagues have said, that there is no clear demand for the Bill. We have been told that the council of BTG supports it, but that is not entirely surprising: for reasons that I do not fully understand, the council feels constrained by the Department of Trade and Industry. BTG seems to me to be operating perfectly well now, and it is certainly profitable. Where, then, is the demand for the Bill?
I shall not rehearse the arguments, but I believe that dogma is at the root of the legislation. It is likely to produce a much less effective private-sector successor, with consequent damage to technology transfer procedures and, equally important, a reduction in the protection available to patent holders.
In the past, the Government have cited as part of the rationale for their privatisations the need to reduce the drain on public resources when nationalised industries are inefficient and unprofitable. We have already heard that BTG in its present form is not only highly efficient but extremely profitable. Last year, it managed a profit of some £7 million on a turnover of £30 million—a good performance by any standards, and in itself an increase of some 24 per cent. on the previous year.
Nor can it be said that a sale would raise much for the Government coffers: being undervalued, it is likely to realise only £35 million to £45 million. We have often been told in the past that one of the Government's aims is the pursuit of a wider share-owning democracy. That aim will not be served by the Bill, which will not extend share ownership among the general public.
BTG makes no demands on the public purse; quite the opposite. It is accountable to the Secretary of State, but is entirely self-financing—which, I believe, is testament to its success. It continues to benefit from the fruits of its expert judgment, and that of its predecessor bodies, over the past 40 years.

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If the public or the national interest is to be served, BTG should remain in the public sector. When plans to privatise it in 1988 were announced, they provoked an outcry in the scientific and research establishment. Not only is there no demand for the privatisation; there has been an outcry in the world of academia and research. There are two main reasons for that. First, the bulk of BTG's income is derived from technology transfer, largely as a result of its having the flexibility to adopt a longer-term view based on technological as well as commercial judgments. By contrast, traditional venture capitalists seek shorter-term returns from equity investments.
BTG's profits are reinvested through research and investment—the seedcorn of the country's future. They are not paid out in dividends, apart from the amount that BTG is obliged to give the Government. That amount is, in any case, modest. BTG is not driven by the same considerations to which a private company is obliged to give precedence. For that reason, private-sector organisations are inhibited from underwriting the long lead-in times that are often necessary to allow a new product to develop and realise its commercial potential. The Minister ascribed no importance to that aspect, although I am sure that he is aware of it. Venture capitalists typically allow a lead-in time of five to seven years, although many inventions may require 10 to 15, especially in the pharmaceutical sector.
I have mentioned the importance of seedcorn capital. Writing in the Financial Times, David Sawers, an economic consultant, said:
"Most venture capital funds are looking for projects which involve limited technical risk, and can be evaluated primarily on commerical criteria…Fund managers accept that a gap exists in the supply of funds".
BTG has not filled that gap entirely, but it has gone much of the way towards filling it. If it ceases to exist—which is the aim of the Bill—the gap will widen, and many young researchers with good ideas capable of development may well be denied the opportunity to develop them.
The lead-in times that are often required are unlikely to attract shareholders; there must be more attractive options for those involved with venture capital. No less important, however, is the question of patent infringement. Scientific and academic opinion are united in the view that BTG will constitute a more formidable deterrent to patent infringement as a public-sector body than as a private company. As a private company, it would have little clout, and doubtless even less enthusiasm for protracted and inevitably costly legal action. My hon. Friend the Member for Dunfermline, East (Mr. Brown) mentioned BTG's pursuit of the Pentagon in a case not so long ago. It is surely inconceivable that a private company would be prepared to invest the money that it takes to pursue such actions.
Overseas predators, paying lip service to patented products, are likely to see the United Kingdom as a soft touch in future. That would leave our universities cruelly, indeed dangerously, exposed. What price multinational companies riding roughshod over academic and research institutions—particularly given the weak financial position in which many universities and research establishments now find themselves as a result of the Government's consistent underfunding over the past 10
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years? They are simply not in a position to defend themselves if multinational companies choose to brush them aside and carry on regardless. That, too, represents a gap in the Bill, with which I hope the Secretary of State will deal.
Sir Trevor Skeet: The hon. Gentleman is talking about the inability of a private enterprise to proceed with infringement actions. Why should he come to such a conclusion, given that most of the litigation is now private in any event? When the political machine is behind something, it will impose all the inhibitions of politics. It is only because we have a good team here, working together, that this course is being taken. That team will be preserved in the new enterprise, and surely it will proceed with its litigation as it would be expected to do.
Mr. Watson: I did not say that companies were unable to proceed; I said that they would be very reluctant, because of the cost. A company taking over the complete portfolio of BTG might regard, for instance, magnetic resonance imaging as one of the lucrative aspects, and in that event it would clearly be worthwhile to pursue legal action. But, in many other instances, a Japanese or European company might choose to steal an invention, and the company that had bought BTG might decide that it was not worth its while to take legal action.
Over the years, BTG has forged a relationship with the academic establishment as well as with leading companies, which has ensured that the best of British research can be developed into marketable products. At a time when manufacturing industry is on its uppers, we need alternative sources for the future regeneration of British industry. It would be a tragedy if we closed any doors, because people with useful ideas could not see those ideas developed. I fear that that relationship between BTG and the academic and industrial establishments is likely to be destroyed if the privatisation goes ahead.
My hon. Friend the Member for Dunfermline, East referred to the opposition of eminent researchers and industrialists. The New Scientist, a publication respected by many who are concerned with and for the British Technology Group, says:
"If the British Technology Group does go private, the Government will one day have to invent an organisation staffed by people with time to spare to wander through academic research laboratories—an organisation that can act at the cutting edge of innovation to promote ideas that are too tentative to attract hard-nosed investors."
That underscores my previous point regarding legal action.
The British Technology Group does an excellent job, as evidenced by its performance over many years. It makes profits. Far from using up public money, it contributes to public funds, albeit modestly. For the reasons that I have outlined, it should be allowed to continue to do its job. One should bear in mind the old maxim, "If it ain't broke, don't fix it."
5.40 pm
Mr. Phillip Oppenheim: The Opposition's attitude to the privatisation of the British Technology Group is based in part on the hope that BTG in the state sector could become the centrepiece of some type of interventionist industrial strategy. Opposition spokesmen often refer to the need for an industrial strategy, by which I assume that they mean more state

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intervention—which of course means politicians and civil servants making the decisions about the British economy. It is too often forgotten that we have tried such industrial strategies before.
Industrial strategies such as those advocated by the Opposition were tried for about 35 years after the second world war. What did we get out of it? It led to a sorry array of industries—steel, coal, nuclear power, shipbuilding, cars and motor bikes—none of which was a paragon of industrial or economic success. When the previous Labour Government tried to create a rival for IBM through the vehicle of the National Enterprise Board, they sponsored an organisation called Nexos; that, too, was an abject failure. Before Nexos went bust, it had lost more than £30 million. Its main achievement was to import a large quantity of Japanese-made facsimile machines which, after Nexos went out of business, it sold for the sum of £1.
We have tried all that before and it has failed dismally, disastrously and abjectly. It is interesting to note that one of our most successful industries since the war has been chemicals and pharmaceuticals. That is one of the least subsidised industries.
Mr. Gordon Brown: They are two industries.
Mr. Oppenheim: The hon. Gentleman says that they are two industries. Perhaps he is splitting hairs. For his information, chemicals and pharmaceuticals are closely linked. Some of our main chemical companies are also our main pharmaceutical companies. I refer to companies such as ICI.
Our chemical and pharmaceutical industries have been the least meddled with and the least subsidised since the war, yet they remain among our most successful. Two of the industries that have been most interfered with by politicians since the war are steel and aerospace. They lost their share of the international market until the beginning of the 1980s, but they regained a great deal of their market share during the 1980s. To a large extent, they were liberated from Government control, since when they have performed strongly.
The iron and steel industries, which had chronic trade deficits in 1980 after 30 years of meddling and interference by politicians, have made substantial surpluses since then. Last year, the British iron and steel industries registered a net surplus of £1 billion. British Steel is now recognised as one of the most efficient steel producers in the world.
Under the previous Labour Government, manufacturing output fell in the 1970s. When Labour's industrial planners were in charge of the economy—supposedly wedded to the great idea of a strong manufacturing industry—manufacturing output fell. Under a more free market economic regime in the 1980s, British manufacturing output increased faster than that of any other European country.
Mr. Rees: Is the hon. Gentleman saying that manufacturing investment did not fall greatly during the early years of this Government? If he says that manufacturing investment has increased, he must, according to the figures, have chosen a different base.
Mr. Oppenheim: I was referring to manufacturing output, not to investment. Manufacturing output in the 1980s—I accept that that is not the whole of the Government's period in office—rose faster than in any
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other European country. If we include 1979, manufacturing output increased by about 12 per cent., which was faster than the increase achieved by most other European countries. It was certainly faster than that achieved by the previous Labour Government, when manufacturing output fell.
If we consider the raw investment figures, it does not look as though it has increased very much in real terms. However, the quality of the current investment is much better. During the 1960s and 1970s, much of that investment was directed by civil servants and politicians and was wasted; money was invested in unwise projects. A great deal of the investment in the 1980s was of a far higher quality. Investments were made as a result of a myriad of market decisions. They tended, therefore, to yield better results. I suspect that the hon. Member for Dunfermline, East (Mr. Brown) would question that assertion.
Labour's magic solution for our industrial strategy is just as much a red herring now as it ever was. They want a return to the bad old days when politicians made decisions for business men, while preaching that profits are bad and have to be equated with greed or crude materialism. That is hardly likely to help British industry. Simplistic solutions, such as a Government-directed industrial strategy, have been tried before and have failed.
The extent to which such a solution persists in Opposition circles is based on a misreading of Japan's success. Many people hold the mistaken belief that Japan's industrial success is founded on a successful state-industry partnership, as embodied in Japan's Ministry of International Trade and Industry. MITI is not nearly so powerful as is made out by those who use the MITI myth as an excuse for their own failure, or to lobby for more subsidies or more protection at home. Many of Japan's most successful industries have completely shunned MITI interference. In the 1950s, for example, MITI tried to consolidate the Japanese car industry and to produce a people's car on the lines of the Volkswagen Beetle. That was a complete failure. None of the Japanese car companies agreed to co-operate with MITI. The record of the Japanese car industry since then speaks for itself.
Many of Japan's most successful industries have received little help or guidance from MITI. I could quote many examples, but three will be sufficient—photocopiers, excavators and motor bikes. All three have had little involvement with MITI. However, many of Japan's least successful industries have been the recipients of large amounts of MITI aid. A MITI-sponsored restructuring of the aluminium industry left it very weak internationally. Many point to the Japanese steel and shipbuilding industries as the supposed paragons of MITI's interventionist approach. However, when a team of economists visited Japan in 1968, at a time when its steel and shipbuilding industries were rapidly overhauling those of Western countries, they found that MITI's aid to the steel and shipbuilding industries was almost insignificant and that other factors, such as Japan's underlying structural competitiveness, accounted for their success.
Other industries where MITI supposedly had a large hand in Japan's success were computers and electronics, semiconductors and components. However, MITI's subsidies to those industries were minuscule compared with the overall research and development requirement of the companies involved. All the OECD, GATT and World bank reports show that Japanese subsidies to the electronics industry were lower than those for the

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electronics industries in Europe and the United States, where such subsidies have often been disguised in Pentagon or NASA budgets.
There are many reasons for the failure of interventionist policies. Far too often, decisions on whether to invest money are made for political rather than for commercial reasons. A classic example is the British steel industry since the war. In the early 1960s, a private sector steel company was told that it would be given a licence to build a plant in Wales only if it built part of the plant at Ravenscraig in Scotland.
Too often, when Government subsidies are about, it is the most powerful lobbyist—not the industries that really need the money—who gets the largest slice of the cake. Too often, the industries that are promoted by politicians are simply unsustainable for the underlying fundamentals of the economy. Quite often, they are simply too advanced.
I am thinking, for instance, of the attempt by the European Community to foster a semiconductor industry. So far, it has been an abject failure. It has swallowed vast sums of money, yet the European semiconductor industry, in international terms, is something of a joke. Too often, interventionism leads to the creation of national champions. They often have semi-monopolistic positions in their home markets, and the result is to divide up the overall market, leading to a plethora of national companies, very few of which are strong global competitors.
This, surely, is the story of intervention in Europe as a whole. Consider the electronics sector or even the car industry in Europe. Over the years, almost every European Government have played the game of subsidising, aiding and protecting their national car industries. National car industries, national steel industries and national electronics industries in Europe have fairly strong positions in their home markets, yet Europe as a whole has very few international players.
Above all, intervention and subsidies almost always lead to misallocated investment and wasted resources—resources that could better be employed elsewhere in the economy. Consider, for example, the huge sums of money and the huge amounts of skilled manpower that were invested in Britain's nuclear power programme in the 1950s and 1960s in an attempt to build an indigenous nuclear power capacity to rival that of the Americans. At the time, everyone knew that it would be cheaper to buy American technology. One must ask how much more good the vast resources and the investment in highly skilled manpower that went into that project could have done if market forces had directed them elsewhere in the economy.
Those are the reasons for the failure of interventionist policies. I urge hon. Members who may be inclined to point mistakenly to the supposed successes of interventionist policies in Japan to point, instead, to the failures of interventionism elsewhere. When I say that, I am not referring just to the eastern bloc. A sorry array of developing countries thought that the way to industrial and economic success was to have a centrally planned and controlled economy, with politicians, rather than business men, making the decisions. All those countries are now paying the price.
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Consider the disastrous state of the Brazilian and Indian economies. Consider the way in which Brazil and India have tried to build indigenous computer companies, to develop space programmes and to engage in other types of nonsense. In those cases, the failure of interventionism is very stark. Having politicians make decisions that business men should be making leads to complete misallocation of resources, and that harms the overall economy.
Mr. Keith Mans: Does my hon. Friend agree that Brazil is now taking our route—reducing interventionism and encouraging foreign investment with no strings attached?
Mr. Oppenheim: My hon. Friend is right. I am full of admiration for President Collor and what he is trying to do in terms of liberalising the Brazilian economy, tearing down trade barriers—Brazil was one of the most protectionist countries in the world—encouraging foreign investment and the internal economy and privatisation. I am also full of admiration for the way in which he is combining that with a strong environmental policy aimed at maintaining the Amazon rain forest and looking after the rights of the Indians. Truly, President Collor is a great man, but he is struggling with all the vested interests and all the heavy baggage of Brazil's industrial and economic history. Looking at Brazil's present position, I fear that his plan may fail, simply because the burden of the past is far too great. I wish him the best of luck, and I certainly hope that he will succeed.
My hon. Friend's intervention came at an opportune time. I was just about to say that, bearing in mind the almost indecent haste with which central planning is being abandoned all over the world—not just in the eastern bloc, but in countries such as Brazil and even, to an extent, India —the Opposition might finally have got the message and might have dropped their predilection for interventionist policies and industrial strategies. That is not to say that there are not lessons to be learnt from countries like Japan and Germany, which are sometimes wrongly held up as being interventionist paradises. There are lessons to be drawn from Japan and Germany. However, the contention that those countries have succeeded as a result of interventionist policies is simply wrong.
Certainly there is plenty that Governments can do to help their economies. For one thing, both Japan and Germany have excellent, although not expensive, education systems. Clearly, in this country we have much to do to gear our education system more closely to the needs of industry. That is something that the Government can do. On the surface, it appears that Labour have grasped how crucial to the economy is a successful edcucation system. However, their answer is simply to throw more money at education. That ignores the fact that the Japanese spend less per pupil than we do, yet their results are far better.
Mr. Robert B. Jones: Does my hon. Friend agree that the education system in Germany reflects what we started to have—technical schools, grammar schools, and so on—and that that is precisely what Labour, when in power, have tried by every means to eradicate?
Mr. Oppenheim: My hon. Friend makes a very good point. Indeed, the parallel could be extended to Japan.

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Germany and Japan both have two-tier education systems and there is no in-built bias against vocational education such as one so often encounters in this country. In academic circles there is no snobbery regarding vocational education. There are, of course, other reasons for the success of German and Japanese education. One is the concentration on literacy in science and maths, and another is that children there work 42 to 50 per cent. longer hours than do children here. We can learn many lessons from their highly successful education systems.
The point that I was making is that throwing more money at education, in an attempt to gear it better to our economic system, is unlikely to succeed. That ignores the fact that the least successful education authorities—least successful in terms of results—are those that spend the most money. Incidentally, all those are Labour-controlled. I do not see how appointing peace studies inspectors, or keeping one quarter of total funds back for central administration, or packing school governing bodies with political supporters of the local council, all of whom have an innate hostility to industry, or having economics teachers who preach the supremacy of socialism, is the way to gear our education system to the needs of industry.
Another lesson that we can learn from the Japanese and the Germans is that public spending must rise in line with what the nation can afford, and that encouraging savings is a good way to bear down on over-consumption and inflation and, at the same time, help to provide a pool of capital for industry. Unfortunately, everything in Labour's policies—from the investment income surcharge to the encouragement of high-spending, low-performance, left-wing education authorities—demonstrates that they have not yet grasped this fundamental truth.
The Opposition spokesman claimed that his opposition to the privatisation of BTG was to a large extent based on the need to retain a Government-run research base in Britain. I contend—although I accept that this is not a very fashionable view—that lack of research is not our problem. It is worth remembering that Britain is still a net exporter of industrial technology licences. Japan and Germany, on the other hand, are still net importers of industrial technology licences. We need not so much to improve our research and development as to improve our production and marketing capabilities. The best research and development in the world does not do much good if one cannot produce the goods properly and get them to the market effectively.
Here again, we can learn lessons from the Japanese experience. It is worth remembering that in the early years of Japan's industrial development, the Japanese were major purchasers of industrial licences. That was often sneered at as being simply copying, but it helped the Japanese to develop extremely fast. It also allowed them to concentrate more of their resources on production and marketing. Of course, as Japan became more powerful as an economy in the 1960s and 1970s, it moved on from simply copying or reproducing western products to improving those products, and in the 1980s, as it became the leading economy, it started to innovate far more and to conduct far more of its own research.
The same happened in the United States. In the early phase of industrial development in the 19th century, it was sneered at by the British as being a mere copier, but the Americans, in turn, moved from being mere copiers to
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being improvers, and eventually became great innovators —and now, in their turn, they sneer at the Japanese as copiers.
The cycle of economic development for nations in terms of technology and research goes from copying to improving and then to innovating. It is natural for an economy at the top of the scale to innovate. For an economy such as Britain's, which is trying to grope its way back to some sort of industrial respectability after many decades of abject decline, it is important to spend more of its resources on improving manufacturing and marketing rather than on basic research, much of which, historically, has been exploited by other countries because our manufacturing production and marketing capabilities have not been as strong as they should have been, despite some major improvements in the past decade.
Far more important than a state-sponsored research body is to encourage industry to look further afield and be more prepared to buy in licences from abroad and be more open-minded about buying in technology from overseas. The "not made here" attitude that has characterised much of British industry since the war and led industry to be less than open-minded about foreign technology has done our industry a great deal of damage and shows that the need for a state-run research body is extremely dubious.
The Opposition spokesman said that he would not renationalise BTG if Labour came into office. If that is the case, why do the Opposition oppose its privatisation? I believe that this is part of a sorry charade of inconsistency by the Opposition. They have opposed every privatisation programme put before the House by the Government. Yet companies such as Amersham International, Rolls-Royce and British Airways have proved that they can be far more effective international competitors in the private sector.
Mr. Robert G. Hughes: Surely there is no mystery about why the Labour party is opposing this measure, as it has opposed every other privatisation measure. The reason was made clear in a statement by the hon. Member for Dagenham (Mr. Gould). On BBC's "On the Record" on 17 September 1989, he said that the Labour party is against all privatisations because they provide for the element of private profit-making. That has always been the basis of its position. Presumably the Labour party is against anyone making any profits out of anything.
Mr. Oppenheim: There seems to be a dichotomy in the Opposition's attitude. They are always telling us that our industry must do better and that they believe in manufacturing, but there is still an inbuilt bias in the attitude of many Opposition spokesmen—not all, since some of them have come on recently—against profit, which they equate with greed and crude materialism. It emanates from their view that human nature is perfectible and that anyone who moves away from their idea of the perfect society should be discouraged and kept down. They seem to believe that politicians and civil servants should make all the decisions.
The Labour party should look at successful economies such as Germany and Japan where there is no inbuilt hostility to money-making, business, commerce and profit. They do not have the outdated 19th-century attitudes that still permeate the British Labour party.
As I said, the Opposition have opposed every privatisation measure, but companies such as Amersham

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International, Ross-Royce and British Airways have proved that they can be more effective in the international marketplace when freed from the control of politicians and civil servants. None of those companies has asked to go back into state ownership. All over the world, countries are not nationalising their industries but privatising them. They are not increasing state intervention in industry, but reducing it. It is sad that the Opposition spokesman and Opposition Members in general have not yet learnt that fundamental lesson.
6.4 pm
Mr. Simon Hughes: If I were an employee, perhaps an engineer, of the British Technology Group listening to the debate, I would think that there was a great philosophical political debate going on above the head of my organisation. The hon. Member for Amber Valley (Mr. Oppenheim) made some perfectly valid and pertinent points about comparison between us and Japan and Germany, and so on. However, we are not talking about just another public sector industry. We are not talking about the steel industry, the coal industry or a company such as Cable and Wireless which, as part of the manufacturing sector, happened to be in public ownership. We are talking about a unique institution which, to use the words available to every hon. Member in the first sentence of the note provided by the House of Commons research staff, is the world's leading technology transfer organisation.
BTG is one of the bodies created intentionally by the Government as an amalgamation of organisations in the public sector to do a specific job. BTG's job is to be a bridge between science, learning and invention and manufacturing, production and economic success. The argument about whether it should be in the public or private sector does no justice to the correct analysis of the role and function of BTG which is that it is there to provide a particular form of assistance so that the private sector can do its job properly. It is there so that science and invention can pass on, through a group of people with expertise, the ability to make us successful, whether we sell our licences to this country or abroad. Therefore, the great polemical debate is out of place.
I hold no brief for a general renationalisation or public ownership programme that may or may not be advanced by the Labour party at the next election. My hon. and learned Friend the Member for Montgomery (Mr. Carlile) and I, together with all our other colleagues, do not have a partisan public/private sector view. We do not have a dogmatic view about whether things are better in the public or private sector since this depends on all sorts of circumstances. We are not against the idea that the market place is usually the best way for corporate enterprise to succeed. However, we are talking today about a different and unique body. If we focus our attention on the nature of BTG, we can begin to address its concerns and the concerns of many others about its future if it takes the path that the Government have charted for it in the Bill.
The Minister prayed in aid the support for privatisation of the senior management of BTG against the wishes of the majority of its work force. The parallel that suggested itself to me was the recent example of the popularity among a small minority of people in certain sections of the health
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service for self-government of hospitals within the national health service, against the view of the majority of the work force who would rather the hospitals remained integrated as part of the local district health authority.
I understand that there may be a view within the management of BTG which says, "We think that we can go out into the big wide world and, because we are already profitable and successful, we can go on being more profitable and successful." However, there are other considerations which I hope that the Ministers will address. To be honest, I have not heard them adequately addressed yet. I was sad about the Minister for Corporate Affairs' speech. He is capable of making an intelligent and cerebral speech, but he made a party political knockabout speech, which belittled his intelligence and the importance of the issue.
The first matter—I shall be brief because this was dealt with by my hon. and learned Friend the Member for Montgomery and in exchanges across the Floor—is that the Government have not come clean about the advice that they have been given. It appears that the advice that they have been given internally is in favour of keeping BTG in the public sector.
It also appears from the partial consultative exercise with the universities, that they also do not want a privatised BTG in the form envisaged by the Government. The Under-Secretary quoted the majority view of the universities and the Committee of Vice-Chancellors and Principals. A majority of them wanted BTG to continue as a private foundation or trust—as a special body in which they conjointly had an interest and which would act as the technology arm to which their research activities could be linked. The universities did not argue for the wholesale divorce of BTG by letting it go off into the private sector sea to be bounced around and bought and sold by whoever came along under whatever conditions were imposed, let alone while we have not heard of those conditions because the Government have no idea about them.
Next, the hon. Member for Amber Valley considered whether we should tie up significant public funds in an organisation that could function equally well in the private sector. He knows—as does anybody else who has considered the issue—that we are not talking about large amounts of public sector funding or about the Government pouring enormous sums into this particular pit, let alone into a bottomless, non-profit-making pit which is a drain on the economy.
It is exactly the reverse. BTG's total income last year was £29·5 million. The operating profit after tax was just short of £7 million. Of course there is a drain if it must pay off a certain amount to the Government. It has to pay a significant amount and that may be an argument for changing that relationship. The £6 million which is siphoned off may be able to be put to better use, but that is not an argument for saying that it is a big drain when looked at as a whole or that it is a loss-making enterprise. It is not. It is successful and we are talking about relatively small amounts of money if we consider the public exchequer expenditure overall.
If we bear that in mind, the argument should not be whether to cast off BTG and let it go unprotected into the private sector or whether it stays where it is. We could properly debate alternative models for BTG. Certainly, my colleagues and I would not argue against that approach, although there are certain criteria that must be fulfilled before we would be happy about any new model.

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The Government have commissioned a study, the conclusions of which they have not shared with us, so this is a debate in the dark. We conclude, therefore, that the reason that BTG is on the agenda is that it has been spotted as a remaining public sector enterprise about which the Government have a straightforward and dogmatic view. That is the only justification.
The right hon. Member for Morley and Leeds, South (Mr. Rees) is, coincidentally, a constituent of mine and a near neighbour of the BTG's headquarters at the Elephant. He has an interest in this debate and I shall be brief in order to allow him to catch your eye, Mr. Deputy Speaker. He asked one of the most pertinent questions: how do we know that the new regime will guarantee the three Is that he identified, of which I shall mention just two —the integrity, and independence of the enterprise that the BTG has been? We are worried that Britain will lose a resource which is currently so successful because it has the confidence of scientists and of inventors. Those people can go in confidence to BTG knowing that their ideas will be respected and not be at risk of being exploited or put into the private sector without the protection that they seek.
The danger of the loss of independence is that the supply of ideas and inventions will cease. That is obvious. If the new regime does not have the same integrity and if scientists and inventors do not believe in it as a body in the scientific and research technology world, they will not use it. They will not supply the ideas and inventions as they have in the past.
The BTG is trusted not to disclose ideas to other people. It is trusted not to pinch ideas and to pretend that they belong to someone else or to sell them at a profit. It is trusted to give a good technical assessment of an idea. It is trusted to ensure that the procedure for licensing the technology will work and will be carried out effectively.
As BTG is in the public sector, there can be no conflict of interest. In the private sector, there is bound to be such a conflict. Yesterday for the first time I visited, relatively privately, one of the private hospitals that have sprung up in my constituency. It is opposite Guy's hospital. It is important to see what is happening. The private sector must have a conflict of interest about where it takes its patients from or what it does to maximise its profits, because it is a profit-making enterprise. If a body is in the private sector and has a profit-making motive, there will be conflicts of interest—whether to maximise profits or to maximise investment and research, and we risk losing the technological advantages that BTG has had.
Will people have the same confidence in a profit-orientated private sector company that they currently have in a commercial but non-profit orientated company which is in the public sector and seen to be accountable to Parliament? Clearly one must at least be sceptical, and the probable answer is no.
Another concern is that there is a special relationship between BTG and the science funding organisations, as mentioned by the hon. Member for Bedfordshire, North (Sir T. Skeet). The logic of his intervention would be to privatise the research councils. There would be no merit in keeping any agency close to Government to ensure that activities of scientific research and of technological importance were carried out. I heard the rather unusual view of the hon. Member for Amber Valley that Britain should reduce the amount of its research, not increase it.
Mr. Oppenheim: No.
Mr. Hughes: I listened carefully. He argued that we should concentrate on manufacturing and production rather than on funding research which is then used abroad. I am not against concentrating on manufacturing and production, in which we have been weak, but I dissent strongly from the view that we can afford to reduce the amount of research carried out in Britain, let alone non-private-sector-led research.
One of the greatest problems that the scientific research community continually bemoans is the fact that scientific research in Britain is too demand led by the private sector and that there is too little blue sky research. Pure research is now at a premium in terms of funding. We risk creating the same problem in the context of technology that we already have in purely scientific research. This is a problem which we should address now rather than bemoan later.
Another of the merits of an organisation such as BTG has been that it has been a long-term institution. It has supported people for two, four, six, eight, or 10 years to develop their ideas to fruition. Sometimes a good idea can take eight or 10 years before it generates profits and may need experts working together to support it from its original concept to exploitation. In the private sector, the danger would be that long-term, difficult ventures would not be supported. The private sector would go for short-term profits. There would be no guarantee of long-termism. Additionally, all the factors that have been built up as a support—the additional education given to researchers in BTG, the benefit of a cross-relationship between people from different disciplines working together in a sort of technological hothouse—are at risk of being lost.
The real threat to BTG is that the Government would take a dogmatic view if the Bill were passed. Parliament would enable it to be sold. We would have no guarantee that we should retain close to the Government or to the public sector anybody at all to be accountable to Parliament and to carry on the work which, according to any record or assessment, has been extraordinarily successful. Why on earth are we running the risk of throwing away what has proved itself an eminently successful, complementary part of Britain's industrial, technological and scientific activity in the past 20 or 30 years?
There have been many failures in industrial terms, but BTG has not been one of them. It has been one of our successes and it has brought about many of our successes. It seems folly to throw away a proven success for a future that is, at best, extremely uncertain.
6.19 pm
Dr. Keith Hampson: I am in something of a dilemma. I appreciate the arguments put so effectively by many of my hon. Friends, and I apologise to a couple of them whose contributions I missed—especially my hon. Friend the Member for Bedfordshire, North (Sir T. Skeet), whose approach, I suspect, is similar to mine.
On the one hand, it seems to me to be eminent good sense to privatise BTG. We have heard from a number of hon. Members just how unnecessary many of the bureaucratic regulations are. It seems quite unnecessary, for example, that BTG should have to go to Ministers in respect of certain levels of investment and to have its appointments approved. Also unnecessary is the general

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involvement of Government officials in scrutinising BTG and so on. BTG should simply be getting on with making sound academic and commercial judgments.
On the other hand, Opposition Members—and, I suspect, my hon. Friend the Member for Bedfordshire, North—have made valid points about the national interest. Collectively, Britain has been under-investing in research—I stress the word "research". I fully accept the central point of my hon. Friend the Member for Amber Valley (Mr. Oppenheim) that, in many respects, there is no point in researching unless one can develop products from one's research. Nevertheless, the research itself is fundamental.
As the hon. Member for Southwark and Bermondsey (Mr. Hughes) pointed out, one must strike a balance between blue sky research and research that is directly industry-driven. That balance was skewed the wrong way, and the Government have rightly tried to swing it back to ensure that there is more industry-related research. There is a huge investment at stake, and in the past we were simply not using our talents as well as we should have been in the generation of products. We have an unrivalled Nobel-prize-winning record, yet many of the breakthroughs that we were achieving were being developed elsewhere—notably in Japan.
The Government have established various means of getting the higher education institutions and research establishments to relate more closely to industry and to discover what industry wants. The LINK initiative immediately springs to mind. We have also encouraged universities to develop science parks. Moreover, as I said in an earlier intervention, most universities now have their own company structure through which to try to exploit their research efforts and patents and that has been very valuable. But we cannot swing the balance wholly in favour of near-market research. There is still a vital need for blue sky research—research driven by the exigencies of the research programme and the ideas of those pursuing it which, throughout our history, has thrown up breakthroughs that are directly relevant to product development that no one initially foresaw.
We have under-invested in relation to our major competitors—notably the Japanese and Americans. A high percentage of our research investment is geared to the military—a consideration that the Japanese do not have. In large measure because of the short-termism of the City's outlook, British industry has shown an unwillingness to invest in its own plant and research facilities, just as it under-invests in training. Since the war, we have had a history of economic cycles and, in periods of downturn, when management rightly have to cut their overheads, the two first victims tend to be training and research.
As a result, whereas we have remained fairly static in terms of civil research investment, our competitors have steadily moved ahead. One can look for figures that approximate our research effort to those of our competitors and compare percentages of GDP, but even in those terms the gap is widening. Our economy has not done terribly well; percentages of GDP hide the real truth —that, in absolute terms, the amount of cash that we invest is much smaller than that invested by Japan, the United States and even Germany.
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That problem must somehow be addressed. The Japanese and the Americans are trying to establish increased collaboration between the academic, higher education and research worlds and companies. The promotion of such collaboration was precisely the role conceived for BTG—or its predecessor body—which was to act as a sort of academic broker. When the group was first launched—at a time when there was a shortage of all the other initiatives to which I have referred—it was the only body that was pretty close to industry and knew some of the directions in which industrialists wished to develop products. The group could scour the higher education markets to find out where research was being done and then establish the extent to which potential development from it was possible.
Most of our major competitors do that in one way or another. The Japanese economy is driven by huge corporations which are ruthlessly competitive, even within the electronics and car industries. Nevertheless, when the Select Committee on which I have the pleasure to serve went to Japan to look at the information technology industry, we found that, in all sorts of different ways—some direct and some indirect—the Japanese Ministry of International Trade and Industry encouraged pre-competitive research effort and collaboration. In the light of that, the United States has had to encourage its companies to engage in pre-competitive research collaboration.
The decision to privatise BTG does not mean that there is not a need for Government, industry and research establishments to work together under partnership arrangements that enable them to make the best use of the limited investment available. On the other hand, Opposition Members are to prone to confuse mission and ownership. I remember vividly our arguments about the polytechnics. For more than a dozen years, I argued that polytechnics should be removed from local authority control and made part of our national investment in higher education. We heard the parrot cry from Opposition Members that the distinct mission of the polytechnics was to relate closely to their local communities and to serve the requirements of local commerce and industry. Opposition Members said that the polytechnics should be owned by the local community—in other words, the council.
That is nonsense and has been shown to be nonsense. Universities, which were not owned by councils, engaged in distinctive local community activities and served local industry. Leeds university is an example. Moreover, since the polytechnics have been removed from councils' control, they have continued to be geared primarily to the local community. There is no reason at all why BTG should not continue to be the academic broker that it has always been. The academic community has trusted BTG with its ideas in the past. Why should it not continue to do so? It is conceivable that one of the options that the Government will consider is a management buy-out. If that happens, BTG will have the same people, and largely the same approach, and it should command the same trust.
The brokerage role is very important, but it could be even more important. I would expect the BTG in the private sector not just to tap the brilliance of our own research effort but to open itself to a wider range of partnerships, enabling it to tap into research elsewhere in the world.
I do not know whether hon. Members mentioned the two notable examples during my absence from the

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Chamber. Because the BTG is a state corporation, it was prohibited from having access to French research endeavours. The French Government did not want the British Government to get their hands on projects that they were funding. As we all know, there was an attempt to establish a joint venture agreement with a Spanish company to tap in to research there. That was exactly what should have been done. British industry should have access to the research effort worldwide. The Spanish Cabinet became involved in the negotiations, and the whole thing fell flat.
There are perfectly sound reasons why the brokerage role could be even greater and more successful for Great Britain Ltd. if BTG were privatised, provided that it is not sacrificed on the anvil of total free market forces and, as soon as it is privatised, a large predator does not come along with the narrow, short-termist thinking which prevails so often in the City. It could buy it up and then either wipe it out of existence or divert it into some other international conglomerate's interest. That predator could be a Japanese bank. It has already been said that BTG should not become locked into a particular part of its activities. For example, the group has a wide range of connections and partnership arrangements with the pharmaceutical industry. Clearly it would be wrong for one company to be allowed to buy up the group.
I finish with this plea. We must examine the options for the privatisation format—a trade sale, a management buy-out, or a consortium, which was mentioned earlier. I should like to know exactly what a consortium would entail. I foresee that the best solution would be to put the group in the private sector, with strict guarantees for all academics who have patents with it already, so that the present arrangements are not at risk.
There should be guarantees that the present relationship, partnership and trust with the academic world will remain, so that exploitation and transfer of technology can continue. We could also consider a Government golden share, at least for a short time, so that the trust can be maintained and people abroad can see that the group is not vulnerable to immediate takeover by predators. French and German companies, for example, or the German Government could then believe that we had a respected body which was not Government-owned but was Government-protected. Companies or Governments would then be more ready to participate in collaborative efforts on research initiatives. If we can establish a framework which gives those guarantees, the university world, the industrial world and Britain as a whole will benefit.
6.32 pm
Dr. Lewis Moonie: I have listened with great interest to the speeches of Opposition Members this afternoon. The hon. and learned Member for Montgomery (Mr. Carlile), the hon. Member for Southwark and Bermondsey (Mr. Hughes) and my hon. Friend the Member for Glasgow, Central (Mr. Watson) made thoughtful speeches, which added to the opening remarks of my hon. Friend the Member for Dunfermline, East (Mr. Brown) many questions which the Government must answer. I shall pass mercifully over most of the speeches made from the Conservative Benches. Words
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such as "banal" flitted through my mind as I listened to them, but perhaps it would be more merciful not to allocate the term to any individual.
Yesterday I read an interesting snippet in one of the newspapers. It gave a quote from a Conservative Member of the European Parliament, Lord O'Hagan. He referred to "Calibans of the intellect" on the right wing of his party. Until I heard the Minister's speech today, I wondered exactly what Lord O'Hagan had in mind, but it is all much clearer now.
The Government have presented a pretty thin case for privatisation. We can see why the Secretary of State conveniently chose not to introduce the Bill, but to absent himself from the premises. Clearly, one debate this month with my hon. Friend the Member for Dunfermline, East was enough for him.
Instead of using the generous time available to him to present a coherent case, the Minister for Corporate Affairs spent his time largely on childish abuse. In doing so, he gained no respect for his superficial and flippant attitude to a serious issue.
As today's debate draws to a close, it is worth taking a few moments to reflect on the statutory function of the British Technology Group, as laid down in the Development of Inventions Act 1967. They are:

"(a) securing, where the public interest so requires, the development or exploitation of inventions resulting from public research…

(b) acquiring, holding, disposing of and granting rights (whether gratuitously or for consideration) in connection with inventions resulting from public research…

(c) promoting and assisting, where the public interest so requires, research for satisfying specific practical requirements brought to the knowledge of the Corporation, where they are of opinion that the research is likely to lead to an invention; and

(d) assisting, where the public interest so requires, the continuation of research where it appears to the Corporation that the research has resulted in any discovery such that the continuation may lead to inventions of practical importance."

Those four points outline the importance of the national interest in the debate today, an importance which was not properly touched on by the Government. Assuming that those remain the key objectives of the British Technology Group, it is surely up to Ministers to show why those objectives would be better served in the private sector and how they propose to safeguard them. The comments made so far have sadly been of little help.
For example, in the interview with The Observer to which my hon. Friend referred, the Secretary of State said:
"The bureaucratic constraints which inevitably impose themselves on statutory bodies are preventing BTG from achieving its full potential. The Government's objectives are to ensure that more, and stronger links are forged between industry and science."
What bureaucratic constraints cannot be removed? How will privatisation of BTG strengthen links between industry and science?
Sadly, the substitution of dogmatic assertion for clear argument is all too typical of Ministers today. That is why they have failed to convince anyone of the necessity for or the validity of privatisation. They have failed to convince the vast majority of the staff of BTG. They have failed to convince inventors, whose patents are handled by BTG. They have failed to convince eminent scientists working in research. They have failed to convince financial observers. I refer the Minister for Corporate Affairs to comments made when privatisation was first mooted two years ago to

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back up the assertion that privatisation was necessary. They have certainly failed to convince, and in this instance also failed to consult, the vice-chancellors and principals of the universities.
The Government have even failed to convince their own advisers. Despite their reticence, we know that Ministers were advised in 1988 that BTG would be better left in the public sector. That is why they have refused to publish any part of the report. It was not because of any issue of commercial sensitivity or anything else: it was merely that the conclusions of the report are inconvenient to Ministers. How, otherwise, can it be right to privatise now, when venture capital is scarce, rather than two years ago, when it was still plentiful?
It is not as if the alternative of a private company has not been tried before by the Government. In the mid-1980s, the then Secretary of State for Defence, the right hon. Member for Henley (Mr. Heseltine), impatient with what he regarded as the inefficiency of BTG in the public sector, set up Defence Technology Enterprises to capitalise on innovatory ideas in his field. The money was provided, somewhat reluctantly, partly by BTG and partly by private institutions. The company came back to the funders for more money a year later. It came back again a year after that. By that time, BTG had had enough and said, "No thanks, we are not putting up any more money."
Two years after it had been set up, Defence Technology Enterprises folded, unable to cope with the twin problems of under-capitalisation and the demand from City investors for an immediate return on their money. Is that what the Government have in mind today for the British Technology Group?
I wish briefly to recap on the reasons why we oppose the sale of BTG. We do not believe that the traditional arguments which the Government advance in favour of privatisation hold in this case. There will be no extension of share ownership. The shares are worth only about £35 million, assuming that the Government abstract the £20 million-worth of working capital which BTG must retain in order to function. I can hardly see the Government selling that off. Little revenue will accrue to the Treasury. The costs of the sale are already substantial and are likely to go up still further. Opportunities for competition after privatisation are likely to decrease rather than increase. There is not the slightest justification for the sale on grounds of efficiency, because BTG is already highly profitable in the public sector.
It is in the national interest to have a public sector body to take responsibility for developing ideas from publicly financed universities and polytechnics. It has a crucial role, as it allows a long-term view of projects to be taken. The sale of BTG represents the Government's abandonment of one of the few examples of long-term thinking within their Administration—BTG will be abandoned to a market that acts as though it is unaware of the meaning of that phrase.
BTG owns a stock of 8,500 patents, and the cost of renaming them will be enormous—again, a waste of money. It regularly takes legal action against people who infringe its patents, but that may not necessarily be true of a private company that is constrained by the demands of its shareholders for a return on their investment.
Perhaps the most important reason for opposing privatisation now is the one that made the Government
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refrain from privatising two years ago—the many conflicts of interest and problems that will beset the Government when they try to sell the company. Those problems were highlighted in the report to the Government by their advisers. I am certain that no sensible person would be in favour of a single large company being given the go-ahead to buy BTG, although some might be attracted by that idea. There is nothing in the Bill to suggest that the Government have found a way out of their dilemma.
I have listened in vain for the slightest logical justification for the proposed privatisation of BTG. That absence has led me to the inescapable conclusion that, once again, dogma has triumphed over reason, prejudice over good sense.
It is no accident that BTG has flourished in the public sector. The translation of new ideas into successful products and techniques is a long, hard process beset by disappointment and frustration. That task needs patience and the ability to see beyond the next quarter's figures or the next year's dividend.
A consideration of the range of products and inventions with which BTG is now presently associated gives one some idea of the hard task undertaken by it. In science, it is considering assays of blood constituents and the production of monoclonal antibodies. In materials technology, one of the key areas of development today, it is considering the production of high-performance plastic fibres. It is also involved with the development of advanced semiconductors. Its pharmaceutical work includes the development of anti-cancer drugs, various pain killers and the therapeutic use of monoclonal antibodies. BTG is also responsible for a wide range of potentially beneficial products in engineering and electronics.
A long-term approach is sadly lacking in most sectors of British industry. Perhaps I have a biased view, as I worked for several years for the pharmaceutical industry, which is the best exponent of such an approach.
Sir Trevor Skeet: Glaxo, Smith and Nephew, and Beecham are in the private sector. If such companies can undertake such long-term work—the hon. Gentleman has already acknowledged that—why not put BTG in the private sector as well?
Dr. Moonie: Obviously Conservative Members have no idea what early technology transfer is about, so it is difficult to convince them of the difficulties of operating in such work. BTG undertakes much of its work before there is any evidence that a specific product is likely to be successful. It takes out patents in no secure knowledge that there will be a return on them. It must look 10 or 15 years ahead.
The pharmaceutical industry may undertake such long-term work, but pharmaceuticals represent just one sector of BTG work, which covers every area of invention. I do not want to repeat myself, but I have already cited the number of sectors in which BTG is involved. I do not believe that researchers or other companies would be happy if a company owned by another pharmaceutical firm, however reputable, took over their ideas and developed them. Those other companies would have taken leave of their senses if they welcomed such a change; that is why so many of them are opposed to BTG going into the

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private sector. It should remain where it has carried out its job efficiently and well for many years—it should remain in the public sector.
By privatising BTG, the Government have confirmed that they are incapable of seeing the value to our nation of such an asset. I hope that, on reflection, they will think again. The privatisation of BTG is being carried out merely for privatisation's sake, despite the damage that that will cause to British industry, science and technology. That is why we shall oppose the Bill.
6.45 pm
The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Edward Leigh): Let me deal with the essence of the debate: should BTG be privatised? Should it operate fully within the stimulus and realities of market conditions, or should it be used as an instrument of state intervention?
The hon. Member for Kirkcaldy (Dr. Moonie) should know that Britain's total research and development effort amounts to £6·9 billion spent by industry and £4·5 billion spent by the Government. A total of £11·4 billion is spent on research and development. Last year, the research spend of polytechnics and colleges amounted to £1·5 billion, while BTG's spend on projects and patents was a mere £11 million. The House should set the debate in proper context—BTG spends £11 million, while the value of total research effort in this country is equivalent to more than £11 billion. Those figures suggest that BTG's contribution amounts to less than one tenth of 1 per cent. of total United Kingdom spend on research and development and less then 1 per cent. of the moneys available to its traditional inventive resources—
Mr. Watson: Why the fuss to privatise BTG?
Mr. Leigh: It is the Opposition, not us, who are making the fuss.
BTG has a staff of just 188 and a turnover of £30 million a year and by most estimates it would rank as a small to medium-sized enterprise.
In 1985 BTG lost the right of first refusal of public sector inventions and with it inventors lost what they considered to be an implied right that BTG should exploit their inventions. Now the whole purpose of BTG is to turn inventions into profit. It is a commercial company.
The hon. and learned Member for Montgomery (Mr. Carlile) got it right—BTG is primarily a patent-creating mechanism to defend ideas in the increasingly predatory international marketplace. BTG chooses inventions and exploits the science base for one purpose only—profit. BTG, having chosen and patented a product, negotiates the sale and licences it with revenue-sharing agreements.
The hon. and learned Member for Montgomery made a characteristically frank and robust speech, but he should know that, by its very nature, the work of BTG is already commercial. It is already a commercial, profit-making enterprise, and it therefore sits uneasily and unnaturally within the statutory framework. The case for privatisation is as simple as that.
The hon. and learned Gentleman said that he generally favours privatisations, but the hon. Member for Southwark and Bermondsey (Mr. Hughes) was less sure. The case is simple—BTG is a profit-making, commercial operation, and there is simply no reason why it should not be privatised.
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BTG's operating profits have averaged more than £4 million a year, rising to £6·8 million in 1989–90. It has been self-financing for more than 20 years and it is involved in 1,600 inventions, 8,500 patents and nearly 500 licences. BTG is a strong, indeed an obvious, candidate for privatisation. It is not surprising that the management of BTG has been pressing for privatisation for some time.
The hon. Member for Dunfermline, East (Mr. Brown) asked a question of my hon. Friend the Minister which my hon. Friend was unable to answer at the time. It related to an alleged publicity campaign concerned with privatisation. It is not surprising that my hon. Friend could not reply. First, BTG has its own public relations budget and Ministers in the Department of Trade and Industry are not consulted; secondly, it is merely a proposal from a public relations company to BTG and BTG has not yet adopted the campaign. So how my hon. Friend the Minister of State could be expected to know about it, I do not know. The hon. Member for Dunfermline, East made great play of that. What I have said is surely the end of it.
I can tell the hon. Member for Glasgow, Central (Mr. Watson) that management look forward to being freed from restrictions on its borrowing powers and obligations to submit approvals to the DTI. Also relevant is the inappropriateness of the domestic statutory duties laid on BTG decades ago and the direction which BTG wants to take on the international stage. Already BTG derives some 70 per cent. of its licence income from outside the United Kingdom, mainly from Japan, the United States and the European Community.
I welcome my right hon. Friend the Secretary of State back to the Chamber. He has just arrived back from India, where he was opening the largest ever trade fair there. BTG was exhibiting at that fair. No doubt the whole House was unimpressed by the carping remarks by some Opposition Members about my right hon. Friend.
Points about BTG's international involvement were made forcefully by my hon. Friends the Members for Bedfordshire, North (Sir T. Skeet) and for Amber Valley (Mr. Oppenheim). My hon. Friend the Member for Bedfordshire, North made a very pertinent point about BTG being unable to exploit a patent in Turkey.
Sir Colin Barker, BTG's chairman, heads a successful international profit-making organisation. He looks forward to BTG entering private life as an independent and integral organisation. I assure my hon. Friends the Members for Bedfordshire, North and for Leeds, North-West (Dr. Hampson) that we believe that our objective of privatising so as to maximise the net returns to the Exchequer, consistent with a good prospect of BTG's technology transfer activities continuing, is the correct way forward.
That objective provides the flexibility to accommodate the privatisation options of public flotation, private placing, trade sale, or management buy-out, and the involvement of any parties with potential interests, such as companies, universities, institutions and BTG's staff. It recognises the reality that the future of a privatised BTG must essentially be a matter for its new owner, management and staff.
I was delighted to read the comments of the hon. Member for Kirkcaldy in The Independent yesterday that a group of British universities was interested in taking over BTG, backed by money from investment funds. How pragmatic of him to enhance and advance the case of capitalism so publicly.
Dr. Moonie rose—
Mr. Leigh: If the hon. Gentleman wishes to retract what was in The Independent, I shall give him the opportunity to do so.
Dr. Moonie: One possibility is that a group of universities, backed by money, might take it over. I do not at present have any knowledge of such a group. It would be wrong to leave the Minister with the impression that I do.
Mr. Leigh: Of course, it would be wrong for anyone to expect the Opposition spokesman to look at the matter with an open mind. One might think that there was nothing intrinsically wrong with the proposal that the hon. Gentleman was advocating in The Independent. Clearly, his knuckles have been rapped and he is beating a hasty retreat.
Privatisation of BTG would not in any way weaken the Government's policy on innovation. Although BTG makes a significant contribution to the United Kingdom's innovative performance, it has rightly not been given a special role in the Government's innovation policy support measures. For example, although BTG's prime focus is as an exploiter of the science base, it has no special role—I use those words carefully—in the LINK scheme for collaborative research between companies and higher education institutions. Nor has BTG any special role in my Department's support for technology transfer through regional technology centres and overseas missions. The absence of such a role for BTG is quite deliberate. I do not believe, and I am sure that the chairman of BTG would agree with me, that an organisation successfully operating within the commercial disciplines of BTG should also act as an instrument of Government support programmes.
The Opposition ask why there is a need to privatise BTG; cannot the same objective be achieved, they say, by removing the present statutory constraints? I am sure that, when hon. Members think carefully, they will agree that bodies in the public sector must have monitoring arrangements. Loosening constraints will not get around that requirement. It is not for Government to second-guess the commercial decisions of companies, which must subject themselves to the discipline of the marketplace.
The Opposition view is that these proposals are tantamount to tampering with BTG's business. They say that BTG fills a gap where the United Kingdom is weak—turning ideas into products. I stress that we are not tampering with BTG's business of turning ideas into marketable products. BTG's management believes that privatisation will afford it the opportunity to compete more effectively without bureaucratic constraints.
It has been suggested that privatisation will not bring new capital to BTG. I disagree. The United Kingdom has the advantage of being one of the largest and most sophisticated capital markets in the world. There has never been a problem in attracting capital for worthwhile investments.
It has also been suggested today that a privatised BTG would no longer be obliged to act in the public interest. Where the public interest coincides with commercial interest, there should be no problem. However, where the two diverge or are in conflict, it will be up to the management to act in the best commercial interests of the company.
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It has been suggested that BTG's business is so inherently long-term and risky that it is impossible to pick winners, and that only a public sector organisation can carry out this function; but many private sector organisations look to the long term—for example, in the oil and pharmaceuticals industries, as my hon. Friend the Member for Amber Valley said—and any prospective purchaser of BTG will also be looking to the long term.
We have heard very little in the debate of the Labour party's plans for BTG. At the beginning of my few words, I said that we must set BTG in perspective, remembering that it spends about £11 million a year out of a total research effort of over £11 billion. From what we understand from its policy document, "Looking to the Future", it seems that the Labour party would give an enhanced role to BTG. That smacks of the old-fashioned dirigiste interventionist approach.
We did not hear from the hon. Member from Dunfermline, East one word about the old National Enterprise Board. The Bill abolishes the NEB. My hon. Friends may be surprised to learn that the NEB is still alive. It has been in long hibernation, no doubt awaiting the arrival of the hon. Member for Dunfermline, East to awaken it. He will not. The Bill kills it off. The powers of the NEB which remain on the statute book are frightening. It can borrow up to £750 million, it can form companies, it can buy shares and it can make acquisitions—[Interruption.] How significant that the Opposition now laugh about the NEB; how significant that they are no longer prepared to defend it. It is not surprising, given its history. Have they forgotten Chrysler, with £160 million poured into that company only for it to go bust within a couple of years? Have they forgotten Nexos, mentioned by my hon. Friend the Minister of State, which went into liquidation owing the taxpayer about £32 million? That is the history of the NEB.
The Opposition are not prepared to accept the resuscitation of the NEB, but they have various sons of NEB in view. They have the BTE, the NIB, the RDA and the LIC. These are only initials to my hon. Friends, but in the unlikely event of a Labour Government, the names would become all too familiar—a national investment bank and regional development associations. They are the same policies, repackaged and revamped. The Bill will abolish the NEB, and I commend it to the House.
Question put, That the Bill be now read a Second time:—
The House divided: Ayes 275, Noes 198.

Division No. 63]

[7 pm

AYES

Adley, Robert

Bennett, Nicholas (Pembroke)

Aitken, Jonathan

Benyon, W.

Alexander, Richard

Bevan, David Gilroy

Alison, Rt Hon Michael

Biffen, Rt Hon John

Allason, Rupert

Blackburn, Dr John G.

Amess, David

Blaker, Rt Hon Sir Peter

Arbuthnot, James

Bonsor, Sir Nicholas

Arnold, Sir Thomas

Boscawen, Hon Robert

Ashby, David

Boswell, Tim

Aspinwall, Jack

Bottomley, Peter

Atkins, Robert

Bottomley, Mrs Virginia

Atkinson, David

Bowden, A (Brighton K'pto'n)

Baker, Nicholas (Dorset N)

Bowden, Gerald (Dulwich)

Baldry, Tony

Bowis, John

Barnes, Mrs Rosie (Greenwich)

Braine, Rt Hon Sir Bernard

Batiste, Spencer

Brazier, Julian

Bellingham, Henry

Bright, Graham

Bendall, Vivian

Bruce, Ian (Dorset South)

787

Buchanan-Smith, Rt Hon Alick

Hill, James

Buck, Sir Antony

Hind, Kenneth

Burns, Simon

Hogg, Hon Douglas (Gr'th'm)

Butler, Chris

Hordern, Sir Peter

Butterfill, John

Howard, Rt Hon Michael

Carlisle, John, (Luton N)

Howarth, G. (Cannock & B'wd)

Carlisle, Kenneth (Lincoln)

Howell, Rt Hon David (G'dford)

Carrington, Matthew

Howell, Ralph (North Norfolk)

Carttiss, Michael

Hughes, Robert G. (Harrow W)

Cash, William

Hunt, David (Wirral W)

Chapman, Sydney

Hunt, Sir John (Ravensbourne)

Chope, Christopher

Hunter, Andrew

Churchill, Mr

Hurd, Rt Hon Douglas

Clark, Rt Hon Alan (Plymouth)

Irvine, Michael

Clark, Dr Michael (Rochford)

Jack, Michael

Clark, Rt Hon Sir William

Janman, Tim

Colvin, Michael

Jessel, Toby

Conway, Derek

Johnson Smith, Sir Geoffrey

Coombs, Anthony (Wyre F'rest)

Jones, Gwilym (Cardiff N)

Coombs, Simon (Swindon)

Jones, Robert B (Herts W)

Couchman, James

Jopling, Rt Hon Michael

Cran, James

Kellett-Bowman, Dame Elaine

Critchley, Julian

Key, Robert

Currie, Mrs Edwina

King, Roger (B'ham N'thfield)

Curry, David

Knapman, Roger

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

Knight, Greg (Derby North)

Day, Stephen

Knight, Dame Jill (Edgbaston)

Devlin, Tim

Knowles, Michael

Dicks, Terry

Knox, David

Dorrell, Stephen

Lang, Rt Hon Ian

Douglas-Hamilton, Lord James

Lawrence, Ivan

Dover, Den

Lee, John (Pendle)

Dunn, Bob

Leigh, Edward (Gainsbor'gh)

Durant, Sir Anthony

Lennox-Boyd, Hon Mark

Eggar, Tim

Lester, Jim (Broxtowe)

Evans, David (Welwyn Hatf'd)

Lilley, Peter

Evennett, David

Lloyd, Sir Ian (Havant)

Favell, Tony

Lloyd, Peter (Fareham)

Fenner, Dame Peggy

Lord, Michael

Field, Barry (Isle of Wight)

Luce, Rt Hon Sir Richard

Finsberg, Sir Geoffrey

Lyell, Rt Hon Sir Nicholas

Fishburn, John Dudley

MacGregor, Rt Hon John

Fookes, Dame Janet

MacKay, Andrew (E Berkshire)

Forman, Nigel

McLoughlin, Patrick

Forsyth, Michael (Stirling)

McNair-Wilson, Sir Michael

Fowler, Rt Hon Sir Norman

McNair-Wilson, Sir Patrick

Fox, Sir Marcus

Madel, David

Franks, Cecil

Malins, Humfrey

French, Douglas

Mans, Keith

Fry, Peter

Maples, John

Gale, Roger

Marland, Paul

Gardiner, Sir George

Marlow, Tony

Garel-Jones, Tristan

Marshall, John (Hendon S)

Gill, Christopher

Marshall, Sir Michael (Arundel)

Gilmour, Rt Hon Sir Ian

Martin, David (Portsmouth S)

Glyn, Dr Sir Alan

Maxwell-Hyslop, Robin

Goodhart, Sir Philip

Mayhew, Rt Hon Sir Patrick

Goodlad, Alastair

Mellor, Rt Hon David

Gorman, Mrs Teresa

Meyer, Sir Anthony

Grant, Sir Anthony (CambsSW)

Miller, Sir Hal

Greenway, Harry (Ealing N)

Miscampbell, Norman

Greenway, John (Ryedale)

Mitchell, Andrew (Gedling)

Gregory, Conal

Mitchell, Sir David

Griffiths, Sir Eldon (Bury St E')

Moate, Roger

Griffiths, Peter (Portsmouth N)

Monro, Sir Hector

Grist, Ian

Montgomery, Sir Fergus

Ground, Patrick

Moore, Rt Hon John

Grylls, Michael

Morrison, Sir Charles

Hague, William

Moss, Malcolm

Hamilton, Hon Archie (Epsom)

Neale, Sir Gerrard

Hamilton, Neil (Tatton)

Neubert, Sir Michael

Hampson, Dr Keith

Newton, Rt Hon Tony

Hannam, John

Nicholls, Patrick

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

Nicholson, David (Taunton)

Harris, David

Norris, Steve

Haselhurst, Alan

Onslow, Rt Hon Cranley

Hayhoe, Rt Hon Sir Barney

Oppenheim, Phillip

Hayward, Robert

Page, Richard

Heathcoat-Amory, David

Patnick, Irvine

Hicks, Robert (Cornwall SE)

Pawsey, James

788

Peacock, Mrs Elizabeth

Sumberg, David

Porter, David (Waveney)

Summerson, Hugo

Portillo, Michael

Tapsell, Sir Peter

Powell, William (Corby)

Taylor, Ian (Esher)

Raffan, Keith

Taylor, John M (Solihull)

Raison, Rt Hon Sir Timothy

Taylor, Teddy (S'end E)

Redwood, John

Tebbit, Rt Hon Norman

Rhodes James, Robert

Temple-Morris, Peter

Riddick, Graham

Thompson, D. (Calder Valley)

Ridley, Rt Hon Nicholas

Thompson, Patrick (Norwich N)

Ridsdale, Sir Julian

Thorne, Neil

Rifkind, Rt Hon Malcolm

Thornton, Malcolm

Roberts, Sir Wyn (Conwy)

Tracey, Richard

Roe, Mrs Marion

Tredinnick, David

Rossi, Sir Hugh

Trippier, David

Rost, Peter

Twinn, Dr Ian

Rowe, Andrew

Viggers, Peter

Rumbold, Rt Hon Mrs Angela

Wakeham, Rt Hon John

Ryder, Rt Hon Richard

Walden, George

Sackville, Hon Tom

Walker, Bill (T'side North)

Scott, Rt Hon Nicholas

Walker, Rt Hon P. (W'cester)

Shaw, David (Dover)

Waller, Gary

Shaw, Sir Giles (Pudsey)

Ward, John

Shaw, Sir Michael (Scarb')

Warren, Kenneth

Shelton, Sir William

Wells, Bowen

Shephard, Mrs G. (Norfolk SW)

Whitney, Ray

Shepherd, Colin (Hereford)

Widdecombe, Ann

Shepherd, Richard (Aldridge)

Wilkinson, John

Sims, Roger

Wilshire, David

Skeet, Sir Trevor

Winterton, Mrs Ann

Smith, Sir Dudley (Warwick)

Winterton, Nicholas

Speller, Tony

Wolfson, Mark

Spicer, Sir Jim (Dorset W)

Wood, Timothy

Spicer, Michael (S Worcs)

Woodcock, Dr. Mike

Stanbrook, Ivor

Yeo, Tim

Stanley, Rt Hon Sir John

Young, Sir George (Acton)

Steen, Anthony

Younger, Rt Hon George

Stevens, Lewis

Stewart, Allan (Eastwood)

Tellers for the Ayes:

Stewart, Andy (Sherwood)

Mr. Timothy Kirkhope and

Stewart, Rt Hon Ian (Herts N)

Mr. David Davis.

Stokes, Sir John

NOES

Adams, Mrs. Irene (Paisley, N.)

Cousins, Jim

Anderson, Donald

Cox, Tom

Archer, Rt Hon Peter

Crowther, Stan

Armstrong, Hilary

Cryer, Bob

Ashley, Rt Hon Jack

Cummings, John

Ashton, Joe

Cunliffe, Lawrence

Barnes, Harry (Derbyshire NE)

Cunningham, Dr John

Battle, John

Dalyell, Tam

Beckett, Margaret

Darling, Alistair

Benn, Rt Hon Tony

Davies, Rt Hon Denzil (Llanelli)

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

Davies, Ron (Caerphilly)

Benton, Joseph

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

Bermingham, Gerald

Dewar, Donald

Bidwell, Sydney

Dixon, Don

Blair, Tony

Doran, Frank

Blunkett, David

Dunnachie, Jimmy

Boateng, Paul

Dunwoody, Hon Mrs Gwyneth

Boyes, Roland

Eadie, Alexander

Bradley, Keith

Eastham, Ken

Bray, Dr Jeremy

Evans, John (St Helens N)

Brown, Gordon (D'mline E)

Ewing, Harry (Falkirk E)

Brown, Nicholas (Newcastle E)

Fatchett, Derek

Brown, Ron (Edinburgh Leith)

Faulds, Andrew

Caborn, Richard

Fearn, Ronald

Callaghan, Jim

Field, Frank (Birkenhead)

Campbell, Menzies (Fife NE)

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

Campbell, Ron (Blyth Valley)

Flynn, Paul

Canavan, Dennis

Foot, Rt Hon Michael

Carlile, Alex (Mont'g)

Foster, Derek

Clarke, Tom (Monklands W)

Foulkes, George

Clelland, David

Fraser, John

Clwyd, Mrs Ann

Fyfe, Maria

Cohen, Harry

Galloway, George

Cook, Robin (Livingston)

Garrett, Ted (Wallsend)

Corbett, Robin

George, Bruce

Corbyn, Jeremy

Gilbert, Rt Hon Dr John

789

Golding, Mrs Llin

Morgan, Rhodri

Gordon, Mildred

Morley, Elliot

Gould, Bryan

Morris, Rt Hon A. (W'shawe)

Graham, Thomas

Morris, Rt Hon J. (Aberavon)

Grant, Bernie (Tottenham)

Mowlam, Marjorie

Griffiths, Nigel (Edinburgh S)

Mullin, Chris

Hardy, Peter

Murphy, Paul

Hattersley, Rt Hon Roy

Nellist, Dave

Heal, Mrs Sylvia

Oakes, Rt Hon Gordon

Healey, Rt Hon Denis

O'Brien, William

Henderson, Doug

O'Hara, Edward

Hinchliffe, David

O'Neill, Martin

Hoey, Ms Kate (Vauxhall)

Orme, Rt Hon Stanley

Howarth, George (Knowsley N)

Parry, Robert

Howell, Rt Hon D. (S'heath)

Patchett, Terry

Howells, Dr. Kim (Pontypridd)

Pendry, Tom

Hoyle, Doug

Pike, Peter L.

Hughes, John (Coventry NE)

Powell, Ray (Ogmore)

Hughes, Robert (Aberdeen N)

Prescott, John

Hughes, Roy (Newport E)

Primarolo, Dawn

Hughes, Simon (Southwark)

Quin, Ms Joyce

Illsley, Eric

Randall, Stuart

Ingram, Adam

Rees, Rt Hon Merlyn

Jones, Barry (Alyn & Deeside)

Reid, Dr John

Jones, leuan (Ynys Môn)

Richardson, Jo

Jones, Martyn (Clwyd S W)

Robertson, George

Kaufman, Rt Hon Gerald

Robinson, Geoffrey

Kinnock, Rt Hon Neil

Rogers, Allan

Kirkwood, Archy

Rooker, Jeff

Lambie, David

Rooney, Terence

Leadbitter, Ted

Ross, Ernie (Dundee W)

Lestor, Joan (Eccles)

Rowlands, Ted

Lewis, Terry

Ruddock, Joan

Litherland, Robert

Salmond, Alex

Livingstone, Ken

Sheerman, Barry

Livsey, Richard

Shore, Rt Hon Peter

Lloyd, Tony (Stretford)

Short, Clare

Lofthouse, Geoffrey

Skinner, Dennis

Loyden, Eddie

Smith, Andrew (Oxford E)

McAllion, John

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

McCartney, Ian

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

Macdonald, Calum A.

Snape, Peter

McKay, Allen (Barnsley West)

Soley, Clive

McKelvey, William

Spearing, Nigel

McLeish, Henry

Steinberg, Gerry

Maclennan, Robert

Stott, Roger

McMaster, Gordon

Strang, Gavin

McNamara, Kevin

Thompson, Jack (Wansbeck)

McWilliam, John

Turner, Dennis

Madden, Max

Vaz, Keith

Mahon, Mrs Alice

Walley, Joan

Marek, Dr John

Wardell, Gareth (Gower)

Marshall, David (Shettleston)

Wareing, Robert N.

Marshall, Jim (Leicester S)

Watson, Mike (Glasgow, C)

Martin, Michael J. (Springburn)

Williams, Rt Hon Alan

Martlew, Eric

Williams, Alan W. (Carm'then)

Maxton, John

Wilson, Brian

Meacher, Michael

Winnick, David

Meale, Alan

Wise, Mrs Audrey

Michael, Alun

Worthington, Tony

Michie, Bill (Sheffield Heeley)

Wray, Jimmy

Michie, Mrs Ray (Arg'l & Bute)

Mitchell, Austin (G't Grimsby)

Tellers for the Noes:

Molyneaux, Rt Hon James

Mr. Thomas McAvoy and

Moonie, Dr Lewis

Mr. Frank Haynes.

Question accordingly agreed to.
Bill accordingly read a Second time, and committed to a Standing Committee, pursuant to Standing Order No. 61 (Committal of Bills).

British Railways (No. 2) Bill
Order for consideration, as amended, read.
Question proposed, That the Bill be now considered. —[The Chairman of Ways and Means.]
7.13 pm
Sir Patrick McNair-Wilson: It may be for the convenience of the House if I remind hon. Members that the Bill received an unopposed Second Reading—[Interruption.]
Madam Deputy Speaker (Miss Betty Boothroyd): Will those hon. Members who are having a meeting by the doors, please do so on the other side?
Sir Patrick McNair-Wilson: I was reminding the House that the Bill received an unopposed Second Reading on 1 February 1990 and went to a Committee on Unopposed Bills on 2 May 1990. During its passage through that Committee, an amendment was made by the British Railways Board removing the works requirements at Bedford, and it is because of that amendment that this consideration stage is now taking place.
Several hon. Members put down blocking motions at various stages in the Bill's progress and I hope that we can now be satisfied that those hon. Members have had their problems dealt with. I refer particularly to my right hon. Friend the Member for Selby (Mr. Alison) who was concerned about the coal trains to the Drax power station. Assurances have now been given to the Selby district council that such heavy coal trains will not normally be routed via Selby.
That conveniently brings me to the point that will perhaps be raised by the hon. Member for Pontefract and Castleford (Mr. Lofthouse) if he catches your eye, Madam Deputy Speaker. He supports works 13 and 14 which affect his constituency.
The hon. Member for Huddersfield (Mr. Sheerman) expressed concern about works 6 and 7, the siding at Deighton, the ICI works. As far as I am aware, no problems about that now remain.
The hon. Member for Leicester, East (Mr. Vaz), whose name appears on the Order Paper today, is concerned about a piece of land in his constituency that has been sold to the local authority and requires fencing, about which he has had discussions with the board. I hope that the matter can be resolved speedily. I can give the hon. Gentleman the assurance that the board is anxious to reach a speedy conclusion, but, clearly, the local authority will have its part to play in that. It may be that the hon. Gentleman will catch your eye, Madam Deputy Speaker, and explain the matter further.
The Bill is one of a large number of British Rail Bills. On this occasion, the works outlined are broadly not contentious. It is part of the legislation that British Rail brings forward each year to modernise and improve services. It will play a significant part in removing freight from road to rail and in providing better access for commuters in the London area and in South Yorkshire.
The Bill must be seen in the context of the £3·5 billion which is due to be spent during the next three years, but it would be impossible to talk about British Rail at this time without mentioning the difficulties that some travellers have experienced. The snow has obviously caused problems not just for rail users, but for road users as well.

791
I am advised by the board that the Meteorological Office has informed it that there have been only four occasions in the past 30 years when there has been a fall of more than 6 in of dry powder snow of the type that we have experienced in the past week. In the 19 years between 1963 and 1982, there was effectively no snow at all. The board is shortly to send a team to Sweden to examine the operation of railways in extreme conditions, and it is hoped that, when its report is available, it will provide information that can be used in future.
Mr. Archy Kirkwood: Did the hon. Gentleman say that there has been no snow deeper than 6 in in the recent past? If so, will he delineate the geographical spread of that claim?
Sir Patrick McNair-Wilson: We are talking about the special type of snow—over 6 in of dry powder. The Meteorological Office has advised the board that only four times in the past 30 years has that snow fallen. I have no doubt that there is plenty of wet snow falling tonight outside the Palace, but the snow that caused the problems in the last week is comparatively rare. I know that the board has taken note of what the hon. Member has said.
Mr. Peter Bottomley: Many commuters in my constituency, and I am sure those in the constituency of my hon. Friend the Member for Beckenham (Sir P. Goodhart) will take the explanation that the snow is of a different type and one not normally seen in the constituency—
Madam Deputy Speaker: Order. The terms of the Bill are quite wide, but not wide enough to allow descriptions of the snow that we have had of late.
Sir Patrick McNair-Wilson: I shall move on immediately and obey your ruling, Madam Deputy Speaker.
Some 340 units on Network SouthEast have been damaged in this bad weather, and 130 traction motors have been replaced in the past 24 hours, but, overall, 50 per cent. of Network SouthEast operated normally this morning. The new Networker train has sealed motors, which will not be subject to the problems that I have outlined. Many of the new trains introduced by the board in recent years have never operated in serious snow conditions. Therefore, the problems relating to door operation and electrical circuits have not been experienced before.
Mr. Peter Bottomley: I shall try to stay in order. If the Bill helps, on those days when there is not a peculiar type of snow, to make services reliable, many of our constituents will be happy. The problem is that the excuse was used in the following days when there was no snow, and there were still no regular trains. I hope that the Bill will help.
Sir Patrick McNair-Wilson: If weaknesses exist in the design or manufacture of the units that have caused trouble, it will be for the manufacturers to put them right. British Rail is ensuring that all the lessons that can be learned are learned so that, by next winter, these problems will be behind us. I do not want to delay the House, because the Bill started with an unopposed Second Reading and went to an Unopposed Bill Committee. The works in the Bill are a small but significant contribution to
792
the revival of the railway system in Britain. I ask the House to approve the amendment made by the Committee and in due course to give the Bill its Third Reading.
7.22 pm
Mr. Geoffrey Lofthouse: I support the Bill, because, for many years, there has been a problem in the small industrial town of Knottingley in my constituency. After the boundary commission report, Knottingley became part of my constituency. In the early days I found that it had a major problem. Some 120 coal trains went through the centre of the town, cutting it in half and travelling 5 m or 6 m from back doors.
The people in the town had complained about that problem for a long time. When a planning inquiry gave permission for the development of the Selby coalfield, people were dismayed to find that one of the conditions was that the coal must travel by rail. The most sensible thing would have been for British Rail and British Coal to get together to get the shortest route between the Selby coalfield and the Drax B power station, which was completed at about the same time. Given that, for 60 years, coal from Selby will travel to Drax B, the longer route through Knottingley will result in much greater expense. It would have been economically viable and attractive to both parties to have a shorter cross-country route.
I understand that there were problems and, as a result, coal travelling from Selby to Drax went through Knottingley. When I tell hon. Members that that was in addition to the 120 coal trains already going through the town, they will appreciate the problem. In many meetings, correspondence and other contacts with all the parties concerned, such as the West Yorkshire county council, the Central Electricity Generating Board and the Secretary of State, great sympathy was shown, because everybody could see the problem. Suggestions were made for either a direct route or a bypass through Knottingley.
Despite all the efforts, in an Adjournment debate that I had in 1984, the then Minister at the Department of Transport turned down the proposal for change because it would cost £4 million. Given the cost of the development of Selby coalfield and of building Drax, £4 million to solve the problem would have been but a drop in the ocean. Unfortunately, it was not to be and since then, apart from the 180 coal trains going 5 m or 6 m from back doors, 24 hours a day, there has also been the problem of the level crossings which are closed for 30 per cent. of the day. One can imagine the traffic problems that that causes.
My constituents are impatient about the delay in the Bill because the Bill will alleviate their problems. British Rail is not getting much praise today, but it has attempted to solve the problem. If the Bill is agreed to, and British Rail carries out the works 13, 13A, 14 and 14A, a substantial amount of the traffic will no longer go through the centre of Nottingley, and none will go through at night. I recognise that hon. Members have a right to block Bills for genuine reasons, but the House will appreciate why my constituents, who do not understand the workings of the House, cannot understand why Parliament has been blocking a Bill that would help them. I hope that the House will pass the Bill, because if it does, my constituents will be most grateful.
7.29 pm
Sir Philip Goodhart: My hon. Friend the Member for New Forest (Sir P. McNair-Wilson) has presented the Bill with his customary skill, but this is a terrible night for British Rail to put forward any Bill. My hon. Friend reminded us of the problems that so many of my constituents have faced in recent days. Normally the service from so many parts of my constituency to the centre of London is, to put it mildly, bad, but in the past five days it has too often been non-existent. It would be difficult to exaggerate the rage which so many commuters in my constituency feel about the way in which British Rail has tried to cope.
I am especially interested in part IV of the Bill, which deals with land and the purchase of land, because one of the curious phenomena of British Rail planning in recent times has been to find that it is proposing to move much of the freight from the industrial heartland of the country to the channel tunnel via the congested rail lines of southern London.
Many of my constituents have found that their properties are severely blighted by British Rail's plans. They are hoping that British Rail will propose better schemes for compensation. However when I looked at the provisions in part IV of the Bill, which relate to the purchase of land, I found that, far from improving compensation in clauses 32 and 36, British Rail is proposing to restrict the amount of money that it will have to pay out in certain cases.
Clearly this will not be the last British Rail Bill to come before us. I hope that in future Bills there will be adequate compensation clauses, because part IV of this Bill is far too restrictive. I am sorry to see it in the Bill.
7.32 pm
Mr. Keith Vaz: I am grateful for the opportunity to speak in support of the motion that I have tabled opposing the Bill. I shall be brief, first, because the issues that I wish to raise can be dealt with briefly as they are simple matters, and secondly, because my hon. Friend the Member for West Bromwich, East (Mr. Snape) has informed me that tonight is his 49th birthday and that he needs to join the various street parties that are taking place in his home town.
My hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse) spoke to me before the debate. I listened carefully to his speech today, and I also know that the Bill has the support of a number of hon. Members on both sides of the House. When my hon. Friend told me that he had been struggling for 12 years to get some of the measures in the Bill into legislation, I felt that I could not be the person to prevent his constituents from benefiting from the Bill. However, having said that, I am sure that my hon. Friends and Conservative Members will not mind waiting a few moments to hear about the problems that the constituents of Leicester, East have had with the British Railways Board. My objection to the Bill is that it gives specific powers and duties to the British Railways Board, which I do not believe it will carry out properly, simply because it has not carried them out properly as they affect the citizens of Leicester and especially of Leicester, East.
My concern is a strip of land at the back of houses on Woodgreen walk in the west Humberstone area of my constituency. Some time ago there were no houses on that piece of land, but, as the housing needs of the city of
794
Leicester developed, it was decided to sell the estate, which became known as the Willow Park estate, to a firm of private developers, which established about 1,000 households there. It left the land abutting the railway line in the ownership of British Rail.
British Rail has specific duties and responsibilities set out in many statutes. One that I would bring to the attention of the House is section 68 of the Railways Clauses Consolidation Act 1845, which I understand has not been substantially amended. Those responsibilities and duties enable the board to protect the lives of those people who live in the vicinity of land that it owns. However British Rail has, in my view, wilfully and continually ignored its statutory responsibilities.
Before I was elected to this place, when I was the parliamentary candidate for Leicester, East and another stood in my place, I was contacted by residents of the Willow Park estate. In particular Margaret Taylor, who went onto become the lady mayoress of Leicester, Philip Currie and Peter Maxwell, who formed themselves into a local residents group. They were worried because, from the time that they had lived on Willow Park estate, British Rail had not only failed to maintain the land and clear it of the debris that people were dumping on it, but had also failed to ensure that fencing had been adequately repaired.
As a result, I started my correspondence with the chairman of the British Railways Board. As the House can see from the pile here, I have written many letters to the British Railways Board to try to resolve the matter. At that early stage, I wrote to the chairman and requested a meeting. Following my election as the Member of Parliament, I convened a meeting with local residents and wrote again to the British Railways Board.
I received replies from the board and from the local authority, Leicester city council, which showed that no one knew who owned that piece of land. Many months of procrastination followed. British Rail, the local authority and the previous developers denied ownership of the land. Eventually, with a great deal of effort and work, we discovered that British Rail owned the land, and I contacted the regional office in Birmingham. I told British Rail what I told officers I met recently—that in my view this piece of land was of no material value to British Rail. The answer to the problem of constant letters and telephone calls from the local Member of Parliament and the local authority and the answer to the problem of young children running on to the track—through holes in the fences which people had cut to enable them to get to work quicker across the track—was to hand over the land either to the local authority or to the local residents. It took many months to convince British Rail of the need for such a scheme.
Eventually, officers from Birmingham came to meet me and local residents at the Northfields neighbourhood centre, and agreed in principle to hand over the land. At that stage, being a large organisation, it wanted to maximise the value of the land and was talking in terms of selling it to local residents or to the local authority. I pointed out to British Rail that there was no point in doing so, because no one could develop the land and the local residents would be the only people to benefit from it. Therefore, British Rail agreed to a scheme that would enable local residents to take the piece of land abutting their gardens, leading directly up to the railway line. British Rail was proposing to give the land to local residents at the peppercorn price of £1 for each strip, which

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I thought was reasonable, as did many residents. Many of them had said that that was all it was worth, as they were not proposing to develop it, and the land was of no value to the local authority or to British Rail.
Then the problems arose. British Rail said that the residents would have to pay the cost of conveyancing—although a large legal services agency supports British Rail, and although British Rail pays a considerable amount to private solicitors to enable it to promote Bills of this nature. I put the residents in touch with a local solicitor.
The costs, it appeared, would amount to £100 per resident; in addition, the residents would have to pay a land registry fee of £30 and a fee for the incorporation of their residents' association. British Rail was not prepared to deal with each owner individually, preferring to deal with a single organisation: that meant another £30.
Next came the problem of who was to pay the cost of maintaining the land and repairing the fences before the land was handed over. British Rail estimated the cost at £10,000. Initially—in all generosity—it was prepared to contribute £2,500, 25 per cent. of the cost of the works. That was despite the fact that British Rail owned the land and was statutorily responsible for the maintenance and repair of the fences.
British Rail then looked to Leicester city council and the residents to make up the £7,500 difference. In good faith, I approached the council and wrote to the director of property services, Terry Ward. I asked him whether the council was prepared to provide £7,500 to repair the land and do British Rail's job for it. The reply stated—rightly, in my view—that it was the board's responsibility and that the council would make no contribution to the cost of the maintenance of the land and the repair of the fences. I was not at all surprised.
I then wrote again to Sir Robert Reid, the chairman of the board, suggesting that the stance adopted by him and his officials was not reasonable—mainly because they were responsible for the work. In March 1990, a meeting was convened at Leicester station, where I met regional officers, the station master and others to try to resolve the problem. During the negotiations, British Rail raised the amount that it was prepared to spend from £2,500 to £5,000: during a half-hour meeting, it was able to find an extra £2,500. At that stage, however, it still refused adamantly to pay the £5,000 that was needed to put the land into a decent state before it was handed over to the residents.
Surely it is reasonable for local residents to expect British Rail and its board to fulfil their statutory responsibilities: if they own land and fences, surely they should ensure that the fences are in a state of repair and the land is cleared of debris. I say that because the land now represents a hazard.
For the past decade, in the summer, people have dumped debris that they do not particularly want to keep in their homes—newspapers, for instance; and, when I went to have a look, a fridge had been dumped there. Anything that people do not want to drop at the council dump, or that council refuse collectors will not take, is dumped at the back of Woodgreen walk.
As can be imagined—even in the weather that we are now experiencing—the area becomes very hot in the summer as a result of the dumping, and there is always the risk of a fire. It is impossible for the emergency services to reach the site, because it is blocked with debris that has
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accumulated for a decade. Moreover, the fence puts local people at risk because there are holes in it: children, especially, can get onto the tracks and could be injured. When I visited the site with a British Rail official, a group of children were playing near the line, having got through the fence.
This represents an important test case, not only for the residents of Woodgreen walk but for residents of all homes that abut railway lines. As a legislator, I am not prepared to come here and vote through British Rail's legislation on the nod, when it has been seen to be completely incapable of fulfilling its proper responsibilities to the people of Woodgreen walk and the people of Leicester.
Everyone suddenly took a great interest in my problem when my name appeared above the motion asking for the Bill to be considered in six months' time—along with the names of the former leader of the Liberal party and others; they disappeared because they had other engagements, but courteously warned me that they could not be present. I was approached not only by Conservative Members, but by a Gentleman called Rufus. He seems to be some kind of liaison officer for the British Railways Board. He is a very courteous person; he wrote to me, but forgot to include my name in the letter. Clearly he has the letter on a word processor: whenever anyone tables a motion criticising British Rail, out pops the letter and Rufus signs it, forgetting to say who it is addressed to. There is no "Dear Mr. Vaz" or "Dear Sir"; it is a general letter saying, "I understand that you have put your name down to the motion. I should be very keen to discuss the matter with you."
I am sure that the board would be keen to discuss the matter with me—but why now? Why do legislators have to go to such extremes to protect their constituents? Why cannot British Rail come to Members of Parliament who have constituency problems and try to sort those problems out, without our having to delay the House by raising these matters?
British Rail has laid down a deadline—31 March 1991—for the completion of the process. It expects the residents to pay up to £300 to acquire a tiny strip of land at the end of their gardens, simply because it will not fulfil its statutory responsibilities.
I believe, in all honesty, that the way out of the problern —and the way in which to stop legislators having to take action of this kind—is for British Rail to come up with the additional money that is necessary for it to fulfil its obligations. If it did that and made a contribution to my constituents' legal costs—so that they would not have to pay up to £130 to take over something with which British Rail should be dealing—I should be satisfied, and I think that they would be as well.
If, however, British Rail fails to fulfil its statutory responsibilities, I will use every parliamentary device to ensure it does so and to bring to the House's attention when it seeks to pass such legislation that British Rail should be given no more powers until it is seen to be dealing with its responsibilities to the satisfaction of local people who pay such people as Rufus and the chairman of British Rail for the work they do.
7.48 pm
Mr. Bob Cryer: In general terms, welcome the Bill. I should declare an interest: I have five £10 shares in the Keighley and Worth Valley light railway.

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I was the founder of the Keighley and Worth Valley railway preservation society; I called the first meeting, and was chairman for 10 years. As the House will be only too keenly aware, no dividend has ever been paid on the shares, because the money goes back into ensuring that the railway provides one of the best preserved steam-operated services in the country. I thought that I should mention that to show that I have some experience of the operation of railways, having done most of the jobs connected with the operation of the five-mile branch line.
Clause 7 relates to a viaduct that formerly carried the Kirkburton branch railway over the Huddersfield broad canal. After a number of works have been carried out, the board will be relieved of the obligation to maintain the viaduct for the purposes of the 1863 Act. Does that mean that the board will be entitled to demolish the viaduct? Insufficient viaducts are carrying railways, their primary and true purpose. However, they form an important part of our landscape. That is recognised by the British Railways Board; its viaducts committee examines the merits of viaducts. The board accepts the onerous obligation of maintaining a limited number of viaducts in such a condition that they remain part of the landscape, even though they do not carry traffic. However, it seeks to discard others. Few commercial organisations retain discarded items of equipment, purely because they are liked by members of the public. I wonder, therefore, whether this viaduct is worthy of preservation, or whether the board intends to demolish it.
There is a fair amount of interest in these often magnificent structures. Their construction sometimes involved loss of life. They provide a reminder of what the former Prime Minister regarded as Victorian values. I am sure, therefore, that all those who sit on the Treasury Bench will want not Victorian values but Victorian monuments to be retained wherever possible. Clause 14 provides that the board shall install a new level crossing in the borough of Northampton. The board normally tries to avoid creating new level crossings. They impede traffic and are a nuisance both to the board and to traffic users. The board has to bear the maintenance costs. If, however, it believes that there should be a level crossing, one accepts its judgment.
According to subsection 3:
"The Board may, subject to such requirements as the Secretary of State may from time to time lay down, provide, maintain and operate at or near the new level crossing such barriers, lights, traffic signs and automatic or other devices and appliances as may be approved by the Secretary of State."
There is no better form of supervision at level crossings than people. A number of accidents has resulted from the use of flashing lights. An infamous accident occurred at Nixon level crossing. A driver was transporting a transformer across a level crossing. Due to a hump on the level crossing, the transformer on the low loader ground to a halt. A locomotive train ran into the transformer, fortunately without doing much injury and there was no loss of life. If, however, that level crossing had been staffed, the accident would not have occurred.
On such minor railways as the Keighley and Worth Valley railway, level crossing gates, due to the light railway legislation, are linked to signals. That is not a requirement of the operating regulations laid down by the Department of Transport for such level crossings as that referred to in
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clause 14(3). That is why I imagine the subsection is couched in such general terms. The Minister is no doubt listening attentively while reading a guide to the House of Commons.
The Department should reconsider that question. It is neither sensible nor safe to continue to say to British Rail, "Get rid of employees." That is what the Government have said, in a number of guises, to British Rail. Danger results from the removal of human supervision at level crossings. If there is no link between gate closures and signals, a hazard may result. That point should be borne in mind.
During this difficult weather there have been a number of train delays because of frozen sliding electrical doors. Trains of that design were introduced so that trains can be operated by one man. If the doors are electrically operated, no platform staff are required to make sure that they are closed before a train leaves the station. Manually operated doors are simpler and safer and can be operated simply and reliably in freezing weather. However, the Government have put pressure on British Rail to cut costs—mostly employees. Consequently, during inclement weather British Rail has great difficulty maintaining services.
The Bill is couched in wide terms. There have been a number of accidents at unmanned level crossings. I suspect that they are different from the kind of level crossing envisaged in clause 14(3). However, I hope that the promoter of the Bill will clarify the position. Unmanned level crossings have led to people going on to them and being involved in accidents. There is a telephone link to the nearest signal box, which may be some distance away. Telephone boxes have sometimes been vandalised. It is outrageous and wicked for anyone to vandalise such equipment and place people's lives in jeopardy.
Towards the end of 1990, there was a level crossing accident near Doncaster. The accident was not due to a vandalised telephone. A young woman and at least two children were, tragically, killed. My hon. Friend the Member for Jarrow (Mr. Dixon) has drawn my attention to an accident at Harrison Farm level crossing. A seven-year-old girl was knocked down and killed by a train on the main Newcastle-to-Sunderland railway line. The view of the people who live there and of the deeply saddened relatives is that either the crossing should be closed or that it should be staffed by someone. If a level crossing is much used, someone should be there.
The Minister for Shipping and Public Transport (Mr. Patrick McLoughlin): The hon. Gentleman said that the Doncaster accident happened on a level crossing. I should put on record the fact that it is a public right of way—a footpath. I am sure that he will accept that it is not a level crossing. I cannot comment on the case in the constituency of the hon. Member for Jarrow (Mr. Dixon).
Mr. Cryer: I am grateful to the Minister. Of course, a level crossing is just what the term implies. A device is fixed across the line to give people a level walk over the rails. I accept the Minister's differentiation—that this was a foot crossing, rather than a vehicle crossing—but the principle is the same.
The Minister may be interested to know that the Secretary of State will have received a letter about the sad accident at Harrison Farm crossing. I hope that the point I am making can be put clearly to British Rail. Where the

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board is given powers to operate a crossing—as in clause 14(3)—the Government should give sympathetic consideration to the provision of staffed level crossings if there is the slightest danger of a reduction in safety arising from having flashing lights and barriers with no linkage between the level crossing gates and the signals.
Let me remind the Minister of the procedure that used to apply to all level crossings throughout the country. A key that was fastened to the gate had to slide into a lock when the gate was in the closed position across the railway, physically preventing access to the railway. In fact, there were two keys at each crossing—one at either gate. Both had to be inserted and turned before the home signal protecting the level crossing against railway traffic could be released and railway traffic could proceed past the level crossing. That was a pretty foolproof system.
There is no doubt that rail speeds are higher than they used to be. Electric trains and high-speed diesel electric trains run at higher average speeds than were prevalent in the days of steam operation. In addition, they do not produce as much noise as did steam-generated locomotives. Of course, that noise was a source of very great affection to many people. The exhaust beat from a three-cylinder Gresley Pacific locomotive—an A4 "Streak"—was music to many people's ears. But it was also a warning to people using level crossings. Modern trains are faster and more silent than their predecessors. I urge the Minister to convey to the Secretary of State and to the other Ministers in his Department that there is a very good case for ensuring the highest possible safety standards at level crossings. If that means providing British Rail with extra money to employ people, it will be money well spent.
I hope that this Bill will pass. It should result in the provision of extra facilities for British Rail. It authorises several additional works. I hope that it will facilitate a shift of traffic from roads to railways—something that all hon. Members, certainly those on the Opposition Benches, wish to see. Railways are inherently safer than roads. My hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse) made a specific point about railways being intrusive. By and large, railways are less intrusive than roads. Freight trains are less intrusive than the juggernauts that pass houses at close quarters 24 hours a day. I accept that my hon. Friend has a perfectly valid case, but that case has been met by British Rail. We want to ensure success for British Rail.
Mr. Lofthouse: I point out that the whole case has not been met, although a substantial part of it has. I should not like it to he thought that the entire problem has been solved.
Mr. Cryer: I am grateful for my hon. Friend's indication that the Bill goes some way towards solving the problem. It is a step in the right direction.
I hope that the Bill will turn out to be a tiny step in the direction of the regeneration of British Rail. It is the annual "odds and sods" Bill—the garnering together of all the bits and pieces of legislative authority that are needed. Let us hope that British Rail, by using that authority, will generate increased traffic and reduce the burden on our roads.
8.5 pm
The Minister for Shipping and Public Transport (Mr. Patrick McLoughlin): It may be helpful if I intervene briefly to give the Government's view on this Bill. The hon. Member for Bradford, South (Mr. Cryer) was rather dismissive of my reading Dod's. In fact, 1 was reading for further background information. I was very interested to see that the hon. Gentleman has written two volumes on railways—one in 1969 and one in 1972. That may have been some time before he entered this House. Perhaps he would use his time well by providing us with volume 3 and perhaps even volume 4.
The Government have considered the contents of the Bill and have no objections in principle to the powers sought by the British Railways Board. So far as the Department is concerned, there are no points outstanding. It is for the promoters to persuade Parliament that the powers they seek are justified. There were two petitioners against the Bill, but those petitions have now been withdrawn. The Unopposed Bills Committee has allowed the Bill to proceed with amendments. Judging by the debate so far, I think that there is agreement to it on both sides of the Chamber.
8.7 pm
Mr. Peter Snape: You will be relieved, Madam Deputy Speaker, that I do not intend to refer to the copious reference books in front of me. A glance at them makes me grateful that I did not have to be present for the winding-up speech in the last debate. Obviously, it was extremely complex.
As the Minister has said, general powers Bills are regular occurrences in this House. Such legislation provides British Rail with a valuable opportunity to make minor improvements up and down the country. I refer in particular to works No. 6 and No. 7. All of us who take an interest in these matters will be pleased to see a switch of freight from road to rail. All too often these days, the reverse happens.
I congratulate my hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse) on being able to get some way along the route of diverting trains away from his constituency. This is something for which he has campaigned for a considerable time. I hope that his partial success will be followed by complete success in the years to come.
I was interested in the contribution of my hon. Friend the Member for Leicester, East (Mr. Vaz). I am grateful to him for his birthday wishes. I know that this has not yet happened to you, Madam Deputy Speaker, but when one reaches one's 49th birthday, one appreciates it if people do not remind others of the event.
My hon. Friend made a very wide-ranging case. His was a splendid piece of advocacy. If I followed the gist of his comments, the projects about which he complained are not covered by this Bill. However, I understand that, under our procedures, he was quite entitled to raise them. He seems to be of the opinion that British Rail should not only sell land at a nominal price but also tidy it up, fence it, and pay the legal costs of his constituents. As I have said, it was a splendid piece of advocacy.
Some of us think that, if British Rail were to be so generous, it might find the money to run the trains in accordance with the timetables. I am thinking in particular of services between Birmingham and London over the past

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few weeks. My hon. Friend's splendid advocacy will have been heard, and perhaps it will be acted upon by those who are in a position to make such decisions.
My hon. Friend the Member for Bradford, South (Mr. Cryer) referred to the viaduct involved in works No. 6 and No. 7 and to level crossings. I hope that he will agree that British Rail has an onerous burden in maintaining many of these facilities, especially those on railway lines that are no longer being used, or are sparsely used. The Government and the Department must consider how best this financial burden might be lifted from the shoulders of British Rail, so that it might be able to do what, at least in theory, it is supposed to do—run passenger services in accordance with timetables.
The House will be grateful to the hon. Member for New Forest (Sir P. NcNair-Wilson) for presenting the Bill in his usual able manner. He spoke about the difficulties that British Rail—particularly Network SouthEast—is suffering now. All too often in debates about railway matters, we end up with anecdotes being swapped from one side of the House to the other, and we do not get very far that way. There is something wrong with a system under which, four days after a major fall of snow, Network South East can still run only 50 per cent. of its booked trains. At the risk of delving into my anecdotal memories, 34 years ago when I first started to work for British Rail—a railway of steam locomotives and paraffin lamps in the signals—passenger train cancellations were virtually unheard of. In the modern and updated system that we have now, they are a daily occurrence in virtually every part of the country.
The hon. Member for New Forest told us, eloquently if not convincingly, that 334 units are out of service because of the type and quality of the snow that fell last week. That is difficult to believe. We need a Government concerned to provide a proper railway service rather than to cut year after year the money available to operate it. We need a management capable of running trains rather than budgets. Managerial prospects now appear to depend exclusively on remaining within a budget laid down by someone else and not on providing satisfaction to the passengers, or customers, or whatever they like to call us poor unfortunates who wait for a considerable time for a train that does not arrive, even when it is shown on a timetable. All too often the timetables appear to be a figment of someone's imagination.
The Labour party officially welcomes the proposals in the general powers Bill. We welcome anything that helps the railway industry. I hope that the hon. Member for New Forest will be back, perhaps later this year, with the British Rail (No. 3) Bill, bringing forward all the necessary improvements that, for various reasons, have not made it into this Bill.
8.12 pm
Sir Patrick McNair-Wilson: With the leave of the House, I should like to refer to some of the points that have been made. I thank the hon. Member for West Bromwich, East (Mr. Snape) for his support on this occasion, as on others. I know that he has the railway system very much at heart. I congratulate him and wish him many happy returns of the day.
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I thank the hon. Member for Pontefract and Castleford (Mr. Lofthouse) for the warm welcome that he gave to the works about which he spoke so eloquently. I hope that they will provide the relief for his constituents that I know he has been seeking for so long.
My hon. Friend the Member for Beckenham (Sir P. Goodheart) dealt with the problems of commuters. My hon. Friend will recall that I previously had the honour to be the Member for Lewisham, West, which shares the same railway system as his constituents have to use. I can assure him that British Rail is as unhappy as his constituents are about the difficulties that have been forced upon it during the past week. As I said earlier, a team is going to Sweden to look at harsh weather performance and other matters to ensure that, in future winters, we do not have the same problems.
My hon. Friend the Member for Beckenham referred to part IV of the Bill, dealing with the purchase of land, and talked about the channel tunnel. He will know that no route has yet been agreed. That may be causing all the problems of blight in the south of London to which he referred. The terms and conditions set out in part IV relate to the works in this Bill. I can assure him that, were we to move to the stage to which he referred—the channel tunnel link in any form—clearly we would be looking at separate terms and conditions of purchase.
The hon. Member for Leicester, East (Mr. Vaz), who is not in his place at the moment, spoke eloquently about the problems of his constituents. He will realise that British Rail will stand by the assurance I gave earlier in the debate. I hope that the matters to which he referred can be resolved speedily.
As has already been pointed out, the hon. Member for Bradford, South (Mr. Cryer) is an acknowledged expert on the railway system. He referred to clauses 7 and 14. On clause 7, the intention is to use the viaduct because it is related to the Deighton siding to which I referred earlier. On clause 14, the hon. Gentleman will know with his experience of these Bills, that, as is pointed out in subsection 3, safety is a matter for the Secretary of State. The Secretary of State has to give his approval for the board to provide, maintain and operate barriers, lights, signs and other devices and appliances. Clearly, the board wants to be free to introduce the latest technology as and when it is available. However, ultimately it is for the Secretary of State to determine that those matters lead to greater safety. I agree entirely with what he said about safety, and I can assure him—I am sure that he knows already—that, for the board, safety is the absolute No. 1 priority.
This has been a useful debate. The Bill started modestly enough, with an unopposed Second Reading, and I hope that, having dealt, I hope satisfactorily, with some of the points that have been made, and judging from the general support that the Bill appears to enjoy in the House, it can now proceed to a Third Reading.
Question put and agreed to.
Bill, as amended, considered accordingly; to be read the Third time.

HEATHROW EXPRESS RAILWAY (No. 2) BILL (By Order.)
Order for Second Reading read.
Motion made, and Question proposed, That the Bill be now read a Second time.—[Mr. Neil Thorne.]
Question put and agreed to.
Bill referred to the Examiners of Petitions for Private Bills.

British Technology Group Bill [Money]
Queen's Recommendation having been signified—
Motion made, and Question proposed,
That, for the purposes of any Act resulting from the British Technology Group Bill, it is expedient to authorise—

(a) the payment out of money provided by Parliament of—

(i) any expenses incurred by the Treasury or the Secretary of State in acquiring securities of the successor company (within the meaning of that Act) or rights to subscribe for any such securities; and

(ii) any administrative expenses incurred by the Secretary of State or the Treasury in consequence of the provisions of that Act;

(b) the payment out of the National Loans Fund of any sums required by the Secretary of State for making loans to the successor company;

(c) payments into the Consolidated Fund or the National Loans Fund.—[Mr. Boswell.]

8.17 pm
Mr. Bob Cryer: There has been a gap between the Second Reading debate and this money resolution. Before the Minister mentions my absence from the Chamber during the Second Reading debate, I should tell him that I was chairing the Joint Committee on Statutory Instruments. It is not a glamorous job, but it has to be done, and it takes me out of the Chamber for a couple of hours every Tuesday afternoon from 4.30 pm. Therefore, I apologise for not being here during the bulk of the debate, but, as the Minister knows, I was here for the Front-Bench replies, so I am familiar with the arguments used.
The money resolution provides, in the usual form, for covering expenses—one cannot cavil at that. It relates to administrative expenses in addition to expenses involved in acquiring securities of the successor company. However, the second part of the resolution causes me some concern, because it authorises
"the payment out of the National Loans Fund of any sums required by the Secretary of State for making loans to the successor company".
The successor company is the replacement for the British Technology Group. When the Minister spoke, he had that fanatical gleam that comes to the eyes of any Members of the no-turning-back or goose-stepping tendency in the Conservative party. We have seen on previous privatisation occasions how the rules of probity and good sense that normally govern the operation of our government are cast to the wind.
I want to suggest to the Minister a possible scenario. Let us consider a contributor to the Conservative party, such as Lord Hanson, who at one time was put forward to buy at least one of the generating companies that are now being offered to the public. It was hoped that he would get the Government off the hook in that area of privatisation. Let us suppose that a Tory party sympathiser comes along and says, "I am very willing to take up the purchase of the British Technology Group." Arrangements are then made to privatise it, and the most influential purchaser of shares in the company is Lord Hanson. What is to stop the Minister expressing his appreciation of that by making loans to the company? He could not do that when it was not a Crown company, but there is a time before full privatisation when the Secretary of State has control of the company and can make loans under clause 8(3). He can lay down conditions and require that the loan

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"shall be repaid to him as such time and by such methods, and interest on it shall be paid to him as such rate and at such time, as he may, with the consent of the Treasury, from time to time direct."
That is a pretty wide power to give the Secretary of State, and it is included in the primary legislation. I am not talking about his producing any delegated powers of any rules subject to approval by the House.
All that is saving us from handing over loans at preferential rates of interest to a company that it is arranged is about to be bought by an influential figure in the City scene—or whomever it may be—is the consent of the Treasury. It is rather alarming that, in the money resolution, we are handing over such powers in a process that I regard as wholly lamentable and which is in the hands of Ministers who are deeply committed not only to privatisation, but to privatisation on the basis that the process will not be subject to the criticism of hon. Members. Those Ministers need to make the process as successful as they can.
One of the ways in which Ministers can make the transfer successful is to ensure that the company is given all the loan money that it needs from the public purse. This will not be the first time that that has happened. Rover was an example of a privatisation in which a firm with assets of more than £750 million was handed over to British Aerospace at a cost of about £150 million. Lord Young, who was then Secretary of State for Trade and Industry, was criticised by the European Commission for the sweeteners that he allowed to be given to British Aerospace and which were not revealed to the public at large in the privatisation. This is a matter of considerable alarm.
My hon. Friend will recall that Lord Macmillan talked about selling off the family silver. We are now getting on to the peripheral pieces of family silver about which most people do not know. We are going into the attic. However, in this attic there is a highly successful group, as has been acknowledged by everyone. All the privatisation proposals have involved organisations that have been widely praised by the Government for the devotion and determination of the workers involved. Yet the Government thrust them out into what is euphemistically termed the "marketplace".
We know that the marketplace is not the never-never land that is so loved by the Minister. We know that it involves deals and arrangements between people who are in influential positions because they have a lot of money. If the Government seek to make this privatisation successful, they will want to make substantial loans. The money resolution and the components of the Bill provide that power. There are few safeguards in the Bill or in the money resolution to restrict what the Government can do.
It is alarming that the Minister, who has a reputation for extreme right-wing zeal, and the Secretary of State, who is part of the No Turning Back group and who is
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another little zealot in the Government machine, are ready to hand over large sums of taxpayers' money. What will happen? We shall be too late. The money resolution and the primary legislation will have been passed. The whole thing is to be handed over with a veneer of legality.
However, we know that the process is designed to ensure not the reasonable loans that are needed but large sums to be handed over to a privatised company. The Government will then proclaim, "This is a success of privatisation." We know that it is a public success in every sense. The Government take a public organisation that has been successful and they then take public funds to provide further loans from the national loans fund to guarantee some sort of success.
I raise those points in perturbation. I tend to examine money resolutions. It is not a convention to vote on those resolutions, although I think that it should be. I should like to vote on them more often, because the money is the key to the whole business. We have passed the primary legislation which authorises the Government to provide money. The money resolution is a specific control by Parliament so that we can say to Ministers, "You have got the power to do this." I should like to withhold that power. I wait with eagerness to see whether the Minister, with the zealot's gleam in his eye, provides a satisfactory explanation or whether he simply provides the defensive briefing on money resolutions with which, I am delighted to say, most Ministers are now provided because money resolutions tend to be debated more frequently these days. I look forward to the Minister's comments.
8.27 pm
The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Edward Leigh): We always enjoy the contributions of the hon. Member for Bradford, South (Mr. Cryer) on money resolutions. It is true that I have come prepared for the comments that I thought that the hon. Gentleman might make. He had some fun, but I will not follow him down that road.
The essence of the hon. Gentleman's remarks was a technical point concerned with the national loans fund and with lending to the successor company under clause 8. If I understood the gist of what the hon. Gentleman said, he seemed to suggest that the money might be misused.
Mr. Cryer: Making excessive loans.
Mr. Leigh: I think that I can give him the reassurance that he needs about excessive loans. The Secretary of State is empowered only to lend money to the successor company from the national loans fund while it remains wholly Government owned. That is merely a contingency measure in case privatisation is delayed. I hope that I can also reassure the hon. Gentleman by saying that it will be a condition of any such loans that they are repaid in full before privatisation. I think that that answers the hon. Gentleman's point.
Question put and agreed to.

Namibia Bill [Lords]
Considered in Committee; reported, without amendment.
Motion made, and Question proposed, That the Bill be now read the Third time.[Mr. Lennox-Boyd.]
8.30 pm
Mrs. Ann Clwyd: Before I give my support to the Bill on Third Reading, let me ask the Minister one or two questions following our Second Reading debate last week.
In her reply to that debate, the Minister for Overseas Development talked about Walvis bay. Do the Government envisage the "early" reintegration of Walvis bay into Namibia taking place before the end of this year? Will Namibia's 12 offshore islands be included, and what sort of encouragement—the Minister's word—will the Government bring to bear on South Africa to relinquish its invalid territorial claim to Walvis bay?
What did the Minister for Overseas Development mean when she said that the Government would help the Namibian Government to tackle the problem of inherited debt, estimated at 800 million rand, which South Africa illegally imposed on the country before independence? Surely in international law the debt belongs to the South African reserve bank which, in turn, owes Namibia a large sum of accumulated foreign currency. Will the Minister support in principle the renunciation of the entire illegal debt?
We appreciate that development projects in education, agriculture and fisheries take time to plan, but does the Minister agree that the Government have been a bit slow off the mark—especially in agriculture and fisheries, given that other countries are already helping to drill bore holes, dig wells, train coastguards, provide seed and research fish stocks?
Mr. Deputy Speaker (Sir Paul Dean): Order. I hesitate to interrupt the hon. Lady, but we had a fairly wide-ranging debate on Second Reading, and we are now on Third Reading. Hon. Members must direct their remarks to what is in the Bill. I am finding it slightly difficult to understand how the hon. Lady's present remarks can be related to what is in the Bill.
Mrs. Clwyd: I appreciate that point, Mr. Deputy Speaker, and I am bringing my remarks to a close.
Namibia is now a Commonwealth country and the Bill reinforces its status as such. The present situation is an example of what could happen elsewhere in southern Africa. Will the Minister therefore explain why, over the next three years, the Government are to provide only about a quarter of the bilateral aid that is to be provided by Sweden, and far less than many other countries are providing?
Given that the most organised part of the Government's aid to Namibia so far is in military and police training, it is not good enough to say that all police forces should operate on the basis of full respect for human rights and the law. Hon. Members asked last week for the assurance that training will have a specific human rights component. Will the Minister now assure us that that will be the case?
I have several other questions, Mr. Deputy Speaker, but I will not strain your considerable patience tonight, as
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we had a full debate last week. Nevertheless, I should be grateful if the Minister would respond more fully to my questions when he has an opportunity.
8.34 pm
Mr. Nicholas Winterton: I apologise to you, Mr. Deputy Speaker, to the occupants of the Treasury Bench, to the House and to the Government arid people of Namibia for not having attended the whole of the Second Reading debate last week. I was present for most of the winding-up speeches, but unfortunately until then was engaged on other commitments elsewhere in the House.
I warmly welcome the Bill. Some hon. Members will know that for almost all my 20 years in the House, I have taken a great interest in Namibia, which is a wonderful country. I do not hesitate to say that, if I was not a citizen of the United Kingdom, there is no other country in which I should like to live more than in Namibia—or South-West Africa, as it was known.
I have had the privilege of visiting that country on many occasions. I must say that the new Government of Namibia would not have been the Government of my choosing. I would much have preferred it had the Democratic Turnhaller Alliance won the election, but SWAPO and its allies won it fairly and squarely and I believe that they stand a chance of forging a multi-party democracy in that country which will stand the rest of Africa in good stead for the future. All of us watch Namibia with great interest.
The hon. Member for Cynon Valley (Mrs. Clwyd) referred to the debt that the new Government inevitably inherited from the Administration that preceded them. I hope that the United Kingdom Government, the EC and other countries will seek to ensure that the fragile body of democracy which is Namibia will not have a millstone round its neck in the form of the large debt that it inherited. I repeat that I have visited Namibia many times; I have been to north, south, east and west. The infrastructure that has been built up is amazing. It is probably one of the best in the African continent. To that extent, the new Administration, under President Nujoma, have a good legacy on which to build for the future. But we do not want them to be handicapped and restricted by the heavy debt incurred by the previous Administration and so prevented from doing what is necessary to ensure their country's prosperity.
I go a little wide, Mr. Deputy Speaker, because the Bill has gone through the House extremely quickly. I do not believe that the admission of a new country to the British Commonwealth should go through on the nod, without those who have some knowledge of that country contributing to the debate and wishing it well. I hope that Namibia's immense potential can be used by its people.
Many hon. Members will know that the country comprises at least 11 different tribal groups, speaking 16 or more different languages. The Namibians have immense problems with education and the provision of educational equipment.
Mr. Deputy Speaker: Order. I must ask the hon. Gentleman, who is a member of the Chairman's Panel, to help me. I have already called the hon. Member for Cynon Valley (Mrs. Clwyd) to order. The occupant of the Chair

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allowed a long debate on Second Reading. We are now on Third Reading and we must discuss what is in the Bill. I am sure that the hon. Gentleman will now do just that.
Mr. Winterton: Indeed I will. You have brought me to order, Mr. Deputy Speaker, and I shall certainly accede to your instruction.
I hope that Britain, as one of the leading countries of what was the British Commonwealth and is now simply the Commonwealth, will seek to play its part in ensuring the success of this fledgling country. Namibia has only 1·4 million people, but, as a member of the Commonwealth, it can take advantage of the immense wealth of good will and experience that is comprised in and can be obtained from the Commonwealth. I wish Namibia well. I wish its Government and its Opposition parties well. I hope that the country can set the example for the rest of Africa. I know that President de Klerk is doing his best in the Republic, but if there is success in African democracy—for that is what is important—there can be peace in that continent and Namibia can set the pace of reform and progress in the whole of southern Africa.
8.40 pm
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Mark Lennox-Boyd): This is a technical Bill to amend United Kingdom law to take account of Namibia's independence and membership of the Commonwealth. There have been debates both in this House and another place, not on the provisions of the Bill, which are largely uncontentious, but on the policy towards the newly independent Government of Namibia. Members of both Houses have had ample opportunity to express their opinions and I am happy to say that the debates have shown universal good will towards Namibia, a good will which was reiterated tonight by my hon. Friend the Member for Macclesfield (Mr. Winterton).
The hon. Member for Cynon Valley (Mrs. Clwyd) asked several questions, to which I shall reply briefly. If any elaboration is needed, I know that my right hon. Friend the Minister for Overseas Development will communicate with the hon. Lady.
As we have already said, we support the early integration of Walvis bay. In this context, "early" means as soon as practicable. It is for the Governments of South Africa and Namibia to determine the pace of negotiations. It is equally for them to determine the scope of any agreement and whether, for example, it would include the offshore islands presently administered with Walvis bay. As for encouragement, we have already emphasised in talks with the South Africans the importance of the talks to Namibia's prosperity. We believe that they will recognise the importance to the region and to themselves of an economically healthy Namibia and the key role of access to Walvis bay facilities.
The hon. Member for Cynon Valley also mentioned the inherited debt, which was referred to by my hon. Friend the Member for Macclesfield. My right hon. Friend the Minister for Overseas Development made it clear that Namibia is already providing in its 1990 budget for servicing and repayment of that debt. Namibia has not sought renunciation of the entire legal debt.
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The hon. Lady asked several questions about aid. If I may, I shall draw them to the attention of my right hon. Friend the Minister for Overseas Development. I know that she will read the Hansard report of the debate. I shall ask her to provide the hon. Lady with answers in writing. Let us all hope that the immense potential of Namibia will be realised, to use the words of my hon. Friend the Member for Macclesfield. On that note, I am happy to commend the Bill to the House.
Question put and agreed to.
Bill read the Third time, and passed, without amendment.

OVERSEA SUPERANNUATION BILL [Money]
Queen's Recommendation having been signified—
Resolved,
That, for the purposes of any Act resulting from the Oversea Superannuation Bill, it is expedient to authorise—

(a) that payment out of money provided by Parliament of—

(i) any expenses incurred by a Minister of the Crown in consequence of any provision of the Act or of any scheme made or having effect as if made under section 2 of the Overseas Pensions Act 1973 by virtue of the Act;

(ii) any administrative expenses incurred by a Government department in consequence of the Act;

(iii) any increase attributable to the provisions of the Act in the sums payable out of such money under any other Act;

(b) the making of payments into the Consolidated Fund.[Mr. Boswell.]

STATUTORY INSTRUMENTS, &c.

  LIGHTHOUSE AUTHORITIES
  Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committee on Statutory Instruments, &c.).
  That the draft General Lighthouse Authorities (Beacons: Hyperbolic Systems) Order 1990, which was laid before this House on 20th December, be approved.—[Mr. Boswell.]
  Question agreed to.

  UNFAIR DISMISSAL (COMPENSATION)
  Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committee on Statutory Instruments, &c.).
  That the draft Unfair Dismissal (Increase of Compensation Limit) Order 1991, which was laid before this House on 19th December, be approved.—[Mr. Boswell.]
  Question agreed to.

  UNFAIR DISMISSAL (AWARDS)
  Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committee on Statutory Instruments, &c.).
  That the draft Unfair Dismissal (Increase of Limits of Basic and Special Awards) Order 1991, which was laid before this House on 19th December, be approved.—[Mr. Boswell.]
  Question agreed to.

  EMPLOYMENT PROTECTION
  Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committee on Statutory Instruments, &c.).
  That the draft Employment Protection (Variation of Limits) Order 1991, which was laid before this House on 19th December, be approved.—[Mr. Boswell.]
  Question agreed to.

House of Commons (Services)
Motion made, and Question proposed,
That Mr. Graham Bright and Mr. David Lightbown be discharged from the Select Committee on House of Commons (Services) and Mr. Anthony Steen and Mr. Greg Knight be added to the Committee.—[Mr. Boswell.]
Mrs. Maria Fyfe: I object to this item on the grounds that the Government have continually failed to set up a Select Committee to deal with Scottish affairs. Until they do, we shall continue to object to motions of this type.
Question put and agreed to.

The Gulf
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Boswell.]
8.45 pm
Mr. Tam Dalyell: My good fortune to begin an Adjournment debate at a quarter to 9 on the role of the United Nations in relation to the Gulf is tinged with just a little sadness. It is sadness that the House of Commons has allowed time to pass from 21 January, when the important questions that I am about to ask should have been asked. In the House of Commons to which I was first elected and of which the father of the Under-Secretary of State for Foreign and Commonwealth Affairs was a distinguished and powerful Member, those questions would have been asked not by a Back Bencher like me, but by Hugh Gaitskell from the Front Bench. These are major issues which belong to not an Adjournment debate but what should be a weekly major debate initiated by the Opposition party or the Government party in prime time.
Having said that, I should like to set some questions, talking quietly to the Minister, as we have the opportunity to do. The first is on the attitude to the United Nations of the Soviet Union. In his most recent statement, Mr. Gorbachev said:
"The events in the region of the Persian Gulf are assuming an increasingly alarming and dramatic turn. The fly-wheel"—
the fly-wheel—
"of one of the major wars of recent decades is spinning free. The number of casualties, including among the civilian population, is multiplying. The military activity has already caused enormous material damage. Whole countries—first Kuwait and now Iraq and later possibly others—are under the threat of catastrophic destruction. The discharge of a gigantic amount of oil into the Persian Gulf may turn into the gravest ecological disaster."
That is part of the latest Russian attitude.
The House will allow me one more quotation on the Russians. It comes from Mr. Brinkley's interview of Marshal Akhromeyev, the chief military adviser to President Gorbachev and the former Soviet chief of stall. Mr. Brinkley said:
"'Mr. Gorbachev has said recently, and again yesterday, that the alliance forces are in danger of exceeding the UN mandate, which is simply to expel Iraqi forces from Kuwait. Is it your view, Marshall Akhromeyev, that by the tactics of comprehensive bombing in Iraq, the United States and its allies may be exceeding the UN mandate? And if so, what might the Soviet Union do about that?"
Marshal Akhromeyev replied:
"'You see, in life we sometimes come across such kind of situations. When a war has been started with just purposes, then it acquires a different kind of character."
I stress those words.
"Something of this kind is taking place in the Gulf area today. Who knows?"
The Government asserted that the American and British force—for such in reality it ever was and has certainly now become—had Russian backing; does it still have Russian backing? What assessment have the Goverment made of the Soviet position? I hear from several sources—there is no reason to suppose that the reports are in any way exaggerated—that men are walking from Tadzhikistan, Uzbekistan, Azarbaijan, Kazakhstan—Muslims from those southern Russian republics—to offer their services to Saddam Hussein. That is an ingredient of an extremely dangerous situation.
What is the Government's assessment of the Soviet attitude now that we are in week 4 of a military situation,

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the nature of which, as in most wars, has changed from the start of that war? The events of 1915 were very different from those surrounding the murder of Archduke Franz Ferdinand. Wars take on a momentum of their own.
My second question, which is linked with the Russians, is about the Government's assessment of the bombing. My question is direct. Can the Minister point out to me whereabouts in the United Nations resolutions there is authority for the pounding of Baghdad night after night after night? There may be that authority, but I have not found it.
Bluntly, an increasing number of people, not only in Arabic and Islamic countries or in third-world countries, but in this country and thoughout the world, are embarrassed and unhappy—many are vomit-stricken—by what is happening. To think that those huge B52s leave that lovely Gloucestershire village of Fairford to go to drop their bombs—I do not know how accurately, except that Ramsey Clark makes it quite clear, as a former American Attorney-General, that the casualties are now mounting. Did the United Nations ever authorise that? Did it authorise the B52s?
What would the Minister or any of us here—my hon. Friends the Members for Bradford, South (Mr. Cryer), for Renfrew, West and Inverclyde (Mr. Graham), for Derbyshire, North-East (Mr. Barnes), for Pontefract and Castleford (Mr. Lofthouse), for Bradford, West (Mr. Madden), for Glasgow Maryhill (Mrs. Fyfe) and for Birmingham, Hodge Hill (Mr. Davis)—do if we were subject to such bombing? If I had been bombed last year or in any year from 1979, I would have "got right behind Margaret Thatcher". It is human reaction to get behind the leader of the country when one is being attacked.
What is the Government's assessment of the reaction to the bombing of Baghdad? I suspect that the people of Baghdad are reacting in the same way as all human beings react, as Londoners in this city reacted in 1940 and as the people of Hamburg reacted in 1943. The people of that proud Hanseatic city did not like the Nazis or Hitler at all, but during the bombing they stepped up production. I cannot say that production is going up in Baghdad, but I suspect that that bombing makes people more determined, not less.
What is the Government's assessment of the effects of such bombing? Furthermore, what is the effect on the troops who are bombed? We may say that we are concentrating all our bombing on Kuwait, but are we sure that that does not make the troops more determined? I fear very much for a land battle, because that battle could be another Stalingrad. It could be a battle of hand-to-hand fighting, block by block. Are we sure that the United Nations authorises that?
I am aware that we have some time for this debate, but my speech will not be endless. I have a specific question about the attitude of the United Nations Secretary General. I drew to the attention of the Foreign Office a report by Leonard Doyle from New York that appeared in The Independent on Monday 11 February under the banner headline "UN 'has no role in running war'". Forgive me, but I thought that we were acting as the United Nations force. That is what I have been told
814
endlessly by my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman). However, that report states:
"The United Nations Security Council is not running the war in the Gulr—
who said that? —
"according to Javier Perez de Cuellar, the Secretary-General."
It might be thought that he was in a position of some authority to pass comment on that.
Mr. Doyle reported that Mr. Perez de Cuellar
"told The Independent at the weekend that the council had handed control to the US, Britain and France and only learnt the outcome of military actions after they had taken place."
If it is a United Nations war, it is a bit odd that the Secretary-General learned about military actions only after they had taken place. The report continues:
"Distancing himself from allegations that the strategic objectives of the US and its allies go beyond the liberation of Kuwait, Mr. Perez de Cuellar said he could not say whether particular military actions, like the sustained and massive bombing of Iraq's infra-structure, were consistent with the United Nations resolutions."
We are entitled to ask, do the Government think that they are consistent with the United Nations resolutions? If the Secretary-General has doubts about it, the burden of proof is certainly on the Government to say how they think that the regular, nightly, massive unparalleled bombing, described by my hon. Friend the Member for Coventry, South-East (Mr. Nellist) as 20 times nighly what Coventry received during the blitz, is consistent with UN resolutions.
The report goes on:
"But he"—
that is, Mr. Perez de Cuellar—
"did express his distress that the UN is now associated with loss of human life caused by the war. 'This war is not a classic United Nations war in the sense that there is no United Nations control of the operations, no United Nations flag, [blue] helmets, or any engagement of the military staff committee', he said.
'What we know about the war, which I prefer to call hostilities, is what we hear from the three members of the Security Council which are involved—Britain, France and the United States—which every two or three days report to the Council, after the actions have taken place.'"
This is different from Korea. I was not in Korea, but I did my national service at the time of Korea as tank crew in the Rhine Army. Many of those with whom I trained went to the King's Royal Irish Hussars and were shot up in Korea. I have a clear memory that it was all about the United Nations; it was certainly drummed into us that it was about the United Nations. The position in the Gulf in 1991 is different.
Mr. Doyle's report of Mr. Perez de Cuellar's comments continues:
"'The Council, which has authorised all this, [is informed] only after the military actions have taken place. As I am not a military expert I cannot evaluate how necessary are the military actions taking place now,' he added.
He was concerned most about the loss of human life, he said, 'because as Secretary-General of the United Nations I consider myself head of an organisation which is first of all a peaceful organisation and secondly a humanitarian organisation."
That has to be explained, because the Secretary-General is saying that he disapproves—no other interpretation is possible from his statement—of the action which is being taken in the name of the United Nations of which he is the titular head.
Mr. Bob Cryer: I am following my hon. Friend's speech with great interest. Does he not agree

815
that those people who claim that the action is to sustain the United Nations are wrong, because the war itself represents a failure of the United Nations? The United Nations is an international body, designed, instituted and committed by charter to resolve conflict by peaceful means, not by war.
Mr. Dalyell: I agree not only politely but from the depth of my heart with the sentiment that my hon. Friend expresses. Emotionally and otherwise, I deeply agree with the point that he has put, extremely succinctly.
Mr. Doyle's report goes on:
"While making a final appeal to Saddam Hussein to pull out of Kuwait 24 hours before the beginning of hostilities, Mr. Perez de Cuellar said that people on both sides did not want war.
Signalling once again his displeasure with the turn of events, Mr. Perez de Cuellar, who is 71, said that even if asked by the Security Council to stay on as Secretary-General he would refuse to do so.
Last week Tariq Aziz, Iraq's Foreign Minister, launched a bitter attack on Mr. Perez de Cuellar accusing him of remaining silent while the allied forces targeted civilians."
So it goes on. Hon. Members can read the rest of the report for themselves. I simply ask the question: if that report or anything like it is true, what is Her Majesty's Government's view of the position of the Secretary-General?
I return to the point raised by my hon. Friend the Member for Bradford, South (Mr. Cryer). I want to read to the House a moving letter, pertinent to the point, from a friend of mine, Howard Kensett, of Eastbourne in Sussex. I have known him as a United Nations stalwart and enthusiast for many years, ever since he invited me to meetings in Sussex on United Nations ecologically related subjects. He says:
"The Gulf War is a blasphemy against the spirit and ideals set out in the United Nations Charter 45 years ago. The world appears to have learnt nothing.
The inspiring preamble to the charter begins: 'We the peoples of the United Nations, determined to save succeeding generations from the scourge of war, which twice in our lifetime has brought untold sorrow to mankind.'."
Mr. Kensett continued:
"As an enthusiastic member of the UN Association for over 30 years, I have been numbed by what has happened in the name of the only world-wide organisation to encompass so much of the world's concern for mankind. The Security Council, formed to resolve conflicts, has compounded the situation by permitting no negotiation or diplomacy except an ultimatum and deadline which offered no face-saving alternative. The Secretary General was given no specific role to play, and has complained that he only knew the war had started one and a half after zero.
In September I attended, as a delegate of the Eastbourne branch of the UN Association, a peace messengers' conference at the UN in New York, where we were told that the Voluntary Trust Fund for the Promotion of Peace stood at $22,000. I said that this was a disgrace.
Since then I have written to Mr. Major, Mr. Kinnock, and the Liberal Democrats. Mr. Hurd replied that 'the United Kingdom makes no contribution to the fund: we doubt its effectiveness and can make better use of its resources elsewhere. We do not intend to sponsor British delegates to future UN peace messengers for the same reason.' No money for peace, but billions—nay trillions, for war—what a comment on our civilisation."
Mr. Kensett speaks for many. If the Minister or I—or any other hon. Member—were a poor Egyptian or Arab peasant and saw that money being given to the United States and the United Kingdom by the Emirates, Kuwait
816
or Saudi Arabia for war, we would begin to wonder why some of it did not come in our direction for economic development.
Page 2 of today's edition of The Guardian features a long article entitled "When UN resolutions met Iraqi resolve". It is, allegedly, a statement by the United Nations Secretary-General to the Security Council on 14 January 1991. Will the Minister comment on the following passages? If he wishes to give me a considered comment in writing, I shall make no fuss. The article states:
"Underlining a theme that had been emphasised during my meeting the previous evening with Foreign Minister Tang Aziz, the President said that it would not be possible in a single meeting to find 'ready solutions to such a complicated situation'. He noted that whereas resolution 598, which Iraq had accepted, set out a comprehensive approach to the issues addressed therein, the Security Council had not, regrettably, adopted a comprehensive approach in dealing with the present crisis."
Does that represent the facts? If so, it means that the criteria laid down by St. Augustine and St. Thomas Aquinas for a just war—that everything should be done to avoid it—have simply not been fulfilled.
The article continues:
"He pointed out that although Iraq had never accepted resolution 660, it had agreed, in the early days of the crisis, to attend a mini-summit in Jeddah and had begun to withdraw its troops from Kuwait. But those efforts, which he stated were aimed at achieving 'an Arab solution', were undermined by the introduction of foreign forces into the region, which heightened the threat posed to Iraq.
Criticising what he called 'precipitous' actions by the Security Council, he stated that Iraq had been tried in absentia and his Foreign Minister had been denied the facilities he needed to be able to present his case. Further, he stated that on earlier occasions when the Council had called for the withdrawal of troops, this had been accompanied by a call for negotiations between the parties; withdrawal had not been set as a precondition for such negotiations.
Moreover, he cited examples of Israeli occupation and annexation, noting that Israel had never been subjected to sanctions or outside military intervention as a means of ensuring compliance with Security Council resolutions."
I should like the Government to comment on that.
The House will forgive me for being personal. I am not an Arabic speaker, but both my mother and my father were fluent Arabic speakers and I was brought up in the belief that one had to be patient with Arabs. The Texan oil executives, Mr. Baker and Mr. Bush, seem to have been extremely aggressive and impatient in all their dealings. I want to know whether all that is printed in The Guardian is true. Either it is untrue, in which case it should be refuted, or it is true, in which case a great many questions have to be asked about the British Government's knowledge of the United Nations activities.
The quote continues:
"On two separate occasions during our meeting, the President called on me to use my good offices, saying that if the other parties were to permit me to play a role in search of a solution, Iraq would facilitate my task and co-operate with me. In response to my comment that this idea would be a non-starter if the position of Iraq was irreversible on the subject of withdrawal from Kuwait, the President reacted by saying that that was not what he meant. He reiterated that I should try to engage the views of the parties, including Iraq, in order to make proposals that could lead to a solution."
Is that or is that not true?
I quote now from extracts from the Iraqi transcript translated from the al-Dustour of Amman of 9 February. This is what is being said in the Arab world and this is what is believed in Jordan. A number of Jordanians have telephoned my hon. Friends and myself, including a

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princess of Jordan, one of the ruling Hashemite family, who are exceedingly concerned about what has happened, for reasons that everyone knows. In Amman, it is published:
"Pérez de Cuéllar …'Now I do not want to argue with you, Your Excellency … but you have been the cause of this achievement for the Palestinian cause' …
Saddam Hussein: … 'From the year 1963 to 1968 Iraq was ruled by two weak brothers, and during their rule the sheikhs of Kuwait marched into the territory once again from Mitla to here, and then during the war with Iran they expanded again and exploited oil fields knowing from the very start that they were within the pre-August 2 1990 Iraq'".
That ties up with something that the right hon. Member for Old Bexley and Sidcup (Mr. Heath) has been saying —to which borders does one withdraw?
I quote again:
"Pérez de Cuéllar: 'If you have this good case, you can go to the International Court of Justice.'
Saddam: 'We have said, and we still reiterate, that we desire peace and we are ready to bear our responsibilities as part of the international family of the UN, but are others ready to shoulder their responsibilities on the same grounds? Are they ready to respect international legitimacy and international law on the Middle East problem according to its background and to do justice to each issue?
'Notice what the American President said, that he speaks of formalties and does not touch on substantial issues which concern us as oppressed nations. He talks about the possibility of the withdrawal of ground forces after the crisis is over and does not mention anything about the withdrawal of naval and air forces.
Pérez de Cuéllar: 'These are not my resolutions. They are the resolutions of the Security Council.'
Saddam: 'These are American resolutions … it is the era of America. What America wants today is what happens, and not what the Security Council wants.'
Pérez de Cuéllar: 'I support you as far as the issue concerns me.'"
Did the Secretary-General of the United Nations actually say:
"I support you as far as the issue concerns me"?
Whether that is true or untrue, the House of Commons should know.
The interview continued in this way:
"Saddam: 'Let us go back to the law and how a member of this family'"—
he means the United Nations—
"is converted into the accused without listening to his defence.
You are the Secretary-General of the United Nations and despite this you have not been able to make it possible for the Iraqi Foreign Minister's aeroplane to land in the United States so that he may attend and defend the Iraqi point of view."
Some of us have been unhappy for a long time about the United Nations being physically in the United States. There is now a case for moving it elsewhere.
Perez de Cuellar's reply was:
"I tried … and I said that this is a violation of the headquarters agreement with the United States."
Did the Secretary-General really say this? If he did, it raises serious issues.
My next subject is the Government's assessment of many of the members of the United Nations whose Governments, to put it mildly, are under the most acute pressure. It is said in the Arab world that, if Saddam Hussein can stand against the might of the world for 40 days, he must be right. The war probably looks rather
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different from Cairo or from Damascus. I am told that we have achieved the near-impossible—bringing together the left in Egypt with the Muslim Brotherhood.
I am not making this up. Let me quote from that impeccable Labour newspaper, The Daily Telegraph. Alan Philps, of the foreign staff, wrote this:
"In non-combatant countries, the Saddam cult is becoming a focus for grievances against the government.
In Bangladesh the campaign for the general election scheduled for Feb 27 has been dominated by Gulf war agitation."
My hon. Friend the Member for Bradford, West, who represents many Bangladeshis, knows that that is true. The article continues:
"The Iraqi embassy in Dhaka, capital of Bangladesh, has claimed to have handed out 1,000 poster portraits of Saddam to marchers …
In Malaysia, where more than half the population is Muslim, police found a home-made bomb containing nails and broken glass planted outside the American Airlines office in Kuala Lumpur …
Tension is also rising in Nigeria, where there have been pro-Iraqi demonstrations in the Muslim north of the country, particularly the city of Kano and the town of Kaduna …
The smaller Muslim nations of Africa—Niger, Senegal and Sierra Leone—which have sent token contingents to Saudi Arabia, now find themselves open to accusations of being bribed by the Saudis."
I was chosen by Mr. Speaker to lead a parliamentary delegation to Zaire because of rain forest interests—hon. Friends of the Minister were members of the delegation—where we met the Zaire Foreign Minister, who was full of a meeting he had had with James Baker three days before. I asked him why Zaire was so definitely siding with the Americans. It was quite clear to all of us that it had nothing whatsoever to do with a judgment on the rights or wrongs of the situation in the middle east. It was all about Zaire's perception of obliging the Americans, so that a ban on aid to Zaire would be lifted—a ban which had been imposed because of that country's appalling human rights record. In a sense, that is corruption of the United Nations Security Council, and the same story could be told about the Ivory Coast vote in the United Nations Security Council.
Mr. Dennis Skinner: This American-led war has been based upon mercenary and corrupt actions from the beginning. America did not pay its subs to the United Nations—it owed $135 million—until the day that it wanted a resolution passed about the 15 January start date for the war. The United States also bailed out Egypt, to the tune of $2·5 million, writing off its debts, and told Yemen that, if it voted with America, it would get other aid. The United States got money from Saudi Arabia and laundered it to Russia, so that the United States would keep its mouth shut while Russia did what it liked in Lithuania. The United States has been trying to cadge money from Germany and Japan, the two countries which supposedly lost the war in 1945. That tells us something about wars—the winners are not always winners for ever.
Mr. Dalyell: I must candidly tell the Minister that, when I first head my hon. Friend the Member for Bolsover (Mr. Skinner) shout across the House that the war was "mercenary", I thought that he had gone over the top. After the past weekend I believe that, as so often before, my hon. Friend's insights were spot on. At the weekend, I said to my wife, "Dennis Skinner was right after all." Having thought that he was exaggerating, even I have now

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come to the conclusion that the mercenary issue is very serious, but I shall not pursue it tonight, because I know that some of my hon. Friends wish to speak.
I am very worried about Tuwaitha, the nuclear facility in Iraq. For 24 years, I have been a weekly columnist of the New Scientist and I do not throw scientific facts around carelessly. As far as I know, it has never been satisfactorily explained what happens when a nuclear facility is bombed. I have always believed that, if one bombed nuclear reactors or certain types of nuclear research establishments, some sort of radiation would result.
I am told that no one in the west knows for certain what has happened in Iraq. There has been no monitoring. How do we know? I am not saying that this has happened, but how do we know that the most appalling Chernobyl-like effects have not resulted from the bombing of those nuclear facilities? People who drop bombs on nuclear facilities had better be clear what they are doing.
I am also worried about the bombing of Samarra, Kerbala and Najaf. I know perfectly well that Saddam Hussein probably put his chemical factories near to Samarra on purpose, and that there may well be missile boosting equipment near Najaf. However, they are holy places, and there is said to have been destruction.
I wrote to the Foreign Secretary about the damage and he replied that the Iraqis might well say that there had been damage when there was none. However, we have now seen pictures, apparently of Najaf—that has not been denied —showing considerable damage.
What is the Government's assessment of the effect on the Shi'ites? I shall leave any related matters pertaining to the Hajj to my hon. Friend the Member for Bradford, West, who knows more about them than I do; but there is, I think, considerable concern about the holy places, and also about Babylon and Ur of the Chaldees. I have asked questions about that. If the Minister doubts what I have said, he should consider what he, as an art lover, would say if Durham, Stonehenge, Salisbury or Wells were destroyed by bombing. What would that do to the British?
Hon. Members may say that I am confining my examples to the Muslim world. I could choose the third world, but I can also choose our West German colleagues in the Social Democratic party. With, presumably, his party's authority, Karsten Voigt, a member of the Bundestag and foreign affairs spokesman for the SPD, has said:
"In the present situation, the SPD calls upon all responsible parties to cease hostilities in order to recreate room for a political solution."
I feel no embarrassment about calling for a ceasefire, at least to give space for discussion. There may be military disadvantages, but there do not seem to many of us to be any military advantages in the current inhuman bombing.
It is not just the inhuman bombing, however. On 5 December, I asked General Colin Powell—upstairs, in Committee Room 14—about his view of the much-repeated ecological figures from the King of Jordan. Part of his reply was, "Well, they will set fire to the trenches. We know from our satellites that they are pouring in oil which can be ignited, using artesian methods. My tanks will have to go through canalised fire."
I take no joy in this, but what I predicted in the first part of my Consolidated Fund debate on 19 December has come true. As can be seen in column 403 of Hansard, I specifically drew attention to the awful oil slicks that are now threatening the Bahrainis, and also threatening the
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coral atolls that produce the larvae to feed the fish that provide a permanent supply of food for the people living around the Gulf. Let me ask—in brackets, as it were—what is happening to Qaruh and Umm A1 Maradim, the coral atolls. The ecological disaster is simply enormous.
I may have spoken for longer than I should have, for some of my hon. Friends wish to speak as well. I beg the Minister, in these quiet circumstances, to try to provide answers to these urgent and extremely worrying questions.
9.27 pm
Mrs. Maria Fyfe: I congratulate my hon. Friend the Member for Linlithgow (Mr. Dalyell) on securing tonight's debate and on his persistence in the face of all the difficulties involved in continuing to present this issue to the House.
In all seriousness, and with no sense of irony, let me also congratulate Mr. Perez de Cuellar on his sheer frankness and honesty. When he admitted to the world at large that he had not even known that war had begun until an hour and a half after the commencement of hostilities, we had to admire his candour. In the world of politics, at almost every level, there is always a great temptation for people to pretend that they know what is going on when they do not, lest they are thought to be less knowledgeable and powerful than they are. That man's honesty will go into the history books: people in future will ask, "What on earth was going on in the Gulf war?"—the "United Nations war" which was nothing of the kind, as the facts that unroll day by day are proving. It is farcical that a war allegedly waged in the name of the United Nations has been going on for three weeks, during which time the United Nations has not even met.
General Schwarzkopf, in his fairly frequent press interviews, has referred to his political masters in the United States. He has never referred to what the United Nations might have to say about the war. Well down a lengthy article in the Evening Standard, General Schwarzkopf was asked whether it was possible that, if Saddam Hussein used chemical weapons, the west would respond with nuclear weapons. He replied that there had been no consultation with the Allies. He did not even mention the United Nations. He said that President Bush would not be able to rule anything out. I do not know whether he intended to frighten the Iraqis, but he certainly frightened me.
The United Nations is certainly not in charge of this war. Various developments are unfolding. I ask the Government not merely to answer my questions but to take action on them. One arises out of a letter in today's Glasgow Herald. It was written by Canon Kenyon Wright, a man who has won a great deal of respect in Scotland, for various reasons. He mentions a letter that he had received from Church relief workers in Jordan. They told him that children in Jordan need baby milk powder but that they are not getting it. Three cargoes of baby milk powder had failed to reach those infants in Jordan because the American forces are not letting them through.
The writer of the letter to Canon Wright said that that is illegal. Due to the sheer confusion of war and battle, mistakes can be made. I hope the Government will take up that matter with their United States colleagues and get them to allow the supplies of baby milk powder to reach the infants in Jordan. We must ensure that the sad effects

821
and casualties of war are reduced as far as possible. When people are so gung-ho that they start to think in Star and Sun headlines, they seem to forget about human needs.
I wonder also whether the Government will take up a question that I understand American congressmen have taken up with their Government. We have not heard a cheep about it in the House of Commons. To this day, the United States is funding people who are carrying out acts of terrorism in E1 Salvador. Many United States senators and congressmen have said that they can hardly go about proclaiming that they care about human rights in Kuwait when acts of terrorism are being carried out against the people of E1 Salvador. They have at least the honesty and goodness to recognise the anomaly. Some members of the United States Government have responded to those criticisms, but I have yet to hear a cheep from any member of this Government about that. Are they not interested in human rights in central America?
We ought to think seriously about trying to find a way out of the war. There is no point in saying that we are right and that history will prove that we are right. We must endeavour to resolve the conflict as well as possible. The United Nations ought to keep on meeting until a way is found to resolve the conflict. We ought to be trying to find some way, under United Nations authority, of organising a ceasefire under conditions that all concerned find acceptable. The United Nations should keep on meeting until a solution is worked out. The alternative is for everyone to sit back and let the war rip. Death, casualties and carnage will then go on and on until someone is declared a winner. In the name of common sense, would it not be preferable to discuss continuously in the United Nations the issues that concern the warring nations, in an effort to resolve the conflict?
Arrangements ought to be put in hand for an international conference—a conference involving not just the nations concerned but the peoples concerned, such as the Kurds and the Palestinians—to make sure that at the end of this episode some kind of settlement will be worked out. We need a settlement that will not merely stop the fighting but will achieve lasting justice in the middle east. If we simply allow the war to continue, and a victor to emerge, we shall end up with the conditions to inspire another war in the future, just as the second world war followed the first.
I hope that the Government will listen to what some newspapers are pleased to call the peacemongers. I regard those people as the ones who are actually thinking about finding constructive ways out of the dreadful mess into which the Government have got this country.
9.35 pm
Mr. Max Madden: The whole House is once again greatly indebted to my hon. Friend the Member for Linlithgow (Mr. Dalyell), who initiated this important debate. This is the 27th day of the Gulf war. For every minute of those 27 days, there has been a bombing raid on Iraq. It has become very clear indeed, as each of those days has gone by, that this war has very little to do with freedom or democracy, but a great deal to do with America's determination to defend its oil interests and its ambition to extend its political influence in the region—political influence, so aptly described by the right hon.
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Member for Old Bexley and Sidcup (Mr. Heath) as the new imperialism. It is indeed the new imperialism that we have seen so graphically demonstrated in the Gulf during the last 27 days.
It has been much more difficult to detect the underlying reasons for the turmoil that has gripped the Gulf—indeed, the whole of the middle east—in recent years. Clearly, those reasons are the legitimate struggle of the Palestinian people for a homeland and for independence, and the recognition by millions upon millions of poor Arabs that, in many Arab countries, the wealth deriving from oil is very unequally distributed. It is important to note that tonight, as during the past 27 days, British forces are seeking to defend one feudal family in Saudi Arabia and are fighting to restore another to Kuwait. If we believe in freedom and democracy, we must commit ourselves to ensuring that freedom and democracy will come to those Gulf countries one day.
Over the past 27 days we have been told that this war is approved, even sponsored, by the United Nations. Again it is becoming clearer and clearer that America hijacked the United Nations, that this war is American-inspired, American-led and American-dominated. My hon. Friend the Member for Linlithgow referred to leaked documents that reveal the extent to which, before 15 January, Perez de Cuellar and the United Nations were marginalised and manipulated. It is very important to recall that, as my hon. Friend has mentioned, it was hours after the attack on Iraq had taken place that the United Nations Secretary-General was informed of it. [Interruption.]
I do not know why the Minister is getting so annoyed. Could it be because this is the first debate on the Gulf and the United Nations initiated by my hon. Friend? The consensus between the Government and the official Opposition amounts to a conspiracy of silence to ensure that the House will not have an opportunity to speak out in the names of the 10 million or 11 million British citizens who are totally opposed to this war. Could it be that the Minister is upset because he is required, at the end of this debate, to come to the Dispatch Box and defend the war—defend it in the name of the House of Commons, which during the past 27 days has been denied any genuine opportunity to debate it?
In particular, I hope that the Minister will comment on the war aims of Her Majesty's Government, remembering that we are embroiled in this venture on the coat-tails of the new imperialism that the United States of America seems determined to introduce in the Gulf region.
We are worried about the war aims, which seem to be confused and contradictory. The Secretary of State for Defence said some time ago that this war would be short, sharp and quick. Yet 27 days later, he said on BBC Radio:
"If Saddam and his forces merely withdraw to the border and we did see the liberation of Kuwait, but all the Iraqi guns and all the military machines were left on the other side of the border merely to repeat the exercise as soon as the allies went away,. that would simply not see the achievement of that resolution. I think people understand that it has to be right after all the effort, all the cost and all the pain that we've been involved in. We can't leave it half finished with a continuing menace continuing to threaten other states in the area."
Those are the war aims spelled out by the Secretary of State for Defence on 27 January. He repeated them precisely two days later, during Defence Question Time. Following that, the Prime Minister, when asked, said that

823
our war aims were entirely in line with the United Nations resolution, and he uttered no word of repudiation of what the Secretary of State for Defence had said.
We have heard some different war aims from the Foreign Secretary. His character is gentler and more civilised than that of the Secretary of State for Defence, and his war aims are significantly different. It is not without significance that Labour's shadow Foreign Secretary prefers the war aims of the Foreign Secretary.
Let there be no misunderstanding that what is happening is the destruction of Iraq. As my hon. Friend the Member for Linlithgow said, power stations are being obliterated, as are water supplies and all the needs of everyday life. Imagine what will happen in a few weeks, in the heat of the summer in temperatures of 100 deg or 120 deg F. Think of the illness and disease that will sweep Iraq at that time.
We should think also of how much Arab opinion is already alienated from America, Britain and the other states in the coalition. We all know that the coalition is America and, in a secondary way, Britain. We should think how difficult it will be for Arab states inside and outside the coalition to maintain their stability because of the alienation that grows deeper every day that the war continues.
In my view, now is the time for the United Nations to exert itself. The Security Council should have been in permanent session since the start of the war. It should have been picking up all the initiatives that have been made by Iran, India, the non-aligned nations, the Maghreb countries and Russia. All those initiatives have been taken in the past few days in an effort to achieve peace. We need a ceasefire and a negotiated settlement. We all know En our hearts that, if that peace is to be real and genuine and to lead to peace and stability in the Gulf region, it has to be worked out by Arabs. It cannot be imposed by external forces—and most of all, it cannot be imposed by the new imperialists.
9.44 pm
Mr. Harry Barnes: Words have lost their meaning, and values and ideas have been stood on their head by the operation of the war. Those of us who favour bringing British troops home are said not to support the troops, when, in reality, we are the people who wish to save their lives. Those of us who have all along stood by the principles for which the United Nations stands are said to be anti-United Nations because we have voted against the Government, who claim that resolution 678 is a mandate from the United Nations to take the action that they are taking in the Gulf. I object strongly to being called anti-United Nations.
Clause IV(7) of the Labour party constitution spells out our commitment to international principles and stands by the United Nations. It states that its objectives are
"to co-operate with the labour and socialist organisation in other countries and to support the United Nations Organisation and its various agencies and other international organisations for the promotion of peace, the adjustment and settlement of international disputes by conciliation or judicial arbitration, the establishment and defence of human rights, and the improvement of the social and economic standards and conditions of work of the people of the world."
There is no way in which the action taken by the allied coalition forces could be said to be in keeping with any of
824
those principles. I do not believe that allied forces are acting in conformity with the resolutions passed by the United Nations.
Resolution 678 states that in certain circumstances all necessary means can be used. We are using wholly unnecessary and counter-productive means in the present circumstances. Resolution 678 also endorses all the previous United Nations resolutions on the Gulf crisis, including resolution 666, which calls for foodstuffs and medical supplies to be made available in Iraq and Kuwait in certain circumstances. Those circumstances were envisaged to be the application of the sanctions. Sanctions still apply, but in the context of a massive bombardment of the Iraqi people. Those circumstances are endorsed by resolution 678.
I shall quote from and explain the early-day motion on United Nations resolution 666 which I tabled today. It states:
"That this House notes that the much-quoted Resolution 678 of the United Nations reaffirms all previous United Nations Resolutions on the Gulf crisis, including Resolution 666."
Conservative Members may say, "resolution 660", but there are a number of resolutions, and resolution 666 happens to be one of them. The early-day motion
"calls for particular attention to 'be paid to such categories of persons who might suffer specially, such as the children under 15 years of age, expectant mothers, maternity cases, the sick and the elderly' and recognises 'that circumstances may arise in which it will be necessary for foodstuffs to be supplied to the civilian population in Iraq or Kuwait in order to relieve human suffering', plus medical supplies; and also notes that Resolution 678 is ambiguous about the means it sanctions to ensure that Iraqi Armed Forces withdraw from Kuwait, but recognises that this element of the Resolution has been interpreted by the governments forming the coalition of Allied Forces to justify a continuous massive bombing raid on Iraq and Kuwait and that the situation has thereby been created whereby Resolution 666 should now engage world attention, and that the supply of foodstuffs and medical supplies to the categories of people mentioned above can only meaningfully be undertaken given an end, or at least a pause, to mass bombing."
Presumably, resolution 666 is as significant in terms of the Gulf crisis as resolution 678. We should now be forced to find a means of pursuing resolution 666 and looking after the groups of people who have been sorely treated in the massive bombing throughout Iraq—especially in areas in the south such as Basra, of which we hear little, but where ports, docks, marshalling yards and railway stations are intimately linked to residential areas, schools and hospitals and where the destruction must be phenomenal. That should be a matter of the greatest concern to us. We should be finding out what is happening and taking steps to overcome the problems.
Fortunately, the United Nations is doing something at least in that direction. The United Nations Children's Fund and the World Health Organisation have set up a mission to send emergency medical supplies to children and mothers in Iraq. It will start with Baghdad, but I hope that, when its members get there and discover what the position is, they will try to find out what is going on in other areas of Iraq, including Basra—an area in which. I have a specific interest.
Another idea that has been turned on its head is the position that people such as I have adopted towards the British troops. I served for two years in Basra and I hope that I therefore have some sympathy for the British troops and an understanding of their circumstances, as well as some concern for the Iraqi citizens—the people with whom

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I mixed and with whom I worked while I was serving with an RAF movements unit there. I worked closely with people in the docks and railways and in shipping. It is those people and their children who have been severely hit by the action.
Mrs. Alice Mahon: My hon. Friend mentioned his position regarding the troops in the Gulf. I wrote to every one of the troops who were mentioned in my local evening paper—which gave an address and asked people to write—offering my support and pledging that we were trying to find a peaceful solution. I am now receiving letters back from those troops, every single one of whom supports our position. They are wonderful letters and I promise to let my hon. Friend see them. He will then be as convinced as I am that we are absolutely right to try to spare them a terrible fate.
Mr. Barnes: Every hon. Member must have at least 50 people from his constituency among the troops in the Gulf; in my case, it is probably more. I object to the nonsense that is appearing in the Daily Star to the effect that we are anti-troops. The troops and their parents and relatives in this country may be in need of all kinds of assistance and may need their Member of Parliament to deal with officialdom on their behalf. They may be deterred from seeking our advice by the nonsense that is appearing in the mass media. That is a dangerous state of affairs. We need to take action and to say that we are their representatives and that British troops and their relatives can turn to us perhaps more readily than they can turn to those hon. Members who regard the troops merely as cannon fodder and who are not interested in their lives and well-being.
It is imperative that we start to push the United Nations to try to overcome the problems and to move towards periods of ceasefire, so that we can put a stop to this nonsense.
9.54 pm
Mr. Bob Cryer: Hon. Members such as those present tonight who ask critical questions on the Gulf war do not intend any reflection whatever on our forces in the Gulf. It is a foul and wicked lie for anyone to use that argument against those of us who talk about peace and a ceasefire so that the men and women in the forces do not have to face the possibility of death and mutilation for an instant longer than is made necessary by the force of the prevailing circumstances.
The Congress of the United States dealt with the Gulf war far and away more openly and better than did the mother of Parliaments. There was an agreement and a conspiracy in the House to have a joint resolution of the House. No alternative vote or voice was permitted by joint consensus. It is amazing that, in the debate on 21 January, certain hon. Members were called, when the overwhelming body of opinion among Opposition Members who wanted to speak was against the war. That expression of opinion was denied by that self-same shabby conspiracy. There is no question about that in my mind.
The supporters of this dreadful war talk about supporting the authority of the United Nations. But the authority of the United Nations has been weakened. The United Nations was established to resolve international
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conflicts by peaceful means. If a country goes to war with the authority of the United Nations, which the Americans claim to have, that is a failure. But we know that to declare war is an important and serious decision. That decision was not made under the required terms of concurrence of all the parties, because China abstained. Technically, it meant that the decision was not in conformity with the United Nations charter. It was an illegality—the sort of argument that could be pored over by international lawyers and courts. But the illegality was shoved to one side and we went to this dreadful war.
Of course, the United States bribed certain nations, such as the Soviet Union, to stay out of the war and others, such as Egypt, to stay in the war. The idea that this is a war of principle is a mischievous deception on our nation and the rest of the world. What is the war for? Of course we oppose the invasion of Kuwait, but when we liberate Kuwait shall we liberate the working men and women of Kuwait? Of course not. We shall restore a feudal autocracy which, shortly before the dispute began suspended Parliament and suppressed student expression of discontent with excessive brutality and zeal.
The Government talk about the authority of the United Nations. The Minister can tell us about it tonight. He will have half an hour, which is as much as a Minister has in a full day's debate. He will have until half-past ten. If the Government care about the United Nations, do they intend to honour the United Nations nuclear nonproliferation treaty to which Iraq is a signatory and which Iraq has honoured? The Minister knows that maintaining Polaris—thank God Holy Loch is to be closed—and purchasing Trident is in clear breach of the United Nations treaty. If the Government are willing to support the United Nations over Kuwait, they should support it on other matters. I am talking about double standards. It is convenient to support the United Nations in the Gulf, but it is not convenient to support the United Nations in its bid to get rid of nuclear weapons. However, that should be done.
There will be no winners from the war. Millions of people in the middle east will feel nothing but contempt and hatred for the United States, and—alack, alas—for the United Kingdom, which has a special relationship with the United States. That special relationship means that we do the bidding of the United States. We have been sucked unnecessarily into this war and we shall face vitriol and hatred from many millions of people throughout the Muslim world. I do not say that as a person who accepts the view of the Muslim world uncritically.
It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.
Question again proposed, That this House do now adjourn.—[Mr. Greg Knight.]
Mr. Cryer: I do not accept the views of the Muslim world uncritically, as those who know my record on the publication of "The Satanic Verses" and the attack on Salman Rushdie will testify. However, Muslims have a right to their religion, their holy places, their cohesion and commonality on the planet. This war will divide nations, not unite them. It will deepen hatreds and divisions between peoples of the world, and that can only be to our harm.
The General Assembly, not just the Security Council, of the United Nations must be invoked so that it can once again wrest control of the terrible conflict from the hands

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of the United States and put it back where it belongs. When that happens, the United Nations should also issue a clear commitment to bring the conflict to an end and to produce satisfactory peace terms.
10.1 pm
Mr. Dennis Skinner: I am pleased that my hon. Friend the Member for Linlithgow (Mr. Dalyell) got the Adjournment debate tonight, and I also compliment those people who managed to collapse the previous debates to allow more than one or two hon. Members to speak in this one. No doubt the Tory Whips will have their knuckles rapped for allowing the debate to collapse—
Mr. Timothy Kirkhope: The hon. Gentleman has got it wrong.
Mr. Skinner: The hon. Gentleman, who is not supposed to speak, tells me that I have got it wrong, but the truth is that the Tory Whips allowed the business to collapse and that has enabled—
Mr. Greg Knight (Lords Commissioner to the Treasury): Very good.
Mr. Skinner: This is not the supper club—this is supposed to be democracy. This is where we speak in the open, talk to one another, in the hope that we transmit some information to the world outside so that those opinion polls that have been twisted can reflect more fairly the views not only of those in the House, but the people outside.
Tomorrow, the United Nations should have its session in public. Tomorrow's meeting should not be secret, but I have no doubt that that suits the Americans who are leading the war and those who are tagging along such as the new Prime Minister, the Secretary of State for Defence and all the rest of them. They are little more than American poodles, because nearly everyone in the street knows what this war is about. It is not about democracy for, if it was, what the hell are we doing having British troops risking their lives on the desert sand while the Kuwaiti royal family are in the gambling dens and the casinos, gallivanting around the world and living in hotels in Cairo? According to newspapers, those hotels are costing $3,000 a month. They are lapping it up and one of the Kuwaitis in those hotels said, "Well, Kuwait is not really a country, it is a country club." They are watching the war on television. While our people are risking their lives, they are having a great time. Those people, 25 of them with the same surname, will be back in Parliament in Kuwait when it is free.
The war is not about democracy, or principle. If it were, why would the British Prime Minister be racing about with others from the Tory Government begging money from anyone they meet in the street? If one were fighting a war about principle, one would not be money grubbing. This is a mercenary war. If money of that scale had been asked for 10 or 15 years ago for South Africa, everyone would have said that that was a mercenary war and "Mad Mike" Hoare would have been running it.
This war is all about America. It has seen that Russia has problems of its own with nationalism and economic troubles. It knows that it has a chance to move into a part of the world where it has never had an opportunity to be since the end of the second world war. The power vacuum in the middle east enabled the United States to move in
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while Russia has troubles of its own. It launders money from Saudi Arabia and says to Russia, "Here is $4 billion to keep your mouth shut," and to Egypt, "Here is $3·5 billion to write off your third-world debts." It says, "Anybody else want money?" It begs off Kuwait and Saudi Arabia and launders the money to different countries. Then it has the cheek to tell us that it is all about a great principle. It is not about a great principle at all.
Of course, there is another factor. When elected President of the United States, George Bush was regarded as a wimp. Everybody knew him to be a wimp. He wanted to be Rambo; he wanted to be macho. This enables him to have an opportunity to change his image in the United States in order to get re-elected. In the process, thousands, perhaps hundreds of thousands, will be slaughtered, but it will not be Bush, it will not be Stormin' Norman, it will not be Colin Powell. It will not be all the armchair generals who tell us about the war. It will not be the Tory MPs in the Government and the Cabinet. They will not lose their lives, they will not put on flak jackets as the Secretary of State for the Environment did once before. He was the man who did his national service but who bought himself out after a few months. They march through the Lobby saying, "We are prepared to send our troops to the battlefield in order to fight for Kuwait and hand it back to the royal family."
Then we see the bombs and read about the shells. We see all the Tornados going under. We count the cost—£21 million for a Tornado, £750,000 for a Tomahawk missile. When I see that, I say to myself that that is the peace dividend gone. We talked about the ending of the cold war and what we would do with the money. The Tories said that they would cut defence expenditure. The Liberals as usual said that they would cut defence expenditure. The Labour party said, "When in government we will cut defence expenditure." Everybody looked forward to more hospitals, more homes to get rid of cardboard city, and proper cold weather payments week in and week out without pensioners having to beg for them. Then we pick up the newpapers every day and see all those munitions being fired in Kuwait and in the desert. The peace dividend is being blasted into smithereens in the Persian Gulf.
We are supposed to accept that. I have not been sent to Parliament to send people to die for these feudal dynasties in the middle east. At the end of it, what happens? People say that war is quick. Sometimes it ain't. The trouble is that some people in this building remember only the Falklands; that is all they remember. It was a short war. There were a few explosions here and there and a few hundred were killed, more Argentines than Britons. There were great celebrations at the dock side.
This might be a long war. If it is, there will be a lot more casualties and people will have different perspectives about it. The jingoism may change if it drags on through a long hot summer. What will happen? The views of people who said, "Let's get stuck in and get this finished," may change. Too many people think that sanctions would have lasted too long, but what about a war that lasts too long?
Of course, after a war people finish up victorious, but what does it do to a generation of young people? It gives them the impression that the way to resolve problems in the world is not by diplomacy, negotiation or the use of tact and skill, but by killing people. It will educate another generation into the belief that that is the way to do things. Yet people tell me that when it is all over we can have a

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new world order—a new world order based upon killing, brutality and the massacre of innocent men, women and children out there in the middle east. I do not believe that.
That is why my hon. Friend the Member for Linlithgow was right to raise the matter. That is why it is important to study the views of other people. It is important to raise these issues. Much could be said about the war, but one thing is certain: everyone who sold arms to Saddam is as guilty as everyone else—the whole lot of them. If they did not sell the arms, they provided them with the machine tools to make them, and with all the equipment. Right up to the nether end, they were writing off Iraq's debts and increasing the Export Credits Guarantee Department's money to about £400 million. They did everything possible to build up that monster, Saddam Hussein.
Then they have the cheek to tell us that we cannot have the motion put forward by my hon. Friend the Member for Bradford, South (Mr. Cryer), to say that, although we support people who will lay down their lives in the desert, we prefer peace. The opposite to war is not appeasement —in our language, it is peace, and it is time that we gave it a chance.
10.10 pm
Mr. Tony Banks: My speech will be exceedingly brief. Further to a comment made by my hon. Friend the Member for Bolsover (Mr. Skinner) about the supply of arms to Saddam Hussein, there is no doubt on either side of the House that Saddam Hussein must not be allowed to benefit from his occupation of Kuwait. That is unarguable. Saddam Hussein is an evil and wicked person. There are many such people in the world, but he qualifies as one of the worst.
However, Labour Members were telling the Government for many years just how evil that man was. We were telling them that he was evil when Ministers were going to Baghdad, were being pictured with Saddam Hussein, and were encouraging him to take up trade credits. Britain was at the Baghdad international trade fair. It is amazing that we are now being told that that man is a monster. We accept that, but why, when we were saying so, were we ignored or laughed at and then told cynically by Ministers, "Well, if we don't provide the technology, if we don't trade with him, someone else will"? We do not need to be lectured by the Government about how evil Saddam Hussein is.
My hon. Friend the Member for Bolsover mentioned arms. The current edition of Time magazine on the Gulf war sets out graphically the armaments available to Saddam Hussein. An American first lieutenant, Alan Leclerc—a US marine pilot who flies daily—used a poignant phrase when he said:
"It angers me. Countries of the world need to be a little more discreet about whom they sell weapons to, and that includes us."
Those American, British and French pilots who have been risking their lives realise that they are facing weaponry that was provided by their own countries. The list of weapons is a list of shame.
The missiles were provided by the Soviet Union; France provided the Exocet missiles that are still there, perhaps poised, waiting to strike at our troops. The tanks were provided by the Soviet Union; the artillery—apparently some of the finest in the world—was provided by South
830
Africa. The aircraft were provided by France and the Soviet Union. Mines were provided by the Soviet Union, Taiwan, Italy and others. Brazil provided fire-controlled radars; Britain provided training and equipment; France provided point defence radars.
We were still training Iraqi troops in this country until a few months ago and now we are told that Saddam Hussein is a monster. When we said so, we were ignored. I do not like the Government's hypocrisy. They now accuse us of being appeasers or, as some of the gutter press suggest, traitors. We have been loyal to the British people from the beginning and have always wanted to ensure that no British military person should lose his life in this shabby war.
As for principles, President Bush would not know a principle if it were stuck on the end of an Exocet and smashed straight through his head. That great, principled politician ordered the invasion of Panama. We do not want to hear about principles but about peace, as my hon. Friend the Member for Bolsover said. We want to ensure that the United Nations is used to resolve those regional conflicts by peaceful means. Surely the new world order is that we talk peacefully and in a civilised fashion about how we reconcile our differences, not how we throw our young people against each other and see them killed and maimed.
10.14 pm
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Mark Lennox-Boyd): This has been a highly charged debate, and I recognise the feelings that have been expressed. I realise that some hon. Members have been kind enough to refrain from speaking in order to give me an opportunity to reply, and that is important in any democratic assembly. I was fearful earlier that I would not have an opportunity to state the Government's position.
Let me make one or two general points fundamentally clear at the outset. Our objectives and the objectives of the alliance, and our actions in the hostilities, are all conducted under the authority of United Nations Security Council resolutions. Hon. Members who have waxed strong and indignant have failed to recognise the import and meaning of resolution 678, which authorises the use of all necessary means to seek the objectives of resolution 660.
Hon. Members have argued that hostilities were not necessary; that hostilities should not have been indulged in. But if Saddam Hussein would not respect United Nations resolutions under the relentless bombing that his armed forces have undoubtedly suffered, under the relentless attack on his armed forces and their installations that he has undoubtedly suffered, how does any hon. Member imagine that he might have left Kuwait under the pressure of sanctions?
There are one or two matters which might have been mentioned amidst all the moral indignation and fervour expressed by Labour Members. The hon. Member for Bradford, South (Mr. Cryer) said that our objective was merely to restore a feudal autocracy. He made no mention of the size of the gigantic Iraqi war machine, which has been so amply demonstrated in recent weeks, or why he felt that that war machine had been assembled. No hon. Member mentioned the rape of Kuwait, Amnesty International's report, the enormous bloodshed that has

831
been caused to the people of Kuwait, the allegations that we have all heard about the incubators and the dreadful suffering that was caused to Kuwaiti citizens.
One further thing of which there has been no mention amidst all the moral indignation is the outrageous treatment of our 10 prisoners of war. Not one hon. Member suggested any indignation that those poor men should have been paraded in their state on television contrary to the Geneva convention. Not one person expressed any outrage or indignation at the fact that there has been no access to them, not even by the Red Cross, and no list has been provided of who they are or there whereabouts.
Ms. Mahon: Will the Minister give way on that point?
Mr. Lennox-Boyd: No, I shall not give way. This has been a long debate. Hon. Members have had an opportunity to speak, and I really must have an opportunity to reply.
The hon. Member for Linlithgow (Mr. Dalyell) mentioned one thing that I shall pick up, because it is of personal interest to me. He said that he was not an Arabic speaker but that his parents were. I am, in some way, an Arabic speaker. I believe that I am the only Arabic speaker in the House. When I hear all the expressions of outrage and feeling about Palestinians and Jordan, I would only say that I have been to Jordan on more occasions than I can count. I have lived there, and I honestly think that I know it fairly well and that I can claim as much knowledge of it as any other hon. Memer—or at least, I did once. I count many Jordanians and Palestinians as my friends.
Hon. Members will be aware that the Foreign Office is not without its Arabists. One of the impressions that I have gained over the few months that I have been in the Foreign Office is that, to a man, the Arabists recognise, albeit reluctantly and unhappily—as we all do, because we all regret war—that ultimately it was necessary that hostilities were used under the authority of the United Nations resolution 678. It could not be avoided.
Mr. Tony Benn: Will the hon. Gentleman give way?
Mr. Lennox-Boyd: No, I will not give way. I have only 10 minutes to reply to the debate; the right hon. Gentleman must respect that.
I have a few words to say about the resolutions of the Security Council. The first of the Council's resolutions—660—was adopted within hours of the invasion. There were no votes against and no abstentions. It condemned the invasion and called for immediate and unconditional Iraqi withdrawal.
The second resolution followed only four days later. Resolution 661 imposed comprehensive trade and financial sanctions on Iraq and occupied Kuwait. It also established a sanctions committee. Three days later, resolution 662 was adopted unanimously, declaring that Iraq's purported annexation of Kuwait was null and void.
The test of whether sanctions worked was whether they brought Saddam Hussein to change his policies and withdraw from Kuwait as the Security Council demanded. They did not. As my right hon. Friend the Foreign Secretary concluded on 15 January, sanctions would not achieve such a decisive rundown of Saddam Hussein's military machine that he would leave Kuwait. Meanwhile, five months had elapsed and his brutal occupation of
832
Kuwait continued. The atrocities committed by the Iraqi forces in Kuwait have been well documented by Amnesty International and others. Waiting longer for sanctions to work was therefore not an option.
I have to reiterate that it was the international community which decided that sanctions were not enough, when the Security Council adopted its resolution 678 on 29 November. To remind hon. Members, this authorised member states to use "all necessary means" to implement earlier relevant resolutions of the Council in the absence of Iraqi compliance by 15 January. Despite this 45-day pause of good will, Iraq ignored the deadline completely. Consequently, with the full authority of the United Nations, the allied coalition embarked on military operations against Iraq.
The Government's position is clear. Allied operations have been directed against Iraq's massive military machine sustaining the illegal occupation of Kuwait. Any such attacks, if necessary for the purposes specified in resolution 678, are fully within the authorisation granted by that resolution. It is absurd to suggest that these operations could be confined in a modern war to the geographical territory of Kuwait. That would not deal effectively with Iraqi aggression. We have made it amply clear that our objectives are to get Iraq out of Kuwait completely, to see the legitimate Kuwaiti Government restored, to uphold the authority of the United Nations, and to re-establish international peace and security in the area. This does not entail the destruction, occupation or dismemberment of Iraq. It is not for us to decide who governs Iraq.
The hon. Member for Linlithgow referred to the pounding of Baghdad. I think that he might have been intending to refer to the pounding of the Iraqi forces in Kuwait. It has been the clearest possible intention of all allied operations to avoid civilian casualties. We have also made it clear that we are doing everything possible to keep civilian casualties to a minimum, and to avoid damaging sites of religious and cultural significance. We have reported as much to the Security Council, in a series of reports since hostilities began. The military action will end as soon as the purposes laid down by the Security Council have been achieved.
The hon. Member for Linlithgow referred to Babylon, Ur of the Chaldees, Najaf and Kerbek. There is no evidence that those sites have been struck. I remind him that, had there been evidence, it would have been available in photographic form, and we should surely have seen it. Would he not consider contrasting that lack of evidence with the terror tactics deployed by the Iraqis in launching Scud missiles on innocent civilians and the risks to mosques and holy places occasioned by such indiscriminate attacks?
The 12 Security Council resolutions form a landmark in UN history. They have all been adopted with overwhelming majorities. They have been characterised by the closest co-operation between the five members of the Council.
I am very glad that we have had this debate, because it allows me, on behalf of the Government, to express our clear view of the importance of the United Nations in handling this major international crisis. Iraq has chosen, at every opportunity, to react to the UN action with invective in denying the authority of the Council—a sea change indeed from the time, during the Iran-Iraq war, when the Iraqis claimed to be its most fervent supporters.

833
The invective has been directed not only against the council but also against the UN Secretary-General. I am sure that the House will join me in paying tribute to Mr. Perez de Cuellar, who has time and again made every effort to act as a messenger and peace broker.
The hon. Member for Linlithgow called for a ceasefire, as have other hon. Members. Others have called for the Security Council or the UN Secretary-General now to call for a ceasefire or a pause in hostilities, to allow Saddam Hussein a chance to respond. But what evidence do we have that Saddam Hussein is prepared to listen? What evidence is there that he is now more prepared than before to heed the demands reflected in all these resolutions? The abuse of the Security Council and the Secretary-General in Tariq Aziz's two letters make it clear that nothing has changed. Saddam Hussein continues to thumb his nose at international opinion, international law and humanitarian obligations.
As my right hon. Friend the Prime Minister made clear on 20 January, we do not want the conflict to continue a day longer than necessary. We do not wish to risk the lives of our forces, if implementation of the Security Council resolutions can be achieved by peaceful means. But we do not favour a pause or a ceasefire. We had a pause for good will until 15 January.
834
Our forces are now engaged. We cannot agree to any suspension of hostilities which would allow Saddam Hussein to regroup and strengthen his position, simply in the hope that this might lead to negotiations. Hostilities cannot end—or pause—until we know that all Iraqi forces are out of Kuwait. The United Nations should not settle for less.
10.29 pm
Mr. Tony Benn: When this debate is read in future, it will be seen to have been the beginning of the end of the United Nations, because of the use made of it by the American and British Governments. This Government left UNESCO because they did not agree with the UN. The Americans left UNESCO. The American and British Governments have brought the Security Council in, and now the most murderous bombing of innocent men, women and children in Iraq is being done in the name of the United Nations.
Tonight, the House has reflected more faithfully the concerns of decent people, who believe in the United Nations, than all the speeches made by the Conservative party since the crisis began. I warn the Minister that, if this is the way in which the Government aims to use the United Nations, we shall indeed fall back into the barbarism from which the UN was intended to rescue us.
Question put and agreed to.
Adjourned accordingly at half-past Ten o'clock.

TRANSPORT

  Bus and Rail Travellers
  Mr. Spearing
  To ask the Secretary of State for Transport what assessment he has made of the impact on bus and rail travellers in Greater London of the reduction in transport facilities recently announced by London Regional Transport.

  Mr. Freeman
  London Buses Limited has announced that it is planning to make a number of alterations to local bus services to match them more closely to passenger demand. Details of all the proposed services are not yet available; they will be the subject of public consultation over the next few months. I understand that the changes that London Underground is developing are mainly reduced counter services at booking offices, made possible by the introduction in recent years of very reliable new ticket machines. I am advised that the changes to train services envisaged by London Underground are modest and are, in the main, aimed at improving reliability on lines where there are problems in providing a full complement of trains.

  Halifax-Huddersfield Rail Link
  Mrs. Mahon
  To ask the Secretary of State for Transport if he will allocate funds to ensure that the West Yorkshire passenger transport authority is able to introduce in 1992 the railway link between Halifax and Huddersfield.

  Mr. McLoughlin
  If the West Yorkshire passenger transport authority seeks resources for this project, we will consider it on its merits, and taking account of the claims of other projects. Credit approvals for 1991–92 have, however, already been allocated, so the earliest that resources for new projects could be made available is 1992–93.

  A45
  Sir Eldon Griffiths
  To ask the Secretary of State for Transport (1) how many separate traffic engineering projects have been undertaken for the purpose of improving Rookery crossroads on the A45 over the past 10 years; how much this has cost in 1990 values; and whether he has any proposals for futher works;

  (2) what steps he is taking, together with the Suffolk county council, to help prevent further accidents at Rookery crossroads on the A45; and how soon he expects to publish plans for grade separation of Sow lane traffic entering and exiting Rougham industrial estate and east-west traffic on the A45.

  Mr. Chope
  There have been six engineering projects costing approximately £50,000 to 1990 prices. I shall write to my hon. Friend with details of proposals for further works.
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  Sir Eldon Griffiths
  To ask the Secretary of State for Transport what was the number of injury accidents on or near the A45 at the Rookery crossroads at Rougham near Bury St. Edmunds in each of the past 10 years.

  Mr. Chope
  The number of recorded fatal, serious and slight injury accidents at or within 20m either side of junction in each of the past 10 years is as follows:

  Year

  Fatal

  Serious

  Slight

  Total

  1980

  —

  —

  1

  1

  1981

  —

  1

  —

  1

  1982

  —

  2

  —

  2

  1983

  —

  3

  —

  3

  1984

  —

  —

  1

  1

  1985

  —

  1

  —

  1

  1986

  —

  —

  1

  1

  1987

  —

  1

  —

  1

  1988

  —

  1

  1

  2

  1989

  —

  1

  5

  6

  1990

  1

  —

  1

  2

  Rail Electrification
  Mr. Morgan
  To ask the Secretary of State for Transport when he expects to announce his decision on rail electrification of the Western Region main line west of Reading.

  Mr. McLoughlin
  British Rail has no current plans for electrification of the main line west of Reading.

  Channel Tunnel
  Mr. Morgan
  To ask the Secretary of State for Transport, further to his answer of 4 February 1991 Official Report, column 4, whether he will consult the chairman of British Rail in relation to the United Kingdom's participation in the European Commission high level working group with respect to low-platform wagon technology for through freight trains using the channel tunnel.

  Mr. Freeman
  Yes.

  Mr. Morgan
  To ask the Secretary of State for Transport when he expects United Kingdom approval of a standard low bogie system for running Berne gauge freight trains through the channel tunnel on to the United Kingdom railway network to be announced.

  Mr. Freeman
  Technical approval of freight wagons for operation in the United Kingdom is a matter for British Rail. Freight wagons for operation through the channel tunnel also require approval from Eurotunnel, the Channel Tunnel Safety Authority in consultation with Her Majesty's railway inspectorate, and other European railways. There is no proposal to run Berne gauge trains in the United Kingdom.

  Cars (Carbon Dioxide Emissions)
  Mr. Soley
  To ask the Secretary of State for Transport whether he intends to introduce stricter limits on carbon dioxide emissions for cars.

  Mr. Chope
  I refer the hon. Member to the strategy set out in "This Common Inheritance"—Cmnd. 1200.

  Railway Safety
  Mr. Hinchliffe
  To ask the Secretary of State for Transport what discussions he has had with British Rail concerning their response mechanism to requests by fire services for trains to be stopped in emergency situations; and if he will make a statement.

  Mr. Freeman
  This is a matter for British Rail. I understand that BR is reviewing arrangements for emergency communication with fire services, and that BR aims to identify one railway control location for each geographical area of its operations.

  Mr. Hinchliffe
  To ask the Secretary of State for Transport what formal machinery exists for meetings between British Rail and representatives of local emergency services.

  Mr. Freeman
  British Rail liaises at all levels with the emergency services. Emergency procedures are regularly rehearsed both as theoretical and practical exercises to ensure that the emergency services are in a position to deal effectively with any incident that may occur.

DEFENCE

  Armed Forces Pensions
  Mr. Allen
  To ask the Secretary of State for Defence where the full provisions of the armed forces pension schemes are set out; and if he will summarise them.

  Mr. Archie Hamilton
  The provisions of the armed forces pension scheme are set out in separate documents for each of the three services. For naval personnel, in Orders in Council; for Army personnel, in the Army Pensions Warrant 1977; for RAF personnel, in Queen's Regulations for the Royal Air Forces.

  Overall, the provisions of the scheme are extensive and detailed. In broad terms the following are provided for:
  —a lump sum and immediate long-service pension for a member who retires on completion of at least a minimum period of reckonable service of 16 years for commissioned officers, and 22 years for other ranks;
  —a preserved pension and preserved lump sum, payable at age 60 or transferable to another scheme, for a member who completes at least two years' contracted-out service, but less than the minimum reckonable service required for the award of an immediate long-service pension;
  —a lump sum and immediate tax-free pension for a member whose service is terminated prematurely on medical grounds which are attributable to service, and where the assessed degree of disability is 20 per cent. or more;
  —a lump sum and immediate pension for a member whose service is terminated prematurely on medical grounds which are not attributable to service, or which are attributable but the assessed degree of disability is less than 20 per cent., provided that at least two years' reckonable service has been given;
  —a pension for the eligible widow or widower of a member, which is for current service normally one half of that which would have been payable to the member but which, in the event of death being attributable to service, is at a special enhanced rate;
  —a pension for each eligible child, up to age 17 or longer if full-time education continues.

  In general the amount of lump sums, and rates of pension, are associated with rank held and length of service given. Awards made in cases where service is
  384
  terminated on medical grounds which are attributable to service are not less than a guaranteed minimum level related to rank held and the assessed degree of disability. No minimum length of service is required in order for the member to become eligible for such an award nor, in the event of death attributable to service, for an award to any eligible widow or widower and child.

  Long-service pensions are increased from age 55 to reflect movements in the retail prices index since the date of award. Other pensions are index-linked from the date of award.

  The provisions apply equally to male and female members of the scheme.

  Gulf War
  Mr. Colvin
  To ask the Secretary of State for Defence what are the contributions made in cash and in equipment by each of the allied countries involved in the Gulf war.

  Mr. Archie Hamilton
  The following nations have committed naval, land or air forces, or medical units, to the coalition forces or are providing practical assistance to these forces:

  Argentina

  Australia

  Bahrain

  Bangladesh

  Belgium

  Canada

  Czechoslovakia

  Denmark

  Egypt

  France

  Greece

  Hungary

  Italy

  Kuwait

  Morocco

  Netherlands

  New Zealand

  Niger

  Norway

  Oman

  Pakistan

  Poland

  Portugal

  Qatar

  Romania

  Saudi Arabia

  Senegal

  Sierra Leone

  Singapore

  South Korea

  Spain

  Sweden

  Syria

  United Arab Emirates

  United Kingdom

  United States of America

  A contingent of Afghan Mujaheddin is also serving in Saudi Arabia.

  In addition to making practical contributions to the coalition force, a number of nations, including Saudi Arabia, Kuwait, UAE and South Korea, are also providing financial support. Japan, Germany and Hong Kong are making a financial contribution to the coalition and Turkey has agreed that the United States may use Turkish bases for operations into Iraq.

  The following countries are providing financial or practical assistance, including medical support, to the United Kingdom.

  Bahrain

  Belgium

  385

  Canada

  Denmark

  Germany

  Hong Kong

  Japan

  Kuwait

  Netherlands

  New Zealand

  Norway

  Oman

  Portugal

  Romania

  Saudi Arabia

  Singapore

  Spain

  Sweden

  United Arab Emirates

  RAF Greenham Common
  Sir Michael McNair-Wilson
  To ask the Secretary of State for Defence whether the redeployment of units of the United States air force in the United Kingdom will have any bearing on the future of RAF Greenham Common as one of their standby bases.

  Mr. Archie Hamilton
  The redeployment of United States dual capable aircraft in the United Kingdom, announced by my right hon. Friend on 5 February, will not have any effect on the future of RAF Greenham Common as a United States standby base.

  Trident
  Mr. Arbuthnot
  To ask the Secretary of State for Defence what is the latest estimate of the cost of the Trident programme; and if he will make a statement.

  Mr. Tom King
  I am pleased to announce that for the fifth year running there has been, in real terms, a reduction in the estimated cost of the Trident programme. The revised estimate now stands at £9,863 million, based on the exchange rate used for the long-term costing of the defence programme, which this year is £1 = $1·56.

  Although this estimate represents a cash increase of £483 million compared to that announced last year, after allowing for the effects of inflation and exchange rate variations, there has been a real reduction of £126 million, and a real reduction of £1,838 million over the original 1982 Trident II estimate. This is additional to the savings resulting from the decision to have United Kingdom missiles processed in the United States facility at King's bay, Georgia.

  The proportion of the programme to be undertaken in the United Kingdom has increased from 69 to 71 per cent.

  The Select Committee on Defence previously asked that when announcing the annual revised estimate, I should report on the state of the project as a whole. I am pleased to say that the Trident programme remains on schedule to enter service in the mid-1990s. There has been no slippage in the in-service data since the decision to purchase Trident II was announced in March 1982. I am, as in previous years, sending to the Chairman of the Select Committee on Defence and the Public Accounts Committee a more detailed report covering the points on which the Select Committee on Defence sought advice. I am also placing a copy of this report in the Library of the House.

ENERGY

  Gas Escapes
  Mr. McMaster
  To ask the Secretary of State for Energy, further to his written answer of 28 January,Official Report, column 423, whether British Gas has any enforceable obligation to make safe any gas escape free of charge or to provide safety checks free of charge where the customer is not elderly or disabled and living alone.

  Mr. Moynihan
  The obligation to make gas escapes safe free of charge is enforceable as part of British Gas's authorisation. However, there is no obligation on British Gas to offer safety checks free of charge for customers who are neither elderly nor disabled.

  Nuclear Plants
  Mr. John D. Taylor
  To ask the Secretary of State for Energy how many nuclear plants are located near the west coast of Great Britain.

  Mr. Heathcoat-Amory
  There are 12 operating civil nuclear plants located near the west coast of Great Britain. In addition, two Magnox stations, at Berkeley and Hunterston, are in the process of being decommissioned.

  Electricity Privatisation
  Mr. Adley
  To ask the Secretary of State for Energy if he will take steps to ensure that people who applied for shares in the electricity distribution companies are refunded immediately with the funds they submitted for shares with which they were not allocated; and if he will make a statement.

  Mr. Heathcoat-Amory
  The receiving banks sent refunds before Christmas to the vast majority of the applicants to whom they were due. They deployed substantial resources throughout January to resolve the majority of the relatively small number of outstanding cases, and are dealing with the few that remain as a matter of priority.

  Mr. Adley
  To ask the Secretary of State for Energy what was the sum of money submitted for shares in the electricity distribution companies; who has had the use of the money submitted for shares which were not allocated; and what arrangements are being made to pay interest to the owners of the money who have not yet had it returned.

  Mr. Heathcoat-Amory
  About £7 billion was submitted in respect of the public offer. Surplus application money was returned to applicants as rapidly as possible: the interest earned on this money in the interim will accrue to the taxpayer. The terms and conditions of the sale made it clear that no interest on such funds would be payable to applicants.

  Electricity Supply
  Mr. Morgan
  To ask the Secretary of State for Energy what consultations he has had with the Director General of OFFER and the chairmen of the regional electricity companies regarding the security of supply of electricity for space-heating and cooking to the elderly, the infirm and the very young during the current cold snap.

  Mr. Heathcoat-Amory
  The code of practice operated by the regional electricity companies makes it clear that no
  387
  consumer in genuine difficulty with their payments will be disconnected, provided that they contact their regional electricity company and agree and keep to a payment arrangement. In addition, the Prime Minister announced on 7 February that cold weather payments to vulnerable groups in receipt of income support had been increased to £6 from 1 February and that the whole of the United Kingdom would qualify for the period from 1 to 7 February.

  Mr. Morgan
  To ask the Secretary of State for Energy what consultations he has had with(a) the chairmen of the regional electricity companies and (b) the Director General of Electricity regulation regarding the level of cut-offs in domestic electricity supply during the present cold snap.

  Mr. Heathcoat-Amory
  I refer the hon. Member to the answer I have given him today. The latest available 12-monthly figures show disconnections for non-payment of bills standing at their lowest level since records began in 1976.

  Energy Efficiency
  Mr. Rost
  To ask the Secretary of State for Energy, pursuant to his answer of 30 January,Official Report, column 507, for what reasons he decided not to maintain figures concerning the proportion of eligible homes in England and Wales with thermostats installed on 50 per cent. or more radiator valves.

  Mr. Heathcoat-Amory
  The energy efficiency industry provides the Energy Efficiency Office in my Department with information on the sales of various types of insulation and heating products, including thermostatic radiator valves, thus enabling the Energy Efficiency Office to monitor trends in the industry. However, the information provided does not enable the incidence of installation of thermostatic radiator valves in domestic premises to be monitored, and my Department does not require such information in the normal conduct of its business.

  Mr. Rost
  To ask the Secretary of State for Energy when he intends to publish forecasts as to when he anticipates different energy efficiency measures will achieve 50 per cent. of the eligible market.

  Mr. Heathcoat-Amory
  I have no plans to publish such forecasts. Although the Government will continue to promote and encourage greater energy efficiency in the home, the take-up of individual measures by householders will depend on numerous factors, which will vary from product to product. The Energy Efficiency Office in my Department seeks to assess the success of its programmes and activities by evaluations, market research surveys, examination of trade sales figures and so on, but does not attempt to forecast future levels of market penetration.

  Mr. Rost
  To ask the Secretary of State for Energy what information he has on the proportion of lighting which has been converted to energy-efficient lighting at(a) the Palace of Westminster, (b) Government buildings, (c) establishments owned or occupied in each Government Department and (d) local authorities.

  Mr. Heathcoat-Amory
  As part of the Government's drive to improve energy efficiency in Government buildings, my Energy Efficiency Office gives advice, and 388
  encourages Departments to adopt cost-effective energy efficiency measures including lighting. However each Department has responsibility for the energy management of its own estate, and the information requested is not held centrally.

  Electricity Industry Conference
  Mr. Flynn
  To ask the Secretary of State for Energy if he, or officials of his Department, have been invited to participate in the conference on the electricity industry post privatisation, to be held in London on 15 April.

  Mr. Heathcoat-Amory
  Yes.

FOREIGN AND COMMONWEALTH AFFAIRS

  Turkey
  Mrs. Mahon
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will protest to the Turkish Government about the recent confiscation of the magazine Towards 2000 and the summonsing to military court of Mahmut Dikerdem.

  Mr. Garel-Jones
  We have no plans to raise these cases with the Turkish authorities. But we have repeatedly urged the Turkish authorities, at ministerial level, to respect their obligations under international human rights conventions.

  Research and Development
  Ms. Primarolo
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many research and development agreements and contracts have been funded by departments in the Foreign Office, excluding ODA, at universities and polytechnics; how many universities and polytechnics have received those research and development contracts and agreements; what is their total value in each of the last five years; and if he will list them.

  Mr. Lennox-Boyd
  There have been only two research contracts or agreements funded by the FCO at universities or polytechnics in the last five years. They were:

  (i) Study by London University (School of Slavonic and East European Studies) on "The Inter-War Party and Political System in the present non-Soviet Warsaw Pact countries and its relevance today" (1990).

  (ii) Study by London University (School of Oriental and African Studies on "Muslim militancy in sub-Saharan Africa") (1990).

  The combined cost was £13,245·00.

  Aramco Employees, Dhahran
  Mr. Morgan
  To ask the Secretary of State for Foreign and Commonwealth Affairs, further to his answer,Official Report, 4 February, column 1, whether he will instruct the British ambassador to Saudi Arabia to seek an assurance from the president of Aramco that Aramco will not penalise those British nationals under contract to the company who do not attend work during air raid warning periods.

  Mr. Douglas Hogg
  Employees of Aramco are under a contractual agreement to the company. We understand that a few, employed on essential services, are required to work through air raid warning periods. Such persons may,
  389
  in the circumstances, wish to terminate their contracts. As I informed the hon. Member on 4 February at column 1, the British ambassador to Saudi Arabia has been assured by the president of Aramco that the company would not penalise those who sought to leave because of the war, and that accrued benefits would not be forfeited.

  Nuclear Non-proliferation
  Dr. Thomas
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether the United Kingdom delegation to the 1990 nuclear non-proliferation fourth review conference in Geneva supported paragraphs 1 to 8 of section VIII, concerning attacks on nuclear facilities contained in the addendum to document NPT/CONF.IV/ MCIII/L.1/ADD.2.

  Mr. Douglas Hogg
  The United Kingdom did not take a position on the language to which the hon. Gentleman refers.

  Iraq
  Mr. Hardy
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many cases of breach or suspected breach of sanctions in regard to trade with Iraq have now ben received by the United Nations or brought to the knowledge of Her Majesty's Government.

  Mr. Douglas Hogg
  We follow up reported sanctions breaches both bilaterally and at the UN: these are treated confidentially and no figures on the numbers of suspected or actual cases of sanctions breaches are publicly available. Any cases of sanctions breaches by United Kingdom nationals and companies are a matter for the Secretary of State for Trade and Industry and the Commissioners of Her Majesty's Customs and Excise.

  Lebanon
  Mr. Marlow
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will take action through the United Nations to require Israel to allow Lebanese Government forces to take up their positions in south Lebanon.

  Mr. Douglas Hogg
  We joined in the unanimous vote of the Security Council on 30 January to review the UNIFIL mandate and to reiterate support for the territorial integrity, sovereignty and independence of Lebanon within its internationally recognised boundaries.

  East Timor
  Mr. Flynn
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is his estimate of the number of civilians in East Timor who have been killed or died from starvation since the invasion by Indonesia.

  Mr. Lennox-Boyd
  Reliable statistics are unavailable. We believe that the figure may be in the region of 100,000 deaths.

  Mr. Flynn
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he or officials of his Department has had any contact with the Falantic Liberation Army in East Timor since the invasion by Indonesia.

  Mr. Lennox-Boyd
  No.

  EC Food Aid
  Mrs. Clwyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs from which EC budget the recently agreed 40 million ecu of EC food aid for Romania and Bulgaria is to be paid; and from which Department's budget are Britain's contributions paid to that budget.

  Mr. Garel-Jones
  The European Council on 10 December 1990 agreed 100 mecu of emergency food aid for Romania and Bulgaria; 30 mecu will come from savings in the 1990 agriculture budget. Following consideration by the 21 December Council, discussion continues on the source of the remaining 70 mecu. The United Kingdom share of this 100 mecu will form part of our contribution to Community own resources in line with all other EC budget expenditure.

  The Gulf
  Mr. Flynn
  To ask the Secretary of State for Foreign and Commonwealth Affairs which member states of the allied military force in the Gulf war remain subject to special licensing procedures for military sensitive exports from the United Kingdom.

  Mr. Douglas Hogg
  All exports of military equipment are subject to stringent licensing control, whatever their destination.

  Syria
  Mr. Flynn
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the occasions when he or his predecessors have met the Syrian Foreign Minister since 1979; and if he will make a statement on the most recent meeting.

  Mr. Douglas Hogg
  The right hon. Member for Plymouth, Devonport (Dr. Owen), the then Secretary of State for Foreign and Commonwealth Affairs, met the Syrian Foreign Minister in London in March 1979. As Minister of State, my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs met the Syrian Foreign Minister in Damascus in October 1979 and in London in September 1981 and July 1982. My noble Friend the then Secretary of State for Foreign and Commonwealth Affairs, Lord Pym, met the Syrian Foreign Minister in London in September 1982 and in Damascus in October 1982. My right hon. and learned Friend for Surrey, East (Sir G. Howe), the then Secretary of State for Foreign and Commonwealth Affairs, had meetings with the Syrian Foreign Minister in New York in September 1983, in Damascus in January 1984, again in New York in September 1984 and lastly in London in March 1986.

  The meeting that my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs had with Mr. Shara' on 6 February provided the first opportunity since the resumption of diplomatic relations with Syria to discuss regional and bilateral matters at ministerial level. It was timely and valuable.

AGRICULTURE, FISHERIES AND FOOD

  Alcoholic Beverages
  Mr. Ron Davies
  To ask the Minister of Agriculture, Fisheries and Food if he will conduct an investigation and review of the Food Labelling Regulations 1989 (S.I., 1989, No. 768) to ensure that they do not permit the adulteration of alcoholic beverages as indicated in a recent report from the trading standards department of Cleveland county council, a copy of which has been sent to him.

  Mr. Maclean
  I have not yet studied the report to which the hon. Gentleman refers. When I have done so, I will send him a detailed reply.

  Consultative Paper
  Mr. Bellingham
  To ask the Minister of Agriculture, Fisheries and Food whether the consultative paper announced on 28 November,Official Report, column 437, is ready for issue; and if he will make a statement.

  Mr. Gummer
  Copies of the consultative paper inviting comments on the proposals of myself and the Secretary of State for Wales for reform of the law on agricultural tenancies in England and Wales have been placed in the Library of the House today and made available to interested parties.

HOME DEPARTMENT

  Police Officers
  Mr. Janner
  To ask the Secretary of State for the Home Department whether he will use his powers under the Police and Criminal Evidence Act to have complaints in respect of the use of racially discriminating language or behaviour by police officers referred automatically to the Police Complaints Authority.

  Mr. Peter Lloyd
  No. My right hon. Friend does not believe that it would be appropriate for him to do so.

  Establishment

  1985

  1986

  1987

  1988

  1989

  1990

  Total

  Ashford

  —

  1

  1

  —

  —

  —

  2

  Hindley1

  —

  —

  —

  —

  1

  3

  4

  Risley

  1

  1

  3

  4

  2

  —

  11

  Total

  1

  2

  4

  4

  3

  3

  17

  1 Became a remand centre in spring 1989.

  There have been no self-inflicted deaths since 1985 at the following remand centres: Brockhill, Feltham, Glen Parva, Latchmere House, Low Newton, Pucklechurch.

  Remand Prisoners
  Mr. Hoyle
  To ask the Secretary of State for the Home Department what training is given to prison officers and prison medical staff in dealing with remand prisoners who are(a) mentally disturbed, (b) drug addicts and (c) have AIDS.

  Mrs. Rumbold
  Responsibility for the health care of prisoners in any prison service establishment rests with the managing medical officer—MMO—of the establishment. The MMO is also responsible for assessing the further

  Police Complaints
  Mr. Janner
  To ask the Secretary of State for the Home Department how many complaints concerning the use of racially discriminating language or behaviour by police officers were made to the Police Complaints Authority in each of the last five years; and how many were upheld.

  Mr. Peter Lloyd
  I refer the hon. Member to the reply given to a question from the hon. Member for Hackney South and Shoreditch (Mr. Sedgemore) on 29 November 1990, at column 452, which gives the available information about such complaints. Figures for 1990 are not yet available.

  Political Asylum
  Mr. Tom Clarke
  To ask the Secretary of State for the Home Department how many people were given political asylum in the United Kingdom in 1990; and what were the comparable figures for each European Community nation.

  Mr. Peter Lloyd
  Full information on grants of asylum in the United Kingdom in 1990 is not yet available. To date, about 1,600 such grants, including associated dependants, are recorded, but this understates because of delays in recording. Information on grants of asylum in other EC countries in 1990 is not yet available.

  Ms. Linda Humphries
  Mr. Hoyle
  To ask the Secretary of State for the Home Department for how much longer Linda Humphries is to be held at Risley prior to being sent to Ashworth hospital.

  Mrs. Rumbold
  I understand that Miss Humphries will be admitted to Ashworth hospital very shortly, as soon as a bed is available.

  Remand Centres (Suicides)
  Mr. Hoyle
  To ask the Secretary of State for the Home Department if he will list the number of suicides in remand centres, and the centres concerned, for each year since 1985.

  Mrs. Rumbold
  The numbers of self-inflicted deaths since 1988 by prisoners at establishments whose main role is that of a remand centre have been as follows:

  training needs of his or her health care colleagues and ensuring that, to the extent that resources permit, they are met either by making local arrangements for training—for example, by links with local NHS hospitals and clinics—by taking advantage of the wide range of external courses that are available to members of the medical and nursing professions or by securing places on courses organised centrally by the directorate of prison medical services.

  Recent courses organised centrally have included 24-week induction courses for hospital officers of which about six weeks are devoted to psychiatric care, one day to

  393
  AIDS and a half day to drug addiction and dependency; a two-day course and a series of one-day seminars for medical officers on clinical aspects of AIDS; a 10-day course for hospital officers with an emphasis on the nursing care of AIDS patients; and a two-day seminar on drug misuse for medical officers and other staff from establishments for women.

OVERSEAS DEVELOPMENT

  Sudan
  Mrs. Clwyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs how much of the £4 million of famine relief for Sudan, announced on 5 February, will be paid for from the 1991–92 budget.

  Mrs. Chalker
  The full cost—estimated at £4 million—of the additional 20,000 tonnes of food aid for famine relief in Sudan, which I announced on 5 February, will be met from the 1991–92 aid budget. My officials are already discussing the detailed uses for this pledge with a number of non-governmental organisations. I hope to agree allocations shortly.

TRADE AND INDUSTRY

  Prudential Corporation plc
  Mr. Austin Mitchell
  To ask the Secretary of State for Trade and Industry whether he will take any action against Prudential Corporation plc for its failure to publish the salaries of directors in its latest accounts in accordance with the requirements of the Companies Acts.

  Mr. Redwood
  The information to which the hon. Member refers is disclosed at page 41 of the company's report and accounts for the year ended 31 December 1989.

PRIME MINISTER

  United Kingdom 2000
  Mr. Beith
  To ask the Prime Minister what has been the total funding to date of the United Kingdom 200 initiative set up by his predecessor under the chairmanship of Mr. Richard Branson; which voluntary organisations have been involved; what have been the achievements of the initiative; whether he has any further proposals to develop this initiative; and whether he will make a statement.

  The Prime Minister
  Total Government funding to March 1991 will be £9·434 million. The partner voluntary organisations in England are the British Trust: for Conservation Volunteers, the Civic Trust, Community Service Volunteers, Groundwork, Friends of the Earth and the Royal Society for Nature Conservation. In Wales the organisations involved are the same apart from the Civic Trust, and in addition the Keep Wales Tidy Campaign. In Scotland, the organisations are the Scottish Wildlife Trust, Scottish Conservation Projects, Community Service Volunteers and Keep Scotland Beautiful.

  The main achievements have been high-quality, practical environmental improvement projects, training and work experience together with the creation of new
  394
  environmental enterprises. This work has been carried out in partnership with the public and private sectors. In 1989–90 there were 717 projects which generated 7,819 training places and 54,218 volunteers and which attracted £2·423 million support from the private sector.

  In England United Kingdom 2000 phase 2 began on 31 March 1991 and, subject to performance, the voluntary organisations will continue to receive grant until March 1993. United Kingdom 2000 (Scotland) will be launched as a company limited by guarantee in April 1991. The initiative in Wales has recently been fully reviewed; the next steps are now under consideration.

  United Nations
  Mr. Wray
  To ask the Prime Minister (1) if he will make it his policy to put forward proposals to amend the United Nations charter to provide for periodic elections of all members of the United Nations Security Council;

  (2) if he will make it his policy to put forward proposals to amend the United Nations charter to provide that United Nations Security Council members should have veto powers;

  (3) if he will make it his policy to put forward proposals to amend the United Nations charter to provide that in the event of war waged in the name of the United Nations basic decisions are taken by all member countries of the United Nations with an ad hoc executive committee to supervise the conduct of hostilities by the armed forces acting for the United Nations.

  The Prime Minister
  No. The Government do not believe that reform of the United Nations charter is either necessary or desirable.

  Mr. Wray
  To ask the Prime Minister when he expects the United Nations Security Council to meet to discuss the conduct of the war in the Persian Gulf.

  The Prime Minister
  The United Nations Security Council has met frequently since the outbreak of hostilities in the Gulf on 2 August, most recently in informal consultations on 8 February.

  Lanarkshire
  Mr. Tom Clarke
  To ask the Prime Minister what specific plans he has to improve investment in Lanarkshire.

  The Prime Minister
  The Lanarkshire working group, which met last month, will identify the main constraints to revitalising the Lanarkshire economy and recommend measures to resolve those problems. Investment in Lanarkshire from the private and public sector, is among the working group's concerns. The working group expects to report to my right hon. Friend the Secretary of State for Scotland around the end of April.

  Pensioners
  Mr. Beggs
  To ask the Prime Minister what is the estimated additional cost incurred weekly by pensioners in Northern Ireland for heating, lighting and travel when expenditure is compared with that of pensioners in a comparable region in Great Britain.

  The Prime Minister
  Information on the expenditure of pensioner households1 on heating, lighting and travel is

  395
  available at household level from the family expenditure survey. Northern Ireland compares with Wales in terms of average normal weekly disposable income for all households, including pensioner households. The table providese information from the amalgamated results of the 1988–89 family expenditure survey for pensioner households.

  Average Weekly Household Expenditure on Selected Items:

  Northern Ireland £

  Wales £

  Additional expenditure in Northern Ireland £

  Total motoring and fares

  5·20

  4·29

  0·91

  Fuel, light and power

  13·11

  8·55

  4·56

  1 A pensioner household is defined as one in which at least three quarters of the total income of the household is derived from national insurance retirement and similar pensions.

  1851 Exhibition
  Mr. Barry Field
  To ask the Prime Minister when the holder of his office last attended a meeting of the royal commissioners for the exhibition of 1851.

  The Prime Minister
  I am not aware of such a meeting.

  Probation Officers, Liverpool
  Mr. Parry
  To ask the Prime Minister what representations he has received from the probation officer based at Liverpool about salaries; and what reply he has sent.

  The Prime Minister
  My right hon. Friend the Home Secretary has received representations from seven probation officers from Merseyside about probation officers' salaries. They either have received or will receive official replies.

  Correspondence
  Mr. Terry Davis
  To ask the Prime Minister whether the policy of the Government with regard to correspondence between hon. Members and officials remains as set out in the letter from the hon. Member for Mid-Worcestershire (Mr. Forth) to the hon. Member for Birmingham, Hodge Hill, of 18 May 1989.

  The Prime Minister
  It is for Ministers in each Department to decide how correspondence will be handled. Following the recent scrutiny of ministerial correspondence, Departments are considering how to assist Members of Parliament to direct their inquiries to the point which is best able to give them a fast, informed and helpful reply.

  The Government reply to the eighth report from the Treasury and Civil Service Committee—Cmnd 1263—states that Ministers will normally ask the chief executive of an agency to reply to letters that concern day-to-day operational matters delegated to the agency.

  East Timor
  Mr. Flynn
  To ask the Prime Minister what is Her Majesty's Government's policy towards the Timor Gap agreement between Indonesia and Australia; and whether 396
  this agreement was discussed during his telephone conversation with Prime Minister Hawke of Australia on 5 February.

  The Prime Minister
  The Timor Gap agreement is a matter between Indonesia and Australia, who recognised East Timor's incorporation into Indonesia in 1979. The agreement in no way affects our own stance on recognition. I have not discussed the agreement with Prime Minister Hawke.

  Engagements
  Mr. Harry Greenway
  To ask the Prime Minister if he will list his official engagements for Tuesday 12 February.

  The Prime Minister
  This morning I had meetings with ministerial colleagues and others. I also called on Her Majesty, Queen Elizabeth the Queen Mother and presented her with a gift from the Cabinet to mark her 90th year. In addition to my duties in the House, I shall be having further meetings later today. This evening I hope to have an audience of Her Majesty the Queen.

  The Gulf
  Mr. Flynn
  To ask the Prime Minister what steps have been taken by allied bombing sorties over Iraq to avoid disruption of the ecological balance of the marshes in the River Euphrates delta and to the habitat of the striped hyenas, jackals and wolves of the western desert of Iraq and northern Saudi Arabia.

  The Prime Minister
  [holding answer 8 February 1991]: Allied aircrews have instructions to attack only military targets which could pose a threat to allied forces or facilities supporting Iraq's occupation of Kuwait. The missions are carefully planned to minimise the risk of damage to other areas.

  Nuclear Test Veterans
  Mr. Higgins
  To ask the Prime Minister, pursuant to his answer to the right hon. Member for Worthing on 4 December 1990,Official Report, column 17, by what process British nuclear test veterans may seek to establish the Crown's legal liability for compensation for the effects of radiation while serving in Her Majesty's forces.

  The Prime Minister
  [holding answer 11 February 1991]: The process to establish the Crown's legal liability in this matter is the need, in common law, to show that participants in the test programme had been exposed to radiation due to Ministry of Defence negligence and that such exposure caused them harm. The Government commissioned a study by the National Radiological Protection Board into this and the report published in 1988 did not establish a causal link between participation and an increased incidence of cancer. A further study by the NRPB to validate the findings of the previous study has been commissioned and the report is due to be published in 1992.

  Elderly People
  Mr. Rooker
  To ask the Prime Minister if he will convene a working group comprised of representatives of the Departments of Health, Social Security and the Environment and of the public, private and voluntary
  397
  sector providers, funders and user representatives to undertake an investigation into problems and issues involved in funding care for the elderly.

  The Prime Minister
  [holding answer 11 February 1991]: There are regular opportunities for interdepartmental consultation on the care needs of elderly people. Provider and user interests are fully reflected in this process. We believe that the creation of a formal working group of the kind suggested would add little to the existing effective collaboration machinery, and might in fact diminish its effectiveness.

  Toxteth Riots
  Mr. Wareing
  To ask the Prime Minister if he will now place in the Library(a) the report of the Secretary of State for the Environment about the Toxteth riots, entitled "It Took a Riot", (b) the letter of the right hon. and learned Member for Surrey, East (Sir G. Howe) in response to that report and (c) the report of the former Central Policy Review Staff on problems of the inner cities; and if he will make a statement.

  The Prime Minister
  [holding answer 11 February 1991]: No.

NATIONAL FINANCE

  Child Care Costs
  Mr. Nicholas Brown
  To ask the Chancellor of the Exchequer if he will estimate the change in Treasury income during the 1991–92 financial year resulting from the introduction of tax allowance for child care costs equivalent to(a) £50 a week and (b) £500 a year, assuming one tax relief per family set against the taxable income of the mother, giving separate figures for (i) all families with children under the age of 16 years and (ii) families with at least one child under the age of five years.

  Mr. Maude
  Estimates of the cost of extra allowances to working married mothers and lone parents in 1991–92 are given in the table. They are based on projections from the 1988 and 1989 family expenditure surveys and are therefore provisional.

  Cost (£ billion)

  Allowance of

  (a) £50 per week

  (b) £500 per week

  Allowance to those with

  (i) children under 16

  1·3

  0·3

  (ii) children under 5

  0·4

  0·1

  Public Expenditure
  Mr. Ridley
  To ask the Chancellor of the Exchequer what has been the change in public spending, in real terms, between 1979 and 1990, expressed as a percentage in(a) the national health service, (b) the social security programme, (c) local authority education spending, (d) higher and further education expenditure, (e) subsidies to councils and housing, (f) associations in pursuit of providing cheap housing for the less well-off, (g) housing benefit, (h) rate rebates and community charge rebates and (i) the arts; and if he will also give the real-terms increase in the gross national product over the same period.
  398
  Mr. Norman Lamont
  Information is not readily available in exactly the form requested. Information is, however, available on general Government expenditure by function over this period and is given in tables 2.2—cash figures—and 2.3—real terms figures—of the "Statistical Supplement to the 1990 Autumn Statement"—Cm 1520. The percentage changes between 1979–80 and 1990–91 in the real-term figures for the functions covering items listed in the question are as follows:

  Per cent.

  Health

  +37

  Social Security

  +35

  Education and Science

  +16

  Housing

  -54

  Arts and libraries

  +38

  Information on individual components within each function could be obtained only at disproportionate cost.

  A forecast of the gross national product for 1990–91 is not readily available to allow the corresponding percentage change to be calculated. Based on the autumn statement forecast for 1990–91, gross domestic product is estimated to have risen by about 25 per cent. in real terms over the period 1979–80 to 1990–91.

  Inflation
  Mr. Lester
  To ask the Chancellor of the Exchequer what is his Department's policy regarding the extent to which(a) quangos and (b) voluntary organisations which receive financial support are compensated for inflation.

  Mr. Mellor
  Funding of non-departmental public bodies and voluntary organisations is a matter for the relevant sponsoring Department. There is no automatic compensation for inflation.

  Severely Disabled People
  Mr. Ashley
  To ask the Chancellor of the Exchequer what representations he has received concerning the possibility of granting income tax relief to severely disabled people who have to pay for nursing attendant care in order that they may continue to work and to live as independently as possible; and if he will make a statement.

  Mr. Norman Lamont
  I have received one such representation, but, at this time of year, the right hon. Gentleman will not expect me to comment further.

  Efficient Cars
  Mr. Soley
  To ask the Chancellor of the Exchequer whether he has any plans to introduce fiscal initiatives to encourage motor manufacturers to produce more efficient cars.

  Mr. Maude
  I cannot anticipate my right hon. Friend's Budget statement.

  Customs and Excise Management Act
  Mr. Flynn
  To ask the Chancellor of the Exchequer if he will list in the Official Report all successful prosecutions made under the Customs and Excise Management Act 1979.
  399
  Mrs. Gillian Shephard
  Information is published in the annual report of the Commissioners of Customs and Excise, a copy of which is in the Library.

  Personal Equity Plans
  Mr. Arbuthnot
  To ask the Chancellor of the Exchequer what are the latest figures for the progress of personal equity plans.

  Mr. Maude
  I am pleased to say that PEPs continue to be very successful. In the 15 months to March 1990 a total of 580,000 plans were taken out, with initial investment of £1,600 million. The provisional figures for the first two quarters of 1990–91 show that a high level of enthusiasm for PEPs continues, with a further 200,000 plans taken out and £600 million invested. The average amount invested remains approximately £3,000.

  The total number of plans taken out since PEPs started is now nearly 1·2 million. The total subscribed—ignoring investment growth—is almost £3 billion.

  The cost of the income tax relief is estimated at £20 million for 1989–90 and £45 million for 1990–91.

WALES

  Planning Officers
  Mr. Alan Williams
  To ask the Secretary of State for Wales if he will bring forward legislative proposals to prevent local authority planning officers leaving their 400
  council employment and setting up private planning consultancies operating in their original areas of jurisdiction.

  Mr. Nicholas Bennett
  No.

  Students
  Mr. Murphy
  To ask the Secretary of State for Wales what number and what percentage of full-time students over the age of 18 years in Wales are studying in(a) further education and tertiary colleges and (b) maintained 11 to 18 years schools.

  Sir Wyn Roberts
  The number and percentage of full-time students aged over 18 years of age for 1989–90 are as follows:

  Number

  Per cent.

  Further education and tertiary colleges1

  Aged 19

  1,104

  28

  Aged 20 and over2

  2,759

  70

  Maintained secondary schools3

  11–18

  39

  1

  Other4

  21

  1

  Total students

  3,923

  100

  1 Full-time and sandwich students on further education courses at higher and further education tertiary colleges. At 31 August 1989.

  2 Includes age not known.

  3 Aged 19 at 31 August 1989.

  4 6th form colleges in Clwyd and South Glamorgan and senior comprehensive school (14–18) in Gwent.

  401
  Mr. Murphy
  To ask the Secretary of State for Wales what numbers and what percentage of full-time students in further education colleges in each county of Wales are studying(a) A and AS level, (b) BTEC, first and national diploma and (c) GCSE.

  A and A/S levels

  BTEC first and national diploma

  GCSE

  Number

  per cent.

  Number

  per cent.

  Number

  per cent.

  Clwyd

  451

  13

  1,528

  45

  251

  7

  Dyfed

  50

  2

  1,337

  51

  40

  2

  Gwent

  112

  8

  277

  20

  79

  6

  Gwynedd

  69

  4

  782

  48

  —

  —

  Mid Glamorgan

  75

  2

  1,281

  38

  53

  2

  Powys

  13

  2

  420

  52

  40

  5

  South Glamorgan

  50

  3

  605

  39

  36

  2

  West Glamorgan

  —

  —

  89

  30

  —

  —

  WALES

  820

  5

  6,319

  42

  499

  3

  Numbers relate to full-time and sandwich students following the required courses at higher and further education colleges, excluding tertiary colleges. They are shown as a percentage of the full-time and sandwich students on further education courses.

  Languages
  Mr. Murphy
  To ask the Secretary of State for Wales what assessment has been made of the effect of the compulsory teaching of Welsh at secondary level on the teaching of modern languages in those schools in non-native Welsh-speaking areas which have traditionally offered more than one modern language to GCSE level.

  Sir Wyn Roberts
  It is too early to gauge the effect of the introduction of Welsh in those schools in non-native speaking areas but I refer the hon. Gentleman to my right hon. Friend's announcement on 22 January about the structure of key stage 4 in the national curriculum in Wales. All pupils will be required to study both Welsh and

  Relief: 1990–91

  (1)

  (2)

  (3)

  (4)

  (5)

  (6)

  (7)

  Domestic rateable value

  Relevant population1

  Domestic poundage

  Notional average domestic rates per adult

  Forecast community charge

  Difference between community charge and rates

  Amount above £18 threshold

  Local authority and community council

  £

  Number

  P

  £

  £

  £

  £

  Alyn and Deeside

  Queensferry

  99,749

  1,536

  270·8

  176

  184

  8

  -10

  Shotton

  341,760

  4,817

  270·8

  192

  184

  -8

  -26

  Connah's Quay

  845,875

  10,717

  270·8

  214

  184

  -30

  -48

  Hawarden

  777,984

  9,157

  270·8

  230

  184

  -46

  -64

  Broughton and Bretton

  348,856

  4,123

  270·8

  229

  184

  -45

  -63

  Higher Kinnerton

  104,213

  1,123

  270·8

  251

  184

  -67

  -85

  Penyffordd

  216,534

  2,564

  270·8

  229

  184

  -45

  -63

  1 As specified in Appendix 2 of the Welsh Revenue Support Grant Distribution Report.

  402
  Sir Wyn Roberts
  The information for 1989–90 is as follows:

  a modern foreign language. The proposed structure provide greater flexibility for parents and pupils to be offered a full choice of subjects including a second modern language.

  Local Government Finance
  Mr. Barry Jones
  To ask the Secretary of State for Wales if he will provide the detailed calculation of the transitional relief level for poll tax payers in the community of(a) Queensferry, (b) Shotton, (c) Connah's Quay, (d) Howarden, (e) Broughton and Bretton, (f) Higher Kinnerton and (g) Penyffordd.

  Mr. Nicholas Bennett
  I refer the hon. Gentleman to the reply given to the hon. Member for Newport, West (Mr. Flynn) on 4 February at columns 22–24 for the method of calculation.

  The figures for the communities requested are given in the following table:
  403

  Relief: 1991–92

  (1)

  (2)

  (3)

  (4)

  (5)

  (6)

  (7)

  Domestic rateable value

  Relevant population1

  Domestic poundage

  Notional average domestic rates per adult

  1990–91 community charge

  Difference between community charge and rates

  Amount above £37 threshold

  Local authority and community council

  £

  Number

  P

  £

  £

  £

  £

  Alyn and Deeside

  Queensferry

  99,749

  1,536

  270·8

  176

  262

  86

  49

  Shotton

  341,760

  4,817

  270·8

  192

  262

  70

  33

  Connah's Quay

  845,875

  10,717

  270·8

  214

  262

  48

  11

  Hawarden

  777,984

  9,157

  270·8

  230

  262

  32

  -5

  Broughton and Bretton

  348,856

  4,123

  270·8

  229

  262

  33

  -4

  Higher Kinnerton

  104,213

  1,123

  270·8

  251

  262

  11

  -26

  Penyffordd

  216,534

  2,564

  270·8

  229

  262

  33

  -4

  1 As specified in Appendix 2 of the Welsh Revenue Support Grant Distribution Report.

  Blood Products
  Mr. Wigley
  To ask the Secretary of State for Wales how many people with haemophilia in Wales who require factor VIII infusions are being treated with high purity monoclonal products; how many are being treated with the intermediate purity concentrates; and if he will break the figures down according to(a) product manufacturer, (b) the number of units of each product prescribed in the latest year for which data is available and (c) for each health authority.

  Mr. Nicholas Bennett
  This information is not held centrally.

  Lime Subsidy
  Mr. Geraint Howells
  To ask the Secretary of State for Wales if he has any plans to reintroduce the lime subsidy; and if he will make a statement.

  Mr. David Hunt
  I have no plans to extend grant aid for routine applications of lime. Farmers with improvement plans under the Farm and Conservation Grant Regulations can obtain grant assistance towards the cost of liming land where this is part of a programme of reseeding and regeneration. In the less-favoured areas, lime treatment alone is eligible for grant where it can be demonstrated to be genuine restoration and not routine treatment.

  Caravan Sites
  Mr. Geraint Howells
  To ask the Secretary of State for Wales how many caravan sites there are in(a) Ceredigion and (b) Dyfed; what the corresponding figures were for each of the last 10 years; and if he will make a statement.

  Sir Wyn Roberts
  This information is not held centrally.

  Small Businesses
  Mr. Geraint Howells
  To ask the Secretary of State for Wales what steps are being taken in Wales by his Department to help small businesses; and if he will make a statement.

  Mr. David Hunt
  My Department continues to attach a high priority to the promotion of enterprise and to helping small businesses. General economic policies at a national level, national enterprise support policies and initiatives 404
  that are unique to Wales such as the Enterprise Wales scheme are all helping to make Wales a place where small businesses can flourish. In Wales the latest annual figures —most recently published in July 1990—show that by the end of 1989 the total number of businesses registered for VAT was nearly 85,200, an increase of 21 per cent. on the stock of businesses at the end of 1979.

  Deeside Community Hospital
  Mr. Barry Jones
  To ask the Secretary of State for Wales when he proposes the commissioning of the Deeside community hospital.

  Mr. Nicholas Bennett
  The time scale for commissioning the Deeside community hospital is a matter for the Clwyd health authority.

  Mancot Community Hospital
  Mr. Barry Jones
  To ask the Secretary of State for Wales what are his future plans for Mancot community hospital; and if he will make a statement.

  Mr. Nicholas Bennett
  Plans for Mancot community hospital are a matter for Clwyd district health authority at this time.

  Hospitals, Clwyd
  Mr. Barry Jones
  To ask the Secretary of State for Wales when he proposes to visit(a) Dobshill hospital, Clwyd, (b) Meadowsleigh hospital, Clwyd, and (a) Broughton hospital, Clwyd; and if he will make a statement.

  Mr. Nicholas Bennett
  My right hon. Friend has no plans to visit these hospitals at present.

  Waste Imports
  Mr. Hinchliffe
  To ask the Secretary of State for Wales in what quantities per nation annually European toxic waste has been imported by Wales for each year since 1979.

  Mr. Nicholas Bennett
  Information on the importation of waste by country of origin into the United Kingdom is available only for the period since the introduction of the Transfrontier Shipment of Hazardous Waste Regulations in October 1988. The information available in respect of
  405
  imports of waste for disposal in Wales from European Community states for the years to 31 March 1989 and 1990 is shown in the table.

  Imports of Hazardous Waste into Wales for the Continent of Europe

  Country of Origin

  Quantity (Tonnes)

  1988–89

  1989–90

  Belgium

  3,265

  1,274

  France

  —

  16

  Federal Republic of Germany

  —

  331

  Greece

  —

  5

  Republic of Ireland

  —

  148

  Italy

  73

  974

  Luxembourg

  —

  17

  Netherlands

  351

  281

  Portugal

  —

  73

  Spain

  —

  218

  Mr. Hinchliffe
  To ask the Secretary of State for Wales what quantity of waste, in the last year for which figures are available, was imported for direct landfill within Wales.

  Total amount of general grant paid to each district council from 1980–81 to 1988–89

  Council

  1980–81 £

  1981–82 £

  1982–83 £

  1983–84 £

  1984–85 £

  1985–86 £

  1986–87 £

  1987–88 £

  1988–89 £

  Antrim

  203,022

  328,676

  273,676

  330,827

  259,285

  312,498

  370,276

  297,415

  230,107

  Ards

  346,468

  593,983

  702,750

  877,683

  821,992

  853,823

  1,145,922

  1,144,002

  1,109,965

  Armagh

  502,001

  671,488

  692,015

  854,148

  774,515

  806,218

  874,313

  934,594

  917,120

  Ballymena

  299,894

  375,831

  393,015

  408,572

  429,719

  416,316

  515,209

  441,014

  468,248

  Ballymoney

  204,458

  311,116

  361,020

  425,117

  422,414

  433,467

  457,971

  600,071

  553,888

  Banbridge

  311,737

  383,449

  395,849

  477,166

  490,608

  505,922

  529,522

  605,433

  586,867

  Belfast

  2,010,941

  2,285,195

  2,987,789

  3,999,843

  4,365,614

  4,692,549

  5,122,136

  5,368,404

  5,680,258

  Carrickfergus

  351,657

  433,369

  523,866

  508,389

  447,617

  423,650

  430,674

  462,328

  449,508

  Castlereagh

  418,909

  422,403

  467,568

  545,002

  470,966

  435,300

  526,291

  426,557

  430,021

  Coleraine

  197,769

  227,528

  245,284

  344,277

  349,431

  370,204

  342,722

  288,401

  311,666

  Cookstown

  286,874

  330,280

  376,234

  468,069

  444,731

  470,701

  479,230

  517,465

  477,515

  Craigavon

  639,863

  727,980

  877,940

  1,169,184

  1,253,782

  1,258,565

  1,256,531

  1,503,284

  1,505,757

  Derry

  988,283

  1,389,176

  1,649,291

  2,005,417

  2,155,433

  2,150,279

  2,411,072

  2,517,295

  2,698,647

  Down

  458,227

  677,867

  750,882

  916,544

  901,658

  1,059,929

  1,235,652

  1,427,921

  1,437,359

  Dungannon

  511,942

  606,880

  735,385

  886,125

  908,574

  945,193

  887,350

  971,853

  942,600

  Fermanagh

  695,689

  807,546

  882,082

  1,015,839

  1,029,604

  1,054,522

  1,144,780

  1,193,343

  1,116,206

  Larne

  169,423

  248,236

  320,358

  346,137

  350,127

  383,348

  395,700

  372,040

  390,630

  Limavady

  239,746

  305,037

  332,150

  372,369

  382,499

  428,037

  486,044

  522,866

  607,730

  Lisburn

  361,035

  511,401

  674,101

  889,998

  915,718

  798,696

  1,089,944

  1,015,680

  1,117,620

  Magherafelt

  307,121

  394,661

  452,749

  558,461

  568,099

  615,274

  623,256

  687,739

  711,912

  Moyle

  183,634

  229,752

  265,262

  326,380

  386,676

  372,579

  447,260

  463,143

  457,943

  Newry and Mourne

  1,004,081

  1,232,093

  1,518,586

  1,890,419

  2,259,691

  2,387,487

  2,598,258

  2,632,989

  2,670,374

  Newtownabbey

  518,411

  538,930

  608,465

  892,923

  951,454

  1,027,691

  1,050,207

  1,053,659

  986,500

  North Down

  85,624

  187,687

  277,955

  378,878

  371,700

  347,092

  655,536

  581,305

  591,281

  Omagh

  440,336

  629,884

  792,264

  958,572

  1,064,991

  1,109,986

  1,026,753

  1,114,700

  1,106,807

  Strabane

  612,662

  667,876

  846,538

  890,887

  1,049,679

  1,163,216

  1,097,377

  1,243,202

  1,204,510

  Mr. Peter Robinson
  To ask the Secretary of State for Northern Ireland if he will provide a table showing the district rate for each district council in ascending order for the year 1980–81 and each subsequent year.

  Mr. Needham
  I will write to the hon. Gentleman and place a copy in the Library.

  Mr. Peter Robinson
  To ask the Secretary of State for Northern Ireland what is the 1990–91 estimated gross expenditure for each district council in Northern Ireland; and what is the estimated population of each district.

  Mr. Needham
  The information is set out in the table.
  406
  Mr. Nicholas Bennett
  No imports of hazardous waste for disposal at Welsh landfill sites have been notified under the Transfrontier Shipment of Hazardous Waste Regulations 1988.

  Mr. Hinchliffe
  To ask the Secretary of State for Wales what proportion of waste incinerated within Wales is imported; and what are the projected levels of such importation for the next decade.

  Mr. Nicholas Bennett
  Figures on waste incineration are not maintained centrally and no future projections are available.

NORTHERN IRELAND

  District Councils
  Mr. Peter Robinson
  To ask the Secretary of State for Northern Ireland what was the total amount of general grant factor given to each Northern Ireland district council in 1980–81 and each subsequent year.

  Mr. Needham
  The information is set out in the table.

  1990–91 Estimated Gross Expenditure and Estimated Civilian Population

  Council

  1990–91 Estimated Gross Expenditure for each DC £

  Population as at 30 June 1988

  Antrim

  3,904,746

  45,700

  Ards

  7,131,700

  64,000

  Armagh

  3,536,450

  49,000

  Ballymena

  4,844,774

  56,700

  Ballymoney

  2,088,880

  23,900

  Banbridge

  2,631,476

  31,900

  Belfast

  52,833,755

  298,400

  Carrickfergus

  3,792,648

  30,000

  Castlereagh

  5,379,512

  58,000

  Coleraine

  5,178,013

  48,100

  Cookstown

  2,218,294

  27,600

  407

  Council

  1990–91 Estimated Gross Expenditure for each DC £

  Population as at 30 June 1988

  Craigavon

  8,548,553

  77,200

  Derry

  12,913,960

  97,700

  Down

  5,702,974

  56,100

  Dungannon

  3,347,209

  43,700

  Fermanagh

  4,608,528

  49,300

  Larne

  2,714,676

  29,000

  Limavady

  2,276,544

  29,300

  Lisburn

  7,888,184

  93,400

  Magherafelt

  2,402,956

  33,100

  Moyle

  1,193,930

  15,200

  Newry and Mourne

  7,832,050

  87,100

  Newtownabbey

  7,839,495

  72,800

  North Down

  7,587,657

  70,300

  Omagh

  5,094,611

  44,200

  Strabane

  3,435,348

  35,200

  Mr. Peter Robinson
  To ask the Secretary of State for Northern Ireland what was the increase in district rate for each district council in Northern Ireland since 1980–81 in both pence and percentage terms.

  Mr. Needham
  The information is set out in the table.

  Council

  1980–81

  Actual p

  per cent.

  Antrim

  6·50

  28·80

  Ards

  12·00

  50·00

  Armagh

  5·34

  25·80

  Ballymena

  4·00

  17·30

  Ballymoney

  6·00

  30·80

  Banbridge

  4·00

  16·70

  Belfast

  9·40

  30·60

  Carrickfergus

  8·50

  29·30

  Castlereagh

  6·50

  30·20

  Coleraine

  7·50

  27·80

  Cookstown

  9·00

  21·60

  Craigavon

  5·00

  15·60

  Derry

  10·26

  35·10

  Down

  7·00

  30·40

  Dungannon

  5·00

  23·20

  Fermanagh

  6·00

  25·50

  Lame

  5·00

  16·70

  Limavady

  4·50

  22·50

  Lisburn

  4·86

  20·90

  Magherafelt

  3·00

  18·75

  Moyle

  7·00

  28·00

  Newry and Mourne

  4·50

  20·00

  Newtownabbey

  6·00

  18·75

  North Down

  8·00

  33·30

  Omagh

  4·50

  23·70

  Strabane

  5·00

  19·20

  Council

  1981–82

  Actual p

  per cent.

  Antrim

  3·5

  12·1

  Ards

  6·0

  16·7

  Armagh

  2·0

  7·7

  Ballymena

  3·0

  11·1

  Ballymoney

  9·0

  35·3

  Banbridge

  3·0

  10·7

  Belfast

  6·4

  16·0

  Carrickfergus

  9·0

  24·0

  Castlereagh

  3·0

  10·7

  Coleraine

  4·0

  11·6

  Cookstown

  2·5

  11·1

  Craigavon

  5·5

  14·9

  Derry

  5·1

  12·9

  408

  Council

  1981–82

  Actual p

  per cent.

  Down

  7·0

  23·3

  Dungannon

  3·5

  13·2

  Fermanagh

  3·5

  11·9

  Larne

  4·0

  11·4

  Limavady

  3·0

  12·2

  Lisburn

  7·53

  26·8

  Magherafelt

  2·75

  14·5

  Moyle

  14·0

  43·8

  Newry and Mourne

  3·5

  13·0

  Newtownabbey

  3·0

  7·9

  North Down

  6·5

  20·3

  Omagh

  5·5

  23·4

  Strabane

  3·0

  9·7

  Council

  1982–83

  Actual p

  per cent.

  Antrim

  7·0

  21·5

  Ards

  7·0

  16·7

  Armagh

  2·5

  8·9

  Ballymena

  2·5

  8·3

  Ballymoney

  4·0

  11·6

  Banbridge

  2·2

  7·1

  Belfast

  8·4

  18·1

  Carrickfergus

  4·0

  8·6

  Castlereagh

  3·0

  9·7

  Coleraine

  2·25

  5·8

  Cookstown

  2·5

  10·0

  Craigavon

  4·25

  10·0

  Derry

  4·7

  10·5

  Down

  6·0

  16·2

  Dungannon

  2·0

  6·7

  Fermanagh

  2·75

  8·3

  Larne

  3·0

  7·7

  Limavady

  3·0

  10·9

  Lisburn

  4·4

  12·4

  Magherafelt

  3·0

  13·8

  Moyle

  4·0

  8·7

  Newry and Mourne

  8·5

  27·9

  Newtownabbey

  2·0

  4·9

  North Down

  4·5

  11·7

  Omagh

  5·0

  17·2

  Strabane

  2·55

  7·5

  Council

  1983–84

  Actual p

  per cent.

  Antrim

  —

  0·00

  Ards

  1·00

  2·00

  Armagh

  1·50

  4·90

  Ballymena

  1·50

  4·60

  Ballymoney

  1·50

  3·90

  Banbridge

  2·29

  6·90

  Belfast

  5·70

  10·40

  Carrickfergus

  1·25

  2·50

  Castlereagh

  1·00

  -2·90

  Coleraine

  2·00

  4·90

  Cookstown

  3·75

  13·60

  Craigavon

  3·72

  8·00

  Derry

  4·40

  8·90

  Down

  2·00

  4·70

  Dungannon

  2·00

  6·30

  Fermanagh

  2·25

  6·30

  Larne

  1·50

  3·60

  Limavady

  1·00

  3·30

  Lisburn

  3·01

  7·50

  Magherafelt

  4·25

  17·20

  Moyle

  1·90

  3·80

  Newry and Mourne

  4·00

  10·30

  Newtownabbey

  2·00

  4·70

  North Down

  2·50

  5·80

  409

  Council

  1983–84

  Actual p

  per cent.

  Omagh

  5·00

  14·70

  Strabane

  4·95

  13·50

  Council

  1984–85

  Actual p

  per cent.

  Antrim

  1·00

  2·05

  Ards

  —

  0·00

  Armagh

  1·50

  4·07

  Ballymena

  1·50

  4·04

  Ballymoney

  1·00

  2·05

  Banbridge

  5·18

  14·06

  Belfast

  4·25

  7·00

  Carrickfergus

  2·00

  3·09

  Castlereagh

  -1·00

  -3·00

  Coleraine

  —

  0·00

  Cookstown

  1·30

  4·02

  Craigavon

  2·45

  4·09

  Derry

  1·40

  2·06

  Down

  —

  0·00

  Dungannon

  1·00

  2·09

  Fermanagh

  2·00

  5·03

  Larne

  —

  0·00

  Limavady

  0·50

  1·06

  Lisburn

  2·60

  6·00

  Maghcrafelt

  1·10

  3·08

  Moyle

  2·85

  5·05

  Newry and Mourne

  3·00

  7·00

  Newtownabbey

  3·00

  6·07

  North Down

  1·50

  3·03

  Omagh

  2·00

  5·01

  Strabane

  —

  0·00

  Council

  1985–86

  Actual p

  per cent.

  Antrim

  1·50

  3·70

  Ards

  —

  0·00

  Armagh

  1·00

  2·99

  Ballymena

  0·85

  2·39

  Ballymoney

  1·25

  3·05

  Banbridge

  4·26

  10·47

  Belfast

  4·19

  6·46

  Carrickfergus

  2·25

  4·27

  Castlereagh

  1·00

  3·13

  Coleraine

  2·25

  5·26

  Cookstown

  3·30

  10·14

  Craigavon

  2·01

  3·80

  Derry

  4·40

  7·99

  Down

  —

  0·00

  Dungannon

  3·00

  8·57

  Fermanagh

  2·75

  6·88

  Larne

  1·50

  3·45

  Limavady

  3·00

  9·38

  Lisburn

  0·64

  1·40

  Magherafelt

  2·94

  9·77

  Moyle

  5·00

  9·13

  Newry and Mourne

  3·00

  6·52

  Newtownabbey

  4·60

  9·58

  North Down

  4·50

  9·57

  Omagh

  2·00

  4·88

  Strabane

  2·00

  4·82

  Council

  1986–87

  Actual p

  per cent.

  Antrim

  3·75

  8·93

  Ards

  3·00

  6·00

  Armagh

  3·50

  10·14

  Ballymena

  1·65

  4·54

  Ballymoney

  3·00

  7·10

  410

  Council

  1986–87

  Actual p

  per cent.

  Banbridge

  3·04

  6·77

  Belfast

  7·32

  10·60

  Carrickfergus

  2·50

  4·55

  Castlereagh

  6·08

  18·42

  Coleraine

  4·00

  8·89

  Cookstown

  3·90

  10·88

  Craigavon

  5·28

  9·61

  Derry

  7·50

  12·61

  Down

  8·00

  17·78

  Dungannon

  3·50

  9·21

  Fermanagh

  6·00

  14·04

  Larne

  4·25

  9·44

  Limavady

  4·00

  11·43

  Lisburn

  2·56

  5·54

  Magherafelt

  3·52

  10·65

  Moyle

  6·00

  10·04

  Newry and Mourne

  5·30

  10·82

  Newtownabbey

  2·50

  14·77

  North Down

  5·40

  10·49

  Omagh

  4·00

  9·30

  Strabane

  7·00

  16·09

  Council

  1987–88

  Actual p

  per cent.

  Antrim

  2·75

  601

  Ards

  —

  0·00

  Armagh

  —

  0·00

  Ballymena

  1·85

  4·87

  Ballymoney

  0·75

  1·66

  Banbridge

  3·01

  6·27

  Belfast

  3·67

  4·81

  Carrickfergus

  1·91

  3·32

  Castlereagh

  1·92

  4·91

  Coleraine

  1·00

  2·04

  Cookstown

  3·25

  8·18

  Craigavon

  3·14

  5·22

  Derry

  2·50

  3·73

  Down

  7·00

  13·21

  Dungannon

  2·50

  6·02

  Fermanagh

  2·00

  4·10

  Larne

  3·30

  6·70

  Limavady

  1·95

  5·00

  Lisburn

  0·95

  1·95

  Magherafelt

  4·49

  12·28

  Moyle

  —

  0·00

  Newry and Mourne

  5·40

  9·94

  Newtownabbey

  2·13

  3·86

  North Down

  4·00

  7·03

  Omagh

  4·65

  9·89

  Strabane

  3·50

  6·93

  Council

  1988–89

  Actual p

  per cent.

  Antrim

  2·50

  5·15

  Ards

  1·00

  1·89

  Armagh

  3·00

  7·89

  Ballymena

  3·00

  7·53

  Ballymoney

  1·00

  2·17

  Banbridge

  —

  0·00

  Belfast

  3·93

  4·91

  Carrickfergus

  3·09

  5·20

  Castlereagh

  -1·10

  -2·68

  Coleraine

  3·00

  6·00

  Cookstown

  -0·25

  -0·58

  Craigavon

  —

  0·00

  Derry

  3·05

  4·39

  Down

  5·00

  8·33

  Dungannon

  —

  0·00

  Fermanagh

  2·75

  5·42

  Larne

  3·20

  6·09

  Limavady

  2·55

  6·23

  411

  Council

  1988–89

  Actual p

  per cent.

  Lisburn

  3·82

  7·68

  Magherafelt

  2·45

  5·97

  Moyle

  -025

  -038

  Newry and Mourne

  —

  0·00

  Newtownabbey

  2·82

  4·93

  North Down

  2·80

  4·60

  Omagh

  3·35

  6·49

  Strabane

  3·00

  5·56

  Council

  1989–90

  Actual p

  Per cent.

  Antrim

  2·00

  3·92

  Ards

  3·5

  6·48

  Armagh

  3·0

  7·32

  Ballymena

  1·15

  2·68

  Ballymoney

  3·25

  6·91

  Banbridge

  —

  0·0

  Belfast

  —

  0·0

  Carrickfergus

  3·25

  5·2

  Castlereagh

  -2·00

  -5·01

  Coleraine

  2·0

  3·77

  Cookstown

  5·0

  11·7

  Craigavon

  4·12

  6·5

  Derry

  4·25

  5·86

  Down

  3·0

  4·62

  Dungannon

  —

  0·0

  Fermanagh

  2·0

  3·74

  Larne

  1·0

  1·79

  Limavady

  3·5

  8·05

  Lisburn

  —

  0·0

  Magherafelt

  2·84

  6·53

  Moyle

  2·90

  4·43

  Newry and Mourne

  -1·70

  -2·85

  Newtownabbey

  4·04

  6·73

  North Down

  2·15

  3·38

  Omagh

  3·50

  6·36

  Strabane

  3·75

  6·58

  Council

  1990–91

  Actual p

  per cent.

  Antrim

  1·50

  2·83

  Ards

  7·50

  13·04

  Armagh

  3·50

  7·95

  Ballymena

  3·00

  6·82

  Ballymoney

  3·75

  7·46

  Banbridge

  3·90

  7·65

  Belfast

  4·12

  4·91

  Carrickfergus

  3·75

  5·70

  Castlereagh

  6·49

  17·12

  Coleraine

  —

  0·00

  Cookstown

  4·00

  8·38

  Craigavon

  3·30

  4·89

  Derry

  7·20

  9·38

  Down

  2·00

  2·94

  Dungannon

  3·75

  8·52

  Fermanagh

  2·00

  3·60

  Larne

  7·93

  13·97

  Limavady

  3·50

  7·45

  Lisburn

  1·99

  3·71

  Magherafelt

  2·66

  5·74

  Moyle

  5·82

  8·51

  Newry and Mourne

  —

  0·00

  Newtownabbey

  0·59

  0·92

  North Down

  3·39

  5·15

  Omagh

  5·80

  9·91

  Strabane

  6·50

  10·70

  412

  Grant Factors
  Mr. Peter Robinson
  To ask the Secretary of State for Northern Ireland what were the de-rating and resources elements of the general grant factor for each of the past five financial years; and on what basis they were set.

  Mr. Needham
  The de-rating and resources elements of general exchequer grant for each of the past five financial years are set out in the following table.

  The basis on which the grants are set is determined by a Local Government (General Grant) Order made in accordance with paragraph 3(1) of schedule 1 to the Local Government, &c. (Northern Ireland) Order 1972.

  The derating and resources elements of the general exchequer grant from 1985–86 to 1989–90

  1985–86

  Council

  Derating element £

  Resources element £

  Antrim

  126,057

  186,441

  Ards

  386,595

  467,228

  Armagh

  132,753

  673,465

  Ballymena

  378,519

  37,797

  Ballymoney

  95,836

  337,631

  Banbridge

  127,936

  377,986

  Belfast

  4,692,549

  —

  Carrickfergus

  161,021

  262,629

  Castlereagh

  307,948

  127,352

  Coleraine

  370,204

  —

  Cookstown

  124,448

  346,253

  Craigavon

  902,136

  356,429

  Derry

  795,414

  1,354,865

  Down

  140,584

  919,345

  Dungannon

  196,697

  748,496

  Fermanagh

  160,977

  893,545

  Larne

  253,222

  130,126

  Limavady

  70,205

  357,832

  Lisburn

  525,986

  272,710

  Magherafelt

  131,018

  484,256

  Moyle

  43,081

  329,498

  Newry and Mourne

  281,471

  2,106,016

  Newtownabbey

  1,027,691

  —

  North Down

  211,480

  135,612

  Omagh

  100,362

  1,009,624

  Strabane

  136,141

  1,027,075

  1986–87

  Council

  Derating element £

  Resources element £

  Antrim

  140,551

  229,725

  Ards

  418,708

  727,214

  Armagh

  147,765

  726,548

  Ballymena

  400,601

  114,608

  Ballymoney

  110,205

  347,766

  Banbridge

  138,868

  390,554

  Belfast

  5,122,136

  —

  Carrickfergus

  141,018

  289,656

  Castlereagh

  366,486

  159,805

  Coleraine

  342,722

  —

  Cookstown

  138,876

  340,354

  Craigavon

  938,657

  317,874

  Derry

  905,216

  1,505,856

  Down

  166,625

  1,069,027

  Dungannon

  218,230

  669,120

  Fermanagh

  191,402

  953,378

  Larne

  282,811

  112,889

  Limavady

  78,025

  408,019

  Lisburn

  566,277

  523,667

  Magherafelt

  148,519

  474,737

  Moyle

  48,889

  398,380

  Newry and Mourne

  299,790

  2,298,468

  Newtownabbey

  1,050,207

  —

  413

  Council

  Derating element £

  Resources element £

  North Down

  243,549

  411,987

  Omagh

  109,902

  916,851

  Strabane

  159,922

  937,455

  1987–88

  Council

  Derating element £

  Resources element £

  Antrim

  146,900

  166,594

  Ards

  429,833

  714,169

  Armagh

  150,996

  783,598

  Ballymena

  424,152

  16,862

  Ballymoney

  116,584

  483,587

  Banbridge

  148,134

  457,299

  Belfast

  5,368,404

  —

  Carrickfergus

  112,449

  349,879

  Castlereagh

  359,491

  67,066

  Coleraine

  288,401

  —

  Cookstown

  150,418

  367,047

  Craigavon

  1,013,227

  490,057

  Derry

  951,978

  1,565,317

  Down

  193,953

  1,233,968

  Dungannon

  233,012

  738,841

  Fermanagh

  206,270

  987,073

  Larne

  306,533

  65,507

  Limavady

  83,825

  439,041

  Lisburn

  566,119

  449,561

  Magherafelt

  169,212

  518,527

  Moyle

  50,788

  412,355

  Newry and Mourne

  337,411

  2,295,578

  Newtownabbey

  1,053,659

  —

  North Down

  270,383

  310,922

  Omagh

  122,545

  992,155

  Strabane

  167,243

  1,075,959

  1988–89

  Council

  Derating element £

  Resources element £

  Antrim

  153,926

  76,180

  Ards

  443,215

  666,750

  Armagh

  163,613

  753,508

  Ballymena

  463,535

  4,713

  Ballymoney

  123,032

  430,856

  Banbridge

  146,384

  440,482

  Belfast

  5,680,258

  —

  Carrickfergus

  131,957

  317,551

  Castlereagh

  331,884

  98,137

  Coleraine

  311,666

  —

  Cookstown

  150,765

  326,749

  Craigavon

  1,027,812

  477,945

  Derry

  1,009,969

  1,688,677

  Down

  221,091

  1,216,268

  Dungannon

  239,443

  703,158

  Fermanagh

  222,697

  893,509

  Lame

  326,908

  63,722

  Limavady

  91,399

  516,331

  Lisburn

  619,286

  498,333

  Magherafelt

  182,270

  529,641

  Moyle

  51,664

  406,279

  Newry and Mourne

  345,298

  2,325,076

  Newtownabbey

  986,500

  —

  North Down

  281,056

  310,225

  Omagh

  133,486

  973,321

  Strabane

  176,010

  1,028,500

  1989–90

  Council

  Derating element £

  Resources element £

  Antrim

  167,073

  88,870

  Ards

  472,128

  665,198

  Armagh

  169,540

  783,284

  Ballymena

  489,728

  17,816

  414

  Council

  Derating element £

  Resources element £

  Ballymoney

  135,581

  395,177

  Banbridge

  147,901

  443,222

  Belfast

  5,600,725

  —

  Carrickfergus

  160,755

  364,581

  Castlereagh

  336,583

  16,030

  Coleraine

  330,250

  —

  Cookstown

  174,634

  354,176

  Craigavon

  1,112,690

  416,548

  Derry

  1,060,634

  1,951,544

  Down

  234,793

  1,218,476

  Dungannon

  248,728

  737,570

  Fermanagh

  236,190

  914,427

  Larne

  338,432

  58,062

  Limavady

  99,362

  522,104

  Lisburn

  657,792

  394,805

  Magherafelt

  198,064

  530,801

  Moyle

  54,942

  349,535

  Newry and Mourne

  350,273

  2,249,375

  Newtownabbey

  985,802

  —

  North Down

  284,166

  380,510

  Omagh

  148,647

  994,195

  Strabane

  208,586

  1,077,913

  Power Station Emissions
  Mr. Beggs
  To ask the Secretary of State for Northern Ireland how soon he expects energy developments in Northern Ireland will enable requirements of EC directives on sulphur dioxide emissions from power stations to be complied with; and whether he envisages the use of natural gas for generating electricity to reduce noxious emissions from power stations in Northern Ireland.

  Mr. Needham
  I recently wrote to the chairman of Northern Ireland Electricity confirming that, if it is built as coal/oil-fired plant, the proposed phase II generating station at Kilroot would require flue gas desulphurisation. The letter also acknowledges that one of the alternative options, which envisages Kilroot phase II being completed as a natural gas fired plant, would satisfy the requirements of the EC large combustion plants directive. However, the technical and economic feasibility of using natural gas for power generation is still being assessed and no decision has yet been taken.

  Hazelbank-Macedon Area
  Mr. Beggs
  To ask the Secretary of State for Northern Ireland whether the reservation of the Hazelbank-Macedon area in the Belfast urban area plan 2001 for landscape, amenity or recreation use provides protection to the area from office-housing development.

  Mr. Needham
  All planning applications are considered on their merits having regard to the development plan for the area and to any other material considerations. It is likely that any future planning application for office or housing development on this site would be the subject of a public local inquiry under the terms of article 22 of the Planning (NI) Order 1972.

  Hotel Development
  Mr. Beggs
  To ask the Secretary of State for Northern Ireland how many hotel development applications in Northern Ireland have been approved in lands restricted for landscape, amenity or recreation use.
  415
  Mr. Needham
  Since 1987 planning permission for 21 such proposals has been granted by the Department of the Environment for Northern Ireland.

  Hazardous Waste, Maydown
  Mr. Hume
  To ask the Secretary of State for Northern Ireland what information regarding the proposal to site a hazardous waste incinerator at Dupont's Maydown complex has been furnishd to the DED's health and safety inspectorate; and what action the inspectorate is now undertaking.

  Mr. Needham
  Du Pont (UK) Limited has provided the Department of Economic Development's health and safety inspectorate with outline information concerning the possible siting of a toxic waste incinerator at Maydown, Co. Londonderry, and the inspectorate is continuing to monitor health and safety aspects of the company's proposals as further details become available.

  Mr. Hume
  To ask the Secretary of State for Northern Ireland, pursuant to his answer of 29 January,Official Report, column 470, what consultation the DOE environmental protection division have had regarding the proposed siting of a hazardous waste incinerator at Du Pont's Maydown complex; what information has been furnished to the division regarding the proposal; and what advice it has given or action it has taken on the matter to date.

  Mr. Needham
  The environmental protection division of the Department of the Environment for Northern Ireland was advised by Du Pont (UK) Ltd of the proposal to establish a hazardous waste incinerator on its site at Maydown in October 1990. In December 1990 the company confirmed in writing that the evaluation of the project was under way. Officials from the Department's environmental protection division will be available for consultation with the company.

  Mr. Hume
  To ask the Secretary of State for Northern Ireland, pursuant to his answer of 29 January,Official Report, column 471, if he will make a statement indicating the scope and nature of informal discussion of the proposed hazardous waste incinerator at Maydown between officials of the United Kingdom and Irish Governments.

  Mr. Needham
  I refer the hon. Gentleman to the joint statement of the Anglo-Irish Intergovernmental Conference which took place in Dublin on 31 January 1991.

  Environmental Protection
  Mr. Hume
  To ask the Secretary of State for Northern Ireland if he will make a statement outlining Government policy on balancing the needs of environmental protection and public safety and perceived job creation benefits indicating in which Northern Ireland Government Department the principal responsibility for assessing the balance rests.

  Mr. Needham
  Proposals for job creation must weigh and reconcile priorities in the public interest. These priorities include tile protection of the environment. Responsibility for assessing the proper balance lies jointly with the Government Departments most immediately 416
  involved in such proposals, having regard to their relevant statutory functions in securing environmental protection and public safety. By virtue of its wide-ranging remit, the Department of the Environment for Northern Ireland has a significant role in such joint assessments.

  Waste Imports
  Mr. Hinchliffe
  To ask the Secretary of State for Northern Ireland (1) what proportion of waste incinerated within Northern Ireland is imported; and what are the projected levels of such importation for the next decade;

  (2) in what quantities per nation annually European toxic waste has been imported by Northern Ireland for each year since 1979;

  (3) what quantity of waste, in the last year for which figures are available, was imported for direct landfill within Northern Ireland.

  Mr. Needham
  None.

HEALTH

  Health Services, Kent
  Mr. Campbell-Savours
  To ask the Secretary of State for Health, for each parliamentary constituency in Kent what percentage of the population are local authority tenants according to the 1981 census.

  Mr. Dorrell
  The information requested is shown in the table:

  Persons in households renting from local authority as a percentage of all persons

  Parliamentary constituency

  per cent.

  Ashford

  31

  Canterbury

  22

  Dartford

  25

  Dover

  27

  Faversham

  15

  Folkestone and Hythe

  17

  Gravesham

  27

  Maidstone

  25

  Medway

  24

  Mid Kent

  21

  North Thanet

  16

  Sevenoaks

  23

  South Thanet

  18

  Tonbridge and Mailing

  22

  Tunbridge Wells

  21

  Gillingham

  14

  Mr. Campbell-Savours
  To ask the Secretary of State for Health which health authority covers which parliamentary constituency in Kent.

  Mrs. Virginia Bottomley
  The information is as follows:

  Bexley Health Authority

  Bexleyheath

  Erith and Crayford

  Old Bexley and Sidcup

  Bromley Health Authority

  Beckenham

  Chislehurst

  Orpington

  Ravensbourne

  Canterbury and Thanet Health Authority

  Canterbury

  Thanet North

  417

  Thanet South

  Dover

  Faversham

  Dartford and Gravesham Health Authority

  Dartford

  Gravesham

  Sevenoaks

  Maidstone Health Authority

  Maidstone

  Tonbridge and Mailing

  Mid-Kent

  Medway Health Authority

  Medway

  Faversham

  Mid-Kent

  Gillingham

  South East Kent Health Authority

  Dover

  Ashford

  Folkestone and Hythe

  Tunbridge Wells Health Authority

  Sevenoaks

  Tonbridge and Mailing

  Tunbridge Wells

  Mr. Campbell-Savours
  To ask the Secretary of State for Health for each health authority covering the Kent area, which hospitals have been granted permission to establish a national health service trust.

  Mrs. Virginia Bottomley
  No hospitals in Kent have been given approval for national health service trust status to date.

  Mr. Campbell-Savours
  To ask the Secretary of State for Health, for each health authority covering the Kent area, which hospitals have indicated an interest in establishing a national health service trust.

  Mrs. Virginia Bottomley
  The information requested is as follows:

  Bexley district health authority

  Bexley Acute and Community Services

  Bexley Mental Health and Mental Handicap Services

  Dartford and Gravesham district health authority

  Dartford and Gravesham Acute Unit

  Dartford and Gravesham Priority Services Unit

  Maidstone district health authority

  Maidstone Acute and Community Unit

  Maidstone Mental Handicap Unit

  Tunbridge Wells district health authority

  Tunbridge Wells mental handicap services

  Queen Victoria hospital, East Grinstead

  Sevenoaks hospital

  Bromley district health authority

  Bromley Acute Services

  Bromley Priority Services

  South East Kent district health authority

  South East Kent Health Authority Community Services

  William Harvey and Buckland hospitals

  Census Statistics
  Mr. Campbell-Savours
  To ask the Secretary of State for Health, for each parliamentary constituency in Kent, (1) what percentage of the population are(a) Asian and (b) black according to the 1981 census;
  418
  (2) what percentage of the population are (a) Asian and (b) black according to the latest information updated since the 1981 census.

  Mr. Dorrell
  This information is not available. There was no question on ethnic group in the 1981 census.

  Mr. Campbell-Savours
  To ask the Secretary of State for Health, for each parliamentary constituency in Kent, what percentage of the population are owner occupiers according to the 1981 census.

  Mr. Dorrell
  The information requested is shown in the table:

  Parliamentary constituency

  Persons in owner occupier households as a percentage of all persons

  Ashford

  61

  Canterbury

  65

  Dartford

  67

  Dover

  59

  Faversham

  77

  Folkestone and Hythe

  67

  Gravesham

  66

  Maidstone

  66

  Medway

  67

  Mid Kent

  70

  North Thanet

  72

  Sevenoaks

  66

  South Thanet

  70

  Tonbridge and Mailing

  68

  Tunbridge Wells

  63

  Gillingham

  77

  Over Hospital
  Mr. Rooker
  To ask the Secretary of State for Health if he will seek a report from Gloucester health authority regarding the extent of consultation during the partial closure of Over hospital.

  Mr. Dorrell
  The Community Health Council Regulations 1985, as amended, provide that a health authority need not consult on any variation of service if the authority"is satisfied that, in the interest of the health service, a decision has to be taken without allowing time for consultation. In this circumstance the district health authority shall immediately notify the community health council of the decision".

  This was the case in the partial closure of Over hospital, which was both urgent and temporary. The community health council was notified immediately of Gloucester district health authority's decision.

  I understand that if Gloucester health authority decides to make this temporary closure permanent, it will consult.

  Laboratory Services
  Mr. Madden
  To ask the Secretary of State for Health what statutory provisions apply to the contracting out of laboratory services by regional and district health authorities; if he is required to approve the terms of such contracts; and if he will make a statement.

  Mrs. Virginia Bottomley
  Under section 23 of the National Health Service Act 1977, and regulations made under that Act, regional and district health authorities exercising the Secretary of State's functions have the power to arrange for non-NHS bodies to provide services
  419
  under that Act. The Secretary of State's approval of the terms of contracts is not required as the health authorities concerned would be acting on his behalf in arranging such contracts. Key issues for health authorities to take into account are the need for appropriate involvement of the individuals and groups concerned and the achievement of cost-effectiveness.

  Mental Illness
  Mr. Robin Cook
  To ask the Secretary of State for Health what was the total number of readmissions to mental illness hospitals and units in each of the last 10 years.

  Mr. Dorrell
  The table provides the numbers of admissions to national health service mental illness hospitals and hospital units where these admissions are known not to be a first admission to a national health service psychiatric hospital or hospital unit. The figures relate to admissions, and not individuals, since a person may be readmitted more than once during a year.

  Reliable centrally collected figures by admission status for years 1987–88, 1988–89 and 1989–90 are not yet available. When figures are available they will not be directly comparable with earlier data.

  Year

  Readmissions

  1977

  118,792

  1978

  120,456

  1979

  120,073

  1980

  127,184

  1981

  132,893

  1982

  133,475

  1983

  138,080

  1984

  138,431

  1985

  146,895

  1986

  145,578

  Mr. Atkinson
  To ask the Secretary of State for Health if he will list the mental illness hospitals planned for closure by 1996 by the health authorities concerned with the total number of beds in each and the number of beds currently occupied by patients.

  Mr. Dorrell
  The tables show mental handicap and mental illness hospitals planned for closure over the next five years and the district health authority in which each hospital is situated. The other information requested is not held centrally.

  Table 1

  Mental handicap hospitals

  DHA

  South East Thames

  Leybourne Grange

  Maidstone (managed by Tunbridge Wells)

  Eastry

  Canterbury and Thanet

  Grove Park

  Lewisham and North Southwark

  Laughton Lodge

  Eastbourne

  Mount Pleasant

  Hastings

  Yorkshire

  Brandesburten

  Hull

  Claypenny

  York

  Whixley

  Harrogate

  Stansfield

  Caldergate

  Caister

  Grimsby (located in North Lincolnshire but managed by Grimsby)

  Oxford

  420

  Mental handicap hospitals

  DHA

  Wayland Hospital

  West Berkshire

  Trent

  Aston Hall

  Southern Derbyshire

  Balderton

  Central Nottinghamshire

  Wessex

  Coldharbour

  West Dorset

  Burderop

  Swindon

  Pewsey

  Swindon

  East Anglian

  Risbridge

  West Suffolk

  Lothingland

  Great Yarmouth and Waveney

  Jane Walker

  East Suffolk

  Hadleigh House

  East Suffolk

  Hales Hospital

  Norwich

  North Western

  Brockhall Hospital

  Hyndburn and Ribble Valley

  Scott House

  Rochdale

  Offerton House

  Stockport

  Table 2

  Menial illness hospitals

  DHA

  Northern

  St. Mary's, Stannington

  Gateshead

  Yorkshire

  Storthes Hall Hospital

  Huddersfield

  Clifton Hospital

  York

  Stanley Royd Hospital

  Wakefield

  Scalebor Park Hospital

  Airedale

  Trent

  Pastures Hospital

  South Derbyshire

  East Anglia

  St. Audry's Hospital

  East Suffolk

  St. Nicholas' Hospital

  Great Yarmouth and Waveney

  St. Andrews

  Norwich

  North West Thames

  Nil

  North East Thames

  Friern Hospital1

  Hampstead

  South East Thames

  Cane Hill Hospital

  Croydon (managed by Bromley)

  Tooting Bee Hospital

  Wandsworth (managed by West Lambeth)

  Hellingley Hospital

  Eastbourne

  St. Augustine's Hospital

  Canterbury and Thanet

  Maidstone Hospital (psychiatric wing)

  Maidstone

  South West Thames

  Long Grove Hospital, Epsom

  Kingston and Esher

  Brookwood Hospital

  South West Surrey

  Wessex

  Whitecroft Hospital

  Isle of Wight

  Herrison Hospital, Dorchester

  West Dorset

  Old Manor Hospital, Salisbury1

  Salisbury

  Oxford

  St. John's Hospital

  Aylesbury Vale

  Fairmile Hospital

  West Berkshire

  Littlemore Hospital

  Oxford

  South Western

  Coney Hill Hospital

  Gloucester

  Moorhaven Hospital

  Plymouth

  Tone Vale Hospital, Taunton

  Somerset

  421

  Mental illness hospitals

  DHA

  West Midlands

  Barnsley Hall Hospital

  Bromsgrove and Redditch

  Rubery Hill Hospital

  South Birmingham

  Central Hospital

  South Warwickshire

  Hollymoor Hospital

  Solihull

  Mersey

  Rainhill Hospital

  St. Helens and Knowlsley

  Winwick Hospital

  Warrington

  North Western Nil

  1 With some facilities remaining on site.

  Mr. Atkinson
  To ask the Secretary of State for Health when he expects to publish comprehensive statistics about mentally ill hospital patients comparable to those in the DHSS statistical bulletins which ceased in 1986.

  Mr. Dorrell
  The K6rner recommendations on health services information were implemented for each financial year, commencing from 1 April 1987. These recommendations involved several definitional changes to information collected by the national health service and some statistics comparable with those previously published are no longer available from central returns. Some information on mental illness is contained in the forthcoming booklet, "Hospital Episode System—Summary Tables for England —1987/88"—a copy of which will be placed in the Library. Further estimates for activity within the specialties of mental illness and mental handicap will be published in a bulletin later in 1991.

  GP Services
  Mr. Galbraith
  To ask the Secretary of State for Health what is the level of achievement of the targets set for childhood immunisation and cervical screening for each area of general practice as defined by the Jarman index.

  Mrs. Virginia Bottomley
  The information is not available in the form requested. For information on the proportion of doctors receiving a target payment in each family health services authority I refer the hon. Member to the reply I gave to the hon. Member for Livingston (Mr. Cook) on 11 February at columns 351–56.

  Physically Disabled People
  Mr. Ashley
  To ask the Secretary of State for Health what is his policy on unaided access for physically disabled people to NHS facilities; and if he will make a statement.

  Mr. Dorrell
  Health authorities are required to comply with building regulations which contain requirements in respect of access for disabled people. From 1 April this year, building regulations will be legally enforceable on the NHS. In 1989, the Department published guidance on designing hospital facilities to meet the needs of disabled people which the NHS is encouraged to use and which exceeds the requirements of building regulations.

  Mr. Ashley
  To ask the Secretary of State for Health what plans he has to increase unaided access to NHS facilities for physically disabled people.

  Mr. Dorrell
  The national health service will be legally bound by the new standards in respect of access for 422
  disabled people which are soon to be introduced by my right hon. Friend the Secretary of State for the Environment.

  Mr. Ashley
  To ask the Secretary of State for Health if he will obtain for his departmental library a copy of the Royal College of Physicians' report on health services for adults with physical disabilities.

  Mr. Dorrell
  The Department has received copies of the report and a copy will be placed in the Library. We welcome it as a timely contribution to the process of improving services for disabled people. It gives a clear picture of the present situation and will be a considerable help to those at all levels in the National Health Service who are concerned with the planning and operation of these services.

  Disabled Young People
  Mr. Ashley
  To ask the Secretary of State for Health (1) what action he is taking to ensure that all district health authorities prepare and enforce formal arrangements for the transfer of disabled young people from paediatric to other consultants; and if he will make a statement;

  (2) what information he has on the number of district health authorities that have prepared and enforced formal arrangements for the transfer of disabled young people from paediatric to other consultants.

  Mr. Dorrell
  In 1988 health authorities were asked to ensure appropriate planning for disabled young people on moving from child to adult health services. The need to ensure continuity in the supervision of their health care will also be underlined in guidance currently being prepared on the welfare of children and young people in hospital. The available information is contained in the Royal College of Physicians' report on health services for adults with physical disabilities.

  GP Centre, Cheam
  Sir Neil Macfarlane
  To ask the Secretary of State for Health if he will meet Merton, Sutton and Wandsworth family practitioners' officials to review the funding arrangements for the new general practitioner centre in Malden road, Cheam; and if he will make a statement.

  Mrs. Virginia Bottomley
  General medical practitioners, as independent contractors, are responsible for providing their own practice premises. From 1 April 1990 family health services authorities have been allocated cash-limited funds with which to finance improvements to GPs' practice premises under the cost rent and improvement grant schemes.

  It is for Merton, Sutton and Wandsworth family health services authority to administer its allocations on the basis of best value for money, taking into account local needs and priorities. The hon. Member may wish to write to Mr. J. Speirs, the chairman of Merton, Sutton and Wandsworth family health services authority regarding the funding arrangements for the general practitioner centre in Malden road, Cheam.

  Kidney Machines
  Mr. Cohen
  To ask the Secretary of State for Health what is the cost of providing a dialysis unit; what is the running cost; and how many would be required to provide dialysis for all persons judged to be in need of it.
  423
  Mr. Dorrell
  This information is not collected centrally. The planning and provision of renal services is a matter for health authorities to decide, taking into account local needs and priorities.

  St. Paul's Eye Hospital
  Mr. Loyden
  To ask the Secretary of State for Health whether St. Paul's Eye hospital in Liverpool has been put on the market for sale.

  Mr. Dorrell
  No.

  Mr. Loyden
  To ask the Secretary of State for Health whether the future of St. Paul's eye hospital in Liverpool is currently the subject of consultation.

  Mr. Dorrell
  Yes. Liverpool health authority issued proposals for the closure of St. Paul's eye hospital on 21 November 1990 and invited comments by 22 January. The closing date for comments has now been extended to 19 February.

  Training
  Mr. Cartwright
  To ask the Secretary of State for Health when he received the application for funding of the Project 2000 training programme submitted on behalf of the Thames College of Health Care Studies; and when he expects to give his decision.

  Mrs. Virginia Bottomley
  The Project 2000 submission from South East Thames regional health authority, identifying Thames college of health care studies as the region's first choice for funding in 1991–92, was received on 25 January 1991. This submission, with the others which have been received, is being referred for consideration to the Project 2000 implementation group. Decisions on funding will be taken in the light of the implementation group's recommendations and will be announced as soon as possible.

  Wheelchairs
  Sir Michael McNair-Wilson
  To ask the Secretary of State for Health whether his Department has now approved a particular design for a powered wheelchair for the use of patients in hospital or suffering disability.

  Mr. Dorrell
  The Department provides an evaluation service to assist NHS prescribers, rather than approve wheelchairs for health service use, as such. Chemotherapy

  Mr. Hardy
  To ask the Secretary of State for Health if he will ensure that where use of the drug Ondansetron is judged clinically to be of help to patients receiving chemotherapy sufficient funding is available to enable it to be prescribed.

  Mrs. Virginia Bottomley
  Ondansetron is available for prescription by doctors throughout the national health service for the prevention of nausea and vomiting in patients undergoing chemotherapy and/or radiotherapy for cancer.

  It is for the individual doctor to decide whether to prescribe Ondansetron, or indeed any drug, in a given set of circumstances. In many districts drug and therapeutic committees have been set up to secure the agreement and
  424
  commitment of clinicians to an efficacious and economical system of drug usage and have drawn up formularies of preferred treatments. It is for health authorities to determine what financial allocation should be made available to any particular area of clinical care, including the provision of drugs.

  Disability Working Allowance
  Mr. Bermingham
  To ask the Secretary of State for Health what are his calculations of the additional costs that may be incurred through entitlement to(a) free prescriptions, (b) free dental treatment, (c) travelling costs to hospitals and (d) vouchers for glasses for those people in receipt of disability working allowance; and if he will make a statement.

  Mr. Waldegrave
  [holding answer 8 February 1991]: Disability working allowance does not exempt claimants from normal NHS charges unless they are exempt for other reasons—for example, a qualifying medical condition—or are entitled to full or partial remission under the NHS low income scheme.

ENVIRONMENT

  Local Government Finance
  Mr. Allen
  To ask the Secretary of State for the Environment what is his latest estimate of the percentage of the population yet to pay their 1990 poll tax(a) in the United Kingdom and (b) in Nottingham; and what additional cost is necessary per poll tax payer to make good the deficit.

  Mr. Key
  My Department has estimated, based on returns from three quarters of all authorities, that in England, no payment had been made by 31 December by 11 per cent. of persons with a liability in respect of a personal community charge. In Nottingham the figure is 23 per cent.

  Comparable figures for Scotland and Wales are a matter for my right hon. Friends the Secretary of State for Scotland and the Secretary of State for Wales.

  It is too early to say what charges payable in 1990–91 will prove to be uncollectable. The effect on chargepayers in future years will be minimised if authorities use all the means at their disposal to ensure that charges are paid in full.

  Mr. Allen
  To ask the Secretary of State for the Environment what is the lowest poll tax charge in England; and what would be the total increase in central Government expenditure required to reduce all charges to this level.

  Mr. Key
  The lowest average community charge in England in 1990–91 was £150, in the London borough of Wandsworth. Assuming that local authorities do not change their budgets, and making no allowance for the reductions in community charge benefit grant and transitional relief grant that would result, central Government grants would need to increase by £7 billion in order for all authorities to set a charge of £150.

  Public Transport
  Mr. Cohen
  To ask the Secretary of State for the Environment by how much the standard spending assessment for 1991–92 of London boroughs and the City of London has been reduced to reflect the fact that they do not provide support for public transport; what that figure is per adult; and if he will give the equivalent figures for 1990–91.

  Mr. Key
  The total 1991–92 standard spending assessment for London boroughs and the City has been reduced by about £160 million, equivalent to £31·40p per adult, to reflect the fact that they do not provide support for public transport. The equivalent figures for 1990–91 are £121 million and £24·01p per adult.

  Crown Suppliers
  Mr. Campbell-Savours
  To ask the Secretary of State for the Environment (1) how much public money has been paid to the unsuccessful Crown Suppliers contract furnishings management buy-out team;

  (2) what is the total amount of public money paid to the Crown Suppliers contract furnishing division buy-out team.

  Mr. Yeo
  A total of £76,980, in support of their professional advisers' fees.

  Mr. Campbell-Savours
  To ask the Secretary of State for the Environment what improprieties by the Crown Suppliers main board members have been indicated from internal departmental investigations over the last three years.

  Mr. Yeo
  Irregularities in respect of travel claims, acceptance of hospitality and the appointment of consultants; only one case was sufficiently serious to justify disciplinary action.

  Mr. Campbell-Savours
  To ask the Secretary of State for the Environment how many performance pay bonuses have been awarded to the Crown Suppliers board in the period 1 January 1990 to 1 January 1991; and what was the total cost of those bonuses.

  Mr. Yeo
  Two, at a cost of £1,357·87.

  Mr. Campbell-Savours
  To ask the Secretary of State for the Environment what is the total estimated cost of closing the Crown Suppliers contract furnishings division.

  Mr. Yeo
  At this stage it is too early to provide a firm estimate. The costs incurred to date are about £6·3 million.

  Mr. Campbell-Savours
  To ask the Secretary of State for the Environment if he will place all those Property Services Agency internal audit reports on Crown Suppliers purchasing practice which have been produced since 1989 in the Library.

  Mr. Yeo
  It would be inappropriate to make internal audit reports generally available; such reports are, however, made available to the National Audit Office and used by the Comptroller and Audit General to inform his examination of the Department's work.

  Mr. Campbell-Savours
  To ask the Secretary of State for the Environment what has been the total cost from 1984 to date of the Government's proposed privatisation of the Crown Suppliers.
  426
  Mr. Yeo
  Since 3 February 1988 when the privatisation decision was announced, the cost of the Government's advisers' fees; of support for management buy-out teams' advisers' fees; and of the unit set up to oversee the privatisation, has amounted to £1·3 million.

  Mr. Campbell-Savours
  To ask the Secretary of State for the Environment what is the total cost of settled claims to date which have directly arisen from the closure of the contracts furnishing division of the Crown Suppliers.

  Mr. Yeo
  A total of £408,670·36.

  Mr. Campbell-Savours
  To ask the Secretary of State for the Environment if he will make a statement about the future of the Crown Suppliers vehicle hire and maintenance division.

  Mr. Yeo
  An announcement will be made as soon as possible.

  Mr. Campbell-Savours
  To ask the Secretary of State for the Environment what is the total cost to date of the design, installation and maintenance of the Crown Suppliers UNISYS system.

  Mr. Yeo
  The total cost between April 1988 and December 1990 of the design, installation and maintenance of the current Crown Suppliers UNISYS computer system was £9·78 million.

  Housing, Kent
  Mr. Campbell-Savours
  To ask the Secretary of State for the Environment (1) what were the figures for homelessness for each parliamentary constituency in Kent in(a) 1979 and (b) 1989;

  (2) if he will list the local authority housing departments which cover each parliamentary constituency in Kent.

  (3) how many council houses have been bought in each parliamentary constituency in Kent since 1979;

  (4) what were the figures for homelessness for each local authority housing department in the Kent area in (a) 1979 and (b) 1989;

  (5) how many council houses have been bought in each housing authority in Kent since 1979.

  Mr. Yeo
  The table gives each parliamentary constituency in Kent together with their respective local authority housing department(s). In all but four constituencies, the constituency consists of part of one or more local authority areas.

  Constituency

  Local authority(ies)

  Ashford

  Ashford

  Canterbury

  Canterbury (part), Swale (part)

  Dartford

  Dartford, Sevenoaks (part)

  Dover

  Dover (part)

  Faversham

  Swale (part)

  Folkestone and Hythe

  Shepway

  Gillingham

  Gillingham, Swale (part)

  Gravesham

  Gravesham

  Maidstone

  Maidstone (part)

  Medway

  Rochester upon Medway (part)

  Mid-Kent

  Maidstone (part), Rochester upon Medway (part)

  North Thanet

  Canterbury (part), Thanet (part)

  Sevenoaks

  Sevenoaks (part)

  South Thanet

  Thanet (part), Dover (part)

  Tonbridge and Mailing

  Tonbridge and Mailing

  Tunbridge Wells

  Tunbridge Wells

  427
  Local authorities report the number of households accepted and found accommodation under the homelessness provisions of the Housing (Homeless Persons) Act 1977 and the Housing Act 1985. Annual figures for each local authority in Kent are given in "Local Housing Statistics"; the figures for 1979 are in table 14 of edition No. 54 and the figures for 1989 are in table 9(b) of edition No. 94

  A table showing the available information on sales for each English local authority for each financial year since 1986–87 and with a cumulative total to September 1990 was recently placed in the Library—Official Report, 30 January 1991, column 542.

  Late returns from Canterbury, Maidstone, Rochester upon Medway and Shepway revise the totals shown in the table as follows:

  Sales 1 April 1979 to 30 September 1990

  Sales as per cent, of stock

  Canterbury

  rtb sales

  2,152

  24·2

  all sales

  2,600

  29·2

  of which flats

  156

  —

  Maidslone

  rtb sales

  1,861

  16·9

  all sales

  2,741

  24·9

  of which flats

  142

  —

  Rochester upon Medway

  rtb sales

  14,100

  130·4

  all sales

  113,166

  197·6

  of which flats

  1481

  —

  Shepway

  rtb sales

  1,428

  24·7

  all sales

  1,669

  28·8

  of which flats

  127

  —

  1 Incomplete numbers of sales·

  Of the 14 local housing authorities in Kent three have transferred their remaining stock to a housing association —Sevenoaks—March 1989, Swale—March 1990, Tonbridge and Mailing—January 1991. Rochester upon Medway transferred its remaining stock to a private company in July 1990.

  It is not possible to give the homelessness acceptance figures or the numbers of sales for all the parliamentary constituencies in Kent. These statistics are available only by local authority area.

  Mr. Campbell-Savours
  To ask the Secretary of State for the Environment (1) what was the 1990 capital allocation to each local authority housing department covering the Kent area;

  (2) what was the 1990 housing investment programme capital bid by each local authority housing authority department covering the Kent area.

  Mr. Yeo
  A table listing Housing Investment Programme allocations for 1991–92 for each local authority was placed in the Library on 13 December 1990. Local authorities' proposals for gross capital expenditure in 1991–92 were as follows:

  £ thousands

  Ashford

  9,949

  Canterbury

  11,715

  Dartford

  5,218

  428

  £ thousands

  Dover

  5,819

  Gillingham

  8,118

  Gravesham

  7,094

  Maidstone

  14,405

  Rochester upon Medway

  10,494

  Sevenoaks

  8,773

  Shepway

  5,093

  Swale

  11,547

  Thanet

  4,899

  Tonbridge and Mailing

  3,900

  Tunbridge Wells

  4,516

  Mr. Campbell-Savours
  To ask the Secretary of State for the Environment (1) according to information submitted to support 1990's capital allocation bids under the housing investment programme, what was the number of unfit properties in each local authority in Kent;

  (2) according to information submitted to support 1990's capital allocation bids under the housing investment programme, what was the number of (a) unfit housing association properties, (b) unfit public sector properties and (c) unfit private sector properties within the area of each local authority housing department in Kent.

  Mr. Yeo
  Local authorities report the number of unfit dwellings in their own stock, and estimates of those owned by housing associations, other public sector bodies and in the private sector, in their annual housing investment programme returns—HIP1. The available figures for 1 April 1990 appear in "1990 HIP1 All Items Print", columns A31, A32, A33, and A34 respectively; a copy of which is in the Library.

  MOD Quality Assurance Unit
  Mr. Devlin
  To ask the Secretary of State for the Environment what expenditure has been incurred by the Teesside development corporation in preparation for the promised move of the MOD quality assurance unit to Preston farm, Stockton.

  Mr. Key
  Teesside development corporation has incurred expenditure totalling £2·47 million, including land acquisition and site preparation costs, on the site earmarked for the relocation of the MOD quality assurance organisation.

  Structure Plans
  Sir Thomas Arnold
  To ask the Secretary of State for the Environment what economic factors he takes into account when approving structure plans.

  Sir George Young
  Local planning authorities are required to base their structure plans on an appreciation of the economic characteristics of their area, and the effect that any changes in them are likely to have on the development of their area and the planning of such development. They also take account of national and regional economic policies and the resources likely to be available for carrying out their structure plan proposals. The Secretary of State similarly takes these matters into account in his approval of structure plan proposals.

  Vipera Berus
  Mr. Ron Davies
  To ask the Secretary of State for the Environment whether he proposes to extend full protection to vipera berus; and if he will make a statement on any other amendments he proposes to seek to make to the Wildlife and Countryside Act 1981 in respect of species protection.

  Mr. Baldry
  Following advice from the Nature Conservancy Council, my hon. Friend the Minister of State for the Environment and the Countryside announced on 3 January that the Government had decided to introduce new protective measures for three species, including vipera berus, the adder. I have arranged for a copy of the news release to be placed in the Library of the House.

  The necessary instrument to give effect to these changes will be laid before Parliament shortly.

  Staff Negotiations
  Mr. Wigley
  To ask the Secretary of State for the Environment whether his Department intends issuing a statement or circular on the implementation of section 12 of the Local Government and Housing Act 1989; and what communications he has received concerning the problems of implementing section 12.

  Mr. Key
  My Department has no plans to issue any general guidance on section 12 of the Local Government and Housing Act 1989, which requires local authorities to avoid having their interests in negotiations with their staff on pay and conditions of service represented by councillors who are themselves local council employees or officers of trade unions representing local authority employees. My Department has received from a number of local authorities queries about the application of the section and other representations.

  Humberside County Council
  Mr. Cartwright
  To ask the Secretary of State for the Environment when he expects the recommendations of the Local Government Boundary Commission on the future of Humberside county council to be implemented.

  Mr. Key
  The Local Government Boundary Commission for England has, as yet, made no recommendations as a result of its further review of the county of Humberside. It is, therefore, premature to speculate on the implementation of any such recommendations.

  Toxic Waste
  Mr. Murphy
  To ask the Secretary of State for the Environment what information he has concerning the whereabouts and possible destination of the Karin B waste.

  Mr. Trippier
  I understand that Rechem has accepted some of this waste for disposal at its high temperature incinerators at Pontypool in Torfaen district and Fawley in Hampshire and has complied with the Transfrontier Shipment of Hazardous Waste Regulations 1988.

  Housing, Tandridge
  Mr. Soley
  To ask the Secretary of State for the Environment how many council homes are owned by Tandridge district council, east Surrey; and what percentage is vacant.

  Sir George Young
  The number of council-owned dwellings reported by Tandridge district council in its April 1990 housing investment programme return—HIP1 —was 3,567, of which some 2 per cent. or, 72, were vacant.

  Mr. Soley
  To ask the Secretary of State for the Environment what has been the change in the level of registered homeless persons in Tandridge district, east Surrey, in the last 12 months.

  Sir George Young
  Local authorities report each quarter the number of households for which they accepted responsibility to secure accommodation under the homelessness provisions of the Housing Act 1985.

  There has been no significant change in the number of households accepted as homeless by Tandridge district council over the 12 months to September 1990.

  The latest reported figures for individual local authorities, including those for Tandridge district, appear in a table of "Households found accommodation under the homelessness provisions of the 1985 Housing Act: England. Results for the third quarter 1990. Supplementary Tables".

  Copies of this document and those for previous quarters are in the Library.

  Council House Sales
  Mr. Gerald Bowden
  To ask the Secretary of State for the Environment what information he has as to when Mrs. Jean Hopwood of 12a Therapia road, SE22, may expect completion of the purchase of her home from the London borough of Southwark under the right-to-buy scheme.

  Mr. Yeo
  I understand that this case has been subject to delay and involves some unresolved negotiations. I trust that Southwark council will do everything that it can to enable satisfactory completion of the sale. The Government have introduced measures which enable tenants to seek financial redress in cases where local authorities do not perform within statutory time limits. These are available, if appropriate, in this case.

  Nuclear Fuel
  Mr. Flynn
  To ask the Secretary of State for the Environment if his Department will participate in, or be represented at, the conference on the management of spent nuclear fuel to be held in London, 29–30 April.

  Mr. Trippier
  My Department will not be represented at the conference on the management of spent nuclear fuel on 29 and 30 April.

  Environment Conferences
  Mr. Flynn
  To ask the Secretary of State for the Environment if his Department will participate in the conference on paying for water, effluent and pollution control 1991–92, to be held in London on 13 February.

  Mr. Trippier
  No, but I understand that the Office of Water Services is providing one of the speakers.
  431
  Mr. Flynn
  To ask the Secretary of State for the Environment if he has been invited to participate in the conference, "What on Earth is to be Done?", to be held in London on 19 March.

  Mr. Trippier
  My right hon. Friend has accepted an invitation to give the opening speech at this conference.

  Water Mains
  Dr. Thomas
  To ask the Secretary of State for the Environment whether he has any plans to bring forward legislation requiring water authorities to contribute to the costs of highway reconstruction following water main bursts.

  Mr. Freeman
  I have been asked to reply.

  The answer is yes. The Public Utilities Street Works Act 1950 contains provisions on the liability of water authorities and other undertakers to highway authorities for damage caused to the property of the highway authority. A distinction is drawn between damage caused as a consequence of the exercise of an undertaker's statutory powers and that caused as a consequence of the carrying out of a statutory duty. The law as it stands is unsatisfactory and has led to a number of disputes over the apportionment of the costs of repairing the road following a burst main. The New Roads and Street Works Bill now before Parliament would replace the 1950 Act provision with a straightforward duty on undertakers to compensate the highway authority in respect of any damage or loss suffered by the authority as a result of the execution of street works or an event such as a burst main.

  Housing Associations
  Mr. Hannam
  To ask the Secretary of State for the Environment what percentage of housing association build is built to(a) wheelchair standard and (b) mobility standard.

  Mr. Yeo
  [pursuant to his reply, 30 January 1991 c. 538]: Approximately 3 per cent. of housing association completions of new dwellings in England reported to my Department in the year ending September 1990 were dwellings for the chronically sick and disabled, built to mobility standards. A further 0·5 per cent. were dwellings for the chronically sick and disabled built to wheelchair standards.

  Community Charge
  Mr. Fatchett
  To ask the Secretary of State for the Environment whether he has received any representations about the exercise of his community charge-capping powers in relation to the proposed 1991–92 budget for West Yorkshire police authority; and if he will make a statement.

  Mr. Key
  [holding answer 8 February 1991]: We have received a number of representations from and on behalf of the West Yorkshire police authority about our intentions for charge capping for 1991–92, including those made when I met a delegation from the authority on 29 November 1990.

  As my right hon. Friend told the House on 29 January, we stand firmly by these intentions which are, however, necessarily provisional, since, under the statute, capping
  432
  decisions cannot be made until authorities have set their budgets. It is now for each authority to set its budget having regard to all relevant considerations including its statutory duties, the approved level of police manpower, our intended capping criteria, the need as appropriate for expenditure restraint, and the scope for greater efficiency.

  Solvent
  Mr. Hinchliffe
  To ask the Secretary of State for the Environment what amount of used solvent is imported to the United Kingdom; and what proportion of this is(a) originally exported from the United Kingdom and (b) imported to the manufacturer for disposal.

  Mr. Baldry
  [holding answer 11 February 1991]: The import of used solvent which is special waste is subject to the Control of Pollution (Special Waste) Regulations 1980. Records of shipments made under these regulations are maintained by the disposal authorities concerned and not by the Department. The producer of the waste is identified but not the manufacturer of the original solvent.

  Waste Recycling
  Mr. Hinchliffe
  To ask the Secretary of State for the Environment if he will take steps to ensure that importation of waste substances for recycling results in the recycling of all the materials imported.

  Mr. Baldry
  [holding answer 11 February 1991]: Under the Transfrontier Shipment of Hazardous Waste Regulations 1988 which implement European Community directive 84/631 as amended on transfrontier shipments, hazardous waste that is imported for recycling must be subject to a contract between the producer of the waste and the recycler to the effect that the waste will be recycled. It is proposed in the draft Council regulation on the supervision and control of shipments of waste within, into and out of the European Community to extend the use of contracts binding the producer and the recycler to all imports of waste, except for certain categories of waste —to be determined—which are completely innocuous.

  Hazardous and Toxic Waste
  Mr. Hinchliffe
  To ask the Secretary of State for the Environment if he will take steps to define in legislation the terms hazardous waste and toxic waste.

  Mr. Baldry
  [holding answer 11 February 1991]: Hazardous waste and toxic waste are equated in British legislation to special waste. Special waste is defined in the Control of Pollution (Special Waste) Regulations 1980. These regulations will be revised in due course to reflect the definition of hazardous waste which will be made under the new EC directive on hazardous waste agreed at the Environment Council on 21 December 1990.

EDUCATION AND SCIENCE

  Grant-maintained Schools
  Mrs. Currie
  To ask the Secretary of State for Education and Science if he will make a statement on progress on grant-maintained schools.
  433
  Mr. Hind
  To ask the Secretary of State for Education and Science how many applications he has received from schools for grant-maintained status; and if he will make a statement.

  Mr. Janman
  To ask the Secretary of State for Education and Science if he will make a statement on the progress of grant-maintained status awarded to schools.

  Mr. Eggar
  A total of 93 schools have now submitted proposals to my right hon. and learned Friend, and he is awaiting a further 18 proposals following ballots in favour. Of the 93 applications, 60 have been approved, 12 rejected and 21 have yet to be decided.

  Mr. Harry Greenway
  To ask the Secretary of State for Education and Science if he will outline the advantages to pupils, parents and teachers of a school opting for grant-maintained status and if he will make a statement.

  Mr. Eggar
  GM schools have many advantages for pupils, parents and teachers. The schools are run by local people; they can make their own decisions about how to make the best use of resources, including a part of LEA expenditure on centrally provided services; their governors and heads have greater autonomy than is provided by local management of schools; and they are proving popular with parents.

  Postgraduate Research
  Mr. Douglas
  To ask the Secretary of State for Education and Science if he will make a statement on the current numbers in Scottish universities undertaking post-graduate research in physics, chemistry and mathematics; and what were the comparable figures for 1990, 1989 and 1988.

  Mr. Alan Howarth
  The numbers of postgraduate students at Scottish universities in physics, chemistry and mathematics were 317, 422 and 135 respectively in the academic year 1989–90. The comparable figures for 1988–89 were 350, 431 and 103. Figures are not yet available for the current academic year.

  RE Teachers
  Mr. Gregory
  To ask the Secretary of State for Education and Science how many qualified religious education teachers are currently employed; and if he will make a statement.

  Mr. Fallon
  In 1988 three were approximately 13,300 full-time teachers in maintained secondary schools in England with a qualification in religious education, of whom 6,400 were teaching the subject.

  Cricket Coaching
  Mr. John Carlisle
  To ask the Secretary of State for Education and Science if he will make a statement on the coaching of cricket in schools.

  Mr. Atkins
  Many schools offer their pupils the opportunity to take part in cricket and I am keen that schools continue to teach the game. PE including sport is a compulsory part of the school curriculum. In addition, the Sports Council provides funding to help develop sports coaching and facilities, and will soon be publishing a review of coaching and coach education.

  Paperwork
  Mr. Stevens
  To ask the Secretary of State for Education and Science whether he has any plans to reduce the amount of paperwork in schools as a result of the introduction of the national curriculum.

  Mr. Eggar
  The Government have already acted to cut schools' paperwork. I recently announced that we had agreed with the National Curriculum Council and the School Examinations and Assessment Council to restrict the amount of non-essential guidance and other material sent to schools. We hope that other bodies, including LEAs' will follow our example.

  Scientific Research
  Mr. Cousins
  To ask the Secretary of State for Education and Science when he last met the chairman of the Science and Engineering Research Council to discuss the funding of scientific research; and if he will make a statement.

  Mr. Alan Howarth
  My right hon. and learned Friend occasionally meets the chairman of the Science and Engineering Research Council. I have met Sir Mark Richmond twice recently when the funding of scientific research was among the issues discussed.

  Education Spending
  Mr. Butler
  To ask the Secretary of State for Education and Science by what percentage the education component of standard spending assessment is due to rise between 1990–91 and 1991–92; and if he will make a statement.

  Mr. Fallon
  The education components of standard spending assessments in England will rise by an average of 16 per cent. between 1990–91 and 1991–92. This substantial increase, far in excess of the likely rate of inflation, should enable all authorities to deliver education services of a high quality if they manage their affairs well.

  History
  Mr. Ronnie Campbell
  To ask the Secretary of State for Education and Science what representations he has received following the publication of his report about history in the national curriculum.

  Mr. Kenneth Clarke
  I refer the hon. Member to the reply that I gave earlier today to the hon. Member for Barnsley, Central (Mr. Illsey).

  Primary Schools
  Miss Lestor
  To ask the Secretary of State for Education and Science how many four-year-old children were admitted to primary schools in the last year for which figures are available.

  Mr. Eggar
  The total number of four-year-olds admitted to primary classes in maintained schools in England in September 1989 and January 1990 was 441,100. For the previous year the figure was 410,900.

  Nursery Education
  Mr. Steinberg
  To ask the Secretary of State for Education and Science what action he proposes to take in respect of the part of his "Starting with Quality" report on under-fives dealing with the number of places in nursery education.

  Mr. Flynn
  To ask the Secretary of State for Education and Science what proposals he has to increase the number of places in nursery education.

  Mr. Eggar
  The committee of inquiry urged increases in overall provision for the under-fives—including childcare —rather than in nursery education specifically. It is for local authorities to decide how far this can be given priority. Much is being done: the numbers of under-fives in maintained schools went up by 29,000 between 1989 and 1990.

  Teachers' Pay
  Mr. Moate
  To ask the Secretary of State for Education and Science what are the latest figures for the real increase in teachers' pay since 1979.

  Mr. Eggar
  Teachers' average salaries have increased by some 30 per cent. in real terms since 1979. When the IAC's latest recommendations are fully implemented it is likely that there will be a further real terms increase as inflation is likely to fall over the coming year.

  Local Management of Schools
  Mr. Robert G. Hughes
  To ask the Secretary of State for Education and Science what is the purpose of the local management of schools scheme; and if he will make a statement.

  Mr. Fallon
  The key aims of the local management of schools are to ensure that resources are allocated to schools in a fair and open way, based mainly on the number of pupils they have to educate; and that as much as is reasonably possible of local authorities' potential schools budget is delegated to schools, to manage as they see fit.

  I expect the introduction of the local management of schools to benefit all schools. Many schools are already experiencing those benefits; many more will do so when formula funding and delegated management have been fully implemented in every local education authority.

  Rural Schools
  Mr. Hague
  To ask the Secretary of State for Education and Science what policies exist to aid small rural schools.

  Mr. Fallon
  The Government's policies for promoting improvements in the education service through the implementation of the national curriculum, through the local management of schools, and through grants for education support and training, all take account of the needs of small rural schools.

  Reading Standards
  Mr. Ron Davies
  To ask the Secretary of State for Education and Science what proposals he has to monitor reading standards in the national curriculum.
  436
  Mr. Eggar
  The national curriculum will secure, for the first time, national information about standards in reading from age seven onwards. Once it is fully in place, all pupils will be required by law to be assessed in reading at the ages of seven, 11, 14 and 16; and aggregate statistics will be published.

  Nursery Provision, Kent
  Mr. Campbell-Savours
  To ask the Secretary of State for Education and Science where in rank order of nursery provision in England and Wales, Kent county council education authority stands.

  Mr. Eggar
  The table shows that in January 1990, Kent local education authority appeared 89th out of the 96 local education authorities in England in regard to the percentage of under-fives attending maintained nursery school and nursery classes.

  Similar data for Wales is the responsibility of my right hon. Friend the Secretary of State for Wales.

  Under Fives in maintained nursery schools and nursery classes in rank order January 1990

  Percentage attending nursery classes and nursery schools

  1 Hounslow1

  66

  2 South Tyneside

  58

  3 Wolverhampton

  57

  4 Walsall

  56

  5 North Tyneside

  56

  6 Cleveland

  55

  7 Manchester

  54

  8 Newham

  54

  9 Salford

  53

  10 Liverpool

  50

  11 Barnsley

  50

  12 Hillingdon

  49

  13 Nottinghamshire

  48

  14 Wakefield

  48

  15 Sheffield

  44

  16 Sandwell

  44

  17 Knowsley1

  42

  18 Leeds

  41

  19 Doncaster1

  41

  20 Tameside

  40

  21 Newcastle upon Tyne

  40

  22 Rotherham

  40

  23 Durham

  40

  24 Merton1

  40

  25 Haringey

  38

  26 Kirklees

  38

  27 Derbyshire

  38

  28 Bolton

  37

  29 Sunderland

  36

  30 Bradford

  36

  31 Inner London

  35

  32 Waltham Forest

  35

  33 Barking1

  35

  34 Ealing

  35

  35 Gateshead

  35

  36 Solihull1

  35

  37 Oldham1

  34

  38 Humberside

  34

  39 Dudley

  34

  40 St. Helens

  33

  41 Sefton

  32

  42 Birmingham

  32

  43 Brent

  32

  44 Kingston upon Thames

  31

  45 Bedfordshire

  31

  46 Rochdale

  31

  47 Sutton

  31

  48 Northumberland

  30

  49 Hertfordshire

  30

  437

  Percentage attending nursery classes and nursery schools

  50 Bury

  29

  51 Barnet

  29

  52 Calderdale1

  28

  53 Wigan

  25

  54 Berkshire

  25

  55 Coventry

  25

  56 Wirral

  24

  57 Cumbria

  23

  58 Trafford1

  22

  59 Leicestershire

  22

  60 Staffordshire

  22

  61 Cheshire

  21

  62 North Yorkshire

  21

  63 Enfield1

  20

  64 Northamptonshire

  20

  65 Richmond upon Thames

  19

  66 Warwickshire

  17

  67 Stockport

  17

  68 Lancashire

  17

  69 Avon

  17

  70 Harrow1

  16

  71 Suffolk

  16

  72 Bexley

  15

  73 Oxfordshire

  14

  74 Cornwall3

  14

  75 Redbridge1

  13

  76 Shropshire

  12

  77 Devon

  11

  78 Cambridgeshire

  11

  79 Surrey

  11

  80 Buckinghamshire

  10

  81 Lincolnshire

  9

  82 East Sussex

  8

  83 Hereford and Worcester1

  7

  84 Croydon

  7

  85 Isle of Wight1

  7

  86 Essex

  6

  87 Dorset1

  6

  88 Norfolk

  6

  89 Kent

  5

  90 Hampshire

  5

  91 Havering1

  4

  92 West Sussex

  4

  93 Wiltshire1

  3

  94 Bromley1

  2

  95 Somerset1

  1

  96 Gloucestershire2

  0

  England

  25

  Note:

  1 Have no Nursery schools.

  2 Have no Nursery schools or Nursery classes.

  3 Includes Isles of Scilly.

  Nurseries
  Mr. Campbell-Savours
  To ask the Secretary of State for Education and Science what percentage of three and four-year-olds in Kent county council education authority area have places in(a) nursery schools, (b) nursery classes and (c) infant classes.

  Mr. Eggar
  The percentage of children under five attending maintained nursery schools, nursery classes and infant classes in primary schools in Kent local education authority in January 1990 was as follows:

  Percentage of Under Fives1

  Nursery schools

  0·2

  Nursery classes

  4·8

  Infant classes

  12·3

  438

  1 The number of under fives as a percentage of the estimated population aged 3 and 4.

  Nuclear Structure Facility, Daresbury
  Mr. Butler
  To ask the Secretary of State for Education and Science what information he has as to the number of postgraduate students attached to the nuclear structure facility at Daresbury.

  Mr. Alan Howarth
  There are 33 postgraduate students who spend part of their time at the nuclear structure facility at the SERC's Daresbury laboratory.

  Research, Bristol
  Ms. Primarolo
  To ask the Secretary of State for Education and Science how many research contracts and agreements the United States Department of Defence currently has with Bristol universities and polytechnics; what is their total value, and if his Department has any involvement in the placing of those research contracts and agreements.

  Mr. Alan Howarth
  Such information is not collected centrally. The Department is not involved in these institutional matters.

  Higher Education Fees
  Mr. Wigley
  To ask the Secretary of State for Education and Science whether he has any plans to issue a directive prohibiting colleges of higher education from imposing top-up fees.

  Mr. Alan Howarth
  The setting of fees for degree and other courses is properly a matter for individual higher education institutions. Primary legislation, for which the Government have no plans, would be required to change this. Equally, the Government have no plans to change the arrangements whereby standard fees are met in full for students eligible for an award under the awards arrangements.

  Nuclear Research
  Mr. Butler
  To ask the Secretary of State for Education and Science if he has any plans to negotiate a higher basic country contribution to the European nuclear research centre.

  Mr. Alan Howarth
  The United Kingdom, in conjunction with other members, will continue to encourage CERN to increase the proportion of its budget financed from sources outside the member state contribution system. This could include further assistance, either in cash or in kind, from the two host states.

  London Institute
  Mr. Soley
  To ask the Secretary of State for Education and Science what steps he has taken to ensure himself that the criteria used by the London institute for allocating money from the access fund is within the guidelines laid down by the Polytechnics and Colleges Funding Council.

  Mr. Alan Howarth
  The conditions of payment of access funds set by my right hon. and learned Friend already require institutions to follow guidelines set by the funding councils. All institutions have been asked to account for their expenditure of access fund grant at the end of the academic year.

  History and Geography
  Mr. Alton
  To ask the Secretary of State for Education and Science what representations he has received about the teaching of history and geography and the attainment targets stipulated in the national curriculum; and if he will make a statement.

  Mr. Eggar
  The representations received in response to the proposals of the then Secretary of State for attainment targets and programmes of study in geography and history were the subject of consultation reports published recently by the National Curriculum Council. On 14 January my right hon. and learned Friend published draft statutory orders and draft associated documents containing attainment targets and programmes of study in these two subjects, and invited comments and representations by 15 February.

  Mr. Alton
  To ask the Secretary of State for Education and Science whether the teaching of history in schools is to be pursued with the intention of understanding contemporary issues; and if he will make a statement.

  Mr. Eggar
  I refer the hon. Member to the reply given by right hon. and learned Friend to my hon. Friend the Member for Wyre Forest (Mr. Coombs) on 14 January 1991 at column 373–74 when he published a draft order and associated document setting out attainment targets and programmes of study for history in the national curriculum.

  Proportion of leavers with 5 or more GCSE results at Grades A-C3

  1 2 Net Institutional expenditure per pupil 1988–89

  as percentage of all leavers

  LEA

  £

  rank

  ILEA

  2,505

  15·9

  91

  Waltham Forest

  2,435

  12·7

  94

  Brent

  2,305

  20·6

  78

  Ealing

  2,145

  22·5

  67

  Newham

  2,140

  14·9

  93

  Croydon

  2,040

  22·1

  70

  Knowsley

  1,990

  8·5

  96

  Barking

  1,970

  11·3

  95

  Coventry

  1,940

  21·2

  76

  Liverpool

  1,905

  19·4

  84

  Kingston-upon-Thames

  1,900

  32·2

  10

  Hounslow

  1,895

  25·2

  49

  Sandwell

  1,885

  15·5

  92

  Walsall

  1,885

  23·4

  59

  Hillingdon

  1,870

  22·7

  65

  Newcastle-upon-Tyne

  1,870

  21·6

  74

  Havering

  1,860

  24·4

  57

  Salford

  1,860

  23·2

  62

  Wigan

  1,845

  30·2

  18

  Dudley

  1,840

  25·5

  47

  South Tyneside

  1,825

  22·2

  68

  Barnet

  1,820

  38·9

  2

  Sheffield

  1,810

  22·2

  68

  North Tyneside

  1,780

  27·5

  36

  Bromley

  1,770

  29·9

  19

  Gateshead

  1,770

  20·4

  80

  Cleveland

  1,770

  26·5

  43

  Leicestershire

  1,770

  25·1

  51

  Wirral

  1,755

  27·8

  31

  Derbyshire

  1,755

  24·6

  54

  Wolverhampton

  1,745

  19·9

  81

  Hertfordshire

  1,745

  31·9

  11

  Nottinghamshire

  1,745

  23·4

  59

  Advisory Board for the Research Councils
  Mr. Butler
  To ask the Secretary of State for Education and Science what information he has on ABRC's flexibility margin for 1991–92, 1992–93 and 1993–94.

  Mr. Alan Howarth
  The science budget for 1991–92 has been fully allocated. In its recent advice to my right hon. and learned Friend, the Advisory Board for the Research Councils recommended that sums of £39 million and £60 million, respectively, should remain unallocated in 1992–93 and 1993–94. He expects to receive further advice from the ABRC on the allocation of these sums in the spring.

  Local Education Authorities
  Mr. Anthony Coombs
  To ask the Secretary of State for Education and Science if he will list all local education authorities in England in rank order of expenditure per secondary pupil per year, starting with the higher spending authority, together with their position in the table of examination results for school leavers achieving grades A-C at GCSE in 1989 and 1990.

  Mr. Fallon
  [pursuant to his reply 8 February 1991, columns. 257–60]: It appears that some of the information supplied was not published fully in the Official Report.

  The correct answer should read as follows:

  The following table gives the net institutional expenditure per secondary school pupil in the financial year 1988–89, and averaged examination results for three years 1986–87 to 1988–89. The purpose of averaging is to reduce sampling error within the derived percentages. Comparable information is not yet available for 1989–90.
  441

  Proportion of leavers with 5 or more GCSE results at Grades A-C3

  1 2Net Institutional expenditure per pupil 1988–89

  as percentage of all leavers

  LEA

  £

  rank

  Harrow

  1,740

  38·6

  3

  Redbridge

  1,735

  25·5

  47

  Bury

  1,730

  27·7

  33

  Stockport

  1,730

  28·6

  25

  Enfield

  1,715

  26·9

  41

  Buckinghamshire

  1,715

  36·0

  5

  St. Helens

  1,710

  20·5

  79

  Trafford

  1,710

  30·7

  15

  Rochdale

  1,700

  20·9

  77

  Shropshire

  1,695

  30·3

  17

  Humberside

  1,690

  22·6

  66

  Bexley

  1,685

  28·5

  26

  Cumbria

  1,685

  28·0

  29

  Calderdale

  1,665

  21·5

  75

  Sunderland

  1,665

  21·8

  72

  Oxfordshire

  1,665

  27·7

  33

  Merton

  1,660

  246

  54

  Tameside

  1,660

  27·1

  39

  Doncaster

  1,655

  21·7

  73

  Solihull

  1,650

  31·7

  12

  Barnsley

  1,645

  19·7

  82

  Richmond-upon-Thames

  1,640

  32·4

  8

  Birmingham

  1,640

  19·1

  85

  Bolton

  1,635

  28·7

  24

  Rotherham

  1,635

  23·0

  63

  Bedfordshire

  1,635

  24·9

  52

  Essex

  1,635

  27·4

  37

  Surrey

  1,635

  38·0

  4

  Warwickshire

  1,635

  28·5

  26

  Sutton

  1,630

  39·1

  1

  Avon

  1,630

  27·8

  31

  Northumberland

  1,630

  30·7

  15

  Kirklees

  1,620

  25·6

  46

  Lancashire

  1,620

  26·8

  42

  Staffordshire

  1,610

  24·9

  52

  Bradford

  1,605

  16·9

  88

  Sefton

  1,600

  28·5

  26

  North Yorkshire

  1,595

  34·5

  7

  Oldham

  1,590

  18·1

  86

  Norfolk

  1,585

  24·5

  56

  Hampshire

  1,580

  29·6

  21

  Durham

  1,575

  23·4

  59

  Berkshire

  1,570

  32·3

  9

  Somerset

  1,570

  27·1

  39

  East Sussex

  1,565

  31·4

  13

  Wiltshire

  1,555

  25·9

  45

  Leeds

  1,545

  22·0

  71

  Cheshire

  1,545

  29·1

  23

  Gloucestershire

  1,545

  31·2

  14

  Northamptonshire

  1,545

  22·8

  64

  Devon

  1,535

  26·3

  44

  West Sussex

  1,530

  35·5

  6

  Cornwall

  1,525

  29·9

  19

  Isle of Wight

  1,495

  19·5

  83

  Dorset

  1,485

  27·6

  35

  Suffolk

  1,485

  24·2

  58

  Cambridgeshire

  1,480

  28·0

  29

  Kent

  1,475

  27·3

  38

  Lincolnshire

  1,475

  25·2

  49

  Hereford and Worcester

  1,440

  29·2

  22

  Haringey

  n/a

  16·6

  89

  Manchester

  n/a

  16·4

  90

  Wakefield

  n/a

  17·5

  87

  Notes to table:

  1. Net institutional expenditure includes the cost of salaries and wages, premises, and certain supplies and services. It does not include the cost of school meals, central administration, debt charges or revenue contributions to capital outlay.

  2. The expenditure figures are based on LEA expenditure returns to DOE and pupil number returns to DES. N/A denotes that an expenditure return has not been received from an LEA.

  3. The examination data are aggregated from the results of a sample survey for the academic years 1986–87, 1987–88 and 1988–89. The survey is based on a 10 per cent. sample of pupils in maintained and independent schools (excluding special schools) who have reached the minimum
  442 443
  school leaving age. The percentages quoted do not reflect the achievements of pupils at O-level, CSE or GCSE after leaving school; nor their attainments in examinations leading to vocational or other qualifications at school or elsewhere. The data includes grades A-C at O-level and CSE grade 1.

HOUSE OF COMMONS

  Overseas Visits
  Mr. Amos
  To ask the Lord President of the Council if he will list the airline used, and the destination of each of the overseas visits undertaken by the House of Commons Home Affairs Committee for the last 12 months; and if he will make a statement.

  Date

  Destination

  Itinerary

  Airlines used

  14–17 May 1990

  Brussels, Bonn, Paris

  London-Brussels

  British Airways

  Brussels-Cologne

  No airline used

  Cologne-Paris

  Lufthansa

  Paris-London

  British Airways

  10–14 June 1990

  Lisbon, Madrid, Lyons

  London-Lisbon

  British Airways

  Lisbon-Madrid

  Iberia

  Madrid-Lyons

  Air France

  Lyons-London

  British Airways

  21 June 1990

  Calais

  No airline used

  19–22 November 1990

  Utrecht, Milan, Rome

  London-Amsterdam

  British Airways; 3 Members with northern constituencies flew respectively with Aer Lingus, Air UK, British Midlands

  Amsterdam-Milan

  KLM

  Milan-Rome

  Alitalia

  Rome-London

  Alitalia

HOUSE OF COMMONS COMMISSION

  Director of Finance and Administration
  Mrs. Clwyd
  To ask the hon. Member for Berwick upon Tweed, as representing the House of Commons Commission, what is the process whereby the advertisement for a Director of Finance and Administration for the House of Commons, placed in The Economist of 26 January, was drafted.

  Mr. Beith
  Advertisements for the new post of Director of Finance and Administration were placed in the national media in late January by Korn/Ferry International, acting on the instructions of the implementation manager appointed by the House of Commons Commission.

SOCIAL SECURITY

  Management Consultancies
  Mr. Allen
  To ask the Secretary of State for Social Security if he will list each of the management consultancies operating in his Department, the title of the project, the finishing date and the cost(a) currently and (b) in 1990 and excluding any in (a).

  Mr. Jack
  Details of current studies and those undertaken since April 1990 are in the tables. The cost of individual studies is not given, as that could breach commercial confidentiality, but total expenditure on these studies in the financial year 1990–91 to date is £2·94 million.
  444
  Mr. MacGregor
  Overseas visits undertaken by the Home Affairs Committee in the last 12 months and the airlines used are as follows:

  Current consultancies

  Consultancy firm

  Project

  Addenbrookes Hospital, Cambridge

  Headquarters relocation project

  Admiral Management Services Limited

  Quality management systems

  Andersen Consulting

  Training project

  Andersen Consulting

  Contributions unit development

  Arthur D. Allwright Associates

  Purchasing consultancy

  Baddeley Associates Limited

  Communicating the operational strategy

  Baddeley Associates Limited

  Code and instruction review

  Baddeley Associates Limited

  Headquarters review team—consultancy support

  Cavendish Tricorne

  Corporate efficiency

  Cavendish Tricorne

  Local factors model

  Cavendish Tricorne

  Information technology services agency manpower model

  Cavendish Tricorne

  War pensions

  Cavendish Tricorne

  Local pay additions

  Cavendish Tricorne

  Performance related pay

  Christine Gratton

  Women in management courses

  Coopers and Lybrand Deloitte

  Creation of the purchasing and supply manual

  445

  Consultancy firm

  Project

  DPS Consultancy Limited

  Retirement counselling courses

  Dun & Bradstreet International

  Purchasing consultancy

  Equalities Associates

  Equal opportunities seminars

  Ernst and Young

  Integrated complementing system (development)

  Ernst and Young

  Departmental information systems strategy scoping study (headquarters units)

  Hadley Hunter

  Overpayments recovery

  Lloyd Northover

  Corporate image for Department of Social Services property

  Meena Goyal

  Housing and community charge

  Meena Goyal

  Benefits project work

  Mick Tyler

  Integrated complementing system

  Mr. John Mesher

  Statement on the principles of trusteeship

  PA Consultancy Group

  Enhancement of the MMD—BMD database (Nottingham staff resource unit)

  PA Consulting Group

  Management reviews

  PA Consulting Group

  Review of the Department of Social Services central office management

  PA Consulting Group

  Human resource needs

  Peat Marwick McLintock

  Counselling for staff leaving under the voluntary redundancy scheme

  Peat Marwick McLintock

  Selection and recruitment of the benefit agency's training manager

  Other consultancies in 1990–91

  Consultancy firm

  Project

  Finishing date

  Anita Ram

  Selected International Comparisons of Household Incomes

  October 1990

  Baddeley Associates Limited

  Director of Social Security Operations (Change Management Project—Managers Charter)

  April 1990

  Ben Williams Consultants

  Customer Service Training

  November 1990

  British Standards Institute

  Corporate Image for DSS Property

  May 1990

  CAS Marketing Services

  Purchasing Consultancy (Engagement Purchasing Director)

  April 1990

  Cavendish Tricorne

  Contributions Unit Development (Human Resource Planning)

  September 1990

  Cavendish Tricorne

  Overbearing Model

  October 1990

  Cavendish Tricorne

  Integrated Pay and Personnel Project

  October 1990

  Central Computer and Telecommunications Agency

  Departmental Information Systems Strategy Scoping Study

  June 1990

  Central Computer and Telecommunications Agency

  Financial Information Strategy Project (Annual Review)

  October 1990

  Civil Service College

  Director of Social Security Operations

  April 1990

  Coopers and Lybrand Deloitte

  Agencies Systems Planning

  August 1990

  Coopers and Lybrand Deloitte

  Agencies Systems Planning (Training Seminar for Leaders)

  May 1990

  Coopers and Lybrand Deloitte

  HQ Relocation Project

  November 1990

  446

  Consultancy firm

  Project

  Perspective Technica

  Quality management systems

  Price Waterhouse

  Contributions unit development (human resources personnel strategy project)

  Price Waterhouse

  Administrative resource management system unit costs and budgeting

  Projecteam

  Headquarters relocation project

  Property Holdings

  Headquarters relocation project

  Public Arts

  Headquarters relocation project

  Redhouse Lane

  Headquarters relocation project

  SERCO Limited

  Purchasing consultancy

  Symonds Facilities Management plc

  Headquarters relocation project

  TOP-IX Limited

  Administrative resource management system work measurement pilot exercise, keywork library

  The Harry Mitchell College

  Administrative resource management system work measurement pilot exercise

  Touche Ross

  Benefits agency implementation work (MIS and finance)

  Touche Ross

  Contributions unit development (FIS and MIS)

  Touche Ross

  Performance indicators for resettlement units

  University College London

  Psychologist for the forms design unit

  Warwick University

  National Insurance contributions yield

  447

  Consultancy firm

  Project

  Finishing date

  Coopers and Lybrand Deloitte

  Procurement Management Information System

  December 1990

  Enator

  Performance Integrated Monitoring for Managers System

  April 1990

  Enator

  Integrated Complementing System

  June 1990

  Enator

  OPSTRAT Project

  October 1990

  Enator

  Integrated Monitoring System

  December 1990

  Ernst and Young

  Integrated Complementing System

  May 1990

  Ernst and Young

  Departmental Information Systems Strategy DISSC Impact Analysis

  October 1990

  Ernst and Young

  Self Investment by Pensions Schemes

  September 1990

  Hadley Hunter

  Lone Parenthood Study

  July 1990

  Handley Walker

  Post Office Counters—Fee Negotiations

  April 1990

  Handley Walker

  Post Office Counters—Fee Negotiations (Stage 2)

  October 1990

  Handley Walker

  Purchasing of Welfare Milk

  November 1990

  Logica UK Limited

  Integrated Complementing System (Integrated Monitoring System)

  November 1990

  London Economics

  Self Investment by Pensions Schemes

  June 1990

  Market and Opinion Research International

  Headquarters Relocation Project

  August 1990

  Mass Observation

  Relocation Assessment

  April 1990

  Nationwide Anglia Relocation

  HQ Relocation Project

  October 1990

  Nigel Parry

  HQ Relocation Project

  September 1990

  Office for Public Management Ltd (King's Fund College)

  Director of Social Security Operations

  April 1990

  P-E Inbucon

  Survey of Local Authorities (Community Charge Benefit Monitoring Exercise)

  August 1990

  PA Consulting Group

  Rewards Strategy

  October 1990

  PA Consulting Group

  Director of Social Security Operations—Change Management (Rewards Strategy)

  April 1990

  Price Waterhouse

  Integrated Complementing System

  April 1990

  Price Waterhouse

  Integrated Complementing System (Development)

  June 1990

  Price Waterhouse

  Research into Costs in Residential Care and Nursing Homes

  September 1990

  Price Waterhouse

  Benefits Agency Finance Director (Selection and Recruitment of)

  November 1990

  Price Waterhouse

  Training Requirements

  November 1990

  Price Waterhouse

  Executive Information Systems Feasibility Study

  January 1991

  Professor Steven Haberman

  Self Investment by Pensions Schemes

  July 1990

  Sema Group

  Social Fund Support

  June 1990

  Touche Ross

  Administrative Resource Management System (Complementing)

  October 1990

  Touche Ross

  Integrated Complementing System (Maintenance)

  May 1990

  Touche Ross

  Lone Parenthood Study

  July 1990

  Touche Ross

  War Pensions

  October 1990

  Touche Ross

  Asset Management

  November 1990

  Whitegates Estate

  Headquarters Relocation Project

  October 1990

  Disability Working Allowance
  Mr. Meacher
  To ask the Secretary of State for Social Security what is his estimate of the numbers of people who would be eligible for the disability working allowance if the capital limit was set at(a) £16,000 and (b) £8,000 broken down in each case by whether tariff income is taken into account for capital over (i) £8,000, (ii) £5,000 and (iii) £3,000.

  Mr. Scott
  We have estimated that about 50,000 people will be entitled to disability working allowance at any one time. The intention is that there should be taken into account at a rate of £1 for each £250 of capital above £3,000. However, given the small numbers involved and 448
  the uncertainty about the characteristics of this group it is not possible to estimate with confidence how this estimate would be affected if a different capital rule was applied.

  Mr. Meacher
  To ask the Secretary of State for Social Security (1) what is his estimate of the total numbers of people who would be eligible for the disability allowance if the taper was set at(a) 50 per cent., (b) 40 per cent. or (c) 30 per cent.;

  (2) what would be the additional net cost to the Department of reducing the taper applied in the disability working allowance from the illustrative rate of 70 per cent. to (a) 50 per cent., (b) 40 per cent. and (c) 30 per cent. broken down by (i) gross cost and (ii) offsetting savings in income-related benefits.
  449
  Mr. Scott
  The effects of applying different tapers in disability working allowance cannot be predicted with confidence since the estimates include assumptions about behaviour changes and likely earnings levels among potential claimants who are not currently in work. Our best estimates are as follows:

  Gross cost £ million

  Net cost1 £ million

  Caseload

  (a) 50 per cent, taper

  30

  20

  65,000

  (b) 40 per cent, taper

  50

  30

  75,000

  (c) 30 per cent, taper

  80

  50

  90,000

  1 This is the cost after deducting the savings in other benefits. These include savings from people moving off incapacity benefits and savings on income-related benefits which may be payable in addition to DWA.

  Mr. Meacher
  To ask the Secretary of State for Social Security what is his estimate of the cost of raising the capital limit for the purposes of the disability working allowance from £8,000 to £16,000.

  Mr. Scott
  I refer the hon. Member to my reply to the hon. Member for Exeter (Mr. Hannam) on 10 December 1990 at col.303–4.

  Benefits, Doncaster
  Mr. Redmond
  To ask the Secretary of State for Social Security what are the latest figures for the Doncaster area as to how many people are receiving(a) income support, (b) family credit and (c) housing benefit; and what percentage of the Doncaster adult population this represents.

  Miss Widdecombe
  The latest available information is as follows:

  Number

  Income support1

  31,991

  Family credit2

  1,977

  Housing benefit3

  22,937

  Notes:

  1 Data derived from 30 November 1990 count of cases in action, which include a number of cases where payment has ceased but other action is continuing.

  2 Number of families who, at the time their award was made, were living in the Doncaster area. Data does not include family credit awards made after 28 December 1990.

  3 Total number of people in receipt of housing benefit in the Doncaster borough council area in November 1990. The borough council boundary is not conterminous with the boundary of the area covered by the Department's local offices in Doncaster and Wath-on-Dearne.

  Data are not available on the total adult population in Doncaster on the dates and for the precise geographical areas to which the above information relates.

  Computerisation
  Mr. Redmond
  To ask the Secretary of State for Social Security if he will list the frequency and nature of errors on the computer system used to calculate benefits at his Department's offices in the Doncaster area; and if he will make a statement.

  Miss Widdecombe
  The Department's strategy for the computerisation of the social security payment system, which includes local offices in the Doncaster area, will be 450
  completed on time in July 1991. One of the aims of the strategy is to reduce the level of payment errors. Although information on specific types of errors are not currently available either locally or nationally, the majority relate to human error, rather than computer faults. The latest available information indicates that the national error rate for all types of income support payments stands at around 5·3 per cent. compared with 7·4 per cent. prior to computerisation. The error rate for payments of retirement pension averages 2 per cent.

  Local Offices
  Mr. Allen
  To ask the Secretary of State for Social Security if he will list the posts, grade and functions of existing vacancies in each of his Department's offices in Nottingham.

  Miss Widdecombe
  On 28 January 1991, the four former offices in Nottingham located in Shakespeare street, David lane, Station street and Castle gate were restructured into two administrative units, namely West Nottinghamshire and East Nottinghamshire districts. There are no vacancies at the present time in either district.

  Benefits
  Mr. Allen
  To ask the Secretary of State for Social Security what proposals he has to review the division between benefits which are paid for out of the national insurance fund and those which are paid for out of taxation; and if he will make a statement.

  Mr. Jack
  The Social Security Act 1990 made certain changes in the division between benefits which are paid for out of the national insurance fund and those which are paid for out of taxation. We have no current plans to review the division further.

  Mr. Madden
  To ask the Secretary of State for Social Security how many individuals in(a) England and Wales and (b) Scotland were receiving rate rebate/community charge benefit in 1987–88, 1988–89, 1989–90 and 1990–91.

  Miss Widdecombe
  [holding answer 31 January 1991]: The figures for 1988–89, 1989–90 and the latest estimates, based on benefit caseload processed at 31 August 1990, for 1990–91 are in the table. The 1990–91 figures are likely to underestimate the current position, because some authorities still had a number of unprocessed claims at that time. The information requested for 1987–88 is not available.

  thousands

  England and Wales

  Scotland

  Rate Rebates 1988–89

  5,840

  840

  Rate Rebates and Community Charge Rebates in Scotland 1989–90

  5,700

  1,100

  Community Charge Benefit 1990–91

  7,940

  970

  Cold Weather Payments
  Dr. Bray
  To ask the Secretary of State for Social Security if he will list all the dates on which, at(a) Glasgow airport and (b) Edinburgh airport, the average mean daily temperature for seven consecutive days was equal to or below 0 deg Celsius, and thus triggered cold weather payments in the Glasgow-Strathclyde area and the Edinburgh area, respectively.
  451
  Mr. Scott
  Edinburgh airport weather station has not triggered this winter, as at 5 February 1991.

  Glasgow airport weather station has triggered twice. The average mean daily temperature for the week ending 16 January 1991 was -0·2 deg C and for the seven days preceding 4 February the temperature was -0·1 deg C.

  Full details of average mean daily temperatures recorded at all the weather stations can be found in the Library.

  Mr. Allen
  To ask the Secretary of State for Social Security (1) pursuant to his answer of 7 February on cold weather payments arrangements, what is the estimated extra cost of the amendments to the scheme per week; and for how long the revised arrangements will endure;

  (2) pursuant to his answer of 7 February on cold weather payments, whether claimants will receive payments earlier under his revised scheme;

  (3) pursuant to his answer of 7 February on cold weather payments arrangements, whether arising from the waiving of the seven-day qualifying rule claimants will be paid for part weeks and single days.

  Mr. Scott
  As my right hon. Friend, the Prime Minister said today, given the continuation of the widespread and exceptional severe weather, we are again waiving the seven-day qualifying period this week. As at last Thursday, the coming Thursday 14 February will be deemed to be the trigger day for all areas of the country which have not already triggered; and people in the appropriate group will be eligible for payment, at the new enhanced rate of £6, for the current seven days just as they will for the seven days up to last Thursday. We shall continue to monitor the situation carefully, and if the cold weather should continue to the same degree we shall take similar measures.

  It will not be possible to give the cost of the changes to the scheme until it is known how many people have claimed. Claimants will, as before, receive payment as soon as possible after making a successful claim. All payments will relate to a seven-day period.

  Income Support
  Mr. Tony Lloyd
  To ask the Secretary of State for Social Security what is the number of people in receipt of mortgage interest payments under income support and who have had that payment stopped under the 52-week limit for those in hospital; how many of these people then returned home; and if he will make a statement.

  Miss Widdecombe
  The information requested is not available.

  Widows' Benefits
  Mr. Flynn
  To ask the Secretary of State for Social Security in what circumstances a person's entitlement to a retirement pension or widow's benefit will be enhanced or reduced by the provisions of the Social Security (Widows Benefit and Retirement Pensions) Amendment Regulations 1990.

  Miss Widdecombe
  The regulations neither enhance nor reduce entitlement to retirement pension or widows benefit. They are essentially technical in nature and set out more clearly than the original regulations the entitlement conditions for reduced rate benefit where the contribution conditions are not fully satisfied.

  Severely Disabled People
  Mr. Ashley
  To ask the Secretary of State for Social Security what is the estimated number of severely disabled people in employment, or self-employment, who require nursing or personal care to enable them to continue to work; what is the average number of hours of care required by each such person per week; and if he will give the average cost of such care.

  Mr. Scott
  The information requested is not available.

  National Insurance Credits
  Mr. Rooker
  To ask the Secretary of State for Social Security when his Department's office in Newcastle expects to give a ruling regarding national insurance credits in respect of Mr. M. J. D. of Birmingham, whose national insurance number is LT079153B; and if he will make a statement about the length of time taken to resolve this matter.

  Mr. Jack
  Resolution of this matter involved consultation between this Department and the Employment Services Agency. This has taken longer than expected but has now been concluded. We expect to be able to write to Mr. M. J. D. of Birmingham within the next week to confirm his credit position. Investigations are in hand to examine thoroughly the reasons for the delays in this case and I will write to the hon. Member about this.

SCOTLAND

  Industrial Investment Fund
  Mr. Sillars
  To ask the Secretary of State for Scotland what EC prohibitions exist with regard to the establishment of a Government funded Scottish industrial investment fund able to provide security-free loans, capital repayment holidays, lower than market rate interest rates, and special support for training.

  Mr. Allan Stewart
  Any proposal to establish a Government-funded organisation providing state aid to industry would require to comply with the provisions of articles 92 and 93 of the treaty of Rome, including the provisions in those articles relating to notification to, and approval by, the European Commission.

  Salmon
  Mr. Wilson
  To ask the Secretary of State for Scotland what information he has on the recent scale of farmed salmon exports from Norway to the European Community and on its impact on the Scottish fish farming industry.

  Mr. Michael Forsyth
  It is understood that Norway exported 72,000 tonnes of farmed salmon to the European Community in 1990. Production of Scottish farmed salmon in 1990 was 32,350 tonnes. I recognise the Scottish industry's concern at the current state of the market and the effect of Norwegian imports on it. The Norwegian Government have recently given renewed assurances of efforts by their industry to stabilise the market and on that basis the European Commission has proposed to close without remedy the anti-dumping case brought by Scottish and Irish producers. The Government are considering this proposal.

  Soft Fruit Growers
  Mr. Wilson
  To ask the Secretary of State for Scotland what measures he proposes to protect Scottish soft fruit growers from subsidised east European imports; and if he will make a statement.

  Mr. Michael Forsyth
  East European imports of semi-processed soft fruit have been the subject of continuing representations to the European Commission since the collapse of the informal price agreements with Poland and Yugoslavia last year. The Government took the lead in ensuring that the Commission reacted to market disruption by introducing safeguard action in the form of minimum import prices in July 1990. These prices were originally intended to last until 31 December. They have, however, been extended to 31 March 1991 as the Commission was unable to meet its commitment to negotiate new price agreements on the basis of the undertaking given when substantial concessions were given by the Community on the extension of the generalised system of preferences to certain East European countries.

  The Government have also made clear their view that, if satisfactory price agreements are still not negotiated before the expiry of the current arrangements, provision should be made for the safeguard action to continue for at least nine months to allow adequate cover during the 1991 marketing season.

  Community Charge
  Sir David Steel
  To ask the Secretary of State for Scotland if he will publish a table in the Official Report showing by region the number of £50 civil penalties imposed on persons failing to return poll tax registration forms; and if he will consider simplification of such forms and consider allowing local editions as in England.

  Location

  Duration

  Description of work

  Lothian

  A1/A6137 (Vert) Crossroads Haddington

  5 weeks January/Feburary (excluding Sundays)

  Advance ducting and services contract (Haddington Bypass Works)

  Haldane Avenue/Hospital Road Junction

  4 Weeks March/April

  Junction Improvement Works

  Haddington

  (Haddington Bypass Works)

  A1/A6137 (Vert) Roundabout on Haddington Bypass

  4 months April/August

  Construction of new roundabout (Haddington Bypass Works)

  Haddington Bypass (East End) to Junction B1347 North Berwick Road

  5 weeks November/December (excluding weekends)

  Road patching

  Haddington to East Linton

  61/2 weeks April/May (excluding weekends)

  Road patching

  Haddington to East Linton

  6 months June/December (intermittent, maximum 2 locations)

  Gas main installation

  Beltonford Bridge

  6 weeks November/December

  Road resurfacing

  Tynefield/Beltonford/Dunbar Bypass

  6 weeks January/February

  Road patching

  Lawfield/Thorntonloch Phases

  2 weeks March/April

  Road resurfacing

  1 & 2

  Bilsdean Bypass

  2 weeks November (excluding weekends)

  Road patching

  Dunglass

  3 weeks November/December

  Road patching

  Borders

  Cockburnspath

  1 week January

  General road maintenance

  2 days March

  General road maintenance

  3 weeks June

  Road reconstruction

  2 weeks October

  General road maintenance

  Tower-farm to Cockburnspath

  Continuing, started November

  Road reconstruction

  Tower Bridge

  21/2 weeks May/June

  Reconstruction

  Penmanshiel

  1 day August

  Road patching

  454
  Mr. Lang
  Information on the number of civil penalties imposed for failure to return registration forms is not held centrally. We will be looking at the registration arrangements as part of our review of the community charge and this exercise will include a review of the forms if it is decided to retain existing procedures. Meanwhile there is no intention of moving away from the present arrangement in Scotland, whereby the format of the registration form is prescribed. There is, of course, nothing to prevent community charges registration officers inserting additional explanatory information along with the forms that are issued.

  Mental Illness
  Mr. McMaster
  To ask the Secretary of State for Scotland what was the total number of patients receiving treatment for mental illness in Scottish hospitals in 1990.

  Mr. Michael Forsyth
  Information for 1990 is not yet available. The total number of patients who were resident in mental illness and psychiatric units at 31 December 1989 was 13,599. The number of in-patient discharges in 1989 was 29,576. For the year ended 31 March 1990 Scottish hospitals dealt with 3,651 day case attendances as well as treating 36,448 new out-patients.

  A1
  Mr. Home Robertson
  To ask the Secretary of State for Scotland if he will list the locations and duration of temporary traffic light controls on the Scottish section of the A1 trunk road during the last year, giving the reason for each case.

  Lord James Douglas-Hamilton
  Temporary traffic light controls on the A1 in Scotland (approximately 90 m long) during 1990 were as follows:
  455

  Location

  Duration

  Description of work

  Harelawside

  2 weeks June/July

  Road reconstruction

  Grantshouse

  1 day February

  Road edge repair

  Renton to Greenwood

  11 weeks March/May

  Construction of metre strips

  6 weeks November/December

  Construction of metre strips

  Renton

  1 week December

  Earthworks for British Rail

  Houndwood

  2 weeks January

  Road reconstruction

  3 days April

  Road edge repair

  1 day June

  Road patching

  3 weeks October

  Construction of metre strip

  Howburn

  2 days December

  British Rail works

  Heugh Head

  21\2 weeks January/February

  Road reconstruction

  Reston to Swinewoodmill

  13 weeks March/June

  Construction of metre strips

  Reston

  2 days January

  Road drainage repairs

  1/2 day August

  Installation of traffic counters

  2 days December

  Road edge repairs

  Burnmouth

  2 days April

  Road patching/resurfacing

  1 day May

  Road drainage repairs

  2 days September

  Road patching

  Lamberton/Burnmouth

  3 days June

  Road patching

  Lamberton

  1/2 day February

  Installation of traffic counters

  2 days May

  Road patching

  1 day November

  Installation of traffic counters

  Mr. Home Robertson
  To ask the Secretary of State for Scotland how many exceptionally large or heavy loads, requiring notification or escort by the police or local authority, were conveyed on the Scottish section of the A1 trunk road in each of the last 12 months.

  Lord James Douglas-Hamilton
  Information on the differing types of exceptionally wide or heavy loads moving annually on the Scottish road network is not held on a centralised data base. Police and bridge authorities are notified in respect of their individual interest. There are many thousands of such notifications per annum on the road network and records for the A1 could be obtained only at disproportionate cost. The Lothian and Borders police however estimate that the number of exceptional loads on the A1 requiring accompaniment are in the region of 200 per annum.

  Mr. Home Robertson
  To ask the Secretary of State for Scotland if he will list the road juctions with the A1 trunk road in Scotland which are being considered for safety improvement measures.

  Lord James Douglas-Hamilton
  The first interim report of the A1 steering group has identified measures which could be taken at Coveyheugh junction, Greenwood junction, Knowes Farm Road junction, Huntington Road junction and at Gladsmuir.

  The Scottish Office Environment Department is discussing these measures with Borders and Lothian regional councils, my agents for maintaining the A1 trunk road in Scotland, with a view to the early implementation. The measures proposed involve the improvement of signing and road markings.

  Age Concern
  Mr. Sillars
  To ask the Secretary of State for Scotland if his Department issues any guidelines to social work departments about consulting committees and local communities before deciding to close local Age Concern organisations.

  Mr. Michael Forsyth
  We have not issued any guidance since decisions on the support of local projects are for authorities themselves to determine.
  456
  Mr. Sillars
  To ask the Secretary of State for Scotland what has been the amount of central Government support given to Govan Age Concern since its inception.

  Mr. Allan Stewart
  Central Government grants under the urban programme totalling £183,274 have been paid to Strathclyde regional council in respect of approved expenditure by the Govan Age Concern project since its inception.

  Mr. Sillars
  To ask the Secretary of State for Scotland if his Department was informed of, or consulted about, the intended closure of Govan Age Concern.

  Mr. Allan Stewart
  No.

  Mr. Sillars
  To ask the Secretary of State for Scotland if his Department has ever received and evaluated reports on the work, objectives and achievements of Govan Age Concern.

  Mr. Allan Stewart
  Yes.

  Alzheimer's Disease
  Mr. McMaster
  To ask the Secretary of State for Scotland when he last met representatives of Alzheimers' Scotland; and if he will make a statement.

  Mr. Michael Forsyth
  My right hon. Friend has not met representatives of Alzheimers' Scotland and has not received any request for a meeting.

  Health Clinic, Johnstone
  Mr. McMaster
  To ask the Secretary of State for Scotland what are the proposed commencement, termination and opening dates for the new health clinic at Ludovic square, Johnstone; and what range of services will be provided at the clinic.

  Mr. Michael Forsyth
  Work started on site on 14 January 1991 and building work is expected to be completed by the spring of next year. Commissioning of the building will take some six to eight weeks thereafter and I anticipate that the new clinic will therefore be opened in summer 1992.

  It is planned to provide the services currently offered in the existing accommodation including chiropody, dental

  457
  and mothercraft but these may be augmented as the result of an update of a user survey to be carried out prior to the opening of the new centre.

  Accommodation for one local GP will be provided and evening clinics may be introduced to meet local needs.

  Sports and Recreation
  Mr. Wray
  To ask the Secretary of State for Scotland if he will take steps urgently to collect information regarding the number of playfields, stadia and recreation grounds in Scotland(a) available to schools and (b) available to the public in general.

  Mr. Michael Forsyth
  I am aware that the Secretary of State for Education and Science plans to make available to the Sports Council (Great Britain) in 1991–92 additional resources to enable the council, the Central Council of Physical Recreation and the National Playing Fields Association to set up a register of recreational land in England. I have advised the director of the National Playing Fields Association that if this register proves to be worthwhile in England, the Government will consider whether a similar register should be created in Scotland.

  Paisley Town Centre
  Mr. McMaster
  To ask the Secretary of State for Scotland what representations he has received about the planning proposal currently before him for the pedestrianisation of Paisley town centre; and if he will make a statement.

  Lord James Douglas-Hamilton
  The Paisley town centre steering group has inquired when a decision would be made on my right hon. Friend's consent to the making of this order and my hon. Friend, the Minister for Industry and Local Government discussed the matter with the hon. Member and the hon. Member for Paisley, North (Mrs. Adams). Explanation of the reasons for rejecting the objections lodged against the scheme have been sought from Strathclyde regional council. Subject to the provision of satisfactory explanation there is no reason why prompt progress should not be made with the consideration of the order.

  Assisted Places Scheme
  Mrs. Margaret Ewing
  To ask the Secretary of State for Scotland what funding has been allocated to the Scottish Council for Independent Schools for an advertising campaign to advise parents of the assisted places scheme.

  Mr. Michael Forsyth
  None. The recent advertising campaign to promote awareness of the assisted places scheme was funded directly by the Scottish Office.

  Milk Production
  Mr. John D. Taylor
  To ask the Secretary of State for Scotland how many farms produce milk and how many of these farms produce less than 200,000 litres per annum.

  Mr. Michael Forsyth
  In June 1990 there were 3,143 farm units in Scotland producing milk and 2,665 registered producers. Approximately 700 producers hold a quota of less than 200,000 litres.

  Imported Waste
  Mr. Hinchliffe
  To ask the Secretary of State for Scotland (1) what proportion of waste incinerated within Scotland is imported; and what are projected levels of such importation for the next decade;

  (2) in what quantities per nation annually European toxic waste has been imported by Scotland for each year since 1979;

  (3) what quantity of waste, in the last year for which figures are available, was imported for direct landfill within Scotland.

  Lord James Douglas-Hamilton
  Very little, if any, of the waste incinerated in Scotland is imported. On the basis of current information it seems unlikely that this will change significantly in the next decade.

  Imports from Europe of hazardous waste, as defined in the Transfrontier Shipment of Hazardous Waste Regulations 1988, were 453 tonnes in 1988 and 480 tonnes in 1989. Virtually all of this waste was imported from Eire for recycling. There have been no reports of hazardous waste under the regulations being imported for direct landfill.

  Forestry
  Mr. Ron Davies
  To ask the Secretary of State for Scotland what was the total amount of planting undertaken by the private sector and supported by the woodland grant scheme in 1990 and for each conservancy, indicating in each case the proportion of broadleaves and conifer.

  Mr. Michael Forsyth
  The areas of new planting grant-aided under the woodland grant scheme in the year ended 31 March 1990, the latest date for which figures are available, were as follows:

  Conservancy

  Conifers hectares

  Broadleaves hectares

  Total hectares

  North England

  155

  242

  397

  East England

  31

  339

  370

  West England

  75

  357

  432

  Wales

  147

  120

  267

  North Scotland

  2,515

  906

  3,421

  Mid Scotland

  1,202

  288

  1,490

  South Scotland

  1,771

  237

  2,008

  Great Britain

  5,896

  2,489

  8,385

  These figures do not include new planting grant-aided under other Forestry Commission schemes or the farm woodland scheme.

  Mr. Ron Davies
  To ask the Secretary of State for Scotland what was(a) the total amount of planting undertaken by the Forestry Commission in 1990 in each conservancy and (b) the respective amounts of broadleaf and conifer.

  Mr. Michael Forsyth
  The areas of new planting undertaken by the Forestry Commission in the year ended 31 March 1990, the latest date for which figures are available, were as follows:

  Conservancy

  Conifers hectares

  Broadleaves hectares

  Total hectares

  North England

  170

  25

  195

  East England

  Nil

  Nil

  Nil

  West England

  1

  2

  3

  459

  Conservancy

  Conifers hectares

  Broadleaves hectares

  Total hectares

  Wales

  86

  10

  96

  North Scotland

  1,749

  99

  1,848

  Mid Scotland

  900

  66

  966

  South Scotland

  914

  59

  973

  Great Britain

  3,820

  261

  4,081

  Smoked Salmon
  Mr. Steen
  To ask the Secretary of State for Scotland if he will make a statement on the provisions which apply to the posting of smoked salmon(a) in Scotland to European destinations and (b) from Europe to destinations in Scotland.

  Mr. Michael Forsyth
  [holding answer 11 February 1991]: Mail for European destinations is accepted provided that it is appropriately packed with a completed customs declaration form and is in compliance with any restrictions and prohibitions which are in force in the relevant country. Incoming packages from European countries would, of course, be subject to the postal requirements of the country of origin and would need to have a satisfactory customs declaration.

  Housing
  Mr. Maxton
  To ask the Secretary of State for Scotland what was the gross domestic fixed capital formation in dwellings in Scotland in constant terms in each year since 1970.

  Mr. Allan Stewart
  [holding answer 11 February 1991]: The table gives gross domestic fixed capital formation in dwellings in Scotland in current prices from 1971, the earliest year for which estimates are available on a consistent basis, until 1988.

  Constant price figures are not available as separate price deflators are not available for Scotland.

  Scotland: Non-HRA gross capital allocations (1990–91 prices)

  Mainstream non-HRA allocations (£ million)

  Earmarked resources for Glasgow and Edinburgh repair grant backlogs (£ million)

  Total (£ million)

  1978–79

  126·3

  —

  126·3

  1979–80

  105·3

  —

  105·3

  1980–81

  117·8

  —

  117·8

  1981–82

  132·1

  —

  132·1

  1982–83

  159·9

  —

  159·9

  1983–84

  141·4

  —

  1141·4

  1984–85

  228·2

  —

  228·2

  1985–86

  154·4

  —

  154·4

  1986–87

  155·9

  —

  155·9

  1987–88

  117·1

  71·5

  188·6

  1988–89

  122·2

  60·4

  182·6

  1989–90

  122·5

  52·1

  174·6

  1990–91

  107·4

  22·3

  129·7

  1991–922

  91·9

  7·8

  99·7

  1 Special arrangements applied in 1983–84 when authorities were allowed to exceed consent subject to certain conditions.

  2 Provisional.

  460

  Gross domestic fixed capital formation in dwellings in Scotland1

  £ million

  1971

  201

  1972

  206

  1973

  247

  1974

  368

  1975

  451

  1976

  525

  1977

  458

  1978

  565

  1979

  684

  1980

  704

  1981

  708

  1982

  792

  1983

  883

  1984

  984

  1985

  997

  1986

  1,124

  1987

  1,217

  1988

  1,333

  Source: Central Statistical Office

  1 Estimates from 1971–79 are not strictly comparable with estimates for later years.

  Mr. Maxton
  To ask the Secretary of State for Scotland what was the Government's allocation to local authorities for expenditure on improvement grants for private sector housing in real terms in each year since 1978–79.

  Lord James Douglas-Hamilton
  [holding answer 11 February 1991]: We do not issue capital allocations to local authorities specifically for expenditure on housing improvement grants. It is for each local authority to determine, from within its overall non-HRA capital allocation for assistance to the private housing sector, the level of resources it wishes to utilise for meeting such grants in the light of other competing demands for resources. Gross non-HRA capital allocations issued to local authorities since 1978–79 and incorporating any supplementary allocations made during the year, are set out in the table, expressed in 1990–91 prices.

EMPLOYMENT

  Disablement Resettlement Officers
  Mr. McMaster
  To ask the Secretary of State for Employment what criteria are used to measure the performance of disablement resettlement officers; and if he will make a statement.

  Mr. Jackson
  Questions on operational matters in the Employment Service executive agency are the responsibility of Mike Fogden, the agency's chief executive, to whom I have referred this question for reply.

  Employment and Disability
  Mr. McMaster
  To ask the Secretary of State for Employment show many responses he has received from Scotland to his White Paper on employment and disability.

  Mr. Jackson
  We have received 45 responses to my consultative document "Employment and Training for People with Disabilities" from organisations and individuals in Scotland.

  Horticultural Therapy
  Mr. McMaster
  To ask the Secretary of State for Employment when he last met representatives of Horticultural Therapy to discuss its role in the development of training and employment for people with disabilities; and if he will make a statement.

  Mr. Jackson
  I have never met representatives from Horticultural Therapy. I understand that Horticultural Therapy is an organisation which assists people, including people with physical disabilities, mental handicaps and mental illness, to gain therapeutic benefit from horticulture. Therapeutic rehabilitation could be a factor in improving the chances of people with disabilities being able to gain and retain employment and develop in it. My Department provides considerable assistance to people with disabilities through training, rehabilitation and employment schemes and services to help them realise their full potential in work, including some support through horticultural work.

  Mr. McMaster
  To ask the Secretary of State for Employment if he will make it his policy to provide financial support to Horticultural Therapy to enable it to develop therapeutic, leisure, training and employment opportunities for people with disabilities and mental health problems throughout the United Kingdom.

  Mr. Jackson
  I understand that Horticultural Therapy currently receives grants from the Department of Health and the Home Office. It would be a matter for Horticultural Therapy to consider whether it wished to put appropriate proposals for which it is seeking financial support to relevant Government Departments for consideration, including to local officials in the Employment Service or to training and enterprise councils or local enterprise companies.

  Disabled People (Quota System)
  Mr. McMaster
  To ask the Secretary of State for Employment if he has any plans to review the quota system for the employment of people with disabilities to assist people who are eligible to register but who do not wish to register.

  Mr. Jackson
  In our consultative document "Employment and Training for People with Disabilities" the operation of the quota scheme was discussed and comments were invited on its merits and demerits. We are presently considering the response to the consultations.

  Quarterly Attenders
  Mr. Terry Fields
  To ask the Secretary of State for Employment who determines the criteria for quarterly attender status; how they are set and under what provisions; and what is the number of claimants with quarterly attender status in each available year.

  Mr. Jackson
  Questions on operational matters in the Employment Service executive agency are the responsibility of Mike Fogden, the agency's chief executive, to whom I have referred this question for reply.

  Special Needs Training
  Mr. Wigley
  To ask the Secretary of State for Employment what guidelines have been issued by his Department to training and enterprise councils concerning special needs training; and whether he has set any specific targets for the numbers of special needs trainees.

  Mr. Jackson
  My Department issued guidelines to training and enterprise councils in the publication "Developing a Special Training Needs Strategy—A Guide for TECs". Further sources of help and information are listed in the publication.

  There are no specific national targets for the numbers of special needs trainees. However, TECs are required to provide appropriate training for people with special training needs. The TECs are obliged by contract to identify such people by endorsement procedures in youth training and initial assessment in employment training. They must show in detail in their business plans how they intend to ensure appropriate provision.

  Mr. Wigley
  To ask the Secretary of State for Employment how many places were offered annually under the employment training scheme since its founding; and how many of these positions have been filled by trainees with special needs.

  Mr. Jackson
  Employment training started in September 1988 with 300,000 available places. During 1989–90 there were an average of 244,000 to 255,000 available places and in 1990–91 there are resources for an average of 215,000 places. In the period September 1988 to September 1990, 11 per cent. of all entrants were people with disabilities and 16 per cent. of all entrants were assessed as having a literacy and/or numeracy training need.

  Textile and Clothing Industry
  Mr. Henderson
  To ask the Secretary of State for Employment if he will estimate how many jobs were lost in the textile and clothing industry in each quarter of 1990 by travel-to-work area and region.
  463
  Mr. Jackson
  The information requested is not available.

  Manufacturing Industry
  Mr. George Howarth
  To ask the Secretary of State for Employment how many jobs in manufacturing industry in the north-west of England were lost in 1985, 1986, 1987, 1988, 1989 and 1990.

  Mr. Jackson
  There are no figures for job losses and job gains. The available information is as follows:

  Employees in manufacturing in the north-west

  Unadjusted December each year

  Net change since previous year

  1985

  5,000

  1986

  -11,000

  1987

  10,000

  1988

  20,000

  1989

  -2,000

  11990

  -2,000

  1 The latest available regional employment estimates are for September 1990.

  South Glamorgan Training and Enterprise Council
  Mr. Morgan
  To ask the Secretary of State for Employment if he will make it his policy to make available to hon. Members who may request them the documents in relation to the South Glamorgan TEC headquarters building project.

  Mr. Jackson
  The documents are the property of South Glamorgan TEC which is a private company. Their release is a matter for the TEC.

  Mr. Morgan
  To ask the Secretary of State for Employment what date his Department first became aware of the ownership of the company which submitted the winning tender for the construction of the new South Glamorgan training and enterprise council headquarters; and whether there is any commercial connection between this company and members of South Glamorgan TEC.

  Mr. Jackson
  The contract to build new premises for South Glamorgan training and enterprise council has not yet been awarded.

  Mr. Morgan
  To ask the Secretary of State for Employment if he has now inspected the documents offered to him by South Glamorgan TEC as regards the headquarters building project and the tender procedures used.
  464
  Mr. Jackson
  I see no need to inspect these documents.

  Mr. Morgan
  To ask the Secretary of State for Employment on what date his Department contacted the chairman of South Glamorgan TEC regarding the decision on which building company should undertake the work of constructing the TEC's new headquarters building.

  Mr. Jackson
  Discussions during the development phase of South Glamorgan TEC took place at regular intervals and included various issues including the TEC's premises.

  Mr. Morgan
  To ask the Secretary of State for Employment when his Department was notified that the building company owned by the chairman of South Glamorgan TEC had withdrawn its tender for the construction of the TEC's new headquarters building.

  Mr. Jackson
  On 7 December 1990.

  Local Offices
  Mr. McLeish
  To ask the Secretary of State for Employment (1) how many representations have been received about the closure of employment service offices during 1990;

  (2) how many representations have been received from hon. Members regarding the closure of employment service offices; and how they were dealt with.

  Mr. Jackson
  Some 140 representations have been made to me, my colleague Ministers and the employment service chief executive about the closure of employment service offices during 1990. Forty-three hon. Members have written to us on this subject. All representations have been taken into account in deciding the future of particular offices.

  Training and Enterprise Councils
  Mr. Morgan
  To ask the Secretary of State for Employment what guidelines exist for TEC's in respect of building projects they may undertake in respect of the procedure for requesting or openly advertising tenders.

  Mr. Jackson
  Training and enterprise councils, as private companies, are required to observe the provisions of the Companies Act 1989 and their memorandum and articles of association when tendering for business.

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

Lord Palumbo
Peter Garth Palumbo, Esquire, having been created Baron Palumbo, of Walbrook in the City of London, for life—Was, in his robes, introduced between the Lord Mishcon and the Lord McAlpine of West Green.

Royal Assent
2.48 p.m.
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:
Development Board for Rural Wales Act,
Caravans (Standing Community Charge and Rating) Act,
Statutory Sick Pay Act.

Water Supply: NRA Report
Lord Nugent of Guildford Lord Nugent of Guildford asked Her Majesty's Government:
When the National Rivers Authority report on water supply deficiencies, especially in the southern half of England, is to be published, and whether they are considering action to be taken in the light of this report.
Viscount Astor: My Lords, the National Rivers Authority expects to publish a preliminary report by Easter this year. It will consider the actual and prospective demand for public water supplies relative to actual and prospective water resources in England
2
and Wales. The responsibility for action to deal with any supply deficiencies rests primarily with water companies. But the NRA will continue to seek to ensure that plans take account of the need to use resources judiciously and to protect the water environment.
Lord Nugent of Guildford: My Lords, I thank my noble friend for that informative Answer, but it does not take us very far forward. Is he aware that the water situation is already grave? The bar on hosepipes still exists in some parts of the country and all water storage levels are seriously down so there is an almost certain prospect of water shortages next summer. Is my noble friend aware that the only way to cure the problem is to construct large new reservoirs? Is he further aware that past experience has shown that planning applications for such constructions have invariably met powerful local opposition which has usually delayed construction not just for years but for decades? Is he satisfied that the normal process for dealing with planning applications and local inquiries is adequate to meet what has now become a national need?
Viscount Astor: My Lords, my noble friend is absolutely right when he says that a ban on the use of hosepipes is still in force, which I believe affects about 13 per cent. of the population. As regards reservoirs, I remind your Lordships that the Roadford reservoir in Devon has recently been completed. It. will increase storage in the south west region by 40 per cent. The Carsington reservoir is due to be completed next year, and it will benefit 3 million people in the East Midlands. Reservoirs are large-scale developments which have a major impact on the environment. The Government appreciate the need to avoid delay. We continue to exhort local planning authorities to improve their performance in the handling of applications. Furthermore, the provisions in the Planning and Compensation Bill which is currently before your Lordships' House are designed to make the planning system more effective and efficient. While we shall continue to do all that we can to speed up the processing of applications by local authorities, we

3
must ensure that the system achieves an appropriate balance between the need for development and the need to protect the environment without unwarranted delay to the applications.
Lord Mellish: My Lords, has the Minister any comment to make about the Thames Water Authority? He will know that it looks after, or is supposed to look after, the water supply needs of the people of London. The press reported that the authority proposes to spend millions of pounds on two new reservoirs. Can the Minister say when construction is likely to start and when it will finish? Has he any general comments to make about it on behalf of London?
Viscount Astor: My Lords, I am aware of one new reservoir. Thames Water is currently consulting about a major reservoir south-west of Abingdon which is designed to meet the forecast of increased demand in the next century. Geotechnical surveys of the site are unlikely to be completed by 1993. Work is unlikely to start until 1996 and therefore the reservoir should be on stream at the end of the 1990s.
Baroness Robson of Kiddington: My Lords, is the Minister aware that one of the worst affected counties in the south of England is probably Kent? Can he give me some information about the proposed reservoir on the outskirts of Canterbury at Tyler Hill?
Viscount Astor: My Lords, I believe that the noble Baroness is referring to the Broad Oak reservoir. Following a public inquiry an application to build a new reservoir was turned down in 1980. The inquiry took account of the environmental impact, apparent overestimation of demand against reservoir capacity proposed and the availability of alternative sources.
Lord Gisborough: My Lords, in view of the fact that the Kielder Reservoir has surplus water and that there is surplus water in the north of England, can my noble friend say whether there are any long-term plans for a grid system, using the rivers, to bring the water south?
Viscount Astor: My Lords, I understand that no national water grid plan is being considered because water is extremely expensive to pump. It is quite easy and cheap to make water flow in the right direction but not if it has to flow uphill. There are various area water transfer schemes in local areas—for example, the London water ring main—and water augmentation schemes. Those are artificial recharge schemes which involve pumping water into aquifers when the river flows high for abstraction when needed.
Lord McIntosh of Haringey: My Lords, I am fascinated by the Minister's response in respect of the Planning and Compensation Bill which is now before the House. In view of the long timescales he described in response to specific questions, none of which has anything to do with delays on the part of local authorities, can he explain why he is still seeking to put the blame on local authorities for delays in constructing reservoirs?
Viscount Astor: My Lords, I did not put the blame on local authorities. I pointed out that a long and complex procedure is involved when one wishes to acquire planning permission for such a major development.
Lord Hailsham of Saint Marylebone: My Lords, is my noble friend aware that when I was about 18 the prospect of what was called a water grid was then thought to be an engineering possibility? Is he further aware that now I am 83 it is rather a disappointment to find that it is no longer on the tapis?
Viscount Astor: My Lords, I certainly appreciate the noble and learned Lord's comments.
Lord Elliott of Morpeth: My Lords, while my noble friend Lord Nugent is quite right to draw attention to the shortage of reservoirs in the south of England, does my noble friend appreciate that in the north of England, despite the fact that we have the Kielder Reservoir, certain areas north of Northumberland have an insufficient water supply? Is he aware that the NRA report is awaited as anxiously in the North as it is in the South?
Viscount Astor: My Lords, I am not aware of any current shortages in the very north of England, but I am sure that we all await the report with interest.
Lord Peston: My Lords, reference has been made to the Thames Water Authority. The Question is about water supply deficiencies. Is the noble Viscount aware that some of us who live in this part of central London and are allegedly served by the Thames Water Authority have no water whatever, either to bath in or even to make a cup of tea? Will the Minister ask his office to get in touch with the Thames Water Authority to ascertain whether it could supply a little water?
Viscount Astor: My Lords, if the noble Lord is short of water I should be delighted to offer him a cup of tea any time he requires one. I understand that the water engineers are working round the clock to try to produce water in Westminster, where there has been a problem.

Straw: Alternative Uses
2.56 p.m.
Baroness Nicol Baroness Nicol asked Her Majesty's Government:
What progress has been made in research into alternative uses for straw.
The Earl of Strathmore and Kinghorne: My Lords, research into alternative uses for straw has assisted in developing the technology enabling straw to be used to manufacture board for building and furniture, paper pulp, compost and animal bedding and feeding. New methods for using straw to combat oil spillages have also been developed. The Government are spending more than £1 million per annum on straw research including its use as a fuel. Of this expenditure, about three-quarters is on methods of handling and storage of straw and its incorporation in the soil.
Baroness Nicol: My Lords, I thank the Minister for that very full Answer. Is he aware that when I last asked a Question on this subject, in 1986, I was told that the Government were spending £2 million per annum? Can he explain why there has been this reduction in the amount spent? Is the noble Earl also aware that at that time the Ministry of Agriculture identified 12 possible alternative uses for straw? Does he not agree that at a time when farmers are in some difficulty an additional source of income would be very helpful to them?
The Earl of Strathmore and Kinghorne: My Lords, in answer to the first question put by the noble Baroness, the AFRC/ADAS programme of research on straw incorporation which began in 1984 has now addressed most of the scientific questions that needed to be answered. In other words, the technological investment has paid off. In the past few years the Ministry has funded a number of projects to look at alternative disposal methods. It is currently undertaking a range of projects covering handling and packaging equipment, techniques of incorporation in the soil and the effects on nitrate leaching, and on pests and diseases. Other research funded by the Department of Energy, the Department of Transport and the. Department of Education and Science brings total government expenditure on straw related research to more than £1 million.
Lord Mottistone: My Lords, is my noble friend aware of the Frogmat? It was devised by a farmer, Ken Frogbrooke, in the Isle of Wight and deals with all these problems. It has been produced during the past five years: since the noble Baroness, Lady Nicol, asked her previous Question. It can control oil pollution—we hope it will be used in the Persian Gulf—and can be used for crop protection and in many other ways.
The Earl of Strathmore and Kinghorne: My Lords, my noble friend is quite correct. The Department of Transport is spending £20,000 in 1990–91 on the development of a straw baler unit. The only work in 1990–91 involved a capital investment in a straw baler. As my noble friend rightly said, the machine produces Frogmats, which are particularly useful for collecting spilt oil from terrains, such as salt marshes, that present difficulties for heavy machinery. This is the end of a four-year development project. In addition, I should point out to my noble friend that, regrettably, the oil slick in the Gulf is far too large for the use of Frogmats.
Lord Alport: My Lords, does my noble friend have any statistics with regard to the reduction in straw and stubble burning in arable areas during the past season? Further, does he have any information as to whether this produced any problems for arable farmers?
The Earl of Strathmore and Kinghorne: My Lords, the Government estimate that in 1990 only 17 per cent. of cereal straw was burnt. That represents a fall of 300,000 hectares, which is a 36 per cent. reduction
6
in the area burnt compared with 1989. Responsible farmers are now finding alternative disposal techniques.
Lord Merrivale: My Lords, can my noble friend say whether greater emphasis is being placed on research into the further utilisation of waste straw from wheat, rye, barley and rice? This is of importance to developing countries, bearing in mind the successful Stramit process—a pressure and heat method that produces building boards for low income homes by using it for structural walls, partitions, roofs and ceilings.
The Earl of Strathmore and Kinghorne: My Lords, in replying to my noble friend's question, perhaps I may refer to linseed crop residue. The Government are spending £45,000 this current year on research into the extraction and possible use of linseed fibre in products such as matting, board, paper and material.
Lord Carter: My Lords, can the Minister tell the House whether the various products for the alternative use of straw take into account the net use of energy? In other words, is any attempt made to measure the energy used in the process to ensure that it will not be wasted?
The Earl of Strathmore and Kinghorne: My Lords, I regret that I do not have the answer to the noble Lord's question. However, I shall write co him on the matter.

Desert Combat Boots
3.2 p.m.
Lord Campbell of Croy Lord Campbell of Croy asked Her Majesty's Government:
Whether they have procured, for issue to the Army, a boot designed for prolonged wearing in operational conditions in the desert.
The Parliamentary Under-Secretary of State, Ministry of Defence (The Earl of Arran): My Lords, we are procuring combat boots suitable for use in desert conditions and these are being issued at present.
Lord Campbell of Croy: My Lords, I thank my noble friend for that reply; indeed, it sounds like very good news. While an army is supposed to march on another part of its anatomy, does he agree that money is well spent if it is used to provide soldiers with a foot covering which is suitable for the part of the world in which they are serving?
The Earl of Arran: My Lords, it is obvious that soldiers serving under the present conditions in the Gulf must have the best possible equipment. I can assure the House that they have such equipment.
Lord Stallard: My Lords, can the Minister tell us from where these boots are being procured? Further, if they are not being procured from home industries, would it be too much to ask the Government at least to support the finest boot and shoe manufacturers in the world? Also, can he give the House an idea of how long the "prolonged wearing" of such boots will be?
The Earl of Arran: My Lords, there are two contractors currently manufacturing the boots. They are suitable for use for up to six months.
Lord Stallard: From whence?
The Earl of Arran: My Lords, I repeat, there are two contractors supplying these boots in the United Kingdom. It is estimated that 39,000 pairs of boots will have been produced by the middle of March.
Lord Hailsham of Saint Marylebone: My Lords, is my noble friend aware that in 1941 in the North African desert we had desert boots which were very useful articles? The only trouble with them was that they were not issued with the rations; we had to pay for them.
The Earl of Arran: My Lords, I believe that I am right in telling my noble and learned friend that the boot in use at that time is the one which has now become the standard combat boot.
Lord Molloy: My Lords, can the noble Earl tell the House where these boots are being made?
The Earl of Arran: My Lords, as I said in the previous answer, they are being made in this country.
Lord Williams of Elvel: My Lords, can the noble Earl confirm that a report was published at the end of October 1990 which highlighted certain inadequacies in the boots then issued to the British Army in the Gulf region? Further, can he advise the House whether the commitment made at that time by a Minister in another place to supply all British troops stationed in the Gulf with at least one pair of combat boots by mid-March is in fact running to schedule?
The Earl of Arran: Yes, my Lords; it is definitely running to schedule. As I said, there will be about 39,000 pairs of boots in the Gulf by mid-March. They are currently being produced at the rate of 2,500 pairs a week and that will rise to 4,500 pairs a week by the end of this month. Further, an additional order has been placed for some 63,000 pairs of boots.
The Earl of Onslow: My Lords, as our Armed Forces have been serving in the desert since at least the time of the Queen's Regiment in Tangiers in 1689, is it not odd that we still do not have a desert boot which is correct and useful for the British Army and produce such boots only after our soldiers have gone there?
The Earl of Arran: My Lords, the standard of the combat boot is considered to be adequate for use in the desert; indeed, it has been worn successfully in hot countries in the past. However, when it was understood that some soldiers had experienced discomfort because of the heat, urgent steps were taken to put the matter right.
Lord Dean of Beswick: My Lords, is it not true to say that the equipment that the British Army had at the start of these hostilities was based on its commitments as a member of NATO? It was never envisaged that troops under the NATO banner would be called to action in the Middle East. Surely, therefore, it is a question of re-equipping the Army. Is not the time factor of vital importance in this situation?
The Earl of Arran: My Lords, the time factor is vital in this situation. That it is why the boots are being issued at this time.

Disability Living Allowance and Disability Working Allowance Bill
Brought from the Commons on Friday last and printed pursuant to Standing Order 48; read a first time.

New Roads and Street Works Bill [H.L.]
3.7 p.m.
Lord Denham: My Lords, I have it in command from Her Majesty the Queen and His Royal Highness the Prince of Wales to acquaint the House that they, having been informed of the purport of the New Roads and Street Works Bill [H.L.], have consented to place their prerogatives and interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
Bill read a third time.
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 1:
After Clause 1, insert the following new clause:
General environmental duty
( " .—(1) It shall be the duty of the concessionaire and the highway authority in discharging any of their functions under this Act to so exercise their powers as to—

(a) ensure the conservation and enhancement of natural beauty and the conservation of flora, fauna and geological and physiographical features of special interest and the protection of sites, buildings and objects of architectural, historical or archaeological interests; and

(b) ensure that any concession agreement includes such conditions as are required to mitigate any adverse effect which the special road may have on the natural beauty of the countryside or any such flora, fauna, features, sites, buildings, structures or objects.").

The noble Lord said: My Lords, I make no apologies for returning to the issue which was raised so eloquently on Report by the noble Lords, Lord Renton and Lord Norrie, and which I and the noble Lord, Lord Tordoff, supported. The proposed new clause is similar but not identical to those previously tabled. On that occasion the noble Lord, Lord Renton, argued extremely powerfully in favour of placing a "general environmental duty" on a concessionaire and on the highway authority in relation to the building of a new private road.
I in no way cast any doubt on the Minister's sincerity or integrity when I criticise his reply to that debate; but his response was extremely unsatisfactory. He advanced propositions regarding the adequacy of the planning procedures currently available—which he said would meet the anxieties expressed in the debate—without adducing a scintilla of evidence in support of that proposition. I must say that bare assertion is not necessarily the naked truth.
The Minister was strongly criticised on that occasion by the noble Lord, Lord Renton, for adducing no authorities when it was critical that the House should be apprised of the base upon which those propositions were being advanced. The Minister

9
said that there were 11 factors which would ensure that anxieties in regard to deficiencies in the procedure were currently deployed and therefore we had no cause for anxiety, or that all our anxieties should be allayed.
Although this morning I have seen a copy of the letter sent to the noble Lord, Lord Renton, I do not believe that the Minister has dealt adequately with the issue. In any event, correspondence between Ministers and noble Lords or Members in another place, while useful and helpful—as I have stated previously the Minister has been extremely helpful in that regard—is no substitute for legal provision. It carries no legal weight; it has no persuasive effect; and it is purely informative in terms of a debate that is taking place. Consequently I have no hesitation in tabling this proposition today.
Perhaps I may briefly rehearse again the arguments put before the House on 24th January by the noble Lords, Lord Renton, Lord Norrie, Lord Tordoff, and me, otherwise noble Lords will have to refer to Hansard, and there are no great incentives for doing that. I shall summarise the position as I see it. First, the Bill contains no provisions concerning the environmental effects which may follow from the building of privately-funded roads. Secondly, it does not deal with their effect on land-use planning policies, as was stated on the last occasion.
Thirdly, it is no answer for the Minister to assert that these considerations can all be dealt with satisfactorily in the concession agreement. That may or may not be the case. There would be no legal requirement for the concession agreement to deal with these matters. Under the new clause the concession agreement would have to include,
"such conditions as are required to mitigate any adverse effect which the special road may have on the natural beauty of the countryside or any such flora, fauna, features, sites, buildings, structure or objects".
The Minister said that that is likely to impair planning procedures. Again, that was bare assertion. How can those considerations impair the planning procedures in respect of the development of the new roads? I cannot see it. It is for the Minister to convince me. He has not yet done so.
Fourthly, it is not open to the Minister to argue that the matters we are seeking to introduce into the legislation are irrelevant or unprecedented. In the last debate ample precedents were cited. There are no fewer than nine different enactments from 1957 which bore the authorship or parenthood of the noble Lord, Lord Renton, when he was a Parliamentary Secretary. They include the Electricity Act 1957, the coal Act 1958, the Countryside Act 1968, the Wildlife and Countryside Act 1981, the Wildlife and Countryside (Amendment) Act 1985, the Agriculture Act 1986, very recently the Water Act 1989, the Electricity Act of the same year and the Coal Industry Act. They all import the kind of environmental considerations which we are seeking to import into the Bill. Why was it right to include them in those statutes but omit them in regard to this one? This legislation engages a new situation arising with the private roads that are to be built.
On several occasions the Minister asserted that in his judgment the existing procedures were satisfactory. Even if the Minister could not, even now, agree —though I hope the House will insist on it—I am sure that the matter will be reflected in the debates which will take place in another place. The Minister agreed fleetingly that existing procedures might—he said only "might"—be of relevance in relation to these matters (at col. 337 of Hansard.). If there is any risk that he is wrong how can he justify offering a complete negative to the proposition we advance? I say that there is more than a risk. In order to be on the safe side and because the Government would lose nothing by accepting the proposition, I suggest that it is something on which the House is entitled to insist.
Fifthly, I do not believe that there is any statutory requirement in Section 105A of the Highways Act or the 1988 statutory instrument to ensure that the matter will be adequately dealt with. Even at this stage I do not follow the Government's argument in regard to environmental impact assessment. Perhaps the Minister can bring his cogency to bear on the matter and persuade me at least about that point. I have said before that I do not believe that environmental impact assessment is mandatory in all cases. The Minister says that it is.
I suggest that it is not clear from the regulations; it is not clear when one looks at the instrument upon which the regulations were based; namely, the environmental impact assessment directive of 1985 which came into effect in 1988. The only requirement that exists is that the information gathered must be taken into consideration in the development consent procedure. The new clause, which specifically provides for an environmental duty, would provide a way to ensure that the developer bears a responsibility for the environment when he proposes plans and implements the project in question. I ask why there should not be mutually reinforcing, mutually complementary environmental duties, and a requirement imposed on the private sector developers for environmental assessment.
My sixth point relates to the pedigree of the new clause. It is not something that noble Lords on both sides of the House suddenly thought up. Many of us felt that there was a need to encompass such a principle in the Bill; and we were reinforced by the CPRE—certainly not a party political body—the local authority associations, and many others, which believed that the environmental effects of privately funded roads needed to be dealt with explicitly in the Bill.
If—and this is the case—those bodies remain concerned, notwithstanding the debate we have had in the House and the Minister's robust defence of an untenable position, that must give rise to considerable anxiety because they are bodies specifically concerned with environmental consequences. They fail to understand the arguments that have been adduced for the exclusion of the provision in the Bill. Without the protection afforded by the new clause, they believe that countryside protection and mitigation measures against the adverse effects of any privately funded road proposal are at risk.
My seventh point is that the Minister has said on a number of occasions that private developers should be under no greater duties regarding the environment than highway authorities. There is a strong case—I share the view of the noble Lords, Lord Norrie and Lord Tordoff—for imposing a somewhat heavier obligation. In fact, the reverse applies. I shall not argue that point now. The noble Lord, Lord Norrie, said that public authorities, including the Department of Transport, have an environmental duty under Section 11 of the Countryside Act 1968, whereas no similar requirement is imposed under the Bill on the private developer. If that proposition is right—I do not believe that it has been satisfactorily refuted by the Minister up to the present—it needs an answer. I hope that the noble Lord will insist upon it now.
I summarise the position in this way: the Minister seems to rely, at best, upon practice and usage. That is not necessarily the law. Noble Lords on both sides of the House have in the past expressed strong feelings —I hope that it is still their view—that the environment needs to be more specifically protected than is provided for by the Bill at present. If the Minister continues to assert that the available legal requirements, together with practice and usage, are satisfactory, then he needs to do what the noble Lord, Lord Renton, insisted upon last time, and provide, as he put it, chapter and verse in relation to the provisions upon which he relies. That is the task that the Minister should fulfil today. However, that is not enough in itself; the case goes rather wider than that.
On Report, with the support of the noble Lord, Lord Tordoff, I introduced a new clause extending far wider than the new clause now proposed. We debated it fully, but it is a matter that will bear further discussion. I recognise that if the Minister was not prepared to concede the new clause tabled by the noble Lord, Lord Renton, he will not concede mine. Of course we divided on the matter. Those wider considerations are important. Today we are dealing with a new clause which follows ample precedent. It is for the Minister to offer some significant reasons for abandoning those precedents which are contained in no fewer than nine different statutes. I beg to move.
Lord Renton: My Lords, as the noble Lord, Lord Clinton-Davis, said, on Report I moved a clause similar to the one he has just moved. As he pointed out, there are nine well-established precedents for it on the statute book. In his reply on Report my noble friend the Minister maintained that existing procedures provide all that is needed for protecting the environment when the new roads to be built under the Bill by private enterprise come into operation. I pointed out that he had not mentioned any statutory authority for his proposition that existing procedures did what was required, adding that we would return to the issue on Third Reading. I am grateful to the noble Lord, Lord Clinton-Davis, for taking that step and for deploying the case so fully.
Since Report, my noble friend has written to me about the matter and we have had several discussions for which I am grateful, although I must confess that
12
he has not convinced me. The trouble is that the Highways Act 1980, as amended in 1988 by a statutory instrument using the Henry VIII clause power to amend the 1980 Act, and the EC directive refer only to the making of environmental assessments. Neither measure contains any obligation to implement the assessment. A road builder, if convenient and if he finds it financially desirable, can ignore part of the assessment. He will probably be wise enough to stick to most of it, but in law he could ignore the assessment altogether. He may be tempted to ignore part of it.
It is only fair to say, as the noble Lord, Lord Clinton-Davis, made clear, that the new Section 105A, introduced by the Highways Assessment (Environmental Effects) Regulations 1988, and the directive go into some detail, giving ample opportunities for the making of assessments; for hearing objections; and giving opportunities for consultation with other authorities and members of the public. That is all very good so far as it goes, but we must ensure that any highway authority or road builder, under the present law and under the Bill, shall have a duty to abide by the conclusions of the environmental assessment.
I shall not weary the House with the full contents of the eight pages of small print of the EC directive or with the lengthy statutory instrument, but I must mention in passing that together they constitute a legislative nightmare. I earnestly hope that the brilliant Scots lawyer who is now Secretary of State for Transport will do something about that. It is not fair to the users of our statutes that we should present them with such circuitous provisions. As I pointed out, although it may not have been quite clear on a first reading, there is a serious gap in the directive and the regulation.
Meanwhile, I hope that my noble friend Lord Brabazon will realise that there is great public anxiety about the way in which some road schemes affect the environment. I need mention only Twyford Down. I know that my noble friend is naturally anxious that those who build new roads under this Bill should be treated no better and no worse than highway authorities are now treated. That is understandable. However, he seems to suggest that as there is now merely an obligation to obtain an assessment of the effect on the environment and no positive duty to implement that assessment, we can leave it at that. Surely that is not good enough. Both the present law and the Bill must get it right.
On 10th December, after his appointment as Secretary of State, my right honourable friend Mr. Malcolm Rifkind said in another place (at col. 685 of Hansard):
"What has become clear in recent years is the extent to which a new dimension is relevant to the debate on transport —the environmental dimension and the impact on the quality of life of our people as a whole which the current transport circumstances inevitably produce".
I am grateful to my noble friend, whom we all respect. I suggest that he should acknowledge what the Secretary of State said and either accept this new clause or give an undertaking that in Committee in another place the present law and the Bill will be put

13
right by ensuring that a duty to implement the environmental assessment will be inserted and made clear.
Speaking for myself and I hope for noble Lords opposite, particularly the noble Lord, Lord Clinton-Davis, if my noble friend tells your Lordships this afternoon that he will invite the attention of the Secretary of State to what was said in the debate and ask him to consider putting the law right in the way suggested, I would not feel that the amendment should be pressed. I very much hope that he will go so far as to give that simple undertaking.
3.30 p.m.
Lord Tordoff: My Lords, perhaps I may start by referring to what the noble Lord, Lord Renton, said at the end of his impressive intervention. I hope that the Minister will go a little further; he would probably need to before we could consider not pressing the amendment to the limit. To draw the point to the attention of his right honourable friend should be unnecessary, since no doubt his civil servants will anyway draw to his attention what has been said in this House today. If your Lordships do not find it necessary to press the amendment it will be because the Minister has given a rather stronger undertaking than that for which the noble Lord called; in other words, it will be a clear undertaking that the Government understand the principle behind the amendment and are prepared to support it in another place.
We have heard two excellent speeches on the amendment and I do not propose to say much more about it. Perhaps I may fill the gap which the noble Lord, Lord Clinton-Davis, was unhappily unable to fill. The quotation he sought was at col. 337 of the Official Report, In his speech the noble Lord, Lord Brabazon, said:
"We expect the same high standards to apply to the tenderers for concession agreements as currently apply for trunk roads, and indeed we shall not settle for less. I am confident that local highway authorities would not either".—[Official Report, 24/1/91; col. 337.]
That is fine and something on which we ourselves would insist. Later, the Minister said at the end of the same speech:
"Privately financed roads must, and it is our intention that they shall, be assessed by the same environmental criteria as apply to the Secretary of State's roads".
There is a difference between private roads and those built by the public authority. At the end of the day the public authority is responsible to the electorate; the private developer is not. The latter is responsible to his shareholders, and that is where the difference lies. That is why, with the best will in the world, we feel it is necessary to have on the face of the Bill the duty to protect the environment.
If some of the Acts already on the statute book relating to the building of roads were brought before your Lordships today, it would be insisted that even in Bills dealing with the public building of roads a strengthening of the environmental duty would be necessary Many of these provisions were on the statute book in the days before our new enlightenment
14
to which the noble Lord, Lord Renton, referred. We ought to do everything in our power to ensure that every Bill that comes before your Lordships' House and goes on to the statute book contains specific environmental provisions in so far as the Bill has an impact on the environment.
It is not merely a matter of producing an environmental assessment but of writing on to the face of the Bill a duty for the people who will have the great good fortune to build these new roads. Perhaps I may say once again that I have no ideological objection to the building of private roads. That is not my purpose in supporting the amendment. I do not wish to put such restrictions on the building of these roads that the private developer would not be able to build them. That is not my intention at all.
Today we need a much clearer view of the damage that can be done to the environment by the building of roads and the increase in traffic that comes from the roads. Therefore it is essential that we pat on the face of the Bill the strongest possible environmental protection that we can. Unless the Minister is prepared at least to accept the principle that lies behind the amendments, I hope that your Lordships will follow us into the Lobby this afternoon.
Lord Norrie: My Lords, I believe that all the arguments have been well rehearsed. All I wish to say at this stage is that the provision and use of transport featured strongly in the Government's environment White Paper. If the Department of the Environment can accept a general duty of care for the environment under the Water Act and if the Department of Energy can accept comparable arrangements under the Electricity and Coal Industry Acts, why cannot the Department of Transport do likewise?
The environment White Paper has established green ministers within each department. On 10th December the noble Lord, Lord Renton, referred to the environmental dimension in transport policy within the Department of Transport. Yet in my opinion there is no recognition of its importance in this Bill. Could my noble friend follow the lead of other government departments at this late stage?
The noble Lord, Lord Renton, made a strong case showing that the provisions in the amendment are not covered by current legislation; thus I look forward to the Minister's reply with interest.
Lord Hunt: My Lords, regretfully I have not followed the course of the Bill up until this point in time. I rise with some diffidence on that account. However, the depth of my feelings and my long association with environmental matters compel me to rise. Having spoken in your Lordships' House on a number of occasions when we were discussing the construction and routing of roads, I feel I must make some remarks although they are not new in any way. I must remind your Lordships of the quite exceptional damage that road building causes to open landscapes and the environment in general.
No one could argue that more roads should not be built, but the private enterprise feature of the case we are talking about means that the commercial motive

15
will undoubtedly weigh in all cases against the environmental protection aspects. Such has been the feeling of the public over the past decade about environmental matters and the landscape and countryside generally that I question whether the Government can afford not to accept this amendment and to do everything possible through this means to limit the damage that will inevitably be caused by the building of private roads.
3.45 p.m.
The Minister of State, Department of Transport (Lord Brabazon of Tara): My Lords, in rising to respond to the amendment, I believe it would be helpful to your Lordships if I first said a few words about roads and the environment in general. My noble friend Lord Renton quoted from a speech made by my right honourable friend the Secretary of State which referred to an environmental dimension in transport matters. We are all environmentalists now. However, I hope your Lordships will forgive me if I point out that the staff at the Department of Transport and their predecessors have been environmentally inclined for many years, indeed since before the Second World War when the Road Beautifying Association gave advice—we can still enjoy the results of that advice —on the planting of ornamental trees on roads such as the A.24 from Dorking to Leatherhead or the old Crawley bypass.
It was in 1956, the year when the first length of motorway was opened, that it was realised that independent advice was needed not only on making roads more attractive but on selecting the routes they should follow. Since its inception in that year, the Landscape Advisory Committee has been involved from the earliest stage of route proposals. Its advice is not shouted from the rooftops or expressed in letters to The Times, and the value of its contribution is perhaps not generally realised, but it is taken seriously within the department.
If I may be allowed one more date, I should say that it is now 30 years since the department appointed its own landscape architect. Now each regional office has its own landscape architect, and consultant environmental specialists are regularly employed. A recent development has been the use of a landscape clerk of works during the construction of specific schemes.
The department's commitment to good practice is developing and improving. The report of a major consultancy on the environmental treatment of inter-urban roads is expected this year. Regional staffing has been increased and £2 million was allocated this year for environmental improvements on existing roads. I am sure that is a measure the Road Beautifying Association would have welcomed. But now our concern extends much further—to the preservation of hedgerows as well as the planting of new trees; to the sowing of wild flowers on verges, and to less visible measures like drainage to protect the delicate ecological balance of neighbouring sites, or tunnels for badgers to cross the road. We have even constructed an artificial sett at a secret location.
16
All trunk road schemes are environmentally assessed. The criteria include traffic noise, visual intrusion, air pollution, community severance and the effects on agriculture, heritage and conservation areas and on all aspects of ecology from dormice to listed buildings. The methods are set out in the department's Manual of Environmental Appraisal which is a pioneering handbook of procedures. It is now being revised and we are discussing that revision with organisations such as the Nature Conservancy Council (which has been involved in training sessions for our road engineers) and English Heritage. We also expect shortly to receive the report of the Standing Advisory Committee on Trunk Road Assessment on giving monetary values to environmental effects. That is an important topic. The committee advised us against such a course previously, and some environmental organisations are strongly opposed to that concept. We have also commissioned research on the methods available for undertaking such assessment.
As your Lordships will be aware, road schemes are also subjected to economic assessment, and we are constantly refining our methods in that area also. We bring the two assessments together in an assessment framework, which includes the effect of doing nothing as well as the proposals for improvement, and that is made available to the public.
We do not, and we should not, claim that building new roads and improving existing routes has no impact on the countryside or the environment more generally. But our policy is clear. Wherever possible roads are kept away from protected areas such as areas of outstanding natural beauty and sites of special scientific interest, and where there is a risk that a proposed scheme will affect such an area it is examined with particular care to establish that a new road is needed and that the route has been chosen to do as little damage to the environment as practicable. In national parks the Government are committed to ensuring that no new trunk route will be constructed or an existing road upgraded unless there is a compelling need which cannot be met by any reasonable alternative means. Special attention is also paid to the effects of new roads on inalienable land owned by the National Trust.
There will be times, even when the interests of nature conservation have been carefully weighed, when these have to be overridden by more pressing legitimate interests; for example, a bypass which the people of a town or village desperately need to improve their environment may impact on an area of much loved or protected countryside. There are many hard choices to be made, and decisions will continue to be controversial on occasions. But much can and is being done to ensure that the impact of road improvements is mitigated. There are even positive gains. During the preparation of the M.40, the Nature Conservancy Council supported the department's proposals at public inquiry because they involved a net gain as a new habitat was created by planting blackthorn for the black hairstreak butterfly. There was a spin-off as valuable research experience was gained on the recolonisation of that butterfly. For

17
many wild flowers, road verges prove the last refuge from weedkiller. Over 600 species, including 27 of the rarest, are found on road verges, and on the A.1 a site of special scientific interest has been designated because of a rare plant.
I hope that I have made our commitment to a "general environmental duty", to take the words of the amendment, clearer to your Lordships. We shall insist that privately financed roads are environmentally assessed to no lower standards than publicly financed roads, that they are designed as sensitively and that their adverse effects are properly mitigated.
Noble Lords may ask why I cannot therefore accept this amendment, or at least the speech behind it. It is because it singles out privately financed roads, while our underlying philosophy is that privately financed roads should be treated like conventional ones. They should be treated no more and no less favourably as regards their appraisal and authorisation. If it were appropriate to enshrine a general duty in statute it should be done for all roads. However, to do so would be beyond the scope of this Bill. I shall of course draw the attention of my right honourable friend the Secretary of State to the remarks made by my noble friend Lord Renton.
But in any case a general provision is not needed or justified. The requirements for environmental assessment are part of Community law and will apply alike to publicly and privately-financed roads. We are committed to the highest standards in selecting, designing and building our roads. Privately-financed roads will not escape the net. Let me stress once and for all that the statutory procedures which apply to the authorisation of publicly funded special roads will apply to the toll roads provided under this Bill in exactly the same way. The only difference is that there will be an additional order—the toll order required by Clause 6. The reason why I can say this with complete confidence lies in the very first clause of the Bill. Clause 1(1) defines a concession agreement in terms of a "special road". "Special road" is defined in the Highways Act 1980 and includes existing motorways. Clause 1 applies the Highways Act provisions to concession roads in the same way as they apply to other special roads, except where the Bill provides otherwise. The provisions of the Highways Act which apply include the authorisation procedure in Section 16—the procedure by which publicly funded motorways are authorised. They also include—and this is the crucial point—the requirements of Section 105A on environmental assessment. Those requirements relate to, but do not restrict or supersede, the requirements of Council Directive No. 85/337/EEC on environmental assessment and apply to roads for which the Secretary of State is the highway authority. Section 105A is now part of the Highways Act 1980, though, as noble Lords have said, it was added later by regulations under the European Communities Act 1972. To complete the story, there are comparable provisions which apply the Council directive to local authority special roads.
My noble friend Lord Renton and the noble Lord, Lord Clinton-Davis, questioned the legal obligation to implement such an assessment. The legal weight of
18
requirements of the Council directive and Section 105A of the Highways Act lie in Schedule 2 of the 1980 Act. The environmental requirements are essential procedural requirements. If they are not followed, application can be made to have the authorising scheme under Section 16 struck down. That is clearly provided in paragraph 2 of Schedule 2 of the 1980 Act.
The mandatory assessment is clear from the Council directive. Article 2.1 states that:
"Member States shall … ensure that before consent is given, projects likely to have significant effects on the environment by virtue of their nature, site or location are made subject to an assessment with regard to their effects".
The concessionaire is not a free agent in that respect. The schemes and orders authorising the road are made by a highway authority. They are subject to public inquiry. Any failure to take due account of environmental matters would be challenged in the courts and the order could thus be quashed.
My noble friends Lord Renton and Lord Norrie and the noble Lord, Lord Clinton-Davis, quoted precedents in other Acts, notably the electricity and water Acts of recent years. However, those deal with cases in which the private concern seeks its own authorisation for its own development. In the case of concession agreements the private concern will act under the authorisation of the Secretary of State, whose authorisation requires compliance with the directive.
My noble friend Lord Renton expressed the wish that we could make that clearer in the Highways Act. No doubt one day Parliament will enact a consolidation of the Highways Act 1980 which will make that provision and other additions which have already been made to that Act more easily accessible. However, your Lordships know that consolidating Bills, like all legislation, must take their turn in the queue. Meanwhile, I am assured that the legal works of reference used by practitioners incorporate Section 105A in the printed text of the Highways Act 1980 and that copies of the directive are readily available to practitioners. Nevertheless, I shall, of course, draw the attention of my right honourable friend to what my noble friend said on the matter.
Lord Renton: My Lords, before my noble friend moves on perhaps I may remind him that the Highways Act 1980 was a consolidation Act and contains between 200 and 300 clauses. That point is linked with his statement that to amend the law as suggested would be beyond the scope of the present Bill. However, if he looks at the Long Title of the present Bill he will see that it is pretty wide and that in any event only a very small amendment to the Long Title would be necessary in order to enable the law to be strengthened in the way suggested.
Perhaps my noble friend will mention that point to his right honourable friend. I am grateful to him for saying that he will in any event invite the attention of his right honourable friend to what noble Lords have said.
Lord Brabazon of Tara: My Lords, I may not have made clear earlier that I will mention that point to my right honourable friend. I had intended to make that clear and I happily do so again.
The noble Lord, Lord Clinton-Davis, asked me to give chapter and verse in my explanation of my refusal to accept the amendment. I hope that I have done so. I have given the assurances which I believe your Lordships required. I hope that your Lordships will therefore agree that the amendment is unnecessary. Far from clarifying the relationship between Part I of this Bill and the Highways Act, I submit that it would confuse it further. I hope, but I do not expect, that I have satisfied the noble Lord, Lord Clinton-Davis.
Lord Clinton-Davis: My Lords, I agree entirely with that last proposition. It is the only point on which I am able to agree with the noble Lord.
The noble Lord, Lord Renton, raised some extremely cogent points which were not answered satisfactorily by the Minister. The Minister's chapter was$$$ very short and his verse left a little to be desired.
One of the points that the noble Lord, Lord Renton, quite rightly addressed was the great complexity of the law as it stands today. The directive was agreed at my very first Council of Ministers meeting. I did not negotiate it and cannot claim responsibility for it, but on a number of occasions I said that I thought that it had too many lacunae and that it was too permissive. My recommendation to the Commission was to re-examine the position within two or three years of the directive coming into operation. I see no reason to resile from that position today. One reason is that major projects can be undertaken and be free of the rigours of environmental impact assessment. That needs to be looked at, but it is a wider issue.
I dissented from what the noble Lord, Lord Renton, said only in regard to the concluding passages of his speech in which he asked the Minister simply to invite the attention of the Secretary of State to our concerns. I am sure that the Secretary of State, as an extremely diligent Minister and in preparation for the debates that will be held in another place, will read in the Official Report the debates that we have had here. Simply to ask the noble Lord to do that—which he willingly agreed to do—is nothing like sufficient to allay our concerns. Therefore, we shall have to take the opinion of the House.
The noble Lord, Lord Tordoff, drew attention to the fundamental difference between private developments. Private developments may prove to be a very good idea. They may supplement the capacity of highway authorities, including the Secretary of State, to undertake major construction. It is therefore all the more necessary that we should protect the environment specifically. That was the point made by the noble Lord, Lord Hunt.
I go further and say that this is a test of that committee of Ministers who are supposed to assess
20
their own departmental policies against environmental requirements. It is a test which the Minister has indicated his department is not prepared to carry out very forcefully.
The noble Lord, Lord Norrie, asked why the Department of Transport could not behave like other departments. I do not want it to behave like some other departments! Nonetheless, the Minister did not respond adequately to the point about precedent.
I turn now to the Minister's response. He touchingly told us that the Department of Transport was environmentally inclined and had been environmentally inclined for many years. It is not inclination that we want; it is commitment. The fact that the department has employed landscape architects and has done all these lovely things to embellish the roads is not a sign of the sort of commitment that people in this country are demanding, particularly in the light of the Government's own assertions in their own paper on the environment which is so critical.
This is not a very radical proposal to put before the House. It is common sense; it is not all that radical. If the Minister wants to be tested on his own department's inclinations, what about the Nazeby debate? What about the way in which it threw overboard the considerations about protecting a major environmental heritage? What trust do we have in that sort of conduct?

The Minister said that economic assessment and environmental assessment would be brought together. However, as this would not be done satisfactorily or in a sufficiently comprehensive manner, it is all the more necessary to examine the possibilities. Again, the noble Lord, Lord Renton, was right in saying that it is not too much to expect, within the Long Title of the Bill, that that could be done. It does not require much imagination.
There is a very big difference between an obligation to carry out an environmental impact assessment and an obligation to implement the assessment. That is a point, among many others, that the Minister singularly failed to address in his response, which left a great deal to be desired. I feel that we have to test the opinion of the House.
Lord Harmar-Nicholls: My Lords, before the noble Lord sits down, I wonder whether he is wise to suggest pushing the amendment to a vote. My noble friend offered to draw the Secretary of State's attention to what had been said. In the hope that he will be swayed by the arguments, we are more likely to get what is wanted. But if the noble Lord pushes the amendment to a vote and the vote goes against it, the Minister will be entitled to say that the House voted against the proposal. I suggest to the noble Lord—he is an experienced parliamentarian—that the wisest course is to allow the Bill to proceed on the basis of the undertaking given in the hope that the impact of the argument will be of service in the other place.
Lord Tordoff: My Lords, is this within the rules of order? It is now clear that the noble Lord had sat down.
Lord Harmar-Nicholls: My Lords, I prefaced my remarks with the phrase, "Before the noble Lord sits down". The noble Lord, Lord Tordoff, should be aware of the procedure.
Lord Clinton-Davis. My Lords, I am not as familiar with the rules here as I am with those in the other place where they are often avoided. I am however familiar with the interventions of the noble Lord, Lord Hamar-Nicholls. I have seen him in operation over a few years, and I do not find his entreaty in the least beguiling.
4.3 p.m.
On Question, Whether the said amendment (No. 1) shall be agreed to?: Their Lordships divided: Contents, 96; Not-Contents, 110.

Division No. 1

CONTENTS

Addington, L.

Kilbracken, L.

Ampthill, L.

Kirkhill, L.

Ardwick, L.

Listowel, E.

Attlee, E.

Longford, E.

Barnett, L.

Lovell-Davis, L.

Birk, B

McIntosh of Haringey, L.

Blackstone, B.

Mackie of Benshie, L.

Blease, L.

McNair, L.

Bonham-Carter, L.

Marsh, L.

Boston of Faversham, L.

Mason of Barnsley, L.

Bottomley, L.

Mayhew, L.

Broadbridge, L.

Milner of Leeds, L.

Brooks of Tremorfa, L.

Mishcon, L.

Bruce of Donington, L.

Molloy, L.

Callaghan of Cardiff, L.

Monkswell, L.

Carmichael of Kelvingrove, L.

Monson, L.

Carter, L.

Morris of Castle Morris, L.

Cledwyn of Penrhos, L.

Mulley, L.

Clinton-Davis, L.

Newall, L.

Cocks of Hartcliffe, L.

Nicol, B.

David, B.

Norrie, L.

Donaldson of Kingsbridge, L.

Northfield, L.

Dormand of Easington, L.

Ogmore, L.

Ennals, L.

Parry, L.

Ewart-Biggs, B.

Peston, L.

Ezra, L.

Pitt of Hampstead, L.

Falkland, V.

Prys-Davies, L.

Foot, L

Richardson, L.

Galpern, L.

Robson of Kiddington, B.

Gladwyn, L.

Roll of Ipsden, L.

Graham of Edmonton, L. [Teller.]

Sainsbury, L.

Salisbury, Bp.

Grey, E

Seear, B.

Grimond, L.

Selkirk, E.

Hanworth, V.

Shepherd, L.

Harris of Greenwich, L.

Stallard, L.

Hatch of Lusby, L.

Stedman, B.

Henderson of Brompton, L.

Stoddart of Swindon, L.

Hirshrield, L.

Strabolgi, L.

Hollis of Heigham, B.

Taylor of Blackburn, L.

Holme of Cheltenham, L.

Tordoff, L. [Teller.]

Houghton of Sowerby, L.

Underhill, L.

Hunt, L

Whaddon, L.

Hutchinson of Lullington, L.

White, B.

Irvine of Lairg, L.

Williams of Elvel, L.

Jay, L.

Wilson of Rievaulx, L.

Jeger, B.

Winchilsea and Nottingham, E

Jenkins of Putney, L.

Winterbottom, L.

John-Mackie, L.

NOT-CONTENTS

Acton, L.

Blatch, B.

Arran, E.

Blyth, L.

Astor, V.

Boardman, L.

Belhaven and Stenton, L.

Borthwick, L.

Beloff, L.

Boyd-Carpenter, L.

Bessborough, E.

Brabazon of Tara, L.

22

Bridges, L.

MacLehose of Beoch, L.

Brougham and Vaux, L.

Manchester, D.

Butterworth, L.

Mancroft, L.

Caithness, E.

Margadale, L.

Campbell of Alloway, L.

Merrivale, L.

Carnegy of Lour, B.

Mersey, V.

Carnock, L.

Milverton, L.

Carr of Hadley, L.

Morris, L.

Carrington, L.

Mottistone, L

Cavendish of Furness, L.

Mountevans, L.

Clanwilliam, E.

Mowbray and Stourton, L.

Cockfield, L.

Munster, E.

Colnbrook, L.

Murton of Lindisfarne, L.

Constantine of Stanmore, L.

Nelson, E.

Cottesloe, L.

Nugent of Guildford, L.

Darcy (de Knayth), B.

Onslow, E.

Davidson, V. [Teller.]

Orr-Ewing, L.

De L'Isle, V.

Oxfuird, V.

Denham, L. [Teller.]

Palmer, L.

Effingham, E.

Park of Monmouth, B.

Elibank, L.

Pender, L.

Elles, B.

Quinton, L.

Elliot of Harwood, B.

Reay, L.

Fanshawe of Richmond, L.

Renwick, L.

Fraser of Carmyllie, L.

Rippon of Hexham, L.

Fraser of Kilmorack, L.

Rodney, L.

Gainford, L.

Roskill, L.

Gainsborough, E.

Saint Albans, D.

Gisborough, L.

Selsdon, L.

Hailsham of Saint Marylebone, L.

Shannon, E.

Shaughnessy, L.

Harmar-Nicholls, L.

Stevens of Ludgate, L.

Harmsworth, L.

Strange, B.

Harvington, L.

Strathclyde, L.

Haslam, L.

Strathmore and Kinghorne, E

Henley, L.

Swinfen, L.

Hesketh, L.

Terrington, L.

Hood, V.

Teviot, L.

Hooper, B.

Thomas of Gwydir, L.

Hylton-Foster, B.

Trefgarne, L.

Ilchester, E.

Tryon, L.

Jeffreys, L.

Vaux of Harrowden, L.

Johnston of Rockport, L.

Waddington, L.

Killearn, L.

Wade of Chorlton, L.

Knollys, V.

Westbury, L.

Lindsey and Abingdon, E.

Wharton, B.

Long, V.

Whitelaw, V.

Lyell, L.

Willoughby de Broke, L.

McColl of Dulwich, L.

Wynford, L.

Mackay of Clashfern, L.

Resolved in the negative, and amendment disagreed to accordingly.
Clause 13 [Further provisions as to charging of tolls]:
4.10 p.m.
Lord Swinfen Lord Swinfen moved Amendment No. 2:
Page 8, line 34, leave out ("which specifies maximum tolls").
The noble Lord said: My Lords, in speaking to Amendment No. 2 I should like also to speak to Amendment No. 3 which is tied in with it. The amendment would exempt disabled people who are entitled to vehicle excise duty exemption—that is, those with mobility allowance—from tolls on the new toll roads. The amendment tabled by my noble friend the Minister at Report stage exempts disabled people in receipt of vehicle excise duty exemption only where tolls are subject to a maximum. In effect that means that the exemption will apply only at estuarial crossings and bridges and where there is no convenient free alternative. That will not include most of the new toll roads.
That is not a concession at all. There is currently a reduced rate for holders of VED exemption or orange

23
badge holders at many tolls or bridges. The House will know that at previous stages of the Bill I have tried to get exemption for all orange badge holders but I have now reduced it to VED exemption holders only. At Report stage my noble friend the Minister said that he had been in correspondence with the Joint Committee on Mobility for Disabled People, the Spinal Injuries Association and RADAR, explaining his views. All those organisations wrote to him stating that a toll was a tax on mobility and that disabled people should be exempt from tolls on the new toll roads.
Those organisations also reiterated their view that disabled people in receipt of vehicle excise duty exemption should be exempt from tolls on the new toll roads. A toll is effectively a tax on mobility, and one that able-bodied people can avoid. It is not one that disabled people who are transport-handicapped can avoid. The principle of exemption for disabled people from certain motoring taxes such as petrol tax and vehicle excise duty is long established and should be continued in this Bill. I beg to move.
Lord Clinton-Davis: My Lords, I shall be very short. I support to the full the arguments that have been adduced on this and on previous occasions by the noble Lord, Lord Swinfen. If the Minister is not prepared to respond adequately I believe that the opinion of the House should be tested. I have nothing to add to the many debates that we have had on this matter. The onus is now on the Minister to satisfy us that he is taking it sufficiently seriously.
Lord Tordoff: My Lords, in rising to support this amendment, to which my name is added, I have little more to say, save that almost by definition the roads we are talking about are roads that will be the "best route"; otherwise the commercial undertaker would not build the road. The reason why people will not always use them is the tolls. These "best routes" should be available to the maximum possible for people who suffer from disabilities. That is why I support this excellent amendment. I hope that by now the Minister will have got round to understanding what the amendment is about and will make a concession in regard to it.
Lord Brabazon of Tara: My Lords, I am grateful to my noble friend Lord Swinfen and also to the noble Lords, Lord Clinton-Davis and Lord Tordoff, for putting down these amendments. I am glad to see that in these amendments my noble friend has accepted that the orange badge scheme would not have been a suitable basis for exemption and eligibility for vehicle excise duty exemption should be the means by which we, or, more precisely, the concessionaires of privately financed roadways, should ensure that the charging of tolls on road facilities does not restrict the mobility of people with disabilities. Given that the number of those eligible for vehicle excise duty exemption is not great, we believe that the private sector would not have hesitated to offer exemption from tolls to disabled people on any road or crossing, whether or not there were free alternatives. On the other hand, I recognise the importance to my noble friend and the
24
groups to which he has referred of a statutory exemption and the strength of the arguments which he and other noble Lords have brought to bear.
We are keen to promote the interests of those who have disabilities and to take all steps possible to improve their mobility. In practice I do not believe that a statutory exemption on facilities authorised under this Bill for those already claiming VED exemption would be objectionable. I am therefore willing to concede my noble friend's arguments and to accept his amendments. I can also give the House the assurance that a parallel amendment to apply the same exemption to tolls referred to in the Scottish part of the Bill will be tabled in another place.
Lord Swinfen: My Lords, I should like to thank my noble friend for his concession. I am glad he has acted in this way because it saves me from pressing the matter to a Division as I would otherwise have done. I am also grateful to him for saying that a suitable amendment to the Scottish part of the Bill will be brought forward in another place.
On Question, amendment agreed to.
Lord Swinfen Lord Swinfen moved Amendment No. 3:
Page 8, line 35, leave out ("which is subject to a maximum").
The noble Lord said: My Lords, I beg to move Amendment No. 3. I have already spoken to it.
On Question, amendment agreed to.
Clause 66 [Duty of undertaker to reinstate]:
Lord Swinfen Lord Swinfen moved Amendment No. 4:
Page 38, line 35, at end insert:
( "( ) He shall ensure that when reinstatement takes place this includes any reinstatement of any existing measures designed to facilitate the convenient passage of disabled persons or other persons using the street.").
The noble Lord said: My Lords, this amendment is intended to ensure that any existing measures such as tactile pavements and dropped kerbs are replaced when streets are reinstated after repair. Arguments in favour of this amendment were well aired at Committee and Report stages. It is vital that street works should not result in a deterioration of street access. It should not need to be stressed how important dropped kerbs and tactile pavements are to blind people and wheelchair users.
I quote from col. 442 of Hansard of 24th January 1991 when the Minister said:
"Such matters are best left to codes of practice … but tying us to what is written on the face of the Bill could be of disbenefit to the people affected by the amendment".
We accept that the Bill is not the place for precise details; they should be left to codes of practice. However, there should be some reference in primary legislation to the fact that existing provision must be replaced. The problem with codes of practice is that they are exactly that—codes—and are therefore not legally binding.
This amendment also states that provision which is of benefit to other persons using the street must be replaced. It is obvious that street works may affect provision of various amenities for able-bodied people as well. That is what I have tried to cover at the same

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time, and it means that I may have the wording slightly wrong. Dropped kerbs are also beneficial to people with prams—not only to the babies in them but to the mothers pushing them—and to people using shopping baskets on wheels. I beg to move.
Lord Tordoff: My Lords, I should like to support this amendment. We debated the point at length during earlier stages. At Report stage I referred to tactile pavements and in particular to the one outside St. Stephen's entrance, and your Lordships will remember that the Government were able to use their influence on Westminster council to ensure that there was a replacement. I have to say to the Minister that it has not yet been replaced and I look forward to the day when it is.
It is clear that to remove suddenly the existing provision whereby wheelchair users and the visually handicapped are accustomed to having assistance at these places can have a devastating effect. Even if the Government cannot accept the wording—as the noble Lord, Lord Swinfen, pointed out, that may be a little difficult to achieve—nevertheless I hope that they will in principle accept that this amendment ought to go on the face of the Bill as a measure of the Government's intention to assist people who have such difficulties.
Lord Brougham and Vaux: My Lords, I support my noble fiend the Minister in this amendment. I believe that an earlier amendment was not acceptable to the utilities in that it was proactive and meant that the utilities had to put in something which was not there. As this amendment reinstates something which was there, it is quite acceptable and I support it.
Lord Underhill: My Lords, my noble friend Lord Clinton-Davis put his name to this amendment and on behalf of the Opposition I should like to say that we fully support its terms. If, by any chance, the Minister feels that he cannot accept the wording, I hope that he will accept the principle and pass the provision on to the other place to ensure that it is incorporated in the Bill when it is discussed further. We support the entire principle of this amendment.
Lord Brabazon of Tara: My Lords, my noble friend will know from an earlier debate on a similar amendment that I am entirely sympathetic to the objective. However, I argued that the detailed guidance to be included in the approved code of practice was the proper place for the requirement to reinstate features provided for the assistance of blind and disabled people.
As a matter of interest my noble friend queried the legal aspects of the codes of practice. I merely draw his attention to the following clause, Clause 67(4), which deals adequately with that point. I have reflected on the arguments put forward by noble Lords and accept the strength of feeling expressed on all sides of the House on this matter. I regret that my noble friend's present amendment is technically defective in a number of respects. Moreover, an amendment to the corresponding Scottish provision will also be required.
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However, I accept the amendment in principle and suitable amendments to the Bill with like effect will be brought forward in another place.
With that assurance, I hope that my noble friend will feel able to withdraw his amendment.
Lord Swinfen: My Lords, I thank my noble friend for his comments. I looked very quickly at subsection (4) of Clause 67 and I note that it says:
"The Secretary of State may issue or approve for the purposes of this section codes of practice".
It says "may" and not "shall".
However, I am sure that codes of practice will be issued. I am delighted that the Minister is prepared to bring forward a more satisfactory form of words to be inserted in the Bill in another place. For my own education I should be very interested if he would be kind enough to arrange for me to receive a copy of the wording. In the meantime, I beg leave to withdraw the amendment on the undertaking that he has given.
Amendment, by leave, withdrawn.
An amendment (privilege) made.
Lord Brabazon of Tara: My Lords, I beg to move that this Bill do now pass. In doing so I should like briefly to thank all noble Lords who have taken part in these debates.
It is somewhat unusual for a Bill of t his kind to be taken first in this House rather than another place; though as it happens there is an excellent precedent in the Public Utilities Street Works Act 1950, which Parts III and IV of this Bill are replacing. This has involved dealing with quite technical legislation which has not been through the refining fire of Commons Committee and Report. One consequence of that, I fear, has been a rather large number of government amendments, the vast majority of which have been purely technical. I should like to thank all noble Lords for their patience and good humour in dealing with these rather tedious aspects of the Bill.
I am glad to say that these technicalities have not stood in the way of serious and well informed debate on the substance of the Bill. This House prides itself on taking the longer and broader view, avoiding the cut and thrust of adversarial politics, and I am glad to say that, although noble Lords on the Opposition Benches have often disagreed with the purposes of parts of this Bill, they have done so invariably in a courteous and civilised manner. In that respect I should like particularly to thank the noble Lords, Lord Clinton-Davis, Lord Underhill and Lord Tordoff.
This Bill has travelled a long way since it was first brought before this House. Second Reading took place on 20th November last year, which seems an age away to me—I do not know how other noble Lords will feel. Since that time it has been greatly improved, mostly in points of detail but also in some more fundamental respects. Without deviating from our essential policy we have been able to accommodate a large number of points raised by noble Lords on all sides of the House. In particular, we have made better and more explicit provision for the needs of disabled people. I believe that my noble friend Lord Swinfen

27
should take particular credit for having achieved many useful additions to the Bill in respect of the disabled. He has certainly been a champion of their cause. I am sure that these changes will be welcomed, even if they do not go as far as some noble Lords would like.
In Parts I and II of the Bill we are providing a new framework for privately financed roads. I have every confidence that the private sector is keen and ready to take up the challenge. The response to the schemes that the Government have suggested has been very encouraging, and I am sure that this Bill will provide a further boost to the initiative.
Parts III and IV of the Bill have been widely welcomed by your Lordships. As all noble Lords agree, reform of the law on utility street works is long overdue. As a result of the amendments made in this House there is now a more clear and workable set of powers and duties for highway authorities. Again, I wish to thank noble Lords opposite for their contribution to this part of the Bill. I also thank my noble friends Lord Brougham and Vaux and Lord Lucas of Chilworth who raised interesting points. I am pleased that in this part of the Bill we have been able to take account of the needs of blind and disabled people.
As I said, I expect that further improvements will be made in another place as a result of the work put in hand following debates on these issues. In short, I commend the Bill to your Lordships and hope that it will have as successful and trouble-free a passage through another place as it has had through this House. I beg to move.
Moved, That the Bill do now pass.—(Lord Brabazon of Tara.)
Lord Clinton-Davis: My Lords, I join the Minister in thanking all those noble Lords who have participated, extremely constructively, in improving the Bill in a number of material respects. As regards Parts III and IV, we said at the very outset that this is a necessary Bill. It is necessary to preserve the balance which had been achieved as a result of the degree of co-operation that had been undertaken by the highway authorities and public utilities in conjunction with the Government. I am glad to say that, up to the present at least, that balance has been preserved. That is not to say that all room for improvement has gone. There are still areas in Parts III and IV which deserve improvement. However, it is most important that the co-operation that has existed between the highway authorities and the public utilities should continue. It needs to go on in terms of development of the codes of practice to which the noble Lord, Lord Swinfen, referred and also to determine whether in due course of time new regulations need to be introduced to amend the provisions of this Act (as it will be) in the light of changing developments. Certainly one of the interesting and useful aspects that the Government have pursued in this Bill, and on which we have supported them very largely, is that it is necessary to do much by way of statutory instrument rather than new legislation.
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I also congratulate the noble Lord, Lord Swinfen, in having persuaded the Government—naturally, with our support—to undertake real improvements in this Bill for the disabled. That will redound to his credit for many years. I am proud that we on the Opposition Benches were able to participate very fully with him in that regard. We still have doubts about some elements of Parts I and II of the Bill. In our judgment, the environmental issues have not been sufficiently addressed. Members in another place will undoubtedly return to that theme.
When the Minister congratulated us on our civilised behaviour, I hope that he was not surprised. We try our best. As I have indicated on a number of occasions, the Minister has always been courteous and helpful and has written to noble Lords when he promised so to do. I have received a battery of letters from the noble Lord. I have never received so much correspondence, even from constituents. His example of ministerial helpfulness should be followed.
Finally I should like to pay tribute to my noble friend Lord Underhill who with his great experience has been a constant source of support to me, to the local authority organisations, to the public utilities, to groups representing the disabled and to many others who supplied us with very useful information that facilitated our work on the Bill.
I wish the passage of Parts III and IV well. When the Bill comes back to this House for consideration of amendments, I hope that it will be further improved.
Lord Tordoff: My Lords, an important debate is due to begin shortly and I shall not speak at length. I echo the sentiments that have been expressed from the Government Front Bench and from the Labour Party Front Bench. I welcome the interventions from all sides of the House. At an early stage I welcomed the first essay of the noble Lord, Lord Clinton-Davis, in relation to a Transport Bill. He will have realised by now that this is a very exclusive and almost private club to which few people are admitted. We have received assistance from the noble Lord, Lord Harmar-Nicholls, and good contributions have been made from all sides of the House.
I shall not repeat the matters which disappoint me: for example, the fact that I did not make much progress in relation to the near monopoly situation of toll roads.
Noble Lords will remember that at Report stage we discussed Amendment No. 132 that was moved by the noble Lord, Lord Brougham and Vaux. The amendment concerned the proportion of allowable costs that would be allocated between the utilities and the highway authorities. I suggested that a difficulty might arise if the proportions which were being written on to the face of the Bill were changed. The noble Lord, Lord Brabazon of Tara, in asking the noble Lord to withdraw the amendment, made it clear that the proportions had been agreed between the utilities and the local authorities.
I asked the Minister whether there was a system of arbitration, if there was to be change in the future. The noble Lord, Lord Brabazon of Tara, has been good

29
enough to write to me. He has explained the situation as he sees it; namely, that the Government do not expect that there will be changes in the proportions and that the situation has resulted from some fairly hard bargaining between the parties concerned. I should like to ask the noble Lord to consider the matter further before the Bill reaches another place. There may be occasions when one or other of the parties strongly desires to have the proportions varied but be unable to convince the other. It may be that in that event the Secretary of State is the arbiter, but at the moment the position is not entirely clear.
I thank the Minister for the courtesy that, as always, he has displayed in handling the Bill. As the noble Lord, Lord Clinton-Davis, stated, if the Minister cannot answer a question on the spot, he will reply in writing. That is extremely helpful. We all try to improve Bills. This Bill is in two parts, one of which is more political than the other. We have all longed for the second part since the Horne Report was produced. There is no doubt that holes in the road are a curse to the average citizen and there is very strong feeling about that subject on all sides of the House. If we have done nothing else, we shall have helped the average citizen to get about his town or city without having the road dug up under his feet once a week. We shall have made life better for road travellers and pedestrians. If the Bill can be improved in another place, so be it. However, I think that between us we have done a good job.
Lord Brougham and Vaux: My Lords, we have listened to some very useful debates on this subject, particularly in relation to Part III of the Bill. There is now a more clear understanding between the utilities, the local authorities, and the Government as to the provisions of the Bill. Many discussions have taken place between the utilities and officials from the department. Those discussions, together with our debates, have been instrumental in influencing changes to the Bill which go some way to restoring the balance. However, there is still more to be done and discussions are continuing in areas such as works after major road works and arrangements to be adopted where undertakers cause obstructions—to mention two areas that are of concern to the utilities. Those matters are to be be discussed by the Highways Authorities and Utilities Committee, and the Government have indicated that they will consider amendments if necessary.
There are three other serious issues which have only been discussed with officials: liability for damage or loss caused (in Clause 78); offences (in Clause 91), and the need for adequate defences to be included on the face of the Bill in a number of clauses. I hope that discussions will prove fruitful in relation to those matters.
When the Bill becomes an Act, it will undoubtedly modernise the execution of street works generally, replacing out of date and bureaucratic methods with sensible procedures that are more in tune with today's pace of life.
I should like to thank my noble friend the Minister and his department for their work in relation to the
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Bill to ensure that a proper balance is struck between the needs of the road users and those of utilities' customers. That balance, which has been painstakingly negotiated within the HAUC working parties, should not be compromised during the remaining stages of the Bill, which we look forward to seeing on the statute book in the near future.
Lord Harris of Greenwich: My Lords, I propose to deal with a point that was raised at Committee and at Report stage; namely the issue of whether or not police costs on the new toll roads will be met by the concessionaires. I shall not rehearse the arguments again. The Minister wrote to me after the Committee stage, in answer to a question that I had put to him. He stated that the Association of Chief Police Officers had not been consulted by anybody in relation to that matter. Since the Report stage I have received a letter from the Association of Chief Police Officers which gives their opinions on the question. Given the importance of the matter, I propose to quote their view.
"The overwhelming majority of my colleagues believe that Police resources should be funded by the concessions. The Chief Officer of Police for each area in which, roads are built should determine the additional resources required and the establishment increased accordingly. The concessionaire should meet the financial implications, after early agreement with the Police, based on existing formulae for optimum Police presence and road safety considerations."
It adds:
"If the tolled roads are of Motorway standard, the responsibility of emergency telephones, matrix signalling and extra Police Control Room staff, will have to be addressed".
That is the view of the Association of Chief Police Officers. I refer to it for the interest of the House and in particular to draw it to the attention of Members of the House of Commons who will consider the Bill. As was pointed out by my colleagues in Committee and on Report, that matter should be dealt with on the face of the Bill.
Lord Swinfen: My Lords, I thank my noble friend Lord Brabazon of Tara and the noble Lord, Lord Clinton-Davis, for their kind remarks. What little I have been able to do for disabled people could not have been done without the support of noble Lords who put their names to my amendments. They were the noble Lords, Lord Tordoff and Lord Clinton-Davis, and the noble Baroness, Lady Masham, who is not present today. I thank the Minister too for the way in which he has responded.
The Minister when moving the Motion that the Bill do now pass said that all noble Lords had behaved in an extremely civilised manner. I regret to advise him, and he knows well, that that is not entirely true. I remember that in Committee I responded to his remarks by suggesting that he had offered someone a glass of milk only for them to find out that it was sour. After reading Hansard I think that my remarks were harsh. I apologise to my noble friend and wish to put that view on the record.
Lord Brabazon of Tara: My Lords, I thank noble Lords who have taken part in this short debate. I am grateful for the kind words expressed about me and my officials in the Department of Transport. The

31
noble Lord, Lord Clinton-Davis, said that there is room for further improvement in the Bill when it reaches another place. I am sure that he is right, but only time will tell whether his ideas of improvement and mine are the same. However, I endorse his comments and those of my noble friend Lord Brougham and Vaux in saying that we hope that the highways authorities and utilities will continue to co-operate. We have welcomed their past co-operation.
The noble Lord, Lord Tordoff, whom I also thank for his kind words, asked me to add to my comment on a matter that he raised at an earlier stage; it concerned the proportion of costs and whether arbitration would be a proper procedure. I can only say that I shall look further into the matter and write to him.
The noble Lord, Lord Harris, again raised the issue of the costs of policing the new special roads and he quoted the views of the Association of Chief Police Officers. I responded in detail on Report, but we have not finally decided on the matter. I no doubt it will be raised in another place when the views of ACPO will be taken into account.
I am grateful to my noble friend Lord Swinfen for his apology for having suggested that my offer of a glass of milk was a glass of sour milk.
On Question, Bill passed, and sent to the Commons.

The Economy
4.43 p.m.
The Minister of State, Department of Trade and Industry (Lord Hesketh)The Minister of State, Department of Trade and Industry (Lord Hesketh): rose to move, That this House takes note of the current state of the economy.
The noble Lord said: My Lords, much has been written and said about the present state of the economy. However, I suggest that little attempt has been made to put recent developments in context. That is my purpose in calling this debate. I want to set the record straight and in particular to distinguish between the cyclical position of the economy and its underlying health.
First, I shall deal with the cyclical position. The reality is that from a very high level of economic activity, reflecting cumulative and sustained growth during the previous nine years of nearly 30 per cent. in total, output has been falling for the past six months or so. There is no shying away from this on the part of Government—business conditions are tough, tougher than they have been for years. Cyclical downturns when they come, as they inevitably do, are painful. Some jobs created during the upswing are lost and some firms which were started up when times were good go out of business. These developments are not welcome but they have to be faced up to rationally and recognised for what they are—part of the necessary dynamic process in a free market economy.
In the 1980s the UK's trend, non-inflationary, growth rate recovered from the depths plumbed in the
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mid-1970s to stand at about 2·75 per cent. per year. Noble Lords may be interested to know that, according to IMF and OECD studies, of the G7 major industrial countries, the UK is unique in achieving a potential growth rate back at its late 1960s level. No other G7 country has seen such a recovery; neither Japan nor the US. The potential growth rate of the UK economy is now above that of France or Germany.
In the four years to 1988 the actual economy, as opposed to the theoretical economy to which I have just been referring, grew at an average annual rate of 4 per cent.; that is the fastest four-year growth period since the Second World War. That rate could not be sustained. The economy was living beyond its ability to deliver the goods despite the big increase in productive potential resulting from the Government's supply side policies. Something had to give in the face of the excess demand, and that something was the rate of inflation. By 1986 we had succeeded in getting inflation down to 3·4 per cent., but it reared its ugly head again following a period when, it is clear with hindsight, monetary policy was allowed to become too lax. Inflation is, to borrow the phrase used by the noble Lord, Lord Callaghan, in his autobiography "the enemy at the gate". It wrecks stability and confidence and destroys the prospects for long-term growth and prosperity. That is why we have never shirked from taking whatever steps are necessary to bear down on inflation.
Those with short memories have suggested that we are currently in the grips of a recession of the 1980–81 variety. Others, of a more apocalyptic frame of mind, have drawn parallels with the 1930s. Both descriptions are wide of the mark. In the 1980s the UK enjoyed an unusually long period of growth reflecting major improvements in the underlying performance of the economy.
I wish to point out to those who would accuse me of being selective with my figures that the record since 1979 has also been impressive. GDP has increased by about a quarter in real terms. Business investment has increased by twice that, by more than 50 per cent.; and with greater quantity has come greater quality, evident from the return to profitability in recent years. That investment has been undertaken by more firms than ever before, with about a third more businesses operating in 1990 than in 1979. More firms employ more people than ever before. In the third quarter of 1990 total employment was 2 million higher than in 1979.
That list is by no means exhaustive but it indicates that companies are now more resilient and better able to cope with an economic downturn than they were a decade ago. Therefore, it is not surprising to find that in a recent survey of the largest UK companies 80 per cent. said just that. It will take more than a cyclical setback to wipe away these gains of recent years.
The gains have been given a firm foundation by the Government's continuing commitment to policies to reform the supply-side of the economy—policies directed at removing the straitjacket of restrictive practices and low incentives which by the 1970s had

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left the UK economy too ossified to respond to the changing structure and pattern of world demand. As a result, we seemed condemned to an ever falling share of world trade and a seemingly irreversible decline in relative standards of living.
I should like to pinpoint five key elements in the transformation under this Government. The first is the reform of trade union law. Managers have been given back the right and ability to manage. Industrial relations have improved out of all recognition. The number of industrial stoppages in 1989 was the lowest since 1935, while the number of working days lost in the year to last November was one sixth of the 1970s average.
The second element is tax reform. Five major taxes have been abolished—NI surcharge, investment income surcharge, capital duty, capital transfer tax and development land tax—and two more are to be abolished. Those are stamp duty on share transactions and (as I know my noble friend Lord Boyd-Carpenter will be the first to remind the House) composite rate tax on interest.
The remaining taxes have not escaped our attention. The basic rate of income tax has been slashed from 33 per cent. to 25 per cent., and the top rate from 83 per cent. to 40 per cent. The UK corporation tax rate at 35 per cent. is now one of the lowest in the industrialised world. The 1984 reform of the corporate tax system means that investment decisions are no longer governed by the availability of tax breaks: companies now have a clear incentive to choose between worthwhile and worthless investment. People are once again rewarded for taking risks, working hard, and investing in themselves.
The third key factor is deregulation. The Government have swept away the mass of unnecessary rules and regulations, and the red tape which distorted decisions and hampered enterprise. It is astonishing to recall that under Labour companies had to obtain permission before they invested abroad; to submit pay settlements to the pay board for scrutiny; and to seek clearance for the payment of a dividend.
The fourth factor is the help for small business that has been instrumental in rekindling the entrepreneurial spirit. The enterprise allowance scheme has encouraged over 440,000 people to start up on their own. The small firms loan guarantee scheme has helped to finance around 20,000 businesses.
Lord Bruce of Donington: My Lords, I am grateful to the noble Lord for giving way. Will the Minister explain how what he has been saying for the past eight minutes relates to the current state of the economy?
Lord Hesketh: My Lords, I am sure that the noble Lord, Lord Bruce of Donington, will be speaking later in the debate in your Lordships' House. One of the reasons the debate was called is that it is important to remind noble Lords of the foundations created in the past decade which have sometimes been overcome by smoke in more recent times.
The structure of capital transfer rates for small companies is now the most favourable in the EC and
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has been to the benefit of all. The massive increase in the number of those entering business on their own account and the continuing rise in the number of firms, despite the current downturn, shows that the entrepreneur, a species close to extinction in the 1970s, is once again alive and kicking. This Government's approach has given entrepreneurs renewed confidence to invest and take risks. The venture capital industry also was non-existent in 1979; but in 1989 members of the British Venture Capital Association invested 1·65 billion.
Last, but certainly not least, competition has been extended and encouraged wherever possible. By far the most dramatic restoration of the market has come through the privatisation programme. The fruits of the transformation are there for all to see in the return to profitability and growth in productivity throughout the public sector, and beyond. Indeed, across the entire manufacturing sector such have been the productivity gains that on average someone working in manufacturing now produces half as much again as he did in 1979.
It is well worth looking behind those aggregate figures at the transformation wrought in specific industries; for example, the United Kingdom motor industry. For a long time it epitomised all that was wrong with United Kingdom manufacturing. In the 1950s it was an internationally competitive industry with a large trade surplus. But the industry lost its way in the 1960s and 1970s. Market share fell in both domestic and export markets and eventually the trade surplus turned into a deficit as the industry reeled from the blows inflicted by poor productivity and poor industrial relations. Government policy only served to make matters worse through promoting a series of misconceived mergers, and eventually the only remaining major United Kingdom-owned car maker, British Leyland, had to be rescued by being taken into state ownership.
The story of the past few years has been very different. Productivity growth in the 1980s averaged 7 per cent. a year, an increase of some 80 per cent. in total. Days lost through strikes have fallen dramatically; the level in the second half of the 1980s was running at only one-tenth of that in the second half of the 1970s. Moreover, the state got out of the business of vehicle manufacturing by returning Rover Group and the other constituent parts of the old British Leyland to the private sector. And they have been very successful in producing cars that people want to buy both here and abroad, and producing them efficiently. Rover is now one of the most productive vehicle manufacturers in Europe, with output per employee more than three times as high as in 1979.
In common with other industries, output for the domestic market has declined recently as the economy has slowed. In response, manufacturers have switched their attention abroad: car production for export increased by a massive 45 per cent. in 1990 leaving total output virtually unchanged. Market shares have stabilised after decades of decline; that is clear evidence of the new-found resilience and flexibility of our motor industry.

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Looking beyond the current downturn, prospects for the UK motor industry look very good. Substantial investment in recent years, in particular by Japanese manufacturers, means that we can expect to see a sharp rise in UK production capacity over the next few years. New plant capacity for at least half a million cars a year will be up and running by the middle of this decade. And, contrary to the jibes which we sometimes hear, these are not just assembly plants using imported components. It is expected that the cars produced by Japanese owned manufacturers in the UK will quickly move towards a local content of 80 per cent. Sunderland-built Nissans, Burnaston-built Toyotas and Swindon-built Hondas should all in time contribute to a further substantial fall in the UK's trade deficit on cars.
The counterpart of those improvements in the supply side is an increase in real incomes. I have already made mention of the increase in profits but for the majority of people it is earnings that count. Real take-home pay for the average family has risen by almost one third since 1979. As real incomes have risen over time, so have the marketed wealth holdings of all groups in society; up by 60 per cent. on average in real terms since 1979. And the greater wealth of the nation is much more evidently and widely spread. Seven-and-a-half million more people than in 1979 have net assets worth more than £5,000 in real terms. There has been a three-fold increase in the number of shareholders since 1979. Privatisation, not to mention ESOPs and other schemes—from which about 2 million employees have already benefited—have helped in encouraging one-in-four of the adult population to become shareholders. Since 1979 owner occupation has risen steadily. Now more than two-thirds of British houses are owner occupied. The Right to Buy programme has transformed the council house sector; 1·5 million public sector dwellings have been sold.
However, progress does not stop at the front door. According to a recent study, almost all homes in the UK now have a colour television; a further 25 per cent. more than in 1980. Nearly three quarters of all homes have central heating; 10 per cent. more homes than in 1980. And one quarter more of all homes have a washing machine. Many in this Chamber will remember when those were unattainable luxuries for all but the few. Innovation fuelled by growth has brought them within the reach of the vast majority of families in this country.
This increase in prosperity is not unique to the UK. Other free market economies have seen their living standards rise. But in the UK they have recently been rising faster, reversing the trend of decades. Put simply, we have stopped the rot. In the 10 years to 1990, UK growth in GDP, investment and productivity was faster than in Germany, France or Italy. As a result, in terms of GDP per capita, the latest figures show that by 1989 we had significantly narrowed the gap with Germany and France, and put space between ourselves and Italy.
I have spoken at some length about past achievements. But what do those achievements count
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for now? They suggest forcefully that our current difficulties will not amount to a repeat of what we experienced in 1980–81. That is neither likely nor necessary. Then a severe world recession coincided with a long overdue restructuring of British industry. Now, as I hope I have made clear, the main problem is to squeeze out the consequences of the unsustainable rapid demand growth of 1987 and 1988. Over the past two-and-a-half years the commitment to bearing down on inflation has been unwavering. As in other areas, events in the Gulf make immediate prospects uncertain but the trend in inflation is manifestly downwards. Our current forecast for 5·5 per cent. inflation by the fourth quarter of this year is not just achievable but is at the pessimistic end of the range of current independent forecasts.
Joining the ERM has reinforced our anti-inflation policy and demonstrated plainly the Government's absolute commitment to get inflation down. Over recent months some people, including some who initially welcomed our decision to join, have begun to question our resolve to abide by our ERM obligations. But there can be no doubt that we joined at the right rate, and a rate at which British companies can compete in Europe. The excellent export performance of the motor industry highlights that fact. Indeed our central rate in the ERM of 2·95 deutschmarks is close to the average real rate over the previous decade.
There will always be calls for devaluation when the economy slows, whatever the level of the pound. But devaluation creates problems rather than solves them. Devaluation would throw away the benefits of lower inflation and can only undermine industry's competitiveness in the long term. In the 1970s, the pound depreciated by one-third. But United Kingdom competitiveness deteriorated by 20 per cent. because prices and labour costs rose more rapidly in the United Kingdom than in competitor countries. The Government have made a firm commitment to stick with the discipline of the ERM. The experience of other members shows that over time this will bring inflation down to the level of our European competitors. We are confident that low inflation will bring with it a return to sustainable growth. Past experience points to this outcome and the increased efficiency and flexibility of the economy increases its likelihood. And once inflation is decisively down we will be able to build on the achievements of the past 11 years and grasp the opportunities that those foundations have provided for the betterment of all in this country. I beg to move.
Moved, That this House takes note of the current state of the economy.—(Lord Hesketh.)
5.3 p.m.
Lord Peston: My Lords, I thank the noble Lord for his speech. Having heard it, I am in great difficulty: obviously, like other noble Lords, I did not know what the Minister was going to say. In the past 20 minutes I have not had time to rewrite my speech. Therefore, I hope that noble Lords will forgive me if I say that the economy the noble Lord described seems

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to bear no resemblance whatever to the economy I intend to talk about. It is as though we were discussing two completely different countries.
I hope that my remarks will be realistic, even sombre. I do not apologise for that. As I shall try to demonstrate, the present position is extremely bad. No government—I underline those words—can put matters right without taking decisions that will fall harshly on probably all members of the community. We read in the newspapers—and the noble Lord has confirmed my fears—that the Government will cut and run on the back of a successful conclusion to hostilities in the Gulf. I hope not. We also read of possible pre-election budgetary sweeteners. Again, I hope not. Indeed nothing could be more dangerous. The public must be told. We on our side will certainly tell them that there are no costless ways out of the position we are in. That does not mean that the problems are insoluble; merely that there are no quick and easy fixes.
I shall endeavour to present the problems in as professional and dispassionate a way as possible. If we can agree on what the problems are, there may be some meeting of minds on the solutions. Although I shall not hesitate to criticise the Government, it is not my intention to engage in political knockabout by saying. "You were worse than us." I am simply not going to waste your Lordships' time with that. Little of my contribution is devoted to the European Community. We have had such debates. I believe that EC matters are in danger of ruining discussion of more pressing issues. Noble Lords may choose for themselves, but I shall concentrate on the UK economy.
The present position may be summarised under five headings. First, inflation is too high. It is falling, but even on the most optimistic forecast it will stabilise at a level above what is compatible with stable membership of the ERM let alone any entry into EMU. Secondly, unemployment is too high. It is rising rapidly. It is impossible to forecast with precision when it will cease to rise or how it will ever start to fall again. Thirdly, the balance of payments on current account is still strongly in deficit. The deficit is falling but too slowly. It is not at all apparent when a surplus will emerge. Fourthly, output is falling. It should start to rise later this year but again it is difficult to see when we shall get back to a satisfactory long-term growth path. Fifthly, our underlying rate of growth, as the noble Lord said, has been restored to the level of the late 1950s and 1960s. However, it is still below what is desired. We have a long way to go on productivity.
All these difficulties are inter-related. I reiterate that any government, whether the next Labour or the present Tory government, will be unable to avoid them. All I can do today is to make some suggestions about how the problems might be solved. In doing so I shall concentrate largely on the short to medium term leaving the long-term questions, especially concerning growth and efficiency, to my noble friend Lady Blackstone.
I shall now say a few words about objectives. Clearly, we must do something about the problem of
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chronic inflation. At the same time unemployment on the scale of the past 12 years—followed by recent increases which look to take the figure well past the 2 million mark in the next couple of months—again reflects badly on the whole nation no matter what the political hue of its government.
The Government sometimes talk as though they give 100 per cent. weight to the inflation problem and zero weight to unemployment. I find that odd. It means that they would allow unemployment to rise to any level in order to deal with inflation. Others, including myself on occasions, have talked as though only unemployment matters. But that too is not a sensible position. We could not—even if we wanted to—protect full employment without paying due attention to accelerating inflation. That was the point of the remark made by my noble friend Lord Callaghan which the Minister quoted. Therefore, the question is: what weight should be attached to reducing inflation and what weight should be attached to reducing unemployment? I hope that the Government have now learnt to avoid the weasel words, "If you only concentrate on inflation, unemployment will take care of itself satisfactorily". Surely they must have learnt something—although listening to the noble Lord I am beginning to wonder —from the experience of the past 12 years.
When talking about objectives I wish also to say something about the external side. Surely we must agree that the current account has to be moved into surplus within the next five years, if not sooner. We need to restore the position of our net foreign assets. It is a commonplace to point out that the current account is related to a sustainable rate of exchange. I shall trespass for a moment on the territory of my noble friend Lady Blackstone. Investment in both the public and private sectors needs to be raised and kept high. I refer not only to plant and machinery but also to research and development and what is called investment in human capital; that is, training and education.
I shall not spend a great deal of time flooding your Lordships with numbers. It is interesting however, to consider a few calculations. If we start from the present level of gross domestic product and assume that it grows by its underlying or average rate over the next five years, it will be about 13 per cent. higher after that interval of time. It seems to me a pretty modest target to suggest that the current account should be in surplus by then. But for that to happen, four of those 13 percentage points must be transferred into the current account. If, then, investment is also given high priority—there is, I believe, no difference between any of us on that—and is encouraged to grow at, again, a modest rate of 5 per cent. per annum, that will take another five percentage points of the 13. The result is to leave only four percentage points of growth of GDP for consumer expenditure on the one hand and for central and local government current expenditure on goods and services on the other. That leaves the following problem.
If government current expenditure on goods and services grows at the same rate as GDP, private

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consumption expenditure cannot grow at all. Equally, if consumption grew fairly modestly, say, at 2 per cent. per annum—much less than in the past decade, which was excessive—then government current expenditure on goods and services would have to fall. Moreover, if transfer payments, whether on child benefit, pensions or the disabled, were to be given priority, even less would be available for consumption expenditure out of the income of those at work.
These figures will not be news for the Minister's Treasury advisers. I see that at least two former Chief Secretaries are present for the debate. The figures are not very different from the kind of material they used to get when they were in positions of power. Therefore, in drawing them to your Lordships' attention I do not claim novelty. I am simply addressing noble Lords in an endeavour to get them to see things realistically. Let me add that I am addressing noble Lords on my own side of the House at least as strongly as I am addressing noble Lords on the other side. I hope that noble Lords have understood the nature of my argument. I regard what I have said as fairly moderate. It would be no difficulty whatever for me, wearing my true professor of economics hat, to paint a much bleaker picture than the one I have just presented.
I must say a little more on inflation. We must tie the economic system down in an anti-inflationary way. Monetary targeting has failed; in my view, it could never have succeeded. Incomes policy appears to be unacceptable, although I remain an unapologetic supporter of it, albeit in a more sophisticated form than we have used in the past. We return therefore to a fixed exchange rate system with the exchange rate mechanism. It may be that the rate we have chosen is too high—whatever that means—and that the bands, as noble Lords know, are too broad. I have said that a slightly lower rate within the ERM with narrower bands would have been more desirable. But that is now all bygones; it is done. In that respect I strongly agree with the noble Lord, Lord Hesketh. Having done it, anti-inflation policy—our credibility—requires us to stick to the rate and convince people that we intend to do so. Whatever government are in power, if they say they regard devaluation as a viable option they are also saying that they accept that this country is inflation prone. Curiously therefore, devaluation would actually cause the Treasury to have to deflate the economy even more in due course.
What follows is that if we have lower interest rates in these circumstances, in the absence of dealing with the institutional forces which make us inflation prone, we must have a tighter fiscal policy. Given both the indigenous and exogenous pressures—they do not come from just our side of the political spectrum: they come extremely strongly from the other side—if we have these pressures for higher public expenditure, taxes must be increased. That is another way of saying that consumption must be reined back.
It was a mistake to lower taxes in the first place. Doing so was one cause of our present inflation. Despite some siren voices, we cannot lower them again
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now. As a Keynesian, I am amused to notice a new Keynesianism in the Government and in those supporting the Government. They say that the correct way to finance the Gulf war is by borrowing. They say that a budget deficit is acceptable in a recession especially if we are also engaged in hostilities. If they take that view I have to say that they cannot also advocate lower interest rates. In present circumstances, if monetary policy is eased, fiscal policy must be tightened; otherwise the present reduction in the inflation rate will be reversed before very long.
On the subject of siren voices, I cannot refrain from referring to the monetarists, who had better be nameless, who do want reductions in interest rates and taxes immediately. Keynes must be laughing in his grave. In fact he would accuse them of imprudence just as much as I do. More to the point, Professor Friedman must be wondering why he ever bothered with British monetarists and the British economy at all.
In this connection I note how modest is the Government's inflation target. The Treasury still seems to be content with reaching 5 per cent. per annum, which is above the EC average. Certainly the Germans seek to do better and will do better. I repeat that if we are to survive in the ERM, let alone enter EMU, 5 per cent. inflation is not a long-run viable position.
This takes us back to the central question of economic policy. How are we to maintain full employment subject to the constraints of not deviating from the inflation rates of our chief competitors? The Government have had a dozen easy years to solve this problem. I would emphasise how easy it was for them. They had North Sea oil; they had a big majority in Parliament. They had a dozen easy years to solve the problem. They have failed. Whether they failed wilfully or otherwise I shall not venture to say. They thought that attacking the unions or reducing the relative size of the public sector would solve the problem. They thought that administering the short, sharp shock or the blunt, long shock of large-scale unemployment would solve the problem. But none of it has worked. In every case they have failed.
The noble Lord is right to ask us to distinguish the short-run cyclical position from the long-run position. It is apparent that any attempt to run the economy flat out or get close to full employment leads inexorably, despite the Government's efforts, to an excessive inflation rate. It looks as if we have a choice between permanent widespread unemployment or massive inflation and, as I hope will be recognised, a new government who will tackle all this in a different way.
The trade unions have indicated that they are again willing to talk about these matters. They have said that they are willing to approach again the question of wage bargaining on a national scale and in a way which will be helpful. They were turned down out of hand by the Government last year when they made such offers. I am happy to say that the Prime Minister has reversed many of his predecessor's policies. Indeed, the political climate seems to be such that his

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predecessor had never existed. Now is the time for Mr. Major to extend the hand of friendship to the trade unions.
I have said that fiscal policy must remain relatively tight for the foreseeable future. I must add that where it is eased it must be to help investment and not consumption. How tight it needs to be depends upon how close we can get to, and how rapidly we dare approach again, full capacity working. Again, I reiterate the point. The improvements we have had so far in inflation and in the current account are cyclical in nature. In other words, they will not be permanent unless the Government announce that from now on they regard the figure of 2 million and more unemployed as being permanently acceptable.
There were those who argued that there was no trade-off between inflation and unemployment. They convinced Ministers of this, with the result that we now have both high inflation and very high unemployment. Worse than that, the desirable decline in unemployment, which we had until last year, went hand in hand with a rapid rise in inflation. Now we have a government-induced rise in unemployment to deal with the added inflation. Therefore, the unemployment-inflation trade-off remains; all that has happened is that the Government have made it a great deal more disadvantageous.
There must be a better way which would enable the economy to grow and keep itself near to something which could validly be called full employment, without giving rise to high inflation and large current account deficits. Efficiency measures which improve the quality of the labour force, improve the infrastructure and restore the position of manufacturing industry would help, but ultimately we must find a more rational way of settling nominal incomes.
In my view we can construct a set of institutions which would allow all sides of industry to set broad nominal income and expenditure guidelines but within which decentralised bargaining could take place. As I said, several trade unions tried to move us into that position last year. They were rebuffed. However, it is not too late. Even if this Government will not consider it, the next Labour Government will. The prize is too great to be thrown away. I say that because the prize is the restoration of full employment in a non-inflationary environment.
I cannot speak for those on the other side. But we on this side—that is, I, my noble friends and my friends in another place—will go for the objective of full employment without inflation from the moment we take power. Above all, we believe that the public want to be told the truth about our parlous economic circumstances. They do not want to hear false promises about how easy it is to improve matters. Harsh decisions need to be made and we on this side are certainly ready and able to make them.
5.22 p.m.
Lord Jenkins of Hillhead: My Lords, there is no doubt that our new Prime Minister, who in many ways has made an attractive and hopeful start, has inherited an economy which is in a most dreadful mess. One is
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inclined to feel some sympathy with him on that account. But then one pauses and asks from whom he inherited it: who was Chancellor of the Exchequer for the past year—admittedly not the period when the worst faults were made; but not a period of heroic correction either—and who was Prime Minister for the past 11½ years?
This Conservative Government, in their 12th year of untrammelled power, feel forced to throw everything into controlling a rate of inflation which is out of line with the world and which is entirely their own creation. They have to do this against a background of a cumulatively pathetic balance of payments performance and, still more serious, on the treacherous ground of a dangerous recession at home which, aided by the nervous psychology produced by the war, could easily spiral out of control. Meanwhile, favourable comparisons with the performance of other countries, which always depended largely on the statistical trick of pretending that the years 1980 and 1981 did not exist, look increasingly tawdry. I remember how the noble Lord, Lord Young of Graffham, in days that now seem almost infinitely remote, used to regale us from the Dispatch Box with a Panglossian view of Mrs. Thatcher's economic miracle.
The strategic fault was that inflation ought to have been attacked when the boom was running high and not left to be dealt with in the much more dangerous circumstances of bankruptcies, mounting unemployment and falling profits and confidence. But that was certainly not the mood of 1988 and 1989. I hesitate, as always, to introduce political controversy into your Lordships' House, but I must say that it is one of our more extraordinary national myths that the Conservative Party is the party of sound finance. All of our most profligate Chancellors have come from that party.
When I was at the Treasury there was an ingrained sense of official guilt that they had allowed that most amiable figure, Reggie Maudling, to do what he had done in the Budgets of 1963 and 1964, and a corresponding determination (about which there was not much need to worry) that I should not do the same in 1970. Then we had the noble Lord, Lord Barber, who was hardly a Gladstonian figure. He turned round every indicator for the worst, produced the highly unstable Barber boom and a most dismal end for the Heath Government. Then, most generously making the sins of his predecessors look like peccadilloes, we had Mr. Nigel Lawson and ultimately the position in which we find ourselves today.
There has been some tendency to seek an alibi in the exchange rate mechanism and to blame everything on four months of membership. To be fair, there has been no hint of that from Mr. Lawson or M r. Major—I suppose that they could hardly say so—but both the old and the new anti-Europeans have been hard at it. I notice that my very old friend Lord Wyatt of Weeford was among them in The Times this morning. He contributed the piercing thought that,
"Mr. Major has handled the British war effort precisely as Mrs. Thatcher would have done".

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I must say I regard that as being well within the category of the Duke of Wellington's famous remark apropos Mr. Smith. In other words, anyone who would believe that would believe anything. But, apart from that, he attributed a large part of the blame on the ERM for the economy being in a worse mess than it need be. The case is that the date and circumstances of our belated adherence to the ERM defy a respectable rational explanation. So many more favourable opportunities had been allowed to come and go. Of the 139 months which have elapsed since the establishment of the European monetary system, I would say that October 1990 was among the 20 per cent.—if not 10 per cent.—least favourable months in which to enter. I say that mostly because of the prevailing exchange rate with the deutschmark and because German interest rates were being forced upwards by the new responsibilities of the Federal Republic in the East. The only considerations on the other side were a shift in the balance of power within the Cabinet and the desire to produce an interest rate cut on the eve of the Conservative Party conference. I suppose that they could be regarded as rational reasons, but they were hardly respectable from the point of view of the national interest.
I have not the slightest doubt that earlier membership would have benefited us both in lower inflation and in lower interest rates. The same will be true in the medium run. The trouble is that we desperately need an interest rate reduction in the short run. Otherwise, the repercussive effects of the downturn in activity may become devastating for business confidence. It is ironic that the worst effects of the present slump should be concentrated upon the flowers of the enterprise culture, especially in the South-East, which has been so much the apple of the Government's eye. Yet there are, I suppose, some compensations in that; for it will make the Conservative Party more sensitive than most of it was to the industrial devastation, mainly in Scotland and the North of England, which was such a feature of the first half of the 1980s and which was left to sweat itself out, principally in Opposition constituencies.
The Government had to kill their own monster of inflation at 10 per cent. in a largely non-inflationary world, but I doubt whether it is right to concentrate on only one part of the dial on the panel, as the Prime Minister came near to doing last Sunday. It is generally a mistake to try to fly an aeroplane with such a narrow gaze. It is also, unfortunately, a little reminiscent of the concentration on the monetary madness—as I always regarded it—of the early 1980s when M1s, M2s, M3 and then MO—the indefinable in pursuit of the unattainable, as it was once described —now forgotten, were treated as eternal deities.
The Government will have to balance a number of different objectives, including some stimulus of the economy and of business confidence: a tightening of fiscal policy, combined with a slight loosening of monetary policy, which I regarded as right a year or so ago. Whether that is a possible combination, the recession having been left to reach its present position,
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I am not as sure as the noble Lord, Lord Peston. Nor am I as sure as he and the Minister that there might not have to be some readjustment of parities within the EMS. It would be the first for about seven years, although previously there were quite a number —11 altogether, I believe, carried through smoothly, and rightly not regarded as the traumatic equivalent of a Bretton Woods' devaluation.
It could conceivably be that, having gone in at the wrong time and probably the wrong rate, we shall need a settling-in one, but it should not be more than that. It could not be regarded as a vote of confidence in the state of the British economy, if we come to that, if we were the only country for seven years to need one. However, fortunately we are not being asked to give a vote of confidence today. Indeed, a vote of sympathy would be a good deal more appropriate, both to those who have to defend the Government's mismanagement which has taken place and to its victims throughout the country.
5.34 p.m.
Lord Stevens of Ludgate: My Lords, perhaps I may first apologise for the fact that I have to leave before the end of the debate. Unfortunately I did not realise that it would be starting so late and I have a long-standing commitment of which I am the host. Perhaps unfortunately for those present, I have to make another speech.
We are asked to note the state of the economy. I do not believe that many of us would dispute that it is in recession. It may not be productive to spend time discussing how we got there. However, let me just say that after the stock market collapse of October 1987 I went on public record stating that the fall in the stock market should be ignored. The reasoning behind that was simple: it was caused by a panic and what I described at the time as a "computer glitch"—basically, a larger than normal desire by investors to sell stocks worldwide was met by the virtual refusal of dealers to deal. The Government's view was that a collapse in the market must be telling us something, and the reading which they made—mistakenly—was further to inflate an economy which was already fast expanding.
A stock market collapse affects the economy most directly if private shareholdings are a substantial part of the market, because that affects personal wealth. Many commentators referred to 1929 which was irrelevant. In 1929, in the United Kingdom, private investors' shareholdings amounted to some 60 per cent. of the market capitalisation. Today, private investors directly own 20 per cent. A stock market collapse does not, therefore, have the impact on private wealth that it had many years ago. Having over-inflated the economy, we are now suffering the consequences.
The golden scenario, where again many commentators—and not only commentators—said that the national debt would be repaid by 2000; that income tax rates would drop to 20 per cent. or 15 per cent.;

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and that Government expenditure would continue to decline as a percentage of GNP, seems to have disappeared.
The reliance solely upon interest rates to control the economy is a mistake. They are too blunt an instrument. They take too long to have an effect, and, furthermore, this country is used to relatively high interest rates. Unless those rates, therefore, are maintained for a considerable time they will have little effect because everyone assumes that they will be reduced in the relatively near future, and so consumers do not adjust their spending habits. We should have used credit controls and fiscal means to restore the balance. There are, of course, ways around credit control as there are around high interest rates. Higher interest rates directly affect less than half of property owners Mortgage periods can be extended. There are low-start mortgages. Some building societies put their rates up only once a year.
One has only to look at the effectiveness of monetary policy in Germany and Japan to see that there are other means of controlling the economy. The administrative guidance issued by the Bank of Japan since the middle of 1989 is a fine example. Known as "window guidance", that credit control device reduces bank lending growth by imposing a limit relative to total loan growth in the corresponding quarter a year earlier. The limit currently stands at 66 per cent. As a result, hank lending in Japan has slowed dramatically and is having the desired effect on activity. The consequence is that although interest rates have been raised, they are much lower than in the United Kingdom.
Every time that this country has a major recession, as in 1980–81 and now, a portion of our manufacturing business is destroyed, making it even harder to climb back up the other side. That is why our trade deficit represents such a large proportion of GNP and is yet again at an unsustainable level. The same problem will arise when the Government reflate the economy this time, unless they take measures to encourage savings and capital investment.
However, having said that, I believe that thanks to this Government—I endorse the speech of my noble friend the Minister—we are in a better position than in the past to recover from the recession. Productivity has increased substantially over recent years and is capable of further improvement. Labour restrictions have almost disappeared. Management can manage. Substantial and vastly increased capital investment has taken place. The Government have encouraged savings with PEPs and TESSAs. They should continue doing so. They should not be deterred by the fact that the initial reaction is one of switching from less tax efficient means of saving. We must raise the savings level in this country, although a substantial improvement from 3 per cent. to 8 per cent. has been seen recently.
Thanks to this Government, therefore, the framework exists for a recovery from the present recession, but we should be in no doubt that the economy —to use a phrase often quoted —"fell off a cliff last summer". It was already falling rapidly before
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the Gulf war, but we should not allow ourselves to use the war as an excuse, or our judgment may well be clouded. It remains for me to say that I hope the policy of encouraging savings and encouraging the private investor—that probably means by fiscal means—will be continued and improved upon. Means will have to be found to encourage investment and to control credit and money supply more effectively in the future. We cannot use the ERM as a palliative to make up for our own failures in controlling inflation. However, there comes a point at which it may be better to have a modest degree of inflation and some growth rather than high unemployment and no growth. Our rate of unemployment on the whole is below that of the rest of the EC—considerably below in some cases. Sadly, it is probably true that in order to control inflation and return to a period of lower but steady expansion, unemployment would have to rise to nearer the EC level.
I believe that, for the reasons I have given, the recession, while severe, may be a temporary pause in a long-term expansion of the UK economy. However, a reduction in interest rates, which must occur sooner rather than later, will take time to work through. Lower rates may not encourage borrowing if industrial output is still declining and costs are being cut. Nor will it do so if the general mood is very depressed. Lastly, it will not do so if the banks are not prepared to lend. Businesses cannot change their current position—which is one of cutting costs as rapidly as they can, freezing recruitment and laying off employees—to one of expansion at the turn of a switch.
In my opinion, the economy will therefore continue to be in recession for some considerable time. The worry must be that if consumers start to feel more confident their requirements can only be met by imports which will compound the problem in the future. The aim must be to avoid the violent fluctuations and achieve steady and consistent growth.
5.40 p.m.
Lord Donoughue: My Lords, it is quite clear from every economic statistic published every day that the Government are in an economic mess. That is not a partisan point, it is a matter of objective economic numbers and, subjectively, of hardship and suffering for millions of people in our society. The CBI's latest survey of industrial trends graphically describes the bleak plight of British industry. It concluded that the prospects for production and employment are the worst since the recession of 1980–81. For exports, investment and profits are the worst for many years.
Output in the economy will surely fall by 1 per cent. or 2 per cent. this year. Investment in the third quarter was down 8 per cent. on the previous year; export prospects have turned massively pessimistic and unemployment is rocketing, probably towards 2·5 million by the end of the year; as bad on comparable numbers as in 1981. Business confidence has slumped. That is not simply part of a worldwide slump. The UK for example, is the only major country where production, investment and employment are falling. It

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is not because of the Gulf war; all those figures were collapsing before the war began. The detailed evidence of this economic failure is clearly set out, even in the Government's own announcements. I shall not continue with it and bore the House, I believe that there is no argument about it.
I wish to focus on two aspects of the present situation: how the Government slid into this predicament; and what are the economic policy alternatives to get the country out of the mess? The explanation of the economic failure is not difficult. It involved four successive phases of policy misjudgments between 1986 and 1990. Together they constitute, I am afraid, total monetary mismanagement.
Phase one was the deregulation of building societies in 1986 which, as the Bank of England has just admitted, released a credit bonanza. That was before the Stock Market collapse. I agree with everything the noble Lord, Lord Stevens, said on credit control. Phase two was the phoney boom generated for the 1987 general election, when existing monetary laxity was converted into profligacy in order to create the false mirage of the economic miracle. Where is that miracle now? Phase three was Chancellor Lawson's error in linking sterling to the deutschmark in 1987–88 at absolutely the wrong time. The German economy was then flat and needed the boost of lower interest rates. In Britain, already suffering from the monetary laxity to which I referred, the result was ballooning credit and inflation. The fourth, fiscal phase, was the final boost to inflation imposed by the poll tax and other Government-inspired social charges.
This mixture of monetary and fiscal ineptitude basically caused the present economic plight. The huge scale of the monetary failure has led inevitably to the huge scale of the credit crunch which is necessary to correct it. Millions of British people are paying the price in record bankruptcies, record mortgage debt and we are now heading for intolerable levels of unemployment.
What is the Government's policy in order to get out of this mess? It is not an easy task and my noble friend Lord Peston was honest in the way he faced that fact. The Government are boxed in, as I have said before. They need to cut interest rates to deal with the recession, for political reasons. However, they cannot reduce interest rates much and at the end of the year inflation will come tumbling down; but interest rates will not tumble far with it. The Government cannot reduce them far; they need to maintain the rates because it is necessary to squeeze wage rates and to keep sterling in line with the deutschmark in the ERM.
By targeting an exchange rate as we have done, especially at a perilously high level, we have lost room for domestic monetary manoeuvre. Like my noble friend Lord Peston, I agree with keeping to it now that we have it. However, there is a price to be paid for having entered the ERM at the wrong time and at the wrong rate. I agree with all that the noble Lord, Lord Jenkins, said about that.
Moreover, we have once again, as in 1987–88, targeted the deutschmark at a time when the German
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and British economies are out of phase. That is important: one is expanding, the other contracting. In 1987–88 this led Britain's credit boom, because our interest rates were forced lower, to become out of control. In 1991 it is pushing us deeper into recession by keeping our rates punishingly high.
Thus the Government are boxed in. In our debate in November, the noble Lord, Lord Hesketh, pulled my leg nicely by stating that there was no lid to my box. All right, I accept that. However, let him tell us how the Government will leap out. Let him show us that, contrary to appearances, the Government's policy is not lying dead in the economic coffin.
Of course, the Government could try some tricks: devaluation would temporarily ease the pressure on interest rates, but that would be an embarrassing confession of failure in the ERM. I was pleased that the noble Lord, Lord Hesketh, commendably rejected that. A quick khaki election might ease political pressure but that would be a fraud, not an economic solution. Either would duck the problem, not solve it.
What is the Government's policy? It appears that it is simply to wait until inflation and interest rates fall —as they will temporarily later this year—and hold a quick election as if the problems were solved. However, that would not be an economic solution; nor is it an economic policy. All it would show is that inflation can be reduced to 6 per cent.—still above the EC average. The balance of trade deficit can be reduced to £12 billion or £14 billion—which would still be worse than under any previous British Government—provided the economy is pushed into recession with 2·5 million unemployed. We know that. We have always known that we could do that; but I do not think that we want it. It does not constitute a proper economic policy. This country needs an economic policy which can achieve strong growth, high investment with low unemployment and without suffering rocketing inflation and trade deficits.
I listened to the Minister's remarks and I shall listen to what he says at the end of the debate. What the Government now apparently offer is a roller-coaster of credit booms and slumps with elections craftily slotted in between. Presumably, if pressed to define their economic policy, the Government would say that it was the same as the policy adopted over the past 15 years: that is, Thatcherism softened at the edges by Mr. Major's genuine social conscience which we all welcome. We know that that Thatcherite approach, which is similar to Reaganism in the United States, places emphasis on individualism, competition, deregulation, private consumer satisfaction and low public expenditure.
During the early 1980s that approach produced a number of benefits. It definitely encouraged an entrepreneurial spirit and it attacked the corporate lethargy which afflicted the public and private sectors. I have always welcomed those benefits but they are long in the past. The disadvantages of the Thatcher-Reagan approach, which possibly can be crudely misrepresented as a kind of jungle individualism, are more evident each day both here and in the United States. It encourages short-termism and the seeking of immediate profits rather than the adoption

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of a long-term strategy and investments. It elevates finance over industry and it leaves our social infrastructure in decay. The consequences of Thatcher-Reagan individualism are clear. Britain and the United States—they are the two leading exponents of this individualist approach—have the worst trade deficits, the worst genuine domestic deficits, the lowest investment and savings ratios, the worst training and education records and the most bankrupt financial systems in the advanced world. That is where that individualist approach has led this Government and this country by 1991.
I shall conclude on a more constructive note by saying that there is an alternative economic policy. It is not Marxist socialism which has been bankrupt for even longer than the American banking system. I believe that only the remote Siberian frontiers of British politics support that approach. The alternative to Thatcherite individualism lies within the boundaries of market economics but it accepts social and collective responsibility. Its priority is long-term economic growth through high private and public investment and a well educated workforce. It accepts that some planning and regulation are desirable. It knows that monetary and credit policies must be sound and it accepts that trade unions have a positive role to play. It accepts that management must invest for the long term and not suffer constant take-over harassment. It accepts that the provision of good social services is a higher priority than deceitfully low nominal direct taxes. Above all, it accepts that our society has values and priorities which supersede individual greed.
Both Europe and Japan have versions of that alternative model of market economics conducted with social responsibility. It is not a coincidence that those countries exhibit superior long-term economic performances to those of Britain and the United States. Fortunately, the Labour Party's economic policies now follow that broad approach. In my view that approach offers the best way forward for Britain. While the Government are stuck with the outdated theology of Thatcher and Reagan I am afraid they will remain in their present economic mess.
5.54 p.m.
Lord Ezra: My Lords, from the speeches which noble Lards have already made in this debate, it is unfortunately clear that Britain is now in the throes of a recession that is equivalent in intensity to that of 1980–81. According to the latest CBI quarterly survey, business confidence is at its lowest level since October 1980. That is particularly true of small firms. The noble Lord, Lord Donoughue, referred to this fall in business confidence.
I suppose that the main evidence for the recession is to be found in the growing rate of business failures and the rapid increase in unemployment. However, there are two features which distinguish the present recession from the previous one of 10 years ago. The first is that whereas in the recession of 1980–81 the main negative features were concentrated in the manufacturing and construction sectors, on this occasion the recession is spread throughout all sectors
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of the economy. It stretches from financial and other services right through the spectrum of manufacturing industry and construction.
The second distinguishing feature is that evidence of the recession was to be found in Britain—and indeed uniquely here—before it extended to the Continent. It is still the case that the evidence of recession is more intense in Britain than it is on the continent of Europe. According to most estimates we are now faced with a 2 per cent. reduction in growth in 1991 as opposed to the 2 per cent. increase forecast as recently as last November in the Government's Autumn Statement. The deterioration since November has been more than noticeable.
The noble Lord, Lord Donoughue, gave a clear analysis of how we have got into these difficulties. However, I wish to express the matter in a slightly different way. I feel that the fundamental reason for our present difficulties is that during the past decade the level of productive investment has been too low, and the level of personal consumption has been too high. My noble friend Lord Jenkins reminded us of earlier occasions when booms had been created with consequent recessions.
If we turn to manufacturing industry, we see that the output in the UK industry has admittedly increased by some 7 per cent. since 1979. However, that rate of increase in capacity compares poorly with that of most other developed countries, and in particular with Germany where the increase has been in the order of 18 per cent., and with Japan where the increase has been no less than 50 per cent I hope I may dare mention Japan. Capacity, in addition to productivity, counts strongly. This critical situation of the juxtaposition of relatively low industrial capacity with increased expenditure on personal consumption was created—the noble Lord, Lord Hesketh, stated this—by the credit boom which took place particularly in 1987 and 1988. That credit boom led to a demand which far exceeded the capacity of British industry.
Therefore, in spite of the benefits of North Sea oil, major balance of payments deficiencies ensued and inflation once more began to spiral. We have thus returned to the stop-go situation of the earlier post-war period. As we know—many noble Lords have mentioned this—the Government's answer to this problem has been to use the single weapon of interest rates. They considered that to maintain interest rates at a high level would restrain demand and thus reduce inflation. However, the unfortunate part of the matter is that while curbing personal expenditure, that policy has also curbed industrial growth and investment and has led directly to the present recession. The Government are in the difficult predicament that, having allowed the economy to overheat, they have adopted a remedy which is cooling it too much.
Thus it is becoming clear that urgent measures are needed to deal with this situation. Without any question the first measure is to seek to reduce interest rates. However, that will not be easy in the present circumstances, particularly in view of the most

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recently announced increase in factory gate prices in January. Those prices rose a further 1.5 per cent., moving in quite the wrong direction from what was anticipated and hoped for.
The main point that I want to make is that in addition to the earliest possible reduction in the interest rate, it will be necessary to take other measures. The most important of those other measures is to stimulate investment. We are now seeing a massive reduction in investment expectations which if continued too long could be seriously damaging. The CBI estimates that in the manufacturing sector alone investment is likely to fall by 16 per cent. in the year to mid-1991. That is catastrophic. Unless countermeasures are taken, the fall in investment could last for much longer than we could cope with.
Measures that could be taken without harming the economy could include direct stimulus to reinvestment in plant and machinery. There is a growing consensus that a tax advantage could be allowed for up to 40 per cent. of such investment. That tax remission should be increased in the case of smaller firms. It is recommended that in their case there should be a facility to write-off investment up to a given sum as current expenditure for tax purposes. The sum of £50,000 in a year has been mentioned. In addition, stimulus should be given to investment in training and innovation. Fiscal benefits could be given to firms whose expenditure in those respects exceeds an agreed norm.
In addition to those measures, there is the question of what will happen to personal expenditure once interest rates come down. There is a possibility that excessive personal expenditure could be reactivated. The noble Lord, Lord Peston, suggested that in order to cope with that situation there should be a tight fiscal policy and that higher taxes would be needed to provide restraint. I should prefer to approach the problem another way: by offering a substantial incentive to saving.
I am not a believer in high taxes. I feel that high taxes inevitably lead to even higher taxes. High taxes could lead to an undesirable situation, particularly compared with the lower tax levels which pertain on the Continent. Therefore, a further major effort, in addition to the measures introduced in the last Budget, should be made regarding personal savings.
It is important to ensure that the public understand more clearly the credit facilities being offered to them. According to latest estimates, up to 5 million households are suffering from over-indebtedness for one reason or another. Not only have those people to be assisted in their predicament, but the best remedy is to ensure that they do not get into that situation in the first place. Guidance should be given to young people before they get into debt beyond their means, and there must be more extensive advisory services and assistance.
Finally, I should like to make this suggestion. There has been increasing unease about the role of the
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Department of Trade and Industry. There is the feeling that we should have a more clearly defined industrial strategy in this country. The Department of Trade and Industry is increasingly becoming a regulatory body as well as being responsible for industry. I suggest that there should be a single department of industry which would have the task of developing a policy framework for the reinvigoration of British industry and of pursuing that policy throughout the years. Without such a clearly defined departmental function in government I very much fear that the policy pursued for industry could continue to lead us into difficulties such as we are currently experiencing.
6.4 p.m.
Lord Cockfield: My Lords, I found the speech of my noble friend Lord Hesketh a most interesting tour d'horizon. However, I do not agree with his views on the present state of the British economy, on the reasons for it or on how we extricate ourselves from our problems. Nor, if it is of any comfort to my noble friend, do I agree with the approach of the noble Lord, Lord Peston. Least of all do I agree with the noble Lord, Lord Donoughue.
My objective is not to engage in the small change of argument over figures or statistics. Having no longer any responsibility in these matters I would much rather look at the fundamental causes of the malaise of the British economy, a malaise which goes back over many years.
I believe that the present recession is bad and will get worse. All the evidence indicates that once such a recession starts it takes a great deal of time before one is extricated from it. There is no such thing as a soft landing or a shallow recession except in the imagination of politicians, particularly those in office.
The primary responsibility for our present troubles rests firmly and squarely on the shoulders of the TUC and the CBI, the one for demanding wage and pay increases beyond the capacity of the economy to sustain and the other for agreeing to wage increases of a kind which cannot be afforded. The result is to be seen in unemployment for the one and bankruptcy for the other. The Government, of course, have some measure of responsibility but it is a secondary rather than a primary measure. It is a question of whether they have acted correctly or incorrectly in relation to the problems with which they are faced.
There is not the slightest doubt that our present problems were triggered by mistakes of policy committed under the chancellorship of Mr. Nigel Lawson. Mr. Lawson has explained that it is all somebody else's fault: that is not a matter that I propose to pursue this evening. Nevertheless, it was relaxations in fiscal and monetary policy which enabled both the CBI and TUC to cast all restraint upon one side; the fons et origo of our present difficulties.
There is every reason, theoretical and practical, to suppose that all economies fluctuate, that they go through periods of growth and recession and that that is part and parcel of the process of adjustment to

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change. I do not go as far as the late Dr. Dalton, as he then was, in regarding inflation as the lubrication of change in the national economy. Nevertheless, I do not believe that one can stop fluctuations in the economy altogether. That is not an issue which I regard as of crucial importance. What matters is why our experience in this country is worse than the experience of other advanced industrial countries; worse in terms of fluctuation in output and worse than Germany, Japan or the United States in terms of inflation. That is the crux of the problem.
Ultimately, the answer lies in differences in what in these days is described as culture. Culture has nothing to do with "culture" in the sense that it is commonly understood. It is simply a convenient phrase to sum up differences in outlook, in attitudes and in approach on the part of both sides of industry, of management as well as of the workforce, towards problems of pay, productivity and prices. However, we tend to start from a much higher datum line than our competitors. And that is what, in the end, results in inflation, in uncompetitive prices and in a deficit in our balance of payments. It is those things which ultimately call into play government intervention.
The situation is extraordinarily interesting. Listening to some of your Lordships, I could have shut my eyes and believed that we were back at any time in the last 45 years. It was the Labour Government of 1945 which sought to solve all these problems on the basis of a planned economy founded on the doctrines of Lord Keynes. That came to nothing. We then had Mr. Rab Butler and the period of free-for-all. That also ended in disaster.
There followed Mr. Harold Macmillan who set up the original National Economic Development Council. I was one of its original members, appointed nominally on the basis that I was an industrialist. In fact, I was put there to look after the interests of the Conservative Party. But that is neither here nor there. The whole purpose of the original Neddy approach was to try to achieve a consensus between management, the unions and government.
After a general election, we had Mr. George Brown who immediately got rid of me for reasons best known to himself. All of Mr. Brown's reasons were best known to himself. But the Neddy experiment, which started off with such high hopes, came to nothing because Mr. Brown tried to use it as a new instrument for achieving the supremacy of the trade unions. The experiment got nowhere.
We then had Mr. Heath and the prices and incomes policy, a policy imported exactly as it stood from the United States of America. It was one of the earliest examples of what is described as the special relationship between this country and the United States. As your Lordships know, I was very closely involved as the chairman of the Price Commission. A prices and incomes policy works admirably for about 12 months or, at the most, 18 months. That is a period in which one hopes that attitudes and outlooks will change; but they did not. We had a general election, and that was the end of that one.
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We then had, as noble Lords will remember, a Labour Government and Mrs. Barbara Castle, now the noble Baroness, Lady Castle of Blackburn, with her policy described as In Place of Strife. If we want to know what happened to that, we need to ask the noble Lord, Lord Callaghan of Cardiff. Whatever else it achieved, we had the winter of discontent and the victory of a Conservative Government under Mrs. Thatcher.
We then had—and I was directly involved as a Treasury Minister in your Lordships' House—the strict application of monetary policy. That succeeded. It broke the inflation. It did so at a very high price, both in terms of unemployment and in terms of output. But, at least, it did succeed. Tragically, of course, as soon as the economy began to expand again, we had Mr. Nigel Lawson. The rest of the story is well-known to your Lordships.
The point that I am making is that nothing very much has changed. We face fundament ally the same problems. We have tried almost every conceivable solution. We find exactly the same solutions, all of which have a proven record of failure, being trundled out again as though they represented something new. Unless we can change the fundamental outlook of our own people, we will never succeed in getting out of this bind in which the British economy find itself.
My own support of the European Community did not derive essentially from the pleasure of quarrelling with Mrs. Thatcher at all. It arose from the fact that I felt that our membership of the Community might provide the channel through which we could alter perceived attitudes in this country. I am not now talking about consensus politics. I am talking about the fundamental attitudes of people on both sides of industry and the reaction of the Government to the situation which arises. Unless we can alter those attitudes, we will simply find ourselves back on the treadmill of what used to be described as stop-go and these days as expansion followed by recession.
When 10 years ago we were debating exactly the same subject in your Lordships' House and I was then speaking from the Government Front Bench, I quoted something which had been said by Marlene Dietrich. Lord Elwyn-Jones, who was then sitting on the Front Bench opposite, questioned the relevance of Marlene Dietrich to the British economy, apart from the fact that she probably knew more about life as it is lived than the average politician. The point was the refrain of that song, which was a well-known one, "When will they ever learn?" That is the fundamental problem that we face. Will we ever learn?
6.18 p.m.
Lord Barnett: My Lords, the noble Lord, Lord Cockfield, began by disagreeing with most of the preceding speakers. On the contrary, I want to say how much I agreed with the noble Lord, Lord Cockfield, and with some of the previous speakers. I shall return to that. But I find it difficult to agree with much of the speech of the Minister. I suppose one has, at least, to say that in that speech given to him by the Treasury one has got away from it all being the fault

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of a blip to it now being, as he said, a cyclical setback and due to the fact that monetary policy was too lax. I could have agreed better with him if he had given the speech back to the Treasury and tried something himself. But I want to concentrate briefly this evening on possible solutions to the situation that we face.
The facts have been well set out by a number of previous speakers, but it is important, first, to summarise what I consider are the essential problems that we face, most of which are long standing. I agree with the noble Lord, Lord Cockfield, that no Government, including the one in which I had the honour to serve, seriously tackled those problems. I say that despite the long list of selected facts that the noble Lord, Lord Hesketh, gave us from his brief, which showed the situation, basically, as marvellous and demonstrated that all will come right in due course. Some of the problems are short term, and I shall come to those, but first it is important that we put the situation in perspective. We are not a poor country but, again as the noble Lord rightly said, relative to others we are doing badly and the situation is getting worse. That is the basic fact which we face.
Let me come to the short term. Inflation has been much discussed in the speeches we have heard. Of course the Government are right in wanting to bring down the rate of inflation. It would be a very foolish policy to aim at keeping inflation hugely above the levels of our competitors abroad and clearly that is not a solution to any of our problems. But it is never a real solution to solve one problem: it is always easy to solve one particular problem if you do not mind too much about what you are doing with the rest. Of course that is precisely what this Government are now doing. I fear that the fundamental danger is the damage that is being done to the basic structure of the economy. That is the real problem we face now.
On unemployment, whatever we do and if, as I should like, we reduce interest rates in the near future, unemployment will rise over the next 12 months at least, almost regardless of what any government do, whether it is a Labour government just coming in or anybody else. Unemployment, because of the basic underlying situation—and it is very sad—is doomed to rise.
I should like to turn to the real problems that we face as a nation. They are virtually all long term or, as the noble Lord, Lord Cockfield, rightly said, they are problems we have never really dealt with. As to economic growth and manufacturing output, putting the matter in perspective, manufacturing output in this country, as the Minister could well quote, has risen in the last 12 years. Indeed, it would have been astonishing if it had not, but considered relative to almost every one of our major competitors, and indeed some others, it has risen to only a derisory extent. That is demonstrated by one important figure: manufacturing imports have risen by 236 per cent. in the same period. That speaks volumes for the way this Government have handled the economy over the past 12 years. Our manufacturing economy has fallen behind those of France and Italy and indeed it is falling to the level of an economy the size of Brazil's.
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That is a big country, but it is still a third world country. So how much further we fall, and the length and depth of the fall, will depend very much on what action we start to take now.
The other major long-term problem we face is that of relative unit wage costs. They are very bad now and, frankly, there is no sign of them improving, although of course that does not apply to all companies. One is bound to generalise, because some Japanese managements have done very well with wage costs in this country and indeed so have some British manufacturers. But overall, by any relative examples, our unit wage costs have continued to get more and more out of line with those of our competitors. Industrial investment, as has been said by many speakers—and figures have been given so I shall not repeat them—has been falling relative to that of our competitors.
On the infrastructure, one has only to look around the country to realise the huge amount of money that needs to be spent on our infrastructure if we are to give our industry a chance to compete. On education and training, we now have fewer college and university students than Korea. The Government's own head of training had admitted that at every level we are at the bottom of the league table in the training of management, of our young people and of everyone you care to think of and in every area you care to think of. How on earth can we hope ever to compete without action in that regard?
I am afraid it is all very depressing, and I stress again that the underlying core problem has been there for a long time—long before 1979—although I am bound to say with particular sadness that the last 12 years have seen a great opportunity missed, with the benefits of North Sea oil and therefore without a balance of payments problem such as has beset every government prior to this. Nothing has basically been done with the privatisation proceeds: nothing has been done about the fundamentals referred to by the noble Lord, Lord Cockfield.
As I have said, I want to concentrate on possible solutions, both short term and long term. In the short term I would certainly want to see some cuts in interest rates because inflation is set to fall. I believe the markets have already discounted the value of the pound inside the exchange rate mechanism and that we could now make a start on cutting interest rates. Making a start will not affect the downturn over the next 12 months very much. Of course, if the change is too great it will result in some pressure on the pound inside the exchange rate mechanism but, in spite of all the statistics one has read in recent months about the fact that we went in at the right rate—and we had the Minister telling us again today that the rate was right, although I personally do not believe it and I do not think that most people who have looked at the matter really believe that the rate was anything other than too high—let me say that I believe, with the noble Lord, Lord Peston, that it would be very wrong and would compound a very serious situation if we now sought to devalue the pound inside the exchange rate mechanism. If we did so it would destroy whatever credibility we have got or will be getting, although, as

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the noble Lord, Lord Jenkins, said, if we can get a realignment—which is perhaps a little overdue—I should not object to that. However, I doubt if many inside the Community, especially Germany, would be in a hurry to give us the pleasure of doing that, although the Chancellor might he more inclined to do so now with the present Prime Minister than with the previous one.
Leaving that aside, I certainly would not devalue, because our credibility inside the exchange rate mechanism is of crucial importance to this country and, for example, to inward investment. So I would not devalue. I would start to spend more on infrastructure and incentives for industrial investment, allowing the borrowing requirement to rise to some extent. That will start quickly to have an impact on the otherwise inevitable downturn in business over the next 12 months. However, we should honestly concede that whatever we now do we are not going to be able to have an immediate impact on the economic situation. What we can do is to try to prevent the situation getting dangerously worse.
Let me now turn briefly to the long-term problems. It is quite clear that more resources are needed for education and training. Indeed the right honourable gentleman the former Secretary of State for Employment, Sir Norman Fowler, said only the other day that we have a mountain to climb in this area. Few who have looked at the figures would dispute that. As I have said, we need to spend more on infrastructure and on capital investment. It becomes what I would call a simple question of priorities in expenditure. In practice, from my five-and-a-quarter years as chief secretary, I realise that it is not a simple matter to choose priorities in expenditure. That is because, if one chooses items of expenditure as a priority, what nobody else will accept is that other items have to be given a lower priority. That makes matters very difficult and indeed little or nothing would be left over for the improvement of living standards. As the noble Lord, Lord Peston, rightly said, improved expenditure on the National Health Service, housing and so on that we all want to see would have to wait.
In those circumstances I am bound to say to the noble Lord, Lord Ezra, that to try when consumption is falling, to solve the problem by providing incentives for savings is a little unlikely to be successful. However, leaving that aside, I am afraid that, if we do not deal with this question of priorities, we shall slip further and further behind our competitors.
In one sense, the solution is comparatively simple. At least we have it in the hands of a government to choose priorities: that is in the Government's own hands, but the problem of relative unit wage costs is more intractable. The noble Lord, Lord Cockfield, sought to blame it on the CBI and the TUC.
With respect, the one thing that this Government claim as the great miracle of the past 12 years is to have totally removed all the powers of the trade union movement. That is the one success that they claim all the time. The plain fact is that, despite having done that, our unit wage costs are still relatively so far out of line. I believe that it was the noble Lord, Lord
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Hesketh—someone else said so too —who emphasised that management can now manage. Well, it has managed. It has managed to get us wildly out of line with our competitors. Who pays wages? Management pays wages and management has paid wages while not achieving the increase in output that should have been obtained. So it is no use constantly blaming trade unions—as has happened in the past—for demanding too much.
Unlike some people I do not pretend to have a solution to the wage problem. It is not a simple solution in this case. Certainly I know that what I would not do is again to go for an incomes policy. I believe that it was the noble Lord, Lord Cockfield, who said that that works for 12 months. I am not sure that it even works for as long as 12 months. Certainly it is not a permanent solution to this problem.
But what we do expect of a government is first to recognise that there is a major problem. And there certainly is a major problem. I do not have a simple solution but I believe that we must return to talking to both sides of industry in the hope of persuading them, perhaps with incentives where appropriate, that it is management and trade unions (the noble Lord, Lord Cockfield, was quite right) which have to face up to the problem. Government cannot resolve it.
I should like briefly to sum up. My long-term solutions require either a major change in attitude on the part of management and trade unions—and I am afraid that I am not optimistic about that—or large sums of money with a major reordering of priorities. The trouble with the latter is that the economic and political pay-off is very long term. I therefore take a much more sombre view than does the noble Lord, Lord Peston, who said that as a professor of economics he might have taken a more bleak view. I thought that he was still a professor of economics but perhaps he did not want to be too bleak.
However, the plain fact is that, if we are to get right our fundamental situation, we shall face a very bleak situation. On top of that there is now a situation in which the economic and political cycles are wildly out of kilter for the Government. What will they do? We know what they will do. Once again they will take the wrong decisions for what they see as the right reasons: to win a general election. So I am afraid that I am not optimistic about the prospects.
I spent five years as Chief Secretary to the Treasury with some responsibility—I apologise for what I did not do—in this field in government. I began as an optimist and I finished as a pessimist about our economic prospects. After 12 years of this Government I see nothing to persuade me that anything fundamental has changed. It is depressing and sad, but I regret to say that I remain a confirmed pessimist about our economic prospects.
6.34 p.m.
Lord Boyd-Carpenter: My Lords, the late lain Macleod once observed that although proverbially money was the root of all evil, it was also the root of everything else. Because of the obvious Truth of that proposition I think that we should all be grateful to

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my noble friend Lord Hesketh for introducing this debate. This is the most important subject that faces our country today. I am sure that it was a good idea to secure an expression of opinion from all sides of the House, from a number of noble Lords with very great experience and knowledge in these matters. That is a proper function of this House.
The only difficulty is that so far in the debate no two speeches have agreed on almost anything. I find myself located physically between my noble friends Lord Hesketh and Lord Cockfield. I am bound to say that I find myself intellectually similarly rather between them. I am sure that my noble friend Lord Hesketh was right to remind your Lordships of a fact that no other noble Lord has since mentioned; namely, that whatever our present difficulties, we have behind us a period of considerable growth in our economy and much of what has been achieved over the past 12 years remains. Certainly there is the fact that the greater part of our population enjoys a higher standard of life than ever previously enjoyed. Of course, that is not true of everybody but it is true of a substantial majority. It is true that we have behind us a period during which large portions of the national debt were paid off, with resulting less demand on future budgets for financing what had been an ever increasing burden. There lies behind us a period of very great success.
However, what we now face, as all noble Lords have observed, is the combined problem of inflation and the unemployment which undoubtedly results from the measures that require to be taken to deal with inflation. I believe that the Government are right to treat inflation, and dealing with inflation, as of the highest priority. One has only to look around the world to see the mayhem which inflation over the past 15 or 20 years has inflicted on so many countries. For example, in South America, Germany and elsewhere one sees the appalling damage inflicted by inflation that has got out of hand. One does not need to recall situations in which people rushed on a Friday to spend their wages because they knew that by Monday the money would have halved in value. Inflation is the greatest of all evils.
Basically, there are only two methods to deal with it. One is high interest rates. The other, as has already been suggested by one or two noble Lords, is a policy of strict control of wages, strict control of the economy generally and high taxation. Faced with those two alternatives I believe that the Government have chosen the right one.
It is fair to say that, in a way, the effects of high interest rates are rather like the powerful modern drugs that are used to treat serious illness. Those drugs almost always produce side effects and it becomes a matter of nice judgment as to how long one can continue the treatment using those drugs without doing much damage, through side effects, to the patient. That medical analogy crystallizes the problem at present faced by the Government.
There is no question but that high interest rates are working. Inflation is beginning to turn down. But the question—one might say the 64,000 dollar question
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—is whether interest rates can be maintained at this level for long enough effectively to bring it down without inflicting inescapable other damage. Of course, the major damage is that done to employment.
At the conclusion of this debate I shall be interested to hear what my noble friend says of the Government's attitude, faced with that situation. Certainly it is not good enough to say, "We shall just soldier along with interest rates and damn the consequences". It will be necessary the whole time to judge the balance between the two; whether interest rates can be maintained at their high level with sufficient vigour to get control of inflation or whether absolutely intolerable consequences will make that increasingly difficult. As I see it, that is the dilemma which faces the Government, as it would face any government in power today.
I agree with the statement that was made by my noble friend Lord Cockfield in relation to the main source of inflation. It is undoubtedly the fact that employers have conceded, and continue to concede, excessive wage claims which have been made by the unions. The employers have less excuse than they used to have because one of the changes that has been effected in our society over recent years has been to alter and diminish the power of the unions. Therefore, the responsibility for inflationary wage increases lies increasingly on the employers. I hope that those employers who seek to criticise the Government will reflect on their own quite substantial part in the situation.
What are the Government to do? Government expenditure must be restrained because it has a direct effect on inflation. Equally, the Government must be very careful not to allow high taxation to damage incentives. It is no use appealing to people to invest and it is no use asking people to stay here and work successfully and ably if an ever larger proportion of their earnings are taken in taxation.
It is essential that one should not be panicked by suggestions that have been made to the Government to the effect that in order to deal with inflation taxation should be increased. An increase in personal taxation has one of two results: the incentive to effort in this country is diminished, or the incentive to leave this country is increased in order to work in a country where a high income can be earned with low taxation. Alternatively, one can retire to the Isle of Man or the Channel Islands where one does not pay high levels of tax. The revenue would be lost in that event.
The Government should realise that it is important to maintain the fullest incentive to enterprise and investment. I am in favour of some of the devices that have been mentioned in the debate for encouraging investment and savings. The PEP system is flourishing and more could be achieved if the Government were a little firmer with the Inland Revenue, less interested in immediate returns of revenue and more interested in encouraging the incentive to invest. I shall be interested to hear from my noble friend, when he replies, whether the Government have any such ideas.
There is another area, which has not been mentioned hitherto, where the Government are involved in the increase in inflation; that is, the

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inflationary effect of VAT. That is a tax which falls particularly on services. The cost of a great deal of work—for example, the repair of houses—is automatically increased in price by 15 per cent. In that respect VAT compares very badly with purchase tax, which it replaced. Under purchase tax, the great weight of taxation fell on luxuries. The tax on jewellery was 66⅔ per cent. whereas most of the necessities of life—for example, children's clothes—were free of tax. VAT falls broadly across the economy, inflating everything by 15 per cent., and it must contribute substantially to inflation. It is very disturbing that our friends in the European Community are urging this country to further increase the scope of VAT by suggesting that it should be imposed on air fares or transport charges. That increase would add to inflation. We must be extremely careful in regard to matters of taxation. It is the responsibility of Government, nobody else.
I share, nonetheless, the optimism expressed by my noble friend the Minister. I believe that this country has considerable powers of recovery. The output per worker, which used to be at the bottom of the European scale in terms of annual increase, is now at the top at an annual rate of 5 per cent. It is true that some of our industries are prospering and that there is a considerable spirit of incentive in many directions. It is up to the Government to give every possible encouragement to that incentive and to do nothing to make things more difficult.
In that context I should like to mention the Statutory Sick Pay Bill which deliberately increased employers' costs. I believe that the Government will come to agree very shortly —perhaps in his heart my noble friend agrees now—that that Bill was a great mistake and one which must not be repeated. However, I think that the general approach of the Government is correct. By encouraging individual incentive and enterprise and by ensuring that the spirit of enterprise is given full encouragement and no discouragement we shall bring this country through the present trouble as we have brought it through so many problems. I believe that with the right honourable gentleman, the Member for Kingston-upon-Thames, as Chancellor, we shall score a major success!
6.46 p.m.
Lord Bruce of Donington: My Lords, it is always interesting to follow the noble Lord, Lord Boyd-Carpenter, in a debate—an opportunity that has been denied me for some years. I was puzzled by the somewhat oblique criticisms that the noble Lord made from time to time against his own Government. The noble Lord is normally called into debate when the Government are in trouble. Today he inflicted upon them the insult of faint praise. During the debate that followed the first speech of the first Thatcherite Chancellor of the Exchequer, Sir Geoffrey Howe, I cannot recall the noble Lord objecting to the increase in the rate of VAT from 8 per cent. to 15 per cent. On the contrary, in his role as a former Chief Secretary he was pleased to congratulate the Government on prudent finance.
Lord Boyd-Carpenter: My Lords, I should be interested to hear whether the noble Lord can quote a specific reference by me to the increase in VAT—not to the general financial policies of the Government —because I do not think that he will find one.
Lord Bruce of Donington: My Lords, the noble Lord cannot wriggle out of the assertion that I made by challenging me to produce a particular detail. The noble Lord knows perfectly well that he was fully in support of the policies of the Chancellor of the Exchequer at that time.
If there was to be an effective indictment of the policies of the Government, in particular of the speech made by the noble Lord, Lord Hesketh, it was made, if I may say so in the friendliest respect, by my noble friend in the unofficial sense, Lord Cockfield. He almost completely demolished the Government's case in his criticism of the former Chancellor of the Exchequer, Mr. Nigel Lawson. It is clear that the noble Lord thought that the Government of that time made a grievous error during the period of that chancellorship. He might have noted, although he did not say so specifically—and one would not expect him to do so —that the present Prime Minister who was in the Cabinet of that Government and a close ally of Mr. Nigel Lawson, fully agreed with those policies. Therefore we accept the indictment of the noble Lord, Lord Cockfield, who spoke with the utmost cogency and honesty, of the criticism of the present Government.
When I listen, as I am privileged to do, to the contributions from the Government Front Bench I sometimes marvel at comments about the virtues of current governmental policy. I am amazed that Members always appear to try to impart the responsibility of anything that goes wrong with the economy—and from time to time things do go wrong —on everybody but themselves. For the record—and I hope that this will be the last time that it is necessary to outline the situation—this Government have been in office for 11 years; they have had a colossal and overwhelming majority in another place; their will in legislation and regulation cannot be gainsaid, not even in your Lordships' House; they have had the enormous power of patronage which they have been able to confer upon people in order to establish their will; they have had the benefit of £100 billion in North Sea oil revenues; they have had the benefit of the almost uncritical support of their favoured newspaper proprietors in order to accustom public opinion and to make it more amenable to government policies. They have had all those things; yet today, 11 years on, we are no further forward than we were in 1979. In fact, in many ways we are in a worse position.
I remember well the posters of the 1979 general election showing an unemployment queue and stating that Labour was the party of unemployment. Since then not once has unemployment fallen below that level; indeed, it is now rising. If the true figures were known, today employment be 3 million were it not for the statistical fiddles that have been accomplished in the meantime. So do not let us talk of any kind of government success.

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Nor is it necessary to elaborate by reference to statistics on the current state of the economy which this debate is supposed to be about. The indictments already exist. The TUC does not have to publish them; the CBI has already published them. Most of the press is normally obedient to the will of She who must be obeyed—or used to be obeyed. It is now completely unanimous in its verdict that the economy is in a shambles. The quicker that the Government admit that to the country, the better it will be for all concerned and the cleaner will be the whole air of politics.
There have been two fundamental errors. One is long term and was recently referred to in a debate on the GATT negotiations that had to be truncated because it was fitted in at the end of the day. It is not generally realised in this country that as a proportion of GDP, and in relation to the rest of the world, our proportion of exports of manufactured goods has been decreasing. Since 1979 our share of world trade has decreased by between 9 and 10 per cent. That matter must be corrected before any endeavours can be made on a domestic level within the country to solve our problems. We must regain our share of the international trade in merchandise. We must arrest the decline in our share of the trade of international merchandise. As I said at the time, I agreed with the noble Lord, Lord Young of Graffham, in emphasising the gravity of the situation that would arise if the GATT negotiations failed.
The GATT negotiations began four years ago. Originally they provided for an increase of 1,000 billion dollars of trade throughout the world after a successful conclusion. There was to be a liberalisation of trade. The negotiations have become frustrated because the Government, who believe in the freedom of the market and in free competition, have been so supine in the EC Council of Ministers that they have tolerated the continued existence of the common agricultural policy in its present form. That is one of the most protectionist regimes in the world. If it is not changed, it may result in the breakdown of the GATT negotiations on which rests our share of international trade that we fundamentally depend on.
The Government have been remiss in meetings of the Council of Ministers because they have been so supine that they have not permitted their Ministers even to know what is happening. They have allowed the CAP negotiations to be conducted on behalf of the farming lobbies in the United Kingdom and Europe with the Treasury wiping its hands of the whole thing. Unless there is an attack on the whole common agricultural policy and the removal of the concept of fortress Europe there will be a failure of the GATT negotiations. Any endeavours that we make domestically to improve our fortunes will be of no use.
The position on the domestic front is entirely different. In that respect we were told 11 years ago that inflation was the be-all and end-all of government policy. The noble Lord, Lord Boyd-Carpenter, echoed it then and has echoed that down the ages in a number of classical speeches. It was said that inflation must be brought down. Why is it that after 11 years of power
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the Government have not brought it down? What in fact went wrong? The answer is simple and at last the Bank of England have admitted it. It was originated by the freeing of the whole of the financial services and the banking system.
Banks began to compete with one another to lend money that to some extent had been derived from the release of funds from OPEC and which had to be re-lent at a higher rate. There was competition to lend money but there was no question of advising borrowers to be prudent. The advertisements read, "We will give you a better percentage, a better service and better terms of repayment". Therefore, we in this country have arrived at a position where we grant mortgages of 100 per cent. of the value of the property. That is the highest rate in the whole of the industrialised world. Although Japan has a home ownership rate of 61 per cent., the banks will advance funds of only 60 per cent. against real property value. Our rate of home ownership is 64 per cent., based on giving 100 per cent. mortgages.
The Bank of England admitted that clearly there was a colossal expanse of credit and therefore a great increase in money supply; mortgage money was used to buy consumer goods, and so forth. The Government (who affect to blame everything upon wage increases) will be well advised to bear in mind that the Bank of England admits that the bulk of the inflation policy was caused by this almost Barber-like boom in the City of London.
When I look at some of my noble friends on the Liberal Benches—particularly the noble Lord, Lord Ezra, who believes that certain areas of banking and economic policy should be put in the hands of an independent bank—I wonder whether he and his colleagues meditate sometimes that it is far better that these matters be reserved to political parties, which can be brought to account, rather than being placed in the hands of banks.
Lord Ezra: My Lords, if the noble Lord will give way, I had the impression that he had already pointed out that political parties had not done the job very well. During the course of the debate, we heard that the advice from the Bank of Japan had been very salutary in the control of inflation in that country.
Lord Bruce of Donington: My Lords, on the contrary. We learnt from the experience of Japan that there are coherent planning policies followed by consensus between the monetary authorities, the government, employees and employers. That is a lesson we learnt also from Germany. There are lessons that we must learn. Another lesson that we in this country must learn is that the old policies of confrontation should be dead. There should be co-operation between trade unions, the CBI, the Government and the monetary authorities. But the Government must remain responsible.
One of the indictments of the Government, who claim that British industry has been left leaner and fitter—although many in manufacturing industry would say that they have been left thin and skinny —is that they still support, and, in the main, their supporters support, those in the City.
Lord Ogmore: My Lords—
Lord Bruce of Donington: My Lords, I shall give way in a moment. They support those rich people who have become meaner and slicker. And those are the people that the Government continue to support.
Lord Ogmore: My Lords, I have slightly lost track during that pause. The noble Lord has been kind enough to give way and I could not expect him to give way sooner. In my lay capacity I understood the noble Lord to speak of nationalised banks. Would he like to see banks in this country completely nationalised or is he referring only to the Bank of England, which is a government agency? My noble friend Lord Ezra referred to the Bank of Japan. I imagine that stands in a similar capacity to the Bank of England. Perhaps the noble Lord, Lord Bruce of Donington, can answer my question.
Lord Bruce of Donington: My Lords, I am all in favour of the maintenance, unamended, of the Bank of England Act 1946.
7.5 p.m.
Lord Cobbold: My Lords, the background to the present parlous state of the economy has been ably described in speeches from all sides of the House and many noble Lords have yet to speak. I will therefore be brief and address my remarks solely to the dilemma faced by the Government between the urgent need to reduce interest rates and the exigencies of the exchange rate mechanism.
Like my noble friend Lord Jenkins of Hillhead, I believe that the decision to join the ERM, while wholly welcome in principle, came far too late. Indeed, it should probably have been taken in 1986 when, as the noble Lord, Lord Hesketh, reminded us, inflation was at 3.4 per cent. However, now we are in the scheme we must play the game by the rules. It is too narrow, in my view, to look at the problem as suggested by the noble Lord, Lord Peston; purely as a UK domestic issue. We are now part of a Community-wide strict monetary regime and must learn to work within it.
To date it is clear that we have not achieved credibility. The pound is at the bottom of the system with the second highest level of interest rates. Incidentally, credibility is not helped by much of the comment in the serious press to the effect that a devaluation is now appropriate. I believe that there are step the Government could take, and may indeed be taking behind the scenes.
The market may well have discounted a small reduction in interest rates, as the noble Lord, Lord Barnett, suggested. However, a short term reduction in interest rates would be more easily achieved if it were done as a co-ordinated move in conjunction with our partners in France, Italy and particularly in Spain. The peseta currently tops the ERM and Spain has the highest level of interest rates. All these countries have similar problems to ours, albeit in differing degree.
As my noble friend Lord Jenkins suggested, if in more extreme circumstances a realignment becomes necessary, such a realignment should not be a
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unilateral devaluation of sterling but a co-ordinated operation which would be, and would be seen to be, a revaluation of the deutschmark relative to all the weaker ERM currencies.
Markets are well aware of the special circumstances—the external shock—that the absorption of East Germany has created for the German economy. Without that shock there is no doubt that the German rates and, by implication, other ERM rates, would be at lower levels than they are. A one-off mark-up of the deutschmark would be seen as a sensible response to reality and a sensible prelude to ultimate monetary union.
If the pound, franc, lira and peseta all retain their approximate parities, we will be seen to have stood our ground in the system, and at the same time to have improved the real economy. It might even improve our credibility.
7.8 p.m.
Lord Selsdon: My Lords, in moving this Motion my noble friend was no doubt being extremely courteous to your Lordships' House in asking for advice and guidance, which he has received in abundance. However, I hope that this time he may encourage his right honourable friends to accept the advice given by your Lordships' House. Had the advice given on many occasions over the past few years been accepted some of the economic difficulties we now face would not exist.
The Government have a difficulty. They have sought to withdraw from the economy, as they encourage greater and greater privatisation, and at the same time are faced with as great a responsibility as ever before, in that people believe they control and run the economy. It is as though those mandarins in the Treasury, who are now under increasing attack, are still able to play mah-jong with numerous pieces rather than some modern form of craps where their sole mechanism lies in interest rates. It is that aspect to which I address myself today.
We are all marginally confused. Many of the original economic dogma of life have gone out of the window. I was brought up to look at the daily rate of the pound against the dollar. We used to think that the economy was doing badly when the pound went down, but there it stands as high, at almost two dollars, as it has been for many a year. I was brought up to believe that there was some significance in gold. Many of my Middle East friends were advising me that the price of gold would rise very rapidly on account of the war, to perhaps 600 dollars an ounce, and it is now down to 350 dollars.
We also thought later that energy and oil prices had a major impact on our economy whether we were discussing our own reserves in the North Sea or attacking governments for having an artificially high energy policy which effectively encouraged inflation and hurt industry. Not so recently I believe I heard government Ministers say that they would be basing the economy on the price of oil at about 25 dollars a barrel, yet it is now down below 20 dollars and falling.

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Once more there is the belief that oil prices could come down as low as 12 or even 10 dollars. That was a factor that hurt us in 1974 which might even benefit us now.
There is no doubt that, as the impact of the Middle East war is felt worldwide and recovery takes place and regeneration is necessary, oil for spending will be pumped out of the ground by the OPEC and OAPEC nations. There will be pressures on oil prices to come down and stay down. Political unity within OPEC may be difficult. Therefore one of those pressures which was inflationary will seem to have disappeared and we need not be concerned about it.
As the noble Lord, Lord Cobbold, pointed out, when Germany reunified we all thought the burden of cost on West Germany might have a depressing effect on the deutschmark itself which the Germans have perhaps countered by raising interest rates. In a way that effect has gone also. So one wonders whether the only factor keeping interest rates up at the moment is our membership of the ERM. Why should we have boxed ourselves in and how do we get out of it?
I shall refer briefly to some of the initiatives that the Government have taken in relation to their own hard ecu. There is a possibility that it could play a greater role than was considered even a few months ago, where we finish with three great major trading currencies of the world—that is to say, the dollar, the ecu and the yen. But if the relationship of one currency to another is causing us our present difficulties, then we should think hard about what can be done.
I step back for a moment, not seeking to give economic advice, but to look at the matter a little from the outside. The economy (I could ask, "what economy?") is as flat as a Shrove Tuesday pancake. The private sector is the economy and it has created growth. The private sector is suffering. The Government have managed their affairs well and they can be praised for excellent housekeeping. As the noble Lord, Lord Boyd-Carpenter, said, we are repaying the national debt. I do not think that criticism can be levelled against the Government for the management of their own affairs.
The climate which has been created makes it very difficult for other people to manage their own affairs. We heard that about a decade or 12 years ago the linchpin of the Government's economic policy was to kill, destroy or reduce inflation. The linchpin of our defence policy was NATO. Yet 10 years later we hear the same story. It is our strategy to reduce inflation. Those in industry or any form of commerce who seek to build a business want to plan medium and long term. They do not like to think short term. As inflation came down and interest rates fell, so the enterprise culture took off. Taxation came down. Even today I believe that noble Lords on all sides of the House will accept that the level of taxation is fair. No one is calling loudly for greater cuts in taxation. Allowances were removed so that the ability to shelter or cheat went out of the window. There were few opportunities to avoid paying tax. The Government's tax stake grew.
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The same companies which were encouraged to invest were contemplating a plan with interest rates in single figures. They were borrowing money and they were encouraged, often by a bevy of foreign banks with salesmen who sold money to them. They genuinely believed that they could plan for growth and invest. The cautious companies which had seen it all before had kept their money on deposit and did not invest or take risks because they were not prepared to take the risk of suffering in the future. However, as interest rates rose and inflation with it, so a great many of those people who made up the enterprise culture began to get hurt. Not only that but they found that their own banks and those who provided them with money were also being hurt. Their own ability to manoeuvre and support their clients had disappeared.
I was brought up to believe that very high inflation which was more than double the prevailing interest rates gradually destroyed the economy. Equally, when the amount of money that must be paid for borrowing is more than double the rate of inflation, that may be hurting the economy more than may be thought. This is where I see something happening. I have never been in an economic situation like this in my life and I have never contemplated it. There is money around, but it is not in the hands of the banks because any sound and prudent saver will think, "I shall place my money on deposit at high interest for the short term rather than invest in the long term". There is a shortage of liquidity. At the same time the Government created a new mechanism, the TESSA, which the young are falling over themselves to invest in. It is a great scheme of long-term investment which is beneficial.
If we are to try to live much longer with high interest rates, what will the impact be? There is a feeling of moral injustice abroad which causes me concern. Those who are the rebuilders of the economy in the private sector and who have borrowed are feeling shattered, nervous and worried about the future. The Government have applied a brake which is far fiercer than they probably realise. They often have to deal with historic information rather than the information of today. Often governments and their officials are out of touch with the real economy.
This is not just a cry for help for industry. There is a case for signalling to the private sector at large that interest rates are now on the way down. There is a feeling that we are past the worst. It is that signal that is perhaps more important than reducing interest rates in large chunks. The right course to take is a steady downward trend which is at least parallel to or perhaps quicker than the fall in the level of inflation in order that the gap between inflation and interest rates may be narrowed. I urge the Government to give consideration to that.
7.18 p.m.
Lord Stoddart of Swindon: My Lords, when the noble Lord, Lord Hesketh, opened the debate he may have wondered why there were gasps of incredulity from this side of the House. Those gasps of incredulity were because he was painting such a rosy picture of the economy. One would never believe that all the news we are hearing on television and through the other

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media, is bad, bad, and still bad, all the way. Where has the noble Lord been? Does he not see the reports that emanate from the Government and various other organisations?
Did the noble Lord not see the CBI Quarterly Industrial Trends Survey Summary which shows that in industry confidence is at the lowest ebb on record? Did he not see that? Did he not see the Central Statistical Office index of output for January which shows that manufacturing output in the three months to November 1990 was 2.5 per cent. lower than in the previous three months? Did he just not happen to pick up the employment statistics which show that total unadjusted unemployment in December rose by 122,000, putting us on the way to mass unemployment?
Did the noble Lord not see the state of trade enquiry for February issued by the Building Employers Confederation which shows that the building industry is facing catastrophe? That is why we were incredulous. We had read those things and we believed the people at the sharp end who know what it is al I about. We therefore wondered why the noble Lord was able to give such a rosy picture.
I wonder why we bother to have these debates. The Government never listen to what they are told. They never listen to any opinion other than their own. I make no apology for referring to the 1985 report of the Select Committee on Overseas Trade. The report identified the problems we were facing then. The noble Lord, Lord Selsdon, who was a member of the committee will know that what I say is true. The report pointed to a decline in manufacturing industry. That is still going on, after five years. It referred to failure to invest. We are still failing to invest. It mentioned failure to encourage exports and to provide import substitution. We are still not doing sufficient in that regard. It drew attention to the failure to provide a high level of education and training. Over the past few weeks and months we know how great that failure has been. It described the failure to maintain and modernise Britain's infrastructure. We know—we have seen it over the past few days—how behind, how old-fashioned, and how badly run our infrastructure is, certainly in respect of the railways. Those problems pervade our infrastructure services. And of course the report also said that we were maintaining sterling at too high a value against other currencies.
After five years the same problems are endemic in our economy and the Government have done nothing about them. The then Chancellor of the Exchequer, the architect of our present economic troubles as we have heard from all sides of the House, Mr. Nigel Lawson, decided to leave the sinking ship for other pastures. Perhaps we will have him here lecturing us on economic policy. Perhaps we shall all forget how disastrous his policies were and merely remember that he was Chancellor of the Exchequer and pay him due deference. But I detract from my argument.
Instead of treating the report, which after all was produced by a committee chaired by his noble friend Lord Aldington, with the respect it deserved, Mr. Lawson, merely sneered at the committee and insulted
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its members. But the chickens are now, coming home to roost. The problems could have been avoided had the Government not been so wilfully stubborn in holding to their own failed economic policies. Over the past two years my noble friends and I have tried consistently to help them avoid the mistakes which have led to the present recession which is now fast turning into a slump. Time and time again we warned of the consequences of an uncontrolled consumer credit boom allied to booming house prices which were becoming completely out of hand. Time and time again we warned the Government that sky-high interest rates would not only hurt home owners but would also result in recession, slump and huge numbers of business failures.
I regret to say that everything we warned of has come to pass. Had the Government listened to what we said our economy would not be in this trough and in this despondent state. They spurned our advice in the most cavalier fashion. They failed to understand that we were not simply party-politicking but trying to save our country's economy from going down the drain. They failed not only to listen to noble Lords on this side of the House; they failed also to take heed of their friends in industry, the CBI and the Institute of Directors. No one could be more pro-Tory than the Institute of Directors. But it was ignored and told to go away and play. The Government's own Back-Benchers have warned that the policies are leading to economic bankruptcy and political suicide. I do not mind the political suicide but I object strongly to the economic bankruptcy.
Even when it came to entering the ERM, in itself an act of sheer stupidity, the Government could not get it right. They entered just at a time when the economy needed a boost through sharply reduced interest rates and at a rate against the deutschmark which was far too high. Thus desperately needed cuts in interest rites are being delayed to maintain sterling at an absurdly high level within the straitjacket of the ERM. It is clear that there ought to be a realignment of currencies within the system. However, this has apparently been ruled out by Herr Pöhl, who now spends his time strutting around Europe telling everyone that they must all behave like Germans. So a realignment which would solve the problem is apparently right out of court.
The correct policy for the Government is to cut interest rates now, and substantially. That is the only way in which the confidence of industry and commerce can be restored. If that leads to our having to leave the ERM then quite frankly I am all for it, because it would help to save the British economy. And how we need confidence to be restored in industry! There is plummeting production. Sales and profits are such that a record number of firms, especially small firms, are being forced out of business while unemployment is rising sharply. The overall percentage rate of unemployment may be 6.3 per cent. but noble Lords should note that male unemployment is now 8.5 per cent. That is a very significant figure. Every time I watch the local news on TVS or Thames Television I see depressing reports of firms laying off

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workers or going out of business. Right in the Tory heartlands the recession is exercising its grip. It is savagely hurting people who have never been out of work before and who, for the most part, have voted Tory all their lives.
A relative of mine, a quantity surveyor, a qualified man who has never been out of work previously, now finds himself without a job and with no prospect of finding another within his profession for a very long time. Small shareholders have also been hit, especially those who invested in small businesses. Under this Government, they have seen the value of their shares drop by 33 per cent. in the past 12 months. They will not easily forgive the Government.
No scapegoats are available to the Government now. They can no longer accuse the trade unions of holding the nation to ransom; indeed, we do not hear the phrase now. The Government have so emasculated the trade unions through oppressive legislation that they are unable to influence very much what happens —certainly not as regards the course of the economy. Had the Government not so wilfully undermined the trade union movement, it is possible that the movement could have been an ally in preventing the slump, business failures and mass unemployment.
Finally, it is still much more lucrative to make money rather than to make goods and provide the real services which are needed. What incentive is there to invest in industry with a meagre 3.5 per cent. to 5.5 per cent. gross return when one can put one's money in any building society and receive a 14 to 15 per cent. gross return? Who will invest in British industry under those circumstances?
It is time for the Government to shake off their obsession with a total free market and to recognise the fact that if British industry and the economy are to revive and thrive, they must lead by applying adequate incentives to industry and by promoting partnership between them and both sides of industry. It is only in that way that we shall have sustained growth and lasting prosperity.
7.32 p.m.
Lord Holme of Cheltenham: My Lords, I must begin by apologising to the Minister for the fact that I shall, sadly, not be present in the Chamber to hear his reply. However, perhaps I may say how struck I was by his metaphor of inflation as the enemy at the gate. Shortly afterwards, the noble Lord, Lord Boyd-Carpenter, referred to inflation as being the greatest of all evils. I believe that the House and the country are entitled to ask why the Government opened the gate in 1988, invited this evil enemy in and asked him to make himself at home. We are still suffering as a result of that act by the Chancellor of the Exchequer; indeed, we are still trying to get inflation out of the other side of the gate. That is as far as I intend to venture in the field of macro-economics, where so many other noble Lords have lingered so informatively. I should like to address myself to one specific topic which has not so far been mentioned in the debate.
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I should like to address the question of the relationship between the environment and the economy. There is a danger, as the noose tightens around industrial profits and as the recession veers perilously close to a slump—we must face the fact that we almost have a slump—that environmental excellence will be seen as a luxury which companies can no longer afford. There will be those who say that the extra costs involved in making products and processes cleaner have become intolerable in these bleak days, that good times can be green, but that the hard times are bound to be dirty.
However, I should like to argue the opposite case. My first contention is that high environmental standards and high added value go together. Secondly, I believe that environmentally pro-active and benign technologies could themselves be the source of economic growth and recovery. As to the first part of my proposition—namely, that high added value and environmental excellence go together—those who doubt it may care to consider the evidence from central and eastern Europe. There we have proof of the opposite. Over four decades economic failure and environmental degradation have gone hand in hand. There are also poor products, pervasive pollution, low living standards and low environmental standards. Today the people of East Germany, Czechoslovakia and Poland can all bear witness to that deadly combination.
I do not wish to compare the British economy with those which I have just mentioned. However, it is regrettably true that Britain, among the major industrialised nations, is characterised by a relatively low added value. I believe that higher environmental standards, along with other factors such as a greater focus on good design, better skills and quality in all phases of business operations, could be part of what would make British goods more sought after all over the world.
Under this Administration, I know that "industrial" and "strategy" are two words that dare not appear in public together in the corridors of Whitehall. However, perhaps I should say in parenthesis that, on a visit to Northern Ireland last week, it was very striking to note that the Province is standing up to this industrial depression a great deal better than are other parts of the United Kingdom. I wonder whether that has some connection with the fact that governments of all complexions have consistently taken a much more active role in the economy of Northern Ireland than they believed they should in the UK economy.
I, too, agree with the Government that industrial strategy in the sense of picking winners is very dubious. However, in the sense of helping British industry to add value, a rational industrial strategy would certainly recognise how widespread the world demand for environmental excellence has become. The Government can make the difference in that area. They can set standards on air and water pollution which are among the highest, not the lowest, in the

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world. They can also do the same in respect of vehicle emissions and really commit themselves to energy efficiency.
It is a great shame that the Government who a few years ago under the leadership of the then Secretary of State for Energy, Mr. Peter Walker, flirted with energy conservation, seems now to have become bored with the subject. It is an even greater shame to note that, although the last Secretary of State for the Environment rode bravely up to the fence of an energy tax under the tutelage of Dr. David Pearce, he refused the fence and rode away at the first murmur of protest from the Treasury. We on these Benches are ready to support the idea of an energy tax. We believe that the Government should be the source of high environmental standards. The best of British industry will respond. Indeed, the very best of British industry is already ahead of the Government. In what is undoubtedly a more environmentally conscious world not only will added environmental value improve the quality of life here but the respect and demand for British goods abroad will also be increased.
We should recognise specifically what has been recognised and encouraged by the governments of France and Germany: that there is a major opportunity for environmental clean-up products and processes, for new waste disposal methods; for new water and air cleansing processes; for new technologies to clean coal before it is burnt, and for ensuring better compression in the internal combustion engine. The examples are endless. The market for clean-up technology world-wide is vast and growing. It can be counted now in tens of billions of pounds.
The Government have always been eloquent in commending self-interest to us as the motor of economic behaviour. I suggest that they widen their horizons to embrace the idea of enlightened self-interest. Enlightened self-interest would put together Government leadership and standard setting with the initiative of the company, of the businessman and of the entrepreneur. In Britain we need a new synthesis of environmentalism and economic enterprise. Therefore, perhaps I may urge upon your Lordships the suggestion that we treat the green imperative not as part of the problem but as part of the solution to our economic predicament.
7.39 p.m.
Baroness Ewart-Biggs: My Lords, it seems a long time since the Minister delivered his robust defence of government economic policies. As my noble friend Lord Stoddart said, since then a rather conflicting set of pictures has emerged. They focus on the depth of the recession which the country now faces. The noble Lord, Lord Jenkins, said that he felt sorrow not just over the mismanagement of this country's economic policies but also for the victims. I should like to make one or two remarks about the human costs of some of the mistakes in economic policy.
A number of noble Lords have referred to unemployment, and the fact that this month's unemployment figures, which will be announced later this week, are expected to pass 1 million. It is
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unbelievable that job losses have been running at 1,000 to 1,500 a week from the beginning of this year. They can only be seen as one of the major human costs of government failures.
I should also like to make a few remarks about a group of individuals and families who, through no fault of their own, are suffering the results of present policies and are in debt. The NACAB and consumer bodies are a good barometer and show the extent of the problems that people face. By way of background, the NACAB reports, first, that in November 1990 outstanding credit amounted to an unprecedented £50 billion. That is believed to be five times what it was in 1979. Secondly, in 1989 bureaux dealt with 1.5 million inquiries about debt; and, thirdly, in 1989 2 million households had problems with repaying debts. A British household is just over 20 per cent. more in debt than its French and West German counterparts. That is astounding. Those figures show the serious problems which are facing many families today. They are families which have no savings to back them up.
When one looks at the causes of indebtedness, one sees that rent arrears are high on the list. The NCC reports that 1 million households have difficulty paying their rent. There is a growing of number of home owners who are either late or defaulting on their mortgage repayments. The NACAB tells us that repossessions increased from 13,740 for the whole of 1989 to 14,390 for the first six months of 1990. The 1990 figures are to be published on 14th February. We could be looking at figures which are 100 per cent. more than those of 1989. Reporting the six month figures in the summer, the Council of Mortgage Lenders firmly blamed interest rates for the increase.
It is of interest to note that increased competition in the provision of credit in the United Kingdom has not forced down the cost of credit—anything but. In 1989, the annual percentage rate of interest in the United Kingdom on loans ranged from 12.5 per cent. to 500 per cent. In contrast, in the countries which set limits to interest rates the rates varied: in France from 8 per cent. to 17 per cent.; in Germany, from 9 per cent. to 25 per cent.; and in the Netherlands from 9.5 per cent. to 18 per cent. That is quite a difference.
It is clear that housing expenditure, which is incurred through high interest rates, is a major cause of indebtedness. There are many other reasons. The citizens advice bureaux are assisting many people who have incurred multiple debts, including poll tax arrears, gas, electricity and water, which have become more expensive since privatisation, and Social Fund repayments which are a new form of debt for many people at the bottom of the income ladder.
One feels that it will not be long before student loans create yet another source of indebtedness that will come before CABs. The bureaux describe how difficult it has become to help people. As the scale of the bureaux' commitments has grown, their options have narrowed. What worries them most is that lenders are putting on the squeeze and their existing strategies for assisting clients in negotiations with lenders no longer work. The bureaux describe some worrying situations. The banks are refusing to freeze

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interest payments. A bureau reports a case in East Anglia where a bank refused to freeze the interest and bank charges on the £350 overdraft of a man terminally ill with lung cancer who had offered to repay the debt at £6 a week. Previously CABs were able to arrange repayment schemes with which the debtors were able to keep up, and which the lenders were able to ease on request. Such arrangements are now unfortunately coming to an end.
The CABs also give some worrying examples of the aggressive tactics and harassment used by creditors when they refuse to accept the repayment terms arranged by the CABs. With regard to the methods used for collecting debts, the NCC and the NACAB are becoming increasingly worried by the growing number of private bailiffs. They would like to see stricter controls applied to them. It appears that those bailiffs are used increasingly by magistrates' courts to collect poll tax, rent arrears and fines. Lady Wilcox, chairman of the NCC recently said:
"We believe that people who can't afford to pay their debts all at once should be enabled to manage repayments in a way which is fair to them and efficient in getting repayments to all creditors. Private bailiffs fail these criteria. In fact, using them may make the situation worse rather than better and plunge people already in dire poverty into deeper misery".
There is supporting evidence from the CABs which endorses those remarks. The bureaux have given some worrying examples of how private bailiffs take over people's possessions and sell them sometimes at a low price. That it is a harsh system.
The situation regarding consumer debt, as reflected by the advice agencies, is critical. It can now only be exacerbated by the expected rise in unemployment. The NCC and other bodies feel that there are some measures which could be taken immediately to try to alleviate the problem of indebtedness with all its social consequences for the family, the marriage and children growing up. They feel, first, that the existing credit unions should be extended. They are saving co-operatives which provide small loans at a low interest rate. They are of enormous use to families on the lowest incomes who find themselves in debt and unable to repay it. They also feel that the Social Fund should be replaced with one-off grants, as before, to people in the greatest need. Otherwise the loan is deducted from the social security benefit, again putting people on the lowest income into terrible difficulties.
Lenders should give more facts to help borrowers understand the cost of credit. I see a rosy picture painted in the letters that my student daughter receives from her bank. They do not explain the financial problems she may eventually face. The agencies also feel that a system of credit management should be introduced, with restraints on bank lending. As banks themselves move further and further into trouble, surely they will need more and more profits from lending at high interest rates.
I end by saying that as regards consumer debt, we face a serious combination of events. On the one hand, people are borrowing more, enticed originally by the so-called economic miracle that the Conservatives
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promised. Secondly, they are suffering from high interest rates and high inflation. Thirdly, there is a greater financial burden on the poorest members of society. On the other hand, the lenders, the banks and credit card companies are much harder on repayment arrangements. This combination can only increase indebtedness, bringing more families into hardship and misery. That is an unforgivable result of the Government's economic policies.
7.50 p.m.
Viscount Caldecote: My Lords, I was particularly struck by one comment in the opening speech of my noble friend Lord Hesketh. He said, "The trouble is that we have been living beyond our ability to deliver goods. There has been excess demand". I imagine he meant that there had been excess demand relative to the output of manufacturing industry. That is a most relevant comment. Yet in his opening remarks the noble Lord, Lord Peston, said that my noble friend's speech was irrelevant. However, he himself spoke of airy-fairy concepts, of institutional forces, of monetary, fiscal and incomes policy but not a word about the added value created in industry which we so sorely need. Worse still, the noble Lord, Lord Peston, gave us three alternatives: high unemployment, high inflation or a change of government. If that is really the case, there is no hope for the future at all, for the alternatives are equally ghastly. However, there is a very good alternative: to press on with the Government's policies, albeit with some modification to meet the developing situation.
I was sad to hear my noble friends Lord Cockfield and Lord Boyd-Carpenter and the noble Lord, Lord Barnett, still referring to excessive wage costs. Surely that is an outmoded concept. It is no longer wages for workers, salaries for managers and fees for directors. We ought to get rid of that concept. Excessive pay costs for all of us are equally relevant to competitiveness in industry.
In another place on 30th January there was a debate on the recession in industry. The Secretary of State for Trade and Industry said during the debate:
"inflation is the consequence of excessive demand—demand which grows faster than output. Its cure must inevitably involve a period of slower growth of demand".—[Official Report, Commons, 30/1/91; col. 956.]
I wish he had added, "and also faster growth in the output of competitive products for home and export markets". That is my theme for my few remarks today.
In pursuing it, I wish to make clear at the outset that the best of British companies are as good as any in the world and probably better than many. The trouble is that there are not enough of those good companies. Unless effective action is taken soon to reverse the contraction of our manufacturing base, when the economy expands again we shall be in real trouble with rising inflation once more and an increasing deficit on our balance in overseas trade.
Inflation is a serious disease which must be cured. As other noble Lords have said, high interest rates are already having their effect. There is greater competition all round. It is much more difficult to

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obtain contracts so many prices are coming down. That is all to the good. However, as the noble Lord, Lord Ezra, made clear, high interest rates continuing for such a long time create serious damage to industry. Worst of all, they damage investment and output which are both now declining.
It is also becoming quite clear that pressure on the sterling exchange rate is a major contributory factor in preventing us from reducing interest rates. The main reason is concern about overseas investments, about our balance of payments and the fear that we might one day be driven into devaluation. I do not believe that we shall. There is also a lot of hot money attracted by high interest rates which would soon disappear if we brought interest rates down too soon. In turn, the balance of payments deficit results from inadequate availability and output of competitive products in manufacturing industry.
It is no accident that the strength of the German and Japanese economies is based on competitive and efficient manufacturing with a big output and no balance of payments problems. It is no accident that the rise of South Korea, Taiwan and, to some extent, India, has come about not from the growth in the GNP through expanding service industries but from increased competitiveness, efficiency, and growing output in their manufacturing industries.
Over the past 10 years the Government have had a good record. Their policies have stimulated and rekindled the spirit of enterprise. They have curtailed the restrictive practices of the trade unions and increased productivity and profitability in industry. All those are essential; though it must be admitted that they were improvements from a low base. We need to do a great deal better compared with our competitors.
Much less satisfactory has been the slow growth of output over those years which is now only about 6 per cent. above 1979 levels. That is almost entirely due to a lack of investment in plant and innovation in manufacturing industry. It is, or should be, a matter of grave concern.
Alas, that does not seem to have been the case with HMG. They do not seem to have appreciated the vital importance of this factor of increased output in manufacturing industry. Last year I was so worried about it that I wrote to the then Prime Minister, Mrs. Thatcher, expressing my concern. In the first sentence of her reply, she said, "I do not share your concern for manufacturing industry". Again, not long before Sir Alan Walters left the service of the Government, I had the opportunity to ask him two questions: "Are you concerned about the huge deficit in overseas trade in manufactured products?" It was then running at the rate of about £20 billion per annum. I also asked: "Should we do something about it?" He replied with a simple and definite "No" to both questions. I earnestly hope that wiser and more constructive advice is now being offered to Her Majesty's Government and that they will take it. If they do not, we shall never achieve the essential change of attitude which was mentioned by my noble friend Lord Cockfield.
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Many of your Lordships will remember the first line of Kipling's poem of the much travelled soldier:
"I've taken my fun where I've found it".
The wheelers and dealers have had their fun in the 1980s in the welter of takeovers. Now that party is over and that is good. Very few of those acquisitions did anything for manufacturing industry or for national prosperity. Few added any value in the wealth creating process. Thus, I shall lose no sleep about the financial institutions crying, "Woe, woe", over the lack of merger and acquisition activity.
We have had too much emphasis on money, which is only a convenient means of exchanging wealth. We have had too little emphasis on adding value by manufacturing. In the fight to control inflation, I hope that the Government will pay due regard to that and ensure that every policy that is discussed and decided in government will be scrutinised for its effect on manufacturing industry.
Years ago there was an old saying in Birmingham, "Where there's muck there's brass". It is time that we put much greater effort into adding value to the brass. It is time we got down to the brass tacks of our economic problems by promoting greater output from manufacturing industry in every possible way by fiscal incentives and selective support, as has been very successfully done in Germany and Japan. That is the way to a stable, prosperous economy and towards the Prime Minister's admirable objective of opportunities for all.
8 p.m.
Lord Jay: My Lords, there has been only one speech in this debate today which seemed to me to have nothing to do with the present state of the UK economy and that was the speech made by the Minister in opening the debate. I do not myself believe, as someone suggested, that his speech was written for him by the Treasury. It sounded to me as if it was written for him by Tory Central Office.
I shall restrict myself to speaking about the present state of the British economy this evening. That economy is now in a state which one can only describe as one of near collapse. It is in a worse state than at any time that I can remember since 1945, as we are suffering from both rapidly rising unemployment and a huge balance of payments deficit.
The public were misled by well-meaning people last summer. Reckless statements were made that joining the exchange rate mechanism would bring us stability and lower interest rates, and that it would also help the economy. Incidentally those same arguments were advanced for fixing the pound at an overvalued rate in 1925. We were even told that there would be a golden scenario as a result of entering the exchange rate mechanism. Some of us argued that such a move would mean high interest rates and rapidly rising unemployment. In your Lordships' House on 20th July at col. 1167 of Hansard I stated:
"Interest rates would be raised, exports would flag, unemployment would grow".
My only mistake was in predicting that the euphoria over the exchange rate mechanism would last about two months. In fact it lasted for about two hours in the City.

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What has happened since we joined ERM in November at a 20 per cent. overvalued rate? Interest rates have stayed high; unemployment has started to rise at a rate of 70,000 or 80,000 a month and real output is falling as fast, if not faster, than at any time either in 1929–1932 or 1979–1981. Real manufacturing output in the UK fell in the last three months of last year at an annual rate of 10 per cent.
Strictly speaking we are not experiencing a recession at all. We are experiencing a deliberate deflation, as in 1979–1981, brought on by the Government's high interest rate policy and intensified by the unsustainable exchange rate. On present policies output is likely to continue to fall; the pound will fall to its ERM minimum and thereby keep interest rates high; factories and industries will close down; dividends will fall and unemployment will rise by 70,000 or 80,000 a month. I estimate that, on present policies, unemployment will reach 2.5 million by autumn 1991 and 3 million in the long promised utopia of 1992.
The high interest rates will cause unemployment by cutting real investment and the overvalued exchange rate will also cause unemployment, both by restricting exports and by increasing competitive imports. Deflation of this kind is cumulative. It does not necessarily stop of its own accord, and indeed it did not in the classical case of 1933. Each batch of workers thrown out of employment reduces its spending and so starts a new wave of unemployment as a result. That is plainly happening now. The inevitable result is a loss of productive capacity, which is likely to be largely manufacturing export capacity in this country.
It is now agreed by the statisticians that in the 1979–1981 disaster, we lost 25 per cent. of our manufacturing capacity. Most of that has been lost for good. I believe the previous speaker would agree with me when I say that one can destroy a factory and much of an industry by deflation in six months but one cannot rebuild it in six months. We discovered that fact in the early years of the last war. The permanent loss of real capacity through deflation has become so well recognised that the academics have invented a new word for it. However, I cannot pronounce that word.
It is bad enough to have a 20 per cent. overvalued exchange rate, but it is even worse if one starts with a huge balance of payments deficit. That deficit was still running last year at a rate of about £16 billion. It consists almost entirely of a visible trade deficit with the EC. It was not mainly caused by the consumer boom of 1988–1989, although that made it worse. However, it has grown continuously ever since we joined the EC in 1973. As a result of that deficit, we have in the past three years borrowed on a short-term basis from overseas something like £50 billion. The payment of the interest on those borrowings has now turned our invisible account into deficit, or near it. That makes the whole situation far more difficult.
Those who thought that joining ERM would give us stability seem also to have forgotten that we still carry out 50 per cent. of our trade with the world outside the EC. Fixing the exchange rate against the
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mark leaves it fluctuating against the dollar and yen and a whole lot of other currencies. In the past few weeks we have found that a fall in the dollar against the mark pushes up the pound against the dollar. That makes the position even worse for us as a result, particularly as regards our exporters and our employment situation.
Amid all this, the Government's only response—we heard it from the Minister again today—is to repeat continually that they are fighting inflation. To my mind the first irony of that phrase is that the Government themselves have stimulated cost inflation in all kinds of ways by raising transport charges, Underground fares in London, water charges, rents and mortgage interest payments. All those charges have contributed to pay inflation. I agree with the previous speaker that we should talk about pay rather than wages. There has been pay inflation.
In any case no intelligent economic policy can be built upon an obsession with one single aim. Economic policy must achieve a judicious balance between a number of objectives and not sacrifice all of them for one. If one is too cowardly or too incompetent to manage any kind of incomes policy, one is forced nowadays to choose between more unemployment or a further rise in prices. If, like this Government, one prefers any level of unemployment to any rise in price levels, one simply cuts down the real output, wealth and capacity of the country. We could achieve a zero rate of inflation by having zero output and zero employment.
In the case of our present economy, thanks to the ERM overvaluation, we cannot now easily reduce interest rates for fear of the pound falling below the ERM floor. We cannot let it fall below that floor because that is thought to be against ERM rules. In fact such a course is not even against ERM rules. We were always assured by those who wanted us to join ERM that it was possible to realign the rate, although only, it appears, by permission of the other members. Frankly, that is now the only way out if we are to tell the hard truth about the present situation. If we do not adopt that course soon, the risk is that we shall decimate much of British industry beyond recovery and finish up little more than an economic satellite of Germany. Incidentally, Germany has just raised its interest rate without in any way consulting us.
I only hope that we shall face and understand these hard facts in time and not waste six years in a long-drawn out and painful struggle as we did from 1925 to 1931. We shall have to lower the exchange rate in the end. The only question now is, when are we going to do it?
8.10 p.m.
Lord Boardman: My Lords, clearly the noble Lord, Lord Jay, did not like the speech of my noble friend Lord Hesketh, probably because my noble friend spelt out clearly the successes of the last 11 years and the strength of our economy. The noble Lord, Lord Jay, painted a very depressing picture of doom and gloom.
I shall refer only to one general statistic on which I believe there will be universal agreement. Over the

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past 11 years the standard of living has improved dramatically across the country. We should never forget that. However, I accept that today the economy is not as good as many of us would like it to be. I shall divide my speech into two parts. First, I shall say a few words about what I understand to be the causes of the present downturn. We should not turn the clock back but if we can learn lessons from those causes it would be valuable. Secondly, I shall say something about future action.
In large part the situation is caused by a general downturn in world trade. We have only to look at what is happening in North America and its importance to our economy to realise that we, as a great trading nation, cannot be immune from the impact of such downturns elsewhere.
A second cause is the expansion of credit, both personal and commercial. The expansion of personal credit has been due largely to the escalation in house prices and the increased borrowing capacity associated with it. Somewhat ironically, that was in large measure due to what was intended by Mr. Lawson when he was Chancellor of the Exchequer to be an act of kindness. Mr. Lawson has been much criticised in the debate today. He announced that tax relief on mortgage interest available to individuals would in future be available only on a property and allowed an interval of several months before that change took effect. In that period an enormous number of people took advantage and borrowed money to buy property. It was not just young unmarried couples. For example, five young men who worked together in the City might club together to buy a property for £150,000, getting full tax relief, when the property was probably worth only £50,000 or £100,000.
The escalation in house and flat prices resulting from that action, which was intended to be a kindness, was dramatic. It did not affect only those individuals. Neighbours who believed that their house was worth £50,000 saw the house next door sold for 150,000 and reckoned that they could borrow a lot of money to have a holiday, buy a boat and make other purchases. That measure had a major impact on the amount of personal credit granted.
The second and, in terms of figures, greater element was commercial credit. Demand during a period of rapid growth and expansion was considerable. Strangely, I agree with the noble Lord, Lord Bruce of Donington. There was a massive expansion of credit due to the demand arising from the expansion of the economy and the fact that there were some 400 foreign banks in London willing and happy to lend money. My noble friend Lord Selsdon also mentioned that point. An unfortunate consequence was the erosion of the relationship which had previously existed between a banker and his customer.
Viscount Caldecote: My Lords, before my noble friend leaves the point, does he not agree that the expansion of credit would have been much less damaging if there had been greater output by manufacturing industry to meet the demands resulting from the expansion of credit?
Lord Boardman: My Lords, I agree with my noble friend. Credit granted for investment purposes in order to produce more was well justified. The relationship between a commercial customer and his bank used to involve a full exchange of views. A loan would be made with prudence in the light of knowledge of a long-standing customer. Unfortunately that changed with the expansion of credit and with large numbers of foreign banks opening here. People who found that their traditional banker was unwilling to lend them further money, perhaps for very good reasons, would go round the corner and get credit elsewhere. That has led to some of the present problems.
It is worth noting, when considering the publicised failures which have occurred recently, that in almost all cases 20, 30 or sometimes as many as 100 banks have been involved as lenders. That has made it very difficult for the old relationship, which benefited both the customer and the bank, to continue. I do not suggest any government action in that respect, but it is a factor to be taken into account when looking at the causes of the expansion of credit.
Two years ago the political and financial writers, and indeed noble Lords opposite, criticised the banking world for not lending enough money to cover the expansion that was taking place Noble Lords opposite, including the noble Lord, Lord Bruce of Donington, called for a nationalised state bank as part of Labour Party policy so that there would be an instrument to lend money to commerce and those industries that were restricted by the lending policies of the time. The same people are today criticising the imprudent and improvident lending that took place.
A recent report from the chambers of commerce shows that 15,000 businesses have closed down in the last 12 months. We should put that report into perspective. We should take into account the number of businesses which have started up in the same period. That figure will be many times the number that have closed down. My noble friend referred to something like 400,000 businesses which have started up. I do not have the figure, but it will be in Hansard. If it is relevant he will no doubt deal with it in his reply.
The criticism which is made most frequently today is that the exchange rate is too high and has been maintained for too long. Linked with that is the criticism of our entry into the ERM; or it is said that we went in at the wrong rate. Yet the most important economic task concerns not the interest rate or the exchange rate but the inflation rate. My noble friend Lord Boyd-Carpenter said that above all priority must be given to controlling inflation.
The interest rate, the exchange rate and the inflation rate are very much linked. If that means that we have to keep the interest rate higher for longer than we would like in order to bring down inflation so be it. I would regret that, but inflation must be the top priority. I believe that a reduction in interest rates is anticipated. Therefore, a cut today or in the near future would not have the effect on the economy and on sterling, and consequently on inflation, that some

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fear. However, I am content to rely upon the far wiser judgment and the information available to the Government and the Bank of England.
High interest rates are having a severe and restraining effect on discretionary expenditure. However, it was a long time after those high interest rates were applied that they began to bite. Similarly, when they come down it will take a long time before retail sales recover. That may not be a bad thing in view of the impact on inflation. The same applies to investment. I agree with my noble friend Lord Caldecote. It is important to maintain investment, particularly in manufacturing industry. There is a time lag. When interest rates go up and people decide that they cannot afford to invest, it is probably two years before that cut takes effect. When interest rates come down and people can afford to invest, there is a similar time lag. So we must be aware of the time lags.
Then there is the worrying trend of unemployment. It is rising and will continue to rise; yet there is still continuing pressure for inflationary wage increases. The present cycle of downturn will pass, whether in six or 12 months' time, and it surely must be in the interests of employees to forgo—certainly to moderate—the wage demands that are now being made in order that they retain their jobs. The alternative of pricing themselves out of a job is one that has been widely publicised. I hope that the culture to which my noble friend Lord Cockfield referred has changed and that there is a greater recognition of the need for a different attitude. It is certainly apparent in some trade unions and work forces. In the present downturn, it is very much in employees' interests to moderate or forgo the wage increases which otherwise they would have demanded—
Lord Bruce of Donington: My Lords, the noble Lord has been addressing his remarks to necessary wage reductions or moderation of wage claims. Will he confirm that that ought to apply to pay generally, and in particular to the paid—many of us think over-paid —directors of boards of companies and of banks?
Lord Boardman: My Lords, I certainly do not intend to pick out any individual group as being particularly suspect. However, what I was going on to say before the noble Lord intervened was that this should apply across the board, and I include shareholders and their dividends.
We are going through a period when general voluntary restraint on both wage demands and dividends would be healthy, welcome and wise. We are going through a cycle and, if we can go through it without increasing our costs, we shall come out in six or 12 months' time able to continue the rapid, healthy economic growth in prosperity that we have enjoyed over most of the last 11 years.
I listened carefully to speeches from the Benches opposite. Some of the criticisms made were perfectly fair and some of the points were certainly valid. But I
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listened in vain for any constructive alternative, and I include the speech of the noble Lord, Lord Peston—
Lord Peston: My Lords, the noble Lord was present during my speech endless hours ago. I offered a whole set of policies which may be wrong but which were certainly constructive. I think that I did my best.
Lord Boardman: My Lords, perhaps I should have phrased what I said differently. I should have said that there was not a set of measures from the Benches opposite which could be hung together to make a sensible economic package that would help carry the country forward in the way the policies so resolutely being pursued by the Government are doing.
8.24 p.m.
Lord Dean of Beswick: My Lords, from what I have been able to hear when my other commitments permitted, this has been an interesting debate. But I should like to view it in a different way from other speakers. At present, as a nation, we are involved in a war on two fronts. While it may be said from all the reports coming back that we are doing rather well in the Gulf, it is obvious that in the economic war we are doing very poorly indeed and are losing the battle.
One has to ask: how has this come about? The three field marshals who have been in charge of our economic battle since 1979 were, first, the right honourable Geoffrey Howe, who has now disappeared from the centre after his act of political matricide. Then there was Mr. Nigel Lawson, whom I remember only a few years ago delivering a Budget in another place. To judge by the reaction of the back-benchers of the Tory Party in another place, who were waving their Order Papers, and by the eulogies which quickly issued from the Conservative supported press, saying that he was probably the best Chancellor of the century, one would have thought that the Messiah had come again. His successor was the present Prime Minister, Mr. John Major, who appears to have inherited a decline which other people foresaw and warned the Government would take place, but nobody listened.
How has this come about? It has come about because this present Government, since 1979, have had the benefit of more income, not derived from hereditary resources, than any other government in history. They have had over £90 billion of oil receipts, which none of their predecessors had. They have also had huge sums of money from the privatisation programme. But they have obviously made a complete cock-up of it.
What has happened to that money? Where has it gone? I remember the report of a Select Committee of your Lordships' House some years ago—it may have been referred to by previous speakers—on the manufacturing industries. It was barely printed before it was rubbished, quite rudely and offensively, by the then Chancellor, Mr. Lawson. I saw in the press this weekend that there had been a succeeding report by a committee whose chairman is the noble Viscount, Lord Caldecote, which is saying the same thing as that earlier report.

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However, in my few remarks I want to talk about two industries which are suffering a great deal, and when they suffer so does the nation. I want briefly to refer to the building industry, which, as previous speakers have said, is the biggest employer of labour in the country. Only a month ago, the Building Employers' Confederation, which cannot be accused of being a supporter of my party, sounded further alarm bells in succession to what was said last year when the danger signs were showing.
Recent headlines have stated that the building industry is now suffering its worst recession in 40 years, and another 100,000 jobs could be lost in the foreseeable future. Prominent people in the building industry are saying that in the foreseeable future the workforce could be cut by half. When it is realised that the building industry will be the main industry to have the job of building and refurbishing in an industrial revival, that indicates a very poor situation indeed.
I am not thinking just about bricklayers, joiners and plumbers. I am thinking about professional staff. There are now serious redundancies among the professional people, who are the generals who run the building industry, such as architects, planners and quantity surveyors, and it is on record that an architect operating gainfully will provide 50 other jobs within the industry. The sad fact is that this group of people is being particularly savaged.
I took the point made by the noble Lord, Lord Boardman, about owner-occupiers. As one who has been interested in the building industry all my life, I have to say that last year 40,000 repossession orders were made against people who had not been able to meet their mortgage repayment commitments. These people are not speculators or people with two homes; they are mostly people who have put their life's earnings, or what they thought would be their life's earnings, into buying a house. It has gone into the wind, and it is a tragedy of enormous proportions. It seems to me the Government are rather underplaying this when they talk about what has been done in the owner-occupier sector and refer to the fact that over a million council properties have been sold. In effect, the percentage is infinitesimal.
I would say to your Lordships and to the Government that I am one of the lucky ones because I happen to be able to pay my mortgage and I own my own home. I would ask your Lordships to think of the situation of someone aged 40, with two or three youngsters whom he is trying to put through college. Suddenly his job disappears, or interest rates go so high that he can no longer meet his repayment commitments. That is an appalling tragedy which ought not to have been visited upon him. I do not think we should trivialise that situation by giving Answers in percentage terms at the Dispatch Box. It does no good because the objectives of most such families will have been trampled underfoot for life and there is no way, unless the parents win the pools or one becomes a highly paid professional snooker player or something like that, of ever recovering. That is a great tragedy.
I am myself an engineer by calling. Until I was privileged to be made a Member of the other place, I
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happened to work in engineering, wearing overalls and earning my living in the manufacturing sector. One of the things which has been grossly underplayed—I spoke about it in my first remarks today—is the importance of the manufacturing sector. The City of London can certainly make a contribution to the wealth of the nation but it is quite clear that, with our historical background—this has been brought out by the Aldington and Caldecote Reports—unless government, whether this one or the next, makes a determined and consistent effort to alleviate what is happening to manufacturing industry, matters will never improve.
Just before I sit down, let me give some figures. Throughout the whole economy productivity growth has fallen fast. It is true that between 1980 and 1983 our productivity grew faster than that of our major competitors: an average of 3.3 per cent., per year, according to the OECD figures.
But since the early 1980s our performance has deteriorated steadily. Between 1984 and 1989 productivity for the whole economy grew at an average rate of 1.3 per cent., while the EC average was 1.9 per cent.: Germany, 2 per cent.; France, 2.2; and Italy, 2.5 per cent. How is it that we get these Answers from the Dispatch Box that we were top of the league? According to the OECD, we came bottom of the list after the first year, compared with our nearest rivals—the people we have to compete with.
In 1989 Great Britain was the only major industrial country where productivity fell, and it fell by 0.3 per cent. In the first half-year of 1990 productivity remained at that level; but here is the most damning statistic of all—the manufacturing sector has been reduced from being able to account for almost one-third of GDP in 1979 to less than one-quarter in 1989. Need I say more? We have got to that situation, and the Government have been claiming that as a success, when a third of our real wealth was generated historically by the manufacturing sector of industry, from which I came as a workshop engineer. The level is now down to 25 per cent. and still shrinking. Unless the Government, whether this one or the next, reverse this trend, our standing in the world and our standing of living in terms of what we hope to do for our people in future, from the cradle to the grave, in terms of looking after children, education, housing, caring for old people, and so on, will decline. We have no chance of solving the problem unless the Government reverse what they have been doing. I am afraid that, on the performance of the past three Chancellors that we have had, including the present Prime Minister, that looks, at this point in time, most unlikely.
8.36 p.m.
The Earl of Gowrie: My Lords, even when the clouds on the international and national horizons are dark, we must, to borrow the phrase of Kipling's used by my noble friend Lord Caldecote, "take our fun where we find it". Speaking for myself, I certainly found it in the extremely clever device of my noble friend Lord Hesketh in putting down this Motion. For many years during the administrations of both Mr. Heath and Mrs. Thatcher, as well as in the years when

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we were in Opposition, I used to help conduct economic debates on behalf of the Government or the Opposition in your Lordships' House. I used to suffer the castigations that we have heard this evening. Occasionally I was the chap uttering them. But in all those years I never thought of putting down a motion of censure against myself, so to speak, and thereby spiking all the attempts of the Opposition effectively to deal with the situation. It was a brilliant stroke and my noble friend will go far in political tactics.
I also think he was quite right to remind us of the very solid achievements of this Government. My noble friend Lord Cockfield quoted Marlene Dietrich's query, "When will they ever learn?" I am a fan of Marlene Dietrich's but I am also a fan of a particular song by Ella Fitzgerald, of which the refrain is, "They can't take that away from me". One of the things that cannot be taken away from this Government is that for a time—and we could argue for exactly how long but in my view it was at least five years, from about 1982 to 1987—they produced the longest period of sustained growth with low inflation of any government since the war.
With respect to my noble friend Lord Cockfield, whose speech interested me and the whole House so much, I think that profound lessons were in fact learnt at that time. And the proof of that is to be seen in the present political platform of the Opposition, because if all was gall and wormwood at that time, why is the Party opposite shadowing those policies in the programme which it seeks to put before the public?
It may not be right for me to speak out of turn and I am not really competent to do so, but there have been dismissive references to my right honourable friend the former Prime Minister. It is no secret that the previous Prime Minister did have a serious policy disagreement with the then Chancellor, Mr. Nigel Lawson. From what I have heard your Lordships say, Mr. Lawson has come in for quite a lot of criticism. But I did not conclude that my right honourable friend was necessarily wrong in the argument that she had with him. The famous Iron Lady lost that argument and paid a heavy price for so doing. I am not sure that though she lost she was necessarily wrong. It is perhaps a matter for history.
However, my noble friend Lord Hesketh and the Government can be in no doubt at the end of this debate that the crisis which they now face is a very real one. Ministers in a parliamentary democracy are always faced with lobbying. The usual preliminary to a lobby is a few ritualised groans about how difficult things are. But this recession is real, like the war in the Gulf; and perhaps because of the war in the Gulf sectors of the economy such as tourism and the finance and leisure industries, which are normally able to provide relief in recession, are not providing it at the present time.
Successful companies, like British Airways, are being hurt as well as companies which have had it easy—perhaps too easy, as some of your Lordships have suggested. The credit-wise (to use a phrase of my noble friend Lord Selsdon) are trading as poorly as the credit-foolish. They can continue with doors open for
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business for rather longer but that is all. The groans of the Britons are real ones. This is not a recession through which we can all sit tight or hope to muddle through. The Government must respond to a crisis which is partly, though not wholly, of their own making. A definite and visible steer of policy is required.
In this debate criticisms of the Government have been made with which I agree—I particularly enjoyed the relish with which my noble friend Lord Cockfield outlined the litany of disasters that had befallen various public bodies with nearly all of which he had himself at some stage or another been associated. There have also been criticisms of the Government with which I disagree. But much more important than the criticism is the steer which the Government give from now on. If they give the right steer, the economy will start to come right quite quickly and, in my opinion, they will be re-elected too.
Although out of personal loyalties and interest I believe that that would be a good thing, I also believe that it is important, because the Labour party has not yet wholly accepted—though it has come some way—that the market is the arbiter in an open society. It is not the servant of society; it is society. The phrase "social market" which is sometimes used is a tautology. The words mean the same thing. Let us take a current example. Suppose you are poor and are having a bad time because you cannot afford to buy or rent accommodation. You have to sleep in the street in the cold. The immediate aim of policy must be to get you off the street and out of the cold. But, once that immediate aim is fulfilled, there still exists an immense cultural divide, so to say, between socialist economics and market economics as they seek to ameliorate your problem. Socialists want services for people; but in the way of the world those services become centres of power and authority, and above all cost, in their own right. By contrast, market economists want people to have money. That way they have the wherewithal to pick and choose among competing services, including accommodation. They become consumers, free men and women, and services at all levels must deliver to them or go under.
I do not apologise for making that brief ideological point because Britain will not flourish until there is an enduring consensus in favour of the market. There will be plenty of other less central matters about which we can wrangle enjoyably in our parliamentary system. The right steer for this economy now is for the Government to resist pressure, however loud and real, for any actions which jeopardise our competitive position in Europe. That means that our wage and price inflation must be in line with those of our competitors.
High interest rates reflect our relative rates of inflation. One does not stop a plane from running into a hill by tampering with the altimeter. As we come into line interest rates will fall. The price mechanism is the only efficient rationing system known to mankind. It is an unjust one, for this is a fallen world, but it is less unjust than the other kinds.
I grew up under food rationing but also under the black market. Credit controls in a modern economy

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mean a black market for money. I am in rather a good position in my businesses to observe the behaviour of black money all over the world. The first steer from the Government, therefore, must be the clearest conceivable signal that they will not under any circumstances whatsoever devalue the currency. I was doubtful of the wisdom of joining the ERM when we did because our rate of inflation was too high but now that inflation is coming down it would be the sheerest folly simultaneously to devalue ourselves out of it.
I am delighted to say that at present the Government are giving the right steer, but they could do a little more. The Prime Minister is a new and attractive figure on the world stage. His ability to combine modesty with self-confidence at a very testing time has made an immense impression. I know that from experience as I am an international commercial traveller. He has had a difficult act to follow. He should find an occasion to say on that international stage what he says so clearly here at home. Frankly, the world thinks that inflation may no longer be the judge and jury of the present Government and that the Government may ease up on the currency if the polls worsen.
So far, so much hair shirt. But, as I have said, the cries are real and present rates of interest hurt, especially as the underlying rate of inflation is falling while the rates of interest are not. That is where the pain lies. But the twin squeezes of high interest rates and unemployment are, alas, the only mechanisms known to the British economy to correct our tendency to confuse human earnings with human rights and to do so on an annualised basis. But I am not a masochist. If the Government cannot —must not—budge on the counter-inflationary front and on controlling money and credit by price, there is no reason, in my view, why they should not ease the passage of recovery by fiscal means through the tax system.
Nearly every speaker advocated greater investment, but, given the cost of money, we need to be careful of borrowing even to invest. We need the equity market. We shall not attract more individuals into the equity market with capital gains tax at a top rate of 40 per cent. and a standard rate of 25 per cent. Halve those rates or even abolish them, cheer up equities and give them a psychological boost.
Most speakers mentioned the pay problem. The noble Lord, Lord Peston, even suggested that a re-run of pay policies might be part of the programme of a Labour government. I was most surprised to learn of that and would welcome confirmation from the noble Baroness who is to wind up.
Lord Peston: My Lords, I was trying to raise the level of the debate above that kind of remark. I was trying to point out that, although I personally favour an income policy, it was not necessarily the policy of my noble friends. I emphasised that, if we are to get rid of inflation without massive unemployment, we must find another way. I was hoping desperately not to get involved in this kind of interchange because I, for one, have had enough of it.
The Earl of Gowrie: My Lords, I apologise to the noble Lord. I have not been able to come to the House
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for some time, but when I was attending regularly it was a reasonable supposition that a speech made from the Front Bench of the Opposition Bench was a declaration of Opposition policy. Obviously things have changed since I was last here.
Lord Williams of Elvel: My Lords, my noble friend Lord Peston stated that he was speaking personally. When people speak from this Dispatch Box personally, it means personally; it does not mean that what they say is necessarily a policy of the Labour Party. My noble friend made that perfectly clear.
The Earl of Gowrie: My Lords, I am very grateful for the last intervention because it is a tremendous relief to me, in case we should get a Labour government, that a pay policy is not to be part of its policy. Such policies cannot and will not work because they hit at essential freedoms; and pay bargaining in a free society is an essential freedom. I do not blame wage negotiators or the TUC for asking; I blame, as do many of my noble friends, managers for granting. I believe in dear money, if only because, if managers grant inflationary wage claims, they go under.
My noble friend Lord Cockfield was a little too gloomy in stating that people never learn. There is evidence across the pay scene at the present time that people are learning —witness the very welcome way in which the union side and management in British Airways have co-operated on a 50 per cent. cut during the present crisis in air travel. Some lessons are being learned.
One of the difficulties of current pay rounds is an own goal on the part of the present Government. If they were to reindex mortgage tax relief, at least for standard rate payers, marginally from £30,000 to £50,000 or make it apply at the current rate to wives as well as husbands, the bargaining process would begin to bear more relation to the economics of the real world and the firms which operate in it. In my view, the Government have rightly encouraged home ownership. Current pay demands in the South-East reflect a credit expansion in housing which has been the subject of remarks by many speakers in the debate.
What I am suggesting would not pave the way for a further credit explosion because house prices have stabilised, even fallen; yet people are paying high interest on their old borrowings at the original high purchase rates. True indexation of the £30,000 target for relief has been estimated as being £150,000. I am in no way suggesting that figure, but one-third of that sum would only reflect the new price stability and it could be restricted to standard rate payers. The success of that attractive lady TESSA should help compensate Her Majesty's Treasury for their horror of mortgage tax relief. They would very quickly see a reduction in pressure on the wage round. I should like to say to the noble Lord, Lord Dean of Beswick, and my noble friend Lord Caldecote that it would also cheer up the construction industry no end.
Supporters of the Government are right to endorse the views of my noble friend Lord Hesketh, that for four or five years this administration produced sustained growth at low inflation over the longest

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period since the war. In my language the Government cleared the way for the market to achieve that. The Government's critics, however, are correct in stating that the shadowing of the deutschmark and the post-1987 stock market crash expansion were disastrous. This was done with the best of intentions but, as my noble friend Lord Stevens demonstrated, it was devastating. We can return to the virtuous state on inflation. We are doing so. We are being punished now for our departure from virtue but as we progress the punishment will surely ease and growth resume.
8.55 p.m.
Baroness Seear: My Lords, it is a real pleasure, all the more real because it is so rare, to follow the noble Earl, Lord Gowrie, with whom many years ago I very much enjoyed crossing swords. Although there were some statements in the noble Earl's speech with which I can agree, I am left winded by his statement that the market is society. This is not the moment, at this time of night, to debate that matter, but if anything illustrated the gulf which lies between these Benches on this side of the House and the noble Earl and his friends on the other, it was that statement. Unlike noble Lords on the Labour Benches, we on these benches have always believed in the market, but we believe that the market is the servant, not the master, and that for social reasons it is frequently essential to intervene in the workings of the market.
When one brushes away the inevitable party slanging which has occurred from time to time this evening, there has been a great deal of agreement in this extremely interesting debate about some of the most important issues facing the economy. No one has questioned the danger of inflation, though it has not been sufficiently stressed that the people who suffer most from inflation are those least able to bear the cost. The people at the bottom of the pile feel the rise in prices most acutely, as well as the people higher up and the people who are trying to run industry. That situation has a further effect throughout the economy. Nobody during the debate has questioned the fact that inflation is a major danger.
There has been general acceptance that the accompanying rise in unemployment is something that we all deplore and wish to see avoided. There has been widespread understanding, if not support, for the cry from the CBI and small employers about the effect on them of high interest rates.
The battle to defeat inflation has to be fought and won. To the extent that it is necessary to keep interest rates high in order to do so, then the level of interest rates has to be supported. What is not accepted is that it is necessary to keep the interest rate so high and that there are no other ways in which some of the evil consequences of the present position can be alleviated. On all sides it is accepted that the plight of small industrial concerns and large-scale industry is grievous in the extreme. They are crying for a reduction in interest rates, and there has been a great deal of support for an attempt to effect a reduction.
I greatly doubt whether any realistic reduction in interest rates will be enough to do more than
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marginally assist in the problems that are being encountered by industry. The real size of reduction that industry needs, if that is to be the cure, is something that no one can accept if they are trying to face inflation. I see the noble Lord, Lord Peston, nodding his head, and I think that that is generally agreed. Therefore, I am surprised that there has not been more emphasis on other measures that the Government could take to help industry in addition to a marginal—it cannot be more than that—alleviation of the burden of interest rates.
First, with the Budget expected on 19th March it is not too late to look at ways in which the tax burden laid on industry can be alleviated. Corporation tax and stock values could be reconsidered. After all, in comparison with real terms, inflation has raised artificially the level of stocks yet taxes are being paid on those inflated stocks. The Government should give their mind to ways of helping industry in the Budget, thereby providing a quicker and more immediately effective way of dealing with some of the problems faced by industry and the consequent results on unemployment, though that would not cure them.
Secondly, it is also possible to reconsider the employers' national insurance contributions. Why cannot the Government agree that the employees' national insurance contribution should be paid above the level of £17,500 at which it now stops? The present position produces the extraordinary effect of paying a lower rate of gross tax when one is earning above that level. The Government should increase the level and reduce the amount that employers are required to pay. That would be an immediate and non-inflationary method of easing the burden now laid upon industry. There are other measures that the Government could take directly and quickly which would bring an immediate effect.
The current state of the building industry has been commented upon by many speakers on both sides of your Lordships' House. There is no question but that the building industry is in a powerless state and on its knees. However, people across the country are crying out for improvements in buildings in both the public and private sector. One need only look at the state of schools. At the moment one can drive a hard bargain with the building industry and get one's repairs done at a greatly reduced rate compared with a year ago. If the Government put money into essential constructional repairs there would be a multiplier effect of great importance. Not only would that help the building industry, the employers, but it would bring a number of people back into employment with a multiplier effect. That would be advantageous at the present time and would see the completion of jobs which have needed to be done for a long time. Any Member of your Lordships' House could list a number of essential building and constructional improvements which could now be done inexpensively.
They are only a few of the immediate measures that the Government can take in addition to a modest—and it can be only modest—reduction in interest rates in order to help industry's plight. They could also

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avoid some of the ridiculous measures that they are now taking which make life more difficult for industry. Only last week we battled with the Statutory Sick Pay Bill. I do not want to go over the argument again, but what a moment to increase the charges on industry, large and small, however modest they may be? Members on all sides of the House begged the Government to make a modest concession and to give some support rather than increase the burden now laying on industry.
I turn to the longer-term view that we might take if industry is to take off and succeed. There has been a great deal of self-congratulation and comment about how well this country has done during the past 10 years. Yes, there have been improvements; for example, in productivity which badly needed to rise. However, we must constantly remember that while we have been improving so have other countries. What matters is not how much we improve but how much our improvement compares with what our competitor s are doing. We must face the fact that we have not been keeping pace with them. The Government boast that our share of world trade has stabilised. It has, but it is bumping along at 6 per cent. and cannot fall much further without falling into a black hole. To say that it has stabilised at 6 per cent. is no great consolation.
Many of the figures that have been quoted in your Lordships' House, not only today but on other occasions, showing how well we have done are based on the fact that we start from a low level. It is easier to attain a high increase in productivity compared with a country which is doing better. It is easier to attain a 5 per cent. increase on two than it is to attain a 2 per cent. increase on 20. Such comparisons are continually being made without people pointing out the relative starting positions. We need to do everything that we can for the longer term.
I shall not speak at length about education and training, as I have done in the past. Comment has been made on that subject on all sides of the House. However, being practical and talking about immediate issues, I must say what a moment this is to cut money to the TECs. The Government have handed to them the enormously responsible job of raising the level of training in this country. We all know that we are abysmally behind in that respect. Rightly or wrongly, the Government have shuffled the responsibility onto the TECs, and some of us have made many criticisms of that; but it has been done and at least they should be given the resources to do the job. Instead money has been cut back and without money one cannot provide good training. Let nobody fool themselves, no good education or training was ever provided on the cheap. To cut that money now when we need to build for industry in the future is short-term folly of the first order.
There are several points of a different kind that one might make, apart from the immediate alleviation that could be given to industry without inflationary perils. One reason why our interest rates are kept high is that the world as a whole does not yet trust sterling. We are keeping the rates up in order to bolster world
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confidence in sterling. Therefore, the underlying problem is how to gain world confidence in sterling, thereby enabling us to lower interest rates without the danger of devaluing the pound. I have no interest in any policy which involves devaluing the pound; it might bring short-term relief but it would be a long-term disaster.
We want people across the world to realise that the pound is a sound and reliable currency; that it does not need to be boosted by excessively high interest rates. I suggest that we enter the narrow band of the ERM. That would give confidence that we mean business. Also—and I know that this separates me permanently and finally from the Labour Party, if anybody needed convincing on that point—we should indicate that we firmly back an independent central bank which will keep control over inflation. We must be prepared to keep control over inflation and show the world that we mean business in that regard.
I wish to make two other points. My noble friend Lord Ezra urged that there should be greatly improved incentives for savings to cut back excess spending among consumers. It is true that at present spending among consumers has fallen; but there is a danger that it could rise again. My party produced policies which are a half-way step towards an expenditure tax, with greater encouragement for saving. I believe that we should look again at ways in which real incentives can be given to check people from spending not only the money they possess but also a lot that they do not possess by encouraging saving rather than encouraging and supporting spending, which is what has happened over the past five or 10 years.
There is one matter on which I wish to speak not for my party but for myself. It is a point I wish to emphasise to the noble Lord, Lord Hesketh, and it is in direct contradiction to what I understood was being said by the noble Earl, Lord Gowrie. Many mistakes have been made, but one important mistake relates to mortgage interest relief. Mortgage interest relief has deflected money into house purchasing which should have gone into industry. It has had the effect of raising house prices with the result that people have been tying up far too much of their resources into house property. That is partly due to the fact that we do not have a proper rented sector either in social or private housing. It is also fuelling wage inflation. Noble Lords on the Labour Benches pretend that wage inflation is not happening; but it is. Wage inflation is fuelled by the need to pay high mortgage rates.
I believe that all parties are aware of that. However, mortgage interest relief is regarded as political dynamite and nobody will discuss it. I do not expect the noble Lord, Lord Hesketh, to give me an answer immediately, but surely it is time that the three parties conferred and agreed that mortgage interest relief is economic folly. They must consider what can be done to tackle the problem in such a way that the political dynamite is exploded. We can then face the problem in economic terms and forget the politics. If we dealt with that issue it would be a real step towards a recovery of the economy of this country.
9.11 p.m.
Baroness Blackstone: My Lords, this debate has been characterised by a considerable amount of anxiety expressed on all sides of the House in regard to the unfortunate state of our economy. I shall not repeat all the statistics which demonstrate so clearly the Government's failure to manage the economy properly.
I am happy to follow the noble Baroness, Lady Seear. As my noble friend Lord Peston indicated at the beginning of the debate, I, like her, will focus on the need to create a better economic environment for British industry in the future so that we are never again in the current appalling state that we are in today. Before doing that, I want to touch on the question of entry into the exchange rate mechanism, which has been raised by several speakers in the course of the debate.
I understand the hostility which some noble Lords, including some of my noble friends, have expressed towards the ERM. I can only say that I am totally incredulous that the Minister can claim that we entered at the right rate. I do not believe that any other speaker in the debate agrees with him on that matter. There is no doubt whatever that the Government displayed remarkable incompetence in their management of Britain's entry into the ERM. As the noble Lord, Lord Jenkins of Hillhead, suggested, the decision to enter the ERM and cut interest rates on the weekend before the Tory Party Conference was bound to result in deep cynicism over the Government's balancing of economic needs with political opportunism. That incompetence has cost and is costing this country dear. It has undermined the market's belief in the Government's commitment to the ERM; it has led to the imposition of higher rates on British industry and households.
However, any suggestion that membership of the ERM is the source of Britain's current economic problems is wrong. After all, we entered the ERM in October only four months ago, and the huge economic problems we face today were not all created within the past four months. It is clear that the decline in our trade performance, particularly our performance in manufactured trade, has been a depressingly persistent characteristic of our country's economic performance for the past decade; a period of time in which until recently exchange rates have been free to float.
That takes me to my main theme. There can be only one criterion by which to judge the success of an economic policy. That is its consequences for the competitiveness of British industry. For on the competitiveness of our industry ultimately depends our ability to sustain employment, sustain growth and hence to sustain the standard of living of the British people. There is only one clear-cut criterion to judge competitiveness and that is our ability to increase or at the very least to hold our share of markets both at home and abroad. That, as they say in business, is the bottom line. As my noble friend Lord Bruce of
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Donington made clear, by that unambiguous criterion this Government's policies have comprehensively failed.
The noble Lord, Lord Boardman, suggests that our poor trade performance is the result of a decline in American trade. Can he really believe that when in the world market for manufactures our share has fallen since 1980 from 10 per cent. to 8 per cent., which is a fall of as much as one-fifth and that the share of manufactured imports in domestic expenditure has risen from 26 per cent. to 36 per cent? It is that underlying failure which is so much more important than even the follies of the Lawson boom, damaging though the consequences of these follies have been. At the root of Britain's economic problems is not so much an excess of demand as a failure of supply.
It is fundamentally wrong to assume that simply by bringing demand under control we shall solve our economic problems. That is why the Government's current economic policy of attempting to deflate the economy by high interest rates is so damaging to the long-run health of our economy. I very much agree with what the noble Viscount, Lord Caldecote, said about this. He is correct in saying that the Government's policy hits investment and in doing so hits our industrial future. The Minister says that the Government are fighting inflation. But high interest rates will not cure inflation, they will only suppress it. Without building comprehensive industrial strength any expansion of demand will always place unbearable pressures on our neglected industrial base. That is why the whole approach to economic policy-making in Britain must be changed now. It is no good waiting for Mr. Major's damaging recession to be over. We need now to start to build out of recession.
The future prosperity of this country can only be built on a commitment to the long term. The noble Lord, Lord Cockfield, made some unjustified criticisms of the Labour Government of 1945. Much of his speech was rather short of solutions. He might like to know that a recognition of the importance of the longer term is the central focus of Labour's policies for macro-economic stability and for supply-side dynamism. A stable macro-economic framework, a stable fixed exchange rate, stable interest rates at levels similar to those in competitor countries and a low rate of inflation have not been achieved by this Government's policies and they will not be achieved by them. We have had irresponsible financial deregulation combined with irresponsible Budgets and a devotion to one-club high interest rate policies which have bludgeoned the British economy into cumulative decline.
That is why a Labour Government will reinstitute reserve asset ratios in the banking system as a means of controlling the growth of bank credit. They will also introduce other credit controls to limit the excessive growth of consumer indebtedness. I was interested to hear the backing given to credit controls by the noble Lord, Lord Stevens of Ludgate. Such measures implemented now would underwrite the cut

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in interest rates which industry desperately needs while preserving the stability of the economy and the currency.
But just as important as Labour's policies for macro-economic stability are our policies for supply-side strength replacing the neglect of and antagonism towards manufacturing industry which has been a characteristic of this Government, and with a commitment to build manufacturing strength. Again, I was interested to hear the noble Viscount, Lord Caldecote, supporting Labour Party policy on those measures.
We must create a framework within which companies can invest with confidence for the long term in the market-place and in which the Government, with enthusiasm rather than reluctance, also invest in the long term. The noble Earl, Lord Gowrie, said that the market is society. As someone who studied sociology many years ago (like the noble Baroness, Lady Seear) I find that a truly extraordinary statement. I say to him and to the noble Baroness, Lady Seear, that the Labour Party accept the importance of the market. However, the past 10 years have demonstated that relying solely on the market simply does not work. It is quite absurd to expect industry to build railways, to conduct the necessary amount of scientific research alone, or to spread new technologies throughout the economy, especially to small and medium-sized firms. Technology transfer is a very good example of where government must play a part.
For the past decade British industry has attempted to compete while living under the constant threat of hostile takeovers. Research demonstrates that the supposed efficiency gains from takeovers are always negligible and often illusory. However, the losses are very real and permanent. Apart from the obvious waste of resources, management time and energy poured into takeover battles, the takeover mechanism emphasises the short term. That is an emphasis which, often internalised by industrial managers, leads to a permanent bias in investment in training and in research and development or in market development, all of which are fundamental to successful competition in the longer term.
Labour will change the criteria for takeover to bias them in favour of those companies which invest in the long term and against those which are interested in short-term gain at the expense of long-term competitiveness. We shall also be looking at other measures to alleviate the short-term pressures which currently exist in British industry, particularly those imposed on small and medium-sized enterprises by a financial system which is more interested in hurrying a small firm to market quotation than in building up its real productive strength.
But short-termism is not simply a characteristic of British industry. As my noble friend Lord Donoughue said, it is a characteristic of this Government. What could be more short-term than cutting support for training? What could be more short-term than cutting support for industrial research? My noble friend Lord Stoddart of Swindon and others have referred to the
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under-investment in infrastructure. What could be more short-term than persistent neglect of the nation's infrastructure, which the CBI estimates is adding £18 billion to industry's costs in the South-East alone. The story of the high-speed link to the Channel Tunnel says it all.
Anyone who takes a serious interest in the economic fate of this country cannot but be depressed by the persistent under-investment in all these things as well as under-investment in productive capacity. This is a Government who seem incapable of providing a framework within which British industry can compete in the long term. By contrast, Labour's economic policies are about building long-term strengths. For example, for the Labour Party education and training are the commanding heights of the economy. A well-trained, well-educated labour force is a necessary condition of the flexibility required for technology innovation. It is therefore the necessary condition for long run industrial competitiveness.
My noble friend Lord Barnett referred to our deplorable record on training. Perhaps I may give just one statistic. Seventy per cent. of the British workforce has had virtually no training since receiving a minimal amount on starting their first job. One of Labour's first priorities will be to rectify this. We have detailed plans for a training revolution in Britain. There will be new legislation which will prevent employers from taking on school-leavers without providing proper training. There will also be a legal obligation on all employers to spend a nationally specified percentage of their payroll on training with proper quality objectives and targets. Those who meet these criteria will receive a kite-mark and will not have to contribute to the national training efforts. Those who fail to do so will have to contribute at a level which relates to their own shortfall.
Economic debates are typically concerned with the grand macro-economic issues of economic policy, with interest rates, money supply, the exchange rate and other international financial problems, and with the overall problems of taxation spending, government deficits and surpluses. We invest these issues with theatrical grandeur; the flummery of Budget Day and the pink coats of the Bank of England.
In all of this we express a preference for macro-economics over industrial policy; that is, a preference for the "hands-off" approach to economic affairs, in place of the nitty gritty of detailed industrial policy which is so important if we are to have the growth and the efficiency which we need. The Treasury prospers. The Department of Trade of Industry contracts.
That neglect of industrial policy is a fundamental error in our economic thinking and in our economic policy making. It is an error which reached its most extreme form in the complacency of monetarism. It is an error which has done great damage to the economy and it is an error which has not been committed in France and Germany. Both those economically successful countries recognised the fact that in the modern world economic success requires both a stable

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macro-economic environment and very active supply-side policies. They committed themselves to providing the seed corn for industrial success and the long term environment within which that success could be forged. That is what we must do in this country.
I said earlier that we must begin now to build out of recession before it is too late. But what hope is there of that happening when we hear complacent speeches of the kind given by the noble Lord, Lord Hesketh, today or when Ministers can stand up, as happened in the House during Question Time only last week, and claim that we are enjoying economic prosperity? Let them say that to the firms who are going bust at the rate of 100 a day. Let them say that to the unemployed, many of whom have little prospect of obtaining another job for many months. In manufacturing industry alone, 5,000 people lose their jobs every week. That should not be seen as just another statistic, because behind those figures lies real human misery.
We should learn some lessons from our European neighbours. In the French recession of 1983–84 the French Government cut overall spending sharply and deflated the economy; but, at the same time, it increased spending on education, on transport and on the arts. That is the way to build out of recession. That is the approach which we should be taking. We must take a supply-side approach and an industrial approach. We must move away from the folly of relying solely on macro-economics. We must throw out a high interest rate policy. Finally, in order to attain lasting prosperity, we must throw out this incompetent Tory Government.
9.27 p.m.
Lord Hesketh: My Lords, the noble Baroness, Lady Blackstone, accuses the Government of complacency. I doubt that there are many matters in respect of which I have an advantage over her, but going out of business in the last recession is, I suspect, one of them. Indeed, there is no need for her to tell me about it. As I said earlier, the present downturn is bound to be painful. I made that fact clear in my opening speech. However, I also said that we are not witnessing a replay of the recession of 1980–81. That is one of the reasons why the necessary adjustment required is not nearly as great now as it was then.
Inflation reached an intolerably high level last year, but it was nowhere near as high as it was in the second half of 1979. At that time the underlying rate of inflation was nearly twice what it was in the second half of last year. Moreover, the gap between the United Kingdom and the EC average inflation rate in the second half of 1990 was less than a half of that in the second half of 1979.
Why am I referring to those statistics? I do so for one reason. The noble Lord, Lord Peston, in a delightful exposition of his hoped-for policies or those of a future Labour government—I am not quite sure which we were supposed to consider—referred to the dozen easy years of this Government. That remark made me realise that one should ask for the name of the happy and balmy shore from whence we set out on
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our voyage of discovery in 1979. We had an economy which had languished at the bottom of the European growth league. Investment and real take home pay for the average family had hardly increased. Public sector borrowing averaged over 5 per cent. of GDP. I suppose that if there is a governmental equivalent of the Official Receiver, it is that we had had to pay a visit to the IMF. We picked up the pieces, and we fashioned them into a modern, flexible, dynamic economy. It is worth looking at what we achieved following the traumatic but necessary adjustments of 1980 and 1981.
Lord Peston: My Lords, perhaps I may interrupt the Minister. He owes us, at some stage in his speech, a statement on the economy as it is at the moment. He does not owe us a repeat of the speech that he made, goodness knows how many hours ago. I have sat here listening to everyone, and I desperately hope that the Government will say something about the position in which we now are. I believe that I speak for many other noble Lords when I beg him to say something about the present state of affairs.
Lord Hesketh: My Lords, I understand the noble Lord's irritation. I am aware of the lateness of the hour, but the Government are entitled to lay down the playing field from which they can then decide how to play the game, and show the noble Lord the desires and aspirations that the Government may have.
It is worth remembering that investment has grown faster than in all other EC countries, bar Spain; that real take-home pay has risen by nearly one-third since 1979; and, most important, that £26 billion of public sector debt has been repaid in the past three financial years.
Current inflation has its roots in the upsurge of consumer spending, and, as my noble friend Lord Stevens of Ludgate pointed out, in the stock market crash. I remind noble Lords opposite that during my reply to the debate on the humble Address in the latter part of last year I drew noble Lords' attention to the fact that there was no man keener for a continuing reduction in interest rates at that time than the shadow Chancellor himself. It should not be forgotten that we took the economy from the sick bed to the recovery room. In the past few years, there has been a great increase in investment in the United Kingdom. That is a fact, whatever definition of "investment" one uses, and however much the prophets of doom concentrate on the current downturn.
If one looks at total fixed investment under the previous government, one sees that it grew at a snail's pace. Contrast that with the 10 years to 1989 when it grew by more than 3.5 per cent. a year. That is after taking into account the sharp cutbacks in 1980 and 1981. Between 1981 and 1989, total investment grew by two-thirds—twice as fast as total consumption. The noble Lord, Lord Ezra, was interested in the relationship between investment and consumption.
To avoid any charge of using figures selectively, I should add that the picture as regards business investment has been even better. That rose by 43 per cent. in the three years to 1989—the biggest increase

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over a three-year period since the war. Since 1979, the increase has outstripped that of any G7 country apart from Spain.
Let us also look at the quality. In the 1970s, investment decisions were all too often distorted by negative real interest rates, tax breaks and public sector subsidies. Indeed, the prevailing wisdom was that without tax breaks companies were unlikely to invest. That is hardly surprising perhaps given that the 1970s was a decade of falling profitability. The rate of return for non-North Sea companies in 1979 was not much more than half of what it had been 10 years previously.
I also point to a change in the economy which has not been mentioned today—the improvement in the quality of the product. The consumer is the arbiter. I am sure that most Members of your Lordships' House, comparing what one finds in a Rover showroom today with what was there 10 years ago, will agree that the product, which is what the consumer will decide upon, has been transformed.
Lord Graham of Edmonton: The Rover's Return!
Lord Hesketh: My Lords, the noble Lord the Opposition Chief Whip will no doubt have an opportunity to pay a visit there shortly. In my opening speech I singled out the motor industry, but that is far from being an isolated example. United Kingdom steel industry productivity nearly trebled during the 1980s.
Lord Stoddart of Swindon: My Lords, I am most obliged to the Minister for giving way. He mentioned the motor industry as one of the industries that has flourished and achieved better productivity. Does he realise that the Rover Group, which he admires so much, would have gone bankrupt had it not been taken over by the Labour government and had investment money pumped into it? It is that investment which has brought about the great improvement in the company.
Lord Hesketh: My Lords, I fear that quite clearly the noble Lord, Lord Stoddart, has not understood the reason I made my earlier point. It concerned the product. It is arguable that when the moment arose, the Morris Marina was the closest thing to a Trabant that the West had ever produced.
Lord Stoddart of Swindon: My Lords, will the noble Lord give way again? I understand the problem because I represented Swindon where there was a Rover works. The noble Lord does not understand that the investment put into the industry by a Labour government got rid of the Morris Marina and laid the foundation of the new models which are now in production and selling so well.
Lord Hesketh: My Lords, I am very grateful that the noble Lord, Lord Stoddart, is here because he, more than any man in your Lordships' House, is able to observe the huge investment being made by the shareholders in the Honda motor company in Swindon as we speak, without any incentive from the British taxpayer.
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The outlook now is undeniably difficult. We know from recent experience that manufacturing production tends to be more cyclical than other aspects of the economy and is likely to be affected to a greater extent by any downturn. But a temporary halt in terms of output, productivity and investment will not undo the enormous progress of the past decade.
The noble Lord, Lord Donoughue, directly and other noble Lords indirectly—I beg their forgiveness if they were more direct than I suspect—referred to the recession as though in some ways it was limited to the United Kingdom. However, it is important that the United Kingdom is not the only country in the industrial world to experience a cyclical downturn. Among the G7 countries, the United States and Canada are also experiencing falls in GDP, as are Australia, New Zealand and Sweden of the smaller OECD countries. With the United Kingdom, these countries account for almost half of OECD output.
The other half are still seeing their output grow, but this should come as no surprise. It is common for different economies to be at different stages of the cycle. The former West Germany grew strongly economically in 1989 and 1990, by perhaps 4 per cent. a year. But in the previous four years when, I have to remind noble Lords, the UK's growth was 4 per cent. a year, Germany grew by only 2·.4 per cent.
The one trend common to all OECD countries is that compared with 1989 all have either experienced or are expected to experience some slowdown in output growth. The OECD's own forecast for its member countries is for a halving in average GDP growth between 1989 and 1991. As with the UK this slowdown is a necessary part of the disinflation process after the build up of inflationary pressures in the late 1980s.
I shall attempt to respond to some of the points raised in the debate. The noble Lord, Lord Peston, asserted that the Treasury was content with 5 per cent. inflation. I can assure him that, as he well knows, our target for the fourth quarter is 5k per cent. We shall certainly not be content with it and hope to see it reduced greatly beyond that.
The noble Lord, Lord Ezra, referred to investment growing too little and consumption too much. I hope I covered that with my earlier points. I reflect that during the five years that preceded this administration, the level of consumption exceeded that for investment by a factor of seven.
The noble Lord, Lord Peston, said that it was a mistake to cut taxes. It is worth remembering that the PSBR average was reduced to 1¾ per cent. of GDP compared with 6¾ per cent. under the last Labour government. More important, there has been talk of "short termism". The last Labour government had a top rate of tax of 83 per cent. There is no greater incentive to creating fast money makers than that. There has to be a policy of low taxation if there is to be investment in the long term.
The noble Baroness, Lady Ewart-Biggs, referred to the Government doing more about making people aware of credit.

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The Government expect lenders to market credit responsibly. I draw the attention of the noble Baroness to the regulations that came into effect recently which tightened up lenders' practices. My noble friend Lord Boyd-Carpenter asked about the Government's future attitude to interest rates. We believe that by reducing inflation we shall be able to reduce interest rates. That has to be supported by the remarks made by the noble Lord, Lord Cobbold, who said that the integrity of our membership of ERM was crucial to the credibility of that mechanism. That view was also reflected by many other noble Lords.
The noble Lord, Lord Bruce of Donington, said we must regain our share of world trade in merchandise. That trade stabilised during the 1980s, and in 1989 it rose. We believe that it will do so again in 1991. The noble Lord, Lord Cockfield, in a most interesting deployment of the history of the British economy since 1945, asked what the Government had learnt from their experiences. I like to think that the kind remarks made by my noble friend Lord Gowrie meant he believed the Government instituted this debate because they wished to listen to opinions, and therefore wished to learn from those opinions.
My noble friend Lord Boyd-Carpenter referred quite rightly to the two-way street that exists. He was quite correct to point out that the Government have reduced restrictive practices and have freed membership for trades union members. However, the Government cannot dictate pay rates. It is right to talk about pay rather than wages. It was quite rightly pointed out that management has just as great a responsibility as anyone else in ensuring that pay is held down across the board. As the noble Baroness, Lady Seear, will know well, a 1 per cent. restraint in pay across the board is worth a great deal more than a 1 per cent. reduction in interest rates.
The ERM rate was discussed by many speakers. Having received the benefit of the observations of many former Treasury Ministers, from a former Chancellor downwards, I am a lucky man. I also like to think that the spread of opinion across the Chamber puts the Government just about in the middle of opinion. I may be slightly wrong on the fine tuning of that, but the noble Lords, Lord Peston and Lord Cobbold, the noble Baroness, Lady Seear, and my noble friend Lord Gowrie confirmed the Government's position. Therefore I felt I was in the right place in the middle.
The noble Baroness, Lady Seear, referred to mortgage interest rates. I am the first to admit that I cannot give the noble Baroness the reply that she would like. I am also quite sure that she would not expect me to arrange the tripartite talks that she feels would cure the scourge that she feels exists. I am always rather surprised that in debates which concern inflation in the housing market, there is never any reference to the role played by the Town and Country Planning Act as regards the value of land. However, that may be a debate for another day.
The noble Baroness, Lady Blackstone, referred to the incompetence of the Government when joining
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ERM. There is possible evidence that I am in good company. The noble Baroness was right to point out that we joined ERM the week before the Conservative Party conference. That was also the week after the Labour Party conference where the Shadow Chancellor, Mr. John Smith, was ferocious in his demands for immediate membership of ERM. I like to feel that perhaps I am a member of a collective ERM.
Baroness Blackstone: My Lords, at the Labour Party conference the Shadow Chancellor did not ask the Government to join ERM at a rate that was so disadvantageous to the British economy. He said we should join at the earliest possible moment that was conducive to our good economic performance.
Lord Hesketh: My Lords, that may be true, but I had to read the Statement in your Lordships' House the following Monday. I remember asking officials whether or not the Shadow Chancellor had reflected the view that has just been referred to. However, there was no evidence of that.
I am deeply conscious that I may in some ways have repeated what was said earlier. I shall conclude by taking a view from the outside rather than from the inside. Whether through modesty or masochism we in the United Kingdom are often too quick to do ourselves down. I do not believe that habit is shared by thousands of foreign investors who invest large sums of money in Britain.
According to a recent OECD study, 46,000 million dollars of inward investment flowed into Britain in 1988 and 1989; nearly a fifth of all overseas investment in those countries and two-fifths of the total overseas investment in EC countries; nearly three times as much as France and six times as much as Germany. That total conceals an interesting breakdown. We received 62 per cent. of all US investment in the Community and 42 per cent. of all Japanese investment in the Community. West Germany invested more money in the United Kingdom than in any other country.
The real reason why other countries invest here is because the United Kingdom is now a competitive, high productivity nation where profitable investment can once again be made. It is a nation where the Government have removed the barriers to enterprise and endeavour; a nation with a motivated workforce which enjoys the fruits of its labours and which is willing to work for them. If we are to pay for a fair society which provides opportunities for success and for creative wealth creators I suggest that that is the prospectus that we require for the 1990s.
On Question, Motion agreed to.

Smith Kline and French Laboratories, Australia, and Menley and James, Australia Bill [H.L.]
Returned from the Commons agreed to.
House adjourned at thirteen minutes before ten o'clock.

  FOREIGN AFFAIRS COUNCIL, 4th FEBRUARY
  FOREIGN AFFAIRS COUNCIL, 4th FEBRUARY
  FALKLAND ISLANDS: FISHING CONTROL
  FALKLAND ISLANDS: FISHING CONTROL
  KIEV: BRITISH DIPLOMATIC REPRESENTATION
  KIEV: BRITISH DIPLOMATIC REPRESENTATION
  HILL LIVESTOCK COMPENSATORY ALLOWANCES
  HILL LIVESTOCK COMPENSATORY ALLOWANCES
  SALMON FISHING IN INTERNATIONAL WATERS
  SALMON FISHING IN INTERNATIONAL WATERS
  ANIMAL FEED INDUSTRY REVIEW: EXPERT GROUP
  ANIMAL FEED INDUSTRY REVIEW: EXPERT GROUP
  DETENTION OF PALESTINIAN: HANDCUFFING ALLEGATION
  DETENTION OF PALESTINIAN: HANDCUFFING ALLEGATION
  DISABILITY BENEFITS: APPEAL COURT RULING
  DISABILITY BENEFITS: APPEAL COURT RULING
  NHS: CONSULTATION DELAYS
  NHS: CONSULTATION DELAYS