Sitting of 13 February 1991

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
NEW WRIT
For the county constituency of Ribble Valley, in the room of the right hon. David Charles Waddington., QC, called up to the House of Peers.—[Mr. Ryder.]
Oral Answers to Questions
  FOREIGN AND COMMONWEALTH AFFAIRS

    Sudan
    Mr. Day: To ask the Secretary of State for Foreign and Commonwealth Affairs whether he will make a statement on Her Majesty's Government's policy in respect of the situation in the Sudan.
    Mr. Stanbrook: To ask the Secretary of State for Foreign and Commonwealth Affairs whether he is making representations to the Sudanese Government about the situation in the Sudan.
    The Minister of State, Foreign and Commonwealth Office (Mr. Douglas Hogg): We have serious differences with the Sudanese Government over their policies on the Gulf conflict, human rights, and terrorism. We are also most concerned about their failure to co-ordinate effectively with foreign relief agencies in order to deal with the major famine that is in prospect. We have made our position on these issues clear to the Sudanese authorities.
    Mr. Day: What representations have Her Majesty's Government made to the Government of Sudan about the latter's rather unhelpful approach to the Gulf crisis?
    Mr. Hogg: The Government of Sudan are one of the few Governments in the world who have given support to the Government of Iraq. That is wrong in principle and it is contrary to the interests of the Sudan. We have made both those things clear to the Sudanese Government.
    Mr. Stanbrook: That huge country, with its immense resources and its wonderful people, has not enjoyed political stability since it was under British administration. Is my hon. and learned Friend aware that Britain has a vast reservoir of experience and expertise with regard to the problems of the Sudan which is not sufficiently tapped? Will he please ensure that that resource, which is available to Her Majesty's Government and to the authorities in the Sudan, is used for the mutual benefit of both countries?
    Mr. Hogg: My hon. Friend makes an interesting point. I am aware that the Sudanese civil service attracted some
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    of the ablest administrators in the colonial service and there is thus a pool of informed opinion. I shall give careful thought to my hon. Friend's ingenious suggestion.
    Mr. Anderson: I fully support the Government's robust response to the release on 7 January by the Sudanese Government of the terrorists who murdered five British citizens. Will the Minister say a little more about the extent of the co-operation between Sudan and Iraq in the Gulf war? For example, Christian Sudanese from the south say that chemical weapons have been supplied by Iraq to the Sudanese Government and ABC News recently carried a report that before the conflict Iraq had positioned combat aircraft and missiles via Port Sudan in Sudan itself for possible use against strategic targets either in Saudi Arabia or against targets such as the Aswan dam in Egypt.
    Mr. Hogg: As regards the second part of the hon. Gentleman's question, yes there have been rumours to the effect that Iraq has been basing equipment of various kinds in the Sudan, but we have no evidence to substantiate them. Our view would be that that would be wrong in principle and contrary to the interests of the Sudan. As to the first part of the hon. Gentleman's question, I am grateful to him for the support that he has given to the Government for the way we responded to the disgraceful decision to release the terrorists who murdered five British citizens and two others.

    Cambodia
    Mr. Wallace: To ask the Secretary of State for Foreign and Commonwealth Affairs whether Her Majesty's Government propose to take any initiative in the United Nations to seek an immediate ceasefire of hostilities in Cambodia.
    Mr. Cryer: To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has received regarding the situation in Cambodia; and if he will make a statement.
    The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Mark Lennox-Boyd): Britain has contributed fully to the agreement between the Permanent Five and the co-chairmen of the Paris conference on Cambodia on a draft comprehensive settlement document, an integral part of which is a monitored ceasefire. We continue to pursue the early implementation of these proposals.
    Mr. Wallace: Can the Minister confirm that one of the provisions of the United Nations peace plan is such that a ceasefire cannot be implemented, nor can the external supply of arms be discontinued until a date is agreed for the implementation of the plan? A meeting to try to arrange a date seems to be becoming increasingly bogged down and is not happening. He must be aware of the public's great concern about the carnage that has taken place in Cambodia. Can the Government take any fresh initiative to hasten the day when a ceasefire will be possible and will not not necessarily be dependent upon the United Nations peace plan?
    Mr. Lennox-Boyd: We constantly urge a ceasefire. Our objective—with our friends and partners, notably the permanent members of the Security Council—is to work for a comprehensive political settlement which includes a

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    ceasefire. The consensus between the Permanent Five, the Paris conference co-chairmen and the United Nations on the draft settlement document must provide an opportunity for the Paris conference to reconvene one day and to adopt a settlement.
    Mr. Cryer: Are not people a little suspicious of the Government's intentions when the Government have been involved in training members of the Khmer Rouge, which includes the Pol Pot faction? Does not the United Nations settlement involve a ceasefire which disarms the Cambodian Government before the Khmer Rouge, including the Pol Pot faction? As the British Government are so concerned about containing aggression, why are they not doing more to aid the Cambodian Government, supported by Vietnam, to resist encroachments by the Pol Pot faction which, as the Minister will readily acknowledge, has one of the worst records in existence for battering human rights?
    Mr. Lennox-Boyd: We have repeatedly stated, and I shall state it again today, that there has never been and there is no Government involvement of any kind in training, equipping or co-operating with the Khmer Rouge. The hon. Gentleman should use his undoubted energies in the direction of encouraging a comprehensive peace settlement. In that way, we would create the conditions to enable the Cambodian people to elect a Government, free from fear of foreign invasion and civil war or Khmer Rouge atrocities.
    Mr. Lester: As regards getting a comprehensive settlement, which is what we all seek, will my hon. Friend consider ensuring that a member of our foreign service goes to talk to the Phnom Penh Government? There are difficulties with the interpretation of the United Nation plan and it would be helpful if we used our diplomatic skills to get over them. Also, will he consider the position of the camps in Thailand, where we are feeding people who are party to a civil war and not under United Nations control?
    Mr. Lennox-Boyd: We have no objection to talking to representatives of the Phnom Penh regime to urge them to co-operate in restoring peace to Cambodia on the basis of the Permanent Five's framework. It is certainly the case also that we support efforts to improve the lot of displaced people in camps along the Thai-Cambodian border.
    Mr. Allason: Given Mr. John Pilger's apparent success in perpetuating the myth that the SAS and other British units have been training the Pol Pot regime and its supporters, has the Foreign Office given any consideration to employing Mr. Pilger as a propagandist against the regime in Baghdad?
    Mr. Lennox-Boyd: The Foreign Office has made clear its fundamental disagreement with so many of Mr. Pilger's allegations.

    Intergovernmental Conferences
    Mr. Favell: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the intergovernmental conferences.
    The Secretary of State for Foreign and Commonwealth Affairs (Mr. Douglas Hurd): Both intergovernmental conferences were opened on 15 December, in Rome. The
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    conference on European monetary union met again on 28 January, attended by my right hon. Friend the Chancellor of the Exchequer. I attended a meeting of the political union conference on 4 February. Ministers' personal representatives are also meeting weekly. The United Kingdom is playing a full and constructive role in both conferences.
    Mr. Favell: The EC conferences are about the future control of our economic, foreign and defence policies—the hallmarks of an independent state. Does it not strike my right hon. Friend as odd that at a time when, quite rightly, our troops are in the Gulf to restore independence in Kuwait, we should talk about giving away our own independence?
    Mr. Hurd: I am not sure that the two situations are entirely comparable. So far as we are concerned, the two conferences are exercises to see whether we can co-operate more effectively with our partners in Europe. I am sure that my hon. Friend would not suppose that my right hon. Friend the Chancellor's plan for a hard ecu, or the ideas that I am quoting in the other conference for stimulating the role of national parliaments in controlling the Community and for more effective compliance by member states of European decisions that they have already accepted in theory, involve any sacrifice of independence on our part.
    Mr. Shore: The Foreign Secretary has given an unusually bland and uninformative reply. He surely recognises the great interest that there is in the progress of the talks on the intergovernmental conferences—particularly that on political union, for which the right hon. Gentleman is more directly responsible. Will the Foreign Secretary keep the House informed as to the substance of the talks at the meeting on 4 February? Will he also ensure that, in future, a separate statement is made whenever the right hon. Gentleman returns from Brussels, Luxembourg, or wherever it may be, so that the House will be kept fully informed?
    Mr. Hurd: I always try to ensure that the House is kept properly informed. On 4 February, we had a general discussion in the intergovernmental conference on the subject of foreign policy. I maintained the view that there is everything to be said for working together effectively, and in trying to agree a line and implementing it—but that would not be achieved by playing about with majority voting or procedures.
    Sir Geoffrey Finsberg: Does my right hon. Friend agree that it has become clear from events in the Gulf that the intergovernmental conference ought not to come to any conclusion that the defence of western Europe should be handed over to the Community? Will he use his best endeavours to strengthen the Western European Union, which is the right organisation, as the European pillar of NATO?
    Mr. Hurd: So far as we and most members of the Community are concerned, there is no question of trying to load on to the EC the responsibility for our defence that is shouldered by NATO. There is a question of how far we can build up the WEU, as my hon. Friend knows and approves, but the essence of our defence will continue to lie in the Atlantic alliance.
    Mr. Robertson: Why, even at this late stage, with the intergovernmental conferences now involving weekly meetings of officials, do we still not have the Government's promised paper on the agenda for the political union conference? When it comes to the economic and monetary union conference, we have not only the Government's agenda but an alternative draft treaty, whereas we know little of the Government's views or negotiating position in respect of the political union prospectus. When it comes to matters of major substance affecting the future of this country, the House of Commons and the people of this nation should have a right to participate, rather than everything being left to faceless officials meeting in Brussels.
    Mr. Hurd: I recall a debate in which I set out our proposals and ideas very clearly. I will refresh the hon. Gentleman's mind by sending him the relevant copy of Hansard.

    The Gulf
    Mr. Barry Field: To ask the Secretary of State for Foreign and Commonwealth Affairs how many countries have now played an active role in the military operations taking place in the Gulf.
    Mr. Steen: To ask the Secretary of State for Foreign and Commonwealth Affairs how many members of the United Nations are contributing financial or military aid to the allies in the Gulf war; and if he will list those countries which have not contributed.
    Mr. Hurd: More than 30 nations, including nine European Community members, are contributing equipment, material and personnel to the multinational force in the Gulf. A number have been involved in military operations already, and others will become involved as the allied campaign takes its course. Most recently, the Governments of Germany, Kuwait and the United Arab Emirates have offered generous financial support to Britain.
    Mr. Field: I thank my right hon. Friend for that detailed answer. Manfred Woerner, secretary-general of NATO, has called for a common defence and foreign policy within the EC. On 5 February, Mr. Jacques Poos said in The Times that if there had been a common foreign policy the result would have been speedier but the same. What is the point of speedier disunity? Does not taking NATO further into the EC risk uncoupling America's defence policy from the destiny of Europe?
    Mr. Hurd: As I have just said, I believe that the bedrock of our defences must continue to be NATO. It is perfectly clear to me, however, that the Americans expect NATO's European members to play a larger part in the defence of Europe; and that expectation will have been increased by what has happened in the Gulf.
    Mr. Galloway: On day two of the war, I described the aerial bombardment of cities as, by definition, mass murder. I was ridiculed by the Prime Minister and later by the Foreign Secretary.
    As the Foreign Secretary watched the television screen at lunchtime and saw the charred ribbons of women and children swept out of the air raid shelter in Baghdad, did it occur to him that some of the blood of those innocent
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    civilians was on his hands and the hands of those who are making this marvellous war against civilian targets in Baghdad and Basra? Will he stop bombing cities now?
    Mr. Hurd: I have no information about the event that the hon. Gentleman has described, beyond what he and I watched on television. He will know—and, I hope, accept —that the greatest possible care is being taken to avoid indiscriminate attack on civilian targets and that the targeting is as precise as has ever been achieved in the history of modern warfare.
    Let me tell the hon. Gentleman and the House that there is no doubt that war has its tragedies and those tragedies can sometimes be great, even when the greatest possible care and precision are exercised. That is why the responsibility lies so heavily on someone like Saddam Hussein who commits aggression and then refuses all peaceful invitations to reverse that aggression.
    Sir Peter Blaker: Do not the allied forces in the Gulf deserve immense credit for the trouble that they are taking to minimise civilian casualties, sometimes at risk to their own lives? Is it not quite possible that the casualties among Iraqi civilians caused by allied bombing are fewer than those caused by Saddam Hussein's terror squads?
    Mr. Hurd: That may well be so. The allied forces do all that they can to avoid civilian casualties; in that regard they are very different from President Saddam Hussein, whose Scud missiles are aimed indiscriminately at civilians, whether in Tel Aviv or in Riyadh.
    Mr. Winnick: Everyone must deplore the number of civilian casualties and I hope that what has happened causes great and genuine concern to every hon. Member. The allied military command should hear in mind both the human and the political costs of the raids and the casualties.
    Should we not also bear in mind, however, the atrocities that have been carried out in Kuwait since the invasion —the way in which so many people there have been terrorised and killed, and continue to be so? I have already said that I deplore the civilian casualties, but did not hundreds of thousands of Iraqis die in the useless, futile war waged by Saddam Hussein against Iran?
    Mr. Hurd: The hon. Gentleman puts his points well. I refer his hon. Friends who think otherwise to the Amnesty report on what has happened and is still happening in Kuwait.
    Mr. Churchill: Is my right hon. Friend aware that there is great concern at the fact that the suffering and plight of the civilian population of Kuwait go unreported because the dictator of Baghdad does not permit them to be reported, while the western media are making themselves the vehicle for Saddam Hussein's propaganda machine by playing up every civilian casualty? Very often, those casaulties may be caused by Iraqi surface-to-air missiles and they may often involve not civilian but military casualties.
    Mr. Hurd: It is very important that all those reporting on these matters do not lose sight of, and continue to search for, evidence of what is happening in Kuwait. When I was talking to the Kuwaitis in Taif a few days ago, I urged them to do everything that they could to make that material available. We are doing our best in that respect.
    Mr. Kaufman: I wish to express the dismay and horror of everyone in the House—certainly all Opposition Members—at the terrible event which took place in Baghdad this morning. I should be grateful if the Foreign Secretary could confirm that the air raid shelter in which those people died was not deliberately targeted. I should be grateful if he would ensure that the utmost efforts are made by the coalition forces to prevent the repetition of such a tragic mistake and that the avoidance of civilian casualties is given an even higher priority than it has been already. Does the right hon. Gentleman agree that the most effective way to avoid further appalling loss of innocent life is for Saddam Hussein to accept the United Nations resolutions, withdraw from Kuwait and end the war?
    Mr. Hurd: The aim of all the allied forces in action now is to weaken the military machine which is perpetuating the aggression in Kuwait and thus bring nearer the time when Kuwait can be liberated as the United Nations has asked. Therefore, it is part of the policy of all the allied forces to keep to a minimum the civilian casualties which may occur as military targets are attacked. I agree entirely with the right hon. Gentleman's last point.

    Soviet Union
    Mr. John Marshall: To ask the Secretary of State for Foreign and Commonwealth Affairs when he last met the Soviet Foreign Minister to discuss human rights in the Soviet Union.
    Mr. Douglas Hogg: My right hon. Friend last discussed human rights with the Soviet Foreign Minister during his visit to Moscow in September 1990.
    Mr. Marshall: Does my hon. and learned Friend agree that the continued enslavement of the Baltic states and the refusal of exit visas to a number of refuseniks is intolerable? Will he remind the Russian authorities that we judge them not by Mr. Gorbachev's speeches but by his deeds and that some of his recent actions are offensive to all decent-minded men and women?
    Mr. Hogg: On the first part of my hon. Friend's question, we believe that the peoples of the three Baltic republics have a right to self-determination and we hope that they and the Soviet Union will be able to negotiate the outcome that is wished by the people of those republics. On the second part of my hon. Friend's question, I agree entirely that the unfettered right to emigrate is one of the characteristics of an open and accountable society. There have been substantial improvements in that regard within the Soviet Union, but there is still further to go.
    Mr. Rowlands: Before the Secretary of State meets his opposite number in Moscow about human rights issues, will he make immediate inquiries of President Gorbachev as to whether the latter supports the views of his own Prime Minister that somehow there was an absurd plot to destabilise the rouble in recent weeks?
    Mr. Hogg: That allegation by the Soviet Prime Minister was manifestly dotty, and Mr. Gorbachev is not dotty.
    Mr. William Powell: In all the representations that my hon. and learned Friend and other members of the Government have made to the Soviet authorities about the disgraceful shootings in Vilnius and Riga in recent weeks,
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    have the Government received any satisfactory explanation from the Soviet authorities as to why they took place; and will my hon. and learned Friend continue to stress to the Soviet authorities that it would be very difficult for the western powers to be accommodating to the economic needs of the Soviet Union until a satisfactory explanation is given?
    Mr. Hogg: We have had a number of explanations from the Soviet authorities, some more persuasive than others. As for the second part of my hon. Friend's question, this is indeed extremely regrettable. The British Government, in concert with others, want to signal our disapproval and condemnation of what is happening by, for example, suspending the non-humanitarian aid element of the Rome declaration. So I support the latter part of my hon. Friend's suggestion.
    Mrs. Mahon: Will the Minister reconsider his letter to me about bringing up at the United Nations the repression and killing in the Baltic states? Will he, even now, acknowledge that it is not good enough to say, as he did in his letter, that he does not think
    "the United Nations Security Council is likely to solve the issue."
    Does not that show appalling double standards, given the Government's reliance on the United Nations for everything they say about the Gulf?
    Mr. Hogg: The hon. Lady does not fully comprehend the jurisdiction and competence of the Security Council. If we tried to raise this matter in the Security Council I am afraid that it would be frustrated by endless sterile procedural arguments. What we need to do and are doing is to take every other opportunity open to us—they are many—to make it plain to the Soviet Government not merely that we condemn what they have been doing in the Baltic republics but that they will have to pay a price in terms of lost co-operation with the west.

    China
    Mr. Simon Coombs: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on relations between the United Kingdom and the people's republic of China.
    Mr. Lennox-Boyd: We are working to achieve a full and constructive relationship with the People's Republic of China. The dialogue we are developing covers a wide range of issues, including human rights. We have a common commitment to the maintenance of the stability and prosperity of Hong Kong.
    Mr. Coombs: Does my hon. Friend agree that the People's Republic has made a substantial contribution to the international peace process in the United Nations, particularly over events in the Gulf? In that context, what progress has been made in recent weeks in discussions between the People's Republic, the United Kingdom Government and the Government of Hong Kong about the development of the port and airport scheme—especially the airport at Chek Lap Kok?
    Mr. Lennox-Boyd: I am happy to confirm that the People's Republic of China has made a constructive contribution to Security Council debates on the crisis in the Gulf.

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    The Government of China agree on the need for the airport. Premier Li Peng spoke to my hon. Friend the Member for Warwickshire, North (Mr. Maude)—then responsible for Foreign Office affairs on China—in July of last year and gave him that assurance. Experts are discussing the project on both sides and we hope that the Chinese will support it in due course.
    Mr. Cox: Is the Minister aware of the role that the British inter-parliamentary group is playing in building better relationships with the People's Republic of China, specifically in the areas of human rights and the rights of the people of Hong Kong? Will he acknowledge the role that the British IPU plays in this important matter?
    Mr. Lennox-Boyd: I am sure that the IPU has made its concern on human rights felt. We, too, express our concern about them on every possible occasion.
    Mr. Sims: Does my hon. Friend agree that it is as much in the interests of China as of Hong Kong that the territory should continue to enjoy stability and prosperity, to which he referred, and confidence in its future? Does he agree that the remarks attributed to Deng Xiaoping about British tricks and about sending in troops to put down rebellion do not contribute to confidence?
    Mr. Lennox-Boyd: I confirm that it is as much in the interests of the Chinese Government as of the Hong Kong Government that Hong Kong should prosper. My hon. Friend referred to a newspaper article quoting remarks by Deng Xiaoping. That statement was not an official one by the Chinese Government. The report to which my hon. Friend referred was of an earlier article in a Hong Kong magazine last month. It is not helpful to comment on speculation.
    Mr. Foulkes: Will the hon. Gentleman confirm that, with only two weeks to go to the deadline, fewer than 6,000 Hong Kong people have applied for the 50,000 available passports? Does not that shambles show that the Government would have been better occupied bringing full democracy to Hong Kong instead of having this flawed scheme? Does not the fact that Hong Kong people are still flooding to Canada, the United States and Australia show that the scheme is not anchoring people in the territory and that those people, like us, no longer have confidence in the United Kingdom Government?
    Mr. Lennox-Boyd: I should have thought that the hon. Gentleman would recall that Labour Members, perhaps including himself, suggested that this scheme would flood the United Kingdom with people from Hong Kong. Considerable interest has been shown in the scheme. A quarter of a million application forms have been distributed. Experience shows that there may be a rush of applications just before the deadline.

    Collective Security
    Mr. Conway: To ask the Secretary of State for Foreign and Commonwealth Affairs what importance he attaches to the strengthening of collective security arrangements.
    Mr. Hurd: NATO, including the presence of north American forces in Europe, remains the basis for our collective security. The alliance is adapting to the new circumstances in Europe and we have put forward
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    proposals for strengthening the European pillar within the alliance by building up the Western European Union. The WEU has shown that it can play a useful role in co-ordinating European military activities outside Europe.
    Mr. Conway: I am grateful to my right hon. Friend for his reply. Does he accept that defending Europe's interests as an entity must extend beyond physical boundaries to include its interests? If so, does he find less than edifying the response of some of our European and NATO allies to the crisis which we face in the Gulf, particularly nations such as Belgium which have been less than enthusiastic about the part that they could play in the conflict?
    Mr. Hurd: This was not a NATO responsibility, except in terms of the threat perceived to Turkey, a NATO member. Efforts to achieve a concerted military response have had patchy results. The Belgians have sent three warships and we are discussing further forms of help with them.
    Ms. Short: I am sure that the right hon. Gentleman agrees that the United Nations plays a part in collective security. Has he heard the suggestions in Germany that in future the Germans cannot be expected to pay without a say and that they should have some kind of representation in the United Nations, perhaps collective European representation, or, as Willie Brandt suggested, two alternating seats for Europe? Does the right hon. Gentleman have a statement to make about those two suggestions?
    Mr. Hurd: I am glad that the hon. Lady recognises the United Nations role in enforcing collective security. I hope that she will now back resolution 678—
    Ms. Short: I do.
    Hon. Members: Withdraw.
    Mr. Hurd: I withdraw that insinuation. I am glad that the hon. Lady shares my view of the importance of the United Nations to collective security. I hope that the German Government will persist in their plan to amend the German constitution, to enable Germany, with her allies and partners, to play a full part in collective security. Germany has not asked for a permanent seat on the Security Council and there is no such proposal on the table.
    Ms. Short: On a point of order. The Foreign Secretary misrepresented me—
    Mr. Speaker: Order. Hon. Members are frequently dissatisfied with the answers that they receive. I heard the Foreign Secretary withdraw that comment.
    Mr. Cyril D. Townsend: May I commend my right hon. Friend for his wise remarks at Blaby on future collective security in the Gulf? Is not it essential that the Gulf states themselves decide what they want, and with whom they co-operate? Does my right hon. Friend agree that, while the United Kingdom is prepared to play its part in underpinning peace in the region, there is no question of our having a large military presence east of Suez once again?
    Mr. Hurd: May I say, first, that I withdrew my suggestion about the hon. Member for Birmingham, Ladywood (Ms. Short) as soon as she began to show

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    indignation. Indeed, I withdrew it even before I had completed it. I am delighted that, with regard to the Gulf war, we are on the same side.
    I agree with the point that my hon. Friend has just made. It is very important that the countries of the region, particularly the Arab members of the coalition against Saddam Hussein's aggression, should begin to form their own ideas about security, especially in the Gulf, after the war. I am very glad that, tomorrow, eight of the states most closely concerned will meet in Cairo to make a start.

    The Gulf
    Mr. Sillars: To ask the Secretary of State for Foreign and Commonwealth Affairs what recent discussions he has had with Arab League states about further exploration of diplomatic solutions to the Gulf crisis.
    Mr. Strang: To ask the Secretary of State for Foreign and Commonwealth Affairs whether he has had dicussions with any of his counterparts who are members of the union of Arab Maghreb nations, since the commencement of military action against Iraq.
    Mr. Hurd: Discussions with members of the Union of Maghreb Nations and of the Arab League continue. We all agree on the need to end the conflict as early as possible, on the basis of the relevant Security Council resolutions. But a diplomatic solution can be possible only once Saddam Hussein is willing to comply with the Security Council resolutions.
    Mr. Sillars: Does the Secretary of State agree that, although Saddam Hussein bears the primary responsibility for the conflict in the Gulf, the events in Baghdad this morning, involving very substantial loss of human life, not only constitute a human tragedy but represent a political disaster for the coalition forces and, in particular, for those Arab leaders associated with the coalition, against the wishes of the mass of people in their countries? Does not this point to the need to rule in compromise as a possible solution before the land battle commences and further civilian casualties of the magnitude experienced today occur? Has the Secretary of State talked to the Kuwaiti Government and received from them any suggestion that they might agree with the United States ambassador to Baghdad that Saddam Hussein could perhaps retreat to the two islands and the oilfield and hold them as a compromise solution until international—
    Mr. Speaker: Order. That is far too long for a supplementary question.
    Mr. Hurd: I had discussions with the Kuwaiti Government four days ago, but I should not have thought it right, or in any way fruitful—their whole country having been invaded and virtually obliterated, and their people tortured and oppressed—to suggest to them that they should take the initiative or should accept from anybody else any initiative involving the dismembering of their country.
    Mr. Strang: What effect does the Secretary of State think the bombing of the air raid shelter today has had on the opinion of these nations and their leaders? Is it not clear that there is growing revulsion, not only among the Arab nations but throughout the world, at what is
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    happening in Iraq? Surely the Secretary of State must accept that thousands and thousands of Iraqi civilians have now been killed.
    Mr. Hurd: In Saudi Arabia and Egypt, and in discussions here with Syria's Foreign Minister, I have heard that in those three key Arab countries, which are members of the coalition against Saddam Hussein, the issue of civilian casualties has been considered fairly and accepted—accepted in the sense that those countries realise the nature of the operation, agree with its objective and intend to stay within the coalition. I do not believe that even tragedies of the kind reported this morning will alter that analysis or shake that determination.
    Sir Richard Luce: Is it not more constructive that my right hon. Friend has made it absolutely plain that the British Government stand ready, once Kuwait has been liberated, to respond to any request from middle east countries to play a prominent role in the economic and political reconstruction of the middle east?
    Mr. Hurd: Indeed, and it is because the Kuwaitis have begun to plan in detail the reconstruction of their country that a group of British business men came with me to talk to the Kuwaitis four days ago. I am glad that they did that. We have made two things clear—first, that it is not for us to impose a political, strategic or economic blueprint on the region. The good ideas have to come from the region itself and that is beginning to happen. Secondly, as my right hon. Friend says, we have made it clear that we are willing, within our means, to consider any suggestions for help from those countries once they have sorted out their own ideas.
    Sir Michael Marshall: Does my right hon. Friend accept that in pursuing a diplomatic solution that will see the withdrawal of Iraq from Kuwait, one of the key players at the present time is Iran? Will he take this opportunity to characterise the state of the dialogue with that country? Does he also accept that the continuing parliamentary links with Iran suggest that there is a much more favourable climate now in which to make progress?
    Mr. Hurd: We restored diplomatic relations with Iran in the autumn, as my hon. Friend is aware. I am in favour of the kind of parliamentary contacts to which he referred and I hope that they will bear fruit before long. The progress of our relations has not been as fast as I would have wished. I am very anxious to make progress on some of the bilateral points, which is diplomatic jargon for the British hostages held by pro-Iranian groups in Lebanon and also Mr. Cooper who is in prison in Tehran.
    Mr. Ernie Ross: When the Foreign Secretary next meets the Arab League states, as part of his attempt to find a diplomatic solution, will he assure them of his determination to strengthen the new Lebanese Government? As part of that determination, will he raise with the Israeli Government the need for them to stop their land, sea and air incursions into Lebanon? Will he also raise with them the need to help strengthen that Lebanese Government?
    Mr. Hurd: I welcome the move of the Lebanese Government into the south of their own country, but that is a slightly different point. Palestinian groups have been using force and rockets against settlements in the north of

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    Israel. While I accept the need for the whole tragedy of Lebanon to be discussed, the Palestinian part in the latest violent episodes cannot be brushed aside.
    Mr. Brandon-Bravo: Will my right hon. Friend contrasts the immediate comments of certain Opposition Members about the tragedy—and I stress the word "tragedy"—of the civilian loss of life about which we have heard today, with the absolute silence that greeted the destruction of thousands of homes in the state of Israel as the result of Scud attacks?
    Mr. Hurd: To be fair, the whole House has shown its revulsion against the indicriminate attacks made by the Iraqi Scud missiles whether against Israel or civilians in Riyadh. The sooner this whole crisis can be brought to an end by reversing the aggression and freeing Kuwait, the sooner we can get on with the task of trying to rebuild a more sensible middle east in which these tragedies d o not occur.
    Mr. Kaufman: I am grateful to the Foreign Secretary for repudiating the offensive and foolish remark made by the hon. Member for Nottingham, South (Mr. Brandon-Bravo). Does the Foreign Secretary agree that as Scud missiles continue to rain on Israel causing civilian casualties and destroying people's homes, the need for Israeli security through a peace settlement becomes more obvious, because it is clear that the occupation of the occupied territories does not provide Israel with that security, as Amos Oz so widely said in that superb interview that he gave on television on Sunday afternoon? Will he remind Mr. Shamir that a settlement is not possible unless he is ready to speak to representative Palestinians and that it is deplorable that he places in prison moderate Palestinians like Sari Nusseibeh?
    Mr. Hurd: I do not think that my hon. Friend the Member for Nottingham, South (Mr. Brandon-Bravo) and the right hon. Gentleman are differing in their reactions to the attacks on Israel or in their support for the restraint that the Israel Government have shown in response. However, the right hon. Gentleman's second point is soundly based, because after the war we will have to return to the search for a lasting settlement of the Arab-Israel dispute. That cannot be done simply by agreements between Israel and Syria on the one hand and Saudi Arabia and other Arab states on the other. It must include what is called the Palestinian question. It must be based on the United Nations Security Council resolution which defines as necessary the ending of the occupation by Israel of the occupied territories and the recognition and the securing of Israel's security behind safe borders.

    Prisoners of War
    Mr. David Evans: To ask the Secretary of State for Foreign and Commonwealth Affairs when he last met the Iraqi ambassador to make representations concerning the treatment of British and allied prisoners of war.
    Mr. Douglas Hogg: I summoned the Iraqi ambassador on 21 January to protest about Iraqi threats to use allied prisoners of war as human shields. I summoned him again on 29 January, following Iraqi news reports that prisoners of war had been wounded and that one perhaps had been killed. I told the ambassador that the Iraqi Government were in breach of their international obligations under
    848
    articles 19 and 23 of the third Geneva convention. I asked him to convey our views to the Iraqi Government at once and at the highest level.
    Mr. Evans: I thank my hon. and learned Friend for that reply. Was his meeting with the ambassador held in the Tower of London? If not, why not? When the ambassador returns to this country, will my hon. and learned Friend have further meetings with him in the Tower of London so that the ambassador can be close to the torture chamber and make himself familiar with what Saddam Hussein has done to prisoners of war and, in particular, our loved ones?
    Mr. Hogg: When I saw the ambassador I made it plain to him that we regarded the conduct of his Government as wholly disgraceful. After that meeting he was under no illusion whatsoever.
    Mr. Rees: Does the Minister recall that during the previous war, when it was reported to the House that RAF air crew had been badly treated and, indeed, shot, a promise was made to do something about it after the war? After the war, it was decided conveniently to forget it. I hope that the Minister's words—a correct condemnation —will not be the end of the matter. It must never be forgotten that, when prisoners of war on any side are badly treated, somebody must be brought to justice.
    Mr. Hogg: I made it plain to the ambassador that where there was a gross breach of international obligations, those responsible could be held personally liable.
    Mr. Onslow: What are the penalties for a reckless breach of the Geneva convention in these matters, and who is responsible for enforcing them?
    Mr. Hogg: There are a variety of ways in which individuals can be made accountable for their individual action. Of course, the consequences depend upon the precise nature of the breach alleged.

    Afghanistan
    Mr. Ron Brown: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about relations with Afghanistan.
    Mr. Lennox-Boyd: We do not have substantive dealings with the Najibullah regime, which is not supported by the majority of Afghans. We would welcome its replacement by a Government truly acceptable to the Afghan people with whom normal relations would be possible.
    Mr. Brown: If the British Government are so chummy with Syria and Iran, for example, what is wrong with Afghanistan? To my knowledge, Dr. Najib's Government are not associated with terrorism—certainly, they are a revolutionary Government—but I wonder why there is not one British representative in Kabul. Could it just be that the Tory Government can never forget that the Afghan trade union movement backed the miners during the struggle—[Interruption.] That is true. The Afghan trade union movement backed the miners against the Thatcher regime. We can never forget that.
    Mr. Lennox-Boyd: No, it has nothing to do with the miners. We have not broken off diplomatic relations wit h Afghanistan but the Najibullah regime is only there with

    849
    the support of the Soviet Union. It remains unrepresentative and unacceptable to a majority of the Afghans and controls only some 20 per cent. of the territory.
    Mr. Atkinson: Can my hon. Friend confirm that a contingent of the Afghan mujaheddin is currently serving in Saudi Arabia? Is not that a welcome development? Can he say what their role is?
    Mr. Lennox-Boyd: I can confirm that a contingent of the Afghan mujaheddin is serving in Saudi Arabia.

    Yugoslavia
    Mr. Wareing: To ask the Secretary of State for Foreign and Commonwealth Affairs when he last met the ambassador of Yugoslavia to discuss that country's relationship with European institutions.
    The Minister of State, Foreign and Commonwealth Office (Mr. Tristan Garel-Jones): The Yugoslav ambassador last paid a formal call on my right hon. Friend in November 1989. On 30 January 1991 he called on my hon. and learned Friend the Member for Grantham (Mr. Hogg).
    Mr. Wareing: Although our minds are rightly concentrated on the Gulf, does the Minister agree that the possible break-up of Yugoslavia creates potential danger to peace in south-east Europe and that the nationalist tensions within that country could give rise to problems for Yugoslavia's neighbours? Is it not therefore in our interest to support the Yugoslav federation's application for membership of the Council of Europe and for a new association treaty with the European Community?
    Mr. Garel-Jones: The hon. Gentleman will be aware that Yugoslavia already is a guest member of the Council of Europe's parliamentary assembly. Yugoslavia has applied for full membership of the Council of Europe. That has been passed in the usual way to the parliamentary assembly. We now await the opinion of the assembly on the matter. No doubt it will bear in mind the points that the hon. Gentleman has just made.
    Mr. Aitken: Does my hon. Friend agree that Yugoslavia seems to be perilously close to civil war? Can he assure the House that he will do everything in his power, both through our diplomatic channels and through European institutions, to persuade the leaders of Croatia and Serbia to turn back from their tragic collision course towards bloodshed?
    Mr. Garel-Jones: The United Kingdom is obliged under the CSCE Final Act to continue to support the unity and integrity of Yugoslavia and also the right of individual
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    peoples to national self-determination. We would deplore the use or the threat of force against any democratically elected Government.

    The Gulf
    Mr. Simon Hughes: To ask the Secretary of State for Foreign and Commonwealth Affairs what have been his Department's responsibilities and activities in connection with the international response to environmental damage caused since the commencement of hostilities in the Gulf; and what consultations he has had with other Governments on the subject.
    Mr. Lennox-Boyd: The Foreign and Commonwealth Office is maintaining close touch through diplomatic channels with the Gulf states affected, who are leading the response to the environmental damage that Iraq is inflicting on the region. The FCO was pleased to be able to assist in making the arrangements for, and a financial contribution to, the visit of the RSPCA team to Saudi Arabia and Bahrain.
    Mr. Hughes: Does the Minister accept that there was widespread concern that at the time of the oil slick—caused, I accept, by the Iraqis and not in other ways—there had not been adequate preparation, given the many warnings of environmental risk to the Gulf as a result of hostilities? In view of the greater danger to human life and to the environment if the chemical cocktail of toxic substances in Kuwait, Iraq and Saudi Arabia were to be detonated or released by future conflict, what is being done now to ensure that the allied forces avoid such detonation, and what preventive measures are planned to mitigate any further much worse environmental damage to humans and to the middle east in general?
    Mr. Lennox-Boyd: The response to the emergency caused by the oil slick is clearly the responsibility of Saudi Arabia and the other sovereign Gulf states affected. However, I can confirm that a considerable amount of equipment—90 tonnes of anti-pollution equipment—from stocks held in Britain has been delivered to the region.
    Mr. Tredinnick: Does my hon. Friend agree that loss of human life is the worst form of environmental damage? Is it true that the Iraqis are setting up concentration camps in Kuwait for Kuwaiti civilians? Will he give an undertaking that, when the war is over, those responsible will be prosecuted under international law?
    Mr. Lennox-Boyd: My hon. Friend has raised a point that is not relevant to the environmental damage, but I can confirm that the worst possible environmental damage caused by Saddam Hussein involves the appalling atrocities that he has committed against people in Kuwait and that region.

B52 Bombers (Bristol Channel)
3.30 pm
Mr. Tony Speller(by private notice): To ask the Secretary of State for Defence whether he will make a statement about the announcement that B52s would dump bombs in the Bristol channel in an emergency.
The Minister of State for the Armed Forces (Mr. Archie Hamilton): I am grateful to my hon. Friend the Member for Devon, North (Mr. Speller) for raising this issue, and hope that I can allay his concern and that of hon. Members on both sides of the House.
The House will recall that we agreed last month that the United States could operate B52s from RAF Fairford as part of an allied effort in the Gulf conflict. The United States air force requested that an area should be provided for jettisoning bombs in the very unlikely event of an emergency occurring shortly after take-off.
Notices to airmen were issued on 8 and 9 February and to mariners on 12 February advising them of the establishment of an emergency jettison area for B52 aircraft off Hartland point, seaward of the Bristol channel. Thousands of notices to airmen are issued every year, covering a variety of planned and possible events. The emergency area selected is a permanently designated military danger area, covering 1,000 square miles, normally active during daylight hours from Monday to Friday, which is notified to all airmen and mariners. It covers an air gunnery range used daily by the RAF for activities including live firing. The purpose in issuing the recent notices to airmen and mariners was to activate the area full time. That would not prohibit the use of the area by shipping.
The likelihood of the area being used by B52s in emergency is extremely remote. In such an event the bombs being jettisoned would not be armed, and the B52 aircrew would use all means available—including visual checks and radar—to ensure that the area below them was clear of aircraft and shipping. In addition, as much notice as possible of any emergency would be given to all shipping through the normal international frequencies.
The issue of the notices to airmen and mariners is therefore a sensible precaution, designed to deal with a very remote contingency in the safest way possible.
Mr. Speller: I thank my hon. Friend for his comments and explanation, and propose to ask him four specific questions.
First, presumably by definition the aircraft will be in some distress, otherwise an emergency would not arise. Will my hon. Friend confirm that the bombs will not be armed, whether the planes are going to, or coming back from, the Gulf? Is my hon. Friend aware that the coastguard at Ilfracombe was not aware of the points that he has made today and the fishermen and those involved in coastal shipping ask how they are supposed to get out of the way if large chunks descend on them—[Laughter.] My constituents do not find this matter nearly as funny as hon. Members. How are fishermen supposed to be notified to get out of the way should a problem arise if they do not have a radio?
Mr. Hamilton: An aircraft is much more likely to be in distress shortly after take-off than when returning, when it
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is very unlikely. If that were the case, one would expect the aircraft to jettison bombs much further out to sea. I emphasise what I said in my opening remarks: we would rely on the B52s to use radar to make absolutely certain that no shipping was below them. I am told that that is reliable. They would not be flying at great altitudes and the radar would work effectively. In those circumstances, the danger to shipping below them would be minimal.
Mr. Alan Williams: Does the Minister accept that we all recognise that this is a remote possibility and that it is better that there are contingency plans than that there are not? Does he further recognise that the designated area is nearly 100 miles from the point of take-off of the aircraft, that along the flight path on either side of the channel live 1.5 million people, and that the aircraft weighs 220 tonnes and carries 30 tonnes of munitions? Will the Minister confirm that, in the event of an aircraft having to jettison its bombs, 108 500 lb bombs, which normally fall in a pattern one mile long and half a mile wide, would fall? What reassurance can he give the constituents of the many hon. Members who represent areas on both sides of the channel who are concerned about an aircraft which may be in trouble and even unable to reach the designated area?
Mr. Hamilton: I am glad that the right hon. Gentleman accepts that this is a remote possibility, as of course it is. We are drawing up a contingency measure for a remote possibility. I remind him that the bombs are not armed, so there is no question of them exploding. I cannot comment on the amount of armament that the B52 carries, but, as I have already emphasised, every precaution will be taken to ensure that there is no damage to the area.
Sir Gerrard Neale: Has my hon. Friend published any guidelines, and, if not, does he intend to do so, on damage which may be done to fishing tackle that could be hit by an undetonated bomb? Does he accept that, although many of my constituents recognise that it is an outside possibility that that would ever happen, there is anxiety? Will he make sure that there is clear guidance about a hotline to the Ministry of Defence, possibly via the local authority, to deal with any queries or anxieties that arise?
Mr. Hamilton: Yes, I am more than happy that we should answer any questions that arise. I have no doubt that my hon. Friend could give the number of my private office to anybody who wishes to ring, and we shall certainly deal with any question that may cause concern. It is important that we get this into perspective. We are talking about an outside possibility of an aircraft which has taken off from RAF Fairford being in trouble. That possibility is extremely remote. If any question of damage to fishing vessels or to nets or fishing gear arises, I remind my hon. Friend that we have always paid compensation in the past, and I am sure that we would do so in future.
Ms. Dawn Primarolo: Does the Minister accept that his explanation to the House is simply not good enough? Whether or not this is an outside chance, communities along the Bristol channel and shipping in it are in danger. Will he tell the House what measures he intends to take to ensure that coastguards are notified so that shipping is cleared from the area and, at all costs, that bombs are dropped not over the Bristol channel but only in the designated areas?
Mr. Hamilton: I do not understand what the hon. Lady is on about. By prescribing this designated area we are ensuring that any bombs will be dropped in that area. That is precisely what we are doing in this whole procedure. If we did not have a designated area, clearly the aircraft would drop the bombs wherever it was convenient to them and we would have no control whatever. It is part of the procedure to alert coastguards, and everything would be done in the time available to alert people in the area to what was happening. Messages would be put out on the radio into which fishermen are tuned.
Mr. Nicholas Ridley: As the Member in whose constituency is Fairford, may I thank my hon. Friend for arranging for me to visit the splendid airmen and their aircraft? May I say how appreciative the majority of the population are that the Americans have stationed their forces here in order to protect our troops who are at risk in the Gulf by bombing Iraqi military targets?
Mr. Hamilton: I am grateful to my right hon. Friend, who is right to say that the B52s are playing a critical role. It is a mark of the responsibility of the United States air force that it has asked us to make contingency plans to cover a very remote possibility.
Mr. Menzies Campbell: Have the arrangements that the Minister has just described ever been made in any circumstances before?
Mr. Hamilton: We have issued a number of other notifications, to both mariners and airmen. As I said, we issue thousands of them every year covering a whole mass of different contingencies and warnings to people in various areas. There has been a large number of other notifications, but I doubt whether there have been any for armed B52s.
Mr. Gwilym Jones: I appreciate that what my hon. Friend has described is absolutely necessary in the circumstances. I am sure that it comes as no surprise that such arrangements should be made at this time. Can my hon. Friend tell me the exact location of the designated area, and also its proximity to the capital city of Wales and the south Wales coast?
Mr. Hamilton: Yes. The centre of the danger area is some 20 miles off Hartland point. The boundary of the area lies not closer than five miles to Hartland point, and
854
it extends for some 30 miles from the Devon coast. The area is fan shaped, rotating from north of Hartland point towards the south-west.
Dr. Dafydd Elis Thomas: What consultation was there prior to the Minister's announcement with fishing and environmental interests along the Bristol channel? Will he carefully explain to the House what precise arrangements for consultation with shipping and with civilian populations on both sides of the Bristol channel would take place in an emergency?
Mr. Hamilton: Obviously, in an emergency, we would have very little time to consult anybody. On the question of consultation with the fishing industry, I can tell the hon. Gentleman that it is very well aware of that area, and has been for a long time. If the hon. Gentleman had listened to my opening remarks, he would have heard me say that the area is constantly used for live firing. All that we are doing is making it a 24-hour danger area. The notification is in addition to what already happens.
Mr. Jonathan Sayeed: Can my hon. Friend confirm that the B52s are flying in support of our troops and other allied troops who are trying to enforce United Nations resolutions? Is he aware that the people of Bristol would prefer B52s to drop their bombs in extremis in the Bristol channel rather than that, in years to come, Saddam Hussein should drop a nuclear bomb in Bristol?
Mr. Hamilton: I could not agree more with my hon. Friend. The B52s are playing a very valuable role in the Gulf conflict. It is nothing other than responsible and sensible for the USAF to make such contingency provision against the outside possibility that something might go wrong.
Mr. Allan Rogers: The Opposition welcome the Government's response. There has been a great deal of disquiet about the lack of information, and I am not sure whether the Minister's statement will allay that disquiet. Will he assure us that the decision will be constantly under review?
Mr. Hamilton: It is not a decision that should be under review because it is a sensible precaution against the outside possibility of something going wrong. The time for review will be when the B52s cease to operate out of RAF Fairford—when, presumably, the conflict will be over and therefore the contingency arrangement will no longer be necessary.

Points of Order
3.44 pm
Mr. Anthony Steen: On a point of order, Mr. Speaker. I wonder whether you would advise Government Departments that, when they group one question with another, they should advise the hon. Members concerned that they intend to do so. I was not advised until a quarter to three this afternoon that my question No. 13 would be grouped with question No. 4. Will you say something about that practice, Mr. Speaker?
The Minister of State, Foreign and Commonwealth Office (Mr. Douglas Hogg): Further to that point of order, Mr. Speaker. I apologise to my hon. Friend the Member for South Hams (Mr. Steen). A letter was put on the notice board, I understand at about 11 o'clock this morning. I am sorry that my hon. Friend did not receive it. It may have been the fault of my officials. I shall contemplate how we can improve communications because I well understand that it puts my hon. Friend and other hon. Members in an embarrassing position, and I would not want that to happen again.
Rev. Martin Smyth: On a point of order, Mr. Speaker. I do not expect that you saw "Newsnight" last night, but I know that many people throughout the nation share with the people of Northern Ireland their concern about the shameful treatment of members of the armed forces and the UDR. Will the Attorney-General be making a statement in the House tomorrow about an appeal?
Mr. Speaker: I did not have an opportunity to watch that programme, but I am sure that what the hon. Gentleman says will have been heard on the Front Bench.
Mr. John Marshall: On a point of order, Mr. Speaker. Questions that were allegedly tabled for answer on 26 February were in fact tabled for answer on 25 February.
Mr. Speaker: I shall look into that.

National Audit Office (Extension of Powers)
3.45 pm
Mr. Robert G. Hughes: I beg to move,
That leave be given to bring in a Bill to extend the powers of the National Audit Office so as to permit the Office, on an application by a national political party, to cost that party's election commitments.
Last year my hon. Friend the Member for Pembroke (Mr. Bennett) introduced a similar Bill. It was, rather curiously, spoken against but not opposed by the hon. Member for Nottingham, North (Mr. Allen). However, he did us a service in that he reminded the House that the Opposition do not have available to them the advice necessary properly to cost their policies? I have listened to that plea, and that is why I am sure today that the Opposition will welcome the help that I am trying to bring to them through the Bill. Let me make it clear that the Bill is intended to help the Labour party.
The National Audit Office is described as Parliament's financial watchdog. It has an acknowledged political role and is not supposed to be impartial. The hon. Member for Birkenhead (Mr. Field) has said:
"To say that the NAO … should not get involved in politics is like saying the Church should not get involved in politics."
If the NAO is to be the parliamentary watchdog, why should we restrict its work to the Government's policies. I want it to be a full watchdog and to scrutinise the Opposition's policies as well. If it found that some Labour policies were unaffordable, ill thought out, out of date or just plain daft, I am sure that the Labour party would be grateful. But if it could not bring itself to be grateful, I am sure that the electorate would be.
The NAO might care to examine the proposed payroll tax that would cost so many jobs. It might seek to examine renationalisation plans, the harmful effects of a national minimum wage or the repeal of trade union legislation which would bring back intimidation, secondary strikes and flying pickets. But the main question that the NAO should consider is the cost of Labour's programme.
I recognise that it is difficult to estimate the cost of Labour's programme. The Labour party has been not so much coy on the subject as mute. It may be that this afternoon the right hon. and learned Member for Monklands, East (Mr. Smith) will turn Queen's evidence and tell us the cost of Labour's programme; or he may be waiting for this Bill to give him the help he needs in order to cost Labour's programme so that he can then tell the House and the country how much it will cost.
What evidence do we have about what a Labour Government would cost? The document "Looking to the Future" has 81 uncosted spending pledges. UBS Phillips and Drew calculate the cost of that to be £19·5 billion, including the promises made in "Meet the Challenge, Make the Change". Professors Patrick Minford and Paul Ashton of Liverpool university, whom the Labour party might not think are the most unbiased assessors of its policies, calculate a similar price of £21·5 billion. Midland Montagu has gone for the jackpot. It says that Labour's policies would cost a maximum of £50 billion.
The hon. Member for Derby, South (Mrs. Beckett) has being trying to restrain Labour party spokesmen, but she has been failing of late, and the promises keep on rolling.

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The last Labour party conference made spending commitments totalling £36·46 billion. I recall three further pledges that I heard made in this Chamber. The hon. Member for Peckham (Ms. Harman) referred to no-fault compensation as
"an idea whose time has come."—[Official Report, 1 February 1991; Vol. 184, c. 1274.]
The hon. Member for Blackburn (Mr. Straw) said:
"We will increase the science budget."—[Official Report, 6 February 1991; Vol. 185, c.346.]
When asked whether extra spending on training would be a priority, the hon. Member for Sedgefield (Mr. Blair) said:
"The answer is obviously yes."—[Official Report, 6 February 1991; Vol. 185, c. 295.]
Those three commitments were made in the space of one week, so how much more would Labour spend if it were given a few months?
One can add to such statements the off-the-cuff comments made to encourage Labour supporters, and the fact that no Labour Member of Parliament makes a speech without promising a massive council house building programme, a large increase in school budgets, or a substantial improvement in housing revenue support. One recalls that, last year, Labour described £3 billion of revenue support as peanuts. You name it, Mr. Speaker, and Labour has promised to spend more of the taxpayers' money on it.
The worst feature is that Labour promises to fund its programme without raising the general level of taxation. Regardless of whose costings one takes, Labour's programme would sting every family and every wage earner, young and old alike. If the National Audit Office could find a way of funding such expenditure without increasing the basic rate of taxation, I am sure that my right hon. Friend the Chancellor of the Exchequer would like to know about it.
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I would like to come clean, because it might be that I am being unfair to Labour, and that its calls for higher public expenditure are just hot air designed to win votes. I will quote from an article that I found in a photocopier:
"Far from getting something out of the next Labour Government, it looks as though we can expect cuts … All previous Labour Governments … introduced some reforms. Very soon afterwards, they started to attack those reforms—starving them of money, introducing cuts in the social services generally, and imposing wage restraint."
Those are not the minutes of the supper club, but come from an article in the Morning Star of 29 January. At least it knows what to expect from a Labour Government.
Either Labour's programme is a complete work of fiction, or by order a Labour Government would abolish the rules of arithmetic, or every family would pay a high price for Labour's rag-bag of dusted-off 1960s policies, topped up with Mussolini-style statism, and repackaged as being electorate-friendly and cheap to operate.
I know that Labour will welcome my Bill, and will look forward to the National Audit Office's recommendations. I am certain that the right hon. and learned Member for Monklands, East and the hon. Member for Derby, South will help me in drawing up the Bill's details. I look forward to working with them on a Bill that will do so much to help Labour and the electorate.
Question put and agreed to.
Bill ordered to be brought in by Mr. Robert G. Hughes, Mr. Andrew Mitchell, and Mr. Ian Taylor.

National Audit Office (Extension of Powers)
  NATIONAL AUDIT OFFICE (EXTENSION OF POWERS)
  Mr. Robert G. Hughes accordingly presented a Bill to extend the powers of the National Audit Office so as to permit the office, on an application by a national political party, to cost that party's election commitments: And the same was read the First time; and ordered to be read a Second time upon Friday 5 July and to be printed. [Bill 86.]

Autumn Statement
[Relevant documents: Chancellor of the Exchequer's Autumn Statement (Cm 1311) and the Statistical Supplement thereto (Cm 1520).
First Report from the Treasury and Civil Service Committee of Session 1990–91 on the 1990 Autumn Statement (House of Commons Paper No. 41) and its First Special Report containing the Government's response (House of Commons Paper No. 212).]
Mr. Speaker: I must announce to the House that I have selected the amendment in the name of the Leader of the Opposition. Because of the pressure to speak in the debate, I shall put a limit of 10 minutes on speeches between 6 o'clock and 8 o'clock. I hope that those hon. Members who are called before and after that time will also bear in mind the 10-minute limit.
3.54 pm
The Chancellor of the Exchequer (Mr. Norman Lamont): I beg to move,
That this House approves the Autumn Statement presented by Mr. Chancellor of the Exchequer on 8th November 1990; commends the Government on its determination to maintain downward pressure on inflation and to build on the great improvements in economic performance over the last eleven years; and welcomes the Government's continued tight control of public expenditure coupled with improved value for money and its provision of additional resources for key areas.
We are debating the autumn statement rather later this year than usual, chiefly because the Government wished to allow the new statistical supplement to the statement to be available to the House before the debate.
The House will understand that I cannot anticipate the Budget statement that I shall be making on 19 March. While this may restrict my remarks on the economy today, I am obviously keen to address the concerns that I know right hon. and hon. Members have.
We are aided in our debate today by a wide-ranging and thorough report on the autumn statement from the Treasury and Civil Service Select Committee chaired by my right hon. Friend the Member for Worthing (Mr. Higgins), and I congratulate my right hon. Friend on his skill in chairing the Committee.
The Government have responded to the Committee's conclusions and recommendations, and I am grateful to the Committee for publishing that response speedily, so that it is available to hon. Members this afternoon.
My right hon. Friend the Prime Minister presented his autumn statement to the House as Chancellor on 8 November last year. As a result of subsequent events, I found myself in the unusual—perhaps unique—position, less than four weeks later, of giving evidence to the Select Committee on the economy, as Chancellor, and on the outcome of the public expenditure round which I had conducted as Chief Secretary.
I want to say a little about public spending plans, but I will start with the economy. While I appreciate that hon. Members, and the country, are concerned about the present recession, and the level of interest rates, I must stress at the outset that the reduction of inflation remains the overriding objective of Government policy. There can be no letting up on that goal. Low inflation is the essential basis for all our success in the future, which is why it is worth striving for.
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Following the ravages of inflation in the 1970s, we made remarkable progress against it in the mid-1980s. For six years in a row, United Kingdom inflation was below the EC average—including 1986 when it fell as low as 3·4 per cent. The low inflation of those years was not merely valuable in itself, but brought in its wake steady growth, high productivity and strong profitability, which saw British business climb from the bottom towards the top of the European league tables. I am determined that in the 1990s Britain should again enjoy those benefits which we had in the 1980s.
I am confident that we can get inflation down again. While the slowdown in the economy is painful, it has none the less improved the prospects for inflation and the current account. Many outside forecasters now expect us to beat the autumn statement forecast for headline inflation of 5·5 per cent. by the end of the year. Their optimism is borne out by the CBI's most recent industrial trends survey, which said that output price expectations for the coming months were the weakest in a January for five years.
There are some who say that inflation is already beaten and that we can let up in the battle against it, but of course, it is often during the downturn that the seeds for the next bout of inflation are sown. While there has been some encouraging news recently on inflation, Monday's producer price figures bring home the risks and the need for a continued firm policy.
There is indeed a price for getting low inflation, but experience has shown that it is a price well worth paying, and we should have the courage to stick with the policies which will, in time, deliver European levels of inflation again. Lower inflation will also make it easier to lower interest rates. I appreciate the anxiety for further progress on interest rates but, from the point of view of industry, what matters most is sustainable interest rate cuts rather than premature cuts which subsequently have to be reversed. We do not want to repeat what happened in 1981 when interest rates were cut sharply and then had to be reversed—a point that seems to have escaped the notice of some learned professors who write letters to The Times.
Mr. William O'Brien: Is the Chancellor aware of the concern in the clothing and textile industry about the advice that economists are giving banks? The banks are being told to withdraw support from the industry because they are at risk. Will the right hon. Gentleman advise the banks to change their attitude to the industry? Otherwise, many companies will fall and many jobs will be lost. Will the Chancellor act to stop those firms going under?
Mr. Lamont: I am, of course, aware of the concern to which the hon. Gentleman refers. It is felt in a number of countries, but I think that it is felt more seriously in other countries than it is here. I do not think that we face the prospect of a credit crunch of the kind that is sometimes talked about in the United States. The Bank of England, however, monitors developments of the kind that the hon. Gentleman has in mind very carefully, and I shall take on board what he has said.
When the economy is in recession, it is always difficult to see where the upturn is coming from. Those who plan for the future often work on the assumption that the next six months will be just like the last; but we know that recession always come to an end, and that the present one

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will be no exception. Indeed, we can already begin to discern some of the forces that will lead to recovery. That is why the vast majority of independent forecasters are expecting a return to growth later this year.
It is important to remember that the recession comes after a sustained period of growth which has greatly strengthened companies and their finances. The current downturn follows a cumulative growth in output between 1981 and 1989 of 28 per cent. That is a lot of extra output to set against a fall currently predicted by some independent forecasters of around 1 per cent. or so. A reversal of that magnitude does not justify exaggerated and irresponsible talk of a depression; nor does the behaviour of the monetary aggregates. The growth of both broad and narrow money has fallen markedly in a way that is consistent with the reduction in inflation that we are expecting but does not suggest that the policy is excessively tight.
We are not alone. Three of the G7 countries are now in recession—the United States, Canada and ourselves. So are Australia and New Zealand. Although continental Europe is not in recession, it has not escaped the downturn. Industrial production has fallen in France, Italy, Belgium, Spain and Sweden—quite strongly in Sweden—within the past six months. Perhaps the right hon. and learned Member for Monklands, East (Mr. Smith), when he talks about the recession and blames it all on the Government, will give us his reasons for the fact that output is also falling in those other countries.
The truth is that much of what is happening is cyclical. The United Kingdom began its recovery from the last recession in 1982–83—sooner than the other countries—and our subsequent growth was particularly strong. It is not surprising, therefore, that we should also be the first to enter the period of downswing.
Other countries are at different stages of the cycle. For example—although we did not hear much about it from Opposition Members—four years ago the British economy was growing strongly and the French economy much less so; the German economy, in growth terms at least, was in the doldrums. Now, Britain is experiencing recession and output growth has recently slowed in France, while the German economy, buoyed up by reunification, is still enjoying strong growth.
Just how deep and how long the recession will be is difficult to predict at any time, but the present outlook is made more uncertain by the Gulf war. The world and United Kingdom economies were slowing down before the Gulf crisis began, but Iraq's invasion of Kuwait last August, and the consequent rise in oil prices, boosted fuel costs and inflation and dented business confidence. Many firms have responded by postponing spending decisions.
The uncertainties created by the Gulf crisis have added particularly to the problems of certain sectors of the economy. Airlines and the travel, hotel and entertainment businesses have lost valuable trade as tourists and other travellers have cancelled flights. The extent of the problem was shown this week, when British Airways announced several thousand redundancies.
Again, we must keep a sense of perspective. Over the past few years this country has seen a rise in employment—an increase by the third quarter of 1990 of 3·75 milion since 1983—greater than in any other EC country, and for
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44 months we saw unemployment falling sharply. That was a remarkable development, greeted in stony silence by the Opposition. Because unemployment is an indicator that lags behind changes in output, the first six months in which activity was weakening saw only a gradual rise in the numbers out of work. That trend has only begun to accelerate over the last quarter, and we can expect unemployment to continue to climb for some time even after the recovery in output has begun.
Although that recovery has not yet begun, experience shows that it will start when we have made and are seen to have made decisive progress against inflation. That is what happened in 1981, when our position was far more difficult than it is today. Then we had to cope with very high inflation—following the Opposition's disastrous policies in Government—and a sharp loss of competitiveness, partly due to the strength of sterling following the United Kingdom's emergence as a major oil producer. In recent months, the rise in inflation has been much less severe. Underlying inflation, at its peak in 1990, reached 8·4 per cent. compared with 20·7 per cent. in 1980.
A new problem that we have encountered this time round has been the adjustment of the economy to very high levels of private sector debt built up during the second half of the 1980s. Inevitably the strain is being felt by those individuals and companies who have taken on the highest levels of debt. For example, some service sector firms borrowed heavily in the 1980s and are therefore among those who have felt the effects of high interest rates most keenly.
The onset of recession started to make the headlines at about the time we joined the exchange rate mechanism and that has prompted many to blame the recession on our entry. But the ERM is not the source of the current recession: it is not a Pandora's box from which the downturn sprang. The downturn in the economy is the inevitable result of exessive demand and borrowing in 1987 and 1988, which it was necessary to curb. A period of weaker activity became essential to reduce inflationary pressures. If there was any mistake, it was that policy was not tight enough and that was far from the course urged upon us by the Opposition.
Mr. A. J. Beith: Who opened the Pandora's box? Was it not the right hon. Gentleman's ministerial colleague, in the team of which he was a member, when he simultaneously presided over the liberalisation of credit and tax cuts and changes in mortgage interest relief?
Mr. Lamont: I am sorry to hear that the hon. Gentleman has been against the liberalisation of the financial system. I believe that, in a modern society, people should have choices about how much they borrow. Although it has brought problems in economic management, it has also brought immense benefit to millions of people, and the deregulation of the financial sector has also created many hundreds of thousands of jobs and boosted international competitiveness.
Mr. Nicholas Budgen: Did the laxness of policy in 1987 and 1988 have anything to do with shadowing the deutschmark? If so, how does that differ in principle from being in the ERM?
Mr. Lamont: I do not believe that the relatively short period in which we shadowed the deutschmark was the

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cause of the subsequent inflation. We all know that the growth of demand in 1987 was distorted after the stock market crash, but it is also a fact that people and firms borrowed and made their decisions to borrow on a scale never before seen in this country or in the United States. The Opposition seem to imply that we should have had higher interest rates—a course that they have never urged on us.
It also requires a feat of memory to recall that only last summer some Opposition Front Bench spokesmen were claiming that, because retail sales were still buoyant, our policies were not working. Some others even suggested that the Budget last year was not tight enough. It is true that the effects of our tight policies have taken longer to work through than many people expected, but ERM entry alone can take neither the blame nor the credit for that—depending on one's point of view.
The ERM and Britain's position in it are central to the Government's overall strategy. The Government, under my right hon. Friend the Member for Finchley (Mrs. Thatcher), took a firm decision last October to join the mechanism and abide by its rules. That decision has been made. We made a commitment then and we will stick to it.
We joined the ERM because it had a good track record of helping to close the inflation gap between its members. We accept the discipline that membership requires. The overriding factor in setting interest rates now is the need to meet our obligations and to keep sterling inside its agreed bands. Our reward will be that, over time, the United Kingdom's inflation rate will converge on the best inflation performance in the ERM.
The right hon. and learned Member for Monklands, East claims that his party would adhere to the rules of the ERM. On BBC's "Newsnight" on 9 January, he said:
"we strongly believe that Britain should be in the ERM and we are willing to accept the disciplines that involves".
Those words appear crystal clear. The right hon. and learned Gentleman seems to accept that we must set interest rates at a level which will keep the pound within its ERM bands: what else could he mean by "disciplines"? Yet when the right hon. and learned Gentleman and his colleagues speak about interest rates in this House, they seem to do so without any regard for our obligations as members of the ERM.
There clearly is some ambiguity in the stance of the Opposition, but our position is clear. It would be irresponsible and misguided to think that interest rates could be cut regardless of sterling's position in the ERM or regardless of the disposition of the other currencies in the mechanism. It would be intolerable if the consequence of lower interest rates was a move outside our ERM band. That is and must remain the primary consideration.
Today's interest rate reduction—and future reductions when the time for them comes—can be made only when sterling's position in the ERM permits—that is, when we judge the reduction to be sustainable and safe. It would be wrong, however, to imagine that we are locked into high interest rates indefinitely. We have flexibility within the band, and it has been the experience of other ERM countries that interest rate differentials have narrowed along with inflation differentials—not necessarily immediately or rapidly, but that can happen. That means that our interest rates will eventually fall
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to reflect our progress in the fight against inflation—although when the further falls in interest rates will occur, I cannot say.
We joined the ERM at a central rate of DM2·95. That is a rate at which British industry can compete in Europe. It is close to the average over the past 25 years. Indeed, if anything, our real exchange rate is relatively low by comparison with the 1980s, a decade during much of which the United Kingdom held its share of world trade in manufactures and recorded stronger export growth than a number of its European competitors. Because of falling inflation in the United Kingdom, I expect any loss of competitiveness in the months ahead to be limited.
Sterling's rate against the dollar may be high, but, as the CBI has pointed out, that reflects the current weakness of the dollar against all the major currencies. A high exchange rate against the dollar is causing pain for all countries throughout Europe which sell to the United States.
Of course, when the economy encounters difficulty, there are always those who look for an easy way out and call for devaluation as though that would be a solution to our problems. It would not. It would be a ticket to renewed inflation and higher interest rates. Devaluation serves only to make us poorer by stoking up inflation and destroying jobs. Its benefits are illusory and its costs only too evident. The strongest economies in the world—the German and the Japanese—have been those with strong currencies.
For the British economy to be competitive, we must set ourselves free of the devaluation culture. Prosperity, competitiveness and lower interest rates all depend on getting inflation down to the level of our main competitors. Nothing else will do. We cannot allow ourselves to be blown off course now that a low inflation objective is firmly within our sights. [Interruption.] That may be described as "suicide", but I ask hon. Members to bear in mind what the CBI says. It has rather more courage than some hon. Members and all Opposition Members. The CBI has supported not just ERM entry but the policies necessary to keep us in it. It recognises that, more than anything, making ERM membership work is the secure route to sustainable interest rate cuts.
Of course I recognise the burdens that high interest rates place on industry, although the real burden is the amount by which interest rates exceed the rate at which companies can raise their prices. Judged by that yardstick, our real interest rates are lower than those in France, Germany and Italy.
Most companies are not powerless in the present situation. They have choices. If they are to prosper, they will control their unit costs and agree realistic, affordable wage settlements. Firms would gain two to three times more from cutting their wage settlements by 1 per cent. than they do from a 1 per cent. cut in interest rates. If costs are held down, the downturn will be shorter and less severe and the level at which unemployment will peak will be lower.
Control of costs will speed the redaction of inflation, but we are already making progress. In the past few months, headline inflation has fallen from its peak of 10·9

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per cent. in October to 9·3 per cent. Underlying inflation is also on its way down—falling from 8·4 per cent. to 7·7 per cent.—and it will fall further.
In the last recession, in 1980–81, the fall in inflation led to an upturn in activity because real incomes rose and because, as confidence came back, people saved less and spent more. That process will work again this time. That is why the vast majority of independent forecasters predict an upturn in the second half of the year. Other factors may work in the same direction.
The fall in the oil price will reduce business costs and lighten the uncertainty which is depressing activity. The rundown of stocks which has contributed to the fall in output is bound, by its nature, to come to a stop.
Mr. John Garrett: The right hon. Gentleman is making forecasts about the future course of inflation but is not yet making any forecast about the future course of unemployment. I hope that he will do so before the end of his speech. In December, the increase in unemployment was the highest for 10 years, which takes us back beyond the trough of the last Government-caused recession. Given that it is a lagging indicator, what is the right hon. Gentleman's forecast about unemployment for the next six to nine months?
Mr. Lamont: I shall present my forecasts at the time of the Budget. As the hon. Gentleman knows, no Government—whether Labour or Conservative—have presented unemployment forecasts. The Opposition seem to be interested in unemployment only when it rises—not in any of the 44 months when there was a remarkable growth in employment and when we created a situation in which unemployment in this country was below the European average. Not once did the Opposition give credit for that. Not once did they acknowledge the benefit that this country had.
Recovery, when it comes, will build on the eight remarkably good years that firms have behind them—years in which total investment in the economy grew by 67 per cent., manufacturing productivity rose by 51 per cent., and profitability reached its highest levels since the early 1970s. By 1990, firms had enjoyed a sustained period of high growth, high investment, improved productivity and healthy profits. That is why, in a recent survey of businesses, 80 per cent. of respondents indicated that they thought they were in better shape now to weather a recession than they had been 10 years ago. That is encouraging. Looking to the testing time that faces British business, I agree that it is in a much better position and in much better shape than it was a decade ago.
I now turn to the other half of the autumn statement—the Government's public expenditure plans. These show that the Government are keeping firm control of public expenditure, despite higher-than-expected inflation. The planning totals for 1991–92 and 1992–93 are lower, in real terms, than we planned a year ago, but within these constraints, we have made sure that the most vulnerable groups do not suffer from the inroads of higher inflation. We have substantially increased resources for health and other priority services. At the same time, we have continued to look for ways of improving the working of the economy.
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Allowing for the cost improvement programmes, spending on health next year will be more than £3 billion higher than in 1990–91—a real increase of over 5 per cent.
We plan to spend over £30 billion on the health service next year. That gives the lie to the Labour Party's constant carping that the Government are not committed to the future of the health service. We have added over 70 per cent. in real terms to the health service capital programme in England since 1978–79. As all my hon. Friends know well, under Labour, capital spending on health was cut by 16 per cent. in real terms. Under the last Labour Government, health spending, in terms of today's prices, was only £365 per head. Next year the comparable figure will be more than £500.
Let us compare Labour's record with the real increase, in 1991–92, of almost 50 per cent. that we have made in spending on the health service in England since taking office. Our spending on health over the last decade has meant treatment for 30 per cent. more acute in-patients each year—almost 7 million in total—employment for 53,000 more nurses and midwives, and the completion of almost 500 major capital schemes.
In this year's autumn statement, we also added nearly £3 billion to social security plans. The bulk of this reflects the benefit upratings which will take effect in April this year. We have fully honoured our commitments to uprate benefits for pensioners and the poor, and we have done this even when, as this year, the RPI is on a downward trend from the figure on which the uprating was based. Indeed, for the poorest pensioners, the income support premium has been uprated by more than that.
On education, the plans announced will finance a further significant increase in student numbers. One in five of the 18 to 19 age group are now in higher education, compared with only one in eight in 1979. We have increased the support available to higher education institutions by about 10 per cent. between this year and next, and provided extra resources for student grants, loans and access funds.
The Opposition always claim that the Government neglect higher education, but the dramatic increase in the numbers of young people in higher education belies this. What do the Opposition make of the fact that the number of qualifications in higher education gained by young people as a share of the relevant age group, is higher in the United Kingdom than in West Germany, France, Italy—indeed, almost any other European country?
Mr. Bob Cryer: Before the Chancellor leaves his claims about providing benefits for people on low incomes, will he tell us why the Government do not restore the link between pensions and employment, particularly in view of their claim that employment has been booming and that wages are high? Is that not a deliberate act by the Government to deny pensioners a share in what the Government claim is prosperity?
Mr. Lamont: Attractive though huge sums of extra public expenditure might be to the hon. Gentleman, we simply could not afford to index pensions to earnings. I think the hon. Gentleman meant earnings when he referred to employment.
Mr. Donald Thompson: Will my right hon. Friend the Chancellor and his colleagues on the Front Bench stop comparing our record with that of the Labour Government? In no way, incident or Department

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can the record of that Labour Government hold a candle to ours. After 11 years of Conservative government, the Opposition can only choose eccentric foreign comparisons.
Mr. Lamont: I apologise to my hon. Friend if I am guilty of tedious repetition. What happened under the Labour Government seems unbelievable and it seems to have happened so long ago, but the point about the comparisons is that the Labour party seems determined to repeat the mistakes made by the last Labour Government.
In the last two public spending rounds, the Government have agreed huge increases in spending on roads. This year our priority has been rail—[Interruption.] I am afraid that the bad weather is not part of the public spending round. However, public transport investment in the years covered by the autumn statement will be double that of the previous three years. That is an increase of more than 70 per cent. in real terms.
In areas to which the Opposition often refer, the Government have provided nearly £6 billion for spending on science and technology next year. We have added an extra £17 million to the science budget of the Department of Education and Science in 1991–92. That is up about 20 per cent. in real terms on its 1979 level.
My right hon. and learned Friend the Chief Secretary will refer in detail to the public expenditure effects of the Gulf. However, the costs of the Gulf are obviously substantial and uncertain. We are already committed this year and in later years to expenditure totalling £1.5 billion in addition to normal defence spending. We must expect eventual costs, allowing for a continuation of the air campaign and the likelihood of a land campaign, to be very much higher. It is impossible to be precise, but the figure of £3 billion that has been mentioned is probably not far from the mark.
There is, of course, no cash limit or predetermined budget. We have made it clear—I am happy to repeat the pledge today—that our forces will not be cash constrained in any way. I am therefore especially grateful for the assistance pledged by friends and allies around the world. Germany has promised about £275 million in addition to a previous package of assistance and Kuwait £660 million, as my right hon. Friend the Foreign Secretary has announced. The United Arab Emirates promised about £250 million, following the recent trip of my right hon. and learned Friend the Chief Secretary to the Treasury. Other countries, including Saudi Arabia, Japan, Hong Kong and other European and Commonwealth countries, have also made contributions, and we are grateful to them all.
In total, contributions already promised amount to some £1·4 billion and I hope that it will be possible to announce a higher figure before long as discussions with a number of countries come to fruition. Despite the extra costs of the war in the Gulf, public expenditure remains under firm control. That is a key element in our economic policy and has been since 1979 because it has allowed us to provide extra resources for priority services while at the same time achieving a transformation of public finances. We do not intend to change that approach now.
To sum up, I am well aware that the recession is hitting companies and individuals hard. However, inflation is falling and, as in the past, that will provide the basis for recovery in future. British industry faces a challenging and difficult period. However, it is today better managed and in better shape than it was 10 years ago. With a period of
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strong growth behind them and low inflation ahead, I am sure that firms in future will emerge from the recession able to compete and take advantage of the single market. I believe that the 1990s like the 1980s can be years of prosperity for Britain and for British business.
While the next few months will not be easy—indeed, they will be difficult—our position is plain. Unlike the Labour party, we know where we are going—I have not referred to the Labour party or its policies so far, but I will make one prediction about the speech of the right hon. and learned Member for Monklands, East. When he is interrupted by my hon. Friends and asked what his policies for dealing with inflation are, he will say, as he always has in the past, "I shall be coming to that point later in my speech"—but he never does, because he has no answers.
The right hon. and learned Gentleman likes to pretend that inflation can be curbed painlessly. He likes to pretend that inflation can be curbed without reducing demand. How one can actually curb inflation without reducing demand is a mystery known to no one but himself. There is no way in which demand can be curbed other than by using interest rates or taxes or by cutting public spending, and the right hon. and learned Gentleman professes to be against all those.
The right hon. and learned Gentleman has no policy. The Labour party is hollow. When we knock Labour Members, all that we ever get is an echo—an echo of the past. If Labour Members have anything to say on policy, all that we hear is a little bit more intervention, more spending, a few credit controls and, of course, a little more inflation. It was all well summed up in Marxism Today —[Interruption.]
Mr. Brian Sedgemore: It is a Tory paper. That is a damnable slur.
Mr. Lamont: The hon. Gentleman is quite right. Marxism Today is now a moderate paper, and far more realistic and worth reading than anything that comes from the Labour party. Marxism Today stated:
"In the '80s, far from being a major engagement with the modern world, Labour's transformation depended on an intellectual package designed for the '50s and '60s, together with a profoundly timid anti-Thatcherism. The Party has no project of its own: it lives in the shadow of others. As a result, it has feet of clay."
I could not put it better myself. We know what our policies are. We are confident about facing the future, and I commend to my right hon. and hon. Friends the Government's plans as set out in the autumn statement.
4.31 pm
Mr. John Smith: I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
'declines to approve the Autumn Statement; deplores the continued mismanagement of the economy which has plunged all parts of the nation into severe economic recession causing an unprecedented and avoidable level of business failures and rapidly rising unemployment; condemns the failure of the Government to invest in the economic infrastructure and in vital public services; and calls upon the Government to adopt an economic strategy which lowers the interest rate burden on industry, commerce and millions of mortgage payers and which promotes the recovery of a wealth creating economy, particularly in the manufacturing sector, by encouraging sustained investment in new technology, in regional development, and in the skills of people.'.

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I suppose that the Chancellor was fortunate that, during his defensive and gloomy speech, which was brought to an end by a rather spluttering and incoherent attack on the Opposition, he was unable to look behind him and see Conservative Members' faces. There was not much joy about on the Conservative Benches, just a sense of gloom and a sense of sickening reality as their constituents remind them of the consequences of the Government's economic policies.
Of course, as usual, the right hon. Gentleman attacked the Opposition. I am accustomed, rightly, to having my speeches attacked after they have been made, but this is the first time that I have had one attacked before it has even been delivered. I certainly intend to criticise the Conservative Government and their economic policies. If that is regarded as tedious repetition, Conservative Members had better get used to it because they will hear quite a lot of it, and not just from Opposition Members but from people all over the country who are suffering the effects of their policies.
For the past 11 years, Conservative policies have been an exercise in roller-coaster economics. At the start of the 1980s, we had a deep and damaging recession that did lasting damage to our economy, particularly to manufacturing. Once again, as we enter the 1990s, we have to suffer yet another Conservative home-made recession which yet again threatens damage to our real economy. In between those two recessions we have had, in typical Tory style, an inflationary credit-led boom, all in the well-established post-war tradition of the Maudling dash for growth, the Barber boom and, most recently, the credit spree of the right hon. Member for Blaby (Mr. Lawson). Conservative economics is about stop-go and stop again—the economics of boom and bust.
The Chancellor's rather weary defence of the Government's economic policies showed no sign of appreciating that phenomenon. He made much of the Government's determination to conquer inflation. Of course, that is a constant refrain, but many in the House will recollect the claims made in the middle of the past decade that the battle against inflation had been won. Since there has been a Conservative Government in power all along, naturally we wonder how the problem recurred. Who were the authors of the misfortune? Who caused the inflation from which we are suffering? Surely it cannot have been the previous Labour Government, the trade unions or the nasty foreigners. The truth is beginning to dawn on some Conservative Members that it might just be the Government whom they support. That is the inevitable conclusion to which one is driven. That is why we must all measure with care protestations about their commitment to fight inflation.
I have little doubt that the inflation rate will fall in the months ahead. It is the inevitable consequence of pushing the economy into a deep and damaging recession. Inflation will come down, but by this method the price in the destruction of economic capacity and rising unemployment will be high, and our economic prospects for the 1990s will be undermined. To avoid that outcome the case for interest rate reduction is overwhelming. So even a 0·5 per cent. cut would be better than no cut, but there can be little doubt that it is too little, too late.
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Interest rates should have been cut before the end of last year and, in the absence of such action, by 1 per cent. today. The 0·5 per cent. cut will bring no relief to hard-pressed mortgage payers and it will be seen as inadequate by most of industry and commerce. I quote the chairman of the National Federation of Small Businesses, Mr. Tony Miller, who said today:
"It's a pity the Chancellor did not have the courage to have at least a full 1 per cent. cut. This really is playing at the edges with a serious problem."
Last week the Leader of the Opposition urged a cut in interest rates. The riposte by the Prime Minister was that that was a panic reaction. A week later we find that the Government have taken at least part of my right hon. Friend's advice. Might it possibly have something to do with the debate occurring today? It strains credulity for the Government to maintain that the cut in interest rates announced this morning has nothing to do with the debate this afternoon. It has all the hallmarks of the botched entry into the exchange rate mechanism and the previous reduction in interest rates timed to precede the Conservative party conference.
I learned only this morning that Downing street sources have been rebutting the charge of political timing by stressing that the Government made the decision last week to cut interest rates. If that be the case, what on earth was the Prime Minister doing accusing the Opposition of panic when he himself in that same week had decided to make the cut? Either he was being completely disingenuous, to put it at its mildest, or he himself is guilty of the panic that he identified with a cut in interest rates. Before selecting his next weapon, our Prime Minister should bear in mind the drawbacks of the boomerang.
The purpose of the debate is to discuss the autumn statement presented to the House as long ago as last November by the Chancellor's predecessor.
Mr. Nigel Forman: The right hon. and learned Gentleman was talking about credulity and credibility in connection with interest rates policy. Does he realise that everything that he and the right hon. Member for Islwyn (Mr. Kinnock) have said over the years would have carried much more credibility if it had not been the case that, whatever the level of interest rates, they always said that rates should be a point lower?
Mr. Smith: When we have been dealing with a Government committed to such high and sustained interest rates, it is not surprising that we should consistently want a cut in interest rates.
Mr. Norman Tebbit rose—
Mr. Smith: I shall give way to the right hon. Gentleman as soon as I have answered the first point. Surely he will allow me the courtesy of answering his hon. Friend. His seniority is not so advanced that he can interrupt in the middle of an answer.
The hon. Member for Carshalton and Wallington (Mr. Forman) should bear in mind that people have had to suffer high interest rates for a very long time, since 1988. That is why we constantly seek a reduction.
Mr. Tebbit: As the right hon. and learned Gentleman rightly says, I should not expect to interrupt him in the course of his answer—I am not optimistic about him ever

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giving an answer. The right hon. and learned Gentleman has just said that—[interruption.] The right hon. and learned Gentleman— [HON. MEMBERS: "Get on with it."]
Madam Deputy Speaker (Miss Betty Boothroyd): Order.
Mr. Tebbit: The right hon. and learned Gentleman has just said that, under this Government, interest rates have always been too high. Does he mean that interest rates were too high during what we now recognise as an excessive boom in 1988?
Mr. Smith: If the right hon. Gentleman had listened to the answer that I gave his hon. Friend the Member for Carshalton and Wallington, he would know that I stressed that I meant the period when high interest rates were not quite so high. I honestly do not know what point the right hon. Member for Chingford (Mr. Tebbit) was making. He seemed to become confused while making it.
The Chief Secretary to the Treasury (Mr. David Mellor): If the hon. and learned Gentleman is unsure of the point made by my right hon. Friend the Member for Chingford (Mr. Tebbit), let me repeat it. He was making the point that, when interest rates were 7·5 per cent. in 1988, the right hon. and learned Member for Monklands, East (Mr. Smith) was still calling for further reductions.
Hon. Members: Why?
Mr. Smith: Because at that time there was a danger, following the collapse in the world stock markets—[HON. MEMBERS: "Oh!"] Indeed there was, and that was the policy followed by the Government. There was then a problem. The Opposition will not be satisfied until interest rates in this country are roughly equivalent to interest rates in other competitor countries in the European Community. That should be the objective of any sensible Government.
I do not understand why satisfaction should be gained from the fact that there have been high levels of interest rates. The price of money is crucial to investment, which is the lifeblood of any economy. The most depressing prospect at present is the cutting off of investment.
Several Hon. Members rose—
Mr. Smith: I must get on with my speech about the autumn statement. I have done well in giving way to hon. Members.
Mr. Ian Taylor: Will the right hon. and learned Gentleman give way?
Mr. Smith: If the hon. Gentleman will forgive me, I shall not give way for the moment. I seem to have done nothing but give way to interventions for the past seven or eight minutes.
The autumn statement gave us a picture of the economy. In 1991, the gross domestic product was predicted to grow by 0·5 per cent., which was not encouraging. Manufacturing output was predicted to decline by 0·5 per cent. and fixed investment was said to be going to fall by 1·75 per cent. We were told, gloomily, that the balance of payments would remain in deficit by £11 billion. It was predicted that, by the end of the year, inflation would be down to 5·5 per cent. Those, in a nutshell, were the economic predictions, from none of which the Chancellor has departed in his speech today.
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Most commentators did not regard that picture of the economy in 1991 as much of a cause for celebration. In particular, the estimates for output, growth and investment gave signs of a year of problems for the economy. Although the then Chancellor, the present Prime Minister, persistently avoided the use of the word "recession", the figures buried at the back of the autumn statement showed a fall in output for four successive quarters up to the middle of 1991. As the accepted definition of a "recession"—and one accepted by the Chancellor—is a fall in output for two successive quarters, the Government clearly knew that we were in recession as their own statement was being issued, whatever they said.
Why, then, would the Chancellor not allow the dreaded word to pass his lips? Perhaps it was because he himself, in 1989, in evidence to the Treasury and Civil Service Select Committee, said that a recession would not occur, and he was expressly not forecasting such an outcome for the economy. He reinforced that prediction by telling the Association of British Chambers of Commerce on 5 December 1989:
"I do not believe myself that recession is likely or necessary."
When the present Chancellor gave evidence to the Select Committee a year later, he was reluctantly forced to admit that there was a recession. He said:
"There are reasons why one could believe that it will be relatively short-lived and relatively shallow."
We have a Prime Minister who told us that a recession would not happen and a Chancellor who told us that it would be shallow and short-lived. I am glad that the Select Committee did not buy that information and, in its report, made it clear that it thought we were heading for a much more serious recession than did Ministers. I congratulate it on that part of its conclusions, at least.
We are in the midst of a recession which was supposed not to happen and which we were told by the occupant of the top seat in the Treasury would be shallow and short-lived. There are some familiar techniques at work, including a complacent but bogus reassurance about the future. When the facts catch up and belie the assurance, the technique is not to admit that anything is wrong but to issue further reassurance saying, "Not to worry. It will not be too bad or last too long. "Subsequent Chancellors have clearly learnt something from the right hon. Member for Blaby—he of "temporary blip" fame.
In recent weeks, keen students of the art of bland but bogus reassurance will have noticed a new twist to the technique. As it cannot be denied that the recession exists, we are told—this formed part of the Chancellor's speech today—that it is part of a malign, worldwide experience, which is beyond our control and, from time to time, like some unfortunate turn of fate, affects even the best-ordered and managed of economies.
The Prime Minister was using that technique only last week at Prime Minister's Question Time when he claimed that unfair opposition in the form of my right hon. Friend the Member for Islwyn (Mr. Kinnock), the Leader of the Opposition, had overlooked the fact that there was also a recession in other countries. We heard that excuse at greater length from the Chancellor today. Before this particular bland but bogus reassurance takes hold of the Conservative party, it is time to look at the facts.
While it is true that the north American economies are in difficulties, not one member of the European Community, apart from the United Kingdom, is now in

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recession or even forecast to be so. The compelling point is that people in those countries live in the same world—indeed, in the same region of that world—and are linked to us by close economic and political ties. At the end of next year, they will unite with us in one single market. It is not merely that those countries are not in recession; they actually continue to invest. Above all, they are investing in preparation for the single market after 1992.
According to the latest report of the Organisation for Economic Co-operation and Development, on which the Government co-operate, as the Chancellor knows, the average increase in investment for 1991 in the European Community as a whole is 3 per cent., while the OECD forecasts a decline of 3·4 per cent. in the United Kingdom. Every Community country except the United Kingdom is avoiding a recession and increasing investment.
Even more worrying is the fact that, since the OECD published its report on 20 December last year, the United Kingdom's investment outlook has deteriorated even further. The official forecast of the Central Statistical Office for manufacturing investment for 1991 is a drop of 7 per cent. in the year. The Confederation of British Industry's recent industrial trends survey predicted an even more dramatic fall—the staggering and deeply depressing prediction of a fall in manufacturing investment of 16 per cent. Those and other facts show that a severe recession exists that is neither shallow nor short-lived. It is a recession built in Britain, and made in Downing street at Nos. 10 and 11.
The depressing facts of Britain's home-made recession are all around us. Business failures and mortgage repossessions are at record levels, and manufacturing output is falling—it is down by 5·6 per cent. since April of last year. Unemployment is rising inexorably. The last figures we have, for December, show an increase of 80,000 in one month. There are understandable fears about what the unemployment figures to be announced tomorrow will reveal. If this experience is shallow and short-lived, why are the results of the latest quarterly economic survey, published by the London chamber of commerce and industry, for London's economy the worst ever recorded since the survey started in 1978?
There has been a sharp acceleration in unemployment in London's service sector. One third of all firms reported that they had reduced their work force during the past three months. Unemployment in the capital grew at a rate of 14·7 per cent. in that one quarter. Only 24 per cent. of firms in manufacturing are working at full capacity, and 50 per cent. report a drop in domestic orders and deliveries. Against that background is it any wonder that, according to Dunn and Bradstreet, London and the south-east accounted for 45 per cent. of the bankruptcies in England and Wales last year.
Faced with that alarming situation, a Minister recently gave a revealing explanation of the Government's attitude to the problems in London and the south-east. In the Financial Times of 6 February, a Mr. Ralph Atkins canvassed the views of Tory Members on the economy. In the midst of much fascinating information and, to be fair, many protestations of confidence in the Government's handling of the economy, such as one would expect, the views of one unidentified Minister are reported as follows:
"One Minister was adamant that high interest rates remained the purgative needed to flush out the 'unreal, yuppie
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jobs in the South-East' created in the last part of the 1980s just as the recession early last decade had cleared out the 'unreal' jobs created by Labour."
I wonder whether that revealing view of the Government's concerns is being repeated in London and the south-east by Tory Members when they meet their constituents who have been thrown into unemployment by the severity of the recession.
Mr. James Arbuthnot: Will the right hon. and learned Gentleman give way?
Mr. Smith: Let me finish this point.
As The Times reminded us last week, unemployment is rising five times as fast in Conservative-held as in Labour-held constituencies, and the largest rise recorded is in the Conservative seats in the south-east, where unemployment has risen by 47·5 per cent. In those circumstances, I should give way to the hon. Gentleman.
Mr. Arbuthnot: My constituents in the south-east are particularly interested in Labour party policy on this. At this time last year the hon. Member for Derby, South (Mrs. Beckett) said:
"What we are promising is an increase for pensioners and an increase in child benefit. Everything else that is regarded as a desirable aim"—
[HON. MEMBERS: "Reading."] I am quoting—
"is also listed, quite clearly and specifically"—
Madam Deputy Speaker: Order. Is the hon. Gentleman making a comment or asking a question?
Mr. Arbuthnot: I am asking a question. The quote continues:
"Everything else is listed … as something that we hope to do as resources allow."—[Official Report, 13 February 1990; Vol. 167, c. 179.]
Will the right hon. and learned Gentleman confirm that that remains the position?
Mr. Smith: We have repeated our policy so often that it should have registered with the hon. Gentleman. We have made absolutely clear our commitment to old-age pensions and child benefit, and that our other commitments are contingent on the capabilities of the economy.
Mr. Phillip Oppenheim rose—
Mr. Smith: What is important is that, under a Labour Government, the results of growth will go to public services, where they are desperately needed. I am sure that, if the hon. Member for Wanstead and Woodford (Mr. Arbuthnot) has more such discussions with his constituents, he will find that they are most interested in Labour's policy. Their experience of Conservative policies, if nothing else, will have made them very interested in Labour's policy. They will be interested in how we can have an economy that revives in London and the south-cast. They will wonder why they are suffering as much as they are now, and they will want the better public services and the greater social justice which will come under a Labour Government.
Mr. Oppenheim: Will the right hon. and learned Gentleman give way?
Mr. Smith: No. I give way to the hon. Gentleman so often and he never asks me anything of any sense, so I shall not give way to him today.

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I wonder how many Tory Members tell their constituents not to worry, that the recession is short-lived and shallow and, in any event, that the jobs they lost were unreal. It was one thing for hon. Gentlemen to be cavalier about the jobs lost in the early 1980s in the manufacturing areas of the north which, for the most part, are represented by Labour Members. That was the last time we heard about unreal jobs. It is another thing—this surely explains the anonymity of the Minister whom I am quoting—to tell that to their own constituents in the south. I predict that their constituents' reply will be sharp and to the point. Their mortgages and poll tax payments are all too real and must continue to be met after the so-called unreal jobs have gone.
Let us bear in mind and not forget, as the Chancellor of the Exchequer tended to do, the burdens that come from high interest rates. There has been a huge increase in mortgage repayments throughout the country, but particularly in London, since the summer of 1988. In London, the average monthly payment for a first-time buyer increased from £555·53 on 1 August 1988 to £662·18 in January 1991—a total extra payment of £2,683·75. That is the mortgage misery inflicted by the Government's high interest rate policies. All over the nation, the same oppressive burden is being borne. In the west midlands, for example, the average payment for a first-time buyer in August 1988 was £253·48 and it is now £302·15—a total extra payment of £1,200·09.
With such dramatic increases in the financial burdens borne by ordinary people, is it any surprise that court actions for mortgage arrears have increased in the midlands by 72 per cent. and in London by a massive 121 per cent.? We know that, all over the nation, the number of borrowers falling into arrears and the number of houses repossessed in 1990 is nearly double the worst year on record.
Mr. Ian Taylor: Will the right hon. and learned Gentleman give way?
Mr. Smith: Let me finish.
Now the public understand the full meaning of the Prime Minister's celebrated justification for his policies —that "if it isn't hurting, it isn't working". They know from bitter experience that it is hurting severely, but where, they ask, is it working?
Mr. Taylor rose—
Ms. Diane Abbott: Will my right hon. and learned Friend give way?
Mr. Smith: I will give way to the hon. Gentleman and then to my hon. Friend.
Mr. Taylor: In reality, mortgage increases hurt. Given, by his own admission earlier in his speech, that the right hon. and learned Gentleman advocated that interest rates should fall further in 1988, the switch in eradicating inflation which his policies would have generated would have had to be even tougher and to take even longer. Is not the way of maintaining our stability within the exchange rate mechanism guaranteed only by this Government's policies, not by the cut-and-run policy which the right hon. and learned Gentleman is now advocating, which would lead to further devaluation and, ultimately, stoke inflationary fuel again?
Mr. Smith: To believe that the only way to tackle inflation is to subject the economy to the punishment of the high interest rate regime for as long as we have suffered from one is an admission of failure and dismay. Other countries in the European Community can achieve low levels of inflation without having to suffer.
Several Hon. Members rose—
Mr. Smith: No; I have given way a great deal.
Hon. Members: Give way.
The Financial Secretary to the Treasury (Mr. Francis Maude): The right hon. and learned Gentleman should give way.
Mr. Smith: The hon. Gentleman did not give way to me at all on the last occasion. Let me finish the point.
The Government's case is that the only way to tackle inflation is by high interest rates. I dispute that. It is not the experience of other countries in the European Community.
Ms. Abbott: The House will have heard Tory Members laughing when my right hon. and learned Friend mentioned mortgage arrears in London. He will be aware, as all London Members are aware, that property prices in London have meant that mortgage burdens are particularly crippling. If he speaks, as I speak day in and day out, to young couples who bought their house in the latter part of the 1980s on the crest of the enterprise and home-owning bubble and now face repossession, he will agree that mortgage arrears in London are no laughing matter.
Mr. Smith: It is important to give some attention in this debate to the problems facing people in difficult circumstances which flow directly from the Government's policies. I am sorry to say that the Chancellor of the Exchequer did not manage to find a word to say about them in his speech.
Mr. Mellor: Where is the pain-free alternative? What policy is the right hon. and learned Gentleman proposing?
Mr. Smith: I do not think that I have ever heard a question such as that from any Minister since I came to the House of Commons—[Interruption.] I accept that the Chief Secretary appeared to have a genuinely inquiring tone. He knows that his Government's policies are not working, so he says in despair. "Is there something better?" I give him one. If the right hon. and learned Gentleman were to rid his mind of some of its prejudices, he would carefully consider the use of credit controls to control demand rather than high interest rates. That would be a much better and a much less painful alternative. After all, it is what some European countries do, and they appear to get by without difficulty. I shall cherish the right hon. and learned Gentleman's intervention long after the memory of this debate has faded.
Several Hon. Members rose—
Mr. Smith: I have given way a number of times, and I shall not do so again.
Mr. Sedgemore: Have another go.
Mr. Smith: The Chief Secretary appears to be resisting my hon. Friend's blandishments. He is wise to do so. One

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thing that the right hon. and learned Gentleman—[HON. MEMBERS: "Answer the question."] I just gave the right hon. and learned Gentleman the answer.
The constituents of Conservative Members will be wary about relying on a Government forecast of the economy. Their estimate of the recession was wrong, so how can we believe their assertion that there will be a near-miraculous recovery in the second half of this year? That is, I understand, still their assertion.
When the former Chancellor, now the Prime Minister, presented his autumn statement, he told us that the British economy was coming back on track. A similar confident assurance was made by the present Chancellor in the Budget debate last year. He is fond of quoting others, so I shall remind him of what he said last year. Bearing in mind that there might be a question such as that just asked by the Chief Secretary, I shall quote the Chancellor exactly. When he was Chief Secretary, he said:
"Pain there may be, but gain there will also be. By this time next year, the prospects will be distinctly brighter."—[Official Report, 21 March 1990; Vol. 169, c. 1144.]
That was the Chancellor's promise in his Budget speech last March. Can any hon. Member honestly say that things are distinctly brighter because of the Government's policies? They may be brighter for some, but they are pretty dim for most of my constituents and for the constituents of most hon. Members.
A year later, we know all about the pain, but what about the gain? Is that put off for yet another year? Will we have the gain if we are patient, with everything coming right as the economic cycle reasserts itself and the country goes into economic recovery?—[Interruption.] The hon. Member for Birmingham, Northfield (Mr. King) should be concerned about what is happening to the industrial economy of the west midlands.
Mr. Roger King rose—
Mr. Smith: I suppose that I rather provoked the hon. Gentleman, so I shall give way to him.
Mr. King: A few months ago, the right hon. and learned Gentleman was asked to state Labour's alternative policy, and he came up with something he described as credit controls. Is he saying that nobody should be able to obtain a mortgage or buy anything in this country that he cannot afford? That would stop British industry in its tracks and ruin the housing market. It is no answer to the problem.
Mr. Smith: I gave way to the hon. Gentleman because I thought that he might be concerned about the industrial economy of the west midlands. I thought that he would deal with that in his intervention. I am sorry to say that I was disappointed. He should bear in mind what industrialists from his area are saying. I noticed an article in the Financial Times the other day, which said:
"Small and medium-sized manufacturing companies in the West Midlands are reducing investment and training programmes".
The Engineering Employers Federation is telling the Government that there is nothing but misery in the west midlands, yet what does one of that area's representative do in the House of Commons? He makes silly interventions. The hon. Gentleman would do better to speak for his constituents and for the companies that he should represent.
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There is supposed to be a dramatic recovery in the second half of this year, but the only basis for believing that it will occur is to take the Chancellor's word for it —or even the former Chancellor's word for it. I fear that, on the record of recent years, there is no basis upon which such a naive confidence could be based. To achieve a recovery from a recession, there must be a change of course—the very option that has been excluded both by the former and the present Chancellors. That is why we have no confidence in their ability to lead us out of the recession into which they have driven this country.
The Government should today have cut interest rates by 1 per cent. and they should be ready, as conditions permit, to make further reductions to bring our interest rates nearer to the levels prevailing in the remainder of the European Community. Further interest rate reductions will be necessary to avoid even more sharp falls in investment, output and employment, and to assist our country's prospects for economic success in the single market.
However, a cut in interest rates, even if extensive, is not enough on its own to ensure a recovery from recession. Above all, we must take steps to arrest the deadly decline in investment. There is simply no way in which we can either recover or begin the long process of catching up with the leading countries of the European Community unless investment is made and maintained in new plant and equipment, new technologies and new enterprises.
That is why the Opposition urge that fiscal incentives for investment in manufacturing industry should be introduced in the forthcoming Budget. Britain's position is now so critical that the Government should abandon their somewhat inconsistent adherence to so-called fiscal neutrality. Both the CBI and the TUC recommend such proposals, and the Government should heed them. However, it is not enough to encourage investment in plant and machinery. The tragedy is that we have a colossal skills crisis in the midst of a severe recession. How foolish can it be to organise a skills shortage in the midst of rapidly rising unemployment? Investment in the skills of our people is vital. If the Government want something to do, if they want a prescription for action—and the Chief Secretary is the best man to do it—the Government should immediately reverse the cuts in the training budgets, which are part of the autumn statement and which were highlighted in the debate on training last week.
Investment is also required—both public and private —to renew the crumbling infrastructure that a decade of Conservative neglect has caused. In almost all my discussions with industrial managers, I am reminded of their belief that the Government have failed in their responsibility to provide the necessary infrastructure for sound industrial development. That investment must, in large part, be made in the regions, which are now being as seriously affected by the recession as the south-east. As the recession bites deeper and deeper into the industrial regions, the north-south divide, which does so much harm to our economy and to our society, will deepen.
In our debates on the autumn statement and the public spending programme, we must remember that, although we need a strong economy—and, given that there is a recession, it is natural that we should concentrate on that —we must also aim for a fair society. The tragedy is that during the past decade the Conservative party has achieved neither.

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In a recent article on the latest edition of Social Trends, the Financial Times commented:
"Britain has entered the nineteen nineties with the image of a land where the rich get richer, the poor poorer, and the rest live on credit."
Social Trends shows that the proportion of income in the hands of the top 20 per cent. of households increased during the 1980s to reach 39 per cent. in 1987 compared with 34 per cent. in 1979. In sharp contrast, there has been a steady fall in the share going to the bottom 20 per cent., from 10·1 per cent. in 1979 to 8·9 per cent. in 1987.
Mr. Maude: They are better off.
Mr. Smith: They are not better off. The figures prove that the trickle-down theory does not work. Many people are worse off as a result of 11 years of Conservative government. Conservative Members should catch tip on their statistics. Indeed, the Government recently had to correct statistics that supported the contention of Conservative Members. The sad thing about these figures, which stop in 1987, bad though they are—statistics that the Government find uncomfortable seemed to stop two or three years ago—is that they exclude the malign effect of the 1988 Budget, with its tax rate cuts for the top tax payers, followed within a matter of weeks by slashing cuts in housing benefit and income support.
The Opposition deplore a Government whose policies fail to achieve economic strength and continually undermine the foundations of a fair society, and many people in Britain are coming to agree with us more and more. Like the people we represent, we look with dismay at the continuing decline in our vital public services. We look at a Government who have neither competence to recommend them nor good social purpose to stand in its place. We stand for a strong economy and a fair society. Britain needs a new start, and it is clear that to achieve it, it will need a new Government.
5.10 pm
Mr. Terence L. Higgins: It is now more than three months since the then Chancellor introduced his autumn statement. I suppose that it is true to say that both in terms of domestic political events and in terms of events in the middle east, there has rarely been a more extraordinary and difficult period at home and abroad.
As a result, economic affairs have tended to be put in the background. Meanwhile, the Select Committee on the Treasury and Civil Service has been taking evidence and has produced a report on the autumn statement. I am grateful for the remarks by both Front-Bench spokesmen on the work of that Committee which enables the House to debate matters in more depth than would otherwise be the case.
One point that has emerged clearly from the debate so far is that the original cause of the recession was in many respects the need to deal with the overheating of the economy which took place after the stock exchange crash in 1987, and that overheating would have been worse if the right hon. and learned Member for Monklands, East (Mr. Smith) had been in charge because he wished to lower interest rates even more than the Government.
I want first to comment on the Government's forecast with regard to the recession and inflation. The Treasury and Civil Service Select Committee went at some length
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into those issues and, taking all the factors into account, concluded that the recession is likely to be deeper and longer in duration than the Treasury forecasts.
That is an important conclusion. The Committee's report on last year's Budget came to the conclusion that the Treasury always underestimates turning points in the economy, whether a turn downwards or upwards, and that that error has become bigger on every successive cycle. We repeated that analysis in our report on the autumn statement. Therefore, I fear that we reached the conclusion, which is reflected in the report, that the recession will be longer and deeper than would otherwise have been expected.
On the other hand, the Committee, which over the years has brought to the attention of the House the way in which the Treasury's inflation forecasts have not been achieved, reaches the conclusion on this occasion that the rate of inflation which my right hon. Friend the Chancellor predicted of about 5·5 per cent. by the end of 1991 is likely to be achieved. That is crucial in determining whether the economy recovers in the way in which he suggests. We reached the conclusion that the inflation forecast is much more reliable than has been the case in the past.
There is no doubt that in comparison with 1980–81 there is a substantial difference in the pattern of the recession. The regional pattern is different. The recession has undoubtedly hit the south more than it did in 1980–81 nd there is a significant difference in the finances of the corporate and banking sectors. I was a little concerned about my right hon. Friend's comment on that, because in paragraph 23 the Select Committee points out:
"The financial deficit of industrial and commercial companies … is unprecedented both in its sheer size (especially for this stage of the economic cycle and because this is the third successive year of financial deficits."
It goes on to point out:
"the corporate sector is finding it increasingly difficult to arrange the necessary finance in the short term."
It also says that the banking system is
"cautious following a number of major corporate insolvencies"
and is
"far less accommodating than previously."
That is a worrying development, in marked contrast to the situation in 1980–81, when many banks went beyond their normal prudential limits in order to preserve companies which had a long-term future. Therefore, that particular aspect gives especial cause for concern.
Having said that, I ask the simple question—what should we do now? My right hon. Friend the Chancellor is right to say that inflation should be the top priority. If we weaken on the objective of reducing inflation, we may obtain some short-term relief, but we would undoubtedly greatly increase the problems in the medium and the longer term.
The right hon. and learned Member for Monklands, East advocated a 1 per cent. cut in interest rates today and, apparently, more later, but it was interesting that he did not say whether he would do that regardless of whether it meant that we had to have a realignment of exchange rates. He was remarkably coy on that point.
My right hon. Friend the Chancellor has made it clear in evidence to the Select Committee and in statements to the House that there is no question of a reduction in interest rates which is not fully justified by our position in the exchange rate mechanism. The cut this afternoon shows clearly that he has been prudent in making that

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change because the exchange rate appears to have responded favourably. I hope that we shall see further progress.
However, we do not know what will happen in the Budget, but the reaction of the market to the Budget will be important and it would be a mistake to reduce interest rates significantly before we know how the market reacts to what my right hon. Friend says in his Budget statement.
However, I am clear that to throw caution to the winds, to reduce interest rates substantially now and to have a devaluation and a realignment of the exchange rate would simply put us back on the old inflationary spiral. Suggestions that we may do that are likely to delay the time when we can prudently reduce interest rates. Therefore, my right hon. Friend's policy on that is right.
As recommended in the Select Committee's report, interest rates have been devoted to maintaining the position of sterling in the exchange rate mechanism within the limits which have been set, so they are no longer available to deal with the domestic situation. The Committee deals with that at considerable length, and it is a view that we have taken over the years. But it is more important in the context of membership of the ERM. The Committee reached the conclusion:
"We consider it to be unwise for the Chancellor to rule out the use of fiscal measures to affect the level of economic activity in all circumstances when the level of interest rates is determined by the commitment to maintain the parity of sterling in the ERM, particularly now when the depth and the duration of the current economic slow down is so uncertain."
I welcome the fact that the Chancellor, in contrast to the statement made by the previous Chancellor when he introduced the autumn statement, has said that he will allow the so-called automatic stabilisers to operate fully —that is to say, the natural increase in public sector borrowing or decline in surplus which would come about as a result of the recession; the fall in tax receipts on the one hand, and more unemployment benefits and so on on the other. It is tremendously important that that should not be inhibited. It is also important to get it over to markets in advance of the Budget that that would in no way mean a weakening of my right hon. Friend's determination to bring inflation under control. It is highly likely that the extent of the public surplus or deficit will change radically as a result.
The case for a more active fiscal policy—in terms not only of taxation but of public expenditure—is appropriate in the circumstances in which we now find ourselves, in endeavouring to reduce the duration and depth of the recession. As we cannot use the interest rate weapon, for the reasons that I have explained, fiscal changes are important.
I will give one example. It is absurd that the hospital building programme should grind to a halt because regional hospital chairmen will not sell land, believing that it will be worth more in two years' time, say. In such circumstances, it would be entirely appropriate to allow some relaxation of the Government's position on public expenditure, for they know that the money will come in later, and because at this stage in the cycle, the construction industry is seriously underutilised. The Committee makes an overwhelming case for the adoption of a more active policy, particularly now that we are in the ERM.
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My final point concerns an aspect that we have not debated for some time. I refer to pay policy. Over the years, the House has seen many forms of pay and incomes policy, and I myself have lived through everything from total laissez-faire to the most rigorous statutory prices and incomes policy that one could envisage. One neglects pay policy in the public sector and its repercussions for the private sector at one's peril.
Although the leader in The Times was unduly harsh on my right hon. Friend the Chancellor, recent settlements in the public sector have caused me concern. Pay in the private sector has been coming down more rapidly than the Confederation of British Industry's figures suggest. In fact, the CBI itself takes that view. That is good for the purpose of getting down the underlying rate of inflation, but public sector settlements should be subject to the kind of policy that we adopted many years ago, involving the so-called N minus 1 formula, which provided effective scrutiny.
In those days, it was a good rule of thumb that, whatever a Department told the Treasury was the increase in pay, the true figure was roughly double that, because of fringe benefits and so on. Unless public sector awards are scrutinised with the utmost vigour by the Treasury and by Ministers, the opportunity to reduce the underlying rate of inflation at a reasonable pace will be seriously jeopardised.
I am concerned also about the argument that pay awards are all right provided that they are staged. Public sector pay is governed by cash limits and running costs, but to store up problems next year by staging a pay agreement from one year to the next is not satisfactory. I am not suggesting that the public sector should be dealt with unfairly. If inflation continues, everyone suffers, but we must achieve a gradual decline. Despite all the Government's preoccupations with the Gulf war, the European Economic Community, and a single currency, they ought to give priority to that aspect.
My right hon. Friend's basic message this afternoon was that his policy, within the ERM, of bearing down on inflation will continue, and be brought to a successful conclusion—and that necessarily means that interest rates cannot be lowered until the market views that as a prudent action, and downward pressures are not exerted on the exchange rate.
I believe that the market grossly underestimates the extent to which there is already downward pressure within the economy. The recession figures themselves show that clearly. However, against the general background of my right hon. Friend's policy, the autumn statement naturally looks rather different from the way that it looked last November, and we await with interest the official forecasts that will be published when my right hon. Friend presents his Budget on 19 March—which will, I am sure, take into account the points that I thought it right to draw to the attention of the House.
5.24 pm
Mr. A. J. Beith: We are in a serious recession—more serious than the Government anticipated at the time of the autumn statement. That is the difference between how we view it now from how it appeared, at least to the Government's own supporters, on the day it was published. That point was also made by the Select Committee.

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The anxiety that is felt about the Government's policy response stems from the belief that continuing high interest rates will make the recession worse. I share that fear. Interest rates must come down, but in a way that does not serve to increase inflation and lead to the reappearance of the very problems that caused them to be so high in the first place.
The only alternatives offered so far are to reduce interest rates and hang the consequences, as advocated by the right hon. and learned Member for Monklands, East (Mr. Smith), or to reduce them in the knowledge of the consequences, which is the preferred option of some Conservative Members—the consequence in that case being devaluation of the pound and the abandonment of sterling's place in the exchange rate mechanism. That, too, would lead to continuing fears about inflation, and unremitting pressure to increase interest rates yet again. Commerce and industry need not just a reduction in interest rates but a sustainable reduction—and a pattern that more closely matches that of our competitors.
Earlier, there was an interesting exchange when the Chancellor rejected the devaluation option, saying that the strongest economies in the world have strong currencies. The hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) added sotto voce—in so far as he ever utters anything sotto voce—"and low interest rates." One could also add the words, "and low inflation". The strongest economies manage to combine all three.
However, the Government did not give us low inflation, or price stability, but they are still promising that interest rates will remain higher than in our competitor countries. The Government forecast—to the extent that they ever forecast it—that underlying inflation, which is something on which Chancellors have always laid great stress, will not fall that much. The Chancellor referred to a fall, but he is not forecasting that it will be below 6 per cent. I will be really generous and suggest a figure of 5·5 per cent. One is referring to a rate of inflation from which mortgage interest is excluded—the rate by which Chancellors and other Treasury Ministers set so much store.
The rate will remain worryingly high even when the supposed effectiveness of the painful cure begins to show itself in the economy. The Government's credibility problem will not disappear, except to the extent that markets take the headline inflation figure as being the whole story. If they do that, the Government may be lucky, and their credibility may increase to the extent that greater interest rate reductions than now seem likely become possible.
Mr. John Smith: I recollect that, in debates last year, the hon. Gentleman opposed a cut in interest rates. Will he make it clear whether the Liberal Democrats are in favour of a 1 per cent. cut in interest rates?
Mr. Beith: My argument is that interest rates should be cut, but that, if they are to be reduced by any significant amount, other policy proposals must accompany that action.
The Chancellor reduced interest rates by half of 1 per cent. today. He decided on such a small reduction because he feared, understandably, that if he made a larger cut there would be dangerous inflationary consequences, arising from a loss of market credibility. I would have used the same reasoning, unless the measures that I am about to advocate were taken to ensure that the economy's
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credibility is enhanced, and that the Government are seen to oppose inflation. I want interest rates to come down, but I want them to stay down. If that is to be made possible, inflation must be defeated.
Mr. Budgen: How can the hon. Gentleman be sure that any policies that he advances to accompany a reduction in interest rates would be acceptable to speculators, as being likely to make the pound more attractive than the deutschmark? If everything is governed by the unpredictable relationship between the pound and the deutschmark, how can any of us be sure which particular factor acts on the minds of any one speculator, or on the minds of speculators generally? We keep hearing from the Chancellor and the Prime Minister that the pound will strengthen as inflation drops. It may—but no one can tell. It is like suggesting that the Prime Minister knows which horse will win the grand national.
Mr. Beith: It is a reasonable assumption that the greater strength of the deutschmark is related to the belief that it is stable and that prices are stable. It is not likely to be devalued and the worth of holding it is not likely to be reduced because it loses value in the economy of which it is a part. If we can change the perception of sterling so that it is viewed in a similar light, there will not be such a premium on the holding of sterling. Our present level of interest rates is the premium that we pay people who believe that this country is not as good at controlling inflation as Germany and other countries—that is manifestly the case.
We have to remove that premium, and the Government have totally failed to do so. The Government have been in power, committed to price stability and getting rid of inflation, for more than a decade, and they are still suffering from the problem that they came into power with. That is why the Government are unable to reduce interest rates by a greater amount.
I believe that we could achieve far greater interest rate cuts than this small half a per cent. cut, if it were accompanied by policies designed to ensure that people believe that we are serious about inflation. Why do I say that people are doubtful about our commitment to inflation? One reason is the way in which interest rates are reduced. Why did it happen today? The interest rate cut today was timed because of this debate, no matter how many days the Chancellor may have been thinking about cutting it. There is no doubt about it—the Chancellor is a politician to his fingertips. He knew that Government Back Benchers were uneasy and he wanted to provide some appeasement to that unease. I know that the hon. Member for Wolverhampton, South-West (Mr. Budgen), who nods, shares my view on this matter, because he is an accurate observer of the way that Governments behave.
There is clear precedent for that behaviour. When we entered the exchange rate mechanism there was a 1 per cent. cut in interest rates, which was timed for the opening of the Conservative party conference. We know, and it is on the public record, that the Governor of the Bank of England thought that that was an unwise moment at which to cut interest rates. He felt so strongly about it that he was not content merely to speak to the Chancellor, but wrote a letter to him about it, which is also on the public record. There was no way that he could express himself more strongly on the subject. He realised that it was a matter of political timing.

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Another opportunity for an interest cut of that type is coming up—on the eve of the general election. To a politician in government, that would seem the most opportune moment to remove some of the fears about high interest rates, and therefore it is quite likely. What is more, a great many other people believe that the Government may behave in that way. In a footnote to its report, the Treasury Select Committee points out that lowering interest rates at the time of ERM entry might have contributed to a loss of credibility.
Industry needs larger interest rate cuts than these, but cuts which can be sustained, and that will not be the case unless they are accompanied by evidence of an anti-inflation policy. One of the most proven ways to contribute to that—I have argued this before in the House and I now find that the right hon. Member for Blaby (Mr. Lawson) argued for that when he was in government—is to entrust an autonomous responsibility for price stability to the Bank of England.
The arguments against that are not economic but political. Those who argue against do not do so because they do not believe that it would have the effect that I describe, but because they want the freedom to put interest rates up or down in the light of considerations other than price stability. That is a dangerous power, which may occasionally be used beneficently but may often be used in circumstances which lead to further inflation later.
It would be desirable to keep sterling within the narrow bands of the exchange rate mechanism, and if that could be achieved, although it is a difficult process, clearly there will be more firmness in our commitment to our currency and its stability.
Mr. Anthony Beaumont-Dark: That is a most interesting argument. However, were we not told in Brussels to reduce wage inflation to 2 or 3 per cent? Some of us pointed out that that would mean 3 or 4 million unemployed, but the attitude there was, so what? The Bank of England, in its superb Georgian offices in Threadneedle street, with magnificent Louis Quinze furniture, could dictate any level of interest rate. Is the hon. Member for Berwick-upon-Tweed (Mr. Beith), who is a Liberal, willing to allow the Bank of England to make 3 or 4 million people unemployed so that it can achieve a virtuous financial circle? He would not win many seats with that policy.
Mr. Beith: The hon. Gentleman has not come to terms with the fact that the tendency to inflation within the British economy is the underlying problem, and the fact that our currency does not repose on price stability. As long as politicians continue to play around with the currency to suit their own short-term political ends, the currency will not do so. Germany's success by adopting another method of dealing with the problem—autonomous responsibility for price stability—is on the record as one of the achievements of post-war Germany.
I shall now mention some of the consequences of recession for other aspects of Government policy. Our present recession might not have been so severe in industry if the Government had taken a number of other steps that we have advocated for years, such as training measures; correcting the mistakes of the 1984 corporation tax reforms, which hit companies especially hard in times of
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high inflation; and legislation to counter late payment of bills, especially by large institutions, which has made the cash flow problems of small and medium-sized firms worse. I know that some Conservative Back Benchers have been sympathetic to the latter and that a Bill was brought in to deal with it.
Other steps would be to attack monopolies more vigorously to ensure that prices are driven as low as possible by competition, and to reduce the burden of employers' national insurance contributions, which would be a less inflationary type of tax cut than those that the Government have made in the past. As well as those steps, which might have helped industry, key investment decisions need to be taken. At the time of the autumn statement, the wrong decisions were taken—and they will not be changed now because of the curious practice that we operate in this country where we consider public expenditure at one end of the year and raising the money for it halfway through the year. Governments seem unable to relate the two.
Any Government could reasonably point out that the Gulf crisis has changed calculations and has to be taken into consideration, but it need not stop essential investment—indeed, it must not. The costs of the Gulf war, serious though they are, are containable, and other countries are contributing to them to a significant extent. The costs are not on a scale which ought to lead to the abandonment of other important spending. I was a little worried that the Chief Secretary, when he appeared before our Committee, gave some signs that savings would be sought in some areas to meet some of the increases that will arise because of the cost of the Gulf crisis.
Mr. George Walden: Will the hon. Gentleman give way?
Mr. Beith: I am a little concerned about the time that I have taken, and I want to keep close to Mr. Speaker's injunction.
Other key elements of investment need to be increased at this time if we are to get out of recession. Training is one area where the Government have made the greatest public spending mistakes of the autumn statement. The training budget has decreased every year since 1987–88 and continues to decrease. It has decreased in real terms year after year, and further cuts are planned during the next three years, supposedly on the ground that unemployment was decreasing, which is no longer the case. However, training is not about employment, but about having a more skilled work force, and we need more investment in training if we are to acquire the skills to get us out of recession.
The Department of Trade and Industry has gone down sharply and regularly. Regional aid to industry will have been cut by £65 million in the years up to 1994 and is virtually disappearing at a time when regions will start to feel the real impact of the recession. Funds for collaborative research have been cut by £38 million in 1991–92, a cut of about 35 per cent.
Essential investment in transport has been ignored, especially rail links to the channel tunnel. We have not tackled such links in the way that the French have, and there will be serious delays in linking the north of England by through freight and passenger trains to continental Europe.

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Wisely used, public spending is sensible in a recession, as it is a less inflationary way to provide stimulus to the economy. If it is targeted towards those areas of investment which can make industry more competitive, it is a sensible direction in which to travel.
The Government have had some remarkable opportunities. They have had more than 10 years in power; they have enjoyed substantial majorities in the House of Commons; they have had the revenues resulting from North sea oil and from privatisation. Yet they have riot got rid of inflation, they are presiding over a recession, and they are trapped in a high-interest-rate policy that is the result of their own past mistakes. What a record!
5.39 pm
Mr. Nigel Forman: In the characteristically witty speech of the right hon. and learned Member for Monklands, East (Mr. Smith), Conservative Members could see very clearly the extent to which Labour—throughout its long and distinguished history as a political party—has nourished a pious aspiration for cheap money. That aspiration is most commonly associated with Hugh Dalton, but it has been felt by many other Labour party figures. In office, however, Labour has always seen such aspirations end in tears—and often in devaluation. The right hon. and learned Gentleman's speech reminded me forcefully of that.
It is at times such as this that the supporters of Government economic policy need to stand up and be counted, as my right hon. Friend the Member for Worthing (Mr. Higgins) has already demonstrated. I strongly agree with my right hon. Friend the Prime Minister, who said in the House on his return from the European Council just before Christmas:
"the purpose of Government economic policy is to bring down the rate of inflation, not to replace inflation today with inflation tomorrow by a premature and unwise movement on interest rates."—[Official Report, 18 December 1990. Vol. 183, c. 166.]
That is the critical difference between Government and Opposition. Conservative Members do not believe in premature and risky reductions in interest rates, whereas I have a feeling that the right hon. and learned Gentleman, were he ever to become Chancellor, would run exactly that risk.
This is the second significant debate on the economy to be held in the House since my right hon. Friend the Chancellor took up his new post. It is still quite difficult for many of us—both in the House and outside, in the media and the markets—to come fully to terms with the new context of economic policy represented by our membership of the exchange rate mechanism. Although everyone professes to see in it either a panacea or a bogey, according to taste, I am not sure that everyone has fully understood the implications and, in particular, the constraints of that policy. Those constraints cannot be stressed too often or too strongly.
ERM entry has put this country firmly back on to an exchange rate standard of monetary policy, which obliges us first to control our costs—if we want to be competitive in the world economy—and secondly, to build sufficient confidence in the conduct of our monetary and fiscal policy, over a period of years, to reassure the financial markets of our determination to squeeze inflation out of the economy.
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We must provide that much more reassurance than some other Governments, because Britain's track record over far too many years—decades, indeed—is one of not being as serious about inflation as we should have been. A premium is built into our interest rates, at any level, unless and until we derive the real benefits that can flow from long-term ERM membership.
We have already begun to achieve some success in our anti-inflationary endeavours: 'headline inflation' has stopped rising, and now looks set to fall when the figures are published later this week. I suspect that will apply to subsequent figures as well. If we stick to our current prudent approach, which necessarily involves validating rather than seeking to lead market sentiment, it will be possible to reduce interest rates further, as and when there is clear evidence of falling inflation.
Evidence of the growth of market understanding seems already to have crept into the lower forward interest rates in the City, which were already on offer before today, and the slight strengthening of the pound against the deutschmark which followed today's interest rate decision. The Government are involved in, and must stick to, the patient building of market credibility for our monetary policy—and a new policy at that.
It took the French authorities several years to achieve the same result, and to arrive at an inflation rate as low as, or lower than, that of the Germans. It need not take us as long—provided that my hon. Friends do not clamour for premature interest rate cuts, provided that the Government do not follow Labour policy by cutting rates, putting up taxation and introducing credit controls, which we heard about today, and provided that industry and commerce, and all pay bargainers, get a grip on all their costs. That means principally labour = costs.
It is worth remembering that employers and unions can limit some of the pain of bankruptcies and rising unemployment by reducing their labour costs to what is required for purposes of international competitiveness. That is true even for industries that are not exposed to international competition. The French did precisely that in the middle and late 1980s, once they saw the light and understood the new framework, and we must do the same in the 1990s and beyond.
Ms. Abbott: I have listened to the hon. Gentleman repeating the formula that businesses can avoid bankruptcies by cutting their labour costs. Can he tell me how many firms in the south-east, at a time of skill shortages, can continue to attract the skilled labour they need, while cutting wages as he suggests?
Mr. Forman: There are two ways of attracting the necessary skilled workers. One is to buy them in; the other is to "grow" them within the business itself. Through the training enterprise councils and by other methods, we are trying to encourage employers to develop skills within their own firms and factories.
Mr. Eric Martlew: Will the hon. Gentleman give way?
Mr. Forman: No; I am sorry.
Even the suspicion that we might leave the exchange rate mechanism, or seek an early opportunity to devalue in the context of an overall realignment of the ERM

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currencies, would send all the wrong signals to the markets in the present conditions, and would set back the anti-inflationary progress that we have already made.
On one point—and one point only—I agree with what Professor Congdon and the others said in their notorious letter to The Times, published this morning. They said:
"Credibility would … be enhanced by … a sustainable monetary discipline".
I agree with that. What was wrong with their analysis—and one of the signatories, Professor Walters, has always been wrong, in my view—was the assumption that such anti-inflation credibility can be established by illusory monetary autonomy in a world of global capital markets. The days of national monetary autonomy are firmly over.
The important feature of the Government's present economic policy is the fact that they have recognised and acted on the economic realities of the modern world, and are working with the grain of market forces—whether in relation to short-term monetary policy, or in relation to the proposals for the hard ecu. We are already reaping considerable benefits from that responsible approach to our new economic policy within the ERM framework.
Let us consider the compelling evidence about inward investment, which comes to Britain only on two important basic assumptions—first, that we remain a core player in the European Community, and, secondly, that we pursue a credible monetary policy within the new ERM conditions. The figures are striking. According to an article in The Independent on Sunday, Britain is now enjoying some two fifths of inward and overseas investment by European Community nations in the Community. It is receiving two thirds of American investment in the Community, and two fifths of Japanese investment. Those are significant proportions, way beyond those achieved by our serious competitors; and that is happening only because of the confidence in Britain that has been instilled by the credibility of our new approach to monetary policy.
Mr. Peter Shore: The figures from The Independent on Sunday that the hon. Gentleman has quoted are absolutely correct. They were based on the OECD report, and showed that Britain was receiving a substantial part of both Japanese and American investment in Europe as a whole.
Is the hon. Gentleman aware, however, that the figures quoted in the OECD report relate entirely to the period before we joined the ERM, when it was national policy —as represented by the then Prime Minister—that we should not join, or, at least, should not do so at early date? What conclusion does the hon. Gentleman draw from that?
Mr. Forman: The conclusion that I draw is that people were investing in this country because they had confidence in the two premises that I have mentioned—first, that we would remain a core player within the Community, and, secondly, that we would pursue a responsible monetary policy. The ERM decision gives us a better chance of doing that for the reasons I have elaborated about generating market confidence and market credibility. So it is an additional reason rather than the sole reason why it is necessary for us to adhere to those disciplines.
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I shall cite two further pieces of evidence in support of my general argument. First, as my right hon. Friend the Chancellor said, a one point move in overall labour costs is perhaps two or three times as significant to British industry and commerce as a one point move in short-term interest rates and that applies in either direction. Secondly, the volume of mobile money being moved around the world today is probably about 20 times more significant than that which is used to finance world trade. Again, we have to take account of the new realities. No monetary institution, not even the federal reserve in the United States of America or the Bundesbank in Germany now has complete monetary autonomy in modern conditions, and that must inform our monetary policy.
Therefore, the Government are right to buttress their monetary policy with a cautious fiscal policy, which ought to be achieved at the present stage of the economic cycle more by overall public expenditure control than by tax increases, disguised or otherwise. I hope that that lesson is not lost on my right hon. Friend the Chancellor in his preparations for the Budget.
In the present circumstances, in spite of the cost of the Gulf war—in some ways we are almost in danger of making a profit, thanks to the strong and sensible efforts of my right hon. and learned Friend the Chief Secretary—the Government can afford to take the strain of any unavoidable public spending increases in a limited extra increase in public borrowing rather than an increase in taxation. Such an approach would be readily financeable in current market conditions and at current rates of interest and could become even easier for us, once the German rates have peaked, which I believe that they will shortly, and once Spanish interest rates come down giving us more leeway within the ERM.
The policy will work as intended, provided that my right hon. Friend the Chancellor is not tempted to go in for any fiscal fine tuning, which does not really work in current economic conditions, particularly in an economy of £600 billion within a huge global economy in which we represent only about 7 per cent. of world trade. It will work provided that my right hon. Friend sticks to his guns and steadily builds market credibility for his new policy. In that way we shall see headline inflation tumble later in the year—I am confident of that—and interest rates can then safely be reduced in the wake of better inflation figures. The balance of payments will continue to improve and we shall have laid a firm basis for continuing prosperity and success in the 1990s.
5.52 pm
Mr. Giles Radice: As a member of the Treasury Select Committee, I pay tribute to the right hon. Member for Worthing (Mr. Higgins) for his excellent chairmanship of that Committee. The quality of the Committee is matched only by its diversity and I hope that I will not be misunderstood if I say that it occasionally needs rather careful and skilful handling. The right hon. Member for Worthing has always provided the necessary leadership, and I salute him for it.
This year we have produced a particularly valuable report on the autumn statement. In fact, I think that in some ways it is rather more valuable than the autumn statement itself, since the problem with the autumn

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statement is that it was out of date by the time it was published. The main flaw was its gross under-estimation of the extent of the recession.
On 8 November, when the then Chancellor of the Exchequer—now the Prime Minister—introduced the autumn statement, he talked complacently about a period of what he called "weak activity". He chided my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) for his allegedly alarmist talk about a recession. However, as the Chancellor spoke, the economy, as my right hon. and learned Friend the Member for Monk lands, East told him at the time, was already in the grip of a fierce recession. Sadly, as we point out in our report and as the right hon. Member for Worthing mentioned, that recession is likely to be much deeper and longer than the Treasury forecast in the autumn statement.
We are now in the second most severe recession experienced by the country since the 1930s and it could turn out to be the most severe. The influential economic commentator, Gavyn Davies, director of Goldman Sachs and economic adviser to the Treasury Select Committee, has pointed out that most of the indicators in the latest Confederation of British Industry survey are worse than they were at the same stage of the 1980 recession. The CBI survey shows that manufacturing output is falling rapidly, investment is declining sharply and unemployment is likely to rise even faster than is predicted by the most pessimistic accounts.
Ms. Marjorie Mowlam: Does my hon. Friend agree that, if Conservative Members were interested in unemployment, those who have already spoken or intervened would have mentioned the increase in unemployment benefit claimants in their constituencies in the past nine months? The hon. Member for Esher (Mr. Taylor), who is still in his seat, would know that there has been a 72 per cent. increase in claimants in his constituency. The right hon. Member for Chingford (Mr. Tebbit) would know that there has been a 32 per cent. increase in his constituency. The Minister—
Madam Deputy Speaker: Order. The hon. Member for Redcar (Ms. Mowlam) is not making a speech; she is intervening in the speech of the hon. Member for Durham, North (Mr. Radice).
Ms. Mowlam: I accept that. However, the Minister should know that there has been a 32 per cent. increase in claimants in his constituency. Does my hon. Friend agree that it is appalling that Conservative Members have not mentioned that?
Mr. Radice: I agree with my hon. Friend. What is interesting about the recession is that, in contrast to 1980–81, when the recession began in the manufacturing sector, this recession began in the housing market and spread to the service sector in the high street. Now it is severely affecting the manufacturing sector as well. Also, in 1980–81 the recession began in the southern part of the country.
As my hon. Friend the Member for Redcar (Ms. Mowlam) pointed out, it is a cause for concern that Conservative Members have not mentioned the unemployment in their own constituencies, considering how fast it has been rising. My hon. Friend will know that the rash of recent bankruptcies suggests that, after a six-months time lag, the recession is now hitting the north with equal
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severity. As a northern Member of Parliament, I find it a tragedy that, after all that has been done in the north and all its efforts to adapt its economy, it should be suffering once again from recession. My hon. Friends who represent northern constituencies also recognise that.
The recession will be longer and deeper than the Government were telling us three months ago, and it is hitting every part of industry and every region. The responsibility for the recession lies fairly and squarely at the door of the Government. It is not caused by world recession. Although there is a slowdown on the north American continent, the two most successful economies in the world—Germany and Japan—are still growing steadily. Germany has a predicted growth rate of 5 per cent. in the coming year and Japan has a predicted growth rate of between 2·5 per cent. and 3 per cent. That is hardly a recession, so we cannot blame the rest of the world for ours.
Nor is it caused by the Gulf war. At a hearing on the cost and economic consequences of the Gulf war, the Chief Secretary rightly told the Treasury Select Committee that the Government were not
"seeking to hide behind the war as an excuse for any other difficulties we face."
It is a pity that the Chancellor of the Exchequer did not heed the Chief Secretary's wise words.
The truth is that we are in a recession because of the mess that the Government have made of the economy since 1987. As the Select Committee pointed out at the time, the Government, by a reckless policy of credit deregulation, tax cuts and monetary expansion, allowed the economy to get out of balance in the first half of 1988. They should have been in a position then to use credit controls, fiscal policy and exchange rate policy to bring the economy back under control. Instead, they stuck—in some ways they did not have many alternatives since they had already got rid of credit controls—to the one-club policy of high interest rates.
As I said in a speech in last year's Budget debate, relying on interest rates as a key lever is likely to be unpredictable and disruptive. I must quote at this point Professor Paish's classic description:
"It is like pulling a brick across a table top with a piece of elastic: nothing happens for ages, and then the brick hits you in the eye."
A long period of high interest rates imposed by the Government has given the British economy a massive black eye.
The question facing the House is what the Government should do to get the country out of the mire in which they have dropped us. A package of measures is required; the first is to reduce interest rates. Everyone welcomes the half per cent. reduction announced today, but that is only a modest beginning. There is no doubt that interest rates will need to come down—[Interruption.] If the Chief Secretary will listen for a moment, I have some good advice for him. Interest rates need to come down by at least 2 to 3 per cent. as soon as possible.
I recognise that ERM membership imposes a restriction on interest rate policy. That is the issue raised in The Times today, and it has been mentioned by the hon. Member for Wolverhampton, South-West (Mr. Budgen) in his stimulating series of speeches; it is also discussed fully in the Select Committee report. I advise those of my hon. Friends who have not read that report to have a look at it.

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I was a strong supporter of British entry of the ERM because it brings more stable exchange rates. Our experience outside it as compared with exchange rates inside it shows that clearly. In the medium term, the ERM can lead to a reduction in interest rates, and I note that interest rates are lower inside it than were ours outside it. It is also a useful counter-inflationary discipline: inflation is lower inside the ERM than was ours outside it.
It is not possible to blame the ERM for the current recession. Unemployment started to rise in April 1990 and we did not enter the ERM until October—
Mr. Shore: Since when, it has deepened.
Mr. Radice: My right hon. Friend will forgive me if I complete my argument. As I said at the time of our entry, we entered at the wrong time, for the wrong reason and at the wrong rate. We entered partly for political reasons, before the Tory party conference, just as today, as the hon. Member for Berwick-upon-Tweed (Mr. Beith) pointed out, we had an interest rate reduction shortly before this debate.
A problem has been created by the former Chancellor's handling of our entry. The weakness of sterling inside the ERM has made it more difficult to obtain the reductions in interest rates that are so vital for domestic reasons. The first answer to that is to manoeuvre such reductions and in a way that is precisely what the present Chancellor has already done. At least a 1 per cent. interest rate reduction has already been largely discounted by the markets, as shown by the fact that sterling strengthened against the deutschmark on the foreign markets today.
Secondly, given that we have joined the ERM, it would be wrong to devalue unilaterally—that would send all the wrong signals. However, there is a stronger case for a deutschmark revaluation within the ERM—[Laughter.] That has been advocated by the Bundesbank; indeed, it is being advocated by it at this very moment. That would create a space for a general realignment.
I make a prediction: within the coming year there will be a general realignment of exchange rates in the ERM, and it will be led by a revaluation of the deutschmark.
Mr. John Townend: May I offer the hon. Gentleman some advice? If he really believes that a significant cut in interest rates is vital for the British economy now, does he think that possible without a realignment? If it is not, will he swallow his pride and support a realignment?
Mr. Radice: I have just said that I think that there is a stronger case for a realignment inside the ERM, led by a deutschmark revaluation.
Thirdly, we must reintroduce some form of credit controls. The minimum reserve asset ratios that operate in France and Germany should operate here, too.
Lastly, there should be what the Treasury calls greater fiscal activism, as we argue in the Treasury and Civil Service Select Committee report. The Government's refusal since 1980 to use fiscal policy counter-cyclically has been bad for the British economy. I welcome the policy announced by the Government on automatic stabilisers, but there is room for sensible investment of public money in incentives for industry, as argued by my colleagues on
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the Front Bench, in employment creation—because we need measures against unemployment—and in training and regional policy.
Mr. Shore rose—
Mr. Radice: I have only four minutes, and to give way now would be unfair to myself. I have already given way twice.
The use of these instruments in the way that I have described would restore some measure of flexibility and credibility to economic management, which has had to rely exclusively on interest rates. The Government have saddled themselves with a policy of economic management which is followed by no other country in Europe. We do not need to do that; we need more flexible economic management policy.
It is essential to tackle the recession and to bring the economy back into balance, and short-term economic management has an important role in that. But we must also operate in the longer term on the supply side of the economy. That is not merely a matter, as Conservative Members seem to think, of liberalising markets; it is equally a question of investing in the factors of supply. We need to invest in skills. It is good that the Prime Minister has at last realised the importance of education and training, but it is a bit late—the dying gasp of a dying Government. Investment in technology, in infrastructure and in transport is also vital for the economy.
By bringing the economy back into balance and by investing in the supply side we should help to prepare the economy for the certain prospect of the single market, for which we are badly prepared, because we are going into it at the wrong time for our economy. It would also prepare us for the possibility of a single currency by the end of the century. I agree with my hon. Friends who are against the idea of a single currency that we must bring about a transformation of the economy if we are not to suffer as a consequence.
The charge against the Government is that, like the Tory Governments in the 1930s and 1950s, they have failed to prepare the country for the challenges that lie ahead. In the coming months, the Labour party will press that important charge in the House and in the country. I predict that the verdict of the voters will be that the Government are guilty as charged.
6.9 pm
Sir William Clark: We should all congratulate the right hon. and learned Member for Monklands, East (Mr. Smith) on being a master at avoiding answering questions. As my right hon. Friend the Member for Worthing (Mr. Higgins) pointed out, when the right hon. and learned Gentleman was tackled about interest rate reductions and about whether there should be a realignment, he did not answer the question.
There is far too much doom and gloom in reference to our economy. Comparisons are made between the 1930s and the 1980s, but one never hears the critics of our economic policy talk about the strength of our economy since 1979. The growth in output per worker in Britain is the highest in Europe—indeed, it is higher than in any other industrial country. Twenty-seven of the 50 top performing companies in the world originate in the United Kingdom. Almost 400,000 new businesses have been created.

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Although they may be profitable, many small businesses have cash flow problems. I urge my right hon. and learned Friend the Chief Secretary to make local authorities and departments pay their debts within 28 or 31 days, or whatever period is decided upon. Many small businesses go into receivership because they cannot get money. Serious thought should be given to providing for mandatory interest after there have been outstanding debts for a certain period. That would help the cash flow. I remind my right hon. and learned Friend that if one of us owes Customs and Excise money on VAT or owes income tax to the Inland Revenue, those departments are quick to start charging interest, whether or not there is a genuine excuse.
The Government must also review the draconian fines imposed on some VAT payers. I assure my right hon. and learned Friend the Chief Secretary that I in no way support or give succour to businesses that try to avoid paying VAT, but many small employers depend on someone else looking after the books. Genuine mistakes may be made. Customs and Excise and the VAT tribunals should have the discretion to decide that a business that has innocently not paid VAT should not suffer a draconian fine.
The other day, I heard about a company which had an addition error of £900,000 in its sales. That error would have been spotted under the company's normal checking procedure, but Customs and Excise not only took the tax on the £900,000 but imposed a fine of £272,000. That was a draconian action. I do not know whether Customs and Excise is as keen to pay interest to someone who overpays VAT.
Like other hon. Members, I welcome the 0·5 per cent. reduction in interest rates. After the stock market crash in 1987, the pundits, economists and all the political parties said, "We must reduce interest rates because there will be a world recession. The only way to avoid a recurrence of the 1930s recession is to reduce interest rates." Interest rates were reduced, but, with hindsight, that was a mistake. The former Chancellor, my right hon. Friend the Member for Blaby (Mr. Lawson), openly admitted that. At the time, however, everyone was clamouring for an interest rate reduction. The same scenario applies today —people, including the Opposition, are clamouring for a reduction. I am delighted that my right hon. Friend the Chancellor is taking things gently and being cautious.
The Government have always said that, as inflation comes down, interest rates will come down. A 0·5 per cent. reduction in interest rates is a step in the right direction. Although it will not make much practical difference in the immediate future, it shows that the Government: are standing by their pledge that when inflation comes down, interest rates will, too. Business men can take comfort from the fact that this is the first step towards reasonable interest rates.
The retail prices index will be published on Friday—apparently, the Government have the figures now. My right hon. Friends the Prime Minister and the Chancellor would not have reduced interest rates by 0·5 per cent., or by anything at all, if they thought that Friday's figures showed that inflation was worse than 9·3 per cent. I am sure that the figures will be satisfactory.
Ms. Mowlam: Will the right hon. Gentleman give way?
Sir William Clark: I am sorry, but I cannot give way in a 10-minute speech.
We must not jeopardise the future by reducing interest rates too quickly. We went down that road in 1987–88. Of course, events in the Gulf will put over public expenditure figures out, although not be a great deal because of the contributions from the Kuwaitis, Saudi Arabians and Germans. I am sure that the House is delighted at the close contact and co-operation between Chancellor Kohl of Germany and my right hon. Friend the Prime Minister. We can build on that co-operation. It was interesting to read that Chancellor Kohl gave a sympathetic hearing to the hard ecu suggestion made by my right hon. Friend the Prime Minister some time ago.
It would be a mistake to rush precipitately into the narrow bands of ERM. We must bring inflation well down before doing so. If we move too quickly, realignment may be forced upon us. That would bring inflationary pressures, because imports would cost more. We should stay on course. We will ride out the recession. The United Kingdom economy is in much better shape than it has been for many years—[HON. MEMBERS: "No."] The Opposition should be aware of the strength of the economy. Our national debt has been reduced by £26 billion over the past three years, which must be a good thing. The average family's standard of living has improved. Two thirds of people own the houses in which they live.
We are in a recession, but we are starting from a higher level of prosperity than in the past. We are not starting at the bottom. In the 1970s and the 1980s, we were at the bottom of the international league. Now we are near the top. I am sometimes astounded by Opposition Members. They seem to take delight in any economic difficulty that we have. They jump gleefully on any bad news and say that the Government's economic policy—
Mr. Speaker: Order.
6.20 pm
Ms. Diane Abbott: I listened with interest, as did my colleagues, as the Chancellor talked defensively, but still rather lightly, about the current recession. People call it "Mr. Major's recession", as he was at the Treasury for almost the entire period of its gestation—a major recession, courtesy of Mr. Major.
I noted how the Chancellor talked about the ballooning of public and private debt, as though it were simply a series of coincidental individual decisions, rather than, as was the case, a response to, and the result of, Government policies—notably, deregulation of financial services, changes in the arrangements for mortgage tax relief, and tax cuts. I must be one of hundreds of Members of the House with a very healthy bank overdraft, and in the past year not a day has gone past without an expensive leaflet urging me to borrow more coming through my door. That is the climate that the Government have created. The Thatcher boom was nothing more than a 20th-century south sea bubble.
I listened, perhaps most sadly of all, as the Chancellor said that the present recession was a price well worth paying. Right hon. and hon. Members on the Treasury Bench can say that this recession is a price well worth paying—they, in their personal lives and circumstances, are not paying it. But let them tell my constituents in Hackney that this recession is a price worth paying. Let

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them say the same thing to the new businesses in Hackney that were launched on the crest of the new enterprise bubble in the latter years of the 1980s.
Many of those businesses, launched by members of the minorities anxious to better themselves by doing what the Government had told them to do—get into the enterprise culture—are now in a very different position. Let the Government talk to people who are surrounded by the ruins of their business endeavours and strangled by high interest rates. Let them talk to old-established businesses in London—particularly businesses in the construction industry—and to people in professions related to the property market. Let them hear those people say that, unless interest rates come down perceptibly in the next six months, they face ruin.
Let the Government tell young people in Hackney who will leave school this summer, and who face a complete drying-up of clerical jobs in the City and in the west end, that this has all been a price worth paying. Let them tell mortgage payers, who face the crippling burden of some of the steepest payments in the country, and consequent repossession or enforced sale, that their misery is a price worth paying. Above all, let them look at the people who have suffered the personal misery and financial disaster of bankruptcies. Let them tell the victims of the rising level of bankruptcies in the past few months that the current recession is a price worth paying.
The Chancellor accused some people of blaming the EMS for the recession. In fact, no one does that—not even the more rabid anti-Europeans on his Benches. It is clear that joining the EMS at too high a level was a blow to industry. Like the new Chief Secretary, I am not an economist, but it is clear that membership of the EMS means that for external exchange rate purposes we have to maintain interest rates that are much too high for the internal domestic purpose of combating recession.
I say a few words about economic and monetary union. The Treasury and Civil Service Select Committee has just returned from Brussels, where it had a series of very interesting meetings with members of the Commission, —off the record, of course. To anyone who talks to members of the Commission it is quite clear that the Government are sidling towards economic and monetary union. For fear of upsetting some of their more excitable supporters, they will not admit it, but it is the fixed opinion of leading members of the European Commission that Europe will have a single currency by the year 2000. No one can have any doubt that economic and monetary union is a moving train and that we are on it.
Without wishing to intrude on private sorrow, I shall say a few words in passing about the hard ecu, of which we have heard so much. It is a tragic tale, but still the Chancellor clutches the hard ecu to his bosom like a mother trying to will a stillborn child to life. In Brussels we found that the hard ecu, despite the Chancellor's claim that it had been greeted with rapturous acclaim in the chancelleries of Europe, is dead in the water. Central bank governors have rejected it, and our European partners have rejected it. There is absolutely no support for a 13th currency.
Of course, the hard ecu was greeted respectfully as a step up from the "Up yours, Delors" style of diplomacy previously favoured by the British Government. Ministers
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have claimed that the Spanish proposal is very similar to the hard ecu, but in fact it is quite different. The hard ecu is acceptable only as a transitional arrangement—if it is acceptable at all. It is not, as Mr. Major has apparently persuaded his more gullible right-wingers, an alternative to the single currency. The hard ecu, as a practical alternative to the single currency, is dead. The problem is that the Government appear to be taking on all the difficulties of European monetary union but none of its benefits and opportunities.
The Government talk about lowering interest rates. They say that lower interest rates are unthinkable within the European system. The fact is that, when the French joined the EMS, they realigned within a very short period. There is no reason why we should not have a realignment. I put it to the Chief Secretary that businesses and the mortgage-paying public are crying out for it. Furthermore, within Europe, the Government, as part of their policy, are taking on the difficulties but are not grasping the opportunities. They are blocking the effective distribution of regional aid. They are preventing local authorities from getting money from Europe for small businesses. Above all, they are fighting the social charter.
Everyone in Europe, apart from the British Government, accepts that a single market will not have the support of ordinary people if it is seen just as a vehicle for increasing the market for big business. The Government have fought a national minimum wage, protection for part-time workers, parental leave and worker representation. Europe seems to want to burden the British Government with all the difficulties of European monetary union but to deny them all the positive aspects.
I return to Mr. Major's recession—
Mr. Speaker: Order. The Prime Minister.
Ms. Abbott: —the Prime Minister's recession. First, we were told that there were problems of definition. Then we were told that the recession would be short and shallow. Now, as all honest Members must admit, the economy is in free fall towards a slump.
I can do no better than quote the Treasury Select Committee's report on the autumn statement:
"Taking all factors into account, we conclude that the recession is likely to be deeper and longer in duration than the Treasury forecast."
That was true when we drafted the report; it is even more true now. The recession will be much deeper and much longer than the Government admit. Right hon. and hon. Members on the Treasury Bench will not pay the human cost of this slump, but we in the Opposition believe that, inexorably, between now and July 1992, they will pay the political price of the Government-manufactured recession.
6.28 pm
Mr. John Townend: I am pleased that, after considerable delay and pain, the Government's anti-inflation policy is now working. It has taken a long time to show through, but on an analysis of the past three months' inflation figures—I appreciate the danger of doing that in light of the experience of the right hon. Member for Leeds, East (Mr. Healey)—the figure amounts to only 1·9 per cent.
Today's cut in interest rates is welcome, but it is smaller than many hon. Members would have liked. To bring inflation down, the Government had to reduce the

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overheating in the economy—which, I hesitate to say, was grossly underestimated by the Treasury in 1987–88—through the use of high interest rates.
Interest rates have been high now for well over 18 months. It is certainly the longest period of high interest rates that I can remember. High interest rates have taken time to work, but they are working now with a vengeance —so much so that the Treasury's forecast of a shallow recession is, as the hon. Member for Hackney, North and Stoke Newington (Ms. Abbott) said, proving to be far too optimistic. If action is not taken soon, I foresee disaster on the horizon. There is a danger that the recession could turn into a real slump.
I was a strong supporter of the monetary policy of my right hon. Friend the Member for Blaby (Mr. Lawson) and it was a tragedy that he did not stick to it. From a monetarist point of view, all the indicators are screaming for an easing of monetary policy and a significant reduction in interest rates. If inflation comes down, but interest rates do not come clown as quickly, there will be a tightening of the monetary stance at the very time that it needs to be slackened.
Unemployment is rising and will soon be more than 2 million. The savings rate is once again rising and is most satisfactory. The froth has come out of the housing market and house prices are flat, or in many places are still falling. Retail trade is falling and company liquidity is under severe pressure. Industrial production is falling and in some industries demand is dropping through the floor. At long last, private sector wage settlements are coming down and it is a great pity that they are not following suit in the public sector.
Bankruptcies and closures are increasing by the week. The growth of money supply is falling; seasonally adjusted for the last quarter it was only 0.8 per cent. The balance of payments deficit is also coming down. Why are interest rates so high? The answer is the exchange rate mechanism.
On 12 Decembr, my right hon. Friend the Chancellor of the Exchequer said:
"There can be no question of a reduction in interest rates that is not fully justified by our position in the ERM. That will be the case however strong is the pressure for lower interest rates based on other indicators."—[Official Report, 12 December 1990; Vol. 182, c. 966.]
That is a chilling statement. The logic is that if to maintain our position in the ERM we needed to raise interest rates, the Chancellor would not flinch from doing that. I believe that that would be disastrous at this stage.
We are now paying the penalty for joining the exchange rate mechanism and for changing interest rates from being an instrument of monetary policy to being an instrument of exchange rate policy. If that policy continues unchanged, the price that we shall have to pay will be a recession that is deeper than the 1980–81 recession and one that will last longer. If that is allowed to happen, the damage to our economy and to the political fortunes of the Conservative party would be immense.
This recession will be worse than that in 1980–81 because at that time much of the unemployment was due to the removal of overmanning and restrictive practices. Many of the firms that went out of business then were inefficient, old-fashioned, badly managed and, in some cases, were driven into the ground by the trade unions. This time, the inefficient, slimmed-down firms with good union relations are going to the wall. On this occasion, the
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recession is not restricted to manufacturing industry. It has affected the south and also service industries—the industries that we have done so much to encourage.
There have been job losses and closures in advertising and public relations and even redundancies in the law, banking and estate agencies. Like other hon. Members, I see evidence of the recession in my area. In the past week, 612 jobs were lost in three firms in and around Hull. No doubt some of those firms faced the difficulty of selling into a $2-for-the-pound American market.
Today we have a combination of high interest rates, collapsing demand and the approximate $2 exchange rate. That is causing great difficulties for many companies. I am worried about the effect that that combination of factors is having on many small and medium-sized firms. No Government have done as much for the small business sector as this Government and no one has done more to recreate the enterprise culture than my right hon. Friend the Member for Finchley (Mrs. Thatcher), the former Prime Minister. However, many small and medium-sized businesses are struggling and going to the wall. Some have already gone out of business.
Mr. Mark Wolfson: Will my hon. Friend give way?
Mr. Townend: No, I only have 10 minutes in which 10 make my speech.
Unless we act now, more businesses will go to the wall and much of the enterprise culture that we have so painstakingly built up over the past 10 years will be lost, perhaps never to return. How right was our former Prime Minister to oppose entry into the ERM.
If we do not act now, at worst we might face a situation similar to when we joined the gold standard before the second world war. We need interest rates to come down quickly, not by 0·5 per cent., but by 2 or 3 per cent. I accept that that will be a difficult decision, but such action is clearly not possible if we maintain our position in the ERM. I should like us to leave the ERM as I believe in floating rates, but I accept that that may be politically impossible. Therefore, there must be a realignment within the ERM.
I challenge those who say that the market would lose confidence in Britain. The markets will lose confidence in Britain if we let a large section of our industry and business go into liquidation. I accept the argument that lower interest rates would reduce the rate at which inflation will decrease. However, the figures that I have quoted show that the rate of inflation is dropping so quickly that perhaps a slower rate might be better. We are now paying for the desire of my right hon. Friend the Member for Blaby to see sterling fixed to the deutschmark.
The current recession has been made worse by the Gulf war, which has had a significant effect on service industries, tourism, airlines, travel and hotels. It is now gathering speed so quickly that, even if interest rates were cut by 2 or 3 per cent. in the near future, the recession would continue to increase for some months before there was an upturn and businesses would continue to fold. There would not be an upturn before the end of the year.
I do not have time on my side, and as a country we do not have time on our side. Industries cannot afford to have the Government wait, and similarly the Conservative party cannot afford to have the Government make the ERM the overriding factor of economic policy. My right

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hon. Friend the Chancellor of the Exchequer is a sensitive man. He inherited our membership of the ERM. He appreciates, even though some of the Treasury mandarins do not, the depth of the recession. He appreciates the pain that small businesses in his constituency are suffering. I know that he wants to do the right thing and I beg him not to be deterred by what our European partners might think and either come out of the ERM or opt for realignment.
Having seen how membership of the ERM has placed our economy in a straitjacket, having seen how disunited Europe has been over the Gulf and how slow Europe has been to give adequate support to Great Britain and the United States, I believe that we certainly should not put our economy and industry at risk on the altar of being good Europeans.
6.38 pm
Mr. Elliot Morley: The Chancellor said earlier that the effects of the recession were exaggerated. Last Thursday, in my constituency, Sooner Foods shed 400 jobs. Last Friday, in Brigg, British Sugar announced that it was closing its factory, with the loss of more than 100 full-time jobs and more than 200 seasonal jobs. This morning, the major employer in my constituency, British Steel, announced that 850 jobs are to go. That amounts to more than 1,400 job losses in the area in less than a week. I do not think that that exaggerates the scale of the recession. It is a recession for which the Chancellor, the Prime Minister and the Government must take responsibility because of their economic mismanagement and their sledgehammer approach to the economy.
Each of those three firms was successful, had good management, and worked with the unions to try to minimise the human effects of those job losses. Nevertheless, the root of their problem is the fall in demand through recession, cripplingly high interest rates, and the exchange rate mechanism. The Government entered the ERM at the wrong time for the wrong reasons.
Ms. Abbott: And at the wrong rate.
Mr. Morley: It was certainly at the wrong rate. That has added to the detrimental effects on our manufacturing base.
It is amazing that the Government are more interested in giving tax cuts to the well-off than they are in building our training, investment and industrial base. It is amazing that the Government, who have had the benefit of North sea oil and the benefit of privatisation proceeds—although those assets were sold off on the cheap and below their real value—are in such an economic mess compared with our main industrial rivals. People in Glanford and Scunthorpe are paying the human cost of that neglect and mismanagement.
As has been pointed out, we need not only a cut in interest rates but a deep cut in interest rates, and not just one approach to controlling inflation but a much more sophisticated approach to controlling inflation. I fear that much of our economic base will never recover from the ravages that are being imposed on it by the Government's economic mismanagement.
6.41 pm
Mr. Nicholas Ridley: On 30 March 1981, 364 economists wrote to The Times and said:
"There is no basis in economic theory or supporting evidence for the Government's belief that by deflating demand they will bring inflation permanently under control and thereby induce an automatic recovery in output and employment."
On that occasion they were wrong. That statement was followed by seven years of low inflation and very high growth. This morning, six economists—many fewer—wrote to The Times and said that they feared that the depth of the recession would be deeper and longer than anybody expected and that an immediate cut in interest rates was required.
What is the difference between now and 10 years ago and the two circumstances in which the economists wrote to The Times? Both were periods in which inflation had to be killed, and I believe that both will successfully kill inflation. Both, of course, cause distress—for example, unemployment and bankruptcies—which is the miserable but necessary price of reducing inflation. The difference is that, in those days, my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) was allowing the pound to go where it would, whereas the pound is now constrained in the exchange rate mechanism.
That brings me to the central questions that I hope that my right hon. Friends on the Treasury Bench will think more deeply about, although they have already thought about them deeply. What is the objective of the squeeze? What do they seek to achieve by high interest rates? We cannot have two objectives, and we cannot have two priorities. There must be one top priority. As between the priorities—defeating inflation or maintaining a certain exchange rate—there must be a choice. I quote no less an expert authority or high priest of European monetarism than Karl Otto Pohl, who said:
"Interest rates should be set according to domestic monetary conditions, and the exchange rate should be left to go where it will."
More recently, he said:
"In my view it would therefore be desirable to embody in the statute of a European central bank a clause to the effect that domestic stability must have priority over exchange rate stability."
I say amen to that. He put his finger on the defect in the exchange rate mechanism, although he is the high priest of that very mechanism.
How can one be a member of the exchange rate mechanism and yet give priority not to the mechanism but to domestic stability? I expect that Mr. Pal was referring to the management of some future European currency as against the dollar or the yen. I am sure that he would say that those are different economies with different problems, different states of development and different rates of growth and that, of course, one must have an exchange rate between them, but that must not be the priority.
Of course, within the ERM there are different economies, different rates of growth and different levies of productivity. Just as our economy is different from Germany's, so we are faced with the choice of whether to keep entirely to the German rate of progress by our relationship with the deutschmark in the ERM or to look after domestic monetary conditions instead. That has the unfortunate consequence as well of putting us into the

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wrong parity against the dollar, which is not a member of the exchange rate mechanism; nevertheless, half our exports go to dollar countries.
Why is it that the people who criticised the Government in 1981 for their very tight monetary squeeze now support the exchange rate mechanism and the present maintenance of high interest rates, whereas nowadays those who supported the Government in 1981 are critical of the Government for their present severe squeeze? The answer is that those like myself who supported the Government in 1981 but are worried about the present situation put as our top priority the defeat of inflation and no more, whereas others of my right hon. and hon. Friends seem to put as their top objective the maintenance of some position in the ERM for primarily European foreign policy reasons and not for economic reasons. That shows how dangerous it can be to get one's priorities wrong.
The 0·5 per cent. cut in interest rates is welcome, but, as many have said, it is too little, too late. The Government have demonstrated that their objective is to do the least possible so as not to disturb the value of the pound in the ERM. As my right hon. Friend the Chancellor has said, his primary objective is to do that. His primary objective should be to kill inflation, but not to have over-kill. Six of the best economists wote to The Times and we had 0·5 per cent. off interest rates, in which case, I shall encourage those six economists to write again on another three days. Three or four more such letters should get us to where we should probably be.
It is not necessary to follow inflation down with successive cuts in interest rates. If the money supply is too restricted and MO is running at only 3 per cent., as I believe that it is, it is right to address the need to get the money supply right, not necessarily to tie it to some indicator such as the RPI, which is meaningless in this context. The RPI measures the inflation of the past 12 months, not the inflation of the hour or the day. Therefore, one is measuring something that is of no relevance to the current state of the economy. We should forget the idea of chasing inflation down with interest cuts. Inflation is coming down very fast indeed, although that will not show because we always have the baggage of the past 12 months within the index.
I urge the Government to use interest rates—if I may again quote Herr Pöhl—
"according to domestic monetary conditions".
I suspect that they never believed that the slump would be as bad as it is obviously going to be. The autumn statement itself said:
"GDP is expected to recover through 1991."
I do not think that GDP will recover through 1991 unless the Government are prepared to make that their main objective.
6.50 pm
Mr. Austin Mitchell: It was a fascinating spectacle at the beginning of the debate watching the Conservative Benches fill with Members who wanted a little hope and good cheer from the Chancellor; they had hope in their eyes and were quietly humming to themselves
"Lead, kindly Light, amid the encircling gloom"
until the Chancellor began to speak. What did he offer them? Absolutely nothing. The only definite prospect he
904
offered them in that long speech was that what goes down must come up, some time; we do not know where, we do not know when, we do not even know why.
That is the question. Why must what goes down conic back up eventually? Why is it not possible that, on the contrary, we are locked into a downward spiral of more bankruptcies, more unemployment deflating demand and therefore leading to more bankruptcies and more unemployment—a process which goes on until it reaches a credit crunch in which banks and building societies begin to demand the return of assets which cannot be sold at prices justified by the borrowing, so increasing the burden of debt?
Far from recovering from the depression, which will be hard, severe and long, it is possible that we are on the brink of worse. Confidence, which has been buoyed up by the Government's hopes and by the 0·5 per cent. cut in interest rates, is poised on a knife edge. The stock market is buoyed by hopes—but hopes of what? Asset prices are kept up because no one dare pull the plug, but we are precious near pulling the plug. The foreign exchange rate, which has been very low against the deutschmark, may go down further, forcing an increase in interest rates. That is the knife edge on which we are balanced.
It is no use the Government exuding hope and good cheer without telling us that something will be done. We are in a uniquely disastrous position. The economy is not well prepared to face it. Industry has over-borrowed; everybody has over-borrowed. We have had the biggest increase in the borrowings-to-earnings ratio of arty country in the advanced industrial world. The ratio is now among the highest, if not the highest. Therefore, we are perilously exposed to a credit crunch.
Our economic statistics are the worst of the Anglo-Saxon world which has been cited in defence of the proposition that the problem must have been caused externally. Although the United States is in difficulty, it is interesting that, because its exchange rate has come dow:n, its exports are doing very well, thus offsetting the decline in the domestic market. That is not happening here. There is no way out through that channel.
We are in a worse mess than the Government are admitting, with no sign or glimmer of a recovery, or even an indication from the Government that they will help the recovery. In those circumstances, we have to ask what the role of the ERM is. The Chancellor gave the easy answer that the ERM did not cause the depression. Nobody said that. What ERM membership does is lock us into the depression and screw down the lid, by removing our ability to use the weapons which we have always had in the past to get us out of the depression. In the past, we had the ability to reduce interest rates to stimulate the economy and to relieve the pressures of debt. All that has gone.
We have abandoned control to Brussels. It is always a mistake to make an externally determined exchange rate, particularly an exchange rate determined by competitors who have a vested interest in seeing it overvalued, a central instrument of management. It is like trying to improve the weather by nailing the needle on the barometer: it cannot be done. It is an even bigger mistake to do that at a time when the cycles are out of kilter. The Chancellor said that Germany was still growing. That is true, but the Germans want to dampen that growth. They want an increase in interest rates. We need a reduction in interest rates, because our economy is so depressed.

905
It is impossible to merge the economic policies of two countries which are at different stages of a cycle and make the stronger one dominant, as has happened with the deutschmark. That is a mere mistake, but the absolutely daft decision of the Government was to go into the exchange rate mechanism at a rate which was grossly overvalued. It was up about 20 per cent. in real terms on the exchange rate at the end of 1986. Even if industry cut wages, it could not overcome that burden and become competitive. It is double-talk and nonsense to expect industry to hold wage increases. If wage rates were cut, industry would still not be competitive on the exchange rate as it was at the end of 1986.
We are overvalued. We are grotesquely overvalued against the dollar. The result will be decimation of our exports on the American market. We have already seen our manufacturing trade with the United States turn from a £1 billion surplus in 1986 to a £3 billion deficit last year. That turnround was caused entirely by exchange rate variations. The position will get worse. We will lose that market. We depend more than any other country in the Common Market on exports to America.
The Government have managed to get the balance of payments deficit down by deflating the economy, but that means that permafrost will be the permanent state of the economy. If that is the only way to rectify the balance of payments deficit, the Government have to keep deflation and they have to keep wage demands down. Otherwise, everything will take off again, particularly the balance of payments problem. The Government are telling us that we have a limitless future of permafrost depression and deflation.
The only way to cure the problem is to have a competitive exchange rate. After all, the exchange rate is only a market clearing mechanism. If we had a competitive exchange rate, we could balance our trade, which we are not doing. That in itself indicates that we are not competitive. With a competitive exchange rate, we would have full employment and a high and sustainable rate of growth. That should be the central measure of economic strategy.
Inflation is irrelevant. As the right hon. Member for Blaby (Mr. Lawson) once pointed out, the only aim of economic policy is to make the country richer. That is what it is all about. It is not about making the country depressed, deflated, unemployed and bankrupt. That is not the measure of economic policy.
The only way to recovery is a competitive currency. We need that desperately. Exports as a share of GDP went down in the 1980s by about 3 per cent. Our industrial base has shrunk so far that it is barely viable. It must remain viable. The only way that we can recover from the balance of payments problem in the long term is to expand manufacturing industry. That means a competitive exchange rate and the ability to invest—both denied by the high interest rate policy. We are taking our front line troops—manufacturing industry—in the battle for survival against the rest of the advanced industrial world—it is a war we are engaged in—and shelling them, putting them out of work by high interest rates. That way lies disaster, a decline in which the country will be reduced to the poor periphery of a wealthier Europe. We will have a decline in tax revenues as corporation tax goes down,
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and a loss of capacity and jobs which will never come back. Our industrial base is already dangerously contracted. That way lies a graveyard.
The only way the Government will achieve lower inflation is by graveyard economics. That is what they are doing. They are putting people out of work, closing capacity and cutting investment. All that is happening now, just to keep us surviving. We shall end up with peace, the peace that passeth all understanding, the peace of the graveyard.
There are ways out. I do not have time to deal with them all, but we certainly need an expansionary Budget which borrows and spends on the essentials—on housing, on the shabby rundown public sector, on public transport and on all the things that need to be done. We need to control credit by requiring substantive reserve ratios from banks deposited with the Bank of England. We need—not now, but soon—an incomes policy. That is the only way we can expand and ensure that inflationary pressures do not choke off that expansion.
Above all, we need devaluation. What is wrong with letting the market decide the exchange rate? Why should we always think of devaluation as a moral crime? Why cannot the exchange rate be decided by the markets? On that basis, our exchange rate would be substantially—about 20 per cent.—lower. Why should sterling not be able to follow the dollar down as it would have done outside the exchange rate mechanism?
Now that we are within the exchange rate mechanism, why should we not be able to say that we are experiencing teething troubles and admit that we have made a mistake? Everyone else had a chance to make substantial adjustments to their exchange rates initially; why cannot we do so? Why should we adhere to the Government policy when all that they have said today is that at this stage in the economic war we need a futile gesture? They are giving us more closures, redundancies, unemployment and loss of capacity and are whittling down our ability to survive and pay our way in the world just to support their fanatic enthusiasm for deflationary economics and the exchange rate mechanism.
7 pm
Mr. Anthony Beaumont-Dark: I shall say only a few words, because many hon. Members want to speak in the debate and there is always a danger that we shall repeat each other.
The right hon. and learned Member for Monklands, East (Mr. Smith) should remember the well-known Scottish saying that fine words butter no parsnips. It is easy for those who are in Opposition or are Back-Bench Members of Parliament to give advice or consent, because they do not have to govern. It is with that genuine sense of humility that I shall give a few words about the problems facing manufacturing industry.
Various Chancellors during the past 11 years have said that I am a Brummie and talk only for the metal bashers, which is basically true. I come from a manufacturing district. My family has been in Birmingham for generations and, over the years, we have been through bad, bad, good, bad and good times. During my political life—30-odd years—in the city of Birmingham, I have come to realise that manufacturing industry does matter.
The right hon. Member for Blaby (Mr. Lawson) once said to me—it was not in private so I can repeat it in public

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—that he did not care how jobs were created, as long as they were created. He said that service industries were fine. Of course service industries are important, but he thought that I concentrated too much on manufacturing industry. I believe that manufacturing industry is the fibre that holds the cloth of a country together. We all use things when going about our lives, whether we are riding a bicycle, driving a car, opening a fridge door, putting something in the oven, sweeping the carpet or going to bed—and everything has to be manufactured.
I agree that I am preoccupied, and almost obsessed with manufacturing, but when I see the balance of payments deficit running into hundreds of millions of pounds, have to be preoccupied with manufacturing. It matters who manufactures the goods. As someone who is fanatical, I find myself buying too many foreign products. Why do I do so? Because often I can buy only foreign products. I am preoccupied with manufacturing industry and shall continue to be so, because if this country is to thrive, it must manufacture to survive.
The Governor of the Bank of England, who would be our master if we gave him entire freedom, as I said in an intervention during the speech of the hon. Member for Berwick-upon-Tweed (Mr. Beith). The German banking system has much to recommend it. The German banks do not merely lend money for a glad, happy, quick return, but invest in their industry. They might have done so accidentally in the 1930s, but now they do so gladly. This week, the Bank of England encouraged the original concept of converting some overdrafts into preference capital or any other capital. That policy has a lot to recommend it.
Mr. Wolfson: I support my hon. Friend's point. Does he agree that the fact that German banks involve themselves more directly in industry than our banks, also brings management skills from German bankers into the management of industry? That may well be one reason for their greater effectiveness.
Mr. Beaumont-Dark: I agree with my hon. Friend to the extent that the German system is important because it brings the management of banks into a much more realistic accord with the management of manufacturing industry. Too often, banks lend hundreds of millions of pounds for a glamorous property or financial settlement, because it will give a quick, glad return.
If this country is genuinely going to thrive, it is not just up to Governments. It is nonsense to suggest that my right hon. Friend the Chancellor or, God forbid, a future Labour Chancellor, can say to industry, "You are going to survive, thrive and be hugely successful." Governments are not the grit that makes the pearl, but rather the shell that too often clamps shut, preventing the grit—of those who have to work—from succeeding. If there is any money to give away in the Budget, we should encourage initial allowances and new businesses and help business to prosper through tax concessions. We should not use the money to subsidise jobs or industry, but to encourage the British will to survive and manufacture tp be more fruitful.
The second use for the money, which the Governor of the Bank of England is now taking up, is to encourage banks, not shut down manufacturing industries because they have short-term problems. As we have all seen in many of the Sunday papers that have concentrated on the issue, firms should not be shut down because of short-term
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cash flow problems. Some of the loans should be converted into genuine capital and the businesses should be given help, encouragement and support. I am not after lame dogs, but after helping the dog that has a temporary problem.
All hon. Members should realise that manufacturing industry is of huge importance. It matters how jobs are created in this land of ours. It matters that I, as a xenophobe who buys British if I can, often have to buy foreign goods. Let us reverse the tide of foreign goods, not by restrictions but by encouragement for those people, not just in Birmingham, but in the north and now the south, who want to manufacture and prosper. The day of the manufacturer should come. If it does not, the day of reckoning will come for this country.
7.8 pm
Mr. Eric Martlew: It is sad that this country's economic climate is far bleaker than the weather outside. Although we can look forward to a thaw in the icy weather conditions, all that we can look forward to from the Government is another economic blizzard, heavier unemployment, more bankruptcies and more house repossessions. Daily, throughout the country, in my constituency and—more important for the Government —in Conservative constituencies, there are 3,000 job losses. Every day, 100 businesses fold up and go bankrupt and 150 homes are repossessed by the building societies and banks.
Although the cold weather can be put down to an act of God, the economic climate can be attributed only to an act of criminal neglect by the Tory Government, particularly the right hon. Member for Blaby (Mr. Lawson), whose ghost seemed to haunt the Chamber this afternoon, especially among Conservative Members, who did not have a friendly word to say about him. It would be wrong to blame the right hon. Gentleman, because in 1988 the Chief Secretary to the Treasury was none other than the present Prime Minister. The sorcerer's apprentice is now in charge.
The 1988 Budget was a giveaway Budget to the super-rich. It sucked in a massive volume of imports and started the spiral of inflation. I am sorry to criticise the right hon. Gentleman when he is not in his place, but he is rarely in his place these days. He quickly swapped the leather of the Front Bench for the plush seating of a dozen boardrooms. Never has failure been so greatly rewarded as in his case. I understand that he has declared that he will not stand at the general election. I am sorry that he did not decide that before the previous election because it could have prevented the suffering of many of my constituents.
Let us return to the fact that the right hon. Gentleman's right hand man was the present Prime Minister. My constituents and the rest of the country are now at his tender mercies. I fear for them, because pain and misery being inflicted. In my constituency are, companies of various sizes are suffering badly. Ferguson Fabrics, for example, an old established, family firm of textile printers which has been going for 150 years, has been taken over. It survived the last Tory slump. I visited the factory about six months ago. It has modernised and invested in new plant and undertaken top-of-the-range printing, yet it has paid off 150 people and the rest are on short-time work. I hope that that company will survive to boom again, but it will find it difficult.

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Another company, Copy Consultants, which would be called a yuppie company down south, is in trouble. Its managing director drove a Porsche and sold his furniture and equipment, all of which were made in Japan. Nevertheless, the company employed 500 people. Only two years ago, the company approached me for help to get bigger premises. Today it is in the hands of the liquidator. If we are lucky, we shall salvage some jobs from it.
We may talk about companies, but we do not get to the heart of the problem—the personal tragedies of job losses and bankruptcies. Like any good constituency Member, I read my local newspaper. Over the past year it has seen a change. We used to have births and deaths, but now we have births, deaths and bankruptcies. I suspect that that is the case throughout the country. I hope that the Chancellor of the Exchequer will consider that.
An insolvency notice in a paper tells a great deal about human tragedy. There is one in this, the paper that I have here, but I shall not add to the individual's tragedy by naming him. The case is before the Cumbrian county court and the individual is now classed as unemployed. Those of us from the area know from his address that he is living on a council estate—there is nothing wrong with that—whereas it is clear from his former address that he used to live on a private estate. His tragedy is that he has lost not only his employment but his house.
The individual is a builder. I understand that 30 per cent. of bankruptcies involve building firms. They have been hit harder than any others. Last week my local paper also listed a grocer and a road haulier who had gone bankrupt. All those people believed in the enterprise culture, but they now face the bankruptcy court. At the bottom of the paper is the name of the official receiver —the official undertaker for that particular business.
Those are the results of high interest rates and reduced demand. It is not just a case of, "If it isn't hurting, it isn't working"; it is a tragedy. If ever a callous comment was made by a Prime Minister, that was it, and I suspect that it will be remembered long after all the other words of this short-lived Prime Minister. We must assist the economy.
It is a good job that we stopped locking up debtors, because if we had not, we would need a prison as big as Manchester. The real criminals are sitting on the Conservative Benches. The individual mentioned in the insolvency notice could have lost his job during the slump of the late 1970s and early 1980s—perhaps at a steel works on the west coast or in train manufacturing in my constituency. He was then beguiled into the business sector by those posh adverts put out by the Department of Trade and Industry, entreating people to be independent, to be entrepreneurs and to get £40 a week enterprise allowance. Those adverts said nothing about going bankrupt.
What do I say to that individual? I do not say, "Well, it's your fault." I do not think that it is. He has probably tried his best. He has not been a bad manager. He is the victim of macro-economics outside his control, and the bank has told him that his company is no longer viable. The irony is that probably many more companies are in a worse state than his, but they are so big that the banks cannot pull the plug on them. Earlier in the debate, complaints were made about big companies not paying bills. The fact is that many big companies are having
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difficulty paying wage bills, never mind suppliers' bills. We must tell that man that the Government are the problem. He is just another Major bankruptcy.
The man probably voted Conservative last time because he believed in the enterprise culture. He probably cannot understand why the Tory generals now tell him that he must be shot by his own side in order to win the war. The only war that interests Tory Members is the one for their re-election. That is what they are about. They have got the economy into a mess and they have decided that he must be a sacrifice. I hope that that gentleman recovers, starts in business again and votes Labour. I hope that he has more sense than to believe the fancy advertisements which the Tories have made with public money. The cost of the political propaganda which they have broadcast on television under the guise of the enterprise scheme runs into billions of pounds.
I also have a word for those on my Front Bench. When we win the general election—it cannot be far away now —we must quickly heal the wounds. We must get people back into work and back on the housing ladder. We must give those who are now in debt and bankrupt, but who have the ability to go back into business, a fresh start. If we do not, by next century Britain will be the poor man of Europe.
7.18 pm
Mr. David Howell: Like almost everyone else, I strongly welcome the 0·5 per cent. cut in short-term interest rates announced today. It is small, but I hope that it is the beginning of a long and sustainable downward step movement of interest rates, following the inflation rate down which will now descend fast to levels that may for once even exceed the Treasury's estimates to the good and be lower than the 5·25 per cent. projected for the last quarter of the year.
My other hope about the process is that it will be conducted at a pace dictated by sound monetary considerations and by the Government and policy makers, not by pressure from the Confederation of British Industry, the media or even Back-Bench Members. I hope that the Government will establish that they are moving at all stages in this reduction of short-term interest rates at a pace consistent with domestic monetary considerations. That is absolutely vital, because if there is to be any gain from the miserable pain about which we keep talking, it must be to establish, once and for all, and after years and years, that sterling is a serious and potentially hard currency. We must pursue the sort of policies that Ludwig Erhard pursued in the Federal Republic of Germany in the 1950s. We must establish the pound not as a long-sliding currency—the byword for devaluation and inflation above all other European and international currencies—but as a sound, tough and strong currency underpinned by firm domestic monetary conditions.
I must say—this will not endear me to all my colleagues—that it would be very much easier to establish that policy if it were not Ministers and the political wing of Government who were making the interest rate decisions at every point. I accept that some people will say that they are vital decisions, and that those who take them should be accountable to Parliament. That is true, but the fact remains that the extent to which they are taken by politicians, at funny times and whether justified or not by monetary policies—and inevitably surrounded by media

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comment—means that their effectiveness in international currency markets is weakened. The credibility of monetary policy in the United Kingdom is permanently lamed and hobbled by the style and method with which we conduct it.
I feel quite sorry for my right hon. Friend the Chancellor and for previous Chancellors, when out of their mouths must come the statement, "I have decided to cut interest rates," or, "I have decided not to cut interest rates." It is a hopeless message for international currency markets. It immediately tells them that decisions are being taken by a Minister, perhaps for reasons—I do not know, and we might be judging him unfairly—other than domestic monetary conditions.
I look back over the past 10 years to the time when I was in the Cabinet, and I have a sinking feeling as I remember hearing the confident forecasts of Chancellors in the early 1980s that they knew how to manage monetary policy. There was all that talk about the medium-term financial strategy: they knew how to do it; it was just a matter of following a sound monetary policy. However, they did not know; they could not establish, in the way that a separate monetary authority could, the full confidence of world financial markets in the monetary policy of this country. Chancellors in the Governments in which I served were wrong. The Treasury was persistently wrong, and has been wrong throughout the 1980s.
Even the distinguished economists who wrote a letter published in The Times today—many of them are personal friends whom I admire—have been spectacularly wrong. In their letter they say that they do not like the exchange rate mechanism but that everything would be right if we followed sound monetary policies. They, too, have not been able to define exactly how we can achieve that sound monetary policy.
Indeed, one of the most prominent signatories to the letter, Sir Alan Walters, only a few weeks ago said loudly and clearly that the problem with the ERM was that we could not raise interest rates but would have to lower them to keep within the bracket. Yet a few weeks later the cry is that we should lower them, but will have to raise them to keep within the bracket. I do not especially criticise Sir Alan; I am merely showing that the confident cries of Chancellors, economists and Treasury mandarins that they can deliver sound monetary policies by themselves turn out to be sadly wrong.
That is why I believe—I am glad that my right hon. Friend the Member for Blaby (Mr. Lawson) reached this conclusion in his resignation speech, and others are beginning to reach it in increasing numbers—that we need, if not an independent monetary authority, a very powerful monetary authority that is seen by international currency markets to be setting the pace in monetary policy decisions. That would make it much more effective when we came to cutting or raising short-term interest rates. I want movement in that direction, but until there is, Britain will be at a disadvantage in the management of our short-term interest rate policy.
The argument in this debate, and in the letter in The Times, is less about that—because people will assume, quite wrongly, that they can deliver a sound monetary policy if only they are allowed to do so—and more about whether the ERM is a terrible constraint on the pursuit of sound monetary policy or a reinforcement of such a policy. I come down on the side of those who believe that being in the ERM, within the present wide band, is a reinforcement. To put it the other way round, if we were
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not in the ERM, huge speculative forces would be building up against the pound, as they have done before, and vast walls of money would be ready to move in in an attempt to shorten the pound. Inflation and devaluation would he forced upon this country at a far faster pace than ever before.
In a sense, I regard the ERM as far from the prison bars that prevent us from following some track towards lower interest rates—which invariably lead towards more inflation and devaluation, which is what the policy amounts to in the end—and as something that, in the eyes of the international financial markets, restrains us within a wide band. I do not believe that the ERM is anywhere near as important as hon. Members crack it up to be. We are driven by forces governing our monetary policy that exist anyway, and would exist whether or not we had the ERM support. At the margins, the ERM provides additional support to our efforts to establish sterling as a serious currency and to maintain the value of our currency internally.
The only respectable escape route would be, as hon. Members have rightly said, if the Germans decided to revalue and there was a general realignment, with the pound and the franc going one way, and perhaps the lire, the peseta and the deutschmark being revalued. That is still a risk, and anyone who thinks that it is not is blind to the fact that Germany has become a large borrower. The bill for East Germany is rising by the day—another DM10 billion, according to today's newspapers. I have no doubt that the Bundesbank officials will be considering whether they need to raise interest rates again, or even to go for an outright realignment. We cannot change, order or persuade that if it happens, and it is a strong possibility.
The question is what will be done to bring Britain out of the recession, and how deep that recession will he. Unlike my right hon. Friend the Member for Worthing (Mr. Higgins)—the Chairman of the Select Committee on the Treasury and Civil Service—I believe that there are counter-cyclical forces at work which, despite present trends, may make the recession a little less grim than some fear. First, there is the German boom, which continues with vast investment and virtual overheating in the German economy. Secondly, there is the prospect that the Gulf war will end on time and according to script, as I believe that it will—after which there will be a natural psychological boost to all sorts of investment projects that have been frozen around the world.
Thirdly, the Iraqis will have 1·5 million to 2 million barrels of oil a day that they will not be able to refine because they will not have any refineries left, so they will have to dump that oil on the world markets. That will mean a substantial fall in oil prices, which may hit our budget, but internationally will be stimulating and counter-recessionary. Fourthly, there will be vast reconstruction throughout Kuwait and the middle east, and the order has already been placed for that. Fifthly, there will be continual huge growth of foreign investment into this island, which is an amazing feature. All those things will mean that the recessionary forces may not be that severe.
I see the light winking at me, Mr. Deputy Speaker, so I shall simply repeat that the Government must accept domestic monetary conditions as its own master, and not be pushed by others. If they do, we will come out of the recession a little faster than the gloomy forecasts made in this debate have suggested.
7.28 pm
Ms. Dawn Primarolo: It is apparent from today's debate that the Government's so-called economic policy is driving the British economy into a deep recession. If my constituents were asked for their verdict on the Government's handling of the economy, they would say that the Government had lost control of the economy and were inflicting pain on the working people of Britain for the sake of it.
The Bristol Evening Post recently reported that last year the number of companies in the south-west going into receivership increased by more than 200 per cent. That is the biggest year-on-year rise in the country. According to Peat Marwick McLintock, throughout the United Kingdom receiverships have more than doubled to nearly 2,634. Since 1979, my constituents have seen the industries in which they have worked destroyed and decimated and they have been thrown on to the unemployment register.
In Bristol, South, between March and December 1990, there was a 21 per cent. increase in the number of people claiming unemployment benefit. Our unemployment rate, ignoring the Government's 50 fiddles, runs at 14·5 per cent. My constituents are being denied work by the Government's economic strategy.
The autumn statement contained a proposal to cut training through the employment training schemes from 520 million to 370 million. The cut presumed a fivefold increase in private sector contributions to training. But businesses in the south-west are making savings on training in an attempt to survive the recession in which they now find themselves. Privately sponsored training schemes have only reached 10 per cent. of the Government's target. In Avon, that has meant a reduction in the training budget from £5·7 million to £4·3 million.
Yesterday and today training managers have been told that training schemes will be closed from 31 March with no alternative. Community Service Volunteers, North Bristol ITEC, Youth and Training, Kingswood Training Services, New Careers Employment Training, Gordeno Training, South-West Training and Age Concern have more than 200 trainees each on placements and they are to close. The number of training weeks that can now be funded in Avon has been cut by more than half, from 15,000 to 7,000. The number of training places currently in Avon is 2,500 and that is to be cut by 1,600 because of the Government's proposals. Yesterday, training managers were given their redundancy notices and told to close 11 schemes. That is in an area with high long-term unemployment.
Those trainees, many of them my constituents, who were in the middle of obtaining City and Guilds qualifications, were told that the training schemes were being scrapped; it was the end of the road. When my constituents asked what the alternative was, they were told it was the training and enterprise councils. But contracts have not yet been issued to the managers who will run the training schemes through the TECs. Moreover, it is not known how many places will be available and it has not been decided what training packages will be required. Therefore, training courses are being terminated with no prospect of any other scheme, and the trainees now have no chance of completing their qualifications in order to re-enter the employment market.
It gets worse. One trainee was told that he could have a training credit. That is a Government idea whereby training completed under one scheme will be recognised by
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another. But the Government have approved only 12 pilot schemes for transfer credits, and Avon does not have one of them.
Trainees who have suffered unemployment under the Government have the meagre training arrangements that they have been granted terminated and their only alternative is to return to the dole queue, look at the vacancies in jobcentres and join the job clubs. They have no right to a job or to training. If that has happened in Avon, the massive 28 per cent. reduction in the money available nationally must amount to a training scandal which shows administrative incompetence on an enormous scale.
My constituents will have an opportunity to read the report of my speech, so will the Minister tell them what emergency steps the Government will be taking to secure the training places of those 2,500 people on training courses in Avon, 1,600 of whom are to lose their places? We do not know what is to be done next year. We do not want to be told that the Government know that it is hurting. We want to know what the Government will do now to fulfil those training promises.
7.36 pm
Mr. Ian Taylor: Those hon. Members who spend a considerable time speaking to business audiences around the country are only too well aware that there is great concern within the business community about the problems facing it. That concern is usually evidenced by reference to the high interest rates, but when one begins to analyse the problems, one finds that they are not solely attributable to high interest rates. Many other factors cause businesses difficulties. For example, in many cases they have made internal misjudgments on their market over and above any general decline in the market, or they may have decided to alter their wage rates perhaps a little imprudently.
However, all those factors show that business must be better understood by Government, but not necessarily told what to do by Government. It is a mistake constantly to tell businesses that they should not pay such and such to their workers. That is not productive from the Government's point of view or necessarily well received by industry. There is always the danger that ultimately we get our come-uppance from the public sector. The Government's responsibility is to set the framework in which business can exist and try to be profitable and obtain a proper return on capital.
The banking sector has some responsibility to assist industry during a trough, which we are undoubtedly in at the moment. I was delighted to hear my hon. Friends this evening say that banks have seriously considered substituting their current loans for equity capital. Debt for equity swaps seems to be a constructive role for British banks to play. If they did that to a considerable extent, it would have two major impacts.
First, it would clearly reduce the marginal costs of business in terms of substituting equity for interest-bearing debt. Secondly, it would integrate our banking system much more into our industrial sector, and that, as we have seen in Germany, would mean that the banks would be proactive rather than just dispassionate and rather cold-heartedly accentuating a trough rather than trying to minimise it.

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It is the Government's job to provide the framework, and it must be as stable as possible. We cannot continue to have an economy that leaps from low inflation to high inflation, from low interest rates to high interest rates—which is why I welcome the Government's current approach. They accept the necessity for discipline in monetary policy, not just domestically but in relation to our principal trading partners. That discipline is the European monetary system.
We could argue all night as to whether DM2·95 was the right level at which to enter the system. There are plenty of academics to argue both ways—some of them at the same time. The reality is that we went in at DM2·95, and it is in our interest to stop questioning that central rate to accept it as the one to which the Government will hold. If that is done, industry can adjust its internal situation to accommodate that reality. More importantly, foreign holders of sterling will know that, contrary to historical evidence, sterling no longer has an inherent tendency to depreciate against other currencies. That will bring a remarkable change in the demands that they make in respect of interest rates if they are to continue to hold sterling, because the historical tendency for sterling to devalue has meant a premium for anyone holding it.
The Opposition completely failed to address the importance of monetary policy in respect of interest rates and currency. It is no use quibbling about whether the central rate is right, or bemoaning the fact that interest rates are too high. We want to know the Opposition's plans for a long-term framework for their policy. We know that the Government's policy is to hold the central rate within the ERM, and to ensure that that imposes its own monetary discipline so that our own inflation increasingly converges with that of our major partners in the Community.
We do not know either whether the Opposition believe that interest rates should he cut regardless of the impact that that action would have on exchange rates, and without knowing whether it would have an inflationary effect through devaluation. I suspect that it would, and the Opposition's policies would come to a sudden stop when they realised that sterling's falling value was having the effect of pumping inflation back into the economy. The Opposition would quickly have to excuse themselves, and to advocate instead a hike in interest rates. That is why the Government's policy of allowing any change in monetary policy or interest rates to be within the disciplines of the ERM is the right one and that most likely to lead to a sustained drop in interest rates as inflation falls.
The failure to observe that caution is the major flaw in the letter that was published in The Times today—although perhaps it is a compliment to the Government that it was signed by only six economists, not 364. Incidentally, they include Sir Alan Walters, whose role as an adviser to the Government was about as reliable as that of Rasputin in his time. The letter argues that depreciation "would not be inflationary." That is an unsubstantiated claim, and I strongly doubt that it could ever be substantiated. We must set a firm discipline, and industry must know what we are doing. The ERM is the right instrument.
I look forward to the Government clarifying their stance in respect of the increased public borrowing that is now inevitable. The demand has grown because of the Gulf war, and that is wholly justified, and cannot be seen just as a one-year item. It must be viewed over a longer
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term. Nevertheless, the general trend must lead us to expect some pressure on total borrowings, unless there is a balancing factor of savings and capital formation in industry. When my right hon. Friend devises his Budget, I am sure that, while acknowledging the public borrowing requirement, he will not panic. It is easily funded, and public sector debt will still remain at a much lower percentage than was the case in the early 1980s.
We might look to the Treasury team to apply some ingenuity to that end, given that monetary policy is largely dictated by the criteria of the exchange rate mechanism. I noted the admirable words of my right hon. Friend the Member for Guildford (Mr. Howell), and if our proposal for a European monetary fund is adopted in stage 2 of the move towards economic and monetary union, it will effectively determine monetary policy—probably using the hard ecu as the benchmark. If that is done, as is suggested in the Government's paper to the intergovernmental conference, monetary policy will increasingly be arrived at on a Community basis, which will allow the Treasury to exercise some ingenuity in respect of fiscal policy and the task of bearing down on the public sector borrowing requirement, year in, year out.
We have had a good few years of debt repayment, which puts us in a strong position to withstand this year's substantial borrowing requirement. We should not panic over that but should consider the longer term, and identify ways in which fiscal ingenuity will allow better management of the economy within a more stable monetary environment.
7.46 pm
Mr. John Battle: Many will regard today's cut of 0·5 per cent. in interest rates as amounting to a half-measure. It is a half-hearted gesture, and it serves to remind us of other half-hearted gestures announced by the Prime Minister. I refer to the Government's half-hearted gestures towards haemophilia HIV victims and in respect of cold weather payments. They are concessions extracted from a Government under pressure and aimed at creating the illusion of action, rather than designed to tackle the root structural problems of society.
The Government are being panicked into doing the least they can get away with. It is a style of gesture politics that attempts to present an image of competence. The economy may grind to a halt, the manufacturing sector may go to the wall, and vital services may dry up—but the Government hope that, if they can maintain that image of competence, they can cling on.
There is universal consensus that the illusion is rapidly being shattered. Today, the Chancellor blithely announced that the price will be worth paying. Who will have to pay that price? Who will suffer that pain, because pain is not always evenly distributed? Often, it is the poor, low-paid and unemployed who must pay the highest price.
On 17 January, I tabled a question to the Secretary of State for Social Security on the subject of poverty. He replied that the Government
"have pursued policies aimed at creating a competitive and thriving economy—because we believe that is the best way of helping all the people of this country.—[Official Report, 17 January 1991; Vol. 183, c. 591.]
The Government's policies have manifestly failed to achieve those aims. We are left with the Government's burnt-out belief in the trickle-down theory. The Government's own figures, which were squeezed out of

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them in a written answer published last July, show that, in respect of households of below-average incomes, the poorest 10 per cent. saw an increase in their incomes of 0·1 per cent. between 1979 and 1987, compared with an average increase of 23 per cent.
The number of people living on less than half the average income has risen from 4·93 million in 1979 to 10·5 million now, according to Government figures. The reality is a growing gap between rich and poor which demonstrates who is paying the price for the Government's economic failure. The poor have been punished by the Government's economic strategy, which is not an economic policy at all, but is proving to be an economic strategy for hardly anyone.
Even the World bank suggested at its January meeting that tackling poverty should be a top priority and proposed that loans should be offered for labour-intensive projects and investment in human capital, especially in agriculture, manufacturing and improvements to infrastructure. That international strategy is certainly not shared by the Conservative Government. Instead, the Government are deliberately allowing unemployment to rise. Roger Bootle, the chief economist at Greenwell Montagu, recently predicted that unemployment will rise to 2·7 million by the end of the year, and to more than 3 million by the end of 1992, according to the Government's lowest possible figures approach.
The Association of British Chambers of Commerce expects one in five manufacturing jobs to go. In my area, Leeds Chamber of Commerce, in its most recent survey, showed that a quarter of all firms surveyed expected their work forces to decrease within the next three months. At the February meeting of the World Economic Forum, Britain was singled out as the only major economy where recession was likely to be deep and protracted.
There is a significant difference in this recession because it is not merely manufacturing which is paying the price. The service sector is contracting—the Oxford economic forecasting unit suggested in a report that it will contract by 2 per cent. this year. In practice, that means that even the Midland bank branch in my constituency is closing. If the truth is that inflation will be hauled down, it will be because unemployment is driven up by Government strategy to bring inflation down.
Unemployment is again emerging as the instrument of economic strategy which the Government will use against inflation. In my area, it has risen to 7·8 per cent., according to Government figures, but in reality, according to the unemployment unit figures, it is somewhere in the region of 12·2 per cent. It is worth reminding the Government that, every time unemployment rises, there is a cost to the Treasury. For every 100,000 unemployed, it gets a bill of £300 million in social security costs. If unemployment rose to 2·9 million, the extra cost to the Government would be about £2,700 million.
Rather than going round the country shutting job centres, which is what is happening in my area at present, the Government should do more. We should nail the myth that people are pricing themselves out of work, because it rings hollow in Yorkshire—the region where wages are the second lowest in Britain. Recently, one company there negotiated a wage cut with its staff before it tragically went
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into liquidation. There was bargaining for a reduction in wages, so it is certainly not wage levels that are pricing people out of work.
The truth is that it is not a question of, "If it's not hurting, it's not working." That has been a throwaway slogan, and it reveals not that it is Government policy to stop the recession, but that Government policy is the recession. The effects are being felt hard on the ground.
The Sunday Times carried an article over Christmas entitled, "Top Business Men Desert the Party". It cited the fact that prominent business men were refusing to give money to the Conservative party because they blamed Government policy for the recession. The chairman of one company, Anglia Secure Homes—the country's second largest provider of old people's homes—replied to Lady Beaverbrook's invitation to the February ball at Grosvenor house in the following words:
"After a decade of hard work and commitment to free market ideology, I find in financial terms I am back where we started, to a future almost entirely reliant on a group of politicians deciding when to drop interest rates."
That sums it up.
When the Prime Minister tells us, as he did recently, that the pain is "regrettable but necessary," he is really saying that the economy is not in an inevitable crisis, and that this is not an act of God or fate, but that our problems are caused by Government-steered policy. It is a little late in the day for the Government to cry that the Gulf crisis has caused the underlying factors. The crisis in the economy and the recession are based on deliberate Government actions, for which they must be held responsible because they are directly responsible.
The Government have increased the uniform business rate and that is why factory and producer prices are up. The recession has been induced by the Government because inflation has been built into the structure with the poll tax, the uniform business rate, the 1988 Budget, which gave away £6 billion in tax cuts to the rich, and the property boom which was engineered by liberalising the banking system.
The Government have lost control over economic management. That is why, as soon as the Prime Minister dares to go to the country, the people of Britain will return a Labour Government and will prove that that illusion of competence is gone for ever.
7.55 pm
Mr. Ralph Howell: I fully support my right hon. Friend the Chancellor in his insistence that we must tackle inflation as a top priority. Like everyone else, I welcome the modest cut in interest rates today.
I support the Government's cautious approach, which is much more sensible than that suggested by the six economists in The Times today. In that respect, I think that the Government are on course.
Nevertheless, we must ask ourselves why we are in this position and why inflation has gone so high. In the past 11 years, the Conservative Administration have done a wonderful job in the private sector. Very few businesses in the private sector are inefficient or overmanned, as that was shaken out long ago and it brought about the successful period that we enjoyed. However, we have dismally failed in the public sector, where there is enormous overmanning in all areas, and we must apply our minds to reducing it. At every turn there is waste. The health service has no decent management and never will

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have until it is put on to a totally different basis. The worst offenders are local government, which employs 1 million more people now than in 1960.
What upsets me most about the autumn statement is that we are pouring more money into trying to make the unworkable poll tax work. We shall never succeed, and the sooner we recognise that the better. The community charge was a major mistake—an albatross around our necks—and we must get rid of it. I suggest that we get rid of this awful system before 1 April 1991 by a simple repealing Act—a one-clause Bill. We could then increase VAT in the Budget by 7 per cent. Everyone would pay and would pay according to their means, and the horror of the poll tax would be out of the way. It would be a major mistake to have another full year of the tax because it will have to rise considerably, especially as so many people have not paid.
I also draw attention to some of the extravagances that we tolerate in the public sector. Although it is commonplace to criticise bureaucracy and to say that we have too many administrators, we should ask a few other questions, for example, about teachers. We have 70,000 more teachers than we had in 1970—although I do not think that the education results are any better—and 735,000 fewer pupils. Any firm that operated on such a basis would soon be in dire trouble.
Then there is the health service. It is not only the administrators who are causing the problem. We are always boasting that 54,000 more nurses have been employed since we came to power, but we also have 90,000 fewer bed patients. Every time we engage an extra nurse, we lose one and a half beds. That needs urgent investigation: it is high time that the health service was put under proper management.
The Treasury forecasts are abysmal. No wonder: there are no real accounts anywhere in the public sector. The time has come for normal commercial and capital accountancy to be exercised in every sector of Government. We are deceiving ourselves at present; we are, as it were, flying blind.
It is obvious to hon. Members on both sides of the House, if they are honest, that we cannot get inflation down without a rise in unemployment. That is the simple truth. It is therefore not surprising that unemployment is now rising; we have been hiding it for several years by creating all sorts of strange training courses, which have not been very successful. I believe that potential employees can be trained only by the firms that are going to employ them. This training business has been a very expensive racket.
We must think again about how to deal with unemployment. For some reason, the Government have set their mind against the workfare scheme that the Americans have adopted extensively. Unemployment in Britain is set to rise, and shaking out the overmanning in the public sector would cause it to rise still further. We, too, should introduce workfare, instead of allowing millions of people to be paid to do nothing. So much work needs to be done that we cannot afford to continue in this way.
8.3 pm
Mr. Peter Shore: I had not planned to speak, but, as I listened to the various clichés and half-remedies advocated by hon. Members on both sides of the House, I found myself irresistibly tempted to do so.
I have come to the conclusion that we are talking about two different subjects. One is the continuing—although, in my view, declining—problem of inflation. Some of today's speeches have suggested that inflation is the outstanding problem of the time; the right hon. Member for Guildford (Mr. Howell) and the hon. Member for Berwick-upon-Tweed (Mr. Beith) were both so concerned about it that they suggested that we invent a new way of ordering our affairs, enabling an independently reconstructed Bank of England to make all the necessary decisions on our behalf.
Even if I accepted that inflation was the outstanding problem of today, I should find that suggestion rather naive. When all is said and done, the Bank of England is not a computer; it consists of men and women who advise the Governor on monetary policy and interest rates. There is no reason to believe that Bank of England governors and their staff will handle things any better than the Chancellor of the Exchequer and his Treasury officials. I accept that they have a natural bias towards sound money and deflation, but beyond that I would not trust them at all. I see no reason to pay such a compliment to the governors of central banks, either here or abroad.
In this debate, concentrating on inflation really means concentrating on last year's or yesterday's problem. As was made plain by many speeches from hon. Members on both sides of the House—very eloquent speeches from Opposition Members—the main problem now is that of recession turning into slump. No one who has seen the various indicators relating to monetary growth, unemployment trends, short-time working and bankruptcy can doubt that we are in for a severe recession—possibly the nastiest since the 1930s. That should be the focus of today's debate, along with this question: what must we do to halt or reverse the slide, and what instruments should we use, now that we have joined the exchange rate mechanism and are no longer free to use interest-rate or exchange-rate policy to combat the slump, unemployment and the major problem of falling output in manufacturing industry?
It has been interesting to observe the way in which various hon. Members have tried to deal with that question without facing it directly. What must we do in the new, vastly changed economic environment in which we so foolishly placed ourselves last October? The Chancellor's speech came shortly after the announcement of a half per cent. cut in interest rates. I am sure that he knows as well as any hon. Member that that is a pathetic amount in view of the internal needs of the British economy—the needs of British industry and the British public, especially mortgage holders. Why, then, does he not do more? The answer is obvious: if he does more, he can reasonably expect us to drop through the floor of the limit—6 per cent. from DM2·95 to the pound—to which he is entitled under the rules of the exchange rate mechanism.
The same problem produced some remarkable innovations in the thinking of some of the Chancellor's right hon. Friends. The right hon. Member for Worthing (Mr. Higgins) is always well worth listening to, and, as we all know, is a very serious man. He suggested that the only

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option, now that we have lost control of interest rates, was an increase in public expenditure and something resembling an incomes policy—certainly in the public sector, if not in the private sector as well. That surely reflects the change that has taken place in our economic environment since we renounced the right to use the great weapons of economic management, interest rates and exchange rate.
My right hon. and hon. Friends have problems here too, because they advocate a greater reduction in interest rates than 0·5 per cent. They face the problem of what to do if a 1 per cent. or 1·5 per cent. cut takes us through the floor of the ERM, below the 6 per cent. margin against DM2·95. My hon. Friend the Member for Durham, North (Mr. Radice) tried to deal with the problem. He obviously felt unhappy about it. His remedy was that the Germans should revalue and put the deutschmark up. He believed that, if the Germans put the deutschmark up against the rest of the currencies in the ERM, the problem would be solved and we could achieve the changed relationship between our currencies with minimum damage to ourselves.
Those approaches are unsatisfactory, because they do not deal with the dilemma of being in the ERM. I can come clean with the House and say that I am not in favour of membership of the ERM. Therefore, I am not constrained by the fear of dropping through the floor of the ERM by cutting interest rates, nor am I the least bit concerned about the change in relationship between the pound sterling and the deutschmark that would follow. On the contrary, I would welcome that. I am far from being in a minority in the country in terms of serious opinion about what our needs are.
Everyone has referred to the letter in The Times today. It is right about going into the ERM in October at that exchange rate. I have plucked out an editorial from The Times of 14 December. It says:
"The highly political decision to enter the European exchange rate mechanism last October and at an exchange rate of DM2·95 to the pound looked like a mistake at the time. Today this can no longer be doubted after the juxtaposition of yesterday's unemployment figures with the previous day's blustering about interest rates by Norman Lamont in his first Commons performance as Chancellor".
I have great sympathy with the Chancellor. What can a Chancellor do except bluster when we have entered an exchange rate mechanism at the wrong rate? We cannot expect him to come here and confess because that would be folly. The first casualty of entering an exchange rate system is that one can no longer tell the truth. We all know that. That was the great problem that dogged us through the 1960s until we floated in the early 1970s.
William Rees Mogg—no softie on inflation, he—said in The Independent on 11 February:
"The recession will be deeper and investment will be lower because of the destabilising effects of entering the ERM at the wrong rate, and at the wrong phase of the British—and, indeed, of the German—trade cycle."
That is pretty clear and I do not think that the opinions that I have quoted are anything other than representative of the majority of economists of all points of view, whether left or right—if one can say that about economists—and of a large number of British business men, not to mention those in the construction industry, and others.
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I am concerned about the problems of recession and the possible slump that we are now in. I am desperately anxious to avoid the damage to our economy and people that a further bout of deflation and unemployment will bring. I do not think that our problems will be solved by simply lowering interest rates or by waiting for the effects of those admirable medium-term measures of training and education that my right hon. and hon. Friends so frequently urge upon us. Something has to be done in the short term. Interest rates alone, even if they are cut, will not be sufficiently effective to deal with the problem of reviving our manufacturing industry and making a major contribution to closing the vast and unmanageable deficit on our current account trading and our balance of payments. We cannot go on running a current account deficit of over £11 billion or £12 billion a year. If it goes on for another two or three years, we will soon find ourselves a net debtor overall in terms of our national assets.
We are not getting a switch of resources. A deflation sometimes, provided that we are competitive at home, will drive resources into exports and import substitutions to the benefit of our current account balance. That is not happening on the scale that is needed. The output of our manufacturing and other industries, which is no longer being bought by domestic consumers, cannot be switched effectively into export markets because the price is wrong. We know that the only way of dealing with the problem of over-valuation is to change the basic exchange rate of the pound against the deutschmark. That is the one way open to us, just as it is the one way open to the United States to change the dollar in its relationship to the yen and the mark in order to close its vast current account deficit.
We are not competitive now, and we must become so. The problem has arisen for us in the exchange rate mechanism. As I have said, one cannot be a member of the ERM and still have a policy of running one's own exchange rate or interest rates. However, one can temporarily agree to freeze those policies if one is in a mechanism within which one can change from time to time. In other words, it is possible to correct an overvalued exchange rate in the ERM because there is still a mechanism—it is not easy to operate—that allows currencies to realign against each other.
Anyone who is contemplating further steps towards economic and monetary union where there is to be a permanently locked exchange rate and a single currency had better look carefully at what is happening in Britain today. They had better look carefully at what happened in 1980, 1981 and 1982, and they had better have a jolly good look at what happened when Winston Churchill put us on the gold standard. They should look at the agony that overtook the Government of that day—I believe that it was a Labour Government—as they attempted to escape from the appalling problems.
I strongly urge the Chancellor to think hard about the decision taken by his predecessor, now the Prime Minister, and I hope that he will be courageous in his conversations with him and bring about the change in the basic rate of the pound against the deutschmark that lies at the centre of our affairs.
8.18 pm
Mr. Quentin Davies: I congratulate my right hon. Friend the Chancellor on his announcement today and on his strong nerves. One needs

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strong nerves if one is to fight inflation effectively, because one has to stand up to a great many pressures, some of which have manifested themselves in the debate. My right hon. Friend the Chancellor has been right all along to say that interest rates must not come down further and faster than is consistent with our counter-inflationary strategy. He has been especially brave to say that the arbiter of whether interest rates can come down further with safety should be the market. He has accepted the discipline of the market bravely.
The fact that the market responded positively today—
Mr. Budgen: Does my hon. Friend know how much intervention there was today?
Mr. Davies: I should be a very rich man if I knew how much intervention had taken place in the foreign exchange markets on any given day.
The fact that sterling did not depreciate against the deutschmark two weeks ago when the Germans increased their Lombard rate, and that the market responded so positively today to the reduction of half of 1 per cent. in base rates, is a considerable tribute to the success of the policies adopted by my right hon. Friend. I hope that he continues in the same vein and that if he believes that additional expansion is necessary he will look as much or more to fiscal measures as to monetary measures in the weeks and months ahead.
I agree with my right hon. Friend the Member for Worthing (Mr. Higgins) about the desirability of trying to advance certain types of capital expenditure in these circumstances. If we are to increase public expenditure to generate some expansion of demand, it is sensible to target it on the construction and infrastructural sectors, for which the employment multiplier of any additional spending is high and for which the import multiplier tends to be low. If we know that we shall have to undertake expenditure on certain capital projects—my right hon. Friend the Member for Worthing mentioned hospitals and I might add projects such as converting the A1 to a motorway or building a fast rail link between the channel tunnel and London—it must make sense to attempt to undertake them now, when capacity utilisation rates are so low, and not to wait for the next boom.
The most remarkable aspect of this afternoon's debate has been the sense of gratification and enjoyment that some Labour Members seem to derive from the fact that we are in a recession. It is foolish of them to adopt that attitude, representing as it does the worst sort of political short-termism—
Mrs. Margaret Beckett: The hon. Gentleman cannot get away with that. Opposition Members resent the recession bitterly because it was caused by the policies that the hon. Gentleman supports and because our constituents suffer most from it.
Mr. Davies: The trouble with that is that the hon. Lady's colleagues—we have not yet heard her speech—have tended to imply that, had they been in charge, things would have been better. But the evidence that has emerged from today's debate confirms the impression, widespread outside the House, that, had the Labour party been in charge, things would have been a great deal worse.
I offer a few examples of that. We have already considered interest rates. It has been pointed out that in
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1988, when, arguably, the economy was overheating, far from demanding an increase in interest rates, the right hon. and learned Member for Monklands, East (Mr. Smith) demanded nothing of the kind. Indeed, around that time he demanded a further reduction in them.
It is a great deal worse than that. As long as I have been in this House, and no doubt for many years before that, no Opposition Front-Bench spokesman has ever done anything but demand reductions in interest rates or resist increases in them—irrespective of the state of the economic cycle, of the monetary aggregates or of any other indicator. The Opposition have placed themselves in the position of a man who purports to know how to drive a car and believes, irrespective of the direction the road takes, that the steering wheel must always be turned in the same direction. Such a person is not someone to whom the country would want to hand over the direction of its affairs.
It is foolish to derive political pleasure or gratification from a recession. Trade and business cycles have always been with us and always will be with us. I do not believe that the hon. Member for Derby, South (Mrs. Beckett) or the right hon. and learned Member for Monklands, East seriously wish to imply—I hope that they will never be drawn into the temptation of implying—that should the electorate impose a Labour Government on us after the next election—which God forbid—we shall somehow enter a qualitatively new phase of economic history, and that the trade cycle will no longer press upon the brow of mankind. If they imply that, they will destroy whatever reputation they still may have for economic judgment. I notice that the hon. Member for Derby, South is not going to contradict me.
I should have thought that the Labour party would use an occasion such as this debate to try to demonstrate to the country that the economic management of the nation would be better in its hands in all the ups and downs that we shall face in the future, just as we have always faced them in the past—but on that score the Opposition have done themselves a disservice. It is clear that their judgment has been consistently wrong on interest rates, so they have no serious standing from which to tell us how we should manage monetary policy, as at every juncture they have adopted the same automatic, mindless, knee-jerk reaction of claiming that interest rates are too high and should come down. That is not the way to manage a sophisticated economy—or, indeed, any economy.
It does not stop there. The Labour party has plans for public expenditure. Again, at every juncture and regardless of the state of the business cycle, the Opposition clamour for more public expenditure for every imaginable good cause—and even for a number of causes that not all of us would regard as good. Of course they want more public expenditure on the NHS and on education and training —the list grows longer as Parliament proceeds.
This afternoon, we have been told of two areas on which the Opposition would spend more public money irrespective of whether the economy could afford it: pensions and child benefit. Worthy as those objectives might be, it is extraordinary to say that we should have more public expenditure regardless of whether the economy can afford it. What do we think of a man or woman who says that he or she is planning further expenditure, irrespective of whether they can afford it? The answer is that such people appear in the bankruptcy courts every week.

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This afternoon, Opposition Members repeatedly said that we need higher taxation. The Labour party offers the country a prospectus of higher income tax and higher marginal rates—up to 59 per cent. in the latest proposal. Have the Opposition seriously considered the economic damage that would be done by re-establishing this country as the most highly taxed nation on the European continent? We should be higher taxed even than Sweden, since the Swedes have learnt the lesson and have recently reduced their taxes. In case the hon. Member for Derby, South has any doubts about that, I repeat that 59 per cent. would establish this country as having the highest marginal rate of tax on the European continent. All sorts of individuals—inevitably, by definition, those who would add the greatest value to the economy—would be tempted to pursue their activities elsewhere.
I take it that the Labour party does not wish capital gains tax to fall behind—it would hardly wish to favour capital gains over income. No doubt the higher marginal rate of capital gains tax would also be increased to 59 per cent., or even more. Has the Labour party even begun to think through its proposals and to consider the enormous economic damage that would be caused by increasing the capital gains tax? For example, a venture capitalist who was investing in his business or someone else's and who was faced with an increase of perhaps 50 per cent. in capital gains tax rate would require—depending on the pay-back period—a 200 or 300 per cent. higher pre-tax return to ensure that there was an equivalent post-tax return. Few investment projects would meet that threshold, investment would not be undertaken and the economy would be damaged.
It does not stop there. The Labour party has what it calls an employment policy to establish a statutory minimum national wage. Remarkably, Labour Members also tell us—apparently with great sincerity—that they would like more rather than less employment. Those two statements can be reconciled in only one way: on the assumption that the Labour party has not learnt an elementary principle of economic science—if the price of a commodity is increased, demand for it is reduced. Clearly, if the price of labour is increased, demand is reduced, resulting in less employment.
I hope that this interesting debate has been closely followed by the electors. If it has, they can draw only one conclusion about the party to which they should entrust the management of the economy, with its inevitable ups and downs. We need a pair of hands that are reliable and we have shown that, over the past 10 years, in all circumstances, the Conservative party has come up with the best record for economic management in the European Community.
8.32 pm
Mr. Peter L. Pike: I disagreed with almost everything that the hon. Member for Stamford and Spalding (Mr. Davies) said. He made a poor contribution and got the basic position totally wrong. The Government's motion shows that they do not live in the real world and do not understand what is going on. When Conservative Members speak as the hon. Member for
926
Stamford and Spalding spoke, I understand exactly why the Government tabled the motion. They have failed to recognise the problems facing the country.
I should like to take up some specific items in the speech of the hon. Member for Stamford and Spalding. He referred to the Labour party's policy on a national minimum wage—a policy which I strongly support and which the Labour party should have supported many years ago and implemented when in government. I represent and live in a part of the country where low wages are traditional. I should like Conservative Members to say, for a change, that they believe in fair wages. We should be trying to achieve that. Many people live on totally unacceptable wages. Some people in my constituency who are married and have children work a 40-hour week for £50, and some work for even less. That is an outrage. I accept that they can get family credit but it is deplorable that such wages should be paid in 1991.
The hon. Member for Stamford and Spalding argued that low wages would save jobs. If one asked people who live in areas with traditionally low wages whether those wages have saved jobs, they would say no. The population in the area covered by the former county borough of Burnley, which has been amalgamated into the bigger new borough of Burnley, is just over half what it was in 1921, because people have been leaving the area. We have changed the type of employment provided in Burnley, but many factories that replaced the cotton and coal industries have gone out of existence. We have moved into service industries, but the people involved are under pressure and are losing their jobs.
The former Prime Minister, the right hon. Member for Finchley (Mrs. Thatcher), often said that low pay was better than no pay. It is time that we started to talk to everyone who works for a living and to ensure that they get fair remuneration for their work. That is an essential ingredient in the Labour party's policy of a national minimum wage.
The hon. Member for Stamford and Spalding warmly welcomed the 0·5 per cent. reduction in interest rates, as we all do. However, there will be no leaping for joy tonight in my constituency. The industrialists will not feel any great benefit from a mere 0·5 per cent. reduction, and mortgage payers will not get any immediate advantage. The Government must do much more.
The hon. Member for Norfolk, North (Mr. Howell) called the poll tax an albatross around the Government's neck. He said that it should be abolished as soon as possible. I agree, although I do not agree with its formula or with its alleged simplicity. The Government must recognise that the poll tax is basically flawed because of its total unfairness. The quicker it is scrapped the better.
A few weeks ago, the Government announced that there would be additional assistance for people who would lose more than £2 a week because of the poll tax compared to their last year of paying rates and that there would be a different basis for the calculations. Although the Government's measures will be a tremendous benefit to many of my constituents, I believe that they were introduced in the short-term interest of electoral advantage. The Government have introduced an arbitrary method and many people are worried that it will be a temporary measure for this year. There are no assurances about what will happen next year.
My right hon. and learned Friend the Member for Monklands, East (Mr. Smith) said that it was increasingly

927
evident that, when figures start to give the wrong answers, from the Government's point of view, the information is no longer available. I want to give a couple of examples to prove that what he said was absolutely true.
On several occasions I have asked for information about the change in output in the north-west between 1979 and the time for which the latest figures are available, and I have put similar questions about investment and employment in manufacturing industry in the area. In the case of jobs, there was a reduction of 38 per cent.; in the case of investment, the reduction, in constant terms, was over 30 per cent. For a period, the Government managed to get the national figure for investment above the 1979 figure, but in many key manufacturing areas, even on the basis of the best figures, they had not reached the levels of 1979. In the north-west, the figures for investment and for output were both down by more than 30 per cent. That underlines the problem that the Government still fail to recognise. Such questions can no longer be asked.
There is another matter about which I want to question the Government. It is one in respect of which they no longer produce figures because the answers that would be forthcoming are not answers of the type that the Government would wish to give. Just over 18 months ago, I went to Reading with the Environment Select Committee. As we were passing through the town, I happened to notice the wages that were being offered in the jobcentre. When I found out the wages for comparable jobs advertised in jobcentres in my constituency and in other parts of Lancashire, I found out that they were a fraction of those that I had noticed. I recently tabled a question on this matter, but the answer that one now gets to such questions, is "This information is no longer collected centrally." As soon as information that is being collected ceases to suit their purposes, the Government stop producing it.
I turn now to my reasons for thinking that the Government's record over the past 12 years has been one of failure. I do not welcome the current recession. It is a great tragedy, but it is the Government's fault; they must accept full responsibility for it. The tragedy is that they have failed to learn the lessons of the recession of the early 1980s. They have failed to recognise the need for investment in industry and for investment in training and education with a view to the provision of a skilled work force. [Interruption.] Let me say to the hon. Gentleman who intervenes from a sedentary position that, sadly, this country's record of investment in its greatest asset—its people—is appalling by comparison with those of the countries with which we compete. It is time the Government did something to get it right.
When I refer to a skilled work force, I include skilled management. At certain levels of management there is still a lack of skill—a lack of people who are able to motivate and make sure that we can compete successfully. It is extremely important that we tackle that problem.
There is something else that the Government have failed to recognise. When industries are in danger of closing down—and industries do close down—there is no point in talking about switching to the export market goods that are not required on the home market, or of switching to the home market goods that are not needed on the export market. Once industries have gone, they are gone, and their products no longer exist either to sell on the home market or to export or for import substitution. Industries have been allowed to disappear.
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The hon. Member for Macclesfield (Mr. Winterton), in putting a question to the Prime Minister the other week, I believe put his finger on the difficulties of manufacturing industries. We have gone into the ERM with our currency tied to the German mark. The Government alone failed to recognise that the level was too high. All those from the industrial and commercial sectors that one meets say continually that it is too high. The only people who defend it are the Prime Minister and his friends in the Government. If we have got the rate wrong—if it makes imports cheap and exports dear—we shall continue to fail.
For far too long, the Government have failed to recognise that manufacturing is this country's bread and butter, and that the regions need far more investment. In saying that, I am in no way dismissing the importance of the service industries or tourism to the national economy. But this is a manufacturing nation, and its future depends on the ability of manufacturers to compete and to export more. Until we get that right, the economy will continue to decline. Interest rates are a major factor in preventing investment, together with the exchange rate problems that industry faces. The Government will have to face up to these problems.
My hon. Friend the Member for Carlisle (Mr. Martlew) referred to repeated newspaper reports of bankruptcies and other such problems. In my local newspaper, I see, week after week, reports of redundancies. Firms affected include British Aerospace in Preston, which employs workers from Ribble Valley, Philips, Main Gas, Skipper's garage, Compound Engineering and Endsleigh Insurance. I could spend the rest of the time allowed for this debate listing firms that have closed down and firms that have had to make people redundant. Let me give the unemployment increases in neighbouring constituencies: Pendle 16·9 per cent., Hyndburn 10·3 per cent., Burnley 10·1 per cent., Rossendale and Darwen 14·8 per cent., Calder Valley 23·4 per cent., and Ribble Valley 6·9 per cent. Those increases all took place between March 1990 and December 1990. That is the Government's record.
During the next few days, I shall spend quite a bit of time in Ribble Valley. I know what problems are being faced by people there who can no longer afford their mortgages. I know also of the pressure on industrialists in that constituency. I am thinking of firms such as Ribble Cement, which depend on the construction industry, which is under great pressure. I know of the pressure on farmers, who, in cash terms, are getting lower prices for livestock than they were getting two years ago. In real terms, the situation is even worse. Farmers who have borrowed to buy livestock or premises are being squeezed very hard by interest rates. They know that the Government have failed. They know that the Government, even with a change of leadership, have no answers to the problems.
The Government have failed to tackle the problems, and they will continue to fail. When the general election comes, they will fail yet again. The people will elect a Labour Government to deal with the problems and to restore Britain to prosperity.
8.48 pm
Mr. Mark Wolfson: As other hon. Members wish to speak, I shall be brief.
I shall pay particular attention to a point made by the right hon. Member for Bethnal Green and Stepney (Mr.

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Shore), who brought us back to the nub of the question that has arisen throughout the debate—that we are now in a new position because of our membership of the ERM and that new thinking must be brought to bear now that there is an additional constraint with regard to interest rates and the use of them. This debate has made it clear that economics is an art rather than a science.
Another point that comes over to me time and again in debates on the economy is that, for more than 40 years, Britain has struggled continually with the problem of how to handle sterling, both as an internal currency and as an international currency. That problem will not go away. There is now an additional constraint, and we have to take action within that.
Many hon. Members have referred to the fact that inflation is falling quickly, and I support that view. It is essential that it does so because British exports of goods or services cannot otherwise be competitive. Therefore, I fully support the Government's attempt permanently to control and squeeze out inflation.
I represent a southern constituency in which there is not a great deal of manufacturing activity. However, my constituency contains a number of small businesses and I should bring home to my right hon. and hon. Friends on the Government Front Bench the reality of the recession and its effect on jobs even on the most buoyant side of our economy. It is essential that we bring down interest rates as rapidly as is prudent with sensible rectitude. Today's move is welcome, but it is a small move. I hope that we shall see a continuation of such movement in a very short time.
Many of us still wonder whether we entered the ERM with an overvalued pound. The discipline of operating within the ERM and the limits that that places on us can be healthy in the long term, but it must not be a form of slavery. We still have some room for movement if that should prove to be absolutely essential. My right hon. and hon. Friends must keep a close eye on that point and not be over-obsessed with the idea that moving outside the present band would be a disaster. Our exports are under great restraint at the moment.
For many years, I have been concerned about the fact that Britain has a tendency—both among individuals and businesses—to spend highly. I have not been happy with our somewhat purist view that credit control should necessarily be anathema to the Conservative party. It might be heresy to air such a view on the Conservative Benches, but I believe that Conservative policies are not "never for never". Within the new constraints that the ERM places on what we can use interest rates for, it may be necessary to consider instruments that we have previously put aside. Interest rates are a blunt instrument. I am not happy that, 10 years after the last recession, we have had to return to a very hard regime in order to squeeze inflation down once more. We must learn from this second experience and perhaps introduce new thinking in the future.
If we accept that business cycles will occur in the future, we cannot remove the tendency to inflate even if a Conservative Government continues in power. I have no confidence that we would not proceed to very high
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inflation under a Labour Government. Inflation will still cause problems, and we need all the possible instruments at our command to control it.
We could argue, as my right hon. Friend the Member for Blaby (Mr. Lawson) did in the past, that borrowing in a freer money market like the one we have established over the past 10 years, requires education, and that people must learn the hard way not to borrow unreasonably. That is a rather over-optimistic view of human nature, particularly in view of the huge barrage of advertisements for bank lending. Indeed, I received a letter today offering a loan of £10,000, apparently at the end of a telephone call. We cannot simply argue that individuals must resist such advertisements.
I hope that greater consideration will be given in the Budget to ways in which we can encourage saving. We must turn Britain from a spending society into a society in which saving is more heavily emphasised. The TESSA plan is a step in the right direction, but I should like to see more radical approaches and greater encouragement in terms of tax incentives to encourage saving.
We need new thinking in a new environment. I support the necessary, but very hard, measures that the Government have taken so far. Inflation is falling and it will continue to fall rapidly. We must now stimulate the economy as quickly as possible to stop the recession turning into a dangerous slump.
8.55 pm
Mr. Keith Vaz: I want to bring the Chief Secretary to the Treasury back to reality, which my right hon. and hon. Friends have done in their contributions. I want to bring to the attention of the House the progress of a firm in my constituency called Bridgeport Manufacturing, which is in Forest road, in Leicester. In 1986, it received the Queen's award for industry.
Bridgeport Manufacturing is the largest machine tool manufacturer in the country. Only a few months ago, the then Minister for Industry visited the firm to congratulate it on its great achievements in exports and its contribution to the British economy. In the past few weeks, the managing director of that company has had to announce more than 100 redundancies. That is the biggest set of redundancies that the company has ever had to make.
I visited the factory two weeks ago last Friday to witness the effects of the Government's policy on that firm. No one was working in Bridgeport Manufacturing on the day that I visited, because there was no work for the workers. The managing director is a great Conservative party supporter and he told me that he could not imagine a worse time than the present for his company and the rest of industry in the east midlands.
The Confederation of British Industry in the east midlands today published a survey which shows that more companies have gone bust in the area than at any time in the region's history. That is a direct result of the Government's policies.
Nothing that the Chancellor has said will do anything to reassure the management of Bridgeport and the management of other firms in Leicestershire. They report a record fall in expenditure on their products. Spending on their products was down by about 40 per cent. in the past year. They have informed me of their fears about what will happen as the year goes on.

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Of course we welcome the 0·5 per cent. reduction in interest rates, but that is precisely the line that was argued by my right hon. Friend the Leader of the Opposition when he faced the Prime Minister on Tuesday. He categorically said that the level of interest rates was so high that it was crippling British industry and making the recession even more damaging than it has been of late. Clearly, 0·5 per cent. is not enough. It is not enough to save the textile and footwear industries in the east midlands, and especially in Leicester. One third of jobs in the textile industry and a quarter of jobs in the footwear industry are based in the east midlands. In 1979, 371,400 people were employed in the textile industry, but, by 1990, that figure had dropped to 206,000. In 1979, 68,000 people were employed in the footwear industry, but that figure dropped to 44,800, a reduction of about 43 per cent., in the past 10 years. Therefore, 188,000 jobs have gone for ever.
It is impossible for the Government to legislate or to bring forward any policies that will result in any success for those two industries. Time and again, manufacturers have told me and to my colleagues that there must be a dramatic cut in interest rates. They suggest 2 per cent., but it must be even more than that if the Government are to save those two industries. Eight jobs in those industries are being lost every hour.
Nothing in the Chancellor's speech would give any comfort to national health service consumers in Leicester. We are still relying on a jumble sale health service, with people having to launch appeals for even the most basic necessary equipment for our two biggest hospitals, the Royal infirmary, and the Leicester general hospital. Nothing in the Chancellor's statement will ease the concerns of staff in the national health service or those who happen to use it.
We have record homelessness and home repossessions in Leicester. The Alliance and Leicester building society, one of the largest in the country, announced only yesterday that 49 families' homes were repossessed last year, compared with three families' homes being repossessed the year before, and it estimates that matters will get even worse.
The Government simply do not care. The Chancellor and the Treasury team have grand titles—for example, Chief Secretary to the Treasury, Financial Secretary, and Economic Secretary—but they do not create jobs. They do not provide resources that would help the economy of Leicester or of the east midlands. All they do is create misery. This is a time of great violence throughout: the world, but we forget about the Government's violence when old people's homes are without heat in the winter, when schools are without books and are literally decaying before our eyes because of insufficient resources, and when the health service is in deep crisis. Nothing is being provided by the Government to help the people who live in Leicester, East, and nothing is being done to provide any more resources.
When my party is in government, as it surely will be this year—that is my estimate of the date of the next election —no Government in the history of the country will have faced the economic mess that we shall inherit. Conservative Members do not need to hear that from me. When the Chief Secretary returns to his constituency this weekend, there will be no garlands welcoming him in Putney high street. Those who once lived in prosperous Putney will tell him exactly the same story as the people of Leicester have told me and other constituents have told my
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hon. Friends: the Government are a disaster, they have provided no help for people, and the quicker they go the better.
9.4 pm
Mrs. Teresa Gorman: I wish to express my concern for the plight of many young people who are finding it difficult to meet their mortgage payments, of small businesses which are having terrible trouble with overdrafts and of large businesses which are struggling to meet their payroll. Those are serious problems. I sometimes think that, in this sheltered world, we forget the misery that our economic policies inflict on ordinary people. It is good to let them know that some of us feel guilty and upset on their behalf mostly because, as Back-Benchers, we can do little about it. I want to make some practical suggestions; I hope that the Chancellor will be here in time to listen to them.
Early in the debate, when the Front-Bench spokesmen were at each other's throats and everyone was at their throats, there was much banter. The right hon. and learned Member for Monklands, East (Mr. Smith) was asked for his solution and his alternatives. No one has come up with alternatives, and we still have the dilemma of high interest rates, recession and inflation.
Other countries—our competitors·are successful, with low interest rates and low inflation; America, Japan, Germany, Austria and Switzerland all have something in, common—the minimum of political interference in the banking structure and the maximum opportunity for their currencies to respond to what are colloquially known as market forces.
Politics messes up economies. It does not matter which political party is manipulating the scene, it is politicians who make a muck of things. If we really wanted to control inflation and the recurring cyclical problems, we would move away from artificial political control, including the ERM and the nonsense of a gigantic central European bank, back to an independent banking structure. We had that in Britain. There was a time when interest rates bobbed along at 2 per cent. to 4 per cent. Before the turn of the century the Government nationalised the banks and the Bank of England came into existence.
Mr. Budgen: In 1945.
Mrs. Gorman: I take my hon. Friend's point.
We once had a much more liberal banking structure and a much freer economy. As a result, we had much lower interest rates. Of course it will be difficult to move from where we are now, as many hon. Members have said, to where we should be if we truly want an economy with low interest rates and steady growth. In the long term, there is no alternative. Hitching our bandwagon to an outside organisation—be it the Bundesbank or any other—to do for us what we could not do for ourselves and control our economy, is nonsense.
The German economy will go through bumpy times in the attempt to amalgamate the country and bring the east German money in from the cold. Germany will have many problems, the last of which we have not seen. As its problems increase, they will reflect on our economy. We have no idea what the effect will be on our domestic position.
Not everything is gloom and doom. Although we all deplore the number of people becoming unemployed, we

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have to remember that the great majority of our citizens are still in jobs. Not every aspect of the economy is in decline. In my constituency, 5,000 new jobs have just been created in a big new marketing centre. The docks at Tilbury, on the border of my constituency, having been liberated from the dock labour scheme, are doing very well, with new businesses and lots of new jobs coming on stream. So there are spots in the economy which are doing well.
When we come out of the difficult patch, our economy will recover much more quickly than some people think. The British economy relies to a larger extent than many hon. Members realise on the financial, banking and international money markets, which recover much more quickly than manufacturing industry. They are an important part of our economy, and are not normally taken into account when considering our position.
We can give people facing personal problems some practical suggestions and help. Young people with a large mortgage who do not know how to keep up the payments could easily take in one or two lodgers. I made that proposal the other day, in a speech on a 10-minute Bill. In the Budget, the Chancellor could allow people to earn up to about £100 a week without the bother of the tax man and all the regulations, which would help them to meet their mortgage payments. That is a good, practical suggestion.
There are many young wives and young women with children who could go out to work and help with the family budget. There are still part-time jobs that they could take if the Chancellor would help women with child care, which would solve another practical problem. It would be sensible for the Chancellor to encourage more savings by announcing in the Budget that interest will not be charged on them. That would give people a greater incentive to save. Although times are hard, they could be made better by good, common-sense, practical suggestions.
I know that the Chancellor has to go along the path that he has set himself, and that we have to go through this period of tears in order to come out into the sunshine on the other side, but, in the short term, the Chancellor could do the country and himself much good by taking account of the practical realities of what people are going through, and giving them an opportunity to help themselves out of their difficulties.
9.12 pm
Mrs. Margaret Beckett: It is three months since the former Chancellor rose to present the autumn statement to the House. When I returned to the text of the statement and its accompanying documents, it was almost like stepping back into another world—a strange, closed world, occupied by the Government, in which a recession might lie hidden in the figures and tables in the back of the document. In that world, the recession must not only be excluded from the text, but be denied any credence or recognition.
I do not know whether you, Mr. Deputy Speaker, are familiar with the concept of a retreat. It is a sort of withdrawal from the world for a period of peace and meditation during which one concentrates the mind on higher things. As I read not only the autumn statement but
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the words with which it was introduced by the then Chancellor, I increasingly got the feeling that the Government had, at that point, gone into retreat. That would tie in with their approach to the problems besetting our economy, as far as the Government admit the existence of such problems. They behave as though the recession were due to an act of God, a well-known get-out clause in insurance policies.
The Government either deny with well-simulated indignation that our problems are as real or as great as we suggest, or they look around in surprise as though searching for a culprit. There is certainly no visible sign of the Government taking any responsibility for their actions, with one outstanding exception, to which the right hon. Member for Worthing (Mr. Higgins) referred. The exception was that little mistake that the Government admitted making in 1987, when they cut interest rates. That step was then being advocated by the Opposition as well as the Government, and was taken at that time in all the major economies.
However, in no other economy has that step led to a recession on the size or scale of ours. We have never been able to get the Government to come to terms with how it was that, if they made only one little mistake and have done nothing else wrong since, that step did not have as disastrous an effect elsewhere as it did here. Whatever difficulties countries such as Japan, Germany and France and Italy have, the statistics show that none of them has difficulties on the same scale as ours.
I shall remind the House how reluctant the Government have been even to admit that problems exist. When the then Chancellor, now the Prime Minister, introduced the autumn statement, he became very huffy with my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) when he used the word "recession". He said that my right hon. and learned Friend
"used the word in the way most calculated to alarm".
The then Chancellor continued:
"The right hon. and learned Gentleman's use of the word recession conjured up an image quite different from the reality of what is happening or is expected to happen in future."— [Official Report, 8 November 1990; Vol. 180, c. 125.]
Let us consider what is happening or is expected to happen. From every quarter of the land comes the cry not just of recession, but of severe recession from every type of business—large and small, manufacturing and services. The Government undoubtedly have a quality all of their own. In their first recession in the early 1980s, they destroyed about 20 per cent. of our manufacturing base. This time, affecting south as well as north, services and financial industries as well as manufacturing, they are going, as a cynic in the City said to me the other day, for the "double whammy". They are picking up what they missed first time round. The reality of what is happening presses in on the House, if not on the Government, from every side.
The CBI survey made its terrifying forecast of an investment fall of 16 per cent. The British Chamber of Commerce, using figures from the Department of Trade and Industry, showed that last year was the worst ever for insolvency. Trade Indemnity, the credit insurance company, predicted a further 25 per cent. rise in business failures this year, following a 77 per cent. increase last year. On top of that predicted fall in investment, there is growing evidence of other problems. In industries such as construction, for example, companies are cutting training.

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That is damaging not only in itself, but will make it harder for them to meet the demand which will surface when the recovery comes. Apart from being damaging in themselves, skills shortages feed inflation. Those shortages were evident not only in construction, but elsewhere even before the full impact of the recession, as a Manpower survey in the middle of last year made clear, showing that 44 per cent. of companies were then facing skills shortages.
That is just one of many signs that either nothing is being done to tackle our problems or that what is being done, such as cutting investment and expenditure on training, will make matters worse. When, against the stark reality of what is happening to British business, we turn back to the autumn statement, it seems almost an irrelevance. Its forecasts are wildly optimistic. Such information as can with difficulty be distilled from its pages shows that the prescription it offers by way of a public spending programme suggests that the Government have learnt nothing from the folly of the 1980s.
I look for a moment at the background against which this statement is set—the state of our economy and public services, and the incompetence and waste over which the Government have presided for over a decade. At the weekend, the Prime Minister said:
"Education is at the top of my agenda."
Many people in education, particularly teachers, must wonder where he has been for the past few years. We know: he has been in the Treasury, where he has had a hand in no fewer than four autumn statements. What evidence do we find for the condition of education, which is so close to his heart? There are more than 6,000 teacher vacancies in our schools, and 20,000 teachers leave the profession every year. Capital spending is down by a third in real terms since 1982 and there is a backlog of repairs, depending on who one heeds, of between £3 billion and £4 billion in our schools. Because of the Government's dogmatic pursuit of opting out, we find continuing waste calculated at up to £600 million because opting out means that schools will be kept in existence, when the economics suggests that they should be closed.
What is the remedy offered in the autumn statement? It shows that central Government plan an increase of £77 million in real terms to set against that enormous capital backlog for all our schools. For city technology colleges, another of the Government's pet projects, there is an almost comparable increase of £50 million. The autumn statement shows that the Government plan to cut expenditure in real terms between 1990–91 and 1991–92 and to transfer the burden to local authorities. I am not sure how that fits with the plans of the Secretary of State for the Environment for the poll tax. Perhaps that is why there has been a slight hiccup. In real terms, the Government intend to spend £198 million less than they planned in the 1989 autumn statement—yet education is the issue at the top of the Prime Minister's personal agenda.
It would pay us to look a little more deeply into the record of the 1980s, during which—whatever the results over the whole period—the Government claim periods of great economic success; indeed, an economic miracle. Let us consider transport. At the end of the 1980s, every class of road is in a worse condition than at the beginning of the decade. The Hidden report following the Clapham rail crash called for £1 billion to be spent on safety measures. The Government promised the money for those safety measures, but took it back from the public sector
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obligations—with effects that have become increasingly clear, and about which the House has been complaining for the past few days.
Public sector housing starts at 14,000 are down 65,000 on the beginning of the decade, and the number of housing association starts has also fallen. Meanwhile, homeless households numbered more than 132,000 by 1989— [Interruption.] I can hear the Economic Secretary muttering. I remind him that it costs more to keep homeless people in bed-and-breakfast accommodation than it does to rehouse them. That is waste, incompetence and mismanagement by the Government, not additional spending. There is a £15 billion outstanding bill for repairs to public housing, but the number and the value of grants available for those repairs have been reduced.
The Chancellor referred to the Government's record on the national health service—something with which the country is all too familiar. Waiting lists are heading towards 1 million. Every time we debate these issues, the Government trot out rolling figures. However, when we look at the small print and consider the implications and the impact of inflation, in fact there is very much less, and often very little, for patient care. That ties in with everybody's experience of the health service—those of us who use it, anyway.
There has been a tremendous shift in resources over the economy as a whole, and in the social security budget in particular, from the less well-off to the better off. I shall pick out one example from that budget of what I consider to be an absolutely scandalous waste—the expenditure on the 2 per cent. incentive to persuade people to gamble with their retirement pensions. It is what the Government like to call the incentive for people to take out personal pensions. The costs of that now run at £600 million to £700 million a year, and by 1993 the total is likely to be £2·4 billion. That is not the knock-on cost or the effect of what happens to the national insurance fund because of the contributions that now come out of it; it is merely the additional incentive to persuade people to gamble with their retirement income. That £2·4 billion is either a waste of money because it is a good buy, or it is a scandalous exploitation of the public if it is not. As the Audit Commission said, there is a net overall cost of £6 billion.
I have lost track of how much we are pouring into the black hole of the poll tax. Is it £3 billion or £4 billion? It goes up by about £1 billion every time the Secretary of State for the Environment turns round. It is a colossal waste of money. I can tell the Government that, even if they put £15 billion into the poll tax, they will not make it popular and they will not help their electoral chances.
All those are examples of how the Government have wasted their time and our money during the 1980s, with a cumulative damage that the autumn statement fails to address. Of course, there is another matter related to their record of investment in the national interest during those years. We must consider Government spending without asset sales, because that is the best way to consider it. Even under this Government, there must come a point where there is nothing left to sell. In real terms, general Government expenditure since 1984 has been almost constant at about £200 billion at 1989–90 prices.
Let me put that another way. It means that the level of investment that the Government have been prepared to provide from the nation's earnings has not risen even during the most prosperous years to which the Government lay claim. Even during the boom years, the

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money that they were prepared to make available from the nation's ordinary earnings, as opposed to what might be considered the windfall gains of privatisation—certainly not to be repeated—has not risen.
Now we are told that, under the new regime, the Government want to improve not only the quality but the quantity of public services. But if that is their record in the boom years, how can we possibly believe that, in the years which lie ahead, in which nobody predicts an imminent boom, the Government will repair the neglect to which those previous policies during the boom years have led and which we can so clearly identify?
Before we leave the autumn statement, let us look again at the area of spending most directly related to the recession—spending on training and industry. The plan for 1991–92 shows a cash cut of £116 million on what was spent on the outturn on training for last year. In real terms, that is a cut of £300 million in the provision that the Government are prepared to make for training.
Nor is that a one-off. Between 1989–90 and 1993–94, looking at the pattern of the Government's plan, they plan to cut £1 billion in real terms from the employment budget—26 per cent. of that budget. That is despite the fact that 62 per cent. of our industrial work force are unskilled, compared with 38 per cent. in Germany, 21 per cent. in Italy and only 20 per cent. in France.
The Government justified the cuts in last year's autumn statement by saying that it was all right to cut spending on employment and training, because unemployment was falling. We pointed out that they were cutting spending per head, but nevertheless they said that it did not matter; it was all right because unemployment was falling.
One of the few clear things to emerge from the Chancellor's speech is that even the Government do not expect unemployment to continue falling. So how come they are still cutting expenditure on the employment budget and on training? They have come up with a new reason. They now say that it is not because unemployment is falling that they are cutting expenditure; it is because they do not think that training is a good idea for the unemployed; it would be better if they had jobs. That is not quite how they put it—they use more civil service-ese. They say that training is not the most appropriate solution to the problems that the long-term unemployed face in getting back to work.
There is nothing that any of the long-term unemployed would like better than jobs. Sometimes, of course, good training might be their best option, but even then, I suspect that, if most of them were offered the option of good training or jobs, their faith has been so sapped by the Government's years of cheap exploitative training that they would probably pick the jobs.
The fact is that that option is not remotely on offer. On the most simple basis, there is about one vacancy for every 10 people unemployed, and that is before tomorrow's figures come out. Recent surveys conducted by some of my hon. Friends in the south-east suggest that there is one vacancy for every 30 people who are unemployed.
It is, to say the least, disingenuous of the Government to claim that they can cut the employment budget because the unemployed do not need training. Certainly it is a total
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neglect of the nation's interest. Again, that comes over from the Select Committee's remarks. Its adviser, Christopher Johnson, says:
"Now that unemployment is rising, it is surprising that training is still being cut back … in view of the inability of the private sector to increase training expenditures at a time of financial pressure."
Alongside those cuts in the training budget are cuts in the budget of the Department of Trade and Industry. They amount to £250 million between 1990–91 and 1991–92 in real terms. Those cuts in training and in the budget of the Department of Trade and Industry should be restored at the earliest opportunity, and certainly within the period covered by the autumn statement. That could be done by abolishing the wasteful and damaging Government subsidy of a 2 per cent. bribe in respect of personal pensions. That would not only pay for the changes that we propose but would leave the Government with a small profit.
The Government still refuse to acknowledge the scale or the nature of the country's problems. After 12 years, they are still looking for someone else to blame. They fail to accept that, without a steady build-up in manufacturing, training, and research and development—of which there is a total lack of evidence in the autumn statement —the country will fall further and further behind its competitors.
Today is Ash Wednesday, but there is no sign of the Government wearing sackcloth and ashes. They are being worn by people throughout the country, who will find little hope in the autumn statement or in the Government's economic forecasts. The Select Committee, referring to the current account balance, remarked that an improvement will be seen as a result of a downturn in the economy, but that it may not prove sustainable when the economy recovers. The OECD report, to which the Government contributed, noted that the trade balance improvement is likely to slow and that the current external deficit may start to rise again in 1992.
We have pointed out time and again that the Government are doing nothing to tackle the economy's underlying structural problems. There is little hope for the Government in the Chancellor's remark that the recession will soon begin to ebb, so that the spending process can begin again. That is what we are all afraid of.
There is little comfort to be taken, too, from the emollient and encouraging words of the Prime Minister, who I am pleased to see in his place. Words are what he is good at, rather more so than actions. That was illustrated in respect of cold weather payments. Last week, the Chancellor announced ex-gratia payments—first for one week, then for two. However, once public attention moves on, the legislation will remain unchanged and as harsh as ever.
That is the underlying message of the autumn statement and of the debate. The same disastrous pattern as we have seen before is likely to produce the same disastrous results. The answer lies not in any change of style, but in a change of Government.
9.32 pm
The Chief Secretary to the Treasury (Mr. David Mellor): I am grateful for this chance to reply to the debate, which gives me my first major opportunity to speak since moving

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to the Treasury. I listened with great care to almost all of today's speeches. I was sorry to miss one or two as a result of unavoidable calls away from the Chamber.
Today's debate has given right hon. and hon. Members an opportunity to discuss wider economic matters than public expenditure, which is right and proper, and to consider the valuable report of the Treasury and Civil Service Select Committee. I am glad that a large number of its members, led by my right hon. Friend the Member for Worthing (Mr. Higgins), are among those who have spoken. The Government's detailed response to the Select Committee's report has not featured much in today's debate, but I am sure that it was both valuable and welcomed. I was glad of the opportunity to appear before the Select Committee myself last week, in connection with burden-sharing in the Gulf, which was a most valuable hearing.
My right hon. Friend the Chancellor dealt in his opening speech with a number of the principal preoccupations of those who spoke today. He has talked about the slowdown in the economy and has described our public expenditure plans, which combine prudence with significantly increased resources in key areas. He has also talked about the cost of the Gulf conflict and our success in covering these costs.
I welcome a number of the speeches made during the debate, which were supportive of what my right hon. Friend the Chancellor was saying. I have already mentioned my right hon. Friend the Member for Worthing and I must also mention my right hon. Friends the Members for Guildford (Mr. Howell) and for Croydon, South (Sir W. Clark), and my hon. Friends the Members for Esher (Mr. Taylor) for Stamford and Spalding (Mr. Davies) and others too numerous to list.
I commend the substantive point made by my right hon. Friend the Member for Croydon, South. He said that, troubling though the present recession may be, it comes after a series of good years for the United Kingdom. They were years in which the Government carried through a series of fundamental reforms to the supply side of the economy: reforms to the tax regime; a major programme of deregulation; and a thorough overhaul of trade union legislation. These reforms produced a modern flexible economy, much better able to resist external shocks than it used to he, and they have greatly improved the long-term sustainable growth rate in that economy. That is a real and lasting achievement, which is not wiped away by the present recession.
Between 1981 and 1989, there were eight successive years of growth, averaging more than 3 per cent. Our economy, which during the Labour years was at the bottom of most of the leagues that we would rather have been top of, and top of most of the leagues that we would rather have been bottom of, has grown faster than that of Germany, France or Italy. Business investment grew faster than in any major industrial nation except Japan—by 43 per cent. in the three years to 1989. That surge leaves the United Kingdom better equipped to compete in world markets.
It is clear that the supply-side reforms which the Government have introduced have also led to a major improvement in labour market performance. In particular, earnings growth rose far less during the recent economic upswing than would have been expected on the basis of previous experience. I shall quote some figures to illustrate that. While unemployment fell by 1·5 million between the
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summer of 1986 and the spring of 1990, real earnings rose at an average rate of only 1·75 per cent., which compares with real earnings growth of 3·25 per cent. between the end of 1977 and the end of 1979, when unemployment fell by only 150,000. That is a sign of how much better the economy has been performing, and those achievements will last.
What my hon. Friend the Member for Carshalton and Wallington (Mr. Forman) said was enormously valuable. He pointed out that not merely are the Government confident about the United Kingdom economy, but so are other countries. In 1988 and 1989, Britain accounted for 39 per cent. of total inward investment in the European Community by OECD countries. France was next best, with only 14·4 per cent. Those are significant figures, showing a level of inward investment equivalent to about £25 billion a year. That is a vote of confidence. It is not merely cross-border investment within the Community, as, of the 49 per cent. of all United States direct investment overseas which went to the European Community in 1988–89, almost two thirds came to Britain. Japan has put one fifth of its overseas investment into the European Community, and we took more than 40 per cent. of that. Surely that is a vote of confidence in the United Kingdom, and it is good that other countries show confidence in us, despite the fact that the Opposition constantly talk Britain down.
The debate has provided us with the opportunity to consider the Government's plans and to have another look at the extent to which the Labour party is prepared to lift the veil on their proposals.
The right hon. and learned Member for Monklands, East (Mr. Smith) seems somewhat resentful, when not embarrassed, about being called to account for Labour party policies. [Interruption.] I am glad that the right hon. and learned Gentleman, who looked somewhat torpid during the speech of his hon. Friend the Member for Derby, South (Mrs. Beckett), has now come to life to intervene noisily in mine. I hope that he will use his ears as well as his mouth; I am sure that that would be to his advantage.
It might help the right hon. and learned Gentleman to bear in mind the fact that not only Conservatives are interested in what the Labour party proposes; people who are broadly in sympathy with Labour are becoming curious about the nature of its economic policy—witness Ian Aitken in The Guardian the other day. Mr. Aitken— not the most obvious Conservative, and not writing in the most obviously Conservative newspaper—wrote:
"the basic weakness in Labour's case against the Government … is … the essential thinness of Labour's own prescription for dealing with the crisis … Labour has no painless solution, and depends on showing British industry's supply-side problems as the most effective … means of ending inflation.
Well, I for one don't believe it. And what's more, I don't think the British people will believe it either."
Writing in the same paper just two days ago, Mr. Will Hutton—[Interruption.] I know that this is embarrassing for Labour Front Benchers; their farmyard noises are even more profound than usual. Mr. Hutton wrote:
"As for the parliamentary opposition parties, their call for interest rate cuts with no accompanying recognition of the economic realities is politically opportunistic and economically naive. And if you cannot come up with something now, what ideas do you have for good government?"

941
That was the challenge that was thrown out to the right hon. and learned Member for Monklands, East, and I do not think that he would have received many pass marks for his response.
On interest rates, we had propounded to us Monklands' law, which may be stated thus: whatever the level of interest rates at any given time, ask for them to be 1 per cent. lower. To the surprise of some of those present, that proved on examination to be true—even at the point when, in 1988, interest rates were down to 7·5 per cent. With a candour to which he, with his lawyer's obfuscation, is not often given, the right hon. and learned Gentleman was ready to admit that he thought that the rates should have been even lower then.
Mr. John Smith: Is the Chief Secretary not a lawyer as well?
Mr. Mellor: It takes one to know one, and we know them very well. I could tell when the right hon. and learned Gentleman was falling back on quarter sessions badinage to avoid having to face up to a difficult point.
Mr. Smith: The Chief Secretary is doing the same.
Mr. Mellor: No; I am trying to set myself higher standards. The right hon. and learned Gentleman must be patient with me.
Monklands' law is suspended only when the Government actually do what the right hon. and learned Gentleman asks: thus, today's reduction of 0·5 per cent. is greeted as being too little, too late. As for the full 1 per cent. reduction that was made in October, although the right hon. and learned Gentleman had called for it in September, by January he was terming it inept.
There is a serious point here. What does Monklands' law tell us about the sincerity of the right hon. and learned Gentleman's commitment to the exchange rate mechanism? On 9 January, he was extremely forthright. Speaking on "Newsnight," he said:
"We strongly believe that Britain should be in the ERM, and we are willing to accept the disciplines that involves."
His use of the word "disciplines" must mean that the right hon. and learned Gentleman accepts the requirement to keep interest rates within the bounds of the ERM. What is the point of a commitment to the ERM if it does not mean that?
Interestingly—the right hon. and learned Gentleman will correct me if I am wrong—although there has been the expected criticism from the Labour Back Benches of the level at which we chose to enter the ERM, it did not find its place in the right hon. and learned Gentleman's speech. He did not say that it was too high a rate. I can do no better than quote the right hon. Member for Berwick-upon-Tweed (Mr. Beith) who called for high interest rates, oblivious or uncaring of the effect that they would have on Labour's commitment to membership of the ERM, suggesting that Labour's commitment to the ERM was simply an opportunistic debating device to get the party out of a difficult argument on inflation and did not amount to any realistic comment.
High interest rates are needed to curb demand and bear down on inflation. Although regrettable, they will remain high for as long as necessary, but, as my right hon. Friend the Chancellor has made clear, for no longer than that. There is proof today of our sincerity on that.
Mr. Ridley: My right hon. and learned Friend said that interest rates will be kept up as long as is necessary. Does that mean as long as is necessary to get inflation right down or as long as is necessary to maintain the value of the pound in the ERM?
Mr. Mellor: I enjoyed my right hon. Friend's contribution to the debate, but I do not see those two as alternatives. Our position within the ERM permits us to bear down on inflation and permits convergence with lower European rates of inflation. It is a means to an end. That is the basis on which the Government proceed.
Mr. Budgen: If the purpose is to get rid of inflation as quickly as possible, why have interest rates not risen to 20 per cent.? That would do the trick, would it not?
Mr. Mellor: Because, as my hon. Friend will know and welcome, we are making progress on inflation, so it is not necessary to do so. [Interruption.] I thought that that was a direct and clear statement, but perhaps I am biased.
If my hon. Friends will allow me, I should like to return to the policies of the right hon. and learned Member for Monklands, East. He took exception to what my right hon. Friend the Prime Minister said when he told us: "If it isn't hurting, it isn't working." That led me to ask the right hon. and learned Gentleman, bearing in mind the helpful observations of Mr. Ian Aitken, where we can find the pain-free solutions. The right hon. and learned Gentleman thought that that was a huge joke and spoke even more as if he were at the assizes. He delighted some of his less critical hon. Friends by suggesting, huff puff, that that was the most naive question that any Minister had asked him in 10 years and, huff puff, "How could anyone ask such a foolish thing?".
Many people read and are influenced by The Guardian. Labour-voting journalists on The Guardian are saying, "We know about the bull but where's the beef?". They are saying, "Where are the pain-free solutions and what are the answers to the questions?". The right hon. and learned Member for Monklands, East may be able to avoid answering today, but, as the general election approaches, he will not be able to do so. We will keep asking, and he will have to answer.
I shall ask the right hon. and learned Gentleman three questions that bear on this matter in case they cause as much hilarity to him as the earlier intervention. How can inflation be reduced without cutting demand? How can demand be reduced without measures to raise savings and reduce borrowing, and how can the level of borrowing be controlled without influencing its price? Those are all questions to which we are striving to find an answer.
The right hon. and learned Gentleman has no answer except—this was astonishing—dragging on the trail of the deadest of dead cats: credit controls. Well may the right hon. and learned Gentleman look back nostalgically to the days of the corset and all those other restrictions, but that does not deal with the fundamental point, which is that demand cannot be restricted by restricting the availability of money—all that does is push up the price of the money that is available. It is utterly naive to expect any pain-free answers to the problems of the inflation rate and excessive demand in imposing credit controls that will move in exactly the opposite direction.
Are we to look back nostalgically to the days of the 1970s, when people were queuing up for mortgages as a result of credit controls? [Interruption.] The right hon. and

943
learned Member for Monklands, East is busy changing the subject and avoiding all eye contact with me, but I shall try to keep up with him. His position on credit controls is not particularly funny, because he thinks that they are a way of dealing with demand—I do not believe they are—and he says that he does not want to go back to the 1970s, when mortgages were limited: he wants to exempt them altogether. But how can credit controls bear down on private borrowing, when 85 per cent. of private borrowing is done in the form of mortgages? So the dead cat is a dead parrot, and it will not work. [HON. MEMBERS: "Answer that."] My right hon. and hon. Friends must be patient; the right hon. and learned Gentleman will have a chance to answer on other occasions.
The right hon. and learned Gentleman might point to the Opposition's supply side measures, which involve increased spending on training, research and development and regional policy, all commitments which trip lightly off the tongue of the hon. Member for Derby, South, who also claims that Labour has only two pledges. What the Opposition propose is not a supply side policy: it is a programme of industrial intervention, regulation and higher public spending dressed up in new rhetorical clothes. All the policies that failed in the 1970s have been dragged out to be given an opportunity, which I suspect the public will deny them, to be allowed to fail again
Mr. John Smith: What about some eye contact with my hon. Friend the Member for Derby, South (Mrs. Beckett)?
Mr. Mellor: I confess that that would be a much more pleasurable experience. I shall look the hon. Lady in the eye when I come to Beckett's law, promulgated on 13 February 1990:
"What we are promising is an increase for pensions and … child benefit. Everything else that is regarded as a desirable aim is also listed, quite clearly and specifically, as something that we hope to do as resources allow."—[Official Report, 13 February 1990; Vol. 167, c. 179.]
Some laws last for generations, even for hundreds of years. Beckett's law is looking a little sorry for itself after less than one year. Opposition spokesmen, led by the Leader of the Opposition, as we might expect, have been queueing up to say that, far from there being only two priorities, everything is a priority. The Leader of the Opposition said about health only in December:
"In this country now there is a strong mandate for using available public resources for the public good, and in their order of priorities the British people give top place to the need to invest in the health services. We shall honour their mandate."
How does Beckett's law look in the light of that? Health was not one of her priorities.
Next, the hon. Member for Copeland (Dr. Cunningham) said:
"Education is our first priority."
No, said the hon. Member for Cynon Valley (Mrs. Clwyd), shadow Secretary of State, drawing herself up to her full height. She wanted
"to see Britain reach the UN aid target of 0·7 per cent. of GNP as top priority."
The hon. Member for Sedgefield (Mr. Blair) said:
"They"—
the Conservatives—
"say: we cannot train until the economy succeeds. Wrong. The opposite is true. The economy cannot succeed until we train."
Appreciating that Beckett's law needed fresh life breathed into it, it was restated today by the right hon. And
944
learned Member for Monklands, East, but within three or four minutes he had broken the law himself by saying that Labour would make training a priority—
Mr. John Smith indicated dissent.
Mr. Mellor: Oh yes he did—Hansard will make that clear. All my hon. Friends heard the right hon. and learned Gentleman say that.
We are left with a return to the policies of yesterday, yet the Labour party brings before us an amendment that severely criticises the Government's record and states that the Government should find policies that promote
"the recovery of a wealth creating economy".
We all know where people were in terms of wealth creation after five years of the last Labour Government—living standards did not rise at all.
It may be worth recalling a few telling statistics to show the validity of what the Labour party says in its amendment. A man on average earnings with a non-income-earning wife is £58 a week better off in real terms after 10 years of Conservative Government; he was lucky if he was £1 a week better off after five years of Labour Government. Share ownership has increased threefold since 1979, and one in four of the British public own shares. Between 1979 and 1988, the real wealth of all groups in society increased by, on average, 60 per cent. Interestingly and most tellingly on wealth, taking £5,000 at constant 1988 prices, in 1988 some 7·5 million more people than in 1979 had assets of more than £5,000, yet the Labour party purports to believe that a Labour Government could create wealth better than we can.
Let us look at national wealth, at the state of our overseas assets. At the end of 1979, after five years of Labour government, our net overseas assets totalled just £12·4 billion, or 5·5 per cent. of gross domestic product. However, at the end of 1989, they had grown to £112·5 billion, or 21 per cent. of GDP. With the greatest respect to the Labour party, I am not sure how many lessons on wealth creation we need from it.
Labour's amendment
"condemns the failure of the Government to invest in the economic infrastructure and in vital public services".
Nothing could be further from the truth. For example, the new plans for the coming year show that capital spending on motorways and trunk roads is more than double, in real terms, what it was in 1979–80. Under the last Labour Government, it fell by 40 per cent. In 1989–90, investment on British Rail was 32 per cent. higher in real terms than in 1979.
Labour Members referred to safety, rightly. The sum of about £750 million is to be spent on safety by BR and London Transport over the next three years. Between 1978–79 and 1989–90, health authorities' gross capital spending increased by 46 per cent. in real terms and the new plans provide for the Government's contribution to increase by £180 million, or 8 per cent. in real terms, on top of existing plans for a gross programme of more than £1·75 billion of capital investment in the national health service.
Once again, what the Labour party has asked of us parts company with reality. Everywhere one looks, one finds criticisms that are ill-directed and wide of the mark. There are criticisms of our record on training, yet we are spending 2·5 times as much on training as the Labour Government did. Unemployment doubled under the Labour Government, but the unemployed then did not have access to employment training, restart programmes

945
or job clubs and had no specialist advice on how to get back to work. All that has come about under a Conservative Government.
We were even criticised by the hon. Member for Bristol, South (Ms. Primarolo) for our cuts in employment training. The 1988 Labour conference voted against employment training and called on Labour councils not to co-operate with it.
Wherever one looks, what one sees in the economy today are public finances that are stronger than ever before and the real achievement of the 1980s on which we can build, with a difficult short-term situation that the Government will be capable of dealing with. The Opposition have no policies whatsoever.
Question put, That the amendment be made:—
The House divided: Ayes 216, Noes 321.

Division No. 64]

[9.59 pm

AYES

Abbott, Ms Diane

Dobson, Frank

Adams, Mrs. Irene (Paisley, N.)

Doran, Frank

Alton, David

Douglas, Dick

Archer, Rt Hon Peter

Dunnachie, Jimmy

Armstrong, Hilary

Dunwoody, Hon Mrs Gwyneth

Ashdown, Rt Hon Paddy

Eastham, Ken

Ashley, Rt Hon Jack

Evans, John (St Helens N)

Ashton, Joe

Ewing, Harry (Falkirk E)

Banks, Tony (Newham NW)

Ewing, Mrs Margaret (Moray)

Barnes, Harry (Derbyshire NE)

Fatchett, Derek

Barnes, Mrs Rosie (Greenwich)

Faulds, Andrew

Battle, John

Fearn, Ronald

Beckett, Margaret

Field, Frank (Birkenhead)

Beith, A. J.

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

Bell, Stuart

Fisher, Mark

Bellotti, David

Flynn, Paul

Benn, Rt Hon Tony

Foot, Rt Hon Michael

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

Foster, Derek

Benton, Joseph

Foulkes, George

Bermingham, Gerald

Fraser, John

Bidwell, Sydney

Fyfe, Maria

Blair, Tony

Galloway, George

Blunkett, David

Garrett, John (Norwich South)

Boateng, Paul

Garrett, Ted (Wallsend)

Boyes, Roland

Gilbert, Rt Hon Dr John

Bradley, Keith

Golding, Mrs Llin

Brown, Gordon (D'mline E)

Gordon, Mildred

Brown, Nicholas (Newcastle E)

Gould, Bryan

Brown, Ron (Edinburgh Leith)

Graham, Thomas

Bruce, Malcolm (Gordon)

Grant, Bernie (Tottenham)

Caborn, Richard

Griffiths, Nigel (Edinburgh S)

Callaghan, Jim

Grocott, Bruce

Campbell, Menzies (Fife NE)

Hardy, Peter

Campbell, Ron (Blyth Valley)

Harman, Ms Harriet

Canavan, Dennis

Hattersley, Rt Hon Roy

Cartwright, John

Heal, Mrs Sylvia

Clarke, Tom (Monklands W)

Henderson, Doug

Clelland, David

Hinchliffe, David

Clwyd, Mrs Ann

Hoey, Ms Kate (Vauxhall)

Cohen, Harry

Home Robertson, John

Cook, Robin (Livingston)

Howarth, George (Knowsley N)

Corbett, Robin

Howell, Rt Hon D. (S'heath)

Corbyn, Jeremy

Howells, Geraint

Cousins, Jim

Howells, Dr. Kim (Pontypridd)

Cox, Tom

Hoyle, Doug

Crowther, Stan

Hughes, John (Coventry NE)

Cryer, Bob

Hughes, Robert (Aberdeen N)

Cummings, John

Hughes, Roy (Newport E)

Cunliffe, Lawrence

Hughes, Simon (Southwark)

Darling, Alistair

Illsley, Eric

Davies, Rt Hon Denzil (Llanelli)

Ingram, Adam

Davies, Ron (Caerphilly)

Janner, Greville

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

Johnston, Sir Russell

Dewar, Donald

Jones, Barry (Alyn & Deeside)

Dixon, Don

Jones, Martyn (Clwyd S W)

946

Kaufman, Rt Hon Gerald

Powell, Ray (Ogmore)

Kennedy, Charles

Prescott, John

Kinnock, Rt Hon Neil

Primarolo, Dawn

Lambie, David

Quin, Ms Joyce

Leadbitter, Ted

Radice, Giles

Lestor, Joan (Eccles)

Randall, Stuart

Lewis, Terry

Rees, Rt Hon Merlyn

Litherland, Robert

Reid, Dr John

Livingstone, Ken

Richardson, Jo

Livsey, Richard

Robertson, George

Lofthouse, Geoffrey

Robinson, Geoffrey

Loyden, Eddie

Rogers, Allan

McAllion, John

Rooker, Jeff

McAvoy, Thomas

Rooney, Terence

McCartney, Ian

Ross, Ernie (Dundee W)

McCrea, Rev William

Rowlands, Ted

Macdonald, Calum A.

Ruddock, Joan

McFall, John

Salmond, Alex

McKelvey, William

Sedgemore, Brian

McLeish, Henry

Sheerman, Barry

Maclennan, Robert

Shore, Rt Hon Peter

McMaster, Gordon

Short, Clare

McNamara, Kevin

Sillars, Jim

McWilliam, John

Skinner, Dennis

Madden, Max

Smith, Andrew (Oxford E)

Mahon, Mrs Alice

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

Marek, Dr John

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

Marshall, David (Shettleston)

Snape, Peter

Marshall, Jim (Leicester S)

Soley, Clive

Martin, Michael J. (Springburn)

Spearing, Nigel

Martlew, Eric

Steinberg, Gerry

Maxton, John

Stott, Roger

Meacher, Michael

Strang, Gavin

Meale, Alan

Straw, Jack

Michie, Bill (Sheffield Heeley)

Taylor, Matthew (Truro)

Michie, Mrs Ray (Arg'l & Bute)

Thompson, Jack (Wansbeck)

Mitchell, Austin (G't Grimsby)

Turner, Dennis

Moonie, Dr Lewis

Vaz, Keith

Morgan, Rhodri

Wallace, James

Morley, Elliot

Walley, Joan

Morris, Rt Hon A. (W'shawe)

Wardell, Gareth (Gower)

Morris, Rt Hon J. (Aberavon)

Wareing, Robert N.

Mowlam, Marjorie

Watson, Mike (Glasgow, C)

Mullin, Chris

Welsh, Andrew (Angus E)

Murphy, Paul

Williams, Rt Hon Alan

Nellist, Dave

Williams, Alan W. (Carm'then)

Oakes, Rt Hon Gordon

Wilson, Brian

O'Brien, William

Wise, Mrs Audrey

O'Hara, Edward

Worthington, Tony

O'Neill, Martin

Wray, Jimmy

Orme, Rt Hon Stanley

Young, David (Bolton SE)

Parry, Robert

Patchett, Terry

Tellers for the Ayes:

Pendry, Tom

Mr. Frank Haynes and

Pike, Peter L.

Mr. Allen McKay.

NOES

Adley, Robert

Bevan, David Gilroy

Aitken, Jonathan

Biffen, Rt Hon John

Alexander, Richard

Blackburn, Dr John G.

Alison, Rt Hon Michael

Blaker, Rt Hon Sir Peter

Allason, Rupert

Body, Sir Richard

Amery, Rt Hon Julian

Bonsor, Sir Nicholas

Amess, David

Boscawen, Hon Robert

Arbuthnot, James

Boswell, Tim

Arnold, Jacques (Gravesham)

Bottomley, Peter

Arnold, Sir Thomas

Bowden, A (Brighton K'pto'n)

Ashby, David

Bowden, Gerald (Dulwich)

Aspinwall, Jack

Bowis, John

Atkins, Robert

Boyson, Rt Hon Dr Sir Rhodes

Atkinson, David

Braine, Rt Hon Sir Bernard

Baker, Rt Hon K. (Mole Valley)

Brandon-Bravo, Martin

Baker, Nicholas (Dorset N)

Brazier, Julian

Baldry, Tony

Bright, Graham

Batiste, Spencer

Brooke, Rt Hon Peter

Beaumont-Dark, Anthony

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

Bellingham, Henry

Bruce, Ian (Dorset South)

Bendall, Vivian

Buchanan-Smith, Rt Hon Alick

Bennett, Nicholas (Pembroke)

Budgen, Nicholas

Benyon, W.

Burns, Simon

947

Butler, Chris

Harris, David

Butterfill, John

Haselhurst, Alan

Carlisle, John, (Luton N)

Hawkins, Christopher

Carlisle, Kenneth (Lincoln)

Hayes, Jerry

Carrington, Matthew

Hayhoe, Rt Hon Sir Barney

Carttiss, Michael

Hayward, Robert

Cash, William

Heathcoat-Amory, David

Chapman, Sydney

Hicks, Robert (Cornwall SE)

Chope, Christopher

Higgins, Rt Hon Terence L.

Clark, Rt Hon Alan (Plymouth)

Hill, James

Clark, Dr Michael (Rochford)

Hind, Kenneth

Clark, Rt Hon Sir William

Hogg, Hon Douglas (Gr'th'm)

Clarke, Rt Hon K. (Rushcliffe)

Holt, Richard

Colvin, Michael

Hordern, Sir Peter

Conway, Derek

Howard, Rt Hon Michael

Coombs, Anthony (Wyre F'rest)

Howarth, G. (Cannock & B'wd)

Coombs, Simon (Swindon)

Howe, Rt Hon Sir Geoffrey

Cope, Rt Hon John

Howell, Rt Hon David (G'dford)

Cormack, Patrick

Howell, Ralph (North Norfolk)

Couchman, James

Hughes, Robert G. (Harrow W)

Cran, James

Hunt, Sir John (Ravensbourne)

Critchley, Julian

Hunter, Andrew

Currie, Mrs Edwina

Hurd, Rt Hon Douglas

Curry, David

Irvine, Michael

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

Irving, Sir Charles

Davis, David (Boothferry)

Jack, Michael

Day, Stephen

Jackson, Robert

Devlin, Tim

Janman, Tim

Dicks, Terry

Jessel, Toby

Dorrell, Stephen

Jones, Gwilym (Cardiff N)

Douglas-Hamilton, Lord James

Jones, Robert B (Herts W)

Dover, Den

Jopling, Rt Hon Michael

Dunn, Bob

Kellett-Bowman, Dame Elaine

Durant, Sir Anthony

Key, Robert

Dykes, Hugh

Kilfedder, James

Evans, David (Welwyn Hatf'd)

King, Roger (B'ham N'thfield)

Evennett, David

King, Rt Hon Tom (Bridgwater)

Fairbairn, Sir Nicholas

Kirkhope, Timothy

Fallon, Michael

Knapman, Roger

Field, Barry (Isle of Wight)

Knight, Greg (Derby North)

Finsberg, Sir Geoffrey

Knight, Dame Jill (Edgbaston)

Fishburn, John Dudley

Knowles, Michael

Fookes, Dame Janet

Knox, David

Forman, Nigel

Lamont, Rt Hon Norman

Forsyth, Michael (Stirling)

Lang, Rt Hon Ian

Forth, Eric

Latham, Michael

Fowler, Rt Hon Sir Norman

Lawrence, Ivan

Fox, Sir Marcus

Lawson, Rt Hon Nigel

Franks, Cecil

Leigh, Edward (Gainsbor'gh)

Freeman, Roger

Lester, Jim (Broxtowe)

French, Douglas

Lilley, Peter

Fry, Peter

Lloyd, Sir Ian (Havant)

Gale, Roger

Lloyd, Peter (Fareham)

Gardiner, Sir George

Lord, Michael

Garel-Jones, Tristan

Luce, Rt Hon Sir Richard

Gill, Christopher

Lyell, Rt Hon Sir Nicholas

Gilmour, Rt Hon Sir Ian

McCrindle, Sir Robert

Glyn, Dr Sir Alan

Macfarlane, Sir Neil

Goodlad, Alastair

MacGregor, Rt Hon John

Gorman, Mrs Teresa

MacKay, Andrew (E Berkshire)

Gorst, John

Maclean, David

Grant, Sir Anthony (CambsSW)

McLoughlin, Patrick

Greenway, Harry (Ealing N)

McNair-Wilson, Sir Michael

Greenway, John (Ryedale)

McNair-Wilson, Sir Patrick

Gregory, Conal

Madel, David

Griffiths, Sir Eldon (Bury St E')

Major, Rt Hon John

Griffiths, Peter (Portsmouth N)

Malins, Humfrey

Grist, Ian

Mans, keith

Ground, Patrick

Maples, John

Grylls, Michael

Marland, Paul

Hague, William

Marlow, Tony

Hamilton, Neil (Tatton)

Marshall, John (Hendon S)

Hampson, Dr Keith

Marshall, Sir Michael (Arundel)

Hanley, Jeremy

Martin, David (Portsmouth S)

Hannam, John

Maude, Hon Francis

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

Mawhinney, Dr Brian

Hargreaves, Ken (Hyndburn)

Maxwell-Hyslop, Robin

948

Mellor, Rt Hon David

Soames, Hon Nicholas

Meyer, Sir Anthony

Speed, Keith

Miller, Sir Hal

Speller, Tony

Miscampbell, Norman

Spicer, Sir Jim (Dorset W)

Mitchell, Andrew (Gedling)

Spicer, Michael (S Worcs)

Mitchell, Sir David

Squire, Robin

Moate, Roger

Stanbrook, Ivor

Monro, Sir Hector

Stanley, Rt Hon Sir John

Montgomery, Sir Fergus

Steen, Anthony

Morrison, Sir Charles

Stevens, Lewis

Moss, Malcolm

Stewart, Allan (Eastwood)

Moynihan, Hon Colin

Stewart, Andy (Sherwood)

Neale, Sir Gerrard

Stewart, Rt Hon Ian (Herts N)

Needham, Richard

Stokes, Sir John

Nelson, Anthony

Sumberg, David

Neubert, Sir Michael

Summerson, Hugo

Newton, Rt Hon Tony

Tapsell, Sir Peter

Nicholls, Patrick

Taylor, Ian (Esher)

Nicholson, David (Taunton)

Taylor, Teddy (S'end E)

Nicholson, Emma (Devon West)

Tebbit, Rt Hon Norman

Norris, Steve

Temple-Morris, Peter

Onslow, Rt Hon Cranley

Thatcher, Rt Hon Margaret

Oppenheim, Phillip

Thompson, D. (Calder Valley)

Page, Richard

Thompson, Patrick (Norwich N)

Paice, James

Thorne, Neil

Patnick, Irvine

Thornton, Malcolm

Patten, Rt Hon Chris (Bath)

Townend, John (Bridlington)

Patten, Rt Hon John

Townsend, Cyril D. (B'heath)

Pawsey, James

Tracey, Richard

Peacock, Mrs Elizabeth

Tredinnick, David

Porter, Barry (Wirral S)

Trippier, David

Porter, David (Waveney)

Twinn, Dr Ian

Portillo, Michael

Vaughan, Sir Gerard

Powell, William (Corby)

Viggers, Peter

Price, Sir David

Wakeham, Rt Hon John

Raison, Rt Hon Sir Timothy

Waldegrave, Rt Hon William

Rathbone, Tim

Walden, George

Redwood, John

Walker, Bill (T'side North)

Renton, Rt Hon Tim

Waller, Gary

Rhodes James, Robert

Walters, Sir Dennis

Riddick, Graham

Ward, John

Ridley, Rt Hon Nicholas

Wardle, Charles (Bexhill)

Ridsdale, Sir Julian

Warren, Kenneth

Rifkind, Rt Hon Malcolm

Watts, John

Roberts, Sir Wyn (Conwy)

Wells, Bowen

Roe, Mrs Marion

Wheeler, Sir John

Rossi, Sir Hugh

Whitney, Ray

Rost, Peter

Widdecombe, Ann

Rowe, Andrew

Wilkinson, John

Rumbold, Rt Hon Mrs Angela

Wilshire, David

Ryder, Rt Hon Richard

Winterton, Mrs Ann

Sayeed, Jonathan

Winterton, Nicholas

Scott, Rt Hon Nicholas

Wolfson, Mark

Shaw, David (Dover)

Wood, Timothy

Shaw, Sir Giles (Pudsey)

Woodcock, Dr. Mike

Shaw, Sir Michael (Scarb')

Yeo, Tim

Shelton, Sir William

Young, Sir George (Acton)

Shephard, Mrs G. (Norfolk SW)

Younger, Rt Hon George

Shepherd, Colin (Hereford)

Shepherd, Richard (Aldridge)

Tellers for the Noes:

Sims, Roger

Mr. John M. Taylor and

Skeet, Sir Trevor

Mr. Tom Sackville.

Smith, Sir Dudley (Warwick)

Question accordingly negatived.
Main Question put and agreed to.
Resolved,
That this House approves the Autumn Statement presented by Mr. Chancellor of the Exchequer on 8th November 1990; commends the Government on its determination to maintain downward pressure on inflation and to build on the great improvements in economic performance over the last eleven years; and welcomes the Government's continued tight control of public expenditure coupled with improved value for money and its provision of additional resources for key areas.

Revenue Support Grant (Scotland)
Mr. Speaker: I understand that there will be four Front-Bench spokesmen. May I ask them to be brief so that more Back Benchers may have an opportunity to participate in the debate? May I also ask Back Benchers to limit their speeches to five minutes so that as many as possible may be called?
10.15 pm
The Parliamentary Under-Secretary of State for Scotland (Mr. Allan Stewart): I beg to move,
That the Revenue Support Grant (Scotland) Order 1991, dated 28th January 1991, a copy of which was laid before this House on 30th January, be approved.
I had hoped that it would be possible to deal also with the second revenue support grant order to distribute an extra £16·5 million grant to certain authorities which suffered a shortfall of non-domestic rate income in 1989–90. However, because of complications that have been discussed with the hon. Members for Cunninghame, South (Mr. Lambie) and Cunninghame, North (Mr. Wilson), in the light of representations from that district council, it will not be possible to lay and debate that order until next month. I hope that the arrangements which we propose, including the details of that order, will have the consent of the Convention of Scottish Local Authorities, with which we are consulting.
Mr. David Lambie: On behalf of my hon. Friend the Member for Cunninghame, North (Mr. Wilson) and myself, may I thank the Minister for his statement and for listening to the representations which we made to him? I am sure that the poll tax payers in Cunninghame will be happy with the announcement.
Mr. Stewart: I am grateful to the hon. Gentleman for his generous comments. No doubt the mood of amity that he has set will continue throughout the debate.
The order before the House marks the final stage of the local government settlement for 1991–92, details of which were first announced to the House by my right hon. and learned Friend the Member for Edinburgh, Pentlands (Mr. Rifkind) on 25 July. My right hon. and learned Friend indicated at that stage that aggregate external finance for 1991–92 had been set at £4,338 million, an increase of £410 million, or 10·4 per cent. over the corresponding figure for 1990–91. He also confirmed, as hon. Members will recall, that an additional £15 million would be provided to those local authorities which, since 1989–90, had benefited from the RSG safety net, thus making the total of Government-determined support for local authorities for next year £4,353 million.
It may be helpful to the House if I explain that the figure of £4,353 million has three components. The first is non-domestic rate income. On the basis of the rate poundages which my right hon. Friend announced on 23 January, and which are prescribed in the Non-Domestic Rate (Scotland) (No. 2) Regulations 1991, we estimate that the total level of non-domestic rate income in 1991–92 will be £1,347 million. This figure takes into account the reduction of £100 million which my right hon. Friend announced on 17 January as the second stage of our policy of harmonising rate poundages north and south of the border.
The second component of aggregate external finance is the provision for specific grants which will be paid in
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1991–92. This is estimated at £313 million. The third component is revenue support grant which, for 1991–92, totals £2,692·6 million, including the £15 million for safety netting.
The purpose of the order is to specify how that total amount of revenue support grant is allocated among local authorities. A full explanation of how those resources have been distributed to authorities is contained in the report to the order, the details of which are fairly complex. However, broadly, there are two stages in the process. First, an amount is distributed among authorities in order to equalise differences in their grant-aided expenditure, which is determined by the client group assessment methodology which, as hon. Members know, is kept under constant review, in consultation with COSLA. The rest of the available support, with the exception of the £15 million safety netting, is distributed on a per capita basis. The safety netting has been distributed to—
Mr. Malcolm Bruce: The Minister said that the allocations were agreed in consultation with COSLA. I do not wish to detract from the good services that COSLA produces, but is it not correct to say that the Government have a direct relationship with each local authority in Scotland and not exclusively with COSLA? Will the Minister acknowledge that the Government sometimes seem prepared to hide behind agreements with COSLA, rather than enter into negotiations with individual authorities, that are not always as happy as COSLA is with the allocations? That is true not least of Grampian regional council, which feels victimised because much late debt has recently been calculated and the COSLA formula does not meet its requirements.
Mr. Stewart: The hon. Gentleman is, in a sense, right. It is always possible that individual authorities will take a different view of a particular formula. However, successive Governments have accepted that it is right to consult COSLA collectively, through the distribution committee, which is the basis of the system. That is not to say that the Government will not take heed of individual representations made to them by hon. Members on behalf of specific authorities. However, the technical formulas are discussed between the professional advisers of COSLA and the Department.
Mr. Tom Clarke: Will the Minister give way?
Mr. Stewart: In the light of what Mr. Speaker said, I do not want to give way too often However, I shall give way to the hon. Member for Monklands, West (Mr. Clarke), as he is a past president of COSLA.
Mr. Clarke: Will the Minister clarify a doubt in my mind? Did he say that consultations are being held with COSLA that have not yet been completed or has COSLA agreed to the formula that he is presenting?
Mr. Stewart: There have been technical consultations between the distribution committee, which involves COSLA, and my Department. Those are on-going and, as the hon. Gentleman will know, there are constant representations from individual authorities which are taken into account in the continuing work of the distribution committee. With regard to the other order to which I referred, consultations are continuing with COSLA and have not yet been completed. The main

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beneficiaries of the safety net remain Strathclyde region and Glasgow district, which will receive an additional £8·5 million and £5·2 million respectively.
The one component for which the settlement specifically does not provide is to cover any shortfall of income that local authorities may face because of non-collection of the community charge.
Mr. Alistair Darling: Will the Minister give way?
Mr. Stewart: I have already given way three times. I shall give way for the last time to the hon. Gentleman.
Mr. Darling: When dealing with the allocation of grant, the Minister said that a complicated formula was involved. Why does Lothian, which spends less than the Scottish average per head, receive £799 per head in grant, whereas Strathclyde receives £919 and Tayside £915? Is it not the case that, in terms of the grant it receives per head, Lothian was discriminated against under the old rates system and is now being discriminated against under the poll tax system? Are not the Government hiding behind a formula and discriminating against Edinburgh and Lothian to manipulate matters for their own political advantage?
Mr. Stewart: I refer the hon. Gentleman to the figures. He will see that the aggregate external finance for Lothian for the forthcoming year is increased by 12·88 per cent. That is substantially more than the Scottish average.
Last summer, and again in its briefing notes for this debate, COSLA argued that the settlement should take account of the non-collection factor. I emphasise that, when my right hon.and learned Friend the Member for Edinburgh, Pentlands (Mr. Rifkind) met the convention in July, he wholly rejected its argument. He made it clear that, as a matter of principle, the Government were not prepared to take non-collection into account in establishing the level of Government support for local authorities. To do so would mean that national taxpayers would be asked to subsidise those who were refusing to pay their community charge. That would be resented, and rightly so, by taxpayers and would simply encourage non-collection.
I emphasise that collection is the responsibility of the authorities. It is clear that they could and should have made more effective and speedier use of the recovery procedures available to them. That is not simply the Government's opinion. Another recent report on the first year of the operation of the community charge in Scotland, that of the Accounts Commission—which is a wholly independent body—supports that view. In its report the commission referred to
"The apparent unwillingness on the part of certain collecting authorities to make full and timeous use of the recovery procedures available to them under statute."
The commission also stated:
"Some authorities have inhibited the effectiveness of sheriff officers' procedures through the manner in which community charge payers were informed of the possibility or imminence of recovery action."
It is disconcerting that certain authorities have seemed reluctant to provide the authority for sheriff officers to conduct their normal recovery procedures in appropriate cases.
Let the House be clear that much more can and should be done by authorities to reduce non-collection levels. To give credit where it is due, I welcome the decisions by Grampian region to proceed with warrant sales. No doubt
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the hon. Member for Glasgow, Garscadden (Mr. Dewar) will welcome the U-turn by certain Labour councillors in Grampian which has enabled that to happen, as reported in today's press.
Mr. Donald Dewar: Will the Minister give way?
Mr. Stewart: I have already given way four times.
Mr. Dewar: There is a great deal of interest in attitudes towards dealing with non-payment. The Minister was a vehement advocate of the removal of all services from those in arrears. Is that still his position?
Mr. Stewart: That was never my position.
I welcome the decision by Strathclyde regional council to arrest the wages and salaries of its staff who are non-payers. Those steps are long overdue, but nevertheless welcome.
Mr. Harry Ewing: On a point of order, Mr. Deputy Speaker. The Minister is misleading the House. He may not be doing so deliberately, but he was the very person who advocated that all services and the right to vote should be withdrawn from those who either could not or would not pay their poll tax. Yet he has just denied that. He is misleading the House and should correct that statement.
Mr. Stewart: If the hon. Gentleman checks the press on that specific point, he will discover that Mr. Phil Gallie made the suggestion.
Mr. Brian Wilson: The Minister made the suggestion. Mr. Gallie is a disciple.
Mr. Stewart: It was made clear that neither I nor the Scottish Office generally agreed with that at all.
Law-abiding charge payers rightly resent those who on the one hand are only to happy to accept employment, wages and salaries from local authorities, while on the other they are not prepared too contribute to the cost of local services. It certainly does not help the non-collection problems to have the president of COSLA call for the speedy abolition of the community charge. Such a statement is the height of irresponsibility. COSLA knows full well that, whatever the outcome of the community charge review, authorities will have a statutory duty to continue to collect the charge. Those remarks will simply encourage non-payment. I must make it clear that, whatever happens, there will be no amnesty for non-payers. The Government certainly will not bail out local authorities because of their failure to collect the community charge.
When we announced the settlement last July, my right hon. and learned Friend described it as fair. As my right hon. Friend the Member for Kincardine and Deeside (Mr. Buchanan-Smith) said, it was very close to the bid made by COSLA. In view of the reduction in the rate of inflation during recent months, and the likelihood of the rate falling significantly this year, I think that it is not unreasonable now to describe the settlement as extremely fair. I certainly reject any suggestion by local authorities that the quite outrageous community charge increases—which represent a high degree of political cynicism—many of them made are due to underfunding by the Government. That is not the case.
I commend the order to the House.
10.31 pm
Mr. Donald Dewar: There is no doubt that we are facing a crisis of credibility in local government finance. The poll tax for 1991–92 will be seen by many people as a crushing burden and it will be resented. A couple living on an ordinary working wage, but who are outwith the rebate net, will be between £800 and £1,100 worse off, depending on geography. That is a substantial imposition.
This year the average increase in poll tax bills was 9 per cent.; in the coming year it is likely to be a thumping 28 or 29 per cent. on average across Scotland. I know that many people will ask, fairly, what has gone wrong and what is to be done about it. I have to say to the Minister that I believe that the fault lies with the system itself and that I have little sympathy with his expressions of outrage. He was well warned by COSLA and everyone in the local authority world, months and months ago, that settlements would be of that order. I know that the immediate reaction of Conservative Ministers is to talk about profligate councillors, overspending and fiscal irresponsibility. That does not stand up as an explanation of what has happened.
I recommend to the Minister the results of a survey published in the current issue of the Municipal Journal. It shows that the average increase in budgets in cash terms for local authorities in Scotland for the coming year is 8·4 per cent. So the budgets are being cut in real terms, yet there is a substantial increase in the poll tax. It is not the result of wildly escalating budgets; in fact, local authorities have often painfully done their bit. The trouble is the inheritance from the past mismanagement of the local government finance system and the present settlement. The Minister's indignation simply does not carry conviction.
The hopes expressed by Ministers for this year's settlement have always been optimistic. The aggregate external finance has risen by about 10 per cent., but that was never likely to stabilise the position, and Ministers knew that. Indeed, on the settlement figures that the Government have used, the difference between expenditure as anticipated by Government and loan charges, less the aggregate external finance, leaves a gap to be filled by the poll tax of £1·094 billion. That is a substantial increase of 16·3 per cent. on the gap that had to be filled in the previous year. To put it another way, even on the Government's own figures, leaving aside all the difficulties that they nodded through and did not comment on or take into account, the hard-pressed poll tax payer has to find another £154 million, or £45 per individual payer.
Mr. Allan Stewart: The hon. Gentleman is quoting from the COSLA brief, but COSLA has simply got it wrong. The 16·3 per cent. is based on the assumption that levels of the community charge in 1991 were based on grant-aided expenditure, but they were not. They were based on budgeted expenditure which, on average, was 7 per cent. below the GAE for 1991–92. To spend to the 1991–92 figure, an increase of 7 per cent. in support would have been required. If that had been all that had been given by the Government and no other influences had played a part, community charge increases would simply have been at the level of inflation.
Mr. Dewar: I would want to study that arithmetical sleight of hand. All that I have done is to take the current expenditure—I make no apology for the fact that I have
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relied on COSLA's figures here; that is perfectly legitimate —and the loan charges, totalled them and removed the aggregate external finance. That leaves us with the gap to which I referred of £1·094 billion. That is a perfectly fair representation.
I return to the general point, which the Minister has not answered. Why, if average budgets have risen by less than the rate of inflation, has the poll tax risen by such an enormous sum? Does that not have a great deal to do with the unsatisfactory nature of the system, where the gearing effect means that any increased expenditure will be put on a narrow tax base, with the result that the poll tax payer will be victimised again and again?
For example, if one takes a legitimate increase, such as the almost £1 million that a large region has spent on school boards, or the £1 million that it has managed to gather together to do something to maintain the momentum of community care—presumably the Minister does not contend that all expenditure is wicked—that, put on the narrow base of the poll tax, is contributing to quite unreasonable increases.
It is a side effect of the fact that councils control only 20 per cent. of their income and 80 per cent. of it is now controlled by the Government, which is built into the system, that, every time the Government lay a new duty, whether it be the litter laws or some educational provision, or every time there is a drift in wage settlements, which may be outwith the control of local government, the poll tax will inevitably be forced up unreasonably, because it will increase the gap between the non-domestic rate income and the revenue support grant income, which is entirely controlled by Government. That is one reason why we are in such trouble.
Of course, there are other complications. There are the interest charges that were underestimated this year and the rises that could not be anticipated. There are such matters as the use of surpluses last year, which I understand were about £105 million, but those have now been exhausted. The Minister looks as though that was the fault of local government, but it did its best to protect the poll tax payer, and what is wrong with that? If he showed the same wish to protect the poll tax payer and maintain a decent level of services, we would all be in a much better position.
But there is also the problem that we cannot duck, of non-payment and the cost of collection. I take an example which, from my point of view, is a difficult one because of the size of the poll tax that has been levied. Lothian region's poll tax this year is £420, plus £26 for water rates —an increase of almost 35 per cent. It sounds like a case study which the Government should welcome, because it would illustrate, presumably, the particular and peculiar irresponsibility of that local authority.
In fact, as we all know, it has cut £20 million from its budget by increasing charges for home helps and school meals and by making staff reductions, which are painful and difficult. We know also that much of the net expenditure, the new expenditure, that has been included is for things such as school boards and care in the community. At the end of the day, it is faced with a budget increase that is just about the rate of inflation, but with an overall increase of 35 per cent.
One reason is the cost of collecting the poll tax, which will be £18 million next year. Even allowing for inflation, that is three times as much as the cost of collection under the rating system. In 1989–90, there was 13 per cent. non-payment, and in 1990–91 that figure will increase to

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38 per cent. I have no doubt that that percentage will sharply decrease, but it is one problem with which the authority has to wrestle. That has led to the Lothian authority taking some unpopular decisions, but I have no doubt that they have been taken with the approval of the Secretary of State. Even now, £48 of the £109 increase is the result of non-payment.
Every authority, irrespective of political complexion, is faced with the problem of non-payment. The regions that are not under the control of the Labour party are confronted by it because of the difficulties that are built into the system. As my hon. Friend the Member for Edinburgh, Central (Mr. Darling) said, Lothian spends less per head on services than the average in Scotland, but despite that it levies a high poll tax. That is because its grant per head is so much less than the Scottish average. Indeed, it is less than that of every other region. Lothian has a shortfall by inheritance, and that is the main reason for its problems. It is shamelessly ducking the issue to talk about 12·55 per cent. this year, given what has happened in previous years. I believe that the Minister knows that. He did himself no credit by avoiding the issue when challenged in an intervention.
I am sure that none of my hon. Friends is unaware of or doubts the difficulties of local authorities, including that of non-collection. There has been feverish speculation about non-collection, and it is my clear recollection—if I am wrong about this, I shall apologise—that, only a few months ago, the Minister, as a Conservative Back-Bencher, was reported in the Glasgow Herald as calling with vehemence for acceptance of the principle that those who did not pay should have services withdrawn. I have no doubt that I am right about that. I shall check and then write to the Minister. I think that he knows that I am right, and I think that he owes the House an apology.
I recognise, of course, the difficulties that the hon. Gentleman faces. He is a Minister now, and he must forswear many of his personal opinions. Given what he has said in the recent past as a Conservative Back-Bench Member, however, he should make it clear that he is putting his irresponsible views behind him in recognition of the discipline of office. That would be some help. It would be useful also if he were to repudiate the views of the demonstrators on the Mound—perhaps it was more of a photo-opportunity than a demonstration—who suggested that Conservatives should not pay the full poll tax but should reduce their payments by what they understood to be the so-called surcharge for non-payment.
I note that a gentleman called the Rev. Roderick D. M. Campbell—
Mr. Allan Stewart: If the hon. Gentleman undertakes a perusal of a front-page article in the Glasgow Herald, he will find that my right hon. Friend the Secretary of State and I made it clear at a Conservative party conference —a public occasion—that in no circumstances would we condone or encourage any person to break the law of the land.
Mr. Dewar: I accept that. I am glad to have the assurance that the Rev. Roderick Campbell is being repudiated. I hope that he will not bring the same irresponsibility to his newly confirmed appointment as a member of the Greater Glasgow health board. I can think only that that is some sort of reward for his honest efforts
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on behalf of the Conservative party. It is important that we are clear where the Minister stands, and I hope that we shall have some correspondence on the matter.
Perhaps we shall also have an opportunity, when the hon. Member for Dunfermline, West (Mr. Douglas) speaks, to clear up the position of the Scottish National party. I see in the Glasgow Herald today that its immediate ex-leader, Mr. Gordon Wilson, is saying that the party should restrict its non-payment campaign to year one of the tax.
Mr. Dick Douglas: It was in yesterday's Glasgow Herald.
Mr. Dewar: Yesterday—I am grateful to the hon. Member. There have been a series of ambiguous statements from the hon. Member for Banff and Buchan (Mr. Salmond), but there is no doubt that the public are very fed up with the policy of the Scottish National party, and I look forward to finding out what the exact position is today, in the hope that it may still be the same tomorrow, and then we may learn exactly where they stand.
I do not think that the hon. Member for Banff and Buchan has been reduced to a position of great dignity, if he can hope only that the Secretary of State for the Environment will do just about enough to get him off the hook on which he has been impaled.
I shall finish by saying that of course we are all victims of the system. Councils are certainly the victims of the system, as are the people whom they represent. Above all, so are the public, in the form of the poll tax payers. We are in the unfortunate position that, if the Government's attitude does not change, the cry remains, "Not a penny more", and if the non-payment campaign is rashly and irresponsibly maintained, despite the effects on jobs and services, people will be in the impossible position of seeing their poll tax rise out of control, or facing the most vicious and fundamental attack on the level of services that we have ever witnessed. That is a dilemma which I do not wish any elected Member of Parliament to have to face, and from which I do not wish the public to suffer.
I am sure that the Minister recognises that, even in Eastwood, there are people who depend on services. There are people who depend entirely on home helps and on a whole range of education and social work services provided by local government who will suffer greatly if the sort of cuts implied by Government rhetoric are made. The system has been discredited and the harsh realism of the figures—a very substantial increase, well above the local authority budgets this year—underlines that point.
The Secretary of State, who has chosen to sit out this debate, has proclaimed that the poll tax system is working well and is a remarkable success story. He is the Minister who has talked of minor changes and of a tax which, in essence, is here to stay. I find that deeply depressing, when I consider the damage that has been done. I have no doubt that Ministers will say little enough today, and probably for quite some time, about their plans for the future. What about the suggestions that expenditure on education should be moved to the Treasury, or that there should be a return to some sort of property-based system? They may find favour with the right hon. Member for Henley (Mr. Heseltine). We shall have to wait and see where his intellectual journey will end, but I repeat my warning to

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Ministers that Scotland will not accept an ingenious but dishonest compromise that merely repackages the unacceptable in a vain effort to save political face.
10.48 pm
Mr. Bill Walker: The hon. Member for Glasgow, Garscadden (Mr. Dewar) probably spoke for the whole House when he asked, "What has gone wrong?" There is no question that something has gone desperately wrong. However, he seemed to ignore the contribution that has been made by his party and by the Scottish National party in Scotland to non-collection of the tax. Anyone who believes that any taxation, or local authority charges, that Members of Parliament and councillors have told people not to pay, will not run into administrative difficulties, is not living in the real world.
The hon. Member for Garscadden has to bear in mind that his party and people sitting beside him on the Front Bench, campaigned not to pay. [HON. MEMBERS: "Who? Point to them". Memories appear to be very short. They campaigned not to register and not to pay—[HON. MEMBERS: "No."] If the memory of the hon. Member for Cunninghame, North (Mr. Wilson) is really so short, let me remind him that he was the leader of the campaign. It seems that his memory is indeed short: he does not want to remember.
Mr. Wilson rose—
Mr. Walker: If the hon. Gentleman will be patient, I will happily give way to him in a moment.
The hon. Member for Garscadden chastised my hon. Friend the Parliamentary Under-Secretary, suggesting that, because he now sat on the Front Bench, he was somehow dissociating himself from views that he had expressed earlier. Let me remind the hon. Gentleman that his hon. Friend the Member for Cunninghame, North, who is sitting beside him on the Opposition Front Bench, has made some fascinating comments both as a Back Bencher and as a Front Bencher. Now I will give way to the hon. Gentleman.
Mr. Wilson: There is always the danger of dignifying the hon. Gentleman's remarks by responding to them, but, as he has mentioned me, let me put the record straight.
I have consistently opposed non-payment for political reasons, and I certainly did not urge people not to register: I urged them, while registering, to make plain their opposition to the poll tax. I have urged people to register, to claim their rebates and to pay at every level. If the hon. Gentleman has an argument, let him put it, but why he has to base it on mendacity is beyond me.
Mr. Walker: I shall resort to the tactics and methods of the hon. Member for Garscadden—
Mr. Dewar: What?
Mr. Walker: If I am wrong, I shall apologise.
Mr. Wilson: Is that the end of it?
Mr. Walker: I am giving as much evidence as the hon. Member for Garscadden gave. In such a short debate, I cannot be expected to do other than emulate the hon. Gentleman. [Interruption.] Opposition Front Benchers do not like it. They want to retain the delightful amnesia that
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enables them to forget not only their own position, but that of their hon. Friends who still sit on the Benches behind them. They paid up only recently, because they were told they must; until that time, they had campaigned consistently against doing so. Even now, some claim that they have somehow destroyed the system.
I agree with the Accounts Commission, which says that recovery procedures have not been adopted either properly or effectively. I do not find that surprising. In Angus district, in my constituency, the Scottish National party is the collector on behalf of Tayside region. Councillors there are telling people that they should not pay. In the circumstances, it would be astonishing if some did not listen to and act on that advice—and, of course, the advice given by parliamentary members of the same party.
These are the people who claim that they want to be the voice of Scotland, and, at some future date, the Government of Scotland. How can they possibly aspire to govern when they are not prepared to accept the taxes and charges levied as a result of statutes passed by a democratically elected Parliament?
When we consider the average increase represented by the community charge, and the 10·4 per cent. increase mentioned in the order, we see only too well that something is very wrong. The hon. Member for Garscadden may be right in one respect: I believe that whatever levy local authorities place on individuals should be one that those individuals consider reasonable. I have written my paper and stand by it and I believe that much more should be collected by central Government. There will be arguments and debates about what methods should be used and how it is done, but more should be collected centrally and less collected locally.
The local collection should be pitched at a level at which people recognise that they are making a contribution, but not so large that it becomes a penal burden. That is why we have to look at the matter in depth, and I welcome the review taking place now.
Mr. James Wallace: If those additional burdens were taken by central Government, what would be the effect on national taxation?
Mr. Walker: I hope that I was making, clear that, if the burden is transferred from local level to national level, it still has to be paid for. If the hon. Member for Orkney and Shetland (Mr. Wallace) has read any of the papers that I have produced, he will realise that I wish to transfer that to value added tax, which is a central tax.
Whatever comes out of this debate, I hope that it will be one of the last such debates, if not the last, that we shall have.
Mr. John Maxton: Is the hon. Gentleman saying that the poll tax will be gone?
Mr. Walker: No. I believe in the community charge, but local authorities should be able to fix it at a level necessary to meet the needs of the services in their area. The hon. Member for Garscadden put his finger on an important point when he said that, if one has to add figures to a small percentage, it must increase the cost substantially in a small area.
Mr. Maxton: Some of us pointed that out to the hon. Gentleman and his colleagues during the Committee stage of the 1987 Bill. He did not learn the lesson then. I am

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grateful for the fact that he seems to have learnt the lesson now, but it would have been better if he had voted against it then.
Mr. Walker: Like that of the hon. Member for Cunninghame, North, the memory of the hon. Member for Glasgow,. Cathcart (Mr. Maxton) is very selective. I have always taken the view that local collection must be at a level that makes people recognise and accept that they are making their contribution to local government expenditure, but it must be a realistic level that people will accept. Bills approaching £450 or £500 are far too high and something must be done.
Mr. Jimmy Wray rose—
Mr. Walker: I have given way enough.
The problem faced by Opposition Members is that they are living with the results of two separate campaigns. One campaign was the legal campaign by the Scottish nationalists. At one end of my constituency, even the Perth and Kinross district SNP provost did not support that, whereas it was supported at the other end of my constituency. [Interruption.] The Labour party has to answer to the people of Scotland for the 29 per cent. increase in the community charge.
Mr. Harry Ewing: On a point of order, Mr. Deputy Speaker. Could you use the powers of the Chair to stop these electrifying speeches?
Mr. Deputy Speaker (Sir Paul Dean): We had better get on with the debate.
10.59 pm
Mr. Malcolm Bruce: The speech of the hon. Member for Tayside, North (Mr. Walker) came to a suitably abrupt end, and not before time.
Many of us have been through these debates before. It is sometimes difficult to find something new to say, but the hon. Member for Tayside, North gave us a brilliant idea to which we can perhaps look forward. He said that he hoped that this was the last debate of this kind that we should ever have in the House. It seemed to imply that there should be no revenue support grant at all in the future. Perhaps that was a revelation of the way in which Tory party thinking is moving.
The Minister said that this was a reasonably generous settlement and that there was no reason for a dramatic increase in the poll tax, because local authorities were getting a settlement broadly in line with inflation. If I am not mistaken, the hon. Member for Glasgow, Garscadden (Mr. Dewar) did not fundamentally dispute that; the point that he disputed concerned the way in which the burden falls on the poll tax payer; because of its fixed element, it is the only area of taxation that is flexible for local authorities. It does not need much intellectual power to understand that, when an authority has a shortfall in expenditure or faces unexpected extra costs, it has a disproportionate effect on poll tax payers because all the money must be recovered from that one component of revenue, although it accounts for only one quarter of the total tax base of local authorities.
I ask the Minister to consider the pleas that I have received from local authorities about the timing of this settlement. Timing is a problem every year, but it seems to have become more acute. It is extremely difficult for local authorities to fix budgets in which a major component is
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not determined until—if they are lucky—the day before the budget must be presented, and often not until a day or two after the budget has been fixed.
I can confirm that I received a fax this morning from Gordon district council pointing out that it determined its budget on the basis of information about what it expected the revenue support grant to be; but the information was wrong to the tune of £21,000, which the council had to draw from surpluses. The Minister seems to deplore the idea of maintaining balances, but this is a good example of why they are a necessary and perfectly legitimate component of local authorities' budgets—to ensure that they have the flexibility to cope with unexpected fluctuations in the demands made on them.
Am I right in deducing that this is a case of the tail, in the shape of the Department of the Environment, wagging the Scottish Office dog? The settlement in England comes two months later than that in Scotland. The new leadership of the Tory party gave a clear sign that more money would be available, so local authorities in Scotland had to determine their poll taxes against that background, and they had much less time to play with.
I understand that the Secretary of State had to consider whether re-billing would have been necessary for Scottish authorities in circumstances in which it would not have been necessary for English authorities. I ask the Minister to bring forward the timing of the allocation of the grants, so as to enable local authorities to plan their budgets in good time.
Earlier, the Minister outlined his concerns about the relationship between the Government and the Convention of Scottish Local Authorities. I am not attacking COSLA; it does an essential job well. I appreciate its value, but it often has to adopt a consensus position in which the interests of all local authority members are not necessarily represented. Authorities in COSLA that are in a minority, politically or geographically, tend to lose out to the majority view. They have a right, however, to expect to make direct approaches to the Scottish Office and to have their anxieties dealt with, and not to expect that the COSLA formula is the be-all and end-all of the settlement.
This is not the first time that I have made this plea. I have had to point out several times to the House how local authorities in my area and in other parts of Scotland have been adversely affected. The Scottish Office has not been willing to find a solution to accommodate those authorities. It should try harder to do so in the future.
We are moving into an era of change. The Government know my view that the poll tax is not reformable and that the sooner it is abolished the better. I hope that they will take to heart my belief that the sooner they are able to say categorically that the poll tax will go and that a new, fairer system will be introduced, the quicker we will be able to resolve the outstanding anomalies faced by local authorities under the present regime.
The hon. Member for Tayside, North (Mr. Walker) castigated members of the Labour and Scottish National parties for their militant non-payment stance. I am getting letters from my constituents telling me that they wholly endorse the position of the Scottish Conservative party in encouraging them to withhold payment of the part of this year's increased poll tax that is caused by non-payment. I represent the only party that has not encouraged people not to pay the poll tax. Ministers should be a little careful.
Mr. Allan Stewart: I made the position of my right hon. Friend the Secretary of State and the Government crystal clear—in no circumstances do the Government condone or encourage anyone in Scotland to break the law.
Mr. Bruce: I accept that point, but I am sure that the hon. Gentleman would not deny that active members of his party do that. They do not appear to be disciplined or to be called to account in any way—
Mr. Wilson: They are appointed to Greater Glasgow health board.
Mr. Bruce: They are promoted by the junior Scottish Office Minister.
Mr. George Foulkes: I agree with the hon. Member. A properly endorsed, prospective parliamentary candidate in Edinburgh, South, Councillor Struan Stevenson, is one of the leaders of the campaign to encourage people not to pay the additional part of the poll tax. Surely Ministers should renounced him and he should be deselected.
Mr. Bruce: The Minister heard that comment and can respond later.
This tax is proving to be an extremely difficult constraint on local authorities, preventing them from providing the services that they are required to provide and, in most cases, are striving honourably to provide. It is administratively difficult to collect the tax. It is difficult to budget when the Government continually impose extra responsibilities on local authorities without always providing the necessary money and when the settlement on which local authority budgets must be based is sometimes made after those budgets have been set. We are legitimately entitled to ask the Government to address those issues.
The Government must recognise that Scottish local authorities need an annual settlement that is reasonably predictable and accept that local authorities have a job that they are elected to do and statutorily required to do and that no other organisation could do. There should not be constant attacks implying that local authorities are irresponsible but central Government are responsible. The opposite is also true. Democratically elected local authorities with clearly defined powers, financed by a properly accountable system, should be allowed to get on with the job. They should be allowed to budget properly, collect the tax because it is administratively simple to collect and deliver the services that people expect them to provide.
11.8 pm
Mr. Gavin Strang: The House can be in no doubt about the importance of these issues to our constituents. In my constituency, poll tax payers will be expected to pay £584 next year, which, as has been pointed out, is a high amount. A substantial number of my constituents cannot afford to pay it. I am grateful to my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar), who knows that that figure was arrived at with great difficulty and was the result of hard decisions by the Labour Administration to hold the increase down. That is a measure of how unworkable the tax is.
We should not lose sight of some of the fundamental flaws of the tax. In Edinburgh, and no doubt in other large cities, hundreds, if not thousands, of people have
962
disappeared from the electoral register and the poll tax register. The most fundamental case against the poll tax is that it is a disincentive to people to vote. No one approves of that, but surely we should judge our democracy by the degree of the participation of communities in the system. It is wholly unsatisfactory that we should have a system of local government taxation that has resulted in the disappearance of thousands of people from the electoral process.
Secondly, I repeat that we have seen a most massive transfer of the burden from the better-off areas of Edinburgh to the less well-off areas of the city. The same applies elsewhere. The amount of money being extracted from working people in my constituency is an absolute disgrace. At every constituency surgery, I come across the tragic cases of people who simply cannot afford to pay and, as a result, are in arrears and have actually had additional charges imposed on them. I am sure that many of my hon. Friends have had the same experience. The people to whom I refer are willing to pay, but they are simply unable to do so.
The third, and final, point that I want to make in relation to the poll tax is perhaps demonstrated more clearly in Lothian than anywhere else. It is that the system is totally unworkable. For the third year of the poll tax —1991–92—the Lothian regional council is budgeting for a 10 per cent. loss on yield. What a state of affairs that is. Whatever controversy surrounds the Lothian collection procedures, no one—certainly not any Minister—can reasonably say that Lothian regional council has not taken steps to secure the poll tax. In fact, the case of every person whose poll tax for 1989–90 is due is in the hands of the sheriff officers, and every effort is being made to collect the amounts due for 1990–91. Not £1 of debt has yet been written off. The reality is that the authorities there have had to face up to the fact that the tax is unworkable. They have had to budget for a 10 per cent. loss on yield. What sort of tax is this if only 90 per cent. of potential yield can be collected? And that takes no account of the people who have disappeared altogether and are not on the register.
Next year, the cost of collecting the tax will be £18·2 million, compared with the £7.4 million that it took to collect the rates in 1988–89—the last year of the rates. These figures are based on prices at September 1990. Surely, a tax that is unworkable, imposes a huge burden on our people and costs the Lothian regional council so much to collect is the ultimate folly.
11.13 pm
Mr. Harry Ewing: It is appropriate, though tragic, that we should be debating this order on the eve of the day when we shall see figures that show a massive increase in unemployment throughout the United Kingdom—and Scotland will bear its full share of that massive increase. It is almost as though Ministers ignore the fact that flowing from that massive increase in unemployment is the responsibility on local authorities to care for the families who are the victims of Government economic policy which has resulted in breadwinners losing their jobs.
I regret to say—for I have never before seen it in politics—that the present Government's attitude is that they could not care less what happens to family life. The poll tax, the revenue support grant and the services that are provided by local authorities are all aspects of family life. If the

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Government turn their back on what is happening to families—I am thinking of people's ability or inability to pay the poll tax, of the suffering that is caused by unemployment and of the effect of almost every other aspect of the Government's economic policy—they will sow the seeds of serious discontent.
As the hon. Member for Gordon (Mr. Bruce) said, the Government, and in particular the Minister who opened the debate, are generating a feeling that local government should be shunned or despised. The Minister's former colleague, Michael Ancram, even built a career on living off the back of local government. Since the Government came to office in 1979, the people of Scotland have every reason to be thankful to local government for the protection that councillors have provided the people whom they represent.
The Minister took pleasure in deriding local authorities in Scotland. However, he should think carefully about his constituents and the protection afforded to them by the councillors and the local authority in his constituency. They offer greater protection than does the Minister. The councillors offer protection that his constituents will welcome, cherish and appreciate because of the impact of the Government's policies on the people of Scotland.
I noticed that, when I rose to speak, the Minister of State, the hon. Member for Stirling (Mr. Forsyth), left the Chamber. I would not hold that against anyone and I do not blame him for doing that. However, it is noticeable that the Under-Secretary of State took every opportunity to criticise local authorities that increase their poll taxes. He did not take the opportunity tonight to praise Stirling district council for holding its poll tax level.
Local authorities cannot win even when they hold the poll tax at last year's level. The Stirling Observer is full of letters from supporters of the Minister of State criticising Labour councillors in Stirling for opportunism because they have held the poll tax at last year's level. If they had raised it, the paper would have been full of letters from the Minister of State's supporters criticising councillors for increasing the poll tax. Councillors in Scotland are doing an excellent job and they deserve the Government's support, not their criticism.
A new phenomenon is developing on the industrial scene in Scotland, involving large industrial conurbations comprising petrochemical industries that are highly capital-intensive, but low in terms of labour involvement. Indeed, BP has just announced that it is about to pay off another 100 people. The rate income to Central region, from those industries is high, but the job content is low. That has a social impact particularly on Central region and I hope that the Minister will consider the problem.
The Minister's main problem tonight is that he has been here before. He was a Minister, then he was a Back Bencher—
Mr. Thomas Graham: A never-ending story.
Mr. Ewing: The Minister is a retread. The Government seem to have more retreads than Kwik-fit.
The Minister has a past to live down. In this debate he has been unable to defend that past, and he has no future. In less than a year, we look forward to my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) and his colleagues occupying the Government Front Bench.
Mr. Ian Bruce: On a point of order, Mr. Deputy Speaker. I do not know whether you or your colleagues have any control over the annunciators, but it was rather surprising, while working in the Library about 10 minutes ago, to see that I was speaking in the Chamber. Is there some form of misrepresentation in this place? I had to rush in to find out what I was saying. Can that matter be reported to the authorities?
Mr. Deputy Speaker: I hope that the hon. Gentleman does not feel too embarrassed about being in two places at once.
11.19 pm
Sir Nicholas Fairbairn rose—
Mr. Foulkes: If the hon. and learned Gentleman rushes out, he will see his name on the annunciator.
Sir Nicholas Fairbain: I hope that I do not see the name of the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) on the annunciator because I should not wish to be confused with him.
The hon. Member for Falkirk, East (Mr. Ewing) made the important point that the Minister has a past to live down. It is important that the House should know that the hon. Member for Falkirk, East has no past to live down, nor has he a future. It is remarkable, as the hon. Member for Falkirk, East demonstrated, that there is great praise for central Government. All government is bad and should be small. The great benefit of Scotland and the reason why the Scots are so popular worldwide is that we are the only recognisable race on earth that has the benefit of not having a Government. That is why the Scottish assembly and all that nonsense shall never come to pass.
It is extraordinary that the proposed tax to be raised by local government, which Opposition Members so greatly praise, should rise by a third. I should have thought that it was a considerable criticism of their capability and their efforts that local authorities should be increasing taxes on pensioners, on the retired, on the sick, and on everybody else by one third. I do not know whether Opposition Members think that that is a good idea—they never stop whingeing about hardship. That tax is a formidable hardship for every person in Scotland, and let us not forget it. Who is praising those who are increasing the burden by a third? Opposition Members are praising them. There are those who say that local authorities are wonderful. Nevertheless, whatever services they give, local authorities are a burden on the back of every citizen. [HON. MEMBERS: "Nonsense."] I notice that those who said "nonsense" have all been members of local authorities—
Mr. Graham: And proud of it.
Sir Nicholas Fairbairn:—and proud of it, and no doubt proud that they are increasing the burden on the backs of the citizens this year by a third.
Mr. Ron Brown: The hon. and learned Gentleman knows that, for the past 10 or 11 years, the clawback from his Government has meant that Scotland has lost in excess of £10 billion of taxpayers' money which should have gone back to local authorities. It was our money. There is an element of dishonesty in the hon. and learned Gentleman's argument, because most of the funding comes from central Government. Local authorities—Tory, Labour or whatever—have a job to do

965
as subcontractors to central Government, but they have to be paid. If they are not paid, who is at fault? It is central Government, his Government. It is not a question of the poll tax. He is being dishonest by trying to kid people that it has something to do with the poll tax. It is about reality. The hon. and learned Gentleman should face up to that.
Sir Nicholas Fairbairn: Once or twice in my life, I have faced up to reality—[HON. MEMBERS: "When?"]—and I will do so now. When I was defending people against the death penalty perhaps I faced up to reality, so let it not be mocked.
Let us be clear about this. I do not know where the hon. Member for Edinburgh, Leith (Mr. Brown) gets his fantasies from about what he cares to call "clawback". In Scotland, we enjoy 30 per cent. per head more of all services than anybody in the rest of the kingdom. If he is looking for clawback, that will be the first thing to be affected if there is a Scottish assembly, whatever form it may take. There will never be another Labour Government, but if the hon. Gentleman cares to fantasise, he will lose 30 per cent. of what is spent on everybody who lives in Scotland. That will make whatever he fantasises about clawback look like major destruction. So let us have no nonsense about that.
The Government have obtained for the people of Scotland a level of life—
Mr. Jimmy Dunnachie: Poverty, unemployment, bad housing.
Sir Nicholas Fairbairn: No. Who said poverty? Let us be clear: when the Government came to office, Scotland had the lowest industrial wage in Europe; now it has the highest. We have obtained a quality of life for the people of Scotland which is denied to the rest of the people of the United Kingdom. It is perhaps something about which we should keep quiet lest we lose it. If we had an assembly, we would lose it.
Let us understand that there is nothing good about government, central or local, spending the money of those from whom they have to obtain it. I do not take pride in the concept that the people of Scotland may have to pay a third more next year because the people who will benefit from that are not those who pay it but those who spend it. I regard that as a Caledonian shame.
11.29 pm
Mr. Dick Douglas: Time is short, but I shall try to respond courteously to the hon. Member for Glasgow, Garscadden (Mr. Dewar), who asked a particular question. I can do no better than respond in a similar manner to that of his hon. Friend the Member for Falkirk, West (Mr. Canavan) who, the other day, when introducing his 10-minute Bill, said, as I would, that as soon as it is indelibly clear that the poll tax is abolished, he would pay all that he owed since that tax was introduced. That is as fair as we can put it.
The hon. Member for Garscadden knows, as does the hon. Member for Edinburgh, East (Mr. Strang) and the hon. Member for Glasgow, Cathcart (Mr. Maxton)—representing the districts they do—that the majority of people who are not paying the poll tax, cannot pay it. It is not sufficient to ask people who are in such a desperate plight to wait until there is a Labour Government. We
966
must analyse the cruelties of the tax by asking the Government whether they are going to persist with their view that the tax is collectable, when every authority gives signs that it is not.
The Parliamentary Under-Secretary for Scotland paraded the support grant order as though it were Government money that was being dispensed. We know well, as it has often been repeated to us, that Governments do not have any money— merely taxpayers' money in one form or another, that is redistributed. A balance has to be struck, and we are discussing the centralising forces of Government, depicted by the revenue support grant, versus local autonomy.
If we have any doubt about the nature of services asked for by central Government and called into being by the House, we should refer to appendix B of the report, which states:
"The following table shows the breakdown of current expenditure for 1991–92 as proposed by the Secretary of State".
The total valuation in terms of grant-aided expenditure is about £4·79 billion, which is what the Secretary of State decrees should be provided locally. Those are services that we in the House demand, and we ask that they be provided locally.
One service that I call, in shorthand, education, although its correct title is education, libraries and museums, receives £2·5 billion. We have the audacity to say that local authorities are profligate, when we know full well that they have to provide such services. We are discussing how to finance them.
The Parliamentary Under-Secretary spoke of the three elements of finance: the revenue support grant, the non-domestic rates and the specific grant. The balance is provided by the poll tax. How can it be right to gather tax from virtually all the population on the basis of taxes that are related to income and ability to pay, but when it comes to squeezing local authorities and trying to make them an example, the tax is totally unrelated to ability to pay?
According to the COSLA figures, 80 per cent. of expenditure by local authorities is determined by and comes from central Government. Local authorities are responsible for only 20 per cent., which now has to be collected by the most draconian measures, and the Government choose to ignore that percentage. They do so at their peril.
The law is being brought into disrepute. Civil liberties are being threatened. Labour Front-Bench Members paraded with me behind banners which declared, "No warrant sales". No doubt they will do so again in a month's time while simultaneously, to avoid breaching the Data Protection Act 1984, going through the list of local authority employees at great cost to embarrass those employees. Some of them may be making a political protest, but others may be lowly paid and cannot pay. I believe Jean McFadden, the leader of COSLA and an honoured member of Glasgow district council, who says that local government finance is in a state of crisis. The Government should make it plain that they will abolish the poll tax.
Yesterday we met the two Secretaries of State. There may well be deficiencies in our proposals for a local income tax, but they do not involve a tax which is unrelated to the ability to pay; they relate strictly to the ability to pay. We may disagree about the particular poundage, but what is not in dispute is that the poll tax is wholly unrelated to the

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ability to pay and should be opposed and brought to an end as soon as possible, in the interests of social cohesion and justice.
11.36 pm
Mr. Allan Stewart: We have had a wide-ranging debate and several detailed points have been raised, particularly by the hon. Member for Gordon (Mr. Bruce). I shall try to deal with them, but if I cannot, perhaps we can meet or exchange correspondence about them.
The hon. Member for Falkirk, East (Mr. Ewing) made some personal remarks about me. I speak as someone who has been a local government councillor.
Mr. Harry Ewing: Down here.
Mr. Stewart: Indeed, in London.
Mr. Ewing: In Westminster.
Mr. Stewart: Not in Westminster.
I am happy to take the opportunity to pay tribute to Eastwood district council, which serves the people extremely well, and to the Labour district councillors and the regional councillor who represent the Barrhead and Neilston wards in my constituency. I may disagree with their policies, but they try to do their best for the communities which they represent.
My hon. and learned Friend the Member for Perth and Kinross (Sir N. Fairbairn) and my hon. Friend the Member for Tayside, North (Mr. Walker) referred to the crucial point about the total level of public expenditure by local authorities. A fact which is not in dispute is that Scottish local authorities spend 30 per cent. more per adult than do local authorities in England or Wales. That figure needs more explanation than it has ever had. There is no obvious explanation for such a major disparity.
Both the hon. Member for Dunfermline, West (Mr. Douglas) and my hon. and learned Friend referred to the level of Government support to local government north and south of the border. In 1990–91, aggregate external finance in England represents 64·5 per cent. of the total. This year, the community charge payer in England pays 35·5 per cent. The comparable figures for Scotland—they may be of interest to some of my colleagues from south of the border who are listening to this debate—are that the aggregate external finance, the Government's contribution—
Mr. Douglas: Not the Government's.
Mr. Stewart: I stand corrected. I should have referred to the taxpayers' contribution—
Mr. Wray rose—
Mr. Stewart: I shall not give way. The hon. Gentleman is a constituent of mine, but in view of the time I cannot give way to him.
Mr. Wray rose—
Mr. Stewart: In case the hon. Gentleman threatens not to vote for me, I shall give way to him.
Mr. Wray: The Minister has mentioned many facts and figures, but he did not mention the magnitude of the uncollected poll tax. Does he realise that he has left untold the 14·9 per cent. uncollected poll tax in 1989–90 in Scotland, 17·4 per cent. of which was in Strathclyde
968
region? That meant a shortfall of £47 million. The latest figures provided by the statistical authorities in the House show that in late December 59·2 per cent. of the poll tax had not been collected. Some 63 per cent. of that was in Strathclyde. That makes a total of £623 million, with £289 still uncollected. How many warrant sales will that mean in Strathclyde?
Mr. Stewart: I am not sure that I shall always give way to my constituent, but I am happy to deal with his point about non-payment. The point was also made by my hon. Friend the Member for Tayside, North and by other hon. Members on both sides of the House.
Hon. Members should look at the precise figures. If it is so difficult to collect the poll tax, why has Borders collected 99 per cent. of its budgeted income for 1989, and is still receiving payments? It expects to collect in excess of its budgeted income this year. That shows that the system is adequate. It is an important fact that community charge income makes up only a little more than 20 per cent. of Scottish local authorities' total income.
The hon. Member for Glasgow, Garscadden (Mr. Dewar) made a number of points, but he failed to recall his forecast of what would happen this year. I shall remind him of that. He asked my right hon. and learned Friend whether he accepted
"that on a standstill budget with no expansion of service, the average payment is likely to rise by about £30 a year?"—[Official Report, 25 July 1990; Vol. 177, c. 490.]
If the hon. Gentleman's forecast had been proved correct, community charge payers in Scotland would be a great deal better off and much happier.
The hon. Gentleman referred to balances. The authorities have run down their balances in this financial year—
Mr. Harry Ewing: Which year?
Mr. Stewart: The current financial year, 1990–91, not the year to which the debate refers. Their reason for doing so is not unconnected with the fact that that was the year of the regional elections. First, the authorities have increased expenditure; secondly, they have run down their balances; and, thirdly, they have piled two years of non-payment on to the community charge payer for the next financial year. That is undoubtedly an exercise in political cynicism.
We have heard a lot from hon. Members about local authorities cutting their expenditure. We heard that particularly from the hon. Members for Glasgow, Garscadden (Mr. Dewar) and for Edinburgh, East (Mr. Strang) in relation to Lothian. But, as I understand it, Lothian is proposing to increase its expenditure by some 11·4 per cent. It has cut planned increases in expenditure, but that is not a cut in expenditure.
This is a perfectly fair settlement, and I commend it to the House.
Question put:—
The House divided: Ayes 292, Noes 193.

Division No. 65]

[11.45 pm

AYES

Adley, Robert

Arnold, Jacques (Gravesham)

Aitken, Jonathan

Arnold, Sir Thomas

Alexander, Richard

Ashby, David

Alison, Rt Hon Michael

Aspinwall, Jack

Allason, Rupert

Atkins, Robert

Amess, David

Atkinson, David

Arbuthnot, James

Baker, Nicholas (Dorset N)

969

Baldry. Tony

Gill, Christopher

Batiste, Spencer

Gilmour, Rt Hon Sir Ian

Beaumont-Dark, Anthony

Glyn, Dr Sir Alan

Bellingham, Henry

Goodlad, Alastair

Bendall, Vivian

Gorman, Mrs Teresa

Bennett, Nicholas (Pembroke)

Gorst, John

Bevan, David Gilroy

Grant, Sir Anthony (CambsSW)

Biffen, Rt Hon John

Greenway, Harry (Ealing N)

Blackburn, Dr John G.

Greenway, John (Ryedale)

Blaker, Rt Hon Sir Peter

Gregory, Conal

Bonsor, Sir Nicholas

Griffiths, Sir Eldon (Bury St E')

Boscawen, Hon Robert

Griffiths, Peter (Portsmouth N)

Boswell, Tim

Grist, Ian

Bottomley, Peter

Hague, William

Bottomley, Mrs Virginia

Hamilton, Hon Archie (Epsom)

Bowden, A (Brighton K'pto'n)

Hamilton, Neil (Tatton)

Bowis, John

Hampson, Dr Keith

Boyson, Rt Hon Dr Sir Rhodes

Hanley, Jeremy

Brandon-Bravo, Martin

Hannam, John

Brazier, Julian

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

Bright, Graham

Hargreaves, Ken (Hyndburn)

Brooke, Rt Hon Peter

Harris, David

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

Haselhurst, Alan

Bruce, Ian (Dorset South)

Hawkins, Christopher

Buchanan-Smith, Rt Hon Alick

Hayes, Jerry

Burns, Simon

Hayward, Robert

Butler, Chris

Heathcoat-Amory, David

Butterfill, John

Hicks, Robert (Cornwall SE)

Carlisle, John, (Luton N)

Higgins, Rt Hon Terence L.

Carlisle, Kenneth (Lincoln)

Hill, James

Carrington, Matthew

Hind, Kenneth

Cash, William

Hogg, Hon Douglas (Gr'th'm)

Chapman, Sydney

Howard, Rt Hon Michael

Chope, Christopher

Howarth, G. (Cannock & B'wd)

Clark, Rt Hon Alan (Plymouth)

Howell, Rt Hon David (G'dford)

Clark, Dr Michael (Rochford)

Howell, Ralph (North Norfolk)

Clark, Rt Hon Sir William

Hughes, Robert G. (Harrow W)

Clarke, Rt Hon K. (Ftushcliffe)

Hunt, Sir John (Ravensbourne)

Colvin, Michael

Hunter, Andrew

Conway, Derek

Hurd, Rt Hon Douglas

Coombs, Anthony (Wyre F'rest)

Irvine, Michael

Coombs, Simon (Swindon)

Jack, Michael

Cope, Rt Hon John

Jackson, Robert

Couchman, James

Janman, Tim

Cran, James

Jessel, Toby

Critchley, Julian

Jones, Gwilym (Cardiff N)

Currie, Mrs Edwina

Jones, Robert B (Herts W)

Curry, David

Jopling, Rt Hon Michael

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

Kellett-Bowman, Dame Elaine

Davis, David (Boothferry)

King, Roger (B'ham N'thfield)

Day, Stephen

Kirkhope, Timothy

Devlin, Tim

Knapman, Roger

Dicks, Terry

Knight, Greg (Derby North)

Dorrell, Stephen

Knowles, Michael

Douglas-Hamilton, Lord James

Knox, David

Dover, Den

Lamont, Rt Hon Norman

Dunn, Bob

Lang, Rt Hon Ian

Durant, Sir Anthony

Latham, Michael

Dykes, Hugh

Lawrence, Ivan

Eggar, Tim

Leigh, Edward (Galnsbor'gh)

Evans, David (Welwyn Hatf'd)

Lennox-Boyd, Hon Mark

Evennett, David

Lester, Jim (Broxtowe)

Fairbairn, Sir Nicholas

Lilley, Peter

Fallon, Michael

Lloyd, Sir Ian (Havant)

Field, Barry (Isle of Wight)

Lloyd, Peter (Fareham)

Finsberg, Sir Geoffrey

Lord, Michael

Fishburn, John Dudley

Luce, Rt Hon Sir Richard

Fookes, Dame Janet

Lyell, Rt Hon Sir Nicholas

Forman, Nigel

MacGregor, Rt Hon John

Forsyth, Michael (Stirling)

MacKay, Andrew (E Berkshire)

Forth, Eric

Maclean, David

Fowler, Rt Hon Sir Norman

McLoughlin, Patrick

Fox, Sir Marcus

McNair-Wilson, Sir Patrick

Franks, Cecil

Madel, David

Freeman, Roger

Major, Rt Hon John

French, Douglas

Malins, Humfrey

Fry, Peter

Mans, Keith

Gale, Roger

Maples, John

Gardiner, Sir George

Marshall, John (Hendon S)

Garel-Jones, Tristan

Marshall, Sir Michael (Arundel)

970

Martin, David (Portsmouth S)

Smith, Sir Dudley (Warwick)

Mates, Michael

Soames, Hon Nicholas

Maude, Hon Francis

Speed, Keith

Mawhinney, Dr Brian

Speller, Tony

Meyer, Sir Anthony

Spicer, Sir Jim (Dorset W)

Miller, Sir Hal

Spicer, Michael (S Worcs)

Miscampbell, Norman

Squire, Robin

Mitchell, Andrew (Gedling)

Stanbrook, Ivor

Mitchell, Sir David

Stanley, Rt Hon Sir John

Moate, Roger

Steen, Anthony

Monro, Sir Hector

Stevens, Lewis

Montgomery, Sir Fergus

Stewart, Allan (Eastwood)

Morrison, Sir Charles

Stewart, Andy (Sherwood)

Moss, Malcolm

Stewart, Rt Hon Ian (Herts N)

Moynihan, Hon Colin

Stokes, Sir John

Neale, Sir Gerrard

Sumberg, David

Needham, Richard

Summerson, Hugo

Nelson, Anthony

Tapsell, Sir Peter

Neubert, Sir Michael

Taylor, Ian (Esher)

Newton, Rt Hon Tony

Taylor, Teddy (S'end E)

Nicholls, Patrick

Tebbit, Rt Hon Norman

Nicholson, David (Taunton)

Temple-Morris, Peter

Nicholson, Emma (Devon West)

Thompson, D. (Calder Valley)

Norris, Steve

Thompson, Patrick (Norwich N)

Onslow, Rt Hon Cranley

Thorne, Neil

Oppenheim, Phillip

Thornton, Malcolm

Page, Richard

Thurnham, Peter

Paice, James

Townend, John (Bridlington)

Patnick, Irvine

Townsend, Cyril D. (B'heath)

Patten, Rt Hon Chris (Bath)

Tracey, Richard

Patten, Rt Hon John

Tredinnick, David

Pawsey, James

Twinn, Dr Ian

Peacock, Mrs Elizabeth

Vaughan, Sir Gerard

Porter, Barry (Wirral S)

Viggers, Peter

Porter, David (Waveney)

Wakeham, Rt Hon John

Portillo, Michael

Waldegrave, Rt Hon William

Powell, William (Corby)

Walden, George

Price, Sir David

Walker, Bill (T'side North)

Rathbone, Tim

Waller, Gary

Redwood, John

Ward, John

Renton, Rt Hon Tim

Wardle, Charles (Bexhill)

Riddick, Graham

Warren, Kenneth

Ridley, Rt Hon Nicholas

Watts, John

Ridsdale, Sir Julian

Wells, Bowen

Rifkind, Rt Hon Malcolm

Wheeler, Sir John

Roberts, Sir Wyn (Conwy)

Whitney, Ray

Roe, Mrs Marion

Widdecombe, Ann

Rossi, Sir Hugh

Wilkinson, John

Rowe, Andrew

Wilshire, David

Rumbold, Rt Hon Mrs Angela

Winterton, Mrs Ann

Ryder, Rt Hon Richard

Winterton, Nicholas

Sayeed, Jonathan

Wolfson, Mark

Shaw, David (Dover)

Wood, Timothy

Shaw, Sir Giles (Pudsey)

Woodcock, Dr. Mike

Shaw, Sir Michael (Scarb')

Yeo, Tim

Shelton, Sir William

Young, Sir George (Acton)

Shephard, Mrs G. (Norfolk SW)

Younger, Rt Hon George

Shepherd, Colin (Hereford)

Shepherd, Richard (Aldridge)

Tellers for the Ayes:

Sims, Roger

Mr. John M. Taylor and

Skeet, Sir Trevor

Mr. Tom Sackville.

NOES

Abbott, Ms Diane

Blair, Tony

Adams, Mrs. Irene (Paisley, N.)

Blunkett, David

Alton, David

Boateng, Paul

Archer, Rt Hon Peter

Boyes, Roland

Armstrong, Hilary

Bradley, Keith

Ashton, Joe

Brown, Nicholas (Newcastle E)

Banks, Tony (Newham NW)

Brown, Ron (Edinburgh Leith)

Barnes, Harry (Derbyshire NE)

Bruce, Malcolm (Gordon)

Battle, John

Caborn, Richard

Beckett, Margaret

Callaghan, Jim

Beith, A. J.

Campbell, Menzies (Fife NE)

Bell, Stuart

Canavan, Dennis

Benn, Rt Hon Tony

Carlile, Alex (Mont'g)

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

Clarke, Tom (Monklands W)

Benton, Joseph

Clelland, David

Bermingham, Gerald

Clwyd, Mrs Ann

Bidwell, Sydney

Cohen, Harry

971

Cook, Robin (Livingston)

Heal, Mrs Sylvia

Corbett, Robin

Henderson, Doug

Corbyn, Jeremy

Hinchliffe, David

Cousins, Jim

Hoey, Ms Kate (Vauxhall)

Cox, Tom

Home Robertson, John

Cryer, Bob

Howarth, George (Knowsley N)

Cunliffe, Lawrence

Ho wells, Geraint

Darling, Alistair

Howells, Dr. Kim (Pontypridd)

Davies, Ron (Caerphilly)

Hoyle, Doug

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

Hughes, John (Coventry NE)

Dewar, Donald

Hughes, Robert (Aberdeen N)

Dixon, Don

Hughes, Roy (Newport E)

Dobson, Frank

Hughes, Simon (Southwark)

Doran, Frank

Illsley, Eric

Douglas, Dick

Ingram, Adam

Dunnachie, Jimmy

Janner, Greville

Dunwoody, Hon Mrs Gwyneth

Johnston, Sir Russell

Eastham, Ken

Jones, Barry (Alyn & Deeside)

Evans, John (St Helens N)

Jones, Martyn (Clwyd S W)

Ewing, Harry (Falkirk E)

Kaufman, Rt Hon Gerald

Ewing, Mrs Margaret (Moray)

Kennedy, Charles

Fatchett, Derek

Lambie, David

Faulds, Andrew

Leadbitter, Ted

Field, Frank (Birkenhead)

Lestor, Joan (Eccles)

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

Lewis, Terry

Flynn, Paul

Litherland, Robert

Foot, Rt Hon Michael

Livingstone, Ken

Foster, Derek

Lofthouse, Geoffrey

Foulkes, George

Loyden, Eddie

Fraser, John

McAllion, John

Fyfe, Maria

McCartney, Ian

Galloway, George

Macdonald, Calum A.

Garrett, John (Norwich South)

McFall, John

Gilbert, Rt Hon Dr John

McKay, Allen (Barnsley West)

Golding, Mrs Llin

McKelvey, William

Gordon, Mildred

McLeish, Henry

Gould, Bryan

Maclennan, Robert

Graham, Thomas

McMaster, Gordon

Grant, Bernie (Tottenham)

McNamara, Kevin

Griffiths, Nigel (Edinburgh S)

McWilliam, John

Grocott, Bruce

Madden, Max

Hardy, Peter

Mahon, Mrs Alice

Harman, Ms Harriet

Marek, Dr John

Haynes, Frank

Marshall, David (Shettleston)

972

Marshall, Jim (Leicester S)

Rooney, Terence

Martin, Michael J. (Springburn)

Ross, Ernie (Dundee W)

Martlew, Eric

Rowlands, Ted

Maxton, John

Salmond, Alex

Meacher, Michael

Shore, Rt Hon Peter

Meale, Alan

Short, Clare

Michie, Bill (Sheffield Heeley)

Sillars, Jim

Michie, Mrs Ray (Arg'l & Bute)

Skinner, Dennis

Mitchell, Austin (G't Grtmsby)

Smith, Andrew (Oxford E)

Moonie, Dr Lewis

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

Morgan, Rhodri

Snape, Peter

Morley, Elliot

Soley, Clive

Morris, Rt Hon J. (Aberavon)

Spearing, Nigel

Mowlam, Marjorie

Steinberg, Gerry

Mullin, Chris

Stott, Roger

Murphy, Paul

Strang, Gavin

Nellist, Dave

Straw, Jack

Oakes, Rt Hon Gordon

Taylor, Mrs Ann (Dewsbury)

O'Brien, William

Turner, Dennis

O'Hara, Edward

Vaz, Keith

O'Neill, Martin

Wallace, James

Parry, Robert

Walley, Joan

Patchett, Terry

Warden, Gareth (Gower)

Pendry, Tom

Wareing, Robert N.

Pike, Peter L.

Watson, Mike (Glasgow, C)

Powell, Ray (Ogmore)

Welsh, Andrew (Angus E)

Primarolo, Dawn

Williams, Rt Hon Alan

Quin, Ms Joyce

Williams, Alan W. (Carm'then)

Radice, Giles

Wilson, Brian

Randall, Stuart

Wise, Mrs Audrey

Rees, Rt Hon Merlyn

Worthington, Tony

Reid, Dr John

Wray, Jimmy

Richardson, Jo

Young, David (Bolton SE)

Robertson, George

Robinson, Geoffrey

Tellers for the Noes:

Rogers, Allan

Mr. Thomas McAvoy and

Rooker, Jeff

Mr. Jack Thompson.

Question accordingly agreed to.
Resolved,
That the Revenue Support Grant (Scotland) Order 1991, dated 28th January 1991, a copy of which was laid before this House on 30th January, be approved.

Water Metering (Isle of Wight)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Boswell.]
11.57 pm
Mr. Barry Field: I thank you, Mr. Speaker, for granting me this debate on water metering. The Isle of Wight faces many challenges in a changing world. We have a corrugated, stainless steel-clad low energy hospital that has not yet opened, a highly controversial, waste-derived fuel plant, which looks as though it will be joined by an equally controversial pellet and coal-fired mini power station, and to date 48,000 domestic water meters.
I had the first Adjournment debate on water metering on 14 June 1989, and tonight is the culmination of our experience thus far, although the trial is to continue until 1993. The purpose of the debate is, I hope, to have some effect on national decisions on water metering, using the benefits of experience on the Isle of Wight, as well as encouraging Ministers to follow up and tidy up a few loose ends.
Mr. Ian Byatt, Director General of the Office of Water Services, visited the island in December last year, and the opportunity for the public and interested bodies to put their views to him on paying for water ends on 31 March this year. Mr. Byatt held his first public meeting on water charging on the island at Sandown, and I must put on record my personal thanks for his courtesy, kindness and refreshingly open approach to both myself and my constituents.
I hope to tackle in this debate first the national and then the local issues. Our experiences tell us that a higher standing charge, with a fixed block tariff, would be preferable to the very low standing charge and the rising block tariff that we have. That is because the Isle of Wight is a holiday destination with a massive seasonal fluctuation and a high proportion of second homes. The consumers involved are not paying an effective price for the infrastructure costs of water supply and sewage disposal, while those of us who are resident all the year round are effectively subsidising the absentee property owners. I hope that my hon. Friend the Minister will give me an assurance that the position will be adjusted as soon as comparative data on the existing tariff structure have served their purpose, remembering that the trial continues until 1993.
The Council for the Protection of Rural England has said that water meters are the right answer to the environmental problems created by ever-increasing consumption of water nationally. The Isle of Wight escaped a hosepipe ban last summer, although we have to import large quantities of water to meet the peak demand in summer.
In my original Adjournment debate, I mentioned that the Liberal Democrats had called for the island to be metered, but had attempted to distance themselves from that position once the project was under way. It is a sad commentary on their political creed that a minority of their number have since sought to create fear and panic in the local population by suggesting that water metering has led to a rise in the number of cases of gastro-enteritis—a claim immediately dismissed as irresponsible and ill founded by the island's public health consultant, a doctor.
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We have only to think of Italy, Spain and France, which have exceptionally hot summers and water meters, to realise how idiotic such claims are.
The waste water charges have led to some concern, particularly among keen gardeners who resent being charged for a percentage of the water consumed on the basis of its being returned to the sewer: in their case, it usually goes on their begonias. The position is difficult to explain logically; some thought will have to be given simplifying that aspect of metering nationally.
I appreciate, however, that in many areas the company supplying the water is not the one responsible for disposing of the sewage. The current freeze-up has highlighted the need yet again to reassure metered property owners that their bills will be adjusted to take account of leaks that are reported and repaired within a reasonable period. Lest anyone should suggest that the cost of water lost through frozen pipes should not be shared by the water company, let me point out that the water companies themselves have wasted many thousands of gallons through burst water mains during the severe weather, through no fault of their own.
The Parliamentary Under-Secretary of State for the Environment, my hon. Friend the Member for Wells (Mr. Heathcoat-Amory), wrote to me on 13 November following my meeting with my right hon. Friend the Member for Finchley (Mrs. Thatcher), who was then Prime Minister. I was concerned at the size of bills facing large familes with young children, and constituents with severe medical problems. I urged my right hon. Friend to consider a survey of all the meter trial areas to analyse the problem.
My hon. Friend the Under-Secretary wrote to me as follows:
"I agree that some further investigation is necessary and we are proposing to carry out a small study of all the trial areas to see if a problem exists. As a first step, the water companies involved in the trials will be asked to identify from their records those customers where the change to metering has resulted in substantial additional cost. Linking this information to data obtained during meter installation surveys about the type of property and the number of occupants should provide a basis for deciding if there are grounds for conducting a small social survey along the lines you suggest.
As you know, Ian Byatt has published a consultation paper on methods of charging for water. That exercise will also provide an opportunity to throw further light on this particular subject and we shall look to see what is said about it in the responses to the consultation paper."
Mr. David Evans: Is my hon. Friend aware that water metering trials were carried out in Welywn Hatfield in the Brookmans Park area and that, after tremendous representation to me, the local media, the Government and the local water authority, the meters—over 500—were found to be faulty? The huge bills, such as those my hon. Friend has mentioned in the Isle of Wight, were found to be far too high. The meters did not work and the whole scheme has been abandoned, much to the delight of the people of Brookmans Park. We are now waiting for the local water authority and the Government to come up with a much more satisfactory scheme that will not cause inconvenience to my constituents. I entirely agree with my hon. Friend the Member for Isle of Wight that it is a ludicrous and unnecessary factor of our life today to introduce water meters that do not work and are against the public interest.
Mr. Field: From his experience of just 500 meters, my hon. Friend might consider how busy I have been with 48,000 of them.
I hope that my hon. Friend the Under-Secretary will agree that it should not be necessary for me to keep troubling the Prime Minister about this. Since my hon. Friend the Member for Wells wrote to me, I have been to see the chairman of the Social Security Advisory Committee, who has drawn attention to the need for some additional adjustment to social security benefits to assist low-income families with their bills. I hope that my hon. Friend the Under-Secretary will tell me where his officials have got to with the study. I urge him to consider recommending a local adjustment to the housing benefit structure to meet the problem if the study shows that it is warranted.
There appears to be an on-going concern with the non-domestic metering of church property and village halls. Such properties used to receive water at a reduced rate, and the transfer to the full non-domestic tariff has been quite a problem for their already stretched finances. That needs serious consideration. I have been unable to obtain any conclusive help from Ministers or the water companies on this point. For my constituents and the various church authorities, it is still very much a live issue.
I should like to use this Adjournment debate to draw the attention of my hon. Friend the Under-Secretary to an anomaly in the law. There is no ability to reduce or waive the infrastructure charges. That is particularly unhelpful for first-time sewage schemes. There is no method available to require households to connect to new sewage schemes, yet those who do not are often the first people to complain about pollution of streams and rivers. That anomaly must be addressed, and I believe that I have the support of the National Rivers Authority in saying that. I make that point in the hope that my hon. Friend the Under-Secretary will take it up and ensure that his Department addresses it in due course when it is considering environmental legislation.
I can tell my hon. Friend the Under-Secretary of one domestic property that has since decided to disconnect from the first-time sewage scheme in order to save the charges. That is irresponsible. The ability not to connect, or even to disconnect, runs contrary to the excellent environmental programme in which the Government are engaged to clean up our beaches and estuaries. It is quite wrong that this should still be a voluntary matter, especially when the borough and district councils and the water company have invested so much in new sewage schemes.
Last week, Southern Water announced that it would not fit any more meters on the island, and that it is drawing the line at 48,000 out of a total of 53,000 homes. At the beginning of the trial, I had an avalanche of correspondence from constituents who did not want their property to be metered. Now I regularly receive letters urging me to obtain meters for my constituents.
I have two secretaries on the island, one with a metered property and the other with an unmetered property. The latter pays £125 a year for her water, based on a rateable value of £180. The former pays £108 for her metered water supply and her house had a rateable value of £240. Those figures show why an increasing number of my constituents want to know why they cannot have meters fitted.
I urge my hon. Friend to find a modest sum to enable the water company to offer meters to customers, allowing
976
an element of customer choice to the remaining 5,000 dwellings. I appreciate that these dwellings are largely the uneconomic properties and that it is uneconomical to meter subdivided flats in large buildings, but I hope that the Minister will agree that 5,000 homes are too many to be left unmetered. I realise that it would never be possible to cover 100 per cent. of the properties on the island, but given our strong island community spirit—we are all in the same boat—the number not yet fitted with meters should be significantly reduced. I believe that we need another 1,000 to 1,500 meters.
My only other plea tonight is that the review of the community charge and the abolition of rateable values should not impede the installation of water meters in the parts of the United Kingdom where water is often in short supply. This method of charging for water puts a precious resource in its proper perspective, and we must make progress with it for the sake of future generations of people and wildlife. I hope to hear that my hon. Friend the Minister for the Environment and Countryside will shortly accede to my request to visit the island to see the scheme for himself.
12.13 am
The Parliamentary Under-Secretary of State for the Environment (Mr. Tony Baldry): I congratulate my hon. Friend the Member for Isle of Wight (Mr. Field) on securing time for a further debate about water metering trials, which are being conducted throughout the whole of his constituency. He has made a number of points with care, and I shall do my best to respond to them in detail. If time prevents me from dealing with all of them, I shall write to him with more details.
This trial, the largest of the 12 metering trials taking place around the country, has been the focus of much attention both within and outside the water industry. My hon. Friend has spared no effort in pursuing a number of important issues that have arisen as a result of the trial with Ministers, senior officials and Southern Water, and he has been steadfast in the pursuit of his constituents' best interests.
As the House will be aware, the water industry has used rateable values as the basis of charging for its services for many years. That basis provides only a rough and ready link with consumption and, like the old system of domestic general rates, it has resulted in anomalies and unfairness, particularly for pensioners and other small households living in houses and flats with high rateable values.
With the abolition of domestic rates last year and the ban on the use of rateable values as a basis of charging for water and sewerage from the year 2000, there is a need for the water industry to move towards new methods of charging for its services. Metering, a flat rate charge per property and banding of property with a flat rate charge for each band are the main options being considered. The House will be aware that the debate on various charging options is being carried forward in a consultation paper that the Director General of Water Services issued last year.
Each water company must make its own choice of future charging method in the light of all the circumstances in its operating area. Although, with normal rainfall, we are not yet near the limit of supplies, even in dry areas, it is an obvious fact that the supply of water is finite. One of

977
the most effective ways of reinforcing the prudent use of water, by discouraging indiscriminate use and waste, is to relate charges to the amount of water used.
I believe that metering is potentially the fairest option, as it extends the normal principle that customers pay for what they use. It is, of course, the method used in relation to other utilities, such as gas and electrictity. My hon. Friend will be aware that a recent survey by the Consumers Association of its members on the Isle of Wight confirms my belief; 66 per cent. or so of those responding expressed a preference for water charges on the basis of a metered supply. My hon. Friend made it clear that some of those on the island who are still unmetered see the benefit of having meters fixed.
The number of domestic properties that have a metered water supply is growing all the time. In addition to the 61,000 properties in the metering trials, many households have opted to have a meter installed on a voluntary basis, and many water companies now require new properties to be fitted with a meter as a condition of connecting a water supply.
The metering trials were set up in 1988 to provide information on the costs and problems of implementing a general system of metering and to determine the impact of charging by volume on consumption. The main aim of the Isle of Wight trial is to establish the practicality and costs of metering on a large scale. It is also designed to investigate the advantages and disadvantages of internal and external metering. It is the only large-scale trial in the programme, involving around 52,000 properties. The installation phase is almost complete, and about 94 per cent. of the properties on the island have been metered.
It is, of course, inevitable that a fundamental change in the basis of charging for water, from rateable values to charges based on the volume of water used, means a shift in the incidence of payment between households. My hon. Friend will be aware that, in the small-scale trials, about two thirds of customers on average are paying the same as, or less than, they would under the rateable value system of charging. Similar information is not yet available from the Isle of Wight because not all customers have been charged on the basis of metered use for a full year, and those that have may not be a representative sample.
Nevertheless, an analysis of some 7,750 annual metered charges for 1989–90 on the island has shown that only about 10 per cent. are paying £50 or more per year more than they would have done under the rateable value basis of charging. This compares with about 11 per cent. of customers in the small scale trial areas. I accept that the Isle of Wight sample may not be representative of the whole, but at this stage I have no reason to believe that, in general, the effect of metering on the Isle of Wight is any different from that in the other trial areas.
My hon. Friend is aware that the charges scheme for the Isle of Wight provided a number of safeguards designed to protect the interests of customers. These included a limit on the amount by which charges can be increased, and provision for the tariff to be reduced if income from the trial exceeds what would have been received from charges based on rateable values for the island as a whole, provided that the increased income did not arise from increased consumption caused by abnormally dry weather conditions.
978
I know that the question of income from the trial has raised particular concern. Monitoring this safeguard poses some difficulty, because not all properties were metered during the first year of the trial, and during this period customers would have been billed variously on rateable value, on part rateable value and part metered consumption, or wholly on metered consumption. This has made it difficult for a proper comparison to be made. In addition, certain information about a water company's operations is commercially sensitive, and it would be improper to make it public.
However, my hon. Friend will be aware that, in order to achieve the same level of income as would have been received under the rateable value charging basis, the trial tariff was determined on the basis of the average consumption per household on the island. He will also be aware that the average consumption is running well below the level assumed when the original tariff was agreed. There is no reason, therefore, to doubt the assurance that my Department has received from Southern Water that its income has not exceeded the level that would have been recovered from rateable value-based charges.
I am aware of speculation that Southern Water might increase the charges to compensate for any loss of income. There is no provision in the charges scheme for an increase in the tariff on that account. A proposal to do so would require an amendment to the charges scheme, which can be made only with the approval of my right hon. Friend the Secretary of State, following consultation with all customers. I understand that the proposed increase in the trial tariff for 1991–92 falls within the limits on increases provided for in the present charges scheme, and that Southern Water is not proposing to seek approval for a further increase.
My hon. Friend has expressed concern over the effect of the rising block tariff on those people who have a need to use large amounts of water. I should explain to the House that the particular tariff used in the Isle of Wight trial is designed to encourage the use of water for essential purposes but, at the same time, to limit non-essential usage. All customers pay a standing charge. The first 90 cu m of water used each year is charged at a preferential rate, and all usage in excess of this amount is charged at a higher rate.
The amount of water charged at the preferential rate was calculated to cover the essential water requirements for a household of three people. This was to the benefit of most customers, since the average household size on the island is less than three people. I accept, however, that this tariff places a relatively higher burden on large families and those who have a need to use larger amounts of water than normal because of a disability or medical condition.
Concerns about the rising block tariff were raised at the public meeting that my hon. Friend arranged in conjunction with Southern Water last December. I understand that Southern Water has taken note of what was said at that meeting and is prepared to adjust the tariff so that the allowable increase in charges for 1991–92 will not bear so heavily on large users. It is proposing to increase only the standing charge and the preferential rate, leaving the higher rate at its present level.
The effect of this is that, at the average level of consumption on the island, the overall increase in water and sewerage charges will be 14·7 per cent.—which is in line with the average increase in regional charges generally. The increase for larger users will be less. For example, at

979
200 cu m, the increase will be only 10·4 per cent. It is inevitable, of course, that low users will pay proportionately more. Households using 80 cu m, for example, will face an increase of 16·7 per cent. But even at this level, the increase works out, on average, at less than 5p per day, and, in general, it is the smaller households that have gained most benefit from the change to metered charging.
I am sure that my hon. Friend will welcome this move towards reducing the differential between the preferential and higher-rate charges. I appreciate, however, that it does not fully allay his concern about the level of charges faced by large low-income families and those people who have a need to use larger than normal amounts of water because of a disability or medical conditon. He is aware that my Department has collected information from the trial areas about the number of households facing substantial increases in bills as a result of metering together with information on the number of people in those households, and whether they are in arrears with payment, in an effort to gauge the possible extent of the problem and to see whether a small social survey was justified.
I have to say that there have been considerable difficulties in making any meaningful assessment of the information from the Isle of Wight trial. That is mainly due to the fact that few customers provided Southern Water with information on the size of household when the properties were surveyed prior to installation of meters. However, based on such information as is available from a relatively small sample, it has been estimated that about 1·5 per cent. of households on the island consist of families with three or more children who are paying £50 or more than they would have done under the old system of charges based on rateable value. It has, however, not been possible to put a reliable figure on the number of households in arrears with payment.
980
My hon. Friend referred to a commitment given by my hon. Friend the Member for Lewisham, East (Mr. Moynihan), when he was Under-Secretary for the Environment, to pursue the question of including increases in water charges in the uprating of income support. I can assure him that this matter has been discussed extensively between my Department and the Department of Social Security. I am aware that the Social Security Advisory Committee has recommended an increase in income support rates by an amount greater than would otherwise be the case in recognition of the fact that water charges are increasing faster than the rate of inflation. I am sympathetic to that recommendation, and we are pursuing it with the Department of Social Security. However, my hon. Friend will of course appreciate that that is one of many demands on public expenditure and will have to be considered alongside those demands.
My hon. Friend raised a number of other points about which I promise to write to him in detail. Those points ranged from the position concerning church halls to hygiene. However, I hope that he will have been reassured by my comments, by the fact that we continue to give attention to his concerns and that my hon. Friend the Minister for the Environment and Countryside has accepted an invitation to visit the island on 30 April.
I congratulate my hon. Friend on bringing the metering trials once more to the attention of the House. As he has said, they will continue well into 1993. A great deal of information has already been collected and published about the cost and problems of installing meters. We are anxious as far as possible to resolve any outstanding difficulties that may still remain.
Question put and agreed to.
Adjourned accordingly at twenty-seven minutes past Twelve o'clock.

TRANSPORT

  Woodford Aerodrome
  Sir Thomas Arnold
  To ask the Secretary of State for Transport (1) what representations British Aerospace plc has made to his Department about the extent to which Woodford aerodrome in Greater Manchester is functioning within the standards set down by the Civil Aviation Authority; and if he will make a statement;

  (2) whether he has any plans to review the standards laid down by the Civil Aviation Authority governing the use and operating limits of individual aerodromes;

  (3) if he will cite the relevant legislation under which the Civil Aviation Authority is empowered to vary or authorise a temporary derogation from the standards laid down governing the use and operating limits of individual aerodromes; and whether he monitors such variations or derogations.

  Mr. McLoughlin
  I have received no representations from British Aerospace about Woodford aerodrome. The statutory responsibility for regulating the safety of civil aviation in the United Kingdom rests with the Civil Aviation Authority in accordance with the Air Navigation Order 1989. This includes the granting of aerodrome licences to persons or organisations who are deemed by the authority to be fit and competent to hold such licences. I have no plans to review the standards laid down.

  Aerodromes
  Sir Thomas Arnold
  To ask the Secretary of State for Transport (1) for which aerodromes he has appointed British Aerospace plc a statutory undertaker; what was the date of the appointment in each case; and how long he expects the appointments to last;

  (2) if he will list the circumstances in which a plc may be appointed statutory undertaker and cite the principal, relevant legislation governing its conduct thereafter.

  Mr. McLoughlin
  The status of certain operators as statutory undertakers is governed by section 57 of the Airports Act 1986. In the main the airports specified are those which are subject to economic regulation under part IV of the Act. Airports specified in this section are deemed to be statutory undertakers for the purposes of other legislation specified in schedule 2 of the Act.

  British Aerospace, through its wholly owned subsidiary British Aerospace (Liverpool Airport) Ltd., owns 76 per cent. of Liverpool Airport plc, which is a statutory undertaker under the 1986 Act. No other airport owned by British Aerospace is a statutory undertaker.

  Rolling Stock
  Mr. Steinberg
  To ask the Secretary of State for Transport, pursuant to his answer of 30 January 1991 at col.520, what information he has on the numbers of (i)
  466
  diesel locomotives over 20 years old, (ii) electric locomotives over 20 years old, (iii) high-speed trains over 15 years old and (iv) coaching vehicles over 20 years old, in use by British Rail.

  Mr. McLoughlin
  Neither the Department of Transport nor Her Majesty's railway inspectorate holds this information.

  Vehicle Emissions
  Mr. Franks
  To ask the Secretary of State for Transport when he will introduce an emissions check in the MOT testing scheme for cars.

  Mr. Chope
  The regulations implementing a carbon monoxide and hydrocarbon emissions check will be made at the earliest opportunity, subject to notification to the EC. I hope that checking will start on 1 November 1991.

  If vehicles are to pass the MOT test, they will need to be properly tuned so that carbon monoxide (CO) emissions are kept as low as possible. The standards we will be setting for carbon monoxide levels are realistic, but they will be only minimum standards and motorists should aim to have their vehicles tuned to manufacturers' specifications wherever possible. The hydrocarbon emissions check will enable MOT testers to be sure the engine is running normally before they carry out the carbon monoxide check.

  This will be a first step in in-service emissions checking. It is our intention that the standards in the test should reflect future improvements in engine technology and developing international standards.

EDUCATION AND SCIENCE

  Geography
  Mr. Terry
  To ask the Secretary of State for Education and Science (1) if he will list the people who were consulted when the consultative report on attainment targets in geography was revised over Christmas 1990; and how many of these were geographers or geography teachers;

  (2) why he decided to remove inquiry skills and land-use conflicts from the attainment targets in geography.

  Mr. Eggar
  My right hon. and learned Friend received advice from the National Curriculum Council in the form of its report on consultation and recommendations for both attainment targets and programmes of study in geography. He accepted the greater part of this advice, but made a number of changes in publishing the draft order for geography. At that time, he explained his view that the main emphasis of the attainment targets should be on the assessment of pupils' knowledge and understanding of aspects of geography, and that less emphasis should be placed on the assessment of skills which are not particular to geography and the study of people's attitudes and opinions.

  Lancashire County Council
  Mr. Pike
  To ask the Secretary of State for Education and Science what requests he has received from Lancashire county council to discuss the 1991–92 capital allocation.
  467
  Mr. Fallon
  My right hon. and learned Friend has received no such requests.

  Departmental Achievements
  Mr. Pawsey
  To ask the Secretary of State for Education and Science if he will make a statement on the principal achievements of his Department since June 1987.

  Mr. Eggar
  We have made rapid progress in implementing the important changes introduced by Parliament in 1988 to improve standards and choice.

  The Education Reform Act (ERA) includes measures to provide a national curriculum for pupils of compulsory school age, comprising a range of subjects for which targets, programmes of study and testing are being established; to widen the choice available to parents; to ensure that schools can admit pupils up to the limit of their capacity; to require all local education authorities to develop schemes for the local management of their schools, with budgets largely determined by reference to pupil numbers; to offer all schools the opportunity to opt out of local authority control and have grant-maintained status; to establish a number of city technology colleges; to establish polytechnics and other major colleges as independent institutions; to reform the government and management of further education colleges; and to reform the finance and management of the university system.

  In addition, the Government continue to seek to improve teaching quality. They are continuing to provide substantial funds through direct grant to support in-service training. The criteria to which courses of initial teacher training must conform have been improved. Regulations are being prepared under which the performance of all teachers in maintained schools will be appraised on a two-year cycle. A range of initiatives has been taken on the supply and recruitment of teachers, and new arrangements for teachers' pay have been brought forward.

  The Government have reformed the examination system for 16-year-olds, through the introduction of the GCSE based on national criteria, resulting in a significant increase in attainment: the proportion of school leavers in England with five or more grades A to C at GCSE—O-level—CSE rose from 26·4 per cent. in 1987 to 31·9 per cent. in 1989 and the proportion of 18-year-olds in England achieving two or more A-levels rose from 15· 7 per cent. in 1987 to 17·4 per cent. in 1989. The proportion of 16-year-olds participating in full-time education in England rose from 48·4 per cent. in 1987–88 to 55·4 per cent. in 1989–90.

  Participation in higher education has increased, with the proportion of 18 to 19-year-olds in Great Britain entering higher education rising from 14·6 per cent. in 1987–88 to nearly 19 per cent. in 1990–91, with every prospect of increasing still further. A student loans scheme, unique in the world in combining universal entitlement with a substantial interest subsidy, has been successfully introduced.

  Accreditation of Teacher Education
  Mr. Andrew Smith
  To ask the Secretary of State for Education and Science what progress Her Majesty's inspectorate have made in their role as assessors to the 468
  Council for the Accreditation of Teacher Education and to local committees as set out in Department of Education and Science circular 24/89.

  Mr. Fallon
  Her Majesty's inspectorate attend all meetings of the Council for the Accreditation of Teacher Education and as many meetings of the local committees as their other duties permit. Her Majesty's inspectorate comment on proposals for new and revised post-graduate certificate of education (PGCE) and bachelors of education (BEd) courses and contribute as necessary to the work of the committees. Her Majesty's inspectorate assessors are currently evaluating the work of the local committees and their progress during the first year of operation.

  Mr. Andrew Smith
  To ask the Secretary of State for Education and Science how much extra money was given to the funding councils in respect of the new criteria and accreditation procedures for teacher training, as per circular 24/89.

  Mr. Fallon
  Grant to the funding councils took account in both 1990–91 and 1991–92 of the costs associated with the new arrangements for initial teacher training announced in circular 24/89. In neither year were funds earmarked within the total grant made available. It is for the funding councils to determine how to reflect the changes in their allocation of funds to individual institutions.

  Music
  Mr. Anthony Coombs
  To ask the Secretary of State for Education and Science when the interim report of the national curriculum working group for music will be published.

  Mr. Kenneth Clarke
  My right hon. Friend the Secretary of State for Wales and I will publish the report tomorrow, together with my letter to the chairman of the group, Sir John Manduell. Copies of this initial advice, including my letter, will be placed in the Library.

ENVIRONMENT

  London Docklands Communities
  Mr. Redmond
  To ask the Secretary of State for the Environment if he will list the number of(a) public highways and thoroughfares, (b) private houses and (c) local authority houses that were lost in the development of the London Docklands development scheme; and what resources have been made available to local and family historians to trace such lost communities.

  Mr. Key
  Developments in London docklands have not led to the loss of any public highways or thoroughfares.

  LDDC has sought to minimise the loss of existing public and private housing. Some demolition is unavoidable in connection with the LDDC's Limehouse link road and a small number of smaller schemes. Over 500 households have recently been rehoused in connection with the link. The rehousing options offered by LDDC included three attractive newly built estates to help retain existing communities as well as providing a wide choice of homes in or near the area.

  LDDC has also helped a number of docklands organisations involved with local history, including some

  469
  £32,000 in grants over the past two years for the Island History Trust, the Rotherhithe heritage museum, and Bermondsey memories.

  Local Government Finance
  Mr. Blunkett
  To ask the Secretary of State for the Environment if he will list for each category of those eligible for poll tax exemption in 1990–91 his estimates of(a) the number exempted and (b) the cost to central Government.

  Mr. Portillo
  The estimated numbers exempt from the personal community charge in England at 1 June 1990 are as follows:

  Number

  People whose sole or main residence is in a residential care home, nursing home, private hospital, or hostel providing care, who are receiving care

  321,000

  Patients whose main residence is an NITS hospital

  42,000

  Severely mentally handicapped

  97,000

  Residential care workers employed at a very low salary

  1,500

  Aged 18 and in receipt of child benefit, or aged 18 or 19 and in full-time education

  179,000

  Full time students whose term address is in Scotland or Northern Ireland

  2,500

  Members of religious communities

  11,000

  Residents of certain crown buildings (mainly military training colleges) for whom the crown makes contributions in aid to local authorities

  4,000

  Members of visiting forces, international headquarters and defence organisations and their dependents and diplomats

  40,000

  Contributors to the collective community charge

  20,000

  In detention (Source: Home Office)

  45,000

  Reliable information on persons without fixed abodes and living in short-stay hostels is not available.

  There is no cost to Government as a result of these exemptions since these groups have never been liable to the community charge under the Local Government Finance Act 1988.

  Mr. Richard
  To ask the Secretary of State for the Environment if he will estimate how many non-domestic ratepayers in England will have faced rates increases in cash of 50 per cent. or more when comparing 1991–92 bills with those of 1989–90.

  Mr. Portillo
  I estimate that approximately 700,000 non-domestic properties in England will attract rate bills in 1991–92 which will be more than 50 per cent. higher in cash terms than in 1989–90. This estimate takes no account of any changes in rateable values as a result of appeals.

  Mr. Richard Shepherd
  To ask the Secretary of State for the Environment if he will estimate the increase in percentage terms in the average rate bill paid by(a) shops, (b) hotels and (c) all non-domestic properties between (i) 1989–90 and 1990–91 and (ii) 1990–91 and 1991–92.

  Mr. Portillo
  The average percentage increases in rate bills for shops and hotels in England are estimated to be:

  1989–90 to 1990–91

  1990–91 to 1991–92

  Shops

  13

  15·3

  Hotels

  23·7

  26·4

  470
  For non-domestic properties as a whole, average bills will have risen broadly in line with increases in the retail prices index. These estimates do not take account of changes in rateable values as a result of appeals.

  Mr. Richard Shepherd
  To ask the Secretary of State for the Environment if he will estimate the increase in the average non-domestic rate poundage in England in each year from 1981–82 to 1991–92.

  Mr. Portillo
  The percentage increases in the average non-domestic rate poundage are shown in the table:

  Per cent.

  1981–82

  20·7

  1982–83

  13·0

  1983–84

  6·5

  1984–85

  5·3

  1985–86

  7·2

  1986–87

  10·3

  1987–88

  5·3

  1988–89

  7·0

  1989–90

  7·8

  1990–91

  17·6

  1991–92

  1109

  1 The figures given are the RPI figures for September 1989 and September 1990 used in setting the non-domestic rate multipliers for 1990–91 and 1991–92.

  Mr. Oppenheim
  To ask the Secretary of State for the Environment if he will give figures for(a) rate support grant per head, (b) business rate income per head and (c) total aggregate external finance for each local authority in England.

  Mr. Key
  [holding answer 8 February 1991]: I have today arranged for the available information to be placed in the Library of the House.

  Joint Police Authorities
  Mr. Madden
  To ask the Secretary of State for the Environment when he intends to announce his proposals for capping of the joint police authorities for 1991–92; what representations he has received concerning the impact of capped police budgets on the recruitment and retention of police officers; and if he will make a statement.

  Mr. Key
  We have received a number of comments and representations on our intentions for charge capping for 1991–92, including those made separately to my noble Friend the Parliamentary Under-Secretary of State and to my right hon. and noble Friend the Minister of State, Home Office when they met a number of police authority representatives to hear their views. As my right hon. Friend the Secretary of State told the House on 29 January, we stand firmly by our intentions for capping, which are, however, necessarily provisional, since under the statute capping decisions cannot be made until authorities have set their budgets.

  It is now for each authority to set its budgets 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.

  My right hon. Friend intends to take his capping decisions as soon as reasonably practicable after authorities have set their budgets. When he comes to do so he will take account of all appropriate considerations.

  Property Services Agency
  Mr. Campbell-Savours
  To ask the Secretary of State for the Environment if he intends to replicate the principal civil service pension scheme in the Property Services Agency Government-owned company and to make provision for its replication in the privatised companies.

  Mr. Yeo
  The Government have made it clear that if PSA is incorporated as a Government-owned company, or sold, steps will be taken to provide transferring employees with pension arrangements that are broadly comparable, and redundancy entitlements that are as far as possible identical, to those they have in the civil service.

  Mr. Campbell-Savours
  To ask the Secretary of State for the Environment if it remains Government policy that the Property Services Agency projects will be sold to the private sector this year.

  Mr. Yeo
  No decisions have been taken on the form or timing of sale.

  Mr. Campbell-Savours
  To ask the Secretary of State for the Environment if it is his intention to proceed with the establishment of the Property Services Agency as a Government-owned company on 1 July; and what plans he has to establish separate Government-owned companies for Property Services Agency Building Management, Property Services Agency Projects, and Property Services Agency Special Services.

  Mr. Yeo
  No decisions have been taken on whether PSA should trade as a Government-owned company or companies before sale, but a number of companies have been established to protect names.

  Stolen Equipment
  Mr. Robert B. Jones
  To ask the Secretary of State for the Environment if he will publish a list of the equipment stolen from his Department in the last three years for which information is available; and what was the value of each item.

  Mr. Menzies Campell
  To ask the Secretary of State for the Environment if he will publish a list of the equipment stolen from his Department in the last three years for which information is available; and what was the value of each item.

  Mr. Heseltine
  Information is not available in precisely the form requested. The Department's losses and special payments register, from which the note to the appropriation accounts on losses is prepared, contains the following details for losses by fraud, theft, arson, sabotage, malicious damage and culpable negligence:

  Number of items

  Value £

  1987–88

  16

  43,570

  1988–89

  44

  23,070

  1989–90

  13

  8,440

  It is not possible without disproportionate cost to extract details for individual items or for loss by theft alone.

  Estate Action
  Mr. Rooker
  To ask the Secretary of State for the Environment if he will make a statement on progress of his Department's estate action work at Wyrley Birch, Birmingham, and give an indication of expected date of completion.

  Mr. Yeo
  The Wyrley Birch estate action scheme was approved by the Department on 24 November 1989 and was scheduled for completion in 1991–92. The £45 million package of works involves nearly 300 flats and maisonettes, which will benefit from refurbishment works, new security measures including a concierge scheme and environmental works. We understand that the works, which are being undertaken by Birmingham city council, are progressing satisfactorily.

  Energy Conservation
  Mr. Ward
  To ask the Secretary of State for the Environment if he has any plans to introduce a requirement that building regulations on the construction of new housing and offices should specify higher levels of energy conservation.

  Mr. Yeo
  Higher thermal insulation standards and other energy conservation measures were incorporated in the amendments to the building regulations and supporting approved documents which took effect on 1 April 1990. We shall be examining the scope for further measures of this kind once we have been able to monitor how the current requirements are working in practice, and in particular whether they are giving rise to any technical problems.

  Liverpool
  Mr. Parry
  To ask the Secretary of State for the Environment if he will make a statement on the recent visit of the Minister for Inner Cities to Liverpool.

  Mr. Portillo
  My most recent visit to Merseyside was on 10 December 1990. On that day I visited Widnes where I met the leader of Halton borough council at the chemical museum, followed by a tour of derelict land sites and the town centre Victoria square refurbishment. In Birkenhead I performed a ground-breaking ceremony to mark the commencement of an office development at the Pier hotel. During a river crossing from Birkenhead to Liverpool I was appraised of the revitalisation of the Mersey ferries by Merseytravel, and in Liverpool I received a presentation by the Mersey Barrage Company on its proposals.

  Housing Corporation
  Mr. Simon
  To ask the Secretary of State for the Environment when he will give details of the regional distribution of the Housing Corporation's approved development programme for 1991–92.

  Sir George Young
  In my reply on 17 December to my hon. Friend the Member for Harrow, West (Mr. Hughes),Official Report, Vol. 183, column 24, I gave details of the overall shape of the Housing Corporation's approved development programme for 1991–92. Total net expenditure for that year is set at £1·4 billion, principally for the provision of new housing for rent, but with a significant proportion for low-cost home ownership and with the aim, overall, of tackling homelessness as a priority need.
  473
  I have now agreed with the corporation the regional distribution of the programme. The distribution has been determined by reference to the recently revised housing needs indicator as the agreed measure of the incidence of need, but with upward adjustment for some regions to ensure that their permitted new approvals in 1991–92 are restored to 1989–90 levels (the current year's planning having been restricted by the corporation's earlier programming difficulties). My intention is that in 1992–93, the housing needs indicator should be applied without adjustment.

  The planned regional distribution of new approvals for housing for rent in 1991–92 is shown in the table, alongside the regions' housing needs indicator scores:

  Regional distribution of housing for rent (units)

  Region

  Revised HNI scores

  1991–92 distribution of units

  1991–92 distribution of units1

  percentage

  percentage

  numbers

  London and Home Counties (NE)

  12·30

  11·49

  2,320

  London and Home Counties (NW)

  11·88

  11·10

  2,240

  London and Home Counties (S)

  15·61

  14·58

  2,945

  West

  12·50

  11·68

  2,360

  East Midlands

  9·61

  8·98

  1,810

  West Midlands

  10·93

  10·94

  2,210

  North East

  13·26

  14·46

  2,920

  North West

  10·39

  11·05

  2,230

  Merseyside

  3·53

  5·72

  21,155

  Total

  3100·00

  100·00

  420,190

  1 Figures represent the (rounded) mid-point of a target range.

  2 Excludes Merseyside special allocation, which provides 184 additional units.

  3 Column does not sum exactly due to rounding.

  4 Excludes special homelessness programme, which targets additional resources on the three London regions and the west.

  The same basis for distribution has been used for the remaining elements of the programme, including the allocation for housing for sale.

  The housing needs indicator undergoes periodic revision. The recent review was undertaken by a joint working group representing the Department of the Environment, the Housing Corporation and the National Federation of Housing Associations. Copies of the working group's second report have been placed in the Library of the House.

  Bathing Waters
  Mr. David Shaw
  To ask the Secretary of State for the Environment what discussions he has had with the EC Commission regarding the state of British bathing waters.

  Mr. Trippier
  My right hon. Friend the Secretary of State spoke to Commissioner Ripa di Meana on 19 December 1990 about the revised proposals for improving the United Kingdom's bathing waters that we had sent to the EC Commission last November.

  The Commissioner was pleased both about the progress we are making in improving standards and about our plans for increased investment in the future. They agreed that United Kingdom and EC Commission officials should study the United Kingdom's proposals in detail so that the Commission could satisfy itself that bathing waters were being improved as quickly as practicable. That work is currently under way.
  474
  They also agreed that once the Commission has satisfied itself that the United Kingdom is doing all that is practicably possible there would be no advantage in pursuing further legal proceedings which, of themselves, do nothing to speed improvements.

  Sheffield Development Corporation
  Mr. Trotter
  To ask the Secretary of State for the Environment what action has been taken on outstanding matters following Sir John Garlick's inquiry into the running of Sheffield development corporation.

  Mr. Portillo
  As I told the House on 15 October, the Garlick report contained several criticisms. Action has been taken since then on all these, as follows:

  (i) Guidance on Conflicts of Interest
  I have today issued guidance to the chairmen and board members of all the urban development corporations on arrangements for dealing with conflicts of interest. Copies have been placed in the Library of the House.

  (ii) Hallamshire Investments
  The chairman of the Sheffielddevelopment corporation, Mr. Sykes, has taken no part in the affairs of Hallamshire since 19 December 1990. His formal resignation, accepted with regret by the board on that day, takes effect on 30 May, and he has leave of absence until then.

  (iii) Secretarial Support: use of SDC facilities for private business
  This problem has been resolved: half a secretarial post is available for Mr. Sykes' SDC business and private business will be conducted elsewhere.

  (iv) Improvement of systems and procedures
  An action plan has been agreed with SDC and is being implemented. This includes a thorough review of systems for handling consultancy appointments.

  Community Charge Register
  Mr. Gould
  To ask the Secretary of State for the Environment if he will list for each authority in England his estimate of the turnover in the community charge register, expressed as a percentage, that will take place during the current financial year; and what is the national figure.

  Mr. Heseltine
  [holding answer 8 February 1991]: No estimates of the turnover in community charge registers are currently available. My Department is making arrangements to collect information on the changes to the registers in the year up to 1 June 1991.

  Waste Disposal
  Mr. Rost
  To ask the Secretary of State for the Environment (1) if he intends to require waste disposal authorities to implement least-cost options where proposals for waste recycling or waste into energy projects are identified as cheaper than landfill;

  (2) if he plans to require waste disposal authorities to seek tenders for waste disposal by landfill, waste recycling and energy from waste in parallel.

  Mr. Baldry
  [holding answer 12 February 1991]: My right hon. Friend the Secretary of State for the Environment has no power to require waste disposal authorities to choose one particular waste disposal option over any other. However, part II of schedule 2 to the Environmental Protection Act 1990 will require those authorities to subject waste disposal to competitive

  475
  tendering and it will empower them to consider maximising recycling and minimising pollution, as well as value for money, when assessing tenders for waste disposal contracts.

  Mr. Rost
  To ask the Secretary of State for the Environment what capital funds and grants are available to a waste disposal authority for the construction of waste recycling centres as part of an energy-from-waste scheme using refuse-derived fuel, in a public-private sector partnership.

  Mr. Baldry
  [holding answer 12 February 1991]: The sources from which local authority capital commitments can be financed are:

  (i) credit approvals which permit capital expenditure to be financed by borrowing or by credit arrangements or specified grants to be taken up;

  (ii) usable capital receipts;

  (iii) Exchequer capital grants or contributions (other than European Community and specified capital grants) and capital grants and contributions from other persons; and

  (iv) revenue contributions.

  A waste disposal authority may draw on any of these sources of finance for a scheme of the type described by my hon. Friend.

  Country

  Project

  Company

  Export value £ million

  ATP element £ million

  Date authorised

  Indonesia

  Jabotabek Railway Study

  L· H· Manderstam

  1·000

  1·000

  June 1984

  Malaysia

  Ulu Jelai Hydro Feasibility Study

  WLPU/Ewbank

  1·850

  1·850

  April 1984

  Thailand

  Mini Hydros Pilot Plant

  Balfour Beatty

  2·500

  2·500

  June 1983

  Indonesia

  Ombilin Coal Mining Training

  Dowty Meco

  0·655

  0·655

  September 1982

  Thailand

  Post-Harvest Ground Nut Study: Phase II

  Rural Investment Overseas

  0·499

  0·499

  April 1984

  Indonesia

  Jabotabek Feasibility Study

  Manderstam/F· Wheeler

  0·007

  0·007

  September 1986

  China

  Cosco Ships

  British Shipbuilders

  44·300

  13·578

  July 1986

  Indonesia

  Steel Bridging

  Mabey & Johnson

  10·702

  6·846

  April 1987

  Indonesia

  Navigational Aids

  Pharos Marine

  9·906

  7·007

  April 1987

  Malaysia

  Liwagu Hydroelectric Study

  Watermeyer/Ewbank

  0·850

  0·850

  October 1986

  Malaysia

  Rural water supervision

  John Taylor

  3·000

  3·000

  October 1985

  Panama

  Gas Turbine Power Station

  JBE

  14·222

  6·727

  October 1987

  Seychelles

  Mahe Water Consultancy

  Sir A· Gibb

  0·122

  0·122

  July 1987

  Zimbabwe

  Harare Airport

  Sir A· Gibb

  0·257

  0·257

  May 1985

  China

  Bohai Aluminium Phase I

  Davey McKee (Poole)

  27·750

  8·786

  April 1988

  China

  Yue Yang Coal Power Station

  GEC

  171·718

  51·417

  July 1987

  China

  Yue Yang Third Party Inspection

  Kennedy and Donkin

  0·324

  0·324

  August 1988

  China

  Yue Yang Monitoring

  Hattersley

  0·273

  0·273

  May 1988

  Egypt

  Leak Detection Equipment

  Palmer Environmental

  0·251

  0·251

  April 1987

  Indonesia

  Cigading Port

  Tarmac Consortium

  17·280

  13·173

  March 1989

  Indonesia

  Bandung TV Studio

  Quantel-Link Systems

  11·735

  9·201

  October 1988

  Indonesia

  Scattered Diesels

  GEC

  6·887

  5·421

  January 1989

  Indonesia

  Airport Security Systems

  Holmes Aviation

  0·020

  0·020

  March 1989

  Indonesia

  Forest Radio Communications

  Phillips Radio Communications

  0·228

  0·138

  April 1988

  Kenya

  Chemeilil Sugar Mill

  Crown Agents

  0·003

  0·003

  April 1985

  Kenya

  Power Distribution

  Private Consultant

  0·007

  0·007

  November 1988

  Kenya

  Mombasa Causeway

  Sir A· Gibb

  0·412

  0·315

  April 1989

  Malaysia

  Privatisation Programme

  J· H· Schroder Wagg & Co·

  0·642

  0·194

  June 1987

  Thailand

  Laem Chabang Port

  Port of Felixstowe Int·

  0·151

  0·151

  May 1986

  Zimbabwe

  Zisco Monitoring

  W· S· Atkins

  0·048

  0·048

  October 1987

  Egypt

  Maghara Coal Mine

  Babcocks

  0·080

  0·080

  October 1988

  Indonesia

  Radio Studios

  David Whittle Associates

  0·390

  0·390

  March 1988

  Indonesia

  Aircraft Simulator

  CAA

  0·050

  0·050

  January 1990

  476
  The Government have announced that local authorities in England may bid for £10 million in supplementary credit approvals in 1991–92, which has been earmarked for investment in recycling facilities.

TRADE AND INDUSTRY

  Project Funding
  Mrs. Clwyd
  To ask the Secretary of State for Trade and Industry if he will list the 42 projects classified in departmental records as negotiated contracts funded out of aid and trade provision monies since 1979; and if he will give the date on which such funding was authorised in each case.

  Mr. Redwood
  The projects are listed in the table. It should be noted that there are 41 projects listed rather than 42 as given in my hon. Friend the Minister for Trade's previous answer, 24 October 1990,Official Report, columns 205–6. This was because of double counting in the previous answer which has now been corrected.
  477

  Country

  Project

  Company

  Export value £ million

  ATP element £ million

  Date authorised

  Indonesia

  Satellite Remote Sensing

  Technology Applied Systems

  0·062

  0·025

  May 1989

  Indonesia

  Cigading/Serpong Railway Rehabilitation

  Davy/British Rail Int·

  33·000

  20·995

  March 1990

  Indonesia

  Radio Studio Rehabilitation

  Audix Ltd·

  6·330

  5·040

  February 1990

  Kenya

  Digital Micro Wave Link

  Telectron Systems

  12·040

  4·214

  June 1989

  Morocco

  Nador Steel Works Study

  W· S· Atkins

  0·265

  0·133

  July 1988

  Pakistan

  Karachi Water II

  Portals Water Treatment

  18·940

  6·629

  July 1988

  Phillipines

  Gas Turbines Power Station

  JBE

  37·500

  7·276

  March 1988

  Red Sea

  Regional Hydro Carbon Study

  Robertson Research Int.

  0·375

  0·187

  May 1989

  Telecommunications
  Miss Hoey
  To ask the Secretary of State for Trade and Industry which representative bodies responded to the Government's consultative document, "Competition and Choice: Telecommunications Policy for the 1990s"; and if he will publish their responses.

  Mr. Redwood
  The representative bodies listed in the table have responded to the consultative document. Unless respondents have indicated otherwise, the Government intend to make public the responses when announcing the conclusions of the review.

  Action with Communities in Rural England

  Advisory Committee on Telecommunications for Disabled and Elderly People

  Advisory Committee on Telecommunications for Small Businesses

  Age Concern England

  Association for Information Management (Aslib)

  Association for the Protection of Rural Scotland

  Association of Independent Radio Contractors

  Association of the Electronics, Telecommunications and Business Equipment Industries (EEA)

  British Computer Society

  British Motorship Owners Association

  British Telecommunications Unions Committee

  Cable Television Association

  Computing Services Association

  Confederation of Information Communication Industries

  Consumers' Association

  Dumfries and Galloway Regional Council

  English Advisory Committee on Telecommunications

  Federation of Communications Services (Cellular Service Providers Group)

  Federation of Communications Services (Duopoly review working party)

  Gandalf Users Forum

  General Council of British Shipping

  Gingerbread

  Greater London Association for Disabled People

  Hull City Council

  Institution of Electrical Engineers

  Joint Radio Committee of the fuel and power industries

  Kent County Council

  London Chamber of Commerce and Industry

  National Association of Victims Support Schemes

  National Consumer Council

  National Council for One Parent Families

  National Federation of Retirement Pensions Associations

  Network Operators Committee (Band III)

  Newspaper Society

  Northern Ireland Advisory Committee on Telecommunications

  Northern Region Councils Association

  OFTEL Working Group on Telecommunications for the Hearing Impaired

  Royal Association for Disability and Rehabilitation

  Royal National Institute for the Deaf

  Samaritans

  Scottish Advisory Committee on Telecommunications

  Scottish Council Development and Industry

  Sheffield City Council

  478

  Specialised Satellite Services Operators Group

  Telecommunications Industry Association

  Telecommunications Managers Association

  Telecommunications Users' Association

  UK Offshore Operators Association

  UK Paging Operators Association

  US Council for International Business

  Welsh Advisory Committee on Telecommunications

  Patent Office
  Mr. Andrew Mitchell
  To ask the Secretary of State for Trade and Industry if he will make a statement about the Patent Office.

  Mr. Leigh
  It is important that the financial framework for the Patent Office enables it to provide a high-quality service as economically as possible. However, at present there is no clear relationship between the level of resources allocated to the Patent Office and customer demand. In order to provide such a relationship the Patent Office will move to a net running cost regime from 1 April. While this provides a close link between customer demand and current resources, restrictions will remain, for example, on transferring funds between financial years. Additional flexibilities, which the Patent Office believes would enable it to improve the service provided to customers, would be available to a trading fund established under the Government Trading Act 1990. As announced in the trade and industry expenditure plan report (Cm. 1504) published this week, I hope that the Patent Office will achieve trading fund status later in the 1991–92 financial year. The Patent Office is today opening a consultation process on this proposal, seeking comments by 12 April. I have placed a copy of this letter in the Library.

  As part of the process of approving the 1991–92 Patent Office corporate plan a review has been conducted of he performance of the Patent Office against the targets for t he period 1990–91 to 1994–95 announced by the then Secretary of State, my right hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley), on 1 March 1990, at column 295. These were three efficiency targets covering annual average improvements in patent search and trade mark productivity and a relative reduction in the size of common services over the five years, together with an annual quality of service measure for patent searches, and a quality of service measure for the five years taken together for trade mark examination. These targets continue to be testing ones for the Patent Office and I do not propose to alter them. I regret, however, that the review has identified an arithmetic error in the calculation of the overall average productivity improvement which results from these targets. The figure should have been 2·5 per cent. a year rather than 4 per cent.

  Companies House
  Mr. Brazier
  To ask the Secretary of State for Trade and Industry what changes are planned to the financial regime under which Companies House operates.

  Mr. Redwood
  Companies House currently operates on a net running cost regime. Although this makes it possible to match resources to fluctuations in workload, it does not enable the agency to work in a fully commercial manner. For example, there are restrictions on transferring funds between financial years.

  Companies House plans to take advantage of the greater financial flexibilities which should be available as a trading fund under the Government Trading Act 1990. The aim is to enable the agency to operate more efficiently, so that its many customers can enjoy an even better service representing improved value for money. I hope that Companies House will achieve trading fund status later in 1991–92, as described in the trade and industry expenditure plans report (Cm 1504) published this week.

  Companies House is today issuing a consultative letter on these proposals, seeking comments by 12 April. A copy of this letter will be placed in the House of Commons Library.

  Antarctica
  Mr. Tony Banks
  To ask the Secretary of State for Trade and Industry which members of his Department were on the British delegation to the November 1990 Antarctic treaty meeting; and whether his Department will be represented at the April 1991 meeting of the Antarctic treaty parties.

  Mr. Leigh
  [holding answer 8 February 1991]: An official from my Department was a member of the British delegation to the Antarctic treaty meeting in November 1990, and one will attend the meeting scheduled for April 1991

  Mr. Tony Banks
  To ask the Secretary of State for Trade and Industry what contribution was made by his Department to discussions on environmental protection measures by the Antarctic treaty parties in Chile in 1990.

  Mr. Leigh
  [holding answer 8 February 1991]: An official from my Department was a member of the British delegation to the Antarctic treaty meeting in November 1990 which took an active part in the discussions on a draft protocol to the Antarctic treaty for the protection of the Antarctic environment.

  Film Industry
  Mr. Tom Clarke
  To ask the Secretary of State for Trade and Industry what information he has on the level of Government provision of film screen finance since 1987 in(a) Britain, (b) France, (c) Germany, (d) Italy and (e) Spain.

  Mr. Leigh
  [holding answer 11 February 1991]: I have no annual information on the level of Government screen finance in France, Germany, Italy or Spain over this period. In Britain, the Government have provided £2 million a year to British Screen Finance Ltd. The Government also provide funding for the British Film Institute, which supports a number of activities, including film production.
  480
  Government support for the British Film Institute since 1987–88 has been as follows:

  Actual expenditure (£ million)

  1987–88

  10·04

  1988–89

  11·30

  1989–90

  11·90

  1990–91

  112·75

  1 Provision.

  Mr. Tom Clarke
  To ask the Secretary of State for Trade and Industry what information he has on the number of British films made in each year since 1980.

  Mr. Leigh
  [holding answer 12 February 1991]: The number of films registered as British for the purposes of the Eady levy in the years 1980 to 1985 was as follows:

  Films

  1980

  41

  1981

  32

  1982

  27

  1983

  36

  1984

  37

  1985

  118

  1Up to 23 May.

  Registration ended with the implementation of the Films Act on 23 May 1985, and no official statistics on the number of British films have been collected since that date.

  Mr. Tom Clarke
  To ask the Secretary of State for Trade and Industry what steps his Department has taken over the past 12 months to promote new British films overseas.

  Mr. Leigh
  [holding answer 12 February 1991]: My Department provided financial support to enable 10 film companies to attend the Cannes festival last May, and is providing support for a further 10 companies attending a festival in Los Angeles later this month.

NATIONAL FINANCE

  Earnings
  Mr. Simon Hughes
  To ask the Chancellor of the Exchequer if he will estimate the numbers of women who have earnings below(a) the tax threshold and (b) the national insurance threshold, broken down into married women, lone parents and single women at the latest date.

  Mr. Maude
  Provisional estimates for 1990–91, based on projections from the 1988 and 1989 family expenditure surveys, are as follows:

  Numbers (million)

  Women with earnings below

  Tax threshold

  National Insurance lower earnings limit

  Single women

  0·5

  0·4

  Lone parents

  0·2

  0·1

  Married women

  2·2

  1·6

  Budget
  Mr. Canavan
  To ask the Chancellor of the Exchequer when he expects his Budget to be announced.

  Mr. Mellor
  As the Chancellor told my hon. Friend the Member for Dorset, South (Mr. Bruce) on 31 January, column 1095, he intends to make his Budget statement on 19 March.

  General Election Payments
  Dr. Marek
  To ask the Chancellor of the Exchequer if he will give details of fees paid to, charges incurred and expenses claimed by the acting returning officer for the Wrexham constituency for the 1987 general election.

  Mr. Maples
  The expenses of the Wrexham parliamentary constituency, met from the consolidated fund, were as follows:

  £

  Acting Returning Officer's fee

  1,073

  Presiding Officers' fees

  4,225

  Poll Clerks' fees

  5,330

  Clerical assistance

  3,050

  Renting and adaptation of buildings

  6,173

  Miscellaneous expenses

  4,542

  24,393

  Government Employees, Scotland
  Mr. McMaster
  To ask the Chancellor of the Exchequer if he will publish a table showing the total number of administrative staff employed by the Government in Scotland for each year since 1975, indicating by which Departments they were employed.

  Mrs. Gillian Shephard
  Details of the numbers of staff—both non-industrial and industrial—employed in Scotland, by Department, are to be found in the annual Treasury publication "Civil Service Statistics", copies of which may be seen in the statistical unit of the House of Commons Library. (Figures for 1975 and 1976 will be found in the 1976 edition.)

  Bingo
  Mr. Alexander
  To ask the Chancellor of the Exchequer, in the financial year ended 31 March 1990, how many raids were made by Her Majesty's Customs and Excise on non-profit-making clubs for the purpose of checking that the correct bingo duty had been paid; and how much revenue was raised as a result of such raids.

  Mrs. Gillian Shephard
  In exercise of their legal responsibility for the care and management of a range of indirect taxes, Customs and Excise make inquiries of, and visit, a variety of businesses and organisations including non-profit making members' clubs which may incur liability to bingo duty. No central record of these inquiries and visits is maintained, or of their effect on the revenue yield from bingo duty. This information could be provided only at the cost of disproportionate time and effort.

  Waste Recycling
  Mr. Ward
  To ask the Chancellor of the Exchequer if he will consider introducing financial measures to encourage manufacturers to introduce new processes and plants to recycle waste products.
  482
  Mr. Maude
  I cannot anticipate my right hon. Friend's Budget statement.

  Mortgage Tax Relief
  Mr. Churchill
  To ask the Chancellor of the Exchequer what is his estimate of the likely increase in tax receipts in the year 1991–92 in the event that higher rate tax relief on mortgages were to be disallowed.

  Mr. Maude
  [holding answer 11 February 1991]: The direct revenue cost of mortgage interest relief for 1990–91 at a rate in excess of the basic rate is provisionally estimated to be £470 million. A little over half this accrual cost is reflected in 1990–91 receipts. The estimate is based on the assumption that interest rates remain at their current levels.

  Third-world Debt
  Mr. Tom Clarke
  To ask the Chancellor of the Exchequer what was the net financial transfer of resources from the United Kingdom to the 17 most indebted countries for the last year for which figures are available.

  Mr. Maples
  [holding answer 12 February 1991]: The data requested are neither collected nor published by individual country.

  "Next Steps" Agencies
  Dr. Marek
  To ask the Chancellor of the Exchequer what progress has been made towards establishing Her Majesty's Customs and Excise and the Inland Revenue as "next steps" agencies.

  Mr. Norman Lamont
  [pursuant to the reply, 31 January 1991, c. 573]: On 25 July 1990 my predecessor announced that changes would be made in Her Majesty's Customs and Excise to enable it to operate fully on "next steps" lines, columns 239–41. The key element of these changes is that 30 commands performing the bulk of the Department's operational and service activities will become executive units. These include the 21 regional collections, the investigation division and certain units at present organised as headquarters divisions.

  The head of each unit will be appointed by the chairman of Customs and Excise and will be more personally accountable for the performance of the unit against agreed plans and targets, in return for substantial new freedoms to manage and innovate. This will increase the direct involvement of the head of the unit and all its staff in the tasks to be done, and improve their effectiveness and their personal satisfaction in the unit's achievements. I expect these changes to lead to further advances in the efficiency of the units and the Department as a whole, and the quality of service provided.

  These changes are set out in the framework document for the Department, "Next Steps: A Framework for Her Majesty's Customs and Excise", which has been published today, together with framework documents for East Midlands and Manchester collections and the VAT central unit, as the first three in the series of executive unit framework documents which describe the responsibilities, freedoms and accountabilities in individual units. The departmental framework document contains a programme of action which includes the introduction of

  483
  significant additional personnel and financial freedoms over the next two to three years. Copies have been placed in the Library.

  Framework documents for the remaining executive units will be published before the House rises for the Easter recess. The arrangements proposed for executive units will take effect from 1 April 1991.

OVERSEAS DEVELOPMENT

  Non-governmental Organisations
  Sir John Stanley
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the non-governmental organisations associated with overseas development which received financial support from his Department in 1988–89, the total sum received by each organisation in that year and the breakdown of the total sum received by each organisation to show separately the sums received(a) under the joint funding scheme, (b) for emergency relief and (c) other.

  Mrs. Chalker
  My right hon. Friend will recall the reply I gave to his question on 16 November last year, column 407, in which contributions to 116 non-governmental organisations in 1988–89 were set out. They totalled £63,214,364, including £11,667,912 from the joint funding scheme and £29,540,580 for emergency relief (disasters, refugees and food aid).

  Sir John Stanley
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the individual amounts granted to United Kingdom nongovernmental organisations by the European Community in each of the years 1989 and 1990(a) for projects in developing countries, (b) for development education and (c) other.

  Mrs. Chalker
  Under its non-governmental organisations programme the European Community co-finances projects in developing countries and development education projects with European non-governmental organisations. Normally the Community contributes 50 per cent. of the costs of individual projects. In 1989, the latest year for which figures are available, amounts granted to United Kingdom non-governmental organisations were as follows:

  £000's

  (A) For projects in developing countries

  Acord

  75

  Action Aid

  107

  Action of Disability Development

  83

  Aga Khan Foundation

  302

  Britain-Tanzania Association

  15

  British Red Cross

  292

  Catholic Fund for Overseas Development

  336

  Catholic Institute for International Relations

  355

  Christian Aid

  625

  Church Missionary Society

  53

  Commonwealth Trade Union Council

  37

  Cooperation for Development

  549

  Concern Universal

  63

  Find Your Feet

  17

  Harvest Help

  93

  Health Unlimited

  78

  Help the Aged

  185

  Indian Volunteers for Community Development

  68

  Intermediate Technology Development Group

  19

  Joe Homan Trust

  17

  484

  £000's

  Leonard Cheshire Foundation

  201

  Lesotho Durham Link

  81

  Marie Stopes International

  443

  Methodist Church

  19

  Opportunities for Women

  59

  Oxfam

  803

  Population Concern

  316

  Ranfurly Library

  126

  Royal Commonwealth Society for the Blind

  336

  Save the Children Fund

  81

  Scottish Catholic International Aid Fund

  90

  SOS-Sahel

  42

  Tear Fund

  272

  Tools for Self Reliance

  71

  Voluntary Service Overseas

  263

  War on Want

  183

  Water Aid

  137

  World University Service—United Kingdom

  17

  Total

  6,909

  (B) For Development Education

  £000's

  British defence and Aid Fund for Southern Africa

  9

  Catholic Institute of International Relations

  121

  Centre for International Studies

  47

  Centre for World Development Education

  27

  Christian Aid

  27

  Commonwealth Trade Union Council

  161

  Derry Development Education Centre

  45

  International Broadcasting Trust

  26

  National Association for Developing Education Centres

  232

  Oxfam

  27

  Voluntary Service Overseas

  17

  World Development Movement

  68

  Total

  807

  Other

  In addition Christian Aid, Oxfam, World University Service—UK, and Leicester WDC—UK received funding for projects in consortium with other European NGOs. The total grants amounted to £1,855,000.

  Aid (Africa)
  Mr. Tom Clarke
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list those major capital projects completed over the last two years which were financed by the Overseas Development Administration in Africa.

  Mrs. Chalker
  [holding answer Tuesday 12 February]: The most recent years for which the information requested is available are 1987 and 1988. The list of capital projects completed in those financial years from ODA's bilateral country programme funds and by the Commonwealth Development Corporation is as follows:

  Country

  Title

  1987

  Overseas Development Administration

  Kenya

  Provision of grain storage facilities.

  Malawi

  Periodic maintenance of a road linking Liwonde and the port of Monkey Bay.

  Mozambique

  Provision of trucks, trailers buses, Land Rovers and spare parts from Leyland UK.

  Sudan

  Red Sea fisheries project to improve catches and design of boats for fishermen.

  Swaziland

  Rehabilitation of community and Government schools damaged by storms in 1987.

  485

  Country

  Title

  Commonwealth Development Corporation

  Botswana

  Provision of a power station at Moropule.

  Botswana

  Telecommunication system improvement for Botswana Telecommunications Corporation.

  Ghana

  Investment in Twifi oil palm plantations and palm oil mill.

  Cote d'Ivoire

  Rubber Project II: to promote outgrower rubber production in south-east region.

  Cote d'Ivoire

  Investment in Societe Africaine de Plantations d'Heveus (rubber producers).

  Malawi

  Assistance to the Investment and Development Bank which provides development finance to small entrepreneurs.

  Mauritius

  Investment in Bonair Fashions which manufactures clothes and textiles.

  Tanzania

  Investment in Kibo Match Corporation Ltd. which is involved in paper board production.

  Zambia

  Investment in Zambia Oxygen Ltd.

  1988

  Overseas Development Administration

  Tunisia

  Supply of engine handling equipment for the engine test facility of the Samko diesel engine assembly plant.

  Ghana

  Agricultural development in the upper region.

  Mauritius

  Rehabilitation of airconditioning system at the Mauritius Civil Aviation Department's communication centre at Bigara.

  Seychelles

  Provision of water supply to Mont Buxton.

  Seychelles

  Rehabilitation of Management Training Centre.

  Commonwealth Development Corporation

  Cote d'Ivoire

  Rubber Project II: promotes outgrower rubber production in Cavally.

  Malawi

  Investment in Kavuzi tea estate and factory.

  Malawi

  Investment in rehabilitation of farms under the Agricultural Development and Marketing Corporation.

  Mauritius

  Construction of Mauritius Development Bank (lending to small-scale enterprises).

  Mauritius

  Assistance to Export Development and Investment Authority which leases factories to entrepreneurs.

  1981–82

  1982–83

  1983–84

  1984–85

  1985–86

  1986–87

  1987–88

  1988–89

  1989–90

  1990–91

  Clwyd

  1,033

  834

  303

  228

  542

  405

  609

  226

  340

  231

  Dyfed

  526

  948

  323

  247

  572

  213

  53

  31

  128

  93

  Gwent

  667

  1,630

  691

  422

  1,452

  412

  142

  264

  215

  541

  Gwynedd

  136

  307

  285

  175

  3

  51

  48

  169

  59

  0

  Mid Glamorgan

  1,759

  1,717

  1,407

  556

  2,163

  289

  138

  235

  305

  584

  South Glamorgan

  702

  1,256

  500

  665

  347

  536

  97

  211

  128

  278

  Powys

  112

  26

  0

  0

  0

  0

  0

  21

  73

  46

  West Glamorgan

  1,798

  1,121

  990

  442

  939

  667

  286

  188

  204

  303

  The figures quoted relate to the October to December period for each financial year shown.

  It should be noted that the 1990–91 figures are still provisional.

  Corlan Housing Association
  Mr. Morgan
  To ask the Secretary of State for Wales, pursuant to his answer of 28 January,Official Report, columns 409–10, if he has discussed with the chairman of Tai Cymru its reasons for approving the mortgage application under section 9 of the Housing Associations Act 1985 by Corlan Housing Association for the land that it acquired from Helical Bar Ltd.
  486

  Country

  Title

  Uganda

  Rehabilitation of a sugar estate/factory and ethanol distillery owned by Sugar Corporation of Uganda.

WALES

  Housing
  Mr. Murphy
  To ask the Secretary of State for Wales if Welsh local authorities will continue to provide social housing in Wales.

  Mr. Nicholas Bennett
  Although local authorities are no longer the principal providers of new social housing they will continue to play a vital enabling role, in partnership with housing associations and the private sector, and in ensuring that the housing requirements of their areas are appropriately tackled.

  Mr. Barry Jones
  To ask the Secretary of State for Wales what is his policy concerning council housing; and if he will make a statement.

  Mr. Nicholas Bennett
  It is that council housing should be managed and maintained effectively, economically, and in accordance with local housing authorities' statutory obligations; that council tenants should have the opportunity to purchase their homes under statute; that they should also have a genuine choice of landlord; and that housing associations should continue to be the main providers of new subsidised homes for rent, working in close partnership with local authorities.

  Redundancies
  Mr. Barry Jones
  To ask the Secretary of State for Wales if he will list, by county, the number of confirmed redundancies in Wales in the third quarter of each financial year since 1978–79; and if he will make a statement.

  Mr. David Hunt
  Figures from 1978–79 to 1980–81 are not available by county. The information from 1981–82 to 1990–91 is set out in the tables.

  Mr. Nicholas Bennett
  No.

  Welsh Assembly
  Mr. Wigley
  To ask the Secretary of State for Wales when he last met representatives from the Association of District Councils to discuss their proposals for(a) an elected Welsh Assembly and (b) a single tier of local government in Wales; and whether he will make a statement on both issues.
  487
  Mr. David Hunt
  I met representatives of the Council of Welsh Districts, together with representatives of the Assembly of Welsh Counties, on 7 January. I am considering the Council of Welsh District's proposals both for an elected Welsh assembly and for a single tier of local government in Wales, and will also be considering other proposals on these matters. I will make my decisions known in due course.

  Factories, Cardiganshire
  Mr. Geraint Howells
  To ask the Secretary of State for Wales what plans the Development Board for Rural Wales has to build advance factories in Cardigan during the next five years; and if he will make a statement.

  Mr. David Hunt
  The Development Board for Rural Wales has the following plans for building advance factories in Cardigan:

  Year

  Units

  Note

  Subject to Welsh

  1991–92

  2 × 3,000 sq ft

  Office approval

  1992–93

  4 × 1,500 sq ft

  In draft programme

  1993–94

  1 × 1,500 sq ft

  In draft programme

  1994–95

  2 × 3,000 sq ft

  In draft programme

  The development board works to a five-year "outline" industrial development programme, which is modified and reviewed on an ongoing basis. Therefore, any specific proposals beyond 1991–92 are subject to possible alteration and change according to circumstances.

  Mr. Geraint Howells
  To ask the Secretary of State for Wales what are the latest developments regarding the building of advance factories at New Quay, Cardiganshire; and if he will make a statement.

  Mr. David Hunt
  The Development Board for Rural Wales has no definite plans to construct units at New Quay at the present time and has no local land holdings.

  Farmers
  Mr. Geraint Howells
  To ask the Secretary of State for Wales when he will next attend a meeting of the European Council of Ministers to discuss the problems now facing Welsh farmers; and if he will make a statement.

  Mr. David Hunt
  In line with long-established practice, my right hon. Friend the Minister of Agriculture, Fisheries and Food takes the lead in European Community discussions and negotiations. I know that my right hon. Friend has the interests of Welsh farmers clearly in mind in that context, and I am in regular contact with him.

  Hill Livestock Compensatory Allowances
  Mr. Geraint Howells
  To ask the Secretary of State for Wales what discussions he has had in the current year with the National Farmers Union in Wales about livestock compensatory allowances; and if he will make a statement.

  Mr. David Hunt
  I met the National Farmers Union of Wales on Monday 28 January 1991 to discuss, among other issues, hill livestock compensatory allowances.

  Sports Centres
  Mr. Barry Jones
  To ask the Secretary of State for Wales (1) how many times he has visited the national sports centre for Wales;
  488
  (2) how many times he has visited the outdoor pursuits centre at the Menai straits, Gwynedd.

  Mr. Nicholas Bennett
  My right hon. Friend has not yet had the opportunity to visit the national sports centre for Wales, Cardiff, or the national watersports centre, Plas Menai.

  Housing (Elderly People)
  Mr. Barry Jones
  To ask the Secretary of State for Wales how many county council homes for the elderly there are in each of the counties of Wales.

  Mr. Nicholas Bennett
  The information requested is shown in the table:

  County

  Number of homes for elderly people1

  Clwyd

  20

  Dyfed

  29

  Gwent

  24

  Gwynedd

  27

  Mid Glamorgan

  34

  Powys

  14

  South Glamorgan

  21

  West Glamorgan

  21

  Wales

  190

  1 As at 31 March 1990.

  Mr. Barry Jones
  To ask the Secretary of State for Wales what policy initiatives he proposes for the running of county council homes for the elderly in Wales.

  Mr. Nicholas Bennett
  My right hon. Friend's proposals for the further improvement of services for elderly people in Wales is set out in chapter 11 of the White Paper "Caring for People—Community Care in the Next Decade and Beyond" (Cm 849). As regards county council-run homes, the White Paper makes it clear that we intend that their standard should be at least on a par with those expected by county councils of the private and voluntary sectors, and that those standards should be monitored and controlled by the inspection units which authorities are required to set up by 1 April 1991. In drawing up their plans for social care, which are to be published by 1 April 1992, social services authorities will need to review, in the light of their assessment of local needs and circumstances, the extent and nature of the residential care they provide. They will need to do this in terms of the balance with wider patterns of domiciliary and day care and also with regard to the need to maximise choice from a variety of sources of care.

  Nursing and Residential Homes
  Mr. Barry Jones
  To ask the Secretary of State for Wales how many(a) private nursing homes and (b) private residential homes there are in each of the counties of Wales.

  Mr. Nicholas Bennett
  The information requested is shown in the following tables:

  County

  Number of private nursing homes1

  Clwyd

  70

  Dyfed

  25

  Gwent

  51

  489

  County

  Number of private nursing homes1

  Gwynedd

  28

  Mid Glamorgan

  8

  Powys

  8

  South Glamorgan

  16

  West Glamorgan

  67

  Number of private residential homes1

  County

  Elderly, younger physically handicapped and blind people2

  Mentally ill people

  Mentally handicapped people

  Clwyd

  151

  6

  22

  Dyfed

  69

  3

  8

  Gwent

  22

  —

  2

  Gwynedd

  84

  4

  7

  Mid Glamorgan

  32

  —

  1

  Powys

  17

  4

  5

  South Glamorgan

  79

  —

  —

  West Glamorgan

  26

  6

  16

  WALES

  480

  23

  61

  1 As at 31 March 1990.

  2 A number of these homes are dually registered as both nursing and residential homes and will therefore have also been included in the first table.

  Mr. Barry Jones
  To ask the Secretary of State for Wales what is his policy concerning private nursing and residential homes in Wales.

  Mr. Nicholas Bennett
  My right hon. Friend's proposals for the further improvement of all forms of social care are set out in chapter 11 of the White Paper "Caring for People—Community Care in the Next Decade and Beyond.' (Cm 849). The Government believe that people should enter residential and nursing home care as a positive choice. Social services authorities, working closely with health authorities and other interests, should ensure the development of adequate networks of domiciliary, day and residential care in the private, voluntary and public sectors which maximise choice and ensure high quality in all aspects of provision.

AGRICULTURE, FISHERIES AND FOOD

  Surplus Food
  Mr. Burns
  To ask the Minister of Agriculture, Fisheries and Food what arrangements he is making for implementing the EC surplus food scheme in the United Kingdom for 1991; and if he will make a statement.

  Mr. Curry
  The European Commission has reviewed the operation of this scheme in 1988 and 1989, and its report is awaited. In the meantime the Commission has decided to continue the distribution of surplus food from intervention stocks to the most deprived citizens of the Community. I have to say that the Government's view remains that the scheme is an inefficient method of dealing with surpluses and of assisting those whom it should help. Nevertheless, as in the past, the Government do not wish to deprive eligible United Kingdom citizens of an opportunity available to their counterparts elsewhere in the Community.

  The Commission has allocated some 150 million ecu to the European Community for this purpose, the same as in 1990. The United Kingdom has maintained its share of the
  490

  County

  Number of private nursing homes1

  WALES

  273

  1 As at 31 March 1990.

  budget in obtaining some 24·95 million ecu, which represents about £17·62 million worth of butter and beef. This produce will continue to be distributed in the United Kingdom by those charitable and other non-profit making organisations wishing to do so and meeting the prescribed conditions. To improve the cost-effectiveness of the scheme, preference may be given to organisations capable of distributing produce widely throughout their local community and to groups of smaller organisations co-operating in the same locality. The scheme applies to certain clearly defined categories of people. Pensioners or the unemployed are eligible only if they fall into one or other of these categories. The coverage of those who are eligible will depend on the extent to which suitable organisations volunteer to participate. I am arranging for further details to be publicised widely and to be sent to the appropriate bodies, and I will place a copy of this information in the Library.

  Fisheries Council
  Mr. Mans
  To ask the Minister of Agriculture, Fisheries and Food what was the outcome of the Fisheries Council held in Brussels on 19 and 20 December.

  Mr. Gummer
  [pursuant to his reply, 14 January 1991, Official Report, col. 388]: I am pleased to announce that the Commission has agreed that the United Kingdom may exempt from the days in port requirement any vessel which satisfies the Fisheries Departments that it will carry only longlines or nets having a mesh size equal to or greater than 110 mm, with or without a 100 mm square mesh panel. Regulations to amend the Sea Fishing (Days in Port) Regulations 1991 (SI 1991/139) will be laid before Parliament shortly.

  Bovine Spongiform Encephalopathy
  Mr. Alan W. Williams
  To ask the Minister of Agriculture, Fisheries and Food what advice he has received from the National Rivers Authority concerning burial of BSE-affected cattle by farmers under their own land.
  491
  Mr. Maclean
  The National Rivers Authority has provided advice on the burial of carcases generally which has been incorporated into the revised "Guidance of Good Agricultural Practice for the Protection of Water" which was published in draft on 15 January. Copies are available in the Library of the House.

  Grain
  Mr. Morley
  To ask the Minister of Agriculture, Fisheries and Food whether all export contracts on grain exported to the EC state EC mass per storage volume, as set out in SI 1975 No. 655, arranged by British Cereal Exports; and if he will make a statement.

  Mr. Curry
  British Cereal Exports is a promotional body which aims to identify the needs of grain buyers in export markets and to help ensure that these are met competitively by United Kingdom exporters. It does not itself export grain.

  The details of grain export contracts are matters to be determined by the exporter and the importer of the grain. Cereals export trade organisations have recently been reminded of the provisions of SI 1975 No. 655 which lays down specific requirements to be met if the term EC mass per storage volume is used in trade in cereals between the United Kingdom and other member states of the European Community.

  Mr. Morley
  To ask the Minister of Agriculture, Fisheries and Food whether the specific weight of grain taken into intervention in the United Kingdom is assessed on instruments which comply with the requirements of SI 1975 No. 655; and what those regulations require in respect of contracts for grain weighed out of intervention containing the words EC mass per storage volume.

  Mr. Curry
  The use of instruments complying with the requirements of SI 1975, No. 655 is not stipulated by EC regulation 1908/84, which governs intake of grain into intervention, nor are such instruments used for that

  Number of confirmed cases of bovine tuberculosis by county in England 1990

  January-March

  April-June

  July-September

  October-December

  Avon

  7

  14

  5

  n/y/a

  Gloucestershire

  Bedfordshire

  0

  0

  0

  n/y/a

  Berkshire

  0

  0

  0

  0

  Buckinghamshire

  0

  0

  0

  0

  Cambridgeshire

  0

  0

  0

  n/y/a

  Cheshire

  0

  1

  0

  0

  Cleveland

  0

  0

  0

  0

  Cornwall

  4

  13

  10

  n/y/a

  Cumbria

  0

  7

  1

  1

  Derbyshire

  0

  0

  0

  0

  Devon

  10

  7

  8

  n/y/a

  Dorset

  1

  2

  2

  n/y/a

  Durham

  0

  0

  0

  0

  Essex

  0

  0

  0

  n/y/a

  Kent

  0

  0

  0

  0

  Hampshire

  0

  0

  0

  0

  Hereford and Worcester

  0

  0

  0

  0

  Hertfordshire

  0

  0

  0

  0

  Humberside

  0

  0

  0

  0

  Isle of Wight

  0

  0

  0

  0

  Lancashire

  0

  1

  0

  n/y/a

  Leicestershie

  0

  0

  0

  0

  Lincolnshire

  0

  0

  0

  0

  Greater Manchester

  0

  0

  0

  0

  Merseyside

  0

  0

  0

  0

  492
  purpose in practice. Contracts for sales of grain out of intervention do not contain the words "EC mass per storage volume"; they are not affected, therefore, by the provisions of the SI, which is concerned only with trade in cereals between the United Kingdom and other member states of the European Community.

  Tourism
  Mr. Simon Coombs
  To ask the Minister of Agriculture, Fisheries and Food if, further to his answer of 1 February at column 693, to the hon. Member for Swindon, he will list those organisations in the tourism industry which (a) were asked for their views and (b) responded.

  Mr. Curry
  We did not specifically ask organisations for their views before the abolition of these capital grants because this would have given a clear signal of our intentions and would have led to a rush of applications to beat the deadline. Over the period since the introduction of the farm diversification grant scheme in 1988, the Government have received representations about it from a number of organisations, including:

  The National Farmers Union

  The Country Landowners Association

  The English Tourist Board

  The British Hotels, Restaurants and Caterers Association

  The Youth Hostels Association

  Bovine Tuberculosis
  Mr. Ron Davies
  To ask the Minister of Agriculture, Fisheries and Food what is the number of individual confirmed cases of bovine tuberculosis by month, for each county of England and Wales in 1990.

  Mr. Maclean
  The information requested is available only by quarter. Figures for October to December are provisional pending laboratory tests. Details for England are given in the following table.

  The figures for Wales are a matter for the Secretary of State for Wales.
  493

  January-March

  April-June

  July-September

  October-December

  West Midlands

  0

  0

  0

  0

  Norfolk

  0

  0

  0

  0

  Northamptonshire

  0

  0

  0

  n/y/a

  Northumberland

  1

  3

  0

  0

  Nottinghamshire

  0

  0

  0

  0

  Oxfordshire

  0

  0

  0

  0

  Shropshire

  0

  0

  0

  0

  Somerset

  0

  1

  0

  0

  Staffordshire

  0

  0

  0

  0

  Suffolk

  0

  0

  0

  0

  Surrey

  0

  0

  0

  0

  East Sussex

  1

  0

  3

  n/y/a

  West Sussex

  0

  0

  0

  0

  Tyne and Wear

  0

  0

  0

  0

  Warwickshire

  0

  0

  0

  0

  Wiltshire

  1

  1

  1

  n/y/a

  North Yorkshire

  0

  0

  0

  0

  South Yorkshire

  0

  0

  0

  0

  West Yorkshire

  0

  0

  0

  0

  ENGLAND TOTAL

  25

  50

  30

  1

  n/y/a—Not yet available.

  Fallen Animals
  Dr. Cunningham
  To ask the Minister of Agriculture, Fisheries and Food what proposals he has to assist hill farmers who are experiencing problems with disposal of fallen stock; and if he will make a statement.

  Mr. Redmond
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on the present situation in respect of the disposal of fallen animals; and if he intends to introduce any legislation in this area.

  Mr. Gummer
  I refer the hon. Members to the letter I wrote on 30 January to Sir Simon Gourlay, president of the National Farmers Union, on this matter, a copy of which I have placed in the Library of the House. I have no current plans to introduce any further legislation.

HOUSE OF COMMONS

  Correspondence
  Mr. Atkinson
  To ask the Lord President of the Council what is the latest estimate of the average cost of a ministerial reply to letters from right hon. and hon. Members.

  Mr. MacGregor
  No definite costings are available. A recent scrutiny of ministerial correspondence estimated total costs of £17·5 million for some 250,000 ministerial replies, a mean average of £70. The estimate was based on small samples, and revealed a considerable range of costs related to the complexity of each Department's caseload.

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

  Mr. MacGregor
  My predecessor, the right hon. and learned Member for Surrey, East (Sir G. Howe), attended a meeting of the commissioners in December 1989.

HOME DEPARTMENT

  Magistrates Courts
  Mr. Wigley
  To ask the Secretary of State for the Home Department how many cases related to non-payment of the poll tax have been dealt with by each magistrates court in Wales during 1990; and what was the average amount of time allocated to cases of non-payment of the poll tax by each magistrates court.

  Mr. John Patten
  The figures for the number of summonses and liability orders issued and the amount of time devoted to the enforcement of the community charge by magistrates courts in Wales during 1990 are set out in the table:

  Community Charge enforcement in Wales in 1990

  Summonses

  Liability orders

  Sitting hours

  Hawarden

  48

  3

  1

  Rhuddlan

  —

  —

  —

  Wrexham Maelor

  5,840

  3,665

  20·5

  Llanelli

  2,077

  1,145

  34

  Gogledd Ceredigion

  2,978

  2,242

  62

  Carmarthen South

  5,367

  3,412

  21

  Cleddau

  4,846

  3,869

  55

  Bedwellty

  500

  388

  5

  East Gwent

  6,918

  596

  25

  Newport

  5,301

  3,214

  15

  Conwy & Llandudno

  5,911

  3,951

  27

  North Anglesey

  2,053

  1,307

  13

  Penllyn

  —

  —

  —

  Caernarfon & Gwyrfai

  3,559

  1,082

  8

  Lower Rhymney Valley

  5,765

  4,441

  24

  Merthyr Tydfil1

  —

  —

  —

  Miskin

  15,990

  11,988

  29

  Newcastle & Ogmore

  15,815

  12,662

  48

  1 Figures for Merthyr Tydfil based on first return: 1 April-30 September 1990

  Mr. Wigley
  To ask the Secretary of State for the Home Department how much money is currently allocated to magistrates courts specifically to assist with cases related to the poll tax; and whether he has any plans to increase resources to deal with the current situation.

  Mr. John Patten
  Specific grant is provided to support expenditure on the workload of the magistrates courts as
  495
  a whole. The Government's proposals for increased grant support were set out in the Home Office annual report 1991 (Cm 1509), but we continue to keep the community charge enforcement position under review.

  Probation Service
  Mr. Bidwell
  To ask the Secretary of State for the Home Department what representations he has had concerning delay in implementing the pay increase for probation officers of November 1990; what assessment he has made of the effect of the delay on morale in the service; and to when the increase will be backdated.

  Mr. Butler
  To ask the Secretary of State for the Home Department if he is yet in a position to authorise the new salary scale for probation officers upon which there has been arbitration.

  Mr. John Evans
  To ask the Secretary of State for the Home Department when he expects to announce the probation officers' 1990–91 pay award.

  Mr. John Patten
  My right hon. Friend has received a number of representations about the length of time it has taken to fix the increase in probation officers' salaries effective from 1 July 1990.

  The main part of the delay was due to the staff side's decision to refer the matter unilaterally to arbitration. My right hon. Friend received the report of the ACAS arbitration panel on 6 November 1990, nearly four months after the employers' side made their final offer of 9·25 per cent.

  Our decision to accept the increase of 9·25 per cent. and one of the three structural changes to the salary scale included in the arbitration award was announced on 6 February 1991. I expect most probation officers to see this decision as reasonable.

  Departmental Achievements
  Mr. Pawsey
  To ask the Secretary of State for the Home Department if he will make a statement on the principal achievements of his Department since June 1987.

  Mr. Kenneth Baker
  The number of police posts in England and Wales increased by 4,285, bringing the total to 127,155. The number of civilians supporting the police increased by 4,699 to 45,405, and since 1986–87 expenditure on the police has increased by 19·5 per cent. in real terms. These increases have been accompanied by action to ensure that the police use their resources efficiently and to enhance their capacity to deal with crime of all kinds, including that with an international dimension.

  Sixteen safer cities projects have been set up in inner-city areas supporting over 850 initiatives with the objective of reducing crime, lessening the fear of crime and creating conditions in which economic enterprise and community life can flourish. Crime Concern, an independent body which seeks to encourage and facilitate local crime prevention activity and to draw the business sector into crime prevention, has been established. Advice on crime prevention has been issued to local authorities, other relevant agencies and to the public, with over 3 million copies of the crime prevention handbook distributed. The standing conference on crime prevention meets annually to discuss and promote new crime prevention ideas.
  496
  My Department has continued to give the highest priority to tackling drug misuse. The London world ministerial drug summit reaffirmed our commitment to be at the forefront, both at home and abroad, of efforts to combat drug misuse. Reciprocal agreements with seven further countries on confiscation of the proceeds of drug trafficking have been concluded, bringing the total to 19. The first five local teams set up under the drug prevention initiative to strengthen community resistance to drug misuse have now started work.

  Legislation has been passed to enable the United Kingdom to ratify the United Nations convention against the illicit traffic in drugs; to enhance the control of firearms; to strengthen the country's defences against terrorism; to increase the powers available to the courts for dealing with football hooligans; to improve our ability to give effect to our policy of firm but fair immigration control; to create a new and more open and competitive framework for the licensing and regulation of independent radio and television services, leading to greater choice for viewers and listeners while maintaining proper safeguards for programme quality and standards; to remove outdated restrictions on licensing laws; to enable the United Kingdom to participate more effectively in the international fight against crime, including a major reform of the extradition law; to make provision for courts to order the confiscation of the proceeds of profitable crime; to provide for unduly lenient sentences to be reviewed; to create a statutory right for the victims of crime to receive compensation; to tighten the law on possession of knives and to ban the sale of offensive weapons which have no legitimate use; to strengthen the jury system; to reform the law on official secrets by replacing section 2 of the Official Secrets Act 1911 with provisions protecting just six classes of official information; and to put the security service on a statutory basis, with the appointment of a commissioner and provision for complaints to be made to an independent tribunal. Legislation has been passed to encourage key Hong Kong personnel and their families to remain there by giving them the assurance of British citizenship in order to help them maintain the future stability and prosperity of the territory.

  Since the beginning of 1987 five new prisons have been opened, providing some 2,500 places, and construction has begun at 13 other sites, which will provide nearly 8,000 additional prison places. By the end of March 1991 nearly 3,000 more places will also have been provided at existing establishments. The Home Office has embarked on a major programme to improve existing prisons. At the beginning of 1987 about 45 per cent. of prison places had access to night sanitation, but by April this year 60 per cent. of all places are expected to have access. Conversion of the remaining places is a high priority.

  Television Licences
  Mr. Bellotti
  To ask the Secretary of State for the Home Department if he will make it his policy to provide for the issue of refunds for unexpired television licences where the person to whom the licence was issued has died and more than one month remains valid on the licence.

  Mr. Peter Lloyd
  No.
  497
  Mr. Wallace
  To ask the Secretary of State for the Home Department (1) what is the estimated cost of the concessions of the reduced television licence for registered blind people;

  (2) whether he has any proposals to extend the reduced cost television licence currently available to registered blind people to those who are registered as partially sighted.

  Mr. Peter Lloyd
  The cost of the concession in 1989–90 in terms of revenue forgone was £47,500. The concession is available to people so blind as to be unable to perform any work for which eyesight is essential. There are no plans to change that criterion.

  Police, Staffordshire
  Mr. Lawrence
  To ask the Secretary of State for the Home Department what increase has been made to the number of police officers and civilian auxiliaries for Staffordshire over each of the past five years; and what has been the increase or decrease in crimes reported, detected and cleared up over that period.

  Mr. Peter Lloyd
  The information requested is set out in the tables:

  (i) Increase in resources

  Year

  Police Officer Establishment

  Civilian Staff

  1985–86

  Nil

  +20

  1986–87

  +27

  +11

  1987–88

  +25

  +3

  1988–89

  +10

  +2

  1989–90

  +22

  -24

  1990–91

  +14

  +41

  Financial year

  Applications

  Cases assisted

  Individuals benefitting

  Cost1£

  1986–87

  141

  41

  65

  51,425·87

  1987–88

  89

  38

  61

  41,400·23

  1988–89

  75

  37

  45

  45,541·08

  1989–90

  70

  43

  55

  42,484·65

  1990–912

  41

  25

  29

  30,666·02

  1 Excluding administrative overheads.

  2 To 8 February 1991.

  Parking, London
  Mr. Dykes
  To ask the Secretary of State for the Home Department if he will hold discussions with the Commissioner of Police of the Metropolis on the scope for further action by officers to deter the parking of untaxed and uninsured vehicles on streets in Greater London.

  Mr. Peter Lloyd
  The enforcement of offences relating to untaxed and uninsured vehicles is an operational matter and therefore for the Commissioner of Police of the Metropolis. I understand that police officers and traffic wardens routinely report vehicle excise offences involving parked vehicles to the Department of Transport and support enforcement campaigns run by that Department. Insurance offences normally come to light only when a driver is stopped and asked to produce his documents.
  498

  (ii) Changes in level of crime

  Year

  Increase/decrease in recorded crime per cent

  Increase/decrease in clear-up rate per cent

  1985

  +3

  +9

  1986

  +8

  -7

  1987

  +1

  -4

  1988

  -2

  +7

  1989

  +5

  +1

  1990

  N.A.

  N.A.

  Voluntary Repatriation
  Mr. Lawrence
  To ask the Secretary of State for the Home Department what are the facilities available for immigrants who seek voluntary repatriation; how many have applied for such repatriation over the past five years; what has been the cost; and if he will make a statement.

  Mrs. Rumbold
  Financial assistance is available in certain circumstances from public funds for non-British citizens settled in this country who wish to return permanently overseas to a non-European country. The scheme, which is operated under section 29 of the Immigration Act 1971, is administered on behalf of the Government by the International Social Service of Great Britain. Assistance, which is means-tested, and is limited to the payment of fares and incidental expenses incurred in leaving the United Kingdom, including the transport of a small amount of personal effects. There is no resettlement grant.

  Over the past five years the number of applications, the number of cases assisted, the number of individuals leaving the United Kingdom and the cost were as follows:

  Overseas Electors
  Mr. Anthony Coombs
  To ask the Secretary of State for the Home Department if he will list, by parliamentary constituency, the numbers of overseas electors included in the draft electoral register for 1991–92, together with totals for each constituent part of the United Kingdom.

  Mrs. Rumbold
  The information requested is set out in the table. The figures do not include valid applications which were received too late for inclusion in the draft register, which was published on 28 November 1990. Final figures for the electoral register for 1991–92 will be published by the Office of Population Censuses and Surveys in the summer.

  Overseas electors included in the draft electoral register published on 28 November 1990 by Parliamentary Constituency

  Number

  England

  28,512

  Aldershot

  112

  Aldridge-Brownhills

  26

  499

  Number

  Altrincham and Sale

  87

  Amber Valley

  19

  Arundel

  62

  Ashfield

  12

  Ashford

  74

  Ashton-under-Lyne

  11

  Aylesbury

  82

  Banbury

  61

  Barking

  8

  Barnsley Central

  2

  Barnsley East

  4

  Barnsley West and Penistone

  15

  Barrow and Furness

  44

  Basildon

  38

  Basingstoke

  78

  Bassetlaw

  37

  Bath

  80

  Batley and Spen

  33

  Battersea

  112

  Beaconsfield

  151

  Beckenham

  66

  Berwick-upon-Tweed

  29

  Bethnal Green and Stepney

  22

  Beverley

  57

  Bexhill and Battle

  96

  Bexleyheath

  29

  Billericay

  51

  Birkenhead

  26

  Birmingham, Edgbaston

  62

  Birmingham, Erdington

  9

  Birmingham, Hall Green

  12

  Birmingham, Hodge Hill

  13

  Birmingham, Ladywood

  18

  Birmingham, Northfield

  25

  Birmingham, Perry Barr

  21

  Birmingham, Selly Oak

  70

  Birmingham, Small Heath

  7

  Birmingham, Sparkbrook

  18

  Birmingham, Yardley

  9

  Bishop Auckland

  21

  Blaby

  53

  Blackburn

  30

  Blackpool North

  22

  Blackpool South

  33

  Blaydon

  22

  Blyth Valley

  22

  Bolsover

  2

  Bolton North East

  17

  Bolton South East

  9

  Bolton West

  36

  Boothferry

  46

  Bootle

  17

  Bosworth

  42

  Bournemouth East

  63

  Bournemouth West

  53

  Bow and Poplar

  21

  Bradford North

  30

  Bradford South

  15

  Bradford West

  32

  Braintree

  67

  Brent East

  50

  Brent North

  119

  Brent South

  27

  Brentford and Isleworth

  102

  Brentwood and Ongar

  104

  Bridgwater

  54

  Bridlington

  39

  Brigg and Cleethorpes

  59

  Brighton, Kemptown

  92

  Brighton, Pavilion

  95

  Bristol East

  25

  Bristol North West

  130

  Bristol South

  14

  Bristol West

  171

  Bromsgrove

  26

  Broxbourne

  87

  Broxtowe

  49

  500

  Number

  Buckingham

  92

  Burnley

  13

  Burton

  33

  Bury North

  38

  Bury South

  64

  Bury St. Edmunds

  68

  Calder Valley

  37

  Cambridge

  243

  Cannock and Burntwood

  26

  Canterbury

  76

  Carlisle

  21

  Carshalton and Wallington

  39

  Castle Point

  45

  Central Suffolk

  48

  Cheadle

  76

  Chelmsford

  80

  Chelsea

  153

  Cheltenham

  85

  Chertsey and Walton

  131

  Chesham and Amersham

  173

  Chesterfield

  19

  Chichester

  115

  Chingford

  36

  Chipping Barnet

  69

  Chislehurst

  65

  Chorley

  40

  Christchurch

  76

  Cirencester and Tewkesbury

  78

  City of Chester

  80

  City of Durham

  41

  City of London and Westminster, South

  207

  Colne Valley

  29

  Congleton

  45

  Copeland

  28

  Corby

  48

  Coventry North East

  18

  Coventry North West

  21

  Coventry South East

  20

  Coventry South West

  53

  Crawley

  69

  Crewe and Nantwich

  39

  Crosby

  68

  Croydon Central

  50

  Croydon North East

  57

  Croydon North West

  41

  Croydon South

  97

  Dagenham

  8

  Darlington

  38

  Dartford

  53

  Daventry

  77

  Davyhulme

  54

  Denton and Reddish

  22

  Derby North

  24

  Derby South

  24

  Devises

  104

  Dewsbury

  17

  Don Valley

  18

  Doncaster Central

  23

  Doncaster North

  13

  Dover

  65

  Dudley East

  20

  Dudley West

  28

  Dulwich

  88

  Ealing, Acton

  138

  Ealing North

  53

  Ealing, Southall

  53

  Easington

  5

  East Berkshire

  124

  East Hampshire

  117

  East Lindsey

  37

  East Surrey

  90

  Eastbourne

  107

  Eastleigh

  87

  Eccles

  24

  Eddisbury

  85

  501

  Number

  Edmonton

  32

  Ellesmere Port and Neston

  37

  Elmet

  29

  Eltham

  46

  Enfield North

  23

  Enfield, Southgate

  83

  Epping Forest

  60

  Epsom and Ewell

  91

  Erewash

  25

  Erith and Crayford

  16

  Esher

  176

  Exeter

  76

  Falmouth and Camborne

  45

  Fareham

  106

  Faversham

  58

  Feltham and Heston

  56

  Finchley

  94

  Folkestone and Hythe

  52

  Fulham

  159

  Fylde

  54

  Gainsborough and Horncastle

  38

  Gateshead East

  28

  Gedling

  32

  Gillingham

  41

  Glanford and Scunthorpe

  40

  Gloucester

  26

  Gosport

  70

  Grantham

  62

  Gravesham

  53

  Great Grimsby

  13

  Great Yarmouth

  39

  Greenwich

  60

  Guildford

  127

  Hackney North and Stoke Newington

  38

  Hackney South and Shoreditch

  34

  Halesowen and Stourbridge

  35

  Halifax

  27

  Halton

  26

  Hammersmith

  68

  Hampstead and Highgate

  194

  Harborough

  78

  Harlow

  39

  Harrowgate

  84

  Harrow East

  73

  Harrow West

  83

  Hartlepool

  20

  Harwich

  60

  Hastings and Rye

  53

  Havant

  95

  Hayes and Harlington

  26

  Hazel Grove

  42

  Hemsworth

  14

  Hendon North

  48

  Hendon South

  113

  Henley

  139

  Hereford

  54

  Hertford and Stortford

  102

  Hertsmere

  85

  Hexham

  49

  Heywood and Middleton

  17

  High Peak

  68

  Holborn and St. Pancras

  108

  Holland with Boston

  11

  Honiton

  66

  Hornchurch

  29

  Hornsey and Wood Green

  199

  Horsham

  116

  Houghton and Washington

  22

  Hove

  89

  Huddersfield

  34

  Huntingdon

  65

  Hyndburn

  9

  Ilford North

  32

  Ilford South

  39

  502

  Number

  Ipswich

  38

  Isle of Wight

  93

  Islington North

  92

  Islington South and Finsbury

  99

  Jarrow

  16

  Keighley

  61

  Kensington

  140

  Kettering

  39

  Kingston upon Hull East

  10

  Kingston upon Hull North

  35

  Kingston upon Hull West

  8

  Kingston upon Thames

  114

  Kingswood

  40

  Knowsley North

  13

  Knowsley South

  17

  Lancaster

  63

  Langbaurgh

  54

  Leeds, Central

  10

  Leeds, East

  16

  Leeds, North East

  54

  Leeds, North West

  39

  Leeds, West

  14

  Leicester, East

  10

  Leicester, South

  44

  Leicester, West

  8

  Leigh

  14

  Leominster

  93

  Lewes

  111

  Lewisham, Deptford

  27

  Lewisham, East

  45

  Lewisham, West

  60

  Leyton

  29

  Lincoln

  27

  Littleborough and Saddleworth

  48

  Liverpool, Broadgreen

  26

  Liverpool, Garston

  28

  Liverpool, Mossley Hill

  42

  Liverpool, Riverside

  19

  Liverpool, Walton

  16

  Liverpool, West Derby

  16

  Loughborough

  42

  Ludlow

  46

  Luton, South

  48

  Macclesfield

  100

  Maidstone

  55

  Makerfield

  26

  Manchester, Blackley

  20

  Manchester, Central

  15

  Manchester, Gorton

  36

  Manchester, Withington

  77

  Manchester, Wythenshawe

  17

  Mansfield

  11

  Medway

  58

  Meriden

  47

  Mid Bedfordshire

  85

  Mid Kent

  42

  Mid Norfolk

  57

  Mid Staffordshire

  29

  Mid Sussex

  105

  Mid Worcestershire

  39

  Middlesbrough

  17

  Milton Keynes

  114

  Mitcham and Morden

  39

  Mole Valley

  121

  Morecambe and Lunesdale

  37

  Morley and Leeds South

  6

  New Forest

  80

  Newark

  18

  Newbury

  109

  Newcastle upon Tyne Central

  64

  Newcastle upon Tyne East

  26

  Newcastle upon Tyne North

  25

  Newcastle-under-Lyme

  24

  503

  Number

  Newham North East

  14

  Newham North West

  19

  Newham South

  16

  Normanton

  11

  North Bedfordshire

  93

  North Colchester

  77

  North Cornwall

  55

  North Devon

  75

  North Dorset

  56

  North Durham

  20

  North East Cambridgeshire

  37

  North East Derbyshire

  25

  North Hertfordshire

  107

  North Luton

  65

  North Norfolk

  47

  North Shropshire

  43

  North Thanet

  45

  North Warwickshire

  27

  North West Durham

  20

  North West Hampshire

  87

  North West Leicestershire

  29

  North West Norfolk

  53

  North West Surrey

  156

  North Wiltshire

  83

  Northampton North

  40

  Northampton South

  54

  Northavon

  14

  Norwich North

  48

  Norwich South

  94

  Norwood

  54

  Nottingham East

  38

  Nottingham North

  6

  Nottingham South

  46

  Nuneaton

  24

  Old Bexley and Sidcup

  42

  Oldham Central and Royton

  20

  Oldham West

  17

  Orpington

  84

  Oxford East

  105

  Oxford West and Abingdon

  198

  Peckham

  21

  Pendle

  43

  Penrith and The Border

  38

  Peterborough

  43

  Plymouth, Devonport

  39

  Plymouth, Drake

  39

  Plymouth, Sutton

  52

  Pontefract and Castleford

  4

  Poole

  68

  Portsmouth, North

  29

  Portsmouth, South

  48

  Preston

  22

  Pudsey

  18

  Putney

  161

  Ravensbourne

  67

  Reading, East

  123

  Reading, West

  79

  Redcar

  40

  Reigate

  100

  Ribble Valley

  66

  Richmond (Yorks)

  33

  Richmond and Barnes

  210

  Rochdale

  38

  Rochford

  69

  Romford

  23

  Romsey and Waterside

  83

  Rossendale and Darwen

  36

  Rother Valley

  10

  Rotherham

  13

  Rugby and Kenilworth

  139

  Ruislip-Northwood

  61

  Rushcliffe

  51

  Rutland and Melton

  88

  Ryedale

  504

  Number

  Saffron Walden

  82

  St. Albans

  150

  St. Helens, North

  34

  St. Helens, South

  17

  St. Ives

  64

  Salford, East

  22

  Salisbury

  85

  Scarborough

  52

  Sedgefield

  19

  Selby

  43

  Sevenoaks

  85

  Sheffield, Attercliffe

  19

  Sheffield, Brightside

  8

  Sheffield, Central

  26

  Sheffield, Hallam

  87

  Sheffield, Heeley

  18

  Sheffield, Hillsborough

  16

  Sherwood

  40

  Shipley

  66

  Shoreham

  91

  Shrewsbury and Atcham

  28

  Skipton and Ripon

  53

  Slough

  39

  Solihull

  76

  Somerton and Frome

  80

  South Colchester and Maldon

  65

  South Derbyshire

  27

  South Dorset

  29

  South East Cambridgeshire

  93

  South East Cornwall

  67

  South East Staffordshire

  12

  South Hams

  57

  South Norfolk

  60

  South Ribble

  46

  South Shields

  8

  South Staffordshire

  32

  South Suffolk

  46

  South Thanet

  52

  South West Bedfordshire

  75

  South West Cambridgeshire

  111

  South West Hertfordshire

  113

  South West Norfolk

  44

  South West Surrey

  121

  South Worcestershire

  119

  Southampton Itchen

  55

  Southampton Test

  73

  Southend East

  42

  Southend West

  44

  Southport

  65

  Southwark and Bermondsey

  16

  Spelthorne

  70

  Stafford

  73

  Staffordshire Moorlands

  27

  Stalybridge and Hyde

  42

  Stamford and Spalding

  57

  Stevanage

  74

  Stockport

  38

  Stockton, North

  35

  Stockton, South

  48

  Stoke-on-Trent, Central

  7

  Stoke-on-Trent, North

  7

  Stoke-on-Trent, South

  10

  Stratford-on-Avon

  64

  Streatham

  95

  Stretford

  30

  Stroud

  89

  Suffolk Coastal

  79

  Sunderland, North

  16

  Sunderland, South

  23

  Surbiton

  66

  Sutton and Cheam

  81

  Sutton Coldfield

  60

  Swindon

  63

  Tatton

  71

  Taunton

  59

  Teignbridge

  54

  The Wrekin

  21

  505

  Number

  Thurrock

  13

  Tiverton

  68

  Tonbridge and Malling

  74

  Tooting

  86

  Torbay

  83

  Torridge and West Devon

  73

  Tottenham

  30

  Truro

  57

  Tunbridge Wells

  93

  Twickenham

  139

  Tyne Bridge

  2

  Tynemouth

  33

  Upminster

  36

  Uxbridge

  47

  Vauxhall

  95

  Wakefield

  25

  Wallasey

  56

  Wallsend

  18

  Walsall North

  17

  Walsall South

  14

  Walthamstow

  28

  Wansbeck

  6

  Wansdyke

  59

  Wanstead and Woodford

  58

  Wantage

  89

  Warley East

  8

  Warley West

  1

  Warrington North

  30

  Warrington South

  39

  Warwick and Leamington

  68

  Watford

  78

  Waveney

  65

  Wealden

  100

  Wellingborough

  55

  Wells

  39

  Welwyn Hatfield

  96

  Wentworth

  16

  West Bromwich East

  14

  West Bromwich West

  —

  West Derbyshire

  46

  West Dorset

  57

  West Gloucestershire

  50

  West Hertfordshire

  95

  West Lancashire

  44

  Westbury

  132

  Westminster North

  136

  Westmoreland and Lonsdale

  50

  Weston-Super-Mare

  47

  Wigan

  30

  Wimbledon

  144

  Winchester

  74

  Windsor and Maidenhead

  115

  Wirral South

  58

  Wirral West

  60

  Witney

  80

  Woking

  170

  Wokingham

  105

  Wolverhampton North East

  11

  Wolverhampton South East

  10

  Wolverhampton South West

  33

  Woodspring

  54

  Woolwich

  19

  Worcester

  45

  Workington

  12

  Worsley

  26

  Worthing

  74

  Wycombe

  104

  Wyre

  39

  Wyre Forest

  51

  Yeovil

  60

  York

  80

  506

  Overseas electors included in the draft electoral register published on 28 November 1990 by Parliamentary Constituency

  Number

  Wales

  867

  Aberavon

  4

  Alyn and Deeside

  21

  Blaenau Gwent

  4

  Brecon and Radnor

  26

  Bridgend

  40

  Caernarfon

  16

  Caerphilly

  10

  Cardiff Central

  70

  Cardiff North

  32

  Cardiff South and Penarth

  25

  Cardiff West

  29

  Carmarthen

  22

  Ceredigion and Pembroke North

  33

  Clwyd North West

  32

  Clwyd South West

  21

  Conwy

  35

  Cynon Valley

  1

  Delyn

  25

  Gower

  29

  Islwyn

  Llanelli

  13

  Meirionnydd Nan Conwy

  8

  Merthyr Tydfil and Rhymney

  9

  Monmouth

  54

  Montgomery

  7

  Neath

  7

  Newport East

  13

  Newport West

  34

  Ogmore

  9

  Pembroke

  47

  Pontypridd

  24

  Rhondda

  3

  Swansea East

  9

  Swansea West

  31

  Torfaen

  11

  Vale of Glamorgan

  53

  Wrexham

  26

  Ynys Môn

  25

  Overseas electors included in the draft electoral register published on 28 November 1990 by Parliamentary Constituency

  Number

  Scotland

  1,445

  Aberdeen, North

  12

  Aberdeen, South

  52

  Angus, East

  25

  Argyll and Bute

  16

  Ayr

  19

  Banff and Buchan

  7

  Caithness and Sutherland

  9

  Carrick, Cumnock and Doon Valley

  9

  Central Fife

  10

  507

  Number

  Clackmannan

  12

  Clydebank and Milngavie

  3

  Clydesdale

  4

  Cumbernauld and Kilsyth

  12

  Cunninghame, North

  20

  Cunninghame, South

  4

  Dumbarton

  4

  Dumfries

  18

  Dundee, East

  29

  Dundee, West

  16

  Dunfermline, East

  17

  Dunfermline, West

  12

  East Kilbride

  8

  East Lothian

  21

  Eastwood

  40

  Edinburgh Central

  85

  Edinburgh East

  22

  Edinburgh, Leith

  44

  Edinburgh, Pentlands

  46

  Edinburgh South

  102

  Edinburgh West

  48

  Falkirk East

  18

  Falkirk West

  11

  Galloway and Upper Nithsdale

  19

  Glasgow, Cathcart

  15

  Glasgow Central

  8

  Glasgow, Garscadden

  3

  Glasgow, Govan

  8

  Glasgow, Hillhead

  44

  Glasgow, Maryhill

  12

  Glasgow, Pollok

  10

  Glasgow, Provan

  2

  Glasgow, Rutherglen

  6

  Glasgow, Shettleston

  —

  Glasgow, Springburn

  5

  Gordon

  39

  Greenock and Port Glasgow

  4

  Hamilton

  1

  Inverness, Nairn and Lochaber

  39

  Kilmarnock and Loudoun

  9

  Kincardine and Deeside

  58

  Kirkcaldy

  18

  Linlithgow

  7

  Livingston

  7

  Midlothian

  20

  Monklands East

  2

  Monklands West

  7

  Moray

  12

  Motherwell North

  2

  Motherwell South

  3

  North East Fife

  38

  North Tayside

  26

  Orkney and Shetland

  13

  Paisley North

  21

  Paisley South

  16

  Perth and Kinross

  35

  Renfrew West and Inverclyde

  47

  Ross, Cromarty and Skye

  24

  Roxburgh and Berwickshire

  9

  Stirling

  54

  Strathkelvin and Bearsden

  11

  Tweeddale, Ettrick and Lauderdale

  34

  Western Isles

  2

  Northern Ireland

  177

  508

  Number

  Belfast East

  20

  Belfast North

  11

  Belfast South

  21

  Belfast West

  8

  East Antrim

  9

  East Londonderry

  7

  Fermanagh and South Tyrone

  9

  Foyle

  3

  Lagan Valley

  12

  Mid Ulster

  11

  Newry and Armagh

  6

  North Antrim

  9

  North Down

  20

  South Antrim

  8

  South Down

  4

  Strangford

  12

  Upper Bann

  7

  United Kingdom Total

  31,001

  Drug Offences
  Mr. John Hughes
  To ask the Secretary of State for the Home Department if he will give the latest recorded figures for convictions for(a) class 1 and (b) class 2 drug offences and the figures for each year from 1980; and if he will make a statement.

  Mr. John Patten
  [holding answer 4 February 1991]: Data are readily available only for 1986 onwards and information on the number of convictions recorded in the United Kingdom concerning class A and class B drugs is given in the table.

  United Kingdom

  Number of convictions relating to:

  Year

  Class A drugs

  Class B drugs

  1986

  4,486

  21,155

  1987

  4,263

  21,489

  1988

  3,692

  23,102

  1989

  3,752

  26,759

  Adoption
  Mr. Thurnham
  To ask the Secretary of State for the Home Department how many clearance papers were issued for the admission to the United Kingdom of children adopted abroad, or in the process of adoption, for each of the last five years in total and by country of origin; and if he will make a statement concerning Romanian children in particular.

  Mr. Peter Lloyd
  [holding answer 12 February 1991]: The available information is that, since December 1989, 149 Romanian children have been granted entry clearance to come to the United Kingdom with a view to adoption by British couples. Fifteen applications have been refused or withdrawn and 42 applications are currently outstanding, 39 of which have been made since 1 December 1990. Earlier information about Romanian children and information about children from other countries granted entry clearance with a view to adoption in the United Kingdom has not been collected centrally.

  Explosives
  Dr. Thomas
  To ask the Secretary of State for the Home Department what consideration was given to the implications for the financing of appropriate policing when the proposed Control of Explosives Order was drafted.

  Mr. Forth
  I have been asked to reply.

  This question relates to proposals currently being prepared for the Home Secretary by the Health and Safety Commission.

  The financial implications of policing the proposed control of explosives regulations were considered during the preparation of the related cost-benefit analysis. This analysis estimates that the proposed regulations will lead to clear savings for the police.

HEALTH

  Breast Care Nurses
  Ms. Walley
  To ask the Secretary of State for Health how many breast care nurses, and at what grade, are currently in post in each district.

  Mrs. Virginia Bottomley
  This information is not collected centrally.

  Mental Health Grant
  Mr. Rooker
  To ask the Secretary of State for Health (1) if he will list the potential level of the specific mental health grant to each local authority and give an indication of the take-up proposed at the latest convenient date;

  (2) if any local authorities have yet indicated they are unable to take up the offer of the specific mental health grant.

  Mr. Dorrell
  The indicative allocations for each local authority are set out in circular HC(90)24/LAC(90)10, a copy of which is in the Library. So far, over 70 per cent. of authorities have notified their intention to take up the grant and none has advised us that the grant will not be taken up. We will publish a full list when we have received the outstanding notifications.

  AIDS
  Mr. Cohen
  To ask the Secretary of State for Health what publicity arrangements he has made to inform people of the protection afforded by, and to advise on the proper use of, a safe spermicide combined with condoms as a protection against AIDS; and if he will make a statement.

  Mrs. Virginia Bottomley
  The AIDS public education campaign has adopted a broad-based strategy which offers people clear health educational advice on which to base informed decisions about their sexual behaviour. This includes advice that the use of condoms can reduce the risk of infection with HIV. Clinical studies do not show that spermicides confer additional protection against HIV infection.

  Mr. Cohen
  To ask the Secretary of State for Health what publicity arrangements he has made to inform people of the relative safety of water-based and oil-based lubricants in terms of contraception and as a protection against AIDS; and if he will make a statement.
  510
  Mrs. Virginia Bottomley
  The AIDS public education campaign has, since inception, advocated that where lubricants are used with condoms they should be water-based, and warned that oil-based lubricants may damage or weaken rubber condoms. This advice has been given in leaflets and press advertisements since 1986.

  Mental Illness
  Mr. Atkinson
  To ask the Secretary of State for Health how much he expects will be transferred from the national health service to Dorset county council for the resettlement of discharged mentally ill patients as a result of the sale of Coldharbour and Herrison hospitals; and if he will make a statement.

  Mr. Dorrell
  Neither of the hospitals in question has been sold and the amount of any future transfer will be for the region to discuss with Dorset county council and the district health authorities involved. My hon. Friend may wish to contact Mr. Robin Buchanan, e chairman of Wessex regional health authority, for the information lie seeks.

  Mr. Corbett
  To ask the Secretary of State for Health what were the number of mental illness hospital beds in each district within the West Midlands regional health authority area by name in the three latest years for which figures are available.

  Mr. Dorrell
  [holding answer 4 February 1991]: The number of mental illness beds in West Midlands regional health authority is given in the table.

  District health authority

  1987–88

  1988–89

  1989–90

  Bromsgrove and Redditch

  351

  307

  229

  Herefordshire

  186

  170

  166

  Kidderminster and district

  77

  83

  81

  Worcester and district

  331

  302

  291

  Shropshire

  409

  410

  394

  Mid Staffordshire

  445

  423

  386

  North Staffordshire

  777

  727

  692

  South East Staffordshire

  735

  732

  709

  North Warwickshire

  30

  30

  30

  South Warwickshire

  438

  394

  365

  Central Birmingham

  199

  198

  199

  North Birmingham

  476

  426

  417

  South Birmingham

  361

  367

  340

  West Birmingham

  540

  520

  51.1

  Coventry

  277

  245

  273

  Dudley

  153

  143

  197

  Sandwell

  17

  17

  57

  Solihull

  329

  313

  307

  Walsall

  14

  14

  14

  Wolverhampton

  208

  208

  205

  Total—West Midlands

  6,345

  6,030

  5,862

  Source: KHO3

  Gulf Casualties
  Mr. Wigley
  To ask the Secretary of State for Health what guidelines have been issued by his Department to local social services departments concerning contingency plans for the rehabilitation of disabled service men and women injured during the Gulf war.

  Mrs. Virginia Bottomley
  I refer the hon. Member to the reply I gave my hon. Friend the Member for Mid-Kent (Mr. Rowe) on 5 February at column 154.

  Mr. Madden
  To ask the Secretary of State for Health, under Operation Granby, how many health authorities
  511
  have been directed to refuse non-emergency admissions to hospitals; how many such refusals have been made to date; if he will make funds available to enable wards and beds closed temporarily and permanently to be reopened, so that non-emergency admissions may be made in addition to any Gulf casualties; and if he will make a statement.

  Mr. Dorrell
  No health authority has been directed to refuse non-emergency admissions to hospitals. The national health service should get sufficient notice of casualties to enable hospitals to cope without emptying beds in advance. It will be for health authorities to decide whether wards not currently operational will need to be reactivated to receive casualties from the Gulf.

  As my right hon. Friend the Secretary of State announced on 16 January, the Government are providing extra money to meet the full costs of any Gulf casualties. We have told health authorities that they should spend what is necessary and we have given guidance on how to account for and reclaim Gulf costs.

  Mr. Tony Lloyd
  To ask the Secretary of State for Health what information he has on the cancellation of operations by the national health service because of the Gulf crisis; and if he will make a statement.

  Mr. Dorrell
  None. The national health service should get sufficient notice of casualties to enable hospitals to cope without emptying beds or cancelling operations at the present time.

  Blood Products
  Mr. Bellotti
  To ask the Secretary of State for Health how much it costs to collect(a) a pint of human blood and (b) a donation of plasma.

  Mr. Dorrell
  The average cost of collecting, processing and transporting a unit of blood in 1989–90 was £29·25. The cost of collecting a donation of plasma is not held centrally.

  Patients' Notes
  Mr. Robin Cook
  To ask the Secretary of State for Health if he is satisfied with current arrangements for protecting the confidentiality of patients' notes which may be subject to scrutiny by the family health services authorities.

  Mr. Dorrell
  Personal health information is strictly confidential. It may be examined only by authorised persons, and only to the extent authorised. The Department is working on draft guidance on the confidentiality of personal health information in the NHS which will be issued for consultation shortly.

  Staff Accommodation
  Mr. David Nicholson
  To ask the Secretary of State for Health what guidance his Department gives to health authorities on steps to take in order to protect NHS staff resident in hospital accommodation blocks from the risk of fire.

  Mr. Dorrell
  I refer my hon. Friend to the reply I gave on 7 February at column 239.

  NHS Drugs
  Mr. Peter Griffiths
  To ask the Secretary of State for Health what arrangements exist for the return to pharmacies of medicinal drugs prescribed and supplied to national health service patients but not taken.

  Mrs. Virginia Bottomley
  No formal arrangements exist for the return to pharmacies of unused medicines, but all pharmacies accept such medicines for safe and appropriate destruction.

  It is not considered good professional practice to use any medicines where there is uncertainty as to the quality of the medicine.

  Mr. Peter Griffiths
  To ask the Secretary of State for Health (1) what would be the estimated net saving to the national health service annually if a system for the return of unused medicinal drugs from nursing homes to pharmacies were established;

  (2) what estimate his Department can make of the value of medicinal drugs prescribed and supplied to national health service patients which are not taken.

  Mrs. Virginia Bottomley
  Information on which to base such estimates is not available.

  Mr. Peter Griffiths
  To ask the Secretary of State for Health whether his Department will arrange for the return of prescription medicinal drugs from registered nursing homes to pharmacies when these drugs are not taken by the patient for reasons such as changed prescription, removal to another institution or death, if the packaging is still intact or the nature and origin of the drugs is certified by a qualified person.

  Mrs. Virginia Bottomley
  The person responsible for a nursing home has a statutory duty to make adequate arrangements for the recording, safe-keeping, handling and disposal of drugs. Health authorities are responsible for ensuring that the statutory requirements are met and must inspect each home at least twice a year.

  It is not considered good professional practice to use medicines where there is uncertainty as to the condition under which a medicine has been stored.

  Sir Peter Emery
  To ask the Secretary of State for Health how many general practitioners in previous years, in complying with his wishes to move to use computers, applied for a grant for the installation of a computer system that was above the figure of payment set out in the published computer cost reimbursement schedule.

  Mr. Dorrell
  No figures are held centrally either in respect of individual claims made by GPs or individual amounts reimbursed by family health services authorities.

  Social Workers for the Blind
  Mr. Hinchliffe
  To ask the Secretary of State for Health what action his Department is taking to assist in the recruitment and training off specialist social workers for the blind.

  Mrs. Virginia Bottomley
  Recruitment and training of staff are the responsibility of employers. The Department is funding a number of initiatives to enable employers to make most effective use of existing work forces and I have recently announced a training strategy aimed at improving
  513
  the supply and training of the personal social services work force at all levels. In addition, we also provide funding specifically for the training of rehabilitation workers with the blind.

  NHS Spending
  Mr. Robin Cook
  To ask the Secretary of State for Health what was(a) total NHS spending and (b) hospital and community health services spending as a proportion of real national disposable income in each year since 1987–88.

  Mr. Dorrell
  [pursuant to the reply 28 January, column 433]: I have subsequently been advised that the term -real national disposable income" does appear in the national accounts. The cash figures that underlie this series are the gross national disposable income (GNDI) figures and the following table gives gross NHS and HCHS spending in the United Kingdom as a proportion of GNDI for the years 1987–88 to 1989–90.

  Gross expenditure as a proportion of Gross National Disposable Income

  Financial Year

  NHS Total

  1HCHS Total

  1987–88

  5·1

  3·8

  1988–89

  5·0

  3·8

  1989–90

  5·0

  3·8

  Source: CSO.

  1 New definition of HCHS expenditure which was used in the Departmental Report. Includes Family Health Services Authority administration, Disablement Services Authority and Family Health Service cash-limited spending.

FOREIGN AND COMMONWEALTH AFFAIRS

  Iraq
  Mr. John D. Taylor
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on relations with Iraq.

  Mr. Douglas Hogg
  Our relations with Iraq are bad.

  The Gulf
  Mr. Roy Hughes
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he has any plans to pay an early visit to the Gulf to discuss the crisis with Governments of Gulf states.

  Mr Hind
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he has any plans to visit Saudi Arabia to discuss the Gulf war with the Emir of Kuwait; and if he will make a statement.

  Mr. Hurd
  I visited Egypt and Saudi Arabia last week, and also called on the Emir of Kuwait in Ta'if. I was greatly encouraged by the resolve and determination of these important members of the coalition.

  Mr. Andrew Welsh
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent discussions he has had with the Arab League states about the further exploration of diplomatic solutions to the Gulf crisis.

  Mr. Douglas Hogg
  Discussions with members of the union of Maghreb nations and of the Arab League 514
  continue. We all agree on the need to end the conflict as early as possible on the basis of the relevant Security Council resolutions. But a diplomatic solution can be possible only once Saddam Hussein is willing to comply with the Security Council resolutions.

  Mr. Pawsey
  To ask the Secretary of State for Foreign and Commonwealth Affairs what progress is being made with our European partners on burden-sharing in connection with the United Kingdom costs of the war in the Gulf.

  Mr. Douglas Hogg
  We are in touch with a number of countries, including European partners, who may be willing to contribute to our costs. Germany has agreed to provide a cash sum of £275 million. This is in addition to practical assistance which the Germans and other partners have already made available in support of British deployments to the Gulf.

  Mr. Dalyell
  To ask the Secretary of State for Foreign and Commonwealth Affairs what response he has made to peace proposals from Iran.

  Mr. Douglas Hogg
  The Iranian Government are reported to have put forward to Iraq certain suggestions for achieving a peaceful solution to the current crisis. The details have not been disclosed, but we would support any proposal based on a complete Iraqi withdrawal from Kuwait and full compliance with the relevant Security Council resolutions.

  Mr. Winnick
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the latest Gulf position.

  Mr. Nellist
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the latest developments in the Gulf.

  Mr. Douglas Hogg
  The allied coalition remains united and steadfast in its determination to prosecute the military campaign until we know that all Iraqi forces are out of Kuwait. My right hon. Friend the Foreign Secretary found complete agreement on this during his recent visit to Egypt and Saudi Arabia. We do not want the conflict to continue a day longer than necessary. But even as recently as 48 hours ago Baghdad radio announced that"Iraq will never cease fighting until total victory is achieved."

  In the light of this sustained Iraqi belligerence it would be irresponsible for the Governments of the allied coalition to agree to a ceasefire, or a pause in hostilities, while our troops are engaged and exposed. None the less, we continue to hope that the Iraqi leadership will see sense and, as a first step, make an unequivocal commitment to withdraw from Kuwait accompanied by concrete steps towards full compliance with UN Security Council resolutions.

  Mr. Patrick Thompson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is his policy on the creation of a stable framework for lasting peace and security in the Gulf.

  Sir Trevor Skeet
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is his policy on the creation of a stable security framework in the Gulf.
  515
  Sir Marcus Fox
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the consideration being given to peace and security in the middle east after the present hostilities.

  Mr. Douglas Hogg
  It must be for the Gulf states and others in the region to decide future arrangements for peace and security once hostilities have ended. We are ready to play our part, if asked to do so, in support of those arrangements.

  Mr. Brandon-Bravo
  To ask the Secretary of State for Foreign and Commonwealth Affairs what progress is being made with other countries on burden sharing with United Kingdom costs of the conflict in the Gulf.

  Mr. Douglas Hogg
  We continue to have discussions with a number of countries which may be willing to contribute to our costs. Generous cash contributions have been pledged by Kuwait, Germany, the United Arab Emirates, Japan, and Hong Kong totalling £1·2 billion.

  Mr. Dykes
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the non-military assistance being provided by European and other countries in respect of the allied efforts in the present Gulf conflict.

  Mr. Douglas Hogg
  Considerable non-military assistance is being provided by European and other countries to the multinational force in the Gulf, mainly in the form of financial backing or medical and other logistical support. We are still in discussion with a number of countries which have not contributed directly to the military effort, but which may be willing to help defray our costs.

  Soviet Union
  Mr. Andrew MacKay
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he has any plans to visit the Soviet Union to discuss United Kingdom-Soviet relations.

  Mr. Douglas Hogg
  My right hon. Friend the Secretary of State attaches importance to maintaining a dialogue with the Soviet Government. Dates for his next visit to the Soviet Union have not yet been fixed.

  Mr. Andy Stewart
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he last met the Soviet ambassador to discuss United Kingdom-Soviet relations.

  Mr. Douglas Hogg
  British-Soviet relations were among the subjects discussed when my right hon. Friend the Secretary of State saw the Soviet ambassador on 31 January.

  Drugs
  Mr. Vaz
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on British participation in the international fight against drugs.

  Mr. Lennox-Boyd
  We give high priority to combating drugs problems. We welcome the recent appointment of Mr. Giacomelli to head the new United Nations 516
  international drug control programme and will continue to work vigorously with the United Nations, in the European Community, with the Council of Europe's Pompidou group and through bilateral assistance programmes in the international fight against drugs.

  Cyprus
  Mr. Morley
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he last met the high commissioner of the republic of Cyprus to discuss United Nations resolutions on Cyprus.

  Mr. Garel-Jones
  My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs last met the Cyprus high commissioner formally on 1 November. He called on me on 15 November.

  British-American Relations
  Mr. Churchill
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he next plans to meet the United States Secretary of State to discuss British-American relations.

  Mr. Hurd
  I am often in touch with Secretary Baker and hope to meet him again within the next few weeks.

  Dalai Lama
  Mr. Mullin
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he is proposing to meet the Dalai Lama of Tibet when he visits Britain next month.

  Mr. Lennox-Boyd
  My right hon. Friend has no plans to do so.

  Guatemala
  Mr. McAllion
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he next intends to meet representatives of the Government of Guatemala.

  Mr. Garet-Jones
  Neither I nor my right hon. Friend have any present plans to meet representatives of the Guatemalan Government. Developments in the Gulf obliged me to abandon plans to attend the inauguration of President Serrano on 14 January. I look forward to visiting Guatemala when I can.

  East Timor
  Ms. Primarolo
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Her Majesty's Government's policy towards the current situation in East Timor.

  Mr. Lennox-Boyd
  We support the efforts of the UN Secretary-General to promote contacts between the Indonesian and Portuguese Governments aimed at achieving a settlement which reflects the interests of the people of East Timor.

  International Criminal Court
  Mr. Archer
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will initiate discussions with the United Nations with a view to establishing an international criminal court.
  517
  Mr. Lennox-Boyd
  The question of establishing an international criminal court is already under consideration at the United Nations in connection with the draft code of crimes against the peace and security of mankind. The United Kingdom participates in these discussions, most recently in November 1990.

  Colombia
  Mr. Dunnachie
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent discussions he has had with the Government of Colombia about human rights.

  Mr. Garel-Jones
  Human rights were discussed during the visit to London of the then President Barco in April 1990. We take every suitable opportunity to register our deep concerns about human rights in Colombia. We welcome President Gaviria's commitment to uphold them.

  Mr. Dimitri Birman
  Mr. Archer
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make representations to the Soviet authorities regarding the case of Dimitri Birman who has been refused permission to emigrate to Israel.

  Mr. Douglas Hogg
  Her Majesty's embassy in Moscow has made representations to the Soviet Foreign Ministry about the case of Dimitri Birman, and we shall continue to follow it closely.

  Departmental Achievements
  Mr. Pawsey
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the principal achievements of his Department since June 1987.

  Mr. Hurd
  The Foreign and Commonwealth Office and Her Majesty's representatives overseas have protected and promoted British interests and pursued the Government's overseas objectives.

  The United Kingdom has played a prominent part in bringing about constructive change in Europe. With other western partners we have promoted democracy and human rights in eastern Europe, a policy pursued over many years which has at last borne fruit. To help the further progress of eastern European countries the FCO is managing a programme of assistance—the know-how fund. The Government have joined others in setting up the European bank for reconstruction and development, whose headquarters will be in London.

  The FCO played a leading part in the negotiations which completed the unification of Germany and the restoration of its sovereignty, a longstanding objective of British policy.

  The United Kingdom contributed to the conclusion of a treaty on conventional forces in Europe which, if implemented, will enhance stability in Europe. This treaty, the charter of Paris, which was agreed at the summit meeting of the Conference on Security and Co-operation in Europe, and the NATO London declaration, form the foundation of a Europe with greater freedom and security for all.

  In the European Community, the FCO has worked with other Government Departments for:
  518
  completion of the single market (70 per cent. of legislation agreed);
  reform of the common agricultural policy, including the 1988 budget decision;
  strengthening European political co-operation; and a co-ordinated EC contribution to eastern Europe.

  The United Kingdom has made a substantial contribution to change in South Africa where the release of Nelson Mandela and the opening of direct talks between the South African Government and the ANC are important achievements. We help black communities in South Africa.

  At the United Nations the United Kingdom has contributed to the adoption of resolution 598 which led to the ceasefire in the Iran-Iraq conflict. We supported the United Nations's negotiations which brought Namibia peacefully to independence.

  The United Kingdom played an important part in securing a prompt, firm and united response by the United Nations Security Council to the Iraqi invasion of Kuwait, and joined our partners in the international coalition in action to remove Iraqi forces from Kuwait in pursuit of United Nations Security Council resolutions.

  The United Kingdom has been at the forefront of international co-operation to combat drug trafficking and to protect the environment.

  The Overseas Development Administration of the Foreign and Commonwealth Office has maintained a substantial aid programme. Gross public expenditure on overseas aid in the period 1987–89 totalled £4·75 billion. Priorities include supporting economic reforms, promoting good government, and reversing environmental degradation. About 80 per cent. of our bilateral aid has been allocated to the poorer countries. We have taken the lead in promoting measures to reduce the debt burden of poorer countries. We have responded swiftly to appeals for emergency aid—over £100 million from 1987–89.

  The assistance provided to business men by Foreign and Commonwealth Office staff overseas (nearly one third of whom are engaged in trade promotion work) has contributed to export sales by small, medium and major United Kingdom companies.

  Consuls and honorary consuls have provided assistance to an increasing number of British nationals travelling and living overseas. During the latter part of 1990 our embassies in Baghdad and Kuwait helped with the evacuation to the United Kingdom of 1,796 people.

  European Political Union
  Sir David Steel
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Her Majesty's Government's attitude towards the inter govermental conference on political union in the light of the Gulf conflict.

  Mr. Garel-Jones
  The 4 February meeting of the intergovernmental conference on political union discussed proposals for a common foreign and security policy. My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs and others emphasised the need to take account of the Twelve's response to the Gulf crisis. Foreign Ministers will return to this subject at subsequent meetings of the IGC.

  Human Rights
  Mr. Harry Greenway
  To ask the Secretary of State for Foreign and Commonwealth Affairs what progress is being made at the current session of the United Nations Commission on Human Rights; and if he will make a statement.

  Mr. Lennox-Boyd
  As observers at this year's Commission on Human Rights, our delegation is playing an active part in its work. I visited Geneva on 4–5 February and gave a speech to the commission, a copy of which is being placed in the Library of the House. We shall continue our efforts in the remaining weeks of the commission and beyond to promote respect for fundamental human rights and to urge compliance by all states with their international obligations in this field.

  Western Sahara
  Mr. Watson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions he has had with the Government of Morocco on the question of independence for western Sahara.

  Target

  Progress

  (i) Consular Work

  (a)To deal with the greater demand for consular services arising from the 6 per cent, increase in the number of British nationals travelling overseas within existing resources.

  The greater volume of travellers to 31 December 1990 was dealt with within overall existing resources.

  (b)To increase interest in, and usage of, public education television and radio fillers; to achieve free broadcast at airtime value of £1 million; and in 1990–91 to target our public information campaign more closely towards those travellers identified as being the major cause of the avoidable consular workload.

  Efforts to achieve the £1 million figure by year end continue. The targetting of the information campaign has been achieved through issuing a leaflet with all British visitors' passports since October 1990, and is ongoing for 1991.

  (c)To complete, by the end of 1990–91, a phased programme for the issue at overseas posts of passports in the European Community common format without any overall increase in existing staffing levels, while at the same time coping with a forecast increase in the number of passport applications.

  Under the above programme, the nine largest passport issuing posts overseas are to be equipped for the computerised issue of passports in the European Community common format. By 31 December 1990, five of these posts were operating the new system. Two more will be equipped before the end of the current financial year: the remaining two posts will be converted to the new system during financial year 1991–92. On the basis of information currently available, it is expected that the programme will be completed within existing staffing levels.

  (ii) Information Work

  (a)To improve the speed of delivery of ministerial statements and other verbatim material to overseas posts, while reducing annual costs by £135,000.

  Project scheduled for completion on 1 July 1991.

  (b)To improve the effectiveness of other information services (eg through better targetting on foreign policy objectives) without increasing costs.

  Improved systems established for the management of publications, including tighter ordering procedures, more consistency of presentation and better quality control.

  Savings on television production and exhibitions have been achieved by recruiting specialists and contracting out less work, eg a 40 per cent, saving on the cost of a new film about the workings of Parliament.

  Efficiency savings achieved to date—£126,500.

  (iii) Cultural Work

  (a)To increase the number of FCOSAS awards jointly funded with United Kingdom institutions, private trusts, private sector and other partners from 156 in 1988–89 to 275 in 1990–91.

  Evidence at 31 December 1990 suggested that 475 such awards would be made in 1990–91.

  520
  Mr. Douglas Hogg
  We have remained strictly impartial in this dispute. However, as one of the permanent members of the Security Council, we have consistently supported the United Nations Secretary General's efforts to arrange a free and fair referendum to determine the territory's future.

  Value-for-Money Exercise
  Mr. Tom Clarke
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the(a) target and (b) progress as at 31 December 1990 of the value-for-money exercise in respect of (i) consular work, (ii) information work, (iii) cultural work, (iv) commercial work, (v) overseas accommodation and (vi) nongovernmental organisations.

  Mr. Lennox-Boyd
  [holding answer 31 January 1991]: The following progress had been made by the FCO by 31 December 1990 in meeting the value-for-money targets set for financial year 1990–91.
  521

  Target

  Progress

  (iv) Commercial Work

  (a) At existing levels of manpower resources, to improve further the targetting and quality of Posts' services to exporters, monitored through the Quality Measurement System and the charging mechanism, and to increase further the quantity and quality of reporting of export opportunities.

  Good progress has been made. Commercial Sections' work overseas, and the deployment of resources, are now guided and directed by the BOTB Forward Plan. The monitoring carried out under the Quality Measurement System has revealed that, over the last 15 months, customers' perception of the extent to which their needs were being met remained positive. The overall satisfaction rates for information, advice and promotion services, were consistently high during 1990.

  (b) To ensure better focussed and targetted output by Commercial Sections overseas directed towards the targets and priorities set out in the BOTB Forward Plan.

  High customer satisfaction borne out by demand for chargeable services, eg sales of market information enquiries increased by over 60 per cent, during the period April-November 1990; over 90 per cent, of the companies contacted would use the services again.

  (v) Overseas Accommodation

  (a) To reduce running costs on the overseas estate by £500,000 in 1990–91 by asset recycling.

  Performance at 31 December 1990 suggests target of £500,000 will be met or exceeded.

  (b) To reduce the level of furnishing stocks by 15 per cent, in the course of the 1990–91; and to achieve a saving in storage charges of £100,000.

  Furnishing stock levels at 31 December 1990 indicated that the target will be achieved; that for savings on storage charges has already been met.

  (c) To achieve 5 per cent, saving on cost of furnishings by direct purchase.

  The FCO is currently in negotiation with a large number of contractors: but it is expected the £250,000 target will be met.

  (d) To achieve savings on consultancy services, construction contracts and the purchase of goods of £250,000.

  £250,000savingsfigurehad been achieved by 31 December 1990.

  (vi) NGOS

  British Council

  (a) To reduce costs of the English language testing service by 55 percent, between 1987–88 and 1991–92.

  The target had been achieved by 31 December 1990. Total global surplus of £170,000 obtained in 1989–90. Forecast surplus for 1990–91 is £120,000.

  (b) To reduce by 1993–94 annual global costs of provision of information to outside enquirers by 15 per cent, of the 1988–89 expenditure figure.

  On target. Costs were reduced by £150,000 in 1989–90.

  (c) To reduce telephone, telex and fax expenditure at headquarters by 5 per cent, per annum between 1989–90 and 1991–92.

  Ahead of target. Reduction of 12 per cent. achieved in 1989–90; reduction of 10 per cent. forecast for 1990–91. Savings of £80,000 were produced in 1989–90.

  (vii) Commonwealth Secretarial

  (a) To find during 1991, in co-operation with other member governments of the Commonwealth, a cost effective solution to the Commonwealth Secretariat's accommodation problem and to press for an improved budgetting and management system for the Secretariat.

  The Commonwealth Senior Officials' Meeting in November1990 authorised the Secretariat to continue negotiations for the purchase of a second HQ building to accommodate their overspill staff. The meeting also introduced new programme budgetting procedures.

  BBC World Service

  (a) The BBC World Service has a number of performance measures and targets relating to efficiency, economy and effectiveness.

  As at 31 December 1990, the BBC World Service was on course to meet all its targets for 1990–91 by 31 March 1991.

DEFENCE

  The Gulf
  Ms. Walley
  To ask the Secretary of State for Defence, pursuant to his answer of 29 January 1991 at column 504 to the hon. Member for Cunninghame, North (Mr. Wilson), if he will give the names and size of the ships chartered by Her Majesty's Government for use in the Gulf.

  Mr. Archie Hamilton
  Although some information has been given in the past, in view of the current terrorist threat and the possibility of reprisals against those shipping companies willing to carry out work in support of 522
  British forces in the Gulf, I do not believe it would be prudent to provide further details. To date a total of 130 vessels have been chartered by Her Majesty's Government for use in the Gulf, of which seven have been British flagged.

  Mr. Win Griffiths
  To ask the Secretary of State for Defence, pursuant to his statement of 31 January,Official Report, columns 1108 and 1114, if he will now give consideration to the provision of call-time-limited free phone calls to the United Kingdom and Germany for service personnel in the Gulf.

  Mr. Archie Hamilton
  We believe that the concession announced by my right hon. Friend on 31 January is the
  523
  most equitable means of subsidising telephone calls made from the Gulf by service personnel. Cable and Wireless has recently announced a complementary scheme which aims to provide 100,000 £10 phone cards free over a two to three-month period.

  Grant paid—Leisure/Recreation Centres

  Council

  1980–81

  1981–82

  1982–83

  1983–84

  1984–85

  1985–86

  1986–87

  1987–88

  1988–89

  1989–90

  Total

  Antrim

  —

  —

  —

  —

  —

  56,348

  50,399

  4,769

  —

  —

  111,516

  Ards

  —

  607

  7,073

  157,704

  200,810

  814,810

  129,014

  543,319

  20,105

  7,646

  1,881,088

  Armagh

  —

  —

  —

  —

  63,069

  349,485

  5,154

  —

  —

  —

  417,708

  Ballymena

  2,386

  91,793

  494,344

  133,965

  262,121

  —

  20,257

  —

  45,522

  —

  1,050,388

  Ballymoney

  674,434

  449,326

  200,855

  343

  3,522

  1,232

  2,589

  56,250

  20,537

  —

  1,409,088

  Banbridge

  53,739

  10,092

  3,329

  1,836

  10,755

  60,385

  —

  608

  —

  —

  140,744

  Belfast

  1,004,949

  2,252,944

  3,164,971

  1,666,133

  648,768

  96,307

  134,652

  74,162

  80,641

  —

  9,123,527

  Carrickfergus

  20,190

  684

  —

  —

  110,742

  45,754

  9,000

  —

  —

  —

  186,370

  Castlereagh

  57,382

  70,962

  2,822

  18,193

  47,648

  29,437

  —

  3,187

  9,524

  —

  239,155

  (Swimming pool only)

  Cookstown

  —

  —

  19,806

  —

  18,652

  390,275

  266,570

  89,712

  52,080

  —

  837,095

  Coleraine

  —

  —

  —

  —

  —

  14,644

  2,318

  456

  18,129

  25,145

  60,692

  Craigavon

  53,616

  27,903

  456

  12,774

  —

  —

  —

  7,065

  —

  —

  101,814

  Down

  —

  67,940

  287,704

  187,423

  139,810

  73,665

  186,959

  7,830

  3,222

  1,588

  956,141

  Derry

  51,719

  73,479

  24,648

  48,015

  3,481

  1,681

  —

  14,942

  7,748

  5,562

  231.275

  Dungannon

  —

  —

  —

  16,881

  9,675

  —

  1,750

  —

  —

  —

  28,306

  (Swimming pool only)

  Fermanagh

  3,144

  —

  80,878

  —

  7,819

  —

  —

  —

  —

  —

  91,841

  Larne

  —

  —

  —

  —

  —

  —

  2,956

  435

  981

  —

  4,372

  (Swimming pool only)

  Limavady

  120,020

  17,316

  64,909

  —

  15,357

  12,504

  2,799

  —

  —

  —

  232,905

  Lisburn

  —

  —

  89,644

  311,981

  476,337

  168,002

  60,748

  11,557

  43,005

  61,376

  1,222,650

  Magherafelt

  119,916

  228,065

  40,208

  90,795

  76,126

  113,992

  8,879

  16,542

  27,859

  6,423

  728,805

  Moyle

  —

  —

  109,972

  91,546

  93,039

  1,833

  —

  855

  —

  —

  297,245

  Newry/Mourne

  72,311

  93,689

  297,573

  243,595

  50,832

  29,275

  296,173

  173,482

  61,921

  13,998

  1,332,849

  Newtownabbey

  —

  —

  —

  —

  —

  —

  —

  19,366

  —

  —

  19,366

  North Down

  317,600

  135,580

  83,353

  22,172

  —

  —

  19,854

  —

  —

  —

  578,559

  Omagh

  397,476

  351,497

  319,543

  1,651

  7,040

  21,838

  18,381

  25,515

  1,458

  3,861

  1,148,260

  Strabane

  1,973

  —

  —

  —

  449,413

  171,073

  —

  —

  15,243

  65,435

  703,137

  Total

  2,950,855

  3,871,877

  5,292,088

  3,005,007

  2,695,016

  2,452,540

  1,218,452

  1,050,052

  407,975

  191,034

  23,134,896

  Mr. Peter Robinson
  To ask the Secretary of State for Northern Ireland what funds are available to assist district councils with the capital cost of leisure centre construction; and if he will make it his policy to fund those councils which have proceeded with schemes ahead of receiving grant aid.

  Dr. Mawhinney
  The funds made available by Government are determined from year to year in relation to the overall priorities of the Department of Education. In the current financial year funds have been made available to allow a start to be made on a sports hall facility at Dungannon.

  Expenditure incurred by district councils which has not been approved by the Department of Education is not grant-aided retrospectively. It is not proposed to change this policy.

  Councils may also apply for EC funding in support of capital development.

  EC Funding
  Mr. Peter Robinson
  To ask the Secretary of State for Northern Ireland how much European Community funding has been granted to each Northern Ireland district council; and if he will list the schemes and show from which European Community fund the grant was made.

  Mr. Needham
  I have arranged for the information requested by the hon. Gentleman to be placed in the Library.

NORTHERN IRELAND

  Leisure Facilities
  Mr. Peter Robinson
  To ask the Secretary of State for Northern Ireland how much grant aid has been given towards the capital cost of district council recreation or leisure centres in each of the past 10 years; and if he will specify the council to which each grant was given.

  Dr. Mawhinney
  Grants by the Department of Education have been made as follows:

EMPLOYMENT

  Adjudicated Decisions
  Mr. Nellist
  To ask the Secretary of State for Employment what is the relationship between information on adjudicated decisions contained in the chief adjudication officer's quarterly reports and clerical returns; and whether the series are compatible.

  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.

  Social Security Act 1989
  Mr. Nellist
  To ask the Secretary of State for Employment what research his Department is undertaking or has commissioned concerning the Social Security Act 1989; and when he expects the research to be published.

  Mr. Jackson
  My Department is presently undertaking research on the implementation of the actively seeking employment condition for benefit entitlement. A study on the perception of employers to this condition has also been commissioned from the Institute for Manpower Studies. It is not possible at this time to provide an indication of the timing of any publication.

SCOTLAND

  Artistic Institutions
  Mr. Wray
  To ask the Secretary of State for Scotland if he will list the projects funded by his Department to help(a) musical, (b) theatre and (c) other artistic institutions and organisations in Scotland to make their activities easily available to low-income Scottish people.

  Mr. Allan Stewart
  The following projects, funded under the urban programme, aim to improve access to, and involvement in, the arts by communities in the worst deprived urban areas in Scotland.

  (a) Music

  Music Project—Inverclyde

  C Sharp Music Factory—Castlemilk

  (b) Theatre

  West Lothian Youth Theatre—Livingston

  Barlanark Theatre Workshop

  Enterprise Theatre—Govan

  Garthamlock Visual Statement

  St. Andrew's High School Theatre—Clydebank

  (c) Other

  Craigmillar Arts Project

  Community Arts Programme—Ardrossan

  Garnock Valley Arts Resource Centre—Glengarnock

  Maryhill Arts Project

  Forum Arts Centre—Townhead

  Community Arts Project—Motherwell

  Community Arts Team—Dundee

  Falkirk Community Arts Project

  Glasgow 1990—Arts Co-ordinator

  Business and the Arts—Govan

  Castlemilk Community Arts/Cultural Development

  Slide Workshop (Magic Lantern Van)—Edinburgh

  Springburn Museum and Exhibition Centre

  The Dundee Dance Factory

  Stanley Community Arts Project—Ardrossan

  Beechwood Integrated Arts Project—Renfrew

  Gear Community Arts Project—Glasgow

  Gorbals Community Arts and Leisure Programme

  Training
  Mr. Tom Clarke
  To ask the Secretary of State for Scotland ( I) how much money he intends to invest in Monklands for the purpose of job creation and training in 1991 to 1994;

  (2) how much the Training Agency plans to invest in Lanarkshire in 1991 to 1994;

  (3) how much money he intends to invest in Strathkelvin for the purpose of job creation and training in 1991 to 1994;

  (4) how much the Training Agency plans to invest in Dumbartonshire in 1991 to 1994;

  (5) what specific resources have been allocated by the Scottish Development Agency to Lanarkshire for the years 1991 to 1995.

  Mr. Allan Stewart
  In Scotland from 1 April 1991 Government resources for investment in economic development leading to the creation of jobs and for training will be devolved to Scottish Enterprise and Highlands and Islands Enterprise, working in conjunction with the local enterprise companies. These organisations will decide where such resources are to be invested. Scottish Enterprise and Highlands and Islands Enterprise are the successor bodies to the Training Agency and to the Scottish Development Agency and the Highlands and Islands Development Board.
  526
  Decisions about the allocation of resources for Lanarkshire and, within that area, for Monklands will be taken by Scottish Enterprise in conjunction with the relevant local enterprise company, Lanarkshire development agency. Similarly, such decisions in relation to Dumbartonshire and, within that area, Strathkelvin will be taken by Scottish Enterprise in conjunction with Dumbartonshire Enterprise Company.

  Local Enterprise Companies
  Mr. McMaster
  To ask the Secretary of State for Scotland what provision there is under the Scottish Enterprise legislation for each local enterprise company to collate monthly figures on unemployment in their areas.

  Mr. Allan Stewart
  None. The collation of unemployment figures remains the responsibility of the Employment Department.

  Housing
  Mr. Malcolm Bruce
  To ask the Secretary of State for Scotland what proportion of eligible homes in Scotland currently have(a) cavity wall insulation, (b) 150mm of loft insulation, (c) thermostats on 50 per cent. or more radiator valves, (d) double glazing on 50 per cent. or more external windows, (e) compact fluorescent lighting in 50 per cent. or more light fittings, (f) gas condensing boilers and (g) floor insulation; and by when he forecasts that each of these figures will reach 75 per cent. and 90 per cent. of the eligible market.

  Lord James Douglas-Hamilton
  This information is not held centrally.

  Blood Products
  Mr. Bellotti
  To ask the Secretary of State for Scotland what consideration the Medicines Control Agency is giving to licensing the process made available to the Scottish national blood transfusion service to produce a higher potency factor VIII for the rest of the commercial plasma fractionation/supply industry in the United Kingdom.

  Mr. Michael Forsyth
  Matters relating to the Medicines Control Agency are for my right hon. Friend the Secretary of State for Health.

  An application for a licence for the production of higher potency factor VIII has not yet been submitted to the agency by the Scottish National Blood Transfusion Service, but it will do so soon. The intention is to produce a supply to meet the needs of Scottish patients.

  Sports and Recreation
  Mr. Wray
  To ask the Secretary of State for Scotland if he will make a statement on the financial support given by his office to local authorities and schools to meet the needs of(a) physical education and (b) recreation in schools and communities in Scotland.

  Mr. Michael Forsyth
  Central Government support for local authority expenditure is not hypothecated to individual services.

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

  Mr. Michael Forsyth
  The information is not available centrally in the form requested. However, data are available on the proportions of general medical practitioners in each health board area achieving the target levels for childhood immunisation and cervical screening; and this information as at 1 April 1990 is published in "Health Briefing No. 91/01/STA", a copy of which is available in the Library.

  Health Boards
  Mr. Robert Hughes
  To ask the Secretary of State for Scotland if he will publish in the Official Report the names of the new members of Grampian health board to serve from 1 April.

  Mr. Bill Walker
  To ask the Secretary of State for Scotland if he will name the non-executive members of the new health boards.

  Mr. Michael Forsyth
  The names of those appointed as non-executive members of health boards with effect from 1 April 1991 are listed with their area of residence.

  Appointments

  Residence

  Argyll and Clyde health board

  Mr. N. M. Faccenda

  Connel

  Mrs. M. A. Foggie

  Greenock

  Mrs. E. S. Lander

  Kilmacolm

  Dr. J. Moffat

  Greenock

  Mr. C. H. Parker

  Kilmacolm

  Mrs. J. C. Le Roux

  Dunoon

  Ayrshire and Arran health board

  Mr. J. Cahill

  Seamill

  Mr. J. W. G. Donaldson

  Isle of Arran

  Mrs. A. Dunbar

  Saltcoats

  Dr. K. G. Fegan

  West Kibride

  Mr. W. M. Richie

  Kirkoswald

  Mr. I. B. Valentine

  Ayr

  Borders health board

  Dr. D. W. Cameron MBE

  Hawick

  Mr. D. A. G. Kilshaw

  Melrose

  Miss M. C. M. Marshall

  Lauder

  Mr. J. P. Metcalfe

  Hawick

  Lady F. E. Sanderson

  Melrose

  Mr. R. A. Stewart

  Galashiels

  Dumfries and Galloway health board

  Mrs. V. M. I. Jardine-Paterson

  Lockerbie

  Mr. H. S. McFadzean

  Port William

  Mr. W. Seright

  Dumfries

  Mrs. J. D. Tulloch

  Lockerbie

  Dr. A. P. D. Wilkinson

  Castle Douglas

  Mr. W. I. Wilson

  Stranraer

  Fife health board

  Mrs. S. L. Aitken

  Wormit

  Dr. A. C. A. Alexander

  Dunfermline

  Mr. F. J. R. Craig

  Gateside

  Dr. C. G. Ingram

  St. Andrews

  Mrs. M. Steedman OBE

  Cupar

  Mr. G. M. Thomson

  Perth

  Forth Valley health board

  Mr. E. T. M. Bell-Scott

  Muckhart

  528

  Appointments

  Residence

  Mr. K. Harding

  Dunblane

  Dr. G. B. Hastings

  Bridge of Allan

  Mr. P. A. Joynson

  Stirling

  Mrs. K. A. Smith

  Killearn, Glasgow

  Mr. C. S. R. Stroyan

  Bridgend of Teith

  Grampian health board

  Mr. A. B. Broomfield

  Aberdeen

  Dr. C. A. MacLeod

  Aberdeen

  Professor D. Ogston

  Aberdeen

  Mr. J. A. Snedden

  Elgin

  Mr. N. Thornton-Kemsley, CBE

  Laurencekirk

  Mrs. J. G. A. Wisely, JP

  Aberdeen

  Greater Glasgow health board

  Rev. R. D. M. Campbell

  Newton Mearns

  Mrs. A. Gilchrist

  Newton Mearns

  Lady S. Goold

  Clarkston

  Mr. P. W. Hoist

  Glasgow

  Professor R. M. Mackie

  Bearsden

  Mr. A. Scobbie

  Bearsden

  Highland health board

  Mr. J. G. Ligertwood

  Inverness

  Mr. D. J. Mackay

  Beauly

  Mrs. A. Macpherson

  Conon Bridge

  Mr. C. Neilson, JP

  Fort William

  Mrs. S. G. H. Stone

  Tain

  Mrs. C. Thomson

  Inverness

  Lanarkshire health board

  Dr. W. R. Criggie

  Lanark

  Mrs. A. S. Hinshalwood

  Strathhaven

  Mr. I. L. Livingstone

  Motherwell

  Mr. R. J. Logan, MBE, JP

  Carnwarth

  Mr. J. P. Robison, JP

  Lanark

  Mr. J. Thomson, MBE

  Motherwell

  Lothian health board

  Professor R. C. B. Aitken

  Edinburgh

  Mrs. G. Barton

  Edinburgh

  Mr. J. A. Campbell

  Edinburgh

  Mr. R. Findlay

  Edinburgh

  Mrs. M. B. M. Knox

  Edinburgh

  Mr. G. S. Millar

  Edinburgh

  Orkney health board

  Mr. J. Flett

  Kirkwall

  Captain M. Gunn

  Stromness

  Mr. E. M. Gibson, MBE

  Kirkwall

  Mrs. E. B. Kerr

  Stromness

  Mr. J. Rendall

  Papa Westray

  Dr. J. S. Walker

  Kirkwall

  Shetland health board

  Mr. R. R. Bentley

  Virkie

  Mrs. M. U. Colligan

  Voe

  Sqn. Ldr. B. P. Gregson

  Unst

  Dr. M. D. Hunter

  Levenwick

  Mr. R. L. Johnson

  Lerwick

  Miss A. I. Manson

  Brae

  Tayside health board

  Rev. K. Campbell

  Barnhill

  Mr. D. W. M. Davidson, JP

  Blairgowrie

  Mrs. S. H. Fallon

  Inchture

  Rt. Rev. L. E. Luscombe

  Kirkton of Tealing

  Professor R. E. Olver

  St. Andrews

  Western Isles health board

  Mr. J. H. Downie

  Isle of Harris

  Mrs. C. R. Macaskill

  North Uist

  Mr. A. Matheson

  Stornoway

  Mr. I. D. Maclver

  Stornaway

  Cereals
  Mr. John D. Taylor
  To ask the Secretary of State for Scotland how many farms produce cereals; and how many of these farms produce less than 75 acres of cereals per annum.

  Mr. Michael Forsyth
  The June 1990 main agricultural census recorded that 13,208 farms in Scotland were growing cereals. Of those 8,273 were growing less than 30.3 hectares (75 acres) of cereals.

  Assisted Places Scheme
  Mr. Worthington
  To ask the Secretary of State for Scotland if he will list the number of pupils on the roll of each school involved in the assisted places schemes.

  Mr. Michael Forsyth
  The information is set out in the table:

  School

  Total roll at September 1990

  Aberlour House School, Moray

  133

  Albyn School for Girls, Aberdeen

  470

  Ardvreck School, Crieff

  151

  Beaconhurst Grange School, Bridge of Allan

  229

  Belhaven Hill School, Dunbar

  80

  Belmont House School, Newton Mearns

  379

  Blairmore School, Huntly

  80

  Butterstone House School, Dunkeld

  54

  Cargilfield School, Edinburgh

  182

  Clifton Hall School, Midlothian

  106

  Craigclowan Preparatory School, Perth

  207

  Craigholme School for Girls, Glasgow

  544

  Crawfordton House School, Dumfriesshire

  80

  Croftinloan School, Pitlochry

  98

  Daniel Stewart's and Melville College, Edinburgh

  1,886

  The Mary Erskine School, Edinburgh

  560

  Dollar Academy

  1,132

  Drumley House School, Ayrshire

  126

  Edinburgh Academy

  919

  Fernhill School, Glasgow

  305

  Fettes College, Edinburgh

  429

  Fort Augustus Abbey School

  62

  George Heriot's School, Edinburgh

  1,452

  George Watson's College, Edinburgh

  2,094

  Glasgow Academy

  773

  Glenalmond College, Perthshire

  309

  Gordonstoun School, Morayshire

  476

  Hamilton College

  719

  The High School of Dundee

  1,143

  The High School of Glasgow

  946

  Hutchesons' Grammar School, Glasgow

  1,666

  Keil School, Dumbarton

  211

  Kelvinside Academy, Glasgow

  640

  Kilgraston School, Perthshire

  274

  Kilquhanity House School, Castle Douglas

  50

  Lathallan School, Montrose

  66

  Laurel Bank School, Glasgow

  396

  Lomond School, Helensburgh

  551

  Loretto School, Musselburgh

  391

  Merchiston Castle School, Edinburgh

  374

  Morrison's Academy, Crieff

  761

  New Park School, St. Andrews

  115

  Oxenfoord Castle School, Midlothian

  90

  Park School, Glasgow

  361

  Park Lodge School, Helensburgh

  100

  Rannoch School, Perthshire

  291

  Robert Gordon's College, Aberdeen

  1,173

  Rudolf Steiner School of Edinburgh

  287

  St. Aloysius' College, Glasgow

  1,075

  St. Columba's School, Kilmacolm

  551

  St. Denis and Cranley School, Edinburgh

  210

  St. George's School for Girls, Edinburgh

  843

  530

  School

  Total roll at September 1990

  St. Leonard's School, St. Andrews

  378

  St. Margaret's School for Girls, Aberdeen

  399

  St. Margaret's School for Girls, Edinburgh

  796

  St. Mary's School, Melrose

  80

  Strathallan School, Forgandenny, Perthshire

  533

  Wellington School, Ayr

  449

  Westbourne, Glasgow

  302

  Stolen Equipment
  Mr. Menzies Campbell
  To ask the Secretary of State for Scotland if he will publish a list of the equipment stolen from his Department in the last three years for which information is available; and what was the approximate value of each item.

  Mr. Lang
  [holding answer 11 February 1991]: A variety of minor items are periodically reported missing. The following more substantial items have been formally recorded since 1988 as losses to the Scottish Office whi[ch are attributable to theft.

  Year

  Item

  Approximate value £

  1988

  Cash

  400

  1989

  Motor car

  2,000

  1989

  Furniture/machinery

  3,800

SOCIAL SECURITY

  Care
  Mr. Conway
  To ask the Secretary of State for Social Security what is(a) the payment per resident from his Department to private nursing and or care homes and (b) the public expenditure per resident in local council care.

  Miss Widdecombe
  At May 1990, the latest date for which complete figures are available, the estimated average annual payment of income support to people in residential care and nursing homes was £6,719 per year.

  Information regarding amounts of other social security benefits paid to people in residential care and nursing homes and information regarding amounts of any social security benefits paid to people in local authority residential accommodation is not readily available and could be obtained only at disproportionate cost.

  I understand from my right hon. Friend the Secretary of State for Health that the available figures show that in 1988–89, the gross annual expenditure by local social service departments on residential care (excluding nursing home care) per supported resident aged 65 and over was £8,788. The net annual local authority expenditure was £5,980. The difference between gross and net is due to fees and charges, most of which are paid out of social security benefits.

  War Pensions
  Mr. Allen
  To ask the Secretary of State for Social Security where the full terms of the war pensions scheme are available; and if he will summarise them.
  531
  Miss Widdecombe
  The full terms of the war pensions scheme are to be found in the Department's publication "War Pensions. The Statutes, Regulations, Rules and Orders as now in Force" a copy of which is available in the Library. The scheme provides for pensions where the disablement or death of a member of the armed forces is due to service; there are similar provisions for other groups such as members of the Merchant Navy. Allied provisions for members of the armed forces form part of the occupational pension scheme which is administered by the Ministry of Defence.

  Pregnancy
  Mrs. Wise
  To ask the Secretary of State for Social Security (1) what steps he takes to monitor the financial, housing or social circumstances of pregnant girls aged under 18 years in the light of the higher risks faced by them and their babies;

  (2) if he is monitoring the applications for income support made by pregnant girls under 18 years old; and if he will now make it his practice to grant such applications during the winter without any further requirements of severe hardship;

  (3) how many pregnant girls under 18 years old and in the first six months of their pregnancy are receiving income support due to severe hardship; and what proportions of such applications are currently being granted.

  Mr. Jack
  All pregnant girls aged 16 or 17 years of age can get income support under normal rules for the 11 weeks prior to, and for six weeks after, their confinement. During the earlier stage of pregnancy they can get income support if they are incapable of work, but the remainder are guaranteed the offer of a youth training place. For those on youth training, training allowance replaces income support. The Secretary of State for Employment has taken measures to ease access to appropriate youth training provision for pregnant girls, the aim of which is to provide training relevant to their needs.

  The severe hardship provisions within income support provide the necessary discretion to enable sensitive handling of such cases and for financial, housing and social circumstances to be taken into account, and there are no plans for making seasonal adjustments to the rules. Between 5 January 1991 and 8 February 1991, of 218 claims for income support by pregnant girls 162 (74 per cent.) were in need of income support under the severe hardship provisions.

  Mobility Benefit
  Mr. Allen
  To ask the Secretary of State for Social Security what is the method by which his Department calculates the cost of extending entitlements to the mobility component to those aged over 65 years.

  Mr. Scott
  The estimate of the cost of extending entitlement to the higher rate mobility component of the disability living allowance to those over 65 was produced by looking at the numbers of people identified by OPCS who were over the age of 65 and not already getting mobility allowance who would meet the current qualifying conditions for mobility allowance were the age limit to be removed.

  Therapeutic Work
  Mr. Terry Fields
  To ask the Secretary of State for Social Security how many claimants of(a) invalidity benefit and (b) severe disablement allowance are taking advantage of the therapeutic earnings provisions; and what is the average weekly amount earned in both cases.

  Mr. Scott
  Information on the number of people claiming an incapacity benefit and receiving earnings for therapeutic work is not collected centrally and could be obtained only at disproportionate cost. Similarly, information on the level of payment received is not collected centrally.

  Attendance Allowance
  Mr. Ted Garrett
  To ask the Secretary of State for Social Security what is the number of persons within the Doncaster metropolitan borough area who are in receipt of attendance allowance.

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

  Income Support
  Mrs. Wise
  To ask the Secretary of State for Social Security (1) if he has issued any additional guidance to his Department's offices in relation to making income support available to under 18-year-olds in view of the exceptionally cold weather;

  (2) what monitoring he is undertaking of the number of applications made, and applications granted, for income support for under 18-year-olds due to severe hardship in the current exceptionally cold weather; and what figures he has collected.

  Mr. Jack
  All claims to income support from young people under 18 years of age which are not successful under normal rules are automatically referred for sympathetic consideration under the severe hardship provisions. All such claimants are automatically interviewed by staff who have been trained to recognise the needs of these particularly vulnerable young people. No further guidance was, therefore, necessary to cater for the exceptionally cold weather.

  During the week commencing 4 February, 866 claims to income support were received from young people and directions for payment were made in 647 (75 per cent.) of them.

  Social Fund
  Dr. Godman
  To ask the Secretary of State for Social Security how many social fund loan applications were refused in each of his two Department's offices at Greenock and Port Glasgow in(a) 1989–90 and (b) 1990 to date due to perceived inability to repay; and what advice was given to those experiencing such a refusal.

  Mr. Scott
  [holding answer 6 February 1991]: The table shows the number of applications recorded as refused on grounds of inability to repay. All letters notifying decisions advise applicants of their right to ask for a review and refer to the citizens advice bureau or a local law centre as a

  533
  source of general advice. Money advice is normally offered to applicants discovered to he in financial difficulties, including such cases where an applicant is refused because of a perceived inability to repay.
  534

  1989–90

  1990 to December 1990

  Greenock

  89

  136

  Port Glasgow

  111

  144

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.

The Gulf: Military Costs
Lord Borthwick Lord Borthwick asked Her Majesty's Government:
What is their policy for financing military operations in the Gulf.
The Parliamentary Under-Secretary of State, Ministry of Defence (The Earl of Arran): My Lords, a substantial part of the costs have come from the reserve through winter and spring supplementary estimates. In addition, some of the costs have been met from the original defence budget and from contributions from other nations both in kind and in cash.
Lord Borthwick: My Lords, I thank my noble friend for his Answer. It is very interesting but not quite what I was looking for. My attention was drawn to something earlier. Can the Minister confirm that the UN Security Council should be responsible for collecting funds for the war rather than private or official individuals going round with the begging bowl?
The Earl of Arran: My Lords, that is not the case. It is the responsibility of individual member states of the coalition forces in the Gulf as to how they fund their requirements.
Lord Kennet: My Lords, can the noble Earl say anything about Saudi Arabia having to borrow from international institutions for the first time in its life in order to meet its quarterly commitment to the United States of 13.5 billion dollars especially in view of the fact that the United States is still financing Israel?
The Earl of Arran: My Lords, I cannot comment on that; it is an internal matter for Saudi Arabia. However, Saudi Arabia has been very generous to this country from the point of view of the material aid it is providing for our forces in the Gulf.
Lord Boyd-Carpenter: My Lords, are we receiving financial help from any of our colleagues in the European Community other than Germany?
The Earl of Arran: My Lords, as my noble friend indicated, Germany is providing £275 million. I understand that other countries are being approached. Obviously I cannot say who is being approached at what time.
Lord Mellish: My Lords, bearing in mind the enormous debt owed by Belgium and Holland to this country is it not time that instead of talking about it they did something about it? What does the Minister say about that?
The Earl of Arran: My Lords, the noble Lord has asked the same question before. I answered in regard to Belgium and Holland; I have nothing further to add.
Lord Molloy: My Lords, can the noble Earl assure the House that with regard to finances for our troops in the desert, not one single penny which can be garnered will be overlooked so that we can respond to their endeavour in a way which will be most practical?
The Earl of Arran: My Lords, as my right honourable friend the Chancellor of the Exchequer indicated, there are no limitations on the funding for our troops while they are in the Gulf.
The Lord Bishop of Manchester: My Lords, can the Minister say whether the cost of financing military operations includes the cost of reconstruction following the war in Kuwait and Iraq?
The Earl of Arran: My Lords, that is a Question for another day.
Lord Williams of Elvel: My Lords, when the Question was raised previously in your Lordships' House the noble Earl will recall that I asked about negotiations taking place between Her Majesty's Government and both Saudi Arabia and Japan to ensure that we received our fair share of the funding they were prepared to provide for the operations in the Gulf. At that time he replied that negotiations were still continuing. Can the Minister give the House any indication as to how those negotiations have progressed?
The Earl of Arran: My Lords, those negotiations are still in progress.
Lord Bruce of Donington: My Lords, will the noble Earl give the House an undertaking that all these questions and other matters associated with them will be borne in mind in the course of the intergovernmental conference that is taking place within the EC? The conference is alleged to deal with the progress that might be made in conceivable circumstances towards achieving economic and monetary union in Europe.
The Earl of Arran: My Lords, the conflict in the Gulf encompasses very wide scope. I am sure that all such points of view will be discussed and taken into account.
Lord Mackie of Benshie: My Lords, will the Government bear in mind that we went into this venture, I hope, on a point of principle and that we are prepared to pay the money? While contributions will be accepted we will not go round begging for money.
The Earl of Arran: My Lords, we are very grateful for the contributions that we have received. As I said, there will undoubtedly be additional costs. The contributions that we have already received will be taken into full account by my right honourable friend the Chancellor of the Exchequer.
Lord Borthwick: My Lords, I regret that my question was not quite answered. I asked who was responsible for collecting money. We went to war but not under our own name. We did so under the

107
protective name of the United Nations Security Council which actually declared war. We joined in the war. Does not my noble friend agree that that organisation is responsible for collecting cash and not individuals from various nations?
The Earl of Arran: My Lords, that is not the case. As I said in my original Answer, it is the responsibility of each nation which has coalition forces in the Gulf.

Exchange Rate Mechanism
2.43 p.m.
Lord Stoddart of Swindon Lord Stoddart of Swindon asked Her Majesty's Government:
Whether they will remove sterling from the exchange rate mechanism of the European monetary system.
The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley): My Lords, no.
Lord Stoddart of Swindon: My Lords, is the noble Lord aware that that is a most disappointing Answer? Is it not a fact that the promise of sharply reduced interest rates before we joined the ERM has proved wrong? Does the Minister agree that it is a fact that the Government are now in a situation where they cannot cut interest rates by the amount required and are therefore endangering the real economy? Does the Minister further agree, as some distinguished economists remarked in The Times today, that we are in danger of having a 1930s-type slump with mass unemployment?
Lord Henley: My Lords, I am sorry that the noble Lord finds my Answer disappointing. He is probably not aware that at 9.47 this morning we announced a reduction in interest rates of a half per cent.
Lord Stoddart of Swindon: My Lords, that is too little and too late.
Lord Barnett: My Lords, will the Minister tell the House why it is that those countries within the exchange rate mechanism have for so long had a much better economic performance than we have?
Lord Henley: My Lords, that is why we went into the exchange rate mechanism—so that we could reap the benefits of that mechanism.
Lord Harmar-Nicholls: My Lords, is my noble friend aware that the exchange rate has nothing whatever to do with one's competitiveness in being able to earn the money to have a good exchange rate? Does he now agree that we joined on terms which are not satisfactory to us? Surely we should do something about the situation even if we do not withdraw from the exchange rate mechanism.
Lord Henley: My Lords, I do not accept what my noble friend said. There have been allegations that we went in at the wrong time. But as we explained when we went in, we thought that that was the right time to join and that is why we did so. I feel that any change
108
now in the exchange rate—in other words, a realignment—would weaken our credibility. It is very important that we stick to the rate and convince people that we intend to do so.
Lord Grimond: My Lords, will the Government have time to study the letter in today's edition of The Times from some very eminent Conservative economists, including a recent adviser to a recent Prime Minister, which deals with this matter and which also stresses the essential need to reduce the interest rate?
Lord Henley: My Lords, I have studied that letter. As I said, we had already reduced the interest rate this morning by as much as it was prudent to do so.
Lord Jay: My Lords, does the Minister understand that at present the forces of depression have been allowed to grow so strong in this country that a small cut in the bank rate, without a drop in the exchange rate, will not turn the tide?
Lord Henley: My Lords, I am sorry that the noble Lord thinks that. The allegation of the risk of a depression must be put into context. The current situation of the 1990 GDP for manufacturing output and employment shows that a number of firms have already reached record levels.
Baroness Seear: My Lords, does the Minister agree that we debated all these matters at considerable length yesterday and that it is really a waste of your Lordships' time to do it all again the day after?
Lord Henley: My Lords, I certainly agree with the noble Baroness.
Lord Bruce of Donington: My Lords, will the noble Lord give the House an indication that, when the Government made the decision to reduce the minimum lending rate by a half per cent., they had already seen the text of the letter to The Times to which many noble Lords have referred? Can the Minister say why the Government do not accept the sensible situation of applying for a realignment within the existing exchange rate mechanism to a point where the pound might be valued at about 2.60 deutschmarks and about 1.55 to 1.60 dollars so that the economy can be put on an even keel and so that we may compete properly on an even playing field internationally?
Lord Henley: My Lords, the cut in the interest rate was not in response to the letter in today's edition of The Times. The cut was a measured response to the current market conditions.
Lord Annan: My Lords, does the Minister agree that the question asked by the noble Lord, Lord Jay, has great cogency? Are not the Government making the same mistake as they made four years ago when interest rates were raised by a half per cent., then by a half per cent. and then by a half per cent. with the result that inflation was not stopped? We are doing the same thing again; we are reducing the interest rate by only a half per cent. when we are facing a major recession.
Lord Henley: My Lords, I do not accept what the noble Lord, Lord Annan, has said. As I said, we judged it right to make a reduction of a half per cent. We shall make further reductions as and when we are able to do so. Interest rates are set at a level needed to keep sterling within its ERM band and thus to bear down on inflation. We feel that it would be a mistake to cut interest rates to provide a short-term stimulus.
Lord Williams of Elvel: My Lords, is the noble Lord aware that after the reduction in the base rate this morning sterling firmed within the ERM, which was contrary to expectations? Will the Government now take the other step and reduce the base rate by another half of one per cent.?
Lord Henley: My Lords, as I said, we reduced the rate by a half per cent. and we shall reduce it further as and when we are able to do so.
Baroness Phillips: My Lords, does the Minister agree that perhaps the previous Prime Minister, being a woman, was right after all and should not have been sacked?
Lord Henley: My Lords, that goes somewhat wide of the Question on the Order Paper.
Lord Stoddart of Swindon: My Lords, is the noble Lord aware that the Government show remarkable complacency about this whole business? Do not the Government realise that unless we have an urgent and substantial cut in interest rates the economy will slide into a real slump with high unemployment? Will the Government do something about that?
Lord Henley: My Lords, I am sorry that the noble Lord accuses me of complacency. I totally reject what he has said. We shall cut interest rates further when we are able to do so.

National Health Service Expenditure
2.50 p.m.
Viscount Hanworth: My Lords, in asking the Question in my name on the Order Paper I apologise for the fact that it was put down without knowledge that we were to have a major debate on the subject. Nevertheless, perhaps I may just say—
Noble Lords: No!
Viscount Hanworth—that I hope that what I am putting forward will be considered important in the major debate.
The Question was to ask Her Majesty's Government:
What consideration they have given to increases which may be required in National Health Service expenditure by new research developments which lead to more sophisticated treatments requiring more expensive equipment; and what action they propose to take.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Hooper): My Lords, technical developments and ever increasing expectations for health services inform our decision-making
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about the level of spending in the National Health Service. We will be increasing it by more than £3 billion next year, taking planned total spending to £32.6 billion. These levels of expenditure, coupled with the measures we have taken to improve efficiency, mean that the service is able to keep pace with the demands arising from demographic change and medical advances.
Viscount Hanworth: My Lords, I thank the noble Baroness for that Answer but it does not in any way meet the point that I was trying to make. We shall be in trouble in the future—
Noble Lords: Question!
Viscount Hanworth: —because we shall simply not have—
Lord Ennals: My Lords, does the Minister agree with me on two simple points? First, does she agree that to cut back on fundamental research can rarely be a sensible economy? Secondly, while I accept that drug costs should always be kept under scrutiny, does she agree that it is not a sensible economy to reject new medicines if they have proved to be effective?
Baroness Hooper: My Lords, we are well aware of the importance of a research and development strategy. It is to that end that my right honourable friend the Secretary of State has appointed a new director of research. We are awaiting his plans.
Baroness Carnegy of Lour: My Lords, does the Minister agree that much medical research aims to increase the use of preventive medicine? That is likely to ease the costs of the National Health Service rather than increase them.
Baroness Hooper: My Lords, I am happy to agree with my noble friend. Indeed the main thrust of our reforms is in the area of preventive medicine.
Lord Elton: My Lords, is my noble friend aware that those of us who were crying "Question" a moment or two ago during the intervention of the noble Viscount, Lord Hanworth, were not seeking to silence him but merely hoping that he would put his question in an acceptable interrogatory form?
Viscount Hanworth: Thank you.

The Gulf: Merchant Shipping Contracts
2.57 p.m.
Lord Dean of Beswick Lord Dean of Beswick asked Her Majesty's Government:
Whether they are making maximum use of ships of the British merchant navy in the military activities in the Gulf, and whether the personnel involved are provided with the same chemical and biological protection equipment as members of the armed forces.
The Earl of Arran: My Lords, all eligible British shipping companies are able to compete for MoD charters but few companies have put ships forward for use in the Gulf. The safety of merchant seamen entering the Gulf is primarily a matter for the shipping

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companies concerned although we are providing advice and assistance to shipping companies as appropriate.
Lord Dean of Beswick: My Lords, I am sorry that the Minister did not care to deal with the second part of the Question, which is very important. Is the noble Earl saying that the jobs have to be tendered for? The figures I have been given show that only seven ships of the 123 in use by our forces are crewed and registered in Britain. Have we not come to a sorry pass when the Government were warned in your Lordships' House by noble and gallant Lords with extensive sea service and by Select Committees in another place that the merchant navy was being run down to a dangerously low level? Will the Government put that matter right?
On the second part of my Question, is the Minister aware that according to my information no such protection has been afforded the crews of these ships? If that is so, why is the situation allowed to continue? These men are in as much danger as anyone on any of the warships.
The Earl of Arran: My Lords, the noble Lord is not quite correct in the last part of his assumption. The merchant navy ships do not have to advance or sail nearly as far forward as the Royal Fleet Auxiliary ships. Therefore, their assessment of risk is considerably less than those in the front line who are serving the Royal Navy. It is for that reason that we give them advice and also assistance in the form of NBC respirators.
Lord Bruce of Donington: My Lords, are we to understand from the noble Earl's reply that the British merchant fleet is no longer entitled to the protection of the Royal Navy?
The Earl of Arran: My Lords, that is not quite the point of the Question. As the noble Lord, Lord Dean of Beswick, said, a total of 130 vessels have been chartered by the Government for use in the Gulf of which only seven are British flagged. The rate of protection depends upon the assessment in the area.
Lord Colnbrook: My Lords, my noble friend said in his original Answer that British ship owners had not tendered for very many contracts to serve in the Gulf. If the Government decide that they need British ships, have the ship owners said that the ships will be available if required?
The Earl of Arran: My Lords, the Government feel that they already have sufficient merchant vessels for the purpose of serving our troops in the Gulf.
Earl Attlee: My Lords, is the Minister aware that merchant seamen serving on the ships of the Royal Fleet Auxiliary are kitted out with gas masks and anti-bacteriological equipment? Is he further aware that sailing alongside them might be an ordinary merchant ship whose crew can obtain only one basic item, a gas mask? They have to apply to the embassy in Bahrain and pay more than £100 for each gas mask.
The Earl of Arran: My Lords, that is really not the point. As I have mentioned, I hope very carefully, merchant navy ships will not be sitting alongside the RFA. They will be considerably behind the RFA. In
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fact the furthest north they will probably advance is A1 Jubayl. If the British ship owner thinks that they require NBC equipment it is his decision as to whether or not they take that equipment. They do receive NBC respirators which play an extremely important part from the point of view of protection against vaporisation.
Lord Williams of Elvel: My Lords, is it the case that, if the ship owner decides that the crew needs protection, he has to pay for that protection? Is it further the case that the MoD is providing full protective equipment to journalists in the Gulf? If it is provided to journalists, why not to British merchant seamen?
The Earl of Arran: My Lords, as regards the protection of British journalists in the Gulf, obviously they are in a very much more front line area. The rate of risk is assessed to be greater there than it is where the merchant navy is operating—no further north than A1 Jubayl.
Lord Mackie of Benshie: My Lords, is not the most disgraceful point about the Minister's reply that only seven of the ships we need to support our troops in the Gulf are British flagged? Surely, something should be done about the flags of convenience under which British ship owners making money in this way are evading their responsibilities to crews. Is this not a matter of grave concern to the Government?
The Earl of Arran: My Lords, the main reason for so few companies offering vessels is that either the British flagged ships are generally busy with existing charters or that those put forward do not meet Ministry of Defence specific requirements in the current situation.
Lord Greenway: My Lords, does the noble Earl agree that the present situation in the Gulf amply demonstrates the need for a strong merchant navy? Is he aware of reports in the shipping press last week that foreign ship owners who have ships on charter to the Ministry of Defence are urgently seeking British seafarers to replace third world crews who have refused to sail into the war zone?
The Earl of Arran: My Lords, I agree with the noble Lord about the continuing necessity for a strong merchant navy. Indeed, over the past few years, the Government have done much to improve the quality of life in the merchant navy.
Lord Callaghan of Cardiff: My Lords, is it not the case that there is a shortage of British ships and especially of British seafarers? Can the noble Earl tell us what progress is being made as regards the strategic review of our maritime needs which was promised in the joint working party report? Further, can he say when that report is likely to be published and what conclusions it reached?
The Earl of Arran: My Lords, I am afraid that I am not able to answer such a question without prior notice. However, I shall certainly write to the noble Lord on the matter and place a copy of the letter in the Library.
Lord Dean of Beswick: My Lords, does the Minister not understand that many Members of your

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Lordships' House think that it is a very dangerous policy to allow such a huge percentage of our logistic support for this operation to be dependent upon market forces—that is what the Minister said—and foreign companies which have no loyalty to the Crown? Have we not learnt our lesson from the reluctance shown by the Belgians before finally deciding to provide us with ammunition? Therefore, would it not be better for us to do this ourselves? Will the Minister kindly convey that message to the Government?
The Earl of Arran: My Lords, as I indicated in a previous answer, it is felt that the Government have sufficient vessels of the merchant fleet to supply our troops in the Gulf. That remains the case.

Business
3.2 p.m.
Lord Denham: My Lords, with the leave of the House, I should like to say a word about the length of speeches in today's debate standing in the name of the noble Lord, Lord Ennals, to which your Lordships have agreed to apply a five-hour time limit. On the principle that the mover is allowed 20 minutes and that the Minister should rise to reply not less than 25 minutes before the scheduled end of the debate, no other speech should exceed nine minutes. I believe it is right to point out on this particular occasion that should any noble Lord speak at greater length, he would be doing so at the expense of other speakers.

Brighton Marine Palace and Pier Bill [H.L.]
Read a second time, and referred to the Examiners.
Commercial and Private Bank Bill [H.L.]
Read a second time, and referred to the Examiners.
Harris Tweed Bill [H.L.]
Read a second time, and referred to the Examiners.

Planning and Compensation Bill [H.L.]
Viscount Astor: My Lords, on behalf of my noble friend Lady Blatch, I beg to move the Motion standing in her name on the Order Paper.
Moved, That the amendments for the Report stage be marshalled and considered in the following order—

Clause 1

Clause 27

Clause 2

Clause 28

Clauses 3 and 4

Clause 29

Clause 5

Clause 30

Clause 6

Clause 31

Clause 7

Clause 32

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Clause 8

Clause 33

Clause 9

Clause 34

Clause 10

Clause 35

Clause 11

Clause 36

Clauses 12 and 13

Clause 37

Clause 14

Clause 38

Clause 15

Clause 39

Clauses 16 to 18

Schedule 1

Clause 40

Schedule 7

Clause 19

Clause 41

Clause 20

Clauses 42 and 43

Clause 21

Schedule 2

Clause 44

Schedule 8

Clause 22

Schedule 3

Clause 23

Schedule 4

Clause 45

Schedule 9

Clauses 24 and 25

Schedule 5

Clause 46

Schedule 10

Clause 26

Schedule 6

Clause 47

Schedule 11

Clause 48

Clause 60

Clause 49

Clause 57

Clause 50

Clause 58

Clause 51

Clause 59

Clause 52

Schedule 12

Clause 61

Schedule 14

Clause 53

Clause 62

Clause 54

Clause 56

Clause 55

Schedule 13

Clause 63

Schedule 15

Clause 64

Schedule 16

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Clauses 65 and 66

Schedule 17.—(Viscount Astor.)

On Question, Motion agreed to.

NHS: Long-term Objectives
3.3 p.m.
Lord Ennals Lord Ennals rose to call attention to the current state of the National Health Service and to consider its long-term objectives; and to move for Papers.
The noble Lord said: My Lords, perhaps I may say first what an honour it is to be opening this debate and how delighted I am that so many distinguished Peers from all parts of the House are taking part. It shows the extent of the concern and awareness of the difficulties in the National Health Service. I am especially looking forward, as is the whole House, to hearing the maiden speech of the right reverend Prelate the Bishop of Exeter. He is chairman of the Hospital Chaplaincies Council and, as I said, we are all very much looking forward to hearing his speech.
The debate takes place at a most difficult time for the National Health Service. The Government are assailed by problems from all sides. I should like to concentrate on some of the challenges. Most of them have been created by the Government but some are the consequence of scientific success. I should then like to share with your Lordships the plans which now stand ready to be implemented by an incoming Labour Government whenever the Prime Minister decides to go to the electorate.
Today's debate cannot be separated from the one which took place yesterday on the economy and the mismanagement of the economy by the Government over so many years. However, because I shall be saying some harsh things, I should like now to say a friendly word about Mr. Waldegrave. It is refreshing to find a Secretary of State who is prepared to listen, who has a charming bedside manner and whose priority does not seem to be to bash the head of anyone who cares to argue with him. Therefore, I wish him well, although so long as he pursues his predecessor's policies he will not receive much support from this side of the House.
We hold our debate in the shadow of a war which has rightly obliged the National Health Service to be prepared and ready to face the possibility of casualties from the Gulf. It is the prayer of all of us that no major demand will be made upon it. However, its doctors, nurses and other health workers will be ready to face an emergency, as indeed is always the case. Whatever happens, no one should use the argument of the Gulf crisis to explain the appalling situation of ward and bed closures and the postponements of operations on a massive and devastating scale. The Gulf crisis is separately funded.
Similarly, the Government cannot be blamed for the current period of bad weather. They may be blamed for the extraordinary way in which they have handled heating allowances in the past few days, but we cannot blame them for the weather. I suppose we could blame the Soviet Government for the weather as
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it seems to come from that direction. However, the Government must accept responsibility for any excessive death rate which may occur as a result of this very cold spell.
The gap between the rich and the poor in Britain seriously widened in the Thatcher years. That was a direct consequence of government economic and social policies. I give as an example the rundown of child benefit, which is now at its lowest level since this Government came to power. The benefit which was supported by all parties across the House is now seriously undermined. It is a sad betrayal of the principles for which I am afraid the present Prime Minister must share some responsibility.
As we hear of old people dying in this cold spell, either at home or sleeping on the streets, let us recall the fact that the British winter death rate is twice that of almost every other Western country. It is bad compared with countries which are accustomed to hard winters, but it is equally as bad when compared with countries such as France, Germany, Italy and the Netherlands. A recent study of winter mortality shows that, while 10 other Western countries see a 10 per cent. increase in deaths during the month of January, the comparable figure for the UK is 19 per cent. I believe that that is a reflection, as the Black Report showed 10 years ago, that people experiencing poverty suffer from poor diet and from bad housing. They are the main causes of higher mortality and the main reasons why old people suffer, especially under the present weather conditions. Indeed, it is a sad story of a decade of cuts.
In the last debate in this House on the National Health Service when the new legislation was before us I urged the Government to postpone the new untried reforms until the National Health Service was ready to deal with them but to press on with the plans for community care. We are now seeing the tragedy caused by the fact that the Government did exactly the opposite.
I shall concentrate on the National Health Service; my noble friend Lord Carter will deal with the frankly cynical decision by the Government to postpone the implementation of the urgently needed reforms in community care. I say "cynical" because the funds needed to provide decent services in the community are now to be used for straight party political purposes to reduce the worst excesses of the poll tax demands. That was a monstrous decision. It reflects no credit on the new Prime Minister or on the new Secretary of State that the community care provisions contained in the Bill have been postponed. However, as I said, my noble friend will deal with that aspect.
What has been the consequence of the Government's decision to bash on with the new NHS reforms? The Secretary of State decided that every health authority must balance its books by 1st April, regardless of the effects upon patient care. Almost every health authority in the country has been forced to cut programmes.
The report of the Association of London Authorities, based upon the results of a survey of

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London's community health councils, gives a district-by-district summary of the current financial situation and recent cuts and closures in each of London's district health authorities and reveals that NHS spending cuts in the 1980s resulted in the loss of a quarter of hospital beds in London—more than in any other part of the country. It revealed that waiting lists for treatment in London are longer than in other regions; that eight of the 10 inner London health authorities are having to make cuts in excess of £1 million in this financial year; and that elective surgery and orthopaedics have been hit especially hard.
When the Secretary of State decided that those cuts were to be made, I do not know whether he knew the consequences—so far 3,500 beds have been closed temporarily. My fear is that many of them will never reopen. There are at least two great London hospitals which are now in peril as a result of those decisions by the Government.
The immediate consequence is that waiting lists have soared to their highest level, and more and more patients and their families are waiting longer and longer for an appointment with a consultant and for admission to the reduced number of beds. Increasingly, patients are having appointments to see their consultants and to be admitted to hospital cancelled. In March last year, the waiting list figure was 963,000. That is about 50 per cent. higher than the average list when I was Secretary of State from 1976 to 1979. The figure must now be over 1 million, but no doubt when she replies the Minister will tell us what the figure is. Consultants in operating theatres are obliged to work below capacity, not because of NHS inefficiency but because of serious underfunding of the NHS.
The latest turn of the screw is the implementation of the NHS reorganisation which is extremely costly in terms of staff—administrators and accountants—and administrative costs. Perhaps the Minister will tell the House what is the latest estimate of those extra costs. I want to know because I believe that that is funding that should have gone to patient care. Had it gone to patient care, we should not have had some of the crises which now exist in the NHS. The funding of the new scheme is part of the new funding for the NHS. As I said, it should instead have gone to looking after patients' needs. With pay increases, and the funding of the higher levels of inflation —a higher level of inflation exists within the NHS than in the public sector generally—there will be little left for improvement.
Perhaps I may quote from the recent report of the Health Database 1990 by the Chartered Institute of Public Finance and Accountancy. It shows that the 8.4 per cent. increase in resources made available for hospital and community health services revenue in 1990–91 does not allow for any growth in services after taking account of the underlying deficit brought forward. The increase needed in hospital and community health services revenue in 1991–92 is estimated to be £1.5 billion—10 per cent.—after taking into account additional cost improvements and income generation.
Out of that new money, there is to be no improvement in the quality of service. The Minister will no doubt recite figures to show that each year funds for the NHS have increased. Of course they have. That is no big deal. It has happened 46 years running—since the first year of the NHS. No government have ever spent less on the NHS—even in real terms—than they did the previous year.
What is now happening in the NHS as it prepares for reorganisation? There has been an influx of new managers, many of them with little or no knowledge of the health service. I insist, from 25 years experience in the NHS, that we cannot run the service as if it were Marks & Spencer or ICI. Some appalling decisions have been taken over the heads of doctors and nurses. Let me give just two or three examples. Breast cancer screening, which could save 1,250 lives a year, has been cut to save money; thousands of long-stay mental patients have been discharged from long-stay hospitals, landing up in prisons or sleeping rough, because the Government will not provide money for good community care; mental hospital beds have been cut by 40 per cent. in a period of just two years; and hundreds of patients on kidney dialysis have been refused modern drugs to save money.
In my day as Secretary of State, we may have made many mistakes—there is no Secretary of State who did not—but it was the doctors who decided what treatment was needed by patients. In the future it may be nurses as well, but not managers. Managers are called upon not to take clinical decisions or to determine who should be treated but to be responsible for the management of the service. The new Tory-style NHS with its opted-out NHS trusts, its injection of business management techniques and restraints on GP clinical budgets, is designed to change all that, and is doing so with a vengeance. Cost-cutting accountants are now in the NHS driving seat.
Since the debate in Parliament last year and the programme of implementation, the plans have gained few friends. Everything that has happened has confirmed views that there should have been pilot projects, as were recommended by this side of the House. Support came from a small minority of consultants who were told that NHS trusts would bring in more money. They have now been told that extra funds will be strictly limited. There was also some real support from managers who knew that they would have more power. A recent survey by the National Association of Health Authorities and Trusts shows that most have now concluded that the new system will not bring the expected improvements. They have complained that the pushing through of reorganisation is seriously disrupting the work of the NHS.
Without doubt, the most disturbing development is the decision of the North East Regional Health Authority that it will reduce waiting lists by striking off the lists patients with painful varicose veins, wisdom teeth and other conditions for which doctors think they need treatment. IVF of course is out. That is the thin end of the wedge. Since the Secretary of State, Mr. Waldegrave, must have given his approval

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—if he did not, no doubt the Minister will say so in her reply—other regions may follow suit. How long will it be before other treatments are prohibited by health authorities and NHS trusts? When will we find that hernias and ingrowing toe nails are off the list? We can think of a number of conditions. What is the answer? How is one to have them done? They are to be done privately. Of course everyone can have their work done privately if they have the money to pay for it.
I say again, in my time as Secretary of State it was doctors and not managers who decided what treatment was necessary. We have the term "clinical freedom". That decision by the North East Regional Health Authority, unchallenged by the Secretary of State, confirms my worst fears—that the NHS is being prepared gradually for privatisation, and that the Government now need to look at a new set of priorities.
I most warmly commend to all of your Lordships, to whichever party you may belong, to read the new Labour Party health policy document entitled A New Start for Health. It is just what is needed. We should know what our opponents think. If the party opposite has some good proposals for the NHS I should like to have a copy so that we may study them. Of course funding is important. We cannot provide an adequate service without gradually devoting a higher proportion of GDP to health care, as other countries do. The problem is that the Government seem determined to reduce that proportion. Our answer is not just more money: who knows what financial crisis there will be when we come to power.
We must change priorities. Our major aim is to seek a better balance between curing disease and prevention. In co-operation with local authorities, we will give higher priority to policies to reduce health risks, to encourage healthier lifestyles, to support reliable screening programmes, to give a boost to natural and complementary medicines. I very much welcome the fact that we have a positive policy towards complementary medicines. This again is a subject which I know several of your Lordships will take up during the debate.
We will launch a national health initiative to tackle the causes of ill health, both mental and physical. Each regional health authority will have its own strategy for improvement of health in its own region, with clear targets and regional budgets for health promotion. Those targets will be adapted to local circumstances and will then be embodied in performance agreements between the local and regional authorities. Such strategies will ensure that every health authority which becomes responsible for family health services as well as hospital community services is working to agreed priorities, including the need to achieve the most effective use of resources. We know that it can be done.
Attention was recently drawn in the Guardian newspaper to the Merseyside region which achieved a dramatic drop in its waiting lists without resorting to shutting the hospital door. Every consultant was given a target which was continually monitored.
Last October, the Audit Commission showed how 300,000 extra patients could be treated each year without extra resources if more doctors would switch to day care surgery. Nationally, day care treatment accounts for about 17 per cent. of all surgical work in the National Health Service. However, in the United States it accounts for 50 per cent. Surveys show that patients prefer it and medical teams have more opportunity to develop routines closer to the needs of patients. Liverpool is the only regional health authority carrying this out but it could be done by every other region in the country. There will be a strategic policy board with responsibility for implementing the performance agreements and setting and overseeing the achievement of local targets.
In conclusion, we wish to establish a new partnership to create a better health service. It will be a partnership with the many professional groups within the National Health Service: consultants, nurses, midwives, and the professions complementary to medicine. We will establish a dialogue with them on the basis of consultation and agreement on our policies. We will have a basis of a partnership with local authorities and voluntary organisations. All of those are having a hard time getting on with this Government.
We will have a partnership internationally to seek to achieve the WHO objective of health for all by the year 2000; a partnership with the people whom the National Health Service exists to serve. Once again, health service management must include close links with consumer groups, including the community health councils. We know that when we come to power we will have a huge task. However, we have great faith in the wisdom of the British people. We will give them back their health service which the Government have hijacked. My Lords, I beg to move for Papers.
3.24 p.m.
Lord McColl of Dulwich: My Lords, I rise to bring you good news about the National Health Service with which I have been closely associated for the past 40 years. My memory is extremely good; I remember everything that happened during those 40 years. However, I have noticed on numerous occasions that time has taken the pain out of the memory for the noble Lord, Lord Ennals. Time has also taken the memory out of memory.
I bring to your Lordships the good news that we have more nurses and doctors today in the National Health Service than ever before. We have more personnel per bed than ever before. Last year we treated 7½ million people, which represents an increase of 2 per cent. on the previous year. Incidentally, in March 1990 the total figure for waiting lists was 5 per cent. lower than in 1979. The noble Lord, Lord Ennals, should take note of that figure. The three years during which he was Secretary of State—we must be fair to him—were the three unhappiest years in the whole 40 years of the National Health Service. Those of us who are old enough will remember the

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winter of discontent when it was even difficult to have one's relatives buried. We do not wish to return to those unhappy years.
It is true that we spend 6.1 per cent. of the gross national product in this country on the health service, and that is lower than the European average. However, if we were to pay the 1 million employees in the NHS at European rates of pay, it would increase the figure to 8 per cent. and that would be above the European average. The problem is that if we put more money into the NHS, it will be difficult to get it to the patients; it can so easily be absorbed in other ways.
Thus, in spite of all the doom and gloom that we have heard today, matters are not so bad as they are made out to be. The doom and gloom merchants do nothing for the 1 million employees in the NHS, except to demoralise them and make recruitment more difficult. Also, the doom and gloom merchants simply terrify some of the 7.5 million patients whom we treated last year.
I wish to look a little further at the way in which morale in the NHS can so easily be diminished. One of the most difficult objectives is to achieve financial control. There has been a long history of personnel overspending their budgets. In the late 1960s, the late Mr. Richard Crossman found himself in the lift with the secretary to the board of governors of Guy's Hospital. He recognised him and said, "You are overspending your budget". Mr. Harry Burfoot, who it was, said, "Yes, and that is what I intend to go on doing because I consider it part of my job". I recount that conversation not as a criticism of Mr. Harry Burfoot or Mr. Richard Crossman—it was just a way of life. When I returned to that story previously, the noble Lord, Lord Ennals, found it impossible to believe that the conversation had ever occurred. It did and it serves to illustrate that there was and is a problem with people keeping within their budgets.
It was the noble Lord, Lord Ennals, who quite rightly brought in cash limits in the 1970s—to be precise, 1976. I suspect that it had something to do with the International Monetary Fund at that time. Whatever the reason, we ought to give him credit for bringing in those limits.
During a previous debate the noble Lord said that if he had ever been faced with a district health authority that had not stayed within its budget, he would sack it. He went on to say that he had sacked it, and as a result the commissioners were brought in. That is another example of the memory of the noble Lord, Lord Ennals, not being quite as good as it should be, because he did no such thing. It was the noble Lord, Lord Jenkin of Roding, who did it a year or so later. I do not suggest for one moment that the noble Lord, Lord Ennals, is deliberately trying to mislead the House; I believe he genuinely feels that what he said is the case and that it was he who did so. Nevertheless, he did not. I say that because it is difficult to get the point over that financial control is all important. Even today, those resource management initiative hospitals that overspend are still being bailed out. Those who keep within their budgets are penalised by losing their savings. A resource
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management initiative on its own cannot work because there are no incentives for good behaviour and no disincentives for bad behaviour. The tradition of overspending, especially overspending someone else's money, seems to be ingrained in the British way of life.
I personally know that it is perfectly possible in the NHS to live within one's budget. At Guy's in my directorate we have lived within our budget for six years. The credit for that goes to the manager of the directorate, who is also the nursing officer. Nurses make good managers. She has lived within her budget of £3 million for the past six years and has managed to save some money. One can imagine how demoralised she would be if someone attempted to take away those savings. That is what people sometimes try to do.
Hardly a day goes by without some rumpus about the closure of hospital beds. There are many aspects to this problem. As the noble Lord, Lord Ennals, has said, nowadays a lot of day case surgery is being undertaken. If one has the same number or a slightly increasing number of surgeons and one is keeping patients in hospital for only a short time, clearly one does not need as many beds as in the past. There have been headlines on this issue in the newspapers. Robin Cook has stated that 20 per cent. of acute beds have been closed in the past 10 years. That does not appear to be good news at first. However, he should have told us how many beds were closed in the previous 10 years. Since 1965, 7,000 beds have been closed every year, irrespective of the government in power. I hope we can reach an agreement in the House that in future no one will ever say that this or that government are closing a certain number of beds. The number of beds available has shown a straight line decline irrespective of the government in power.
Waiting lists are a strange phenomenon. To a surgeon they are like a virility symbol. Ira surgeon has a long waiting list, it means he is an important surgeon. That idea has been around for a long time. The true value of a surgeon is the amount of work he gets through. Some of the people on waiting lists have forgotten why they are on them. When some of them are asked to come in, they have either forgotten why they are on the list or they have had the operation performed some time in the past.
Noble Lords: Or they may have died.
Lord McColl of Dulwich: My Lords, it is perfectly true that they may have died. That gives rise to a great headline "Patients dying on waiting lists". However, if one asked those patients what they were dying of, they would mention some other condition. That too is a relevant fact. I read an article in a Sunday newspaper which stated that patients were dying on waiting lists. I wrote to the author of the article, and he informed me that he could not give me any details because his article was more concerned with polemics than with facts.
Unfortunately it is a characteristic of the British people to denigrate their own institutions. I wonder whether it would be possible for noble Lords to try to triumph over their British environment and be a little

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more positive about the National Health Service. Perhaps we should congratulate NHS employees on improving the quality and quantity of their work when there are fewer beds available and when they are rewarded with a rate of pay which is well below that of their European Community colleagues. Encouragement costs nothing.
3.34 p.m.
Lord Winstanley: My Lords, I am grateful to the noble Lord, Lord Ennals, for giving us an opportunity to debate this vital subject which is of immense importance to each and every one of us. I agreed with almost everything that he said about the current state of the National Health Service. However, I did not altogether agree with some of his remarks which had nothing to do with the current state of the National Health Service. I thought he went further than the immediate subject we are discussing and I regret that some of those remarks were said in a way that I believe was calculated to turn the discussion into more of a party political contest than should be the case. With so many experts on this matter in your Lordships' House, we should have an informed discussion about the National Health Service and what we should do about it rather than indulge in a party battle.
I am not so naive as to suggest that we can keep politics out of the National Health Service. Certainly when I speak in your Lordships' House I do not speak non-politically, particularly when I remember how one defines that phrase. In years gone by when I sought votes to enter another place I knocked on doors and people used to say, "I am sorry, doctor. We are not political; we are Conservatives". I hasten to say that I am not non-political and I am not being non-political. However, I believe my fears were rather borne out by the kind of response which the words of the noble Lord, Lord Ennals, triggered in the noble Lord, Lord McColl. When one considers the immense expertise in hospital work of the noble Lord, Lord McColl, one would have expected him to use up some of his nine minutes explaining to us precisely how he thinks the National Health Service trusts self-governing status will work for hospitals.
I deny that it is a question of hospitals opting out of the National Health Service. A hospital that becomes a NHS trust is still in the National Health Service. However, I should like to hear how trust status will work from someone who is intimately connected with the detailed working of these matters. I regret that the noble Lord did not explain that. However, he talked about the record of the previous government. I notice that the Motion we are discussing comprises two subjects—the current state of the National Health Service and its long-term objectives.
I hope that the long-term objective of the National Health Service is to do everything that is necessary for every patient, be they men, women or children, at the time of need without charge. I hope that that will continue to be the objective of the National Health Service. The noble Lord, Lord McColl, said he had been connected with the National Health Service for
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40 years. I go back two-and-a-half years further than that and I can declare that the National Health Service never has achieved the objective I have spoken of. That objective was not achieved on 5th July 1948 when the service was established. The objective I have mentioned is impossible to achieve given the way in which medicine constantly develops, thereby creating rods for its own back.
Every week we keep alive at immense expense people who formerly would have died—they require a great deal of care from the National Health Service —and constituted no expense or trouble to anyone. I shall give an example of that. Let us consider the huge and expanding science or discipline of human organ transplants. If we were ever to say that every man, woman or child who could conceivably benefit from a human organ transplant was entitled to have such a transplant, we should then have to accept that no one would treat people for haemorrhoids, bronchitis or any minor ailments. The whole National Health Service would be turned over to operations involving advanced technology.
We have to consider that position. The National Health Service cannot do everything for everyone. There have to be priorities. As has been rightly said, the National Health Service cannot use up all the resources available. Other government activities also require resources and some of those activities such as housing or the environment are not unconnected with health. The National Health Service will merely have a share of available resources. That share will never be large enough and that means we must have certain priorities. It also means that sooner or later we shall have to carry out cost-effective studies into the activities that our hospitals and our doctors perform almost daily to find out what is worth doing.
I am not talking about ceasing to perform minor operations such as removing in-growing toe nails or varicose veins. However, we should start to reconsider some of the more costly and resource consuming activities of the National Health Service. We must consider whether we can devote such a large proportion of our resources to activities which on the whole benefit only a small number of people.
Nine minutes is not a long time to deal with a subject such as this. I shall therefore move on at once to say how very much I look forward to hearing the maiden speech of the right reverend Prelate the Bishop of Exeter. I have a special interest in that one of his distinguished predecessors as Bishop of Exeter, Hugh Oldham, many years ago founded the school at which I was educated. Now that the Manchester Guardian is called the Guardian I say that I was educated at the grammar school. The grammar school was founded in 1515 by Hugh Oldham, Bishop of Exeter.
The noble Lord, Lord McColl, concentrated to some extent on hospitals and there has been much talk about waiting lists. I should like to use some of what little time remains to me to talk about general practice. I believe that our system of the family doctor general practice is almost unique in the world. If it perished, the situation would be very serious and the nation would suffer greatly.

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In the family doctor system which we still possess in this country one doctor is responsible for the family. Instead of a number of different doctors each being responsible for different parts of the patient, there is one doctor—the family doctor. That is a uniquely British concept, and it is in danger.
I was in general practice for many years. In the eyes of one's friends and relations once a doctor always a doctor, but I am very much out of date. I thought that I should bring myself up to date on some aspects. I spoke to a doctor who is now in active practice. It so happens that he started in general practice as a trainee with me. There has been much talk of waiting lists: I decided to examine those for outpatient appointments. In my recollection they are the ones which cause immense trouble for general practitioners and their patients.
I consulted the doctor who practises in a fairly prosperous suburban area near Manchester. He told me that for neurological outpatient appointments there was a wait of about three months. In orthopaedics the shortest wait for an appointment at any hospital in the area was two months. At the Manchester Royal Eye Hospital, perhaps the best centre for ophthalmic work in the North-West, the waiting time for an outpatient's appointment was one year. That means one year before a general practitioner can get a second opinion free of charge on the National Health Service from a hospital consultant without going to the trouble of calling out a consultant for a domiciliary visit which is difficult to achieve now.
For skin conditions, the wait was three months; for ear, nose and throat conditions, it varied according to the hospital from one month to nine months. That is a very difficult situation.
General practitioners now have new contracts. There was much discussion of that subject when the contracts were first mooted and came into force. The review body has reported recently on salaries. I was disturbed to find that the one part of the review body award which is not to be phased in is the increase in capitation fees. Payment on the basis of capitation encourages increased list sizes for doctors. For the whole of my professional life—and I am sure that this also applies to the noble Lord, Lord McColl —the emphasis was on reducing list sizes. It is therefore very regrettable that the one item which has not been phased is the increased payment on the basis of capitation.
The doctor to whom I spoke told me "When I studied in your practice years ago we did our best to see whether in 24 hours we could satisfy the needs of our patients. Now I find that I am having to do my best in 24 hours to satisfy the needs of bureaucrats in the family health service authority". I could go into that matter at great length but time does not permit.
Health education has been mentioned. I hope that noble Lords will listen carefully to the speeches of the noble Earl, Lord Baldwin, and the noble Lord, Lord Colwyn, both of whom will suggest ways in which we could reduce the burden on practitioners. Health
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education has changed from the days when I was involved. Now we need to teach people that most things get better by themselves. However, we also have to teach them how to recognise the danger signals which indicate the need for special and very expensive resources. That is the type of exercise on which we have to embark.
3.45 p.m.
The Lord Bishop of Exeter: My Lords, in this contribution I aim to draw attention to just one component part of the National Health Service, the hospital chaplain. I thank the noble Lord, Lord Ennals, for mentioning my responsibilities in that regard.
I apologise to your Lordships for the fact that I shall not be able to be present at the very end of the debate. I am very disappointed about that. Until a few days ago the debate was scheduled to be a shorter one and I arranged my subsequent duties in the South-West accordingly.
The hospital chaplaincy is regarded by the service itself as an integral part of the service. The hospital chaplain is appointed not by the Churches but by the health authority. The health authority pays and it is to the health authority that the chaplain is accountable.
The Churches are very appreciative of the opportunity afforded by the health service to offer ministry to patients and to staff. The Churches are very appreciative of that investment, particularly in the training of hospital chaplains. The Churches are also appreciative of the fact that the number of full-time hospital chaplaincy posts has increased steadily year by year over the past decade.
There is plenty of evidence that the ministry of hospital chaplains is appreciated by the public. Public opinion seems to approve of hospital chaplains. The Health and Social Service Journal a few years ago carried an article entitled "Treating Mind, Body and Soul" which read:
"Which group of National Health Service staff has doubled its numbers over the past 10 years, scarcely raising a comment from the public and government? Which group of staff did most patients in a survey say they would have liked to consult while in hospital?
"Answer: hospital chaplains".
I know of one instance in which a health authority was a little slow to appoint to a vacant part-time post. The local general practitioners took action themselves and wrote to the health authority to ask for speedy action.
The favourable view of the hospital chaplain which seems to be held by the public is not surprising. We all know that the healing process is not entirely a matter of physical and technical skills. There is a good word applied to the National Health Service—"quality". It relates to quality of service. That quality is not to be judged only by practical criteria, necessary as those are and right as it is that they are being brought to bear with increasing stringency. Quality of service is also to be judged by less measurable criteria. In the chaplain and the team of helpers that a chaplain often gathers around him or her a hospital has a person who, in the midst of all the pressures of work, can

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stand back and see the patient as a whole person—body, mind, soul—with needs in all those departments.
The chaplain is someone who can be with the patient at a time when the patient is under the considerable stress of a new experience. The patient is away from home and from the familiar resting place at night, away from wife or husband perhaps for the first time in 20 or 25 years and is facing the unknown in surgery. In the hospital chaplain the hospital has a person like the Royal Navy chaplain, who is described as being the friend of all on board. The hospital chaplain is able to go into every department of those great institutions (our hospitals) as a totally non-hierarchical person. The chaplain is concerned as much with staff as patients. Staff are under pressure. The hospital chaplain, especially in making time for staff, can bring to bear great qualities and help different parts of the institution understand each other. The hospital chaplain is being increasingly given a place in the plans now coming to the fore to deal with major accidents and disasters.
Health authorities are required by statute to make provision for the spiritual needs of patients and staff. The view of the Department of Health, I understand, is that it is not a statutory requirement to provide chaplains as a way of making that provision, although in practice it is usually the way. At a time of financial stringency a health authority faces agonising decisions as to what the true priorities are. Some signs are emerging that those pressures are possibly putting the hospital chaplaincy post down the list of priorities. Why, it is asked, cannot the locally-based minister do the work? There are three reasons why in a large hospital that is not possible. One is that the acquisition of the skills involved depends on stability of employment. Another is that a large hospital needs a full-timer as part of the family or team. Lastly, the number of local ministers has halved over a generation. In the year I was ordained I was one of 600 new deacons that year. We are fortunate if we can now ordain 300 new deacons every year.
Hitherto the National Health Service has regarded chaplaincy as an integral part of the service. That is consonant with what we know about health and healing, which are a combination of technical advances, for which all of us are grateful, and meeting the less measurable needs of the human being. I am referring to the non-physical needs of a person, especially when under pressure, and the needs for faith and a purpose in life—a life which can be very delightful but also at times very painful.
3.54 p.m.
Lord Morris of Castle Morris: My Lords, perhaps I may say first what a great privilege it is to be following the right reverend Prelate the Bishop of Exeter. I am sure I speak for the whole House when I say that he has made a most distinguished and thought-provoking maiden speech. As your Lordships may know, he is the son of a doctor (a lieutenant-colonel in the Royal Army Medical Corps) and despite the fact that he graduated from
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Cambridge rather than another place, he has pursued a long and distinguished ministry in the Church at Northampton, Wisbech, Folkestone and as Bishop Suffragan of Willesden. The whole House will look forward to many regular contributions from him in the future.
We are invited by the terms of the Motion to speculate on the long-term objectives of the National Health Service. Philosophically speaking, I suppose there can be no other ultimate objective than the control and elimination of disease. To that end, the logical means is to give priority to preventive medicine and the prevention of disease rather than its cure. Of course that is an impossible aim, but it has been well said that the first duty of the health service is to help the public to stay healthy. It is towards the present embryonic state of a few initiatives to that end that I beg leave to direct your Lordships' attention, with special reference to the situation in Wales.
The Labour Party publicly stated as recently as December 1990 that:
"The most obvious imbalance in our health service is that it offers a first-class repair service to those in ill health, but gives little priority to preventing ill health".
I hope the Minister will comment on that when she speaks.
"Coronary heart disease absorbs an estimated £500 million a year in health spending on emergency treatment and intervention surgery, but only £10 million is allocated to health promotion programmes to reduce heart attacks. Britain has some of the highest rates of coronary disease in the advanced world and is making slower progress in reducing them. Yet poor investment in strategies of prevention has persisted despite examples of good practice, such as Heartbeat Wales or the work of the Health Promotion Authority".
Heartbeat Wales, under the dynamic and indefatigable direction of Professor John Catford, was an inspirational success in an area which for a variety of reasons had a much higher than average incidence of heart disease. That success led to the creation of the Health Promotion Authority for Wales, which published its strategy document Health for All in Wales last month. That document is not vague or cautious. It lists nine specific health goals or intentions, for example: to reduce the incidence and impact of cardiovascular diseases by at least one third; to reduce disability and premature death from cancers by at least one quarter; and to reduce the incidence and impact of chronic respiratory disease by at least one half—and anyone who has known a disabled miner fighting for breath and unable to walk up 10 steps as a result of the humiliating ravages of pneumoconiosis or silicosis must say amen to that.
It is an awesome challenge, but the key to it is the concept of a dynamic partnership between the Health Promotion Authority and local authorities, the education sector, commerce and industry, voluntary and community organisations, the mass media and governmental organisations. Such a concept makes every kind of political, economic, financial and community sense. It is devoutly to be hoped that appropriate funding will be made readily available to support and complete such a visionary initiative. It should have happened 10 years ago, but there is joy in heaven over one sinner that repenteth—even in the

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present Government—and in fairness it can now be said that there is at last hope for the future for preventive medicine in Wales.
A crucial part of a preventive programme is the provision of efficient screening methods for the early detect ion of known serious conditions. It may surprise some of your Lordships to learn that the Welsh breast screening programme did not become operational until February 1989. Results are available for the first 18 months of screening in south-east Wales where 15,000 women have been screened, and there is a breast cancer detection rate of 0.97 per cent. At 9.7 per 1,000 women screened, the Cardiff screening centre has one of the highest detection rates in the United Kingdom. If that experience continues, some 850 cancers will be detected in screened women during the prevailing round of screening in south-east Wales. It is the objective of Breast Test Wales to identify and invite at least 90 per cent. of the 250,000 women aged 50 to 64 resident in Wales to have an initial mammogram by December 1993, and thereafter every three years, and to achieve acceptance of the screening initiative by at least 70 per cent. of those invited. Those targets are realistic but it must also be said that they are very modest. For many women in Wales it will be too little too late.
But long-term prevention can hardly be better illustrated than from the field of medical genetics. The Institute of Medical Genetics at the University of Wales College of Medicine is absolutely in the forefront of this work. It provides a service for patients and families with genetic disorders in all parts of Wales as part of the National Health Service. Families are seen for genetic counselling. The aim is to give full and accurate information on the risks of a possible genetic disorder in the family and advise on what can be done to help avoid that risk.
Parallel to that clinical work are the laboratory genetic services. New techniques in genetics offer increasing possibilities for the detection of serious genetic disorders. They include the examination of both the chromosomes and the genes themselves. Supporting that is the regional DNA bank. By isolating and storing DNA from blood or tissue of an affected person, tests that benefit relatives may be possible many years after the patient has died. All that research is being constantly fed into the training of doctors of the future since the staff of the medical genetic service are actively engaged in postgraduate teaching throughout Wales as well as with undergraduate teaching in the college of medicine. That is an initiative which the Government will surely smile upon.
One of the principal goals of the Health for All in Wales programme is to reduce obesity and overweight. All the evidence nationwide points to the perils of obesity and inactivity in the incidence of cardio-vascular and other diseases. At this point I come close to home. The daily work of your Lordships' House is not characterised by the vigorous physical activity which generates rude health and —present company excepted—as I look around the Chamber day by day I see that many noble Lords and,
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it must be said, some noble Baronesses are (how may I put this delicately and not call a spade a shovel?) much too fat.
Is it not our duty to take positive health promotion and preventive medicine seriously ourselves? Dare we preach to others what we do not practise? The Westminster gymnasium, which is fully equipped and professionally staffed, has been set up to encourage us to maintain good health by sensible exercise. It is not a conventicle of muscle-bound health freaks sweating and grunting their way to cardiac arrest. It is a sensible way to a healthy lifestyle. It symbolises the best contribution that we can make to achieve the long-term objectives of the NHS. I beg leave to commend it to your Lordships.
4.3 p.m.
Lord Nugent of Guildford: My Lords, I start by thanking the noble Lord, Lord Ennals, for giving us the opportunity today to debate the National Health Service. However, I am not able to thank him for his somewhat slanted picture of the health service, a picture which my noble friend Lord McColl so brilliantly put into more objective perspective.
Briefly, the Government's record over the past 11 years will bear comparison with that of any other government. The funding of the health service has risen by some 42 per cent. in real terms, from £8.1 billion to £32 billion a year. That is a record that no other government can match. As my noble friend said, the number of hospital in-patients treated has risen by 25 per cent. and day cases treated have increased by 100 per cent. With regard to manpower, there are more doctors: 3,000 more GPs is an increase of 15 per cent. and hospital doctors show a 10 per cent. increase. Numbers of nurses and midwives have increased by 8,000, which is an increase of 4 per cent. Pay scales for doctors have risen by more than 36 per cent. in real terms; for nurses and midwives they are plus 41 per cent. That is an impressive record. But dialectic sometimes blurs the view and many of those extra features were forgotten when last year's policy development Working for Patients was announced. The hostile reception, I have to admit, came from across the board.
Perhaps the emphasis on instant transformation to a market economy was a mistake. The good ideas in Working for Patients were lost in the welter of criticism. But the fog of war has now dispersed and, despite what the noble Lord, Lord Ennals, said, the virtues of the new policy are being recognised and are beginning to be adopted. Even the BMA has a kind word to say for the resource management initiative and has produced an excellent commentary on it.
The resource management initiative is central to improving the working of our hospital services. It proposes that consultants and all clinicians should be fully involved in the management of their hospital, so that they share responsibility with managers in a partnership (as the noble Lord, Lord Ennals, called it) for the budgeting and allocation of resources. The executive manager continues to carry ultimate

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responsibility as the accountable officer but management can be devolved to clinical directorates, each under a clinical director, covering the individual specialties in the hospital. Each clinical director will be fully involved in setting the budget for each directorate.
To make that complex structure work satisfactorily it is necessary to install a comprehensive range of computer services and modern information technology. That is expensive. A pilot scheme was introduced five years ago into six hospitals. As a result the structure is now being introduced into 50 hospitals across the country. I have been privileged, through the kindness of my noble friend Lord McColl, who took a leading part in producing it, to see the report on Guy's Hospital. The result of five years' intensive work shows a great improvement in the use of resources for the benefit of patients, the satisfaction of staff and, ultimately, the benefit of the taxpayer in value for money. It also confirms the magnitude of the task. I warmly congratulate my noble friend on the part that he played in it.
However, the BMA reports that extension to 50 hospitals across the country is being considered on an off-the-peg basis founded on the experience of those six hospitals. I hope that that will not happen. I hope that my noble friend will take note. There is no scope for short cuts. Each hospital, with all the complexities of its many strands of activity, is different.
I urge on my noble friend the Minister certain fundamental factors which are essential for success. First, the clinical staff across the board must enthusiastically want the scheme. Success depends on much extra work being done by them. It is essentially a team effort. Secondly, a specialised business consultant will be required to study the working of each hospital in order to design a management and accounting structure to suit it and advise on the appropriate computer system to collect and organise the information and accounts. The staff must then be prepared for four or five years of very hard work to get the system going.
The calibre of the executive manager required to make a success of the combined operation of managers and clinicians is critical. The manager must stand several grades higher than in the present management structure and the salary level must be nearer the award-holding consultants if he is to succeed with the leadership. As we all know, top consultants are high-powered creatures focused primarily on the welfare of their patients. To form and lead the new combined structure the executive manager must be of similar calibre. I say again to my noble friend that without that the Secretary of State had better say goodbye to the whole idea.
American experience with a similar concept is absorbing over 20 per cent. of the total cost. That is alarming; and I am sure that it is unnecessary. In the experience of Guy's Hospital, that did not occur. However, the position must be watched very closely in hospitals which are adopting such a scheme. Some hospitals will opt to become self-governing National
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Health Trusts. Obviously the great teaching hospitals will wish to regain the self-governing status which they lost in 1974. Others may also wish to gain the advantage of submitting their annual requisition for finance from the Secretary of State on the basis of their accurately budgeted accounts. That would rescue them from the present poverty trap suffered by all enterprising hospitals—that the harder they work the sooner they run out of money. We see that happening every year. I believe that the resource management initiative is an essential preliminary to any hospital becoming a National Health Trust.
I conclude that Her Majesty's Government's policy development, Working for Patients, contains some excellent ideas. However, it is not a prescription for instant change, rather a sound basis for organic development over the coming years. I cannot discuss any other aspect of it. I welcome the kind words of the noble Lord, Lord Ennals, about the new Secretary of State. With his first-class intellectual grasp of this great national service which touches the lives of us all, and with his diplomatic approach to the vast body of professionals and technicians of which it is made up, I believe that there is a real prospect of progress for the benefit of patients, staff and taxpayers.
4.11 p.m.
Lord Butterfield: My Lords, I hope that on behalf of the Cross-Benchers you will permit me to add our congratulations to the right reverend Prelate the Bishop of Exeter for his splendid and profound maiden speech. I can vouch for the fact that the work of hospital chaplains is widely appreciated, not only by the patients and their relatives but by the clinical staff who frequently find such psychological support assists their work when trying to help people who are gravely ill.
In the remaining few moments for which I may speak, I hope to show how important it is to harness the fast developing technology. It is not impossible that within the foreseeable future, through such projects as genetic fingerprinting, we may be able to tell those people who are at special risk from cancer of various parts of the body exposed to various toxins that they are at risk. I hope that that will further open the way to people being able to protect their health. Technology has allowed diabetics to take increasing responsibility for the management of their health at home. I am sure the health service will develop that aspect with the passage of time.
As a Cross-Bencher, I do not wish to enter into party exchanges. When I joined these Benches our convener reminded me that one of our purposes was to try to improve things. I must commend the improvements that I have seen in the health service over the past months. No doubt the noble Baroness, Lady Hooper, will be able to widen the definitions of progress. However, it is important that funds are now going into medical audit. There is wider recognition, as the noble Lord, Lord McColl, pointed out, that nurses are excellent managers. There is the possibility that within the foreseeable future they will act as prescribers in the National Health Service.

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The noble Lord, Lord Nelson, may touch upon this fact. But there are strong rumours that there will be more clinical research in the National Health Service. The noble Lord led the Select Committee of your Lordships' House which pressed for that, and I am sure 1 hat it is timely.
Perhaps I may say how happy I am to hear, as the Secretary of State pointed out, that the salaries of junior doctors will be to a national scale. One or two noble Lords may have been awake at quarter to one one night when I pressed that we might have a national scale for all clinical workers in the service. The objective is to discourage concentration of especially able people in the new trust hospitals. I shall not develop that to the discomfiture (I should like to hope) of Her Majesty's Government. However, it raises an important point. There is much evidence of variations in class culture between attitudes towards health. The attitude towards smoking varies in different parts of the country and with different classes. The same is true of the attitude towards the consumption of alcohol.
I do not live far from Huntingdon. To me the good thing about the Member of Parliament for Huntingdon who has become our Prime Minister is his statement that his aim is for a classless society. That would be a great help to those of us concerned with health promotion. More recently he has spoken to the Young Conservatives about education. The health service will certainly be grateful for any enrichment of the educational standards that we can achieve in this country.
As was pointed out by the noble Lord, Lord Morris of Castle Morris, the health service needs health education and health promotion. It needs targets of healthiness. I am sure that in the long run we shall find more young doctors coming forward who are anxious to serve that aspect of the nation's life.
It is also important that we in the health service are conscious that it is only one part of an immensely complicated network. The health of the nation depends upon the economic success of the nation. Slumps and unemployment add to the burden of illness. We in the health service are greatly concerned about the food that people eat. That aspect involves the Ministry of Agriculture. It is therefore important to bear in mind that the health service is part of the warp and weft of the nation. That gives me a chance to return to the speech of the right reverend Prelate. In the health service we should never forget that our origins are in the charity that was initiated by the great religious houses.
I wish to spend a few seconds on health promotion. I am the chairman of a health promotion research trust. My vice-chairman is the noble Baroness, Lady Birk. She said that she was sorry that she could not be present. She was kind enough to say that she felt sure that I would speak up properly for the trust, and I shall try to do so briefly. We have run 150 projects. We have uncovered an enormous amount of the most dreadful ignorance. When our report is published in a year or so about the fate of young girls in schools
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when their menses begin, I venture to say that many noble Lords will be shocked by the experiences that those young girls suffer.
We found that it is fairly easy to organise research. It is immensely difficult to organise promotion. In the future high technology must help us all to achieve ways and means of targeting important information to the people who need it. Targeting information will be a vital factor in the health service of the future. I believe that the health service can do great pioneering work to find out the best way to do that.
Those in the health service are aware of that factor. Ann Richardson, Christine Jackson and Wendy Sykes have recently produced a report called Taking Research Seriously. They have seen the importance of targeting information to the people who need it. I emphasise most strongly that they have also seen the importance of an educational service in translating science into language that people can understand.
I tried to write a book about diabetics, which is my subject, and I showed it to a young American school teacher. He said, "My dear professor, there are far too many words with too many syllables for the kind of people you wish to reach to be able to understand what you are saying". I believe that not only will technology provide us with the means of reaching people but it will have to teach those such as me and perhaps other Members of this House the skills of communicating information so that it is understood by those being targeted.
I am grateful for your Lordships' attention. I am also grateful to the noble Lord, Lord Ennals, for giving us the opportunity to talk about this important service and to look into the forward dimension. We must harness the fast-moving technology. We must aim to teach people to protect themselves from what is happening in the world around them. We must also teach people to take care of themselves after diagnosis.
4.21 p.m.
Lord Nelson of Stafford: My Lords, I too thank the noble Lord, Lord Ennals, for introducing the debate at what is, an appropriate moment when important changes are taking place in the National Health Service. I too congratulate the right reverend Prelate the Bishop of Exeter on his excellent maiden speech. I found it intensely interesting.
I shall confine my remarks to research because, as was said by the noble Lord, Lord Butterfield, I was chairman of your Lordships' Select Committee on priorities in research. First, however, I congratulate the Government for tackling the important issue of reviewing the National Health Service. Every large organisation must be reviewed from time to time. The larger it is the more important it is. As times change so do needs, people, and conditions, and one must also change one's ways. It is good that the Government are doing so.
As a result of the Select Committee's inquiry into medical research it reached a number of conclusions. Time will allow me only quickly to summarise them. We found that as regards the research which was being carried out by the MRC, the research charities and the

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pharmaceutical industry within their available resources—and naturally they were insufficient—the work was excellent. It provided a good background for the National Health Service. However, our report also contained a number of criticisms. We were not impressed by the status which was accorded research within the NHS. We were unhappy because insufficient demands for need-led research were coming up from the NHS to be fed into the research programmes. We found considerable conflict in hospitals between the responsibilities for patient care and the need to conduct clinical research in the shortest possible time so as to bring research to a fruitful conclusion. That was particularly so as a result of the pressure on funding. We were also surprised at the paucity of the work being undertaken in the field of public health research and operational research. It was surprisingly small for such a large organisation. We believed that a greater effort in that area would more than pay for itself while providing a useful opening for the training and education of future NHS managers.
After a long time the Government responded to our report. Their reply was encouraging but it did not go far enough. We referred it back to the Government and held further discussions. I can add to the good news referred to by my noble friend Lord McColl because at the end of the day the Government decided to appoint a director of research and development within the National Health Service with a seat on the NHS management committee. We believe that such a person will play an important part in rectifying some of the disclosed weaknesses providing that the post has adequate backing from the department and from the NHS. We welcome the appointment to the post of Professor Michael Peckham who took over the duties at the beginning of the year. We wish him well in the important task that he has undertaken.
In congratulating the Government on taking those decisions I offer a special word of thanks to the Minister for the part that she played. She was extremely receptive to the views expressed by your Lordships during our debate on the report. We owe a lot to her for the fact that this important change has been introduced. It was an added encouragement when recently she announced the scheme of £2 million towards meeting the service support costs of research in non-teaching hospitals.
So much for what has been done arising out of our inquiry. However, there remains one area about which I am unhappy, as are my colleagues on the Select Committee. In our report we drew attention to the unhappiness that we found among research personnel, whether they were scientific, clinical or technical. They were worried about their lack of career prospects. That is a serious issue, affecting the future standards of personnel within the NHS as a whole. The Select Committee looked into that important problem but could not find where the responsibility lay for tackling it. It is an issue which is part of manpower policy as a whole, especially the training and education of research workers. We believe that a solution to the
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problem is of vital importance to the maintenance of the high standards of research which have existed in the NHS. Can the Minister tell the House where the responsibility lies for such manpower planning and for appropriate action to be taken arising from that? That information would add to the answers that the Select Committee received and the proposals put forward in its report.
4.29 p.m.
Lord Molloy: My Lords, I too appreciated the speech of the right reverend Prelate the Bishop of Exeter. I found it somewhat touching because I remember days in the valleys of Wales when steelworkers and coal-miners depended on the local Baptist minister. Usually he, too, was a coal-miner in a cloth cap but he did wonderful work similar to that described by the right reverend Prelate.
The House was lucky to hear the excellent speeches of my noble friend Lord Ennals and the noble Lord, Lord McColl of Dulwich. They set the tone of the debate. Of course, they were opposed to each other but in a manner that one could enjoy and understand. I was a little saddened that the noble Lord, Lord McColl, found humour in people on the waiting lists. Those of us who previously served as Members in another place still receive letters from former constituents concerning their family problems in regard to the NHS. Perhaps their mum, dad or brother is on the waiting list and that worries them.
Some of my colleagues have had letters from men in the Gulf who are worried, for example, about a mother who has been on a waiting list for so long. I am sure that they do not find any remarks about waiting lists humorous. It is that kind of thing that we have to try to understand. There are some matters that are not brought to our attention. As Aneurin Bevan, who introduced this magnificent measure, said, the problem with us is that we never recognise that silent pain evokes no response. Therefore, somebody has to stand up and attack governments, local authorities, and health authorities.
There are some of us who have always been prepared to defend the health service and to attack those who we think are running it down irrespective of what government are in power at the time. Many hospitals have been closed; on the one hand waiting lists are lengthening; and on the other hand wards are being closed. Families and indeed National Health Service staff share anxiety and grief at operations that are cancelled and at waiting lists that are being ignored, and sometimes just erased. It is not in any way funny to the family that has someone on a waiting list, or to someone who is waiting for an operation and being denied it. That is what we have to try to understand.
The present Government are in the worst possible situation. They are actually spending much more on the National Health Service than ever before, but we have a worse NHS than ever before. We are getting the worst of both worlds. Knowledgeable people within the medical profession say that this situation is without precedent in the 40 years of the National

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Health Service. Let us just take as an example Westminster Hospital down the road, which has now closed its doors to patients on waiting lists. It is amazing that a hospital that is usually recognised as your Lordships' hospital and for Members of the other place will not now take in anybody. I do not understand why it is doing it, but I believe that it is a serious issue. No government should be complacent about it. I do not believe that any Member of this House should be complacent about it. The condition of our ailing National Health Service is causing pain and anxiety.
Another aspect is the financial cuts affecting not only London's teaching hospitals but also many more hospitals right across the country. When the injured and sick cannot be attended to I believe that the situation is desperate. It should be regarded as desperate by every one of us, and not merely the children or relatives of those who cannot be attended when they are injured or sick. Heaven forbid, but if Gulf casualties have to come here for treatment will we be able to respond efficiently? I hope that the Minister, as I am sure she will, will respond to this, by saying that we shall be able to respond efficiently.
The previous Secretary of State gave a guarantee last year —and I beg your Lordships to listen to it —that the National Health Service would cope with all casualties, military and civilian. How do we reconcile that with the closing of Westminster Hospital; with waiting lists being abandoned; with people who are genuinely ill having to wait for an operation? It is a serious situation. I hope that we shall be prepared to meet the casualties that we may have, and that we shall also be prepared to see that civilian casualties will be properly dealt with and looked after as well.
Despite the promises of the reform of the National Health Service, I believe that it has not been a great success. I am sorry about that. I am sorry for the Government, and I hope that the Government are sorry that they have not been able to do better. What I find annoying too is that the privatised industries left the public sector with millions of pounds written off. British Steel had £4,500 million; the water industry had £5,000 million, yet health authorities need financial help, are begging for it, and are getting nothing. There is something wrong there. There is also this terrible myopia of the school eye service being cut. Can your Lordships imagine that eye testing is being attacked and the school eye service is being cut? All we have to do, all the Minister has to do, all that the noble Baroness, Lady Hooper, has to do is to just shut our eyes and say, "This is for ever", and we will restore those cuts in a wink.
I also believe, as the noble Lord, Lord McColl, rightly said, that preventive medicine is a vital part of the National Health Service, but it is under attack. What we believed under Bevan—and something which we endeavoured to achieve but which we never really achieved—was that care would extend from the cradle to the grave. Of course the National Health Service must be kept under review. That is vital. We
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must make sure that everything being done in the National Health Service is worth doing. That is fundamental.
Unless all industries and professions within our National Health Service march together in reciprocal activity, we shall be in danger of limping on one foot. I should like your Lordships to note that the Confederation of Health Service Employees, all the health visitors' associations, the British Medical Association, surgeons, dentists, and all the royal colleges agree that a regular review is a good thing. I hope that we shall do that kind of thing fairly regularly.
They also agree that the great moral imperative of our National Health Service is that wealth will not be advantaged and poverty and poorness will not be a disability, but rather that everybody, all of us, will be entitled to the best. The National Health Service was created after the most terrible war in history. It later enjoyed the support of all medical practitioners. It was thought by ordinary people that, in a typical British phrase, Bevan's National Health Service was a blessing, and I think it still is.
There now exist disturbing apprehensions that the fundamentals of the National Health Service might be at risk. I ask for the sake of our nation—not for a particular party but for all parties—and for the sake of our children that such risks must be remedied. We in this country created a great piece of human endeavour when the National Health Service was created. It has been maintained ever since as best we could. I believe that the present Government are slipping back. They have got the worst of both worlds; they are spending more for an inferior service.
I hope that the Government will have a look at what I have had to say and at what other noble Lords have had to say, because our National Health Service is a boon to the nation. No longer, as in 1939, are 30 per cent. of our young men unfit for national service. The National Health Service has seen to it that that will never happen again. It is a great service that is the envy of the world. Our nation created it. It is well worth looking after not only for the people of our land but also as a model for other nations too.
4.38 p.m.
Lord Smith: My Lords, I shall be brief because I have one thing to say, and one only, about the long-term objectives of the National Health Service. First, I very much hope that your Lordships will forgive me for leaving the House before the end of the debate, for today is the anniversary of John Hunter's birth and I have to be at the Royal College of Surgeons later this evening.
I was a consultant surgeon to John Hunter's hospital, St. George's Hospital, at Hyde Park Corner for more than 30 years. I was enthusiastic at the beginning of the National Health Service, but I did not foresee—nobody foresaw—that in a few decades the phenomenal increase in the cost of health care must drive a wedge between independent medicine and national health medicine, and that the inevitable result

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would be a waiting list for routine cases in the national health hospitals and not in the independent sector of medicine.
As the cost of medicine continues to increase the paths of those two medical philosophies diverge more and more. Any doctor who embarked upon a medical career from a sense of vocation would be aghast at the thought that he had to vary the treatment of patients who sought his care according to the patient's means. But that is the direction in which medicine is moving in this sad era of financial restraint.
The obvious cure, however difficult, is a move to draw together independent and national health medicine in a true partnership. I feel certain that independent medicine could do more to help national health medicine; and in return national health medicine could do more to help independent medicine. For instance, it could encourage consultants who wish to do private work to do so in national health hospitals. They would be near national health patients and not a mile or two away in a private hospital or in a traffic jam between the two. That could help both sectors of medicine.
I have spoken on this subject before. But those who speak for the Department of Health pretend that all is light in the grey area between the two philosophies; as though there were no complaints in regard to private practice pinching facilities meant to serve national health patients, and protestations that patients are better treated in private rather than national health hospitals. Many consultants are resentful at frictions of that kind. They are anxious to retain the vocational spirit in medicine and draw independent and national health medicines closer together.
In a short speech I shall not go into detail. Among the thoughts that immediately occur to me are the following. When a national health hospital has to shut an entire ward to save money, can the independent sector of medicine help? Should not the plentiful clinical material in private hospitals be of use in teaching medical students and post-graduate students? Should not the expensive technological equipment in private hospitals and the consultants in charge be available for national health patients on financially advantageous terms? Should not there be private consulting rooms in national health hospitals? That would keep consultants near their national health patients. In London, consulting rooms in the Harley Street area are villainously expensive and many consultants would rather pay the equivalent sum to the National Health Service.
In November I wrote to the Secretary of State for Health and humbly expressed the opinion that perhaps he should consider setting up a small informal working party to give him advice upon drawing together independent and national health medicine. The Department of Health does not like the idea. However, I am an optimist and hope that the Secretary of State may think again.
4.45 p.m.
The Earl of Clanwilliam: My Lords, I thank the noble Earl, Lord Ennals, for introducing this important debate and for hosting an interesting meeting earlier today on the subject of general practitioners who are interested in complementary medicine. I also congratulate the right reverend Prelate the Bishop of Exeter upon introducing a non-controversial subject into the debate, which is a feat in itself. Perhaps I may remind him that within his diocese there is, in the Exeter University, a centre for complementary health studies. I hope that it will receive his support in the future.
The long-term objective of the National Health Service concerns costs. The National Health Service is a great institution of which we can be justly proud. It has become part of the national fabric and its preservation and continuity is vital to the country. The costs of achieving that will be exorbitant in the near future. I suggest that two areas might be addressed in that regard. The first is research and development, and the other is in regard to relieving the pressure that old age pensioners place on the National Health Service.
As we heard from the noble Lord, Lord Nugent, the number of day cases has almost doubled in the past decade. There has been no enormous increase in the population to account for that, nor can the British race be described as total hypochondriacs. The reason lies entirely with the advances of medical and pharmaceutical researchers, who continue to believe that a human being is a mass of biological cells which can be controlled. They have produced products which, as was mentioned by the noble Lord, Lord Winstanley, will be impossible to finance in the future. They have produced ever more complicated and expensive panaceas to prolong life, and this in the face of the demographic certainty that an ever increasing proportion of the population will be old age pensioners. At the present rate of progress the time will come when the NHS costs will be beyond the ability of the community to bear.
The Government have already faced up to that subject in regard to the matter of state earnings related pensions. In the course of promoting that project they demonstrated demographically that in 2015—when I shall not be here to see it—the working population will have been so reduced that it will need to spend 30 per cent. of its income keeping the old age pension at its present level.
If there are to be that number of old age pensioners it will create an enormous problem for the National Health Service. One way to relieve the pressure lies in helping the elderly. Where family care exists it is more important to an OAP than anything else. Where a home environment exists or can be encouraged to exist there follows a lesser degree of dependence on the NHS. That is obvious.
In the 1960s and 1970s it was fashionable to decry the family unit. That has changed in modern thinking. The Government are introducing incentives into the sphere of supporting the old age pensioner in the home. I suggest that those could be increased to provide a positive advantage to the family which looks after the old age pensioner. They could more

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accurately reflect the savings of the social services as opposed to the Treasury's view of what is appropriate so that no advantage can be taken. Those savings are on a scale to provide genuine opulence in any family world, which indicates that opportunities must exist for additional help.
The object must be to dissuade people from flocking to hospital. The constant reiteration of everyone's right to instant total care regardless of expense has created a whole class of people who are dedicated to exercising that right. Indeed, as we know, the number of day cases has nearly doubled in the past 10 years. I believe that the problem can be relieved to some extent by Government intervention. I hope that my noble friend the Minister will be able to address that point.
We now come to the question of drugs. If only the scientists would spend more time making their discoveries economically possible rather than competing with each other to be the first in the field, the cost in terms of both money and successful results would be beneficial both to the NHS and the patient. There would be fewer costs to recover from the development and sale of drugs over some of which it might be more tactful to draw a discreet veil. I must immediately agree that the great majority of recent developments have been of enormous benefit to mankind, but the costs range between the exorbitant and the expensive.
Every effort is made by the authorities to ensure that drugs are safe and to test for safety. That again is an additional cost which has to be borne. If that had been properly projected in the first place that cost would not be necessary. Another but hidden cost of drugs to the NHS is their iatrogenic effect. Large numbers of patients either have to return to hospital or have their stay prolonged because of the side effects of the drugs administered.
That leads me to the subject of complementary medicine. I refer again to previous conversations that I had with my noble friend the Minister on the matter. I emphasise that there has been no reported instance of death in the administration of herbal remedies prescribed by qualified practitioners. What an outcry there would have been in the press if any had ever been discovered! Herbal medicines, like any other medicines, other than a placebo, have a toxicity value, but in qualified hands they are safer than artificial drugs. Much work is being done in bringing complementary medicine into the NHS and that is most welcome. I urge my noble friend the Minister to apply pressure where it is most needed—that is to say, within the higher echelons of the medical profession —to ensure that the present demand for such services is met by the NHS. One thing is sure: they will be a great deal cheaper than the drugs which are supplied.
The NHS is part of the fabric of this country. Any review of it must encompass the broad range of the nation's needs and its capacity to pay the bill. I believe that is the prime matter to address.
4.53 p.m.
Lord Rea: My Lords, it is possibly the privilege, even the duty, of a party in opposition, even though it will not be in opposition for long, to take the broader view which my noble friend's title for this debate
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suggests that we do. We should look not only at the health service but at health in the wider sense which is not the same thing as the health service. I believe that the document A Fresh Start for Health which has been mentioned by my noble friend, does just that. But it looks at the problem in a very practical sense as well. Noble Lords may remember that 12 years ago my noble friend Lord Ennals set up a small but high-powered working group to look at the question of inequalities in health under the chairmanship of Sir Douglas Black who was then president of the Royal College of Physicians.
The reason that topic was chosen was not doctrinaire; and it was not chosen because Labour is or was the party of the underdog. It was chosen for the very serious reason that the disparity in standard measures of health between the better off and the less well off sections of the population were dragging the whole of our health performance down as a nation. As an example the infant mortality rate now for those in social classes I and II—that is, the best off and best educated people—now stands at six per 1,000 births. That is the equivalent of the total national rate for countries such as Sweden, Japan or Iceland. However, if we look at the rate for those in social class IV or V, which are the less privileged, it remains at around 12 or more, bringing the whole rate in the United Kingdom up to about nine. That is a level which is now bettered by 15 or more other countries in the world whereas at one point we were among the leaders.
The same contrast by social class can be found in practically every cause of illness and death throughout the age range. That was alluded to by the noble Lord, Lord Butterfield. There is only one exception to that which is skin cancer. That occurs more often in better off people because of their greater exposure to the sun's rays in pleasant parts of the world. Overall, in the 10 years since Sir Douglas Black's report, it is true that health has improved in all social classes because of the technical advances which the noble Lord, Lord Butterfield, mentioned.
But the contrast between the social classes remains and in some cases it has even widened as my noble friend Lord Ennals mentioned. Social discrepancies in health persist and put us some way down the international league table for health. That is due to the persistence of a backlog of poor environmental conditions, housing and working conditions, sub-optimal nutrition, the persistence of smoking and other adverse life style-factors, nearly all of which have social class trends. The Black Report made a number of recommendations which went to the root of these problems. Not one of them has been tackled by the present Government even though they would not have cost very much.
It is little use exhorting people to change their life style when social and economic pressures pull them in other directions. That is what the policies of the current Government have been doing for the past 10 years. That is why I am delighted with the approach of the programme in A Fresh Start for Health. It takes up many of the suggestions of the Black Report though it

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is updated for the 1990s rather than the 1980s. For instance, it tackles child poverty, which is a basic cause of ill health, by suggesting that the true value of child benefit should be restored and that a nursery place should be offered to every child aged three to four years whose parents want it. That is one of the first ways in which the spiral of under-privilege can be negated and reversed.
It is suggested that municipal housing programmes should be restarted in order to abolish the squalid, unjust, uneconomic and altogether scandalous bed and breakfast accommodation which many homeless families have to suffer at the moment and which leads to a very bad indices of morbidity in the families who are in those conditions. It suggests that a minimum wage should be brought in which would reduce poverty among working families. A ministry of food and farming would change the emphasis from helping the producer towards helping the consumer. That would be assisted by an independent food standards agency and clearer nutritional labelling of food. These are measures which I, as vice-chairman of the National Forum for the Prevention of Coronary Heart Disease, have been trying to plug for the past eight years.
An integrated approach to sports and exercise is also suggested with more school time for physical education, and more help for local authorities and education authorities to provide sports facilities, reversing the pressure to sell off and privatise which has characterised the present Government.
The menace of cigarette smoking will be tackled by banning tobacco advertising except at the point of sale and tightening up the sale of tobacco to minors. We hope that the Private Member's Bill which is now going through another place will succeed, but if it does not the next Labour Government will see that it does. This will be combined with a policy steadily to increase excise duty on tobacco. I could list other useful suggestions in the report which will really assist people to change to more healthy lifestyles. However, the social causes of ill health are recognised and action is proposed to remedy them. At present too much is expected of the Health Education Authority and of primary healthcare teams to promote health without tackling the root causes at national and local authority level.
I see that I am approaching the end of my nine minutes. However, as an addendum, I should like to ask the noble Baroness about a completely different matter. First, I ask her to congratulate her right honourable friend, Mrs. Bottomley, on making some progress in reducing the contracted hours of duty of junior hospital doctors. How is further progress towards reaching that 72-hour goal to be monitored? What mechanisms are available to ensure that that laudable aim is arrived at? Will the department look at hard pressed health authorities to see that they make progress in that direction?
Finally, I should like to echo what was said by the noble Lord, Lord Butterfield. I am delighted that national terms and conditions of service for junior
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hospital doctors will apply throughout the National Health Service, including independent hospital trusts. Can the Minister say whether the same will apply to other grades of medical staff, such as consultants who are working for independent hospital trusts? Will they also enjoy nationally agreed terms of service so that standards throughout the National Health Service can be kept high?
5.2 p.m.
Lord Pearson of Rannoch: My Lords, I too should like to join in thanking the noble Lord, Lord Ennals, for the opportunity of this debate. I should also like to apologise to the House for arriving late but I was detained by unexpectedly difficult business elsewhere.
I wish to speak briefly and entirely from personal experience, as the father of a 10 year-old Down's syndrome girl. There are, I submit, few more shocking moments in life than when one is told that one's newborn child is irreparably handicapped. My wife and I were reasonably mature when this happened to us and so we were able to stand back from the substantial quantity of well-meaning attention which came towards us from many sides, some of which we did not find very helpful. We may just have been unlucky, but I must say I found the attitude of some of the social workers —most of whom were a good deal younger than us—unhelpful and even at times irritating. It took me some time to work out why this should have been—and perhaps I got it wrong—but it seemed to me that they felt we should have been sharing more in the pleasure they took in trying to help us; that their attitude was a little bit the triumph of well-meaning theory over reality, a reality which was much more difficult for us than they could possibly have imagined, never having been through our problems themselves.
The same problem arose when the question of our daughter's schooling came along. The special education needs experts were clearly surprised, and one of them was even openly disapproving, that we did not think our daughter would be happy in an ordinary school, or even in a special day school, but that we were convinced that she would have been most happy in a special residential school. As we therefore visited a number of these—and this is now some six years ago—we met many fine and dedicated people. Nearly all of them were very nervous of the growing trend to try to educate mentally handicapped children in ordinary schools.
In the wider context, as time went on, I became more and more worried about the extent to which it was intended to move the adult mentally handicapped and mentally severely ill out of our institutions and into the community. I felt the same good intentions were at work which I had faced in the social workers and special education needs officers, but now they were on a massive national scale. Good intentions, my Lords, but was the balance right?
I am afraid I still wonder whether we have got that balance right. I fear we may be veering too far towards care in the community, which may not be as fully enthusiastic or as competent about providing it as

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well-meaning theory suggests it should be. So from my own experience I would put in a plea for greater flexibility of provision between community and residential care.
Again, I can but draw on my personal experience to say that I am sure my wife and I were right in our decision to send our daughter, when aged only five, to a special residential school. We were extremely lucky to find her a place in a Camphill Community Rudolf Steiner school where she has made tremendous progress and is extremely happy. She has four terms and four holidays in a year. I very much hope that she may one day earn a place in a Camphill village or sheltered community.
Of course I know that residential care may not be right for many children and adults and that community care will be right for many people, especially if they really can be adequately cared for in the community. In that sense I would put in a plea that they should be under health care more than under social work care, and perhaps more so than is at present intended. I understand that many of our institutions may not have been all that good but I should have thought there must be some sound sense in a suggestion put forward by the National Society for Mentally Handicapped People in Residential Care, or Rescare, as it is known. I quote:
"Rescare believes that the evolution of suitable hospitals into village communities, each with a co-ordinating Principal and with increased autonomy for the individual living units, is one practical and economical way of improving services for all mentally handicapped people including those living at home who could be given daily access to on-site services. The NHS could provide specialist health related services, other bodies (local authorities, charities, private sponsors and voluntary groups) could manage (and provide) some of the residential units. Such community provision would be readily available to all wishing to use it".
I am sure that is a sound suggestion and worth looking at.
I am also sure that the mentally handicapped, and at least mentally handicapped children, are more different to us so-called normal people than we would often like them to be. When my daughter was seven I reminded her that the next day she was going back to her Camphill residential school. Her reply was revealing: "Oh no, Daddy, I'm going home". That is not the reply one would get from a normal seven year-old who is very fond of her family and whose family is very fond of her.
I only hope that there will be enough "homes" for the other children and adults who need them in the future.
5.8 p.m.
Baroness McFarlane of Llandaff: My Lords, I rise with some trepidation after the many exhortations to the importance of diet, exercise and lifestyle. I take a small comfort from the recently published evidence about the value of milk—what is more, whole milk —and I look to the future with hope.
Many of your Lordships have made reference to the spiralling costs of the health service and the whole problem of resource management in the health service. This is occasioned by both increased consumer
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demand for the goods of the health service and also the tremendously sophisticated advances that have been made and the tremendous improvements in health that have taken place under the aegis of the health service. This afternoon we have been told many times about the increased resources that have been given to the health service in each year of its being.
However, despite the increased resources, despite the increase in the number of staff employed, despite the increased productivity measured in numbers of operations and by other indices, there can still be to the consumer of the health service, the patient, the frustrating experience of delays and inadequacies and even the squalor of some of the buildings in which we care for patients.
Alongside the undoubted gratitude of so many patients for the care they receive and the undoubted dedication of many staff to the health service there is an increasing feeling of stress on the part of the health service. It seems to me that in future there must be not only an increase in resources to the health service to bring us at least to the level of other countries but at the same time a rationing and a determination of the priorities. My problem at the moment is that the basis of rationing is not made explicit. The system of rationing is there implicitly and covertly. We have heard about it this afternoon. We see it in areas such as waiting lists, bed closures and ward closures, in the inability to prescribe expensive drugs and in the reduction of minor operations. We have to make explicit the basis on which rationing of services in the health service will take place.
I am most concerned that the ethical basis of those decisions should be laid bare. Rationing of health services is not just a matter of medical decision-making, economic decision-making or managerial decision-making. It has a profound ethical content. That we must lay bare to the public. We need to establish guidelines for the rationing of our services and to establish them in the public domain. Honesty with the public, equity in the provision of services and many other ethical principles underlie the rationing of services.
I wish briefly to headline three concerns allied to nursing. I am sure that we are all delighted with the policy guidance on community care, but within the community many of the agencies will have to work very closely together. It seems to me that within the plans and discussions that we have had so far the pivotal role of community nurses has not been sufficiently addressed. I think in particular of the skills of health visitors not only in health education and their contribution through that to the prevention of disease but also in the assessment of the needs of the population and in the ability to target certain client groups. Health visitors are the epidemiologists of the primary health care team and can do much to direct our services in that field.
Likewise, I look at the role of district nurses and their ability to manage care in the community. The services of health visitors and district nurses are essential in the assessment of community health needs and in the assessment of individual patient care needs.

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Another issue affecting nurses is that of nurse prescribing. Although we are delighted that the Government have reaffirmed their support for this in principle, there is now a delay while a cost benefit analysis is carried out. Can the Minister give an indication of the time schedule in mind before the necessary legislative changes are brought in?
A third small item to do with nursing is the implementation of Project 2000. Again we are delighted that this has been accepted and that much of the recurrent moneys are being made available. However, there are capital implications in some of the schemes to amalgamate smaller schools of nursing into more efficient and cost-effective colleges. It would be useful to know from the Minister what plans are being made for the capital costs involved.
Lastly, I should like to congratulate the right reverend Prelate the Bishop of Exeter on his maiden speech and to align myself with much of what he said. I look forward to working with him from April onwards as a member of the Hospital Chaplaincies Council. I am sure we have no doubt about the very necessary contribution of chaplains to the health service. The health service is concerned not only with physical care but with psychological, social and spiritual care and with the less tangible aspects of care. There are certain fears within the health service that the chaplains may become a victim of cost-cutting exercises. I quote from the Hospital Chaplaincies Council report to the General Synod a fortnight ago:
"There is a serious concern that the Government's principle of devolving every possible decision with regard both to staffing and the terms and conditions of service of Health Service Staff from the Department of Health to the individual Health Authorities and Units, and the emphasis upon financial efficiency poses the possibility of a threat to those groups within the service whose contribution to Health Care cannot be measured in specifically financial terms. Hospital Chaplains themselves constitute one such group".
I should like an assurance that the circular PM 86/15, which sets out so adequately the role of the hospital chaplain, will be reissued to the new health authorities.
5.18 p.m.
Lord Auckland: My Lords, it is a privilege to speak after the noble Baroness, Lady McFarlane of Llandaff, who has given a lifetime of experience and dedication to the nursing services. I should also like to thank the noble Lord, Lord Ennals, for initiating what has been a vigorous debate and to congratulate the right reverend Prelate the Bishop of Exeter on a very fine maiden speech. In 1942, when I was at school in Devon, I was confirmed by the then Bishop of Exeter. I was particularly interested in his remarks on hospital chaplains.
Two organisations do a great deal for the health service outside therapeutic care. One is the Hospital Chaplaincies Council. It does a great deal in the long-stay mental hospitals. Where my wife and I live in Surrey we have seven such hospitals. Another organisation is the League of Friends, which raises a great deal of money for the patients and staff of hospitals. I declare an interest of a particularly non-financial nature. I am president of the friends of
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the district hospital in the town where I live. The relationship between the friends and the patients and staff of the hospital is a very good one.
There have been two endemic, main problems associated with health, both pre-health service and post-health service, for many years; namely, nurses' pay and hospital waiting lists. Members of my family served in the voluntary services in the hospital field many years before the establishment of the health service. Waiting lists are a major problem. Obviously they are worse in some areas than in others. The reasons for them have been rehearsed both in this House and in another place on many occasions. However, in this country we treat 40 million or perhaps 50 million people per year under the National Health Service, as well as treating visitors from abroad. It is worth drawing attention to that fact.
I have mentioned this before, but I think that it is worth repeating. Whenever I go abroad I try to visit at least one hospital. There are two countries with which I have a particular affinity: one is New Zealand and the other is Finland. Finland has one of the finest hospital services in the world. I visited one of its hospitals north of the Arctic Circle with a parliamentary delegation. On that occasion I asked the general manager, "You don't have waiting lists here, do you?". He replied, "We have a waiting list of 18 months for hernia operations". That was because they had a paper mill half a mile away. Therefore, I believe that it is worth mentioning that waiting lists are not confined to this country, where we treat about 50 million people a year. Even in the Scandinavian countries, with populations of only 3 million to 4 million people, and in New Zealand and Australia, with populations of about 3 million and 15 million respectively, the problem of waiting lists exists. Moreover, there is also a shortage of nurses in those countries. That is partly due to pay and partly due to the unsocial hours which nurses have to work.
I turn now to consider the second part of the Motion tabled in the name of the noble Lord, Lord Ennals. It is the part upon which I believe we should concentrate. It is easy to be critical of any government, but the question is how the Government will solve such problems. The simple fact is that in any health service, whether private or public, one needs nurses and doctors. Moreover, in many cases patients need treatment for 24 hours of every day. If someone is knocked down by a car at three o'clock on Christmas day he cannot be left in the road. Such a person would need treatment. These are simple facts, but I believe that they should be examined in debating the Motion.
I turn now to consider management. My noble friend Lord McColl made a speech drawing from his considerable experience in the health service as a distinguished surgeon. He emphasised the fact that nurses make good managers. That is true, but there is a grave tendency to compel nurses to undertake too many managerial duties. I am sure that many of your Lordships and Members of the other place who visit hospitals and talk to nurses and doctors and those in the ancillary professions often hear about such problems. They invariably say that they spend far too

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much time on courses and on management instead of being able to treat patients. I can give the example of a friend of the family who is a therapist. She is now retired, but we knew her both professionally and socially. Her cri de coeur 12 to 15 years ago was, "If only I could get on with my job of treating patients and not have to go to committee meetings".
I am not for one moment saying that managers are unnecessary. They are indeed necessary. However, there is a danger in our health service that we have too much management and too little therapeutic treatment in some places. In some respects, that is due to the Salmon report, but it is a problem which needs to be further considered.
In conclusion, I should like to express my faith, that of my family and of all those who have been treated by it in t the National Health Service. I believe that the plea which must come from this House and elsewhere is that more time should be given to nurses and doctors to allow them to treat patients and rather less time to management.
5.26 p.m.
Lord Richardson: My Lords, I am greatly indebted to the noble Lord, Lord Ennals, for the second part of his Motion which calls for us to consider the "long-term objectives" of the National Health Service. I wish to make only one point, but it is a point which will go right into the mists of the future and it is something which will affect the health service in its objectives and achievements so long as any medical service exists. It is concerned with the attitude of doctors to patients. My point was touched upon during the debate by the noble Lord, Lord Rea, who asked the Minister about equal pay for equal work for doctors throughout the hospital service. Of course the medical profession rejoices in the fact that it has been agreed that junior doctors should have their terms and conditions of employment negotiated centrally. I want to make the case as strongly as I am capable of doing for extending that agreement to all doctors in the health service.
With the leave of the House I should like to quote from a statement by the BMA. It is not in any way a unique statement but it expresses clearly the profession's view:
"The NHS must not undermine the morale of the team which delivers health care to the patients. The NHS is dependent upon the dedication and good will of its staff".
Quite frankly, the most important quality of its staff must be the dedication of those who are leading and those who are making the ultimate decisions. The morale of the team depends upon those people. They are the people who deliver the health care to the patients. Therefore, it is upon morale and delivery, the team and the patients that I wish to concentrate.
Why do I consider myself justified to take on this task which is really very fundamental? It is my antiquity. With the exception of the noble Lord, Lord Porritt, I am the only doctor in the House who can claim to have practised medicine before the war, not only in a great London teaching hospital across the river but also in an LCC hospital—a hospital with different attitudes and different privileges.
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I can also claim to be one of those who, after the war, had to compete to obtain a consultant's post in one of our hospitals. Consultants' posts were rightly frozen throughout the war. I know the disappoint-ments and anxieties felt by people about the type of hospital in which they would obtain a job. There was a sense of, "Yes, it's a nice place, but it is not quite the same". I know from working for 40 years plus -doctors are bandying that figure about this afternoon —in both kinds of hospitals the feeling that, "It's all very well for you up there".
I have watched with the greatest possible pleasure the up-and-coming members of staff of the non-teaching, non-privileged, non-specialist hospitals. They have become members of committees and inquiries both nationally and at the level of the royal colleges. As that has occurred, I have noticed a great diminution in the sense of being only second best. That was graphically illustrated in a Committee Room upstairs in the House by the secretary of the BMA when discussions on the NHS Bill were being undertaken last year. The man looked at the noble Lord, Lord Walton of Detchant, and myself with a wicked grin. He said, "I should like the Committee to understand that the difference between teaching hospital consultants and those at the periphery are diminishing very rapidly indeed". His look may have been wicked—he was laughing at us—but we were both delighted that that was so.
I feel strongly about the matter, as your Lordships may have guessed. If the Government would agree to establish equality of pay for equality of work, they would be in no way damaging the ideas underlying the trusts—the market economy and so on. They would receive a much better service from the consultants and the hospital staff if there were no sense of there being two types of hospital and two types of pay. It is pay upon which I concentrate. If the Government would agree to that idea they would acquire the continuation of an extremely valuable contribution to the management of patients. It is only human of us, if we belong to an elite corps, to feel a satisfaction in it and to give that extra bit of drive, service, consideration and perhaps good manners that make all the difference to patients when they are being dealt with in their times of stress.
In talking about those important, if somewhat subtle, ways of helping patients by keeping a balance of privilege, I am following the thinking of the right reverend Prelate the Bishop of Exeter who talked about the importance of excellence and service.
5.35 p.m.
The Earl of Longford: My Lords, if I were taken suddenly ill, something which could happen to the youngest of us—among whom I am not included—I would have a wide range of options open to me. My noble friends will forgive me if I plump for the senior and supremely qualified physician, the noble Lord, Lord Richardson. Should we need nursing attention it could be provided by the noble Baroness, Lady Cox. An operation might even be called for, and I feel sure

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that the noble Lord, Lord McColl, would put aside party preconceptions and handle me dispassionately. This is the right place to be taken ill.
Lord Ennals: I was once an ambulance driver.
The Earl of Longford: That is also helpful. There may be greater co-operation between my noble friend Lord Ennals and the noble Lord, Lord McColl, than was evident earlier.
I am sure that no one will disagree if I say there is a close connection between the efficiency of the NHS and what is called community care. In my eyes, the phrase "community care" has been a disaster. I do not know who thought it up, but in the end he has done more harm than good. It is full of ambiguities. The phrase is of course a noble aspiration, but it has misled many people and produced poor results.
I shall take the local situation in East Sussex where Hellingly Hospital is being closed. It once had 1,400 patients. There are now 100. There soon will be no one there. What will happen to the patients when the hospital closes? A patient might be transferred to a small unit, which may be the best answer. Day care might be provided. The local authority might take over responsibility for the patient, or it might not. The patient might be left in his home in a village. In many villages he might be well looked after by his family and friends. All those meanings are attached to the phrase, and a phrase that has a great many meanings is usually misleading.
I shall not dwell upon the deficiencies of community care. They have often been discussed. Whatever has been written down on paper, most of us know that the result has been disappointing. I shall talk for a few minutes about what should be done for those who have been in mental hospitals. Several years ago I was chairman of a strong committee which included several Members of the House. It produced a report on mental aftercare which was financed by the Richmond Fellowship. As your Lordships may know, the Richmond Fellowship was inspired by that wonderful woman, Elly Jansen, who, with my friend Peter Thomson, has done more than any lay person for mental health in this country. Now, 7½ years later I turn for professional guidance to the great Professor Wing of Maudsley Hospital who wrote that report and who is well known to all the doctors present.
I shall use most of my time putting one idea before the House. It is a matter of which I have given some notice—not much—to the Minister. Professor Wing had a great many things to say and many valuable suggestions to make. He considers that we should not draw a sharp line between care in the hospitals and community care. He feels that we go wrong if we do so. Part of his message, which he would have to expand for it to be appreciated, is that many of the sites of the hospitals which are being closed should be used for sheltered communities. That is just one aspect of what he has to say, but it is all part of the doctrine of not bringing about a sharp separation between hospitals and so-called community care. It is best if I say no more because I wish to lay that point of supreme importance to me before the Minister.
5.40 p.m.
Baroness Cox: My Lords, I also thank the noble Lord, Lord Ennals, for providing us with another opportunity to discuss this important subject. I shall focus on two areas: first, the so-called Cinderella areas, where especially vulnerable people tend to suffer neglect or to fall through the interstices of care; and, secondly, issues concerning my own profession of nursing.
I begin by congratulating my right honourable friend the Secretary of State on three specific initiatives since he assumed office. First, as a member of the council of management of St. Christopher's Hospice, I warmly welcome the announcement of extra funding of £17 million for hospices. Secondly, as a nurse I welcome the positive signal my right honourable friend sent to the nursing profession when he invited the chief nursing officer to join the NHS policy board. This recognition of the contribution of nursing expertise to policy making has been greatly appreciated. Thirdly, I naturally welcome the recent announcement of salary increases, although I also regret that they are to be phased, significantly reducing their value.
My first area of concern is the relationship between health care and social care, with particular reference to people with mental handicap and/or mental illness. Here I echo themes which have already been raised by the noble Earl, Lord Longford, and also my noble friend Lord Pearson.
I am a patron of Rescare, the National Society for Mentally Handicapped People in Residential Care. This excellent organisation has expressed grave fears over the confusion in current policy about the sometimes spurious distinction between social care and health care. It has expressed alarm over the statement in the publication Caring for People, paragraph 2.14:
"it has become increasingly recognised that the needs of the most [mentally] handicapped people … are largely for social, rather than health, care".
Rescare points out that for many people with mental handicap, social and health needs are linked and both must be satisfied by every agency providing care. Mentally handicapped people often suffer from some psychiatric disorder or neurological dysfunction such as epilepsy. Rescare is worried that some mentally handicapped people in community residential care establishments have been denied access to specialised practitioners through a misplaced adherence at official level to inappropriate assumptions about so-called normalisation.
I have always feared that people in community care, where the emphasis is to be on social care rather than health care, might suffer through inadequate recognition of their clinical needs. These fears are echoed by Rescare which is alarmed by health authority strategic plans to reduce residential provision for people with mental handicap in the NHS by something like 80 per cent. of the present level. It will be with management-led hospital rundown and without satisfactory alternative residential or day services. For example, the MRC's study of the effects of the closure of Darenth Park Hospital found that

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one-third of the residents who had moved out enjoyed a better quality of life, but two-thirds did not. Indeed, one-third were worse off.
The research indicated that living units in a campus with large grounds or sheltered villages could offer more freedom and a more interesting life for some mentally handicapped people than could houses in ordinary streets. This is consistent with Professor Segal's book The Place of Special Villages which makes a cogent case for village-like communities, perhaps on upgraded hospital sites, as the most appropriate milieu for many people with mental handicap.
I had the privilege recently of speaking to a Rescare lobby. I was deeply moved by the difficulties experienced by many carers who give so unstintingly in looking after relatives with mental handicaps. Many of these carers are under great stress, they are getting older and need help with respite. Can my noble friend reassure these dedicated people that their experience will be taken into account in future policy making?
Similar concerns have been expressed by people involved with the mentally ill. For example, the National Schizophrenia Fellowship is alarmed at the catastrophic reduction in English mental hospital beds by over 25,000 since 1988–89, compared with an increase of only 6,000 places in day centres and registered homes for the mentally ill over the previous 10 years. Recent figures suggest that the situation is deteriorating even further. The National Schizophrenia Fellowship's advisory service has experienced a fivefold increase in serious cases. Between 7th and 31st January this year it received 49 inquiries from relatives of people whose behaviour was causing grave alarm. They were no longer able to manage effectively in the community. The cases had not been resolved by GPs, social services or any of the community care providers. Desperate relatives were left without any help. The National Schizophrenia Fellowship suggests that this is just the tip of the iceberg of need.
Thus, it is not surprising that there are reports of increasing numbers of patients suffering from schizophrenia who are swelling the ranks of the homeless. About one-third of homeless people suffer from the problem of mental illness.
My noble friend the Minister reminded us on 17th January that the Government had introduced the care programme approach for mentally ill people underpinned by the mental illness specific grant, to operate from 1st April. I heartily welcome this. However, the Government's circular indicates that hospital care should be provided for patients whose needs cannot be met in the community. Will this be possible with the closure of 25,650 hospital beds? Can my noble friend give the reassurance that they will be re-opened or replaced as necessary?
I also hope that the delay in implementing the law relating to community care may be used constructive-ly, perhaps for some radical reassessments. For example, can safeguards be built into NHS and community care policy to ensure that people with clinical needs receive adequate health assessment,
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health monitoring and health care from health professionals? Otherwise, many of the mentally handicapped and mentally ill, as well as the frail elderly, who are least able to articulate their needs or to assert themselves, will suffer.
I turn briefly to two issues concerning nursing. First, current proposals to give nurses specified prescribing rights have already been mentioned by the noble Baroness, Lady McFarlane. The primary concern here is the wellbeing of patients such as the elderly and chronically disabled; those with a mental illness; terminally ill patients and people with conditions such as diabetes. All would benefit from the quick, flexible response to their condition which the nurse, with regular and intimate contact, can provide. Others who would benefit include homeless people in bed and breakfast accommodation who frequently change addresses. Often health visitors are their only contact with the primary health care team. I therefore warmly welcome recent ministerial statements of support for the principle of nurse prescribing. I hope that legislation will soon be forthcoming.
Finally, I briefly refer to the preparation of nursing staff for care of casualties from the Gulf. We all pray that these will be few. However, it is crucial to be prepared for a scenario of unknown numbers of casualties. Meeting colleagues in different parts of the country, I find variations in perceptions of the extent to which nursing staff are being prepared to care for conditions with which they may be unfamiliar and which could occur in large numbers.
Can my noble friend reassure your Lordships that every part of the country has made comprehensive preparation for adequate numbers of nursing staff to work in highly specialised areas such as intensive care, burns units and facio-maxillary surgery? Can she say whether there are adequate numbers of well prepared reserve nurses who can care for NHS patients, if regular NHS nurses are seconded to care for war casualties? This must be of particular anxiety, given the current shortages of specialist nurses in some of these areas. I know that staff in colleges of nursing are keen to update and enhance the clinical skills of specialist nurses in practice and also potential nurse returners. They are anxious to do this before the casualties arrive, if they are given the green light to do so.
That is a specific anxiety, but one which illustrates the general point that health needs will continue to increase as we move further into the 1990s. The NHS must expand its provisions to meet these needs with the compassion and effectiveness that have earned it the respect and affection of people throughout the country. I hope that we shall finish this debate reassured by my noble friend that the NHS is indeed safe in this Government's hands.
5.50 p.m
Earl Baldwin of Bewdley: My Lords, I want to say a few words about complementary medicine. The leader writer of The Times wrote on 1st November last year,

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"The extension of complementary medicine…to NHS patients is a wholly desirable aim".
In common with three-quarters of the population I share that opinion. I speak as the chairman of the recently formed British Acupuncture Accreditation Board, and as a patron of the Research Council for Complementary Medicine. But, most importantly, I speak as a patient who has experienced a wide spectrum of complementary therapies and, I must add, has been lucky enough to be able to afford them. Many cannot afford those therapies.
Times have changed. It is no longer necessary to make a detailed case every time one speaks of the benefits of complementary medicine, and for this one must be thankful. The debate in your Lordships' House on 9th May last year, and to an even greater extent the amendment at the Report stage of the National Health Service and Community Care Bill on 12th June which so nearly succeeded in getting some complementary therapies on the NHS, showed the extent of the support that now exists for osteopathy, chiropractic, homoeopathy, acupuncture and the rest. I need only summarise the reasons why these therapies should be generally available.
In reverse order of importance these are, first, cheapness. All the surveys that I am aware of, including the Medical Research Council-funded study last year on the benefits of chiropractic, show that there are great savings to be made. The second reason for making the therapies more generally available is safety. Modern Western medical treatment hospitalises upwards of 10 per cent. of the total in-patient population. Natural medicine is not in that league. The third and most important reason is effectiveness. This is where in the past there have been most differences of opinion.
Research is crucial here. It is most encouraging to see the Labour Party commit itself to this, among other measures, in promoting complementary medi-cine in its document A Fresh Start for Health. This document was referred to by the noble Lord, Lord Ennals, when he introduced this debate, for which we must all thank him.
But I think one has to beware of falling into what I might call a medico-scientific trap over research. Good research does not come cheaply or quickly. At present there is little money in the complementary medical world and not a lot of research expertise. Furthermore there is a need for new methodologies to take account of an often very different approach and philosophy. Meanwhile, out there, there are suffering patients. So, what do you do? It seems to me there is a choice of two approaches. Either you sit on your hands and say, "There is no evidence to show that this treatment works"; in this way you maintain your academic respectability, and the patient, to take the case of chiropractic which I referred to a moment ago, waits 95 years until the case is made to everyone's satisfaction; or —and this is how we take most of the important decisions in our lives—you accept that the definitive evidence may be unobtainable at present and decide on other criteria.
Recently a medical researcher conducted a survey at a national GP trainee conference to discover what
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kind of evidence doctors considered important before accepting an alternative technique as one that was useful for their patients. The least important criteria were rated as laboratory evidence and a theoretical scientific rationale: both of these came lower than the views of colleagues or even patients. Most important was rated the organised audit of clinical experience. This casts an interesting light on the types of research that may be appropriate for complementary therapies, and on doctors' willingness to make use of them in everyday practice. It is already becoming clear that probably a majority of GPs are willing to work with other therapists within the National Health Service.
I see two ways forward for complementary medicine under the NHS. The first is the gradual approach exemplified by the current high-level discussions being conducted with the osteopathic profession which may lead to state regulation and eventual incorporation into the National Health Service. The problem here is the slowness of the process. While chiropractic may be poised to follow this route, almost all the other therapies, for historical and organisational reasons, are some years away from this kind of recognition.
This is why, from a consumer's point of view, I favour a parallel approach which would allow doctors now to refer to a local acupuncturist, say, if this was felt appropriate, or to incorporate a reflexologist in a group practice. Patients could then get the treatment they need when they need it, under the continuing care of the GP who is the best judge of the local situation. The Labour Party document talks of supporting pilot projects of this nature, and I believe this is an initiative which should be welcomed all round. There should be no legislative difficulties about it.
The noble Baroness the Minister has appeared to argue in past debates that patients are not too badly off because doctors are themselves entitled to give complementary treatments. In fact this is something of a worry, as can be seen from surveys showing doctors giving hypnotherapy and acupuncture with no training whatever. But even where they are properly qualified, their numbers are much too small to make any real impact. We need, as I have argued before, all the expert help we can get in making health for all a realistic goal.
I might add that it is time that some of the remaining misconceptions about complementary medicine were laid to rest. I think we are probably past the stage where a former government minister could cause astonishment by declaring that he knew that complementary medicine was fine for conditions above the waist (I think it was that way round) but was no good below. But I still find people who believe that complementary approaches are good for prevention, and for psychosomatic complaints, but not much else. I would go so far as to say that they offer the most exciting prospects in the fields of cancer and AIDS, as the noble Lord, Lord Colwyn, pointed out on Tuesday 5th February at col. 1130 of Hansard. The noble Lord is not yet in his place. These approaches are really not that difficult to find out about and follow up, if there is a real will to do so. The

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trouble in the past has been a failure truly to engage with alternative methods, to the real detriment of patient care. You do not learn the full picture by sitting in a medical library and searching the literature.
Other governments take a more positive stance. I could refer to many examples, but I am particularly struck by the moves that are afoot in Holland to sweep away the monopoly on the practice of medicine and promote a plurality of health care so that in principle all can practise, but under certain government restrictions and guarantees. I shall quote from a document that I have recently seen, which states:
"the patient of 1990 should be deemed mature enough to be able to choose his own treatment".
I think this motto would serve us well also. I welcome the Labour Party's stand on complementary medicine. I look forward to the progressive accreditation and eventual registration of the various therapies, but would press at the same time for a way to be found to make use of some of them in appropriate cases now, along the lines I have indicated. I believe this to be a valuable and acceptable objective for the health service for only in this way will patients get the service they need and are asking for.
5.58 p.m.
Baroness Faithfull: My Lords, I join with other noble Lords in thanking the noble Lord, Lord Ennals, for initiating this debate. The debate gives me the opportunity to speak on the need for a comprehensive, integrated child health service within the provisions of the National Health Service and Community Care Act. I pay tribute to the Secretary of State for Health and to his helpful and co-operative civil servants—I am particularly grateful to one civil servant who shall be nameless—for their help as regards providing such a service for children.
The Court Report was published way back in 1975. That report recommended an integrated service for children. Little was done from 1975 until the latest legislation was passed. However, during the passage of the then National Health Service and Community Care Bill in 1990 there was considerable worry among child health and social work organisations that the recommended reforms might hinder progress towards establishing a comprehensive, integrated child health service.
Since then, however, the Department of Health has held wide-ranging consultations and has exchanged views with interested organisations, all of which considered that they had received a sympathetic hearing and a positive response from the department and from the civil servants involved.
The exchange of views and the consultations between the ministry and the relevant organisations have made for better understanding and led to a good relationship between those within the ministry and those outside it. The document The Welfare of Children in Hospitals has been widely welcomed by the health organisations consulted.
We now await the publication of guidance covering community child health services. Here again the
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department has sought to consult with and seek the views of the relevant organisations. Can my noble friend the Minister say when we can expect publication of the document on community child health services?
During the consideration of the welfare of children in the community the department sought the views of child health organisations. In order to show their appreciation and to assist with the long-term objectives and the implementation of the comprehend-sive integrated child health service the National Children's Bureau and the National Association of Health Authorities and Trusts will shortly hold a day conference entitled "Acting Together". The effects of the National Health Service and Community Care Act will be considered in conjunction with the Children Act 1989. The sympathetic partnership between the Department of Health and those in the child health and social services concerned has resulted in policies which are acceptable to all those who desire to help children within the health service.
I join the noble Lord, Lord Ennals, in congratulating my right honourable friend Mr. William Waldegrave on his appointment as Secretary of State for Health. I also congratulate the right reverend Prelate the Bishop of Exeter who, as the noble Lord, Lord Richardson, said, has enjoined us to call for excellence of service in our National Health Service.
6.2 p.m.
Lord Pitt of Hampstead: My Lords, I too should like to thank my noble friend Lord Ennals for giving us this opportunity to discuss the National Health Service. I was disappointed in the noble, Lord, Lord McColl. I found his complacency disturbing. The National Health Service is presently in anything but a healthy state.
I am very glad that the noble Lord, Lord Winstanley, brought the question of waiting times to the attention of your Lordships. Waiting times, particularly for outpatient appointments, is of much greater importance than the length of waiting lists. I received a letter from a colleague at St. Thomas' Hospital which illustrates the present situation. It states:
"Dear Doctor,
Owing to the cuts imposed upon us by Administration to keep within budget we are obliged to reduce our out patient workload by 10%. Regrettably this means reducing the number of new patient appointments. As a consequence the wait for an appointment will now increase beyond three months. After discussion with my colleagues we thought the most efficient process would be to return the referral letter and ask you to re-refer the patient if necessary. In doing so further delay will be avoided if you can include the results of all relevant blood tests and X-rays and where the films have been performed in other hospitals arrange for them to be sent to us in advance of the appointment. Medically urgent problems will need a telephone call to the Registrar on call.
I am very sorry indeed to have to enact this policy and hope that it will not lead to any lasting breakdown in what has been a very good working relationship".
The state of the health service is the result of chronic underfunding. That has been exacerbated by the need for hospitals to clear deficits in order to enable the new arrangements to start on 1st April. The underfunding is the consequence of insufficient

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allocation for demographic changes and technological advance and the use of an allowance for inflation which is lower than the actual rate of inflation. It is also due to paying only a portion of pay awards, leaving the rest to be met by health authorities out of savings. Over the years those factors have accumulat-ed, leading to considerable underfunding. The consequences are there for all to see.
In looking at the state of the National Health Service one must also look at some of the underlying causes of disease. I am very pleased that my noble friend Lord Ennals raised the question of deprivation because deprivation is an important cause of ill health. The correlation between deprivation and health has been found in many studies to be very strong. There are physical, physiological and psychological mechanisms by which deprivation can affect health. Foremost among the areas of deprivation that affect health are damp and overcrowded housing and homelessness. Both are prominent in present society. So is low income. They require urgent action.
The Government have decided to deal with the problems of the health service by introducing a form of internal market, with health authorities purchasing services from hospitals and general practitioners being both providers of services and purchasers of services from hospitals. The market throws up losers as well as winners. There is the possibility that among the losers will be some of the centres of excellence, the London teaching hospitals. That could be a consequence of their location and capital charges.
Moreover, the insistence on separate pay awards for hospital trusts could result in the best consultants being confined to certain hospitals instead of there being an even spread of consultants throughout the country, which is one of the successes of the present National Health Service. I am glad that both the noble Lord, Lord Butterfield, and the noble Lord, Lord Richardson, dealt with that point. The Government have agreed that national pay awards should be retained for junior doctors. They should also be retained for consultants.
The National Health Service should continue to be free at the time of use and should be adequately funded. Pay awards should be met in full and full allowance should be made for inflation. Adequate allowance should be made for demographic changes and technological advances and innovation. I agree that one cannot always be sure of what percentage should be added but some allowance must be made every year. There should be a full range of services within reasonable geographical reach of all patients. While it is obvious that treatment should be cost-effective, financial considerations should not be used to override responsible clinical decisions. Adequate resources should be provided for community services.
The proposals in the Labour Party document A Fresh Start for Health meets those requirements. I join the noble Lord, Lord Ennals, in inviting your Lordships to read and study that document. I hope that the time is not far off when we shall be able to put those proposals into effect.
6.10 p.m.
Baroness Cumberlege: My Lords, I should like to start by thanking the noble Lord, Lord Ennals, for introducing the debate and to say that, although I cannot always agree with everything he says, I recognise and respect a lifelong commitment to the National Health Service.
This evening I want to concentrate my remarks on that part of the Motion which refers to the long-term objectives of the NHS. My job as a regional chairman is primarily to understand and implement the objectives, and I am happy that the nub of the reforms coincides with my philosophy; that is, the NHS has to move away from the ethic of "do as we say", which is authoritarian and paternalistic, to the ethic of fulfilling people's needs. That is a subtle shift of power from those who at the moment provide the service and work in the NHS to those who use it. All the reforms come back to that objective.
Seven million people in this country buy private health care. I think that is a measure of the NHS's failure to be user-friendly. I want to be part of a successful organisation, and I welcome the changes and the challenges to make it more successful. I want to cherish the ethic of the NHS, which I think is the best in the world, but remove the smug assumption that the services we provide are the best in the world. There is some room for improvement.
In the last month a report has been published by Jane Griffin which gives a good illustration of the need for change. She points out that 70 per cent. of terminally ill cancer patients who die in hospital had expressed the desire to die at home. We failed them. That is not just sad, but nearly 10 per cent. of NHS beds are filled by people who do not want to be there. We fail the user and fill the beds that others need. I believe we have to be holistic in our attitude to people when they are ill, as was so ably presented this evening by the right reverend Prelate the Bishop of Exeter in his approach.
As we jealously guard clinical freedom—or "the doctor knows best" approach—there is a danger that we may do what is medically right for the patient but lose sight of the person and what he or she wants. As far as clinical freedom is concerned, I share the view of the noble Lord, Lord Ennals, that we do not want managers making clinical decisions and deciding who on waiting lists will be treated. I am sure that he will be pleased to know that on the 29th January the chief executive of the NHS sent a letter to all regional managers saying:
"The principle must be that admission to a waiting list is a matter of clinical judgment".
He went on to applaud the work being done by the Royal College of Surgeons in drawing up protocols to help clinicians decide who goes on to waiting lists and who does not.
The noble Lord, Lord Winstanley, gave a superb description of the role of GPs and the strength of primary care. I think it absolutely right that the reforms start with the GP. In future, people can choose and change their GPs with much greater ease and can do so based upon information which practices give about themselves. I think that is user-friendly.

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Only the most perverse of us want to be ill, so it is right that there should be incentives for GPs to keep people fit by regular check-ups. People want a health service, not just an illness service. That is a key part of the reforms which is wholly commendable. When health promotion fails and we are ill we want our treatment to be successful.
Another key to the reforms is the concept of medical audit whereby consultants review their performance. That is not just right for users but is an efficient use of the health service, because readmissions and ineffective treatments tie up beds and waste resources. Surely, none of us wants that.
It is, clearly demonstrable that some hospitals can provide treatment at lower cost than others, and there is no correlation between costs and successful treatment. No other organisation has such a dearth of financial information. When we try to improve that sometimes it is portrayed as an increase in bureaucracy, but if we have poor management it prevents the NHS from accommodating people's changing needs, because we do not know the costs and cannot work them out.
I agree with the noble Baroness, Lady McFarlane of Llandaff, who said that choices of resources must be explicit. There is also a fear that if the NHS gets proper financial control it will radically alter the service, and in an organisation which embraces technological advance but eschews changes in provision people are deeply suspicious of change.
In my experience, fudge and muddle lower morale; waste and inefficiency are the enemies of a quality service; and poor use of resources means fewer people are treated and cared for. The NHS needs good quality management. However, I do not believe that governments are naturally good managers; rather they should be shrewd purchasers of services. The concept of trust status for hospitals is absolutely right and makes that possible, allowing the Government through district health authorities to buy the best services for people. Trusts run by local people can develop highly efficient and effective hospital services.
We have been through many of these exercises with other state-run organisations, and we know how to do it. We also know that the state is an inefficient provider of services and the NHS, which employs 1 million people, is almost bound to be extraordinarily difficult to manage other than locally. I think the act of breaking it down into smaller units having a great deal of autonomy is entirely in the interests of users.
With the deepest respect to the noble Lord, Lord Pitt, I do not share his concerns, because I believe that centres of excellence will not diminish; if they are excellent they will prosper. That is how an internal market works, because money follows patients.
The reforms provide greater flexibility, which is important, given that modern technology can provide treatment to many people on a day case basis, or even as out-patients. As I go round hospitals I know that is a very popular thing to do. The question most frequently asked in hospital is: "When can I go
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home?" People instinctively know they recover quicker at home, and there is plenty of research to back up that instinct.
Finally, everyone of worth is galvanised by challenge. When going around my region I see those hospitals which are going for trust status or GP practices which are anxious to become budget-holders. They have a new air of exhilaration and self-confidence; they want to throw away the crutches of bureaucracy and do the job their way. The empire that I chair is tremendously efficient, but for me the satisfaction will come when all the hospital and community units I cherish are strong and confident enough to govern themselves, and that will be when their ethic is to listen to the people and give them the health service they want. The reforms will enable that to happen.
6.20 p.m.
Baroness Masham of Ilton: My Lords, I should like to add my thanks to the noble Lord, Lord Ennals, for introducing the debate. I must first declare an interest, as I serve as a member on the North Yorkshire Family Health Service Authority (FHSA). I also live in London and see the stress and pressure on the inner London teaching hospitals. There is a tremendous diversity of needs. In the two places where I live I see at first hand how different the requirements are and I shall try to illustrate some of them to your Lordships.
From the inside I see many people who are now trying to make the reorganisation of the National Health Service work. There has been a monumental upheaval. New committee members have to get to know each other and non-executive members have to get to know executive members. I see some suspicion by GPs of the Family Health Service Authority members. There is no doubt that people have to learn to know and trust each other. To make the National Health Service work, people need people. They need to work in co-operation and not to be in conflict.
I should like to bring to the fore a few problems that women encounter. Recently a patient who had been in a gynaecological ward in a Stevenage hospital told me that the patients were not given any information and were very unhappy. She said that it had been a wholly unpleasant experience. People who come into hospital are often keyed up. They need assurance and a little TLC. That does not cost money. In fact, it can be very cost-effective as patients relax and co-operate.
In January I had a few days in the Westminster Hospital in just such a situation. The junior members of the staff were quite excellent but the ward sister did not bother to speak to any of the patients. This was commented upon by many of the patients in the ward, two of whom had been nurses. I asked a student nurse about the sister's attitude and was told, "She does not bother to speak to patients. She is only interested in administration. And, anyway, she comes from the Charing Cross Hospital". That appeared to explain a lot. But it seemed a pity that a ward sister did not set a better example to her students. I hope that one of the

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long-term objectives of the reorganisation will be to show helpful and kind attitudes towards all patients. That needs to be incorporated in nurses' training.
On Thursday 31st January I read in the Independent the headline:
"National Health Service cuts threaten breast screening scheme".
It was reported that breast cancer screening for women over 50 is threatened by financial cuts despite a government report which says that it will prevent one in four deaths from the disease. Will the Minister please give a progress report on that situation?
Also, as president of the North East Kidney Association, I ask the Minister, what is the future hope that EPO (erythropoietin) will be available when needed? I am told that EPO represents an important advance in the treatment of anaemia, which is a common side effect of chronic kidney failure. It also vastly improves the quality of life. A young doctor who is a user of EPO considers that it is of vital importance to many patients.
I should like to ask the Minister how different health authorities throughout the country are tackling the problem of hospital security now and in the future. Hospitals used to be places held in high esteem by the public at large. Recently there have been some horrifying incidents of rape and even murder within what should be a protected environment. Tunstall Telecom has produced a very interesting call system, and when a woman was raped at St. James's University Hospital in Leeds I asked myself whether the culprit might have been caught if the nurse who was the first person on the spot had been able to press a button in order to summon help. I am sure that the Minister would be interested to see that system. Members of staff could have in their pocket or on their person a button which, activating a call unit, immediately sounds an alarm at the central control panel and shows the zone in which the incident is taking place. Each at-risk area needs a good system for the protection of staff and patients. Well trained security staff will have to be available. It is at patient level that one needs motivated, well trained staff.
In Britain there are many general practices in rural areas. As we sit in this splendid Chamber in the heart of London it must not be forgotten that the National Health Service covers all corners of the country. I live on the edge of the Yorkshire Dales. There are many other rural areas in England, Scotland and Wales, such as Northumberland, North Wales, Lincolnshire and so on. Many rural GPs feel that they are losing out on the new contract. Many of them already have the entire local population on their practice list. They have no chance to attract any more patients. In isolated communities patients have no choice of doctor. A GP working single-handed has to carry the whole burden of overheads. The same kind of staff must be employed and the cost of a locum is very high. The additional problems of a doctor who serves a small isolated population need to be understood. The large mileage covered in rural areas by staff and patients is time-consuming and expensive. It needs to be taken into consideration.
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It is important that rural communities have good primary health care, as the nearest district general hospital may be 25 miles away. I feel that FHSAs can be of help in advising doctors and assisting with the problems of rural isolation. The difficulties encountered in travelling to clinics and outpatient appointments give rise to a need for a variety of transport schemes. Public transport is almost non-existent in certain areas.
I recently paid an interesting visit to Brent and Harrow FHSA. It was very different from North Yorkshire. Our group visited a GP practice which had been told that it would close if it did not make much-needed improvements. I could see what had been done, including the installation of a lavatory for disabled people. We were made very welcome by the staff. I believe that, if there is firmness by FHSAs about good standards and help and advice are given, patients will see improvements, though there is a great deal to do.
Nothing is more important than a healthy health service. When there is too much stress on staff and pressure for beds, the system breaks down. There are many excellent consultants who are always present and available when needed; but there are others who could help their National Health Service patients and junior staff more than they do at present. Patients will never respond well if they are treated like groceries being checked off through a conveyor belt system. The personal dignity of the individual will always be important.
6.28 p.m.
Lord Colwyn: My Lords, I must apologise to the noble Lord, Lord Ennals, for my late arrival in the Chamber this evening. I look forward to reading in Hansard tomorrow his speech and others that I missed, in particular the speech of the noble Lord, Lord Winstanley, who has perhaps been converted to complementary medicine, and that of the noble Earl, Lord Baldwin, who will have made many of the points that I would wish to be noted by the House.
With the noble Lord, Lord Ennals, I am joint president of the Parliamentary Group on Alternative and Complementary Medicine, but my noble friend the Minister will be glad to hear that it is not my intention to make yet another speech on that subject this evening. She is well aware of my views and concern that successive governments continue to pour more and more finance into a health service that will never be sufficiently funded and could be considerably helped by recognition and use of the therapies.
Those of us who support the integration of the complementary therapies with the health service will continue to remind the Minister that in June last year an amendment to the National Health Service and Community Care Bill, which would have permitted fund-holding practices to make use of complementary practitioners, received support from all sides of the House and was defeated on Division by only four votes. I am sure that my noble friend will have had

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brought to her attention this afternoon the section on complementary medicine in the Labour Party document A fresh start for health.
I support all that it states on increasing choice for patients and on initiatives to enable the eventual integration of the complementary therapies. I hope that I shall eventually be able to persuade my own party that that is the way forward.
The debate gives me the opportunity to discuss one of the least glamorous professions in the NHS, but one very close to my heart. Dentists are not always popular with the public! People do not die from dental disease. They often attend the dentist only when they are in pain. Consequently the public associate the dentist with pain, and not the relief from it or the prevention of its causes.
Nevertheless, dentistry is vitally important to the health of the nation. Anyone who has suffered from problems with their oral health can testify to the deleterious effect of such problems on their quality of life. Indeed, the maintenance of one's teeth and gums in healthy condition is essential to overall health. Dentists within the NHS have contributed significantly to the improved dental health of the nation. For example, in 1968 the proportion of adults with no natural teeth was 37 per cent. Today it is 20 per cent. Since the early 1960s, dental caries in children has been reduced by 80 per cent.
Following changes in patterns of dental disease, dentists have oriented their practices towards giving more preventive care. However, for general dental practitioners this change in emphasis was not rewarded under their contract with the NHS. As a consequence, the British Dental Association renegotiated that contract with the Government during 1989 and 1990 to provide a better service for patients and to reward dentists for preventive care. The new contract has been accepted by the Consumers' Association among others as a good deal for patients. Many dentists accept the principles of the new contract but they are worried.
General dental practitioners occupy a unique position within the NHS. They are "independent contractors"—self-employed dentists who own, finance and manage their practices as well as providing clinical services. They are paid a range of fees for different types of service out of which they cover practice costs, premises costs, staff wages, and "prescribing" costs. On average about 60 per cent. of a dentist's gross fee turnover from the NHS is needed to cover practice costs and the balance is what the dentist is paid for his/her own contribution to the practice and the care of patients. Dentists are suffering from e same pressures faced by any other small business in this difficult economic climate.
At the same time the need to contain public spending has resulted in a severe pay decline for dentists relative to other professions. They have less money with which to manage and develop their practices. It has not been surprising that some have questioned the wisdom of remaining within the NHS when fees obtained from private patients have been
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shown from a BDA survey to be much higher in the North West and the London area. Nevertheless, dentists have shown a high degree of commitment to the NHS in implementing a new contract which has resulted in increased administrative and management burdens.
Another survey carried out by the BDA last October found that over 90 per cent. of dentists were working with the new contracts. The recognition recently by the Doctors' and Dentists' Review Body (DDRB) of an increased workload has given the profession some encouragement in a year which for many will be "make or break" as to whether they stay in the NHS. But the nation needs excellent dental health which can continue to be provided under the NHS. Dentists wish to continue to provide the most cost effective dental service in the world under the NHS. They can do so only if there is government commitment to maintain their clinical standards by providing adequate resources.
The new contract and the recommendations of the DDRB acknowledging the serious situation that GDPs face are a small but significant step in the right direction.
6.34 p.m.
Lord Broadbridge: My Lords, I congratulate the noble Lord, Lord Ennals, on the timing of his NHS debate today for it was in the Radcliffe Infirmary, Oxford, 50 years ago today that the first-ever patient was treated with penicillin.
If this debate on the objectives of the NHS has turned also into something of a debate on complementary medicine the Government have in some measure only themselves to blame. Her Majesty's Government have consistently turned a rather deaf ear to the case for including some complementary therapies in the services available free on the NHS. Indeed, they have somewhat resembled the heckler who during a public meeting shouted at Disraeli, "Speak up, I can't hear you", to which Disraeli responded, "Truth travels slowly but it will reach you in time". In the brief remarks that I now wish to make I can only subscribe to the spirit of Disraeli's pious hope—but perhaps with less confidence.
To state the position simply, it might be stated that in the matter of complementary medicine within the NHS there is a triangle of involved parties: first, the patients; secondly, the doctors; and, thirdly, the Government. I should like briefly to examine their relative positions.
Demand for complementary medicine and complementary therapies is growing consistently and rapidly in numbers of practitioners, statistically recorded consultations and surveys in opinion polls. Early last year a MORI poll recorded that an average of one in three would consider using acupuncture, homeopathy and osteopathy, and that the vast majority who used complementary therapists—up to 93 per cent. of chiropractic patients—were "very satisfied" or "fairly satisfied". On a national representative basis, one in three is about 15 million people.

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A slightly earlier attitude study by the City Health Centre concluded that the majority across age, sex, income and occupation, wanted complementary medicine to be available on the National Health Service and on private insurance schemes. Back pain is a classic example. According to the Office of Health Economics, the cost of lost production through back pain alone amounts to over £1,000 million a year.
The European view is still more emphatically in favour of complementary medicine both in practitioner numbers and in funding. Complementary therapies are proving ever more popular through Europe and beyond. France has 10,000 doctors who also practise homeopathy. We have 500. Validity of homeopathy and acupuncture is accepted by the French Academy of Science and the prescriptions and consultations to which they give rise are reimbursed by social security payments.
In Germany naturopathy and nature cure are the dominant therapies. The German Government are spending 800,000 deutschmarks on complementary medical research rising to 3 million deutschmarks after three years. In the Eastern bloc herbalism is very popular. In Switzerland, acupuncture and homeopathy are widely practised. In Britain osteopathy, chiropractic and homeopathy are widely practised, the latter by six generations of our Royal Family.
The second point of my triangle is the doctors. In the BMJ of 7th June 1986, in a study on complementary medicine and the general practitioner, two doctors—one a general practitioner—reported on the responses of 145 randomly selected GPs in the Avon area. Their findings were that overall GPs knew little about the techniques of complementary medicine. However, despite that, over the past year 110 GPs—that is, 76 per cent.—had referred patients to medically qualified colleagues for such treatment and 72 per cent. had referred patients to non-medically qualified practitioners.
We must remember that it is only about 12 years since the General Medical Council rescinded a total ban on referral of patients to non-medical practitioners. Indeed, this interest by general practitioners to become more involved with complementary medicine is one of the most marked recent developments in the relationship of complementary medicine to conventional treatment. Interestingly, a study in the Lancet of 17th October 1986, showed that the highest levels of complementary consultations were found in Oxford, Cambridge and Exeter, all cities which are well served medically. Other reports have also established that complementary medicine does not thrive in regions where conventional medicine is poorly represented. It would surely be reasonable to deduce from that that complementary therapies do not exist to prey on populations which are poorly represented conventionally but truly on a "two-plus-two-makes-five" basis, to complement established orthodox practice.
Furthermore, the disorders for which patients see complementary medical practitioners do not exactly overlap those for which they see conventional practitioners. They focus on chronic and mild muscular-skeletal and stress-related dispositions
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rather than on infections. About one third of complementary medical patients are known to be seeking help from conventional doctors. Thus, again, the role of complementary medicine is truly complementary to, rather than conflicting with, conventional medicine, with each system finding its separate region of competence.
Finally on the subject of doctors, a survey conducted as long ago as 1983 and reported in the BMJ showed that 76 per cent. of general practitioner trainees wished to learn one or more complementary medical skill.
The third and final point in my triangle of involvement with complementary medicine is the Government. The latter have consistently taken the view expressed concisely in May 1988 by Sir Richard Bayliss of the Royal College of Physicians when he said:
"the same standards of assessments should be used to determine the efficacy of complementary as of orthodox medicine and drugs".
It was for that reason that nine years ago the Research Council for Complementary Medicine (RCCM) was established. During that period some 109 projects have been presented to the council for a call on its very limited funds. But in March last year the Department of Health grant of £70,000 towards the administrative costs of the council came to an end. Although much appreciated, it pales into insignificance beside the sum of £500 million of government funding and charitable donations for conventional medical research. The RCCM has struggled to support some 20 per cent. to 25 per cent. of the proposals put to it on the basis that they would be of primary value in discerning the proper use or mechanism of some of the complementary therapies. In addition, they would contribute towards answering Sir Richard Bayliss's stricture that the same standards of assessment should be used to determine the efficacy of complementary as of orthodox medicine and treatment. But it is difficult to compete with £500 million on a budget of £70,000 plus donations.
I mix my metaphors somewhat in saying that the complementary medical horse wishes to drink, but the Government have turned off the water supply. I ask the Minister who is to reply whether the Government will give more help because, in conclusion, I believe that additional Government funding for the RCCM in Britain will guarantee that adequate research is done, will protect patients from exploitation and will encourage authentic therapeutic practitioners. In addition, it will lead to greater co-operation between orthodox and complementary practitioners and, importantly, to considerable economies for the NHS in the annual drugs bill, as mentioned by several noble Lords.
The doubters and the unsympathetic would do well to remember that in a Gallup poll carried out five years ago 50 per cent. agreed with the statement that:
"Human nature is such that we are frequently prevented from seeing that that which is taken for today's unorthodoxy is probably going to be tomorrow's convention".
6.43 p.m.
Baroness Robson of Kiddington: My Lords, I too thank the noble Lord, Lord Ennals, who is no longer in his place, for introducing the debate. Any debate in this House on the National Health Service is always attended by a large number of Peers and contributions come from an enormous number of informed speakers. The reason is that on all sides of the House there is a deep anxiety about the future of the NHS.
The one issue upon which we all agree is that the NHS constitutes a unique and precious asset which provides basic services of a high standard at a low cost proportionate to GDP and compared with other countries. The noble Baroness, Lady Cumberlege, my successor as Chairman of the South West Thames Regional Health Authority, said that the NHS was galvanised by change. To my knowledge it has been four times galvanised. I was part of the first galvanisation in 1974. It was later galvanised by Griffiths. It was galvanised again by the abolition of the area health authorities, with which I totally agreed. Now it has once again been galvanised. Members of this House should pay tribute to the people who work in the NHS and who have put up with the four-yearly changes that have occurred. They have done so with no lowering in the standard of care for their patients. They deserve our praise.
In introducing the debate, the noble Lord, Lord Ennals, referred to our debates on the National Health Service and Community Care Bill. He believed that the community care part of the Bill should have been introduced first and that the rationalisation of the NHS should have been the second priority. I agree with his view because there was hardly any controversy over the community care provisions. They were universally welcomed and would have enabled the setting up of pilot schemes on the alterations in the management and functioning of the NHS. Like the noble Lord I regret that the Government did not see fit to take that order of priorities.
But they did not and, as a result, 66 hospitals have applied for trust status. I do not disapprove of that. I understand that 56 hospitals have been accepted and have been given the go-ahead from 1st April 1991. I also understand that 123 units are working on trust status for 1992. I do not remember hearing during our debates on the National Health Service and Community Care Bill that external financing limits would be put on the trusts, although I may be wrong. I am certain that some of the hospitals which have applied for trust status believed that they had the right to go to the commercial market and to develop in the way they wished. They also believed that they had the right completely freely to pay their staff and set standards of salaries and wages within their hospitals. I wonder whether now, in hindsight, they believe that they were sold an idea on a slightly false prospectus. That is how I should feel. I may be wrong about that. If the provision was contained in the original prospectus I shall be corrected by the Minister.
I welcome the fact that the junior doctors will be paid the same throughout the National Health
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Service, whether in trust hospitals or not. I agree with the noble Lord, Lord Richardson, that that condition should apply to members of staff at all levels. I welcome too the fact that the Government have gone a long way towards solving another problem; they have reduced to a maximum of 72 per week the number of hours worked by junior doctors. However, even that is a great number of hours. In order to make the necessary arrangements it is essential to change the working practices of the consultants. I understand that the Government have accepted that fact and that, as a result, a greater number of consultants must be appointed.
When I was chairman of South West Thames, I occasionally got permission to appoint one or two extra consultants. But I never got the cash to do it, so even when I got the permission I found it very difficult. I got the cash for the consultant's salary, but if you appoint a consultant the cost of establishing him will be at least double that. Therefore, I am a bit wary about believing that we can appoint enough consultants to enable junior doctors to work only—I emphasise "only"—72 hours a week.
One of the strengths of the National Health Service is the general practitioner service. My noble friend Lord Winstanley mentioned the uniqueness in our National Health Service of general practitioners. I am a bit concerned about reports that I have seen in the press that general practitioners who are going to be fund-holding are having pressure put on them to use the contract that the district health authority has negotiated, because I always thought that the strength of the GP service was that they could refer their patients to any hospital they thought fit.
There have been many questions about how we can afford a health service of the type we want. My noble friend Lord Winstanley referred to priorities; the noble Baroness, Lady McFarlane, spoke of rationing. I think we should be quite dishonest if we went to the nation and said that we could afford everything that was needed for everybody. It is not true. Therefore, we must develop a better system for measuring outcomes. We have to make certain not only of the duration of survival but the quality of that survival. We must be able to measure that real outcome.
As long ago as 1863, Florence Nightingale wanted to assess the standard of hospitals, and she wanted to set targets to measure those hospitals. She said, "You have to measure how many dead, how many relieved, and how many unrelieved". In a way, that is what we must set about doing. This is going to be one of the most difficult problems which will face us in the future. Unless we can measure the real outcome of what we do in the NHS, we shall not be able to afford the future.
6.53 p.m.
Lord Carter: My Lords, we have had a wide-ranging debate on the one area of social policy that affects every member of the community. All of us will, at some time in our lives, have to use the National Health Service. I should like to deal immediately with one important aspect of health care that was touched

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on by my noble friend Lord Longford and by other speakers in the debate, and that is community care. The House will remember well the many hours that we spent on the community care section of the National Health Service and Community Care Bill, and indeed the amendments that the House accepted —which were later overturned by the Government—to secure the ring-fencing of community care funds.
We now know, of course, that our efforts on the Bill have been somewhat reduced in value by the Goverment's decision, as a direct result of their panic over the poll tax, to postpone until 1993 the full implementation of community care. An idea has been floated recently that, as a part of the Heseltine review of the poll tax and in order to secure a reduction in local authority spending, consideration is being given to removing responsibility for community care from local authorities, and handing it over to health authorities. There have been similar proposals for the education budget.
I should like to ask the Minister—and before the debate I told her that I should be asking this question —whether in fact such a proposal is being considered by the Government. If it is to happen, am I right in thinking that this would require a new Act of Parliament? Indeed, have the Government any plans at all to amend the timetable for the introduction and implementation of community care? I am sure that the Minister will know that some recent reports have suggested that the implementation should be brought forward from 1993 to 1992. I am sure it would be extremely helpful, and would help to allay anxieties outside the House, if she could answer those questions.
My noble friend Lord Ennals, in his powerful opening speech, drew attention to the problems in the health service and in April's impending reforms. He set out the proposals that we have formulated as the Labour Party policy that we shall wish to put into effect in government. The central problem is of course the source and the quantum of the funding of the health service, and those would be problems for any government. Various calculations have been made. They tend to suggest that, taking into account specific health care inflation rather than the general RPI, overall funding since 1985 has been only about one-quarter of the amount required to maintain and improve the service.
We are all aware of the problems—particularly for the National Health Service—arising from what was described some years ago as the revolution of rising expectations. That is a phrase which I believe was first coined by Mr. Enoch Powell. The argument goes that no society can afford the level of health care required to give everybody the treatment they need when they need it. Or, per contra, no government can impose the level of taxation required to produce all the necessary resources in the public sector.
I believe that both these arguments are false. No one in his right mind expects the waiting lists for hips or hernias to be reduced from 18 months to 18 days. To reduce them to 12 months and then
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eventually to six months would be a great boon to a great many people. When the Government refer, entirely correctly, to their increased expenditure on the health service, and they link this with what the taxpayer will stand, what they are really saying is that they cannot spend even more on the health service and at the same time reduce higher rate taxes by about £26 billion, spend hundreds of millions of pounds on the fees and advertising of privatisation, pour some £10 billion down the drain on the poll tax, and give £40 million tax relief for private health care and so on. I am describing and not criticising. Every government has the right to choose its own priorities. But it is a fact that a Labour Government will have some very different priorities, and, as a result, more resources will be available for the health service.
We all know that debates like today's produce a great deal of helpful briefing from outside organisations, but it occurred to me that it would be also useful to also hear from the people actually operating the service. I therefore wrote to a number of doctors, both consultants and GPs, and I told them about our debate and I asked them for their views. I do not know, nor do I wish to know, their politics. I just know them all as very good, caring doctors.
Their letters illustrate much better than anything I can say the state of the National Health Service today. A general practitioner says:
"As a general point there is little doubt that in this area at least the service is getting worse; that wards are closing routinely, so far as I can make out, for financial reasons; and that this has an inevitable knock-on effect on waiting lists. The main problem certainly seems to be on the surgical side, but there is also the matter of consultants who are trying to keep within their budgetary limits and are asking the general practitioners to prescribe the often very expensive drugs that they recommend".
I quote from the chairman of an orthopaedic department in a substantial hospital in the West Country, who says:
"Due to a combination of factors, not least of which is the general trend towards a reduction of junior doctors' working hours, we have been unable to fill 50 per cent. of our Senior House Officer posts in Orthopaedics and Accident and Emergency … It is therefore with deep regret that we have had to take the step of cancelling all cold Orthopaedic surgery (except for those cases with an urgent medical priority) as from Monday 4th February 1991 … The same embargo will apply to out-patient clinics, where new patient referrals will have to be deferred, (again with the exception of urgent cases).
"We are very aware of the terrible consequences that such a reduction in service is bound to have on the local community but are not prepared to struggle on with a second rate, potentially dangerous service."
A general practitioner in the Midlands states:
"Several hospital managers are already on record that they will not agree to pay for patients referred to hospitals with whom they have no prior contract and most others say they will insist on written agreement being obtained before such referrals are made".
Later he adds:
"Community Health Services have been hit not only by health authority cuts; transfer of responsibility for the elderly, or handicapped, to Social Services has meant a further series of cuts due to 'rate-capping'. Examples are chiropody services, the supply of commodes, incontinence appliances, etc., 'Home Help' services, 'Meals-on-Wheels', hospital transport".

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A consultant anaesthetist said:
"Emergency surgery, however, gets a very raw deal, and, with our ageing population, our orthopaedic service suffers most. For 15 years we have been trying to get a dedicated orthopaedic trauma theatre funded—we are still waiting!"
He also refers to a recent operating list and says,
"Beside the name of each patient … is the time these patients had been waiting [four days to two weeks] with their fractures for surgery. Disgraceful treatment, I am sure you will agree".
Continuing, he says:
"We shall be cancelling all surgery for one afternoon a month as regular Audit meetings will become a necessity, and doctors are not prepared to give up any more of their free time for yet more meetings".
Later in the letter he says:
"Morale amongst consultants is reasonably good because of the opportunities in private practice. Without the latter, my NHS salary would probably be the same as that of a young doctor just starting in general practice".
I received a letter from a consultant anaesthetist in a general hospital, in which he writes:
"I am genuinely distressed to have to admit that despite my personal effort—I spent 25 hours in theatre on Saturday and Sunday—we were unable to provide either a proper emergency service or a proper trauma service … The trauma service is in a state of crisis and, if it is not possible to rectify this situation from within the resources of the Acute Unit, the District Health Authority should be formally apprised of our difficulties. We must demand that resources for an appropriate service are made available or else we should cease to provide a trauma service".
I received a long and helpful letter from a consultant in the Midlands, in which he states:
"You will know that, whilst Health Authorities are being forced into increasingly unpalatable cuts in service in order to stay within budget, virtually unlimited Central Government funds are available for anything related to 'White Paper implementation'. This includes hardware, software and any category of staff as long as they are not connected with patient care, i.e. business managers, accountants, statisticians, advisers, training officers".
He adds a postscript, which reads:
"I have just learnt that the facilities for long term and respite care for elderly disabled people at this hospital are to be closed to meet the April 1st deadline after an interim period during which the existing patients will be put under the care of psychiatrists. Responsibility for this appalling decision is being fudged between the Health Authority and the hospital management".
I ask noble Lords to compare those reports with the panegyric that was given to the House by the noble Lord, Lord McColl. One should also contrast that with the experience of a young lady of whom I was told only yesterday. She has been waiting for a non-urgent operation for over a year. She was offered by her consultant a weekend package deal in a private hospital for £1,500 as soon as she wanted it.
Only last week on the "London Programme" on television there was information that health authorities in the South of England are investigating the setting-up of contracts with hospitals in France. A hospital spokesman in Boulogne was interviewed. I ask the Minister whether the Government are aware of that, and if so whether they approve of it. What would happen if anything went wrong? Who would the patient or health authority pursue in the case of medical negligence? Would they have to go through the French legal system?
Almost all the problems related in those letters that I have quoted are due to the requirement to balance the books of the health authorities by April. Why are
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the Government prepared to write off billions of pounds of debts to prepare nationalised industries for privatisation while they refuse to write off around £100 million of health authority debts? I quote from the general manager of a substantial hospital in West London which had to close wards. He writes:
"I don't like doing this and it is very unfortunate that patients will have to wait longer for treatment but I have a responsibility to balance the hospital's books at the end of the year and this was the least damaging option".
Time does not allow me to deal with the many other problems faced by the National Health Service. I conclude by saying that there is a genuine and sincerely held difference of view between the Government and the Labour Party regarding health policy. In the Labour Party we believe fundamentally that the provision of health and community care is peculiarly unsuitable for the imposition of a market mechanism. The Government, although entirely sincere, believe the opposite.
Rejecting the market mechanism does not mean that cost efficiency audits are not required or necessary as a means of providing information to increase efficiency. But they should not be used to allocate medical care. That must be done on the basis of medical need.
Let us consider the health service in the light of the Government's own theory of the free market. If the supply of any product is restricted—in this case through under-funding—and demand increases as a result of an ageing population, increases in technology and demand for higher standards, there are only two ways of allocating resources to clear the market. That can be done only through rationing or through price.
We know that rationing is already taking place, either behind closed doors or out in the open, as in the example given by my noble friend Lord Ennals. The North East Thames Regional Health Authority has laid down the medical conditions which it will not allow on to the operating list. It is true that we have an inefficient system of rationing health care. A valid point in that regard was made by the noble Baroness, Lady McFarlane.
The Government intend to solve the Problem by a gradual introduction of the price mechanism; first, through the proposed contract system—the so-called purchaser/provider relationship. When that fails, as it undoubtedly will, those customers who can afford to will exercise their consumer choice and migrate to the private sector, no doubt encouraged on their way by generous tax reliefs. Or, to put it more graphically, the patient will have to wait longer, to travel further or to cough up.
I am reminded by my noble friend Lord Molloy that all the Royal Colleges, the BMA, the Junior Doctors' Association, the Confederation of Health Service Employees and the Health Visitors' Association have condemned the Government's proposals for the health service.
We should contrast the approach of the Government—we are entitled to do that—and their use of the price mechanism with the Labour Party policy set out in our policy document, A Fresh Start for Health. That places the emphasis on the prevention of ill health; providing the treatment that patients need in a hospital of their choice; the ring-fencing of

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funds for community care; the establishment of a quality commission for community care; the abolition of the market mechanism in public health care; the full funding of health service pay awards; the establishment of a charter for patients; and the establishment of a quality commission for the health service as a whole.
However, the most fundamental difference is that a Labour Government will truly believe in a properly funded health service providing high quality health and community care allocated according to need and not according to the ability to pay. We reject the market mechanism as a method of allocation. When the time comes we have no doubt which policy the electorate will choose.
7.9 p.m.
Baroness Hooper: My Lords, at the outset of the debate we were enjoined by the noble Lord, Lord Winstanley, to concentrate on an informed discussion. We have had that. We have had the benefit of people's personal experience and expertise. We were also privileged to hear the right reverend Prelate speaking for the first time in your Lordships' House. He referred to the important role of hospital chaplains. His contribution was extremely timely as the department is currently considering the need for an overall review of hospital chaplaincy services.
The noble Lord, Lord Ennals, has given everyone the opportunity to air their views on the current state of the National Health Service. He has given me the opportunity to assure the House about the current healthy state of the National Health Service, and to outline some of the important developments we plan for the future. I am grateful for that. As my noble friend Lord McColl said, there is much good news to tell.
The Motion asks us to consider the long-term objectives of the health service. Throughout history different meanings have been given to the concept of health. The one, central to the development of modern medicine, is freedom from clinical disease. The fundamental goal of the health service is to sustain this by providing the means to restore health to everyone in need regardless of income, and with resources financed mainly out of general taxation. We have no intention of changing that. I probably had no need to repeat that, but I felt it worth it.
We set out our objectives for the NHS in our White Paper Working for Patients. They are as follows: to extend patient choice; to delegate responsibility to those best placed to respond to patients' needs and wishes; and to secure the best value for money. We said that the result would be a better deal for the public, both as patients and taxpayers, and that we would build further on the strengths of the NHS while tackling the weaknesses. All this we are doing.
The founding fathers of the health service expected demand for health care to fall as people reaped benefits of its high quality clinical care. As we all know, the opposite actually occurred and demand for services has risen dramatically. The ability of the NHS
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to respond depends not only on funding but also on management. We have met this challenge with structural reforms designed to make the service even more patient centred, with clear targets to work towards and more accountability.
It is now less than two months before the main elements of these reforms come into effect. The massive programme of change to ensure that better patient services are delivered locally is on target. The service must be congratulated for that. My noble friend Lady Cumberlege was able to confirm that from her standpoint as a regional health authority chairman. For example, the newly constituted district health authorities are taking on their new responsibilities in purchasing services for the people they serve. NHS contracts that include challenging quality measures—we are all agreed on the importance of quality in patient care—are being finalised. Hospitals and other units providing services are developing independence, and 57 will be operating as trusts and are already running in shadow form. I say to the noble Baroness, Lady Robson, that as regards National Health Service Trusts, I believe that I was always clear in confirming that they would remain within the National Health Service. It therefore goes without saying that public sector borrowing requirements apply. With all these changes there has been a major shift in attitudes. The changes include the substantial number of GP fund holders. These changes mean putting quality and responsiveness to the patient at the top of the agenda and it is exactly what the reforms are about.
I say to the noble Lord, Lord Carter, that using the tools of business does not mean that we are trying to turn the National Health Service into a business. We are just trying to make it more businesslike. The noble Lord, Lord Ennals, suggested that the cost of implementing the reforms would be at the expense of patient services. The extra £1.9 billion provided by the Exchequer for hospital and community health service revenue and capital spending in 1991–92 takes full account of the cost to health authorities of implementing the reforms. Apart from the substantial increase in health authorities' main allocations, they will receive funding for specific review-related projects such as medical audit. There is no question of funding for patient services being diverted to fund the introduction of the reforms.
We have been reminded that the total National Health Service spending in the United Kingdom is at record levels. Our plans for the next financial year will bring it up to £32.6 billion. That is 50 per cent. higher than in 1978–79. At 14.2 per cent. of total government spending, health is the second biggest publicly funded programme after social security. Financial growth has been sustained throughout our period of office and demonstrates to anyone in doubt our commitment to the National Health Service.
I say to the noble Lord, Lord Pitt, that activity growth has more than kept pace with demographic change because of extra government finance and National Health Service efficiency.

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We have also carried out the largest-ever hospital building programme. Gross capital expenditure by health authorities increased by 45 per cent. in real terms. Over 475 schemes, each costing over £1 million, have been completed. For example, I refer to the new control centre for the Surrey ambulance service in Banstead. It is the first of its kind in the country and uses the most advanced computer-based control and display techniques to enable location and availability details of its 50 front-line ambulances to be accurately pinpointed. This time last year the ambulance service was high on the health agenda. It is very interesting to note that not a single speaker in the course of today's debate has mentioned the successes that we have had in the ambulance service.
We shall continue our work to improve the infrastructure of the health service. Throughout England over 470 similar capital schemes are at various stages of planning, design and construction. A capital loans fund providing £50 million over three years which was launched in January last year will help with the rationalisation and modernisation of the NHS estate. An additional £8 million is being made available for 1991–92.
It has been said many times that more people are employed in the National Health Service than in any other organisation in Western Europe. The numbers of doctors, dentists and nurses have increased significantly during the lifetime of this Government. I shall not go over all the figures on this subject because they have been quoted in the course of the debate. What is most important is the fact that as a proportion of the total National Health Service workforce, direct care staff grew to 67 per cent. in 1989. In the family health service the number of GPs increased by 22 per cent. in the 10 years to 1989, enabling list sizes to be reduced.
The Government are conscious of their responsibilities as an employer. Not only are there more doctors and nurses now, but they are better paid. For example, basic nurses' pay has risen by over 41 per cent. in real terms since 1979. It has been recognised by a number of your Lordships that we are also working with doctors to bring down unacceptable duty rotas. The agreement signed on 17th December about junior doctors' hours was a major breakthrough. We shall be funding 200 new consultants and 50 new grade posts in England alone. I reassure the noble Lord, Lord Rea, that we shall most certainly be monitoring the effects of this agreement.
As employers we also take most seriously matters concerning education and training, both in terms of initial qualifications and in-service training, to keep up with the pace of technical developments. That includes training, in management techniques. I note the point made by my noble friend Lord Nugent on the resource management initiative. It also includes arrangements for doctors who wish to obtain qualifications in homoeopathy, for example. We appreciate in this context the role of the royal colleges and other professional bodies because manpower issues are very much within their domain. We believe that we are working very much in partnership on this.
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Since a number of your Lordships referred to the national terms and conditions for medical staff—although I recollect that we discussed this on a number of occasions during the passage last year of the National Health Service and Community Care Act —I must point out that my right honourable friend felt that it was necessary to make a special case for junior doctors in view of their training needs. But for senior medical staff we still intend that existing contracts will transfer from regions to trusts which will then be free to negotiate with consultants to make mutually acceptable changes to the terms of the contract. I reiterate that we see this as an opportunity to secure increased motivation through a shared vision of the corporate objectives, greater involvement in the running of the organisation, greater flexibility in working patterns and the provision of opportunities for more training.
Continued growth in government funding, however, has to be linked with a drive to improve efficiency. This is what has enabled activity rates to increase to levels that do more than meet increased demand. Over the 10 years to 1990 the numbers of acute in-patients treated rose by nearly 25 per cent. to 5.8 million; the number of day cases treated doubled to 1.1 million and the number of geriatric in-patients treated rose by almost 90 per cent. I realise that it is easy to quote numbers and I am well aware that at the end of the day statistics represent individuals. We have to recognise that some on waiting lists are more ill than others but that all deserve to be treated as quickly and as considerately as possible.
Because we are treating more people than ever before, waiting lists have fallen. Half of all our patients are now admitted immediately, and another 25 per cent. have to wait for around five weeks for admittance. The number of people waiting for more than a year fell by 7 per cent. in the 12 months to March 1990. Our waiting list initiative, costing £119 million so far, will we hope improve matters further. The noble Lord, Lord Ennals, referred to the North-East Thames Regional Health Authority. We commend the determination of the authority to make an impact on its long waiting times. Its plans have been greatly misinterpreted. In considering cases the region proposed that clinicians should establish whether treatment was still practical or possible in some cases and that it should be a matter for clinical judgment. That is precisely what the noble Lord, Lord Ennals, was calling for.
In terms of the impact of Gulf casualties on the National Health Service workload, I can assure my noble friend Lady Cox that, although some non-emergency admissions may need to be deferred, the extra money for casualties announced by the Secretary of State on 16th January will enable health authorities to continue to use all the money in their normal allocations for their normal workload. We are confident that the health authorities can deal adequately with this increased emergency workload.
My noble friend Lady Cox and the noble Baroness, Lady McFarlane, referred to nurse prescribing and welcomed the recent comments of my honourable friend the Minister of State supporting nurse

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prescribing. We recognise that this could have benefits for some categories of patients; but we believe that more work needs to be done before legislation can be introduced. However, I can reaffirm that this remains our objective.
Our reforms to put patients first extend beyond the hospital service and into primary health care where we are concerned not only to treat illness but to promote better health. Many of your Lordships have raised this issue. The new GP contract introduced last April creates strong incentives for GPs everywhere to increase their accessibility, provide better information about services, improve services to the elderly, give regular check-ups and step up immunisation and vaccination and disease screening. The noble Lord, Lord Butterfield, expressed his particular anxieties and hopes in this area. Again, it is good news. Only this morning I was able to visit the Health Education Authority and discuss with it its programme and very responsible role. The latest figures show clear evidence that GPs have got up to speed on childhood immunisations and cervical screening. For example, the trend in immunisation against diphtheria, tetanus and polio is up to 90 per cent.; whooping cough 83 per cent.; measles 88 per cent. A Pulse survey shows that an extensive range of health promotion clinics has been set up by 75 per cent. of the GPs surveyed, covering a wide range of activities including anti-smoking, diabetes, well-person, alcohol control, diet and exercise clinics. Fifty-three per cent. of GPs are being remunerated for providing additional services in the area of child health surveillance and minor surgery. The new capitation system for children's dental care is very important in the preventive field.
Far from falling behind on breast cancer schemes, as the noble Lord, Lord Ennals, alleged, the United Kingdom is the first country in the European Community to introduce nationwide breast and cervical cancer screening programmes based on inviting women by computerised call and recall. I can say to the noble Baroness, Lady Masham, that the response has been excellent. In this area we are setting the pace in preventive health care for women.
Baroness Masham of Ilton: My Lords, perhaps I may ask the Minister whether the press release was false. It said that there were cutbacks in this area and that some surgeons were very worried.
Baroness Hooper: My Lords, the figures do not in any way agree with the information in that press release. There has been an enormous increase.
I move on now to the important subject of research. I am grateful for the welcome of my noble friend Lord Nelson for our new director of research and development. Having been barely a month in post, he is currently developing plans for an improved scientific basis for health care development. An important objective will be to provide reliable, relevant and readily accessible data on costs and benefits to the providers and purchasers of health care and to introduce more effective ways of assessing new
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and existing health practice methods and technologies. The plans will seek to ensure that appropriate methods are employed to measure the outcome and quality of treatment and to identify obsolete and ineffective methods of investigation and treatment that should no longer be employed. I should also point out in regard to National Health Service trust applications that special provision has been made to ensure that research should be specified among the statutory functions of individual trusts where this is a major activity. My right honourable friend the Secretary of State holds reserve powers to ensure that research is carried out by National Health Service trusts. Therefore, the present statutory duty for the National Health Service to provide facilities for clinical research by university, medical and dental schools will continue.
The noble Lord, Lord Ennals, and others referred to health inequalities. These can exist for a number of different reasons. They can be caused by geographical, medical and social factors and not merely by economic ones. This has to be taken against a background of steady improvement in overall health and wealth of the nation. It is important to remember that perinatal mortality in England and Wales has almost halved since 1978. Infant mortality is down from 13.2 to 8.4 per thousand live births and life expectancy is now 72 years for men and 78 years for women. That is an overall improvement.
I was also asked about winter deaths. In this regard there has been a steady decrease in excess winter mortality over the past 35 years, from 68 per cent. in 1951–55 to 24 per cent. in the period 1986–89. Hypothermia was the principal cause in less than 1 per cent. of those excess winter deaths. Because we recognise that medically the causes of mortality and morbidity are extremely complex, we have asked the Medical Research Council to undertake a project to look into this area.
The noble Lord, Lord Smith, advanced the case for an enhanced independent health sector and closer links with the National Health Service. The Government welcome the contribution the private health sector makes with more than 26,000 National Health Service patients treated annually. Health authorities continue to explore ways of improving current arrangements. We are very happy for that to be the case.
My noble friend Lady Faithfull endorsed the plans to publish a guide on the welfare of children in hospital. We were aware of the many good practices in this area, usually initiated locally and often with the support of voluntary organisations. We seek to disseminate this good practice more widely by bringing together the main points in a single document. We intend that the guide should be used by both the new district health authorities, as they prepare and refine contracts for children's services, and by provider hospitals as they seek to develop the services to meet the standards required by the districts. We plan to publish the guide in April. I can confirm that we are planning a similar document on the child

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health services delivered in the community by GPs, child health clinics, health visitors and the school health service.
Alternative and complementary therapies were referred to by a number of noble Lords. Indeed, we held a comprehensive debate on the subject last year. Our view remains that although we encourage a wider availability of National Health Service treatments from which patients can benefit, we still believe that it is not for the department to influence doctors on how they should treat their patients: that is entirely a matter for the clinical judgment of the practitioner concerned. I am glad too that my noble friend Lord Colwyn drew our attention to dentists and to the fact that the new contract encourages continuing care and the practice of modern preventive dentistry.
The noble Lord, Lord Carter, referred to the subject of community care and asked whether any changes were envisaged. I can assure him that there are no plans to change the phasing in of our community care policies which remain on target, as planned, for full implementation by April 1993. I hope that that reassures the noble Lord.
Perhaps I may say to the noble Baroness, Lady McFarlane, that we recognise the role of district nurses and health visitors in community care. That is integral to the provision of high quality primary care. Implementation of our proposals will enhance these roles.
Lord Carter: My Lords, did the noble Baroness say that responsibility for community care is to stay with local authorities? That was not entirely clear from her answer.
Baroness Hooper: My Lords, in saying that we were continuing on target as planned, we intend it still to be transferred to the local authorities.
On the subject of mental illness and mental handicap, both very important subjects, the noble Earl, Lord Longford, was concerned about the closure of hospitals. I must say again that contrary to popular belief the aim of current policy is not to close all mental hospitals; it is to develop a wide range of local hospital and community services which will render many of the traditional large and often remote hospitals unnecessary. No hospital closures will be approved unless it can be demonstrated that adequate alternatives have been developed.
The Earl of Longford: My Lords, if that is a new policy, it sounds better than the existing one. Until now a good many hospitals have been closed without alternatives being available.
Baroness Hooper: My Lords, that is not intended to be the case. There are still a number of institutions as well as arrangements for community care provision. The proposal of Professor Wing, to which the noble Earl referred, for sheltered communities is still one of the possible arrangements within the range of provision. There is certainly a need for asylum care as part of that range. A sheltered community of the kind proposed by Professor Wing would be perfectly acceptable. My noble friend Lord Pearson drew our attention most movingly to some of the problems of
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mental handicap and in a sense made a similar point about the provision of a range of facilities. That is certainly our intention.
We are all agreed that health care has developed dramatically over the past 11 years. Treatments previously unknown or barely available are now a matter of routine. With our reforms on course, it is now time to look beyond organisational matters. The next step is to build on the reforms to bring about genuine improvements in health for which so many have called. We have set in hand the development of a national strategy for health in England. The strategy will be about identifying, setting and achieving a number of priority objectives. Its starting point will be the identification of the most important areas to concentrate on. Achievable national targets will be set to give a sense of direction and purpose and to provide a realistic goal at which all those with a part to play can aim. The strategy will develop over time.
We shall not seek to be comprehensive from the outset. To avoid over-reaching ourselves we shall be very selective in what we deal with at each stage in the process. Nor will national initiatives ride roughshod over local circumstances. National strategies should be capable of blending local needs to form local strategies which serve the needs of differing patients. The National Health Service is being involved in the preparation of this strategy right from the outset. We intend that a consultative document will be published this spring.
The one true indicator of the state of the National Health Service is the health of the people. We have seen steady improvements in this regard, whatever anyone may say about particular areas. We are proud of our record but we are not complacent.
7.37 p.m.
Lord Ennals: My Lords, my first task is to thank all those who have taken part in the debate—noble Lords, noble Baronesses, right reverend Prelates and all. One of the great features of your Lordships' House is that for debates of this kind we can assemble people with an enormous range of experience in research, in the administration of regional health authorities and in social services. We have GPs and dentists. We have an extraordinary range. I am most grateful to all those who have taken part in the debate.
We have a problem of statistics. We always disagree on statistics. I think we might ask the department to set up a small working party to see whether the noble Lord, Lord McColl, is right in his recollections or whether I am right in mine. It all depends on where one starts, where one finishes, over what period of time one makes one's assessment, whether one takes into consideration an industrial dispute which suddenly threw the figures out for a month, whether one takes average figures and so on.
I was accused of being slightly partisan in my opening speech. I do not apologise for that. I happen to be the Opposition spokesman on health. If I did not oppose, I should not be doing my job, for which, as noble Lords will know, I am very fully paid. It would be foolish to pretend that there were not some quite sound differences both of principle and in priorities

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between the Opposition Benches and the Government Benches. A debate such as this gives an opportunity for those priorities to be assessed and for the experts to bring in their views. I am grateful to all those who have done so.
I am convinced that we need to have a full day's debate on community care. Community care was referred to on a number of occasions. Both the noble Baroness, Lady Faithfull, and my noble friend Lord Carter referred to it. In a sense, community care is part of the continuum of care of which the health service is a very important part. However, we have concentrated today on the health service. I hope, therefore, that we shall find the opportunity very soon, whether it be provided by government time, by us or whoever, to have a major debate on community care. There are colossal problems in that area with which we ought to deal. Having said that, I should like to thank once again all those who have taken part in the debate and at the same time I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Musical Instruments and Theatre in Schools
7.40 p.m.
Lord Donaldson of Kingsbridge Lord Donaldson of Kingsbridge rose to ask Her Majesty's Government what steps are being taken to safeguard the teaching of musical instruments and theatre in education programmes in schools, and whether at least one cultural subject will be made mandatory in the national curriculum after the age of 14.
The noble Lord said: My Lords, while the Chamber is emptying I should just like to express my pleasure at the fact that I am starting the debate at least 20 minutes before anyone expected would be the case. Having been a Member of your Lordships' House for a long time, this is the first time that I have ever opened a debate in such circumstances. I hope, therefore, that the debate will end as satisfactorily as it began.
From time to time it is wise in very bad circumstances to turn and look at other things. In the presence of a major war, a ferocious cold snap and an infinitely dispiriting depression, I shall concentrate upon the very detailed edges of the education system which are capable of having a profound effect on the future of the nation. I propose to inquire into one or two aspects of our education policy. If, as I suspect, I can convince the Government that they are being dangerously neglected, I hope that we shall receive some kind of indication from them that they will do something about the matter. I was urged to do so by the National Campaign for the Arts. Its director, Simon Mundy, has given me and other speakers in the debate some very useful briefing.
As I said, I do not propose to enter into a general discussion on education. I have always been sceptical about educational thinking. It seems to me that it usually contains too many vague theories which are supported by too few hard facts. In my opinion, there
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are only two hard facts in education: the first is that good education depends upon good teachers and the second is that good teachers are born and no one knows how to make them. I shall not, therefore, pursue that rather negative beginning but turn instead to the more fruitful question not of how to teach but of what to teach. Even here I shall avoid the main problems and concentrate upon one small point of what should be taught. I refer to the necessary function of the nation to present some aspect of the arts to all children as a regular part of their curriculum.
One of the objects of education—not, I admit, the only one—is to teach children to enjoy life. One of the most direct roads to enjoyment is through the arts. However, not all the arts can reach everyone. But I believe that there are very few children, given the chance at an early age, who would not find something to please them for the rest of their lives in the sounds and rhythms of music, in the beauties or difficulties of drawing and painting and in the magic of words in poetry, literature and drama. I shall pick out just two details from that list; namely, the teaching and understanding of musical instruments and what is known as the "theatre" in education. Both of them have grown up through pressure being put on local authorities to provide such facilities. Over a period of about 30 years, both have worked extremely well. Of course standards have varied from authority to authority, but in general all children leaving school have regularly seen good theatrical performances in real theatres and have also had the opportunity to learn how to play an instrument. Moreover, if they have shown talent in the latter, they have been able to have individual lessons, instruments have been lent to them and their parents have been given advice about buying instruments if they wanted to take the matter further.
However, both those widespread and, on the whole, very successful undertakings seem to be in serious decline. If anyone doubts that fact, there is an article in The Times today which deals with it. It says,
"the provision of peripatetic instrumental teaching in the state sector has sunk to a level that threatens, in many areas, to undo the advances made by borough and county orchestras in the 1980s".
It goes on to suggest that there is some endorsement of the idea that state education is opting out of all responsibility for training the musicians of tomorrow. That is the kind of thing we want to avoid.
Perhaps I may first look for a moment at "Theatre in Education". That is a general term for a movement which has been building up for about 25 years. It was initiated by a combination of local and touring theatre companies in collaboration with the local education authorities and helped by discretionary grants from the Government. Plays are performed free, or at greatly reduced prices, at matinees for children drawn from schools in the local authority's area. It has been extremely successful. The actors enjoy the performances and feel that they are building up an audience for the future. Moreover, the children love the afternoon out, enjoy the plays and ask for more.
The finances for the movement have always been provided by the local education authorities, helped very much by the local theatres who provide the performances without profit, and sometimes with actual loss. That applies all along the line from the puppet theatre in Birmingham to the Royal Opera House at Covent Garden. However, I have evidence of serious reductions in performances, and attendances in about 16 local authority areas and other areas will be equally affected. I shall quote one or two of the most evident examples. At Greenwich the Young People's Theatre faces cuts of £120,000; in Hackney, the Half Moon Theatre has been closed; in Newcastle, the Skin & Bone Theatre has lost its entire £32,000 grant "to avoid poll capping"; and in York, the Young People's Theatre has collapsed after 23 years. I shall not continue because other speakers know more about the theatre than I do. I shall, therefore, leave it to them to enlarge upon the signs of real decline in the theatre.
I shall now concentrate upon a subject about which I know a little more. I refer to the teaching of musical instruments. Perhaps I may begin by saying that it is the best and most direct way of creating future audiences. All, or nearly all, children when presented with a trumpet, a violin or a clarinet will at once want to try to play it and will be anxious to be shown how. Of course, only one in a hundred will emerge after school days as a worthwhile performer; but many of the high percentage who drop by the wayside will retain a permanent interest in music and in its performance. I speak from experience in that respect. When I was five years old I was given a drum. I spent many happy hours trying to do a roll. When I was seven I was given a violin and I continued to have lessons until I finally gave up at the age of 22. That was because a professional string quartet stayed at my house and, on hearing them practise, it became clear to me that it was a case of Wimbledon as opposed to country-house tennis. Therefore, I gave up playing —but not listening. That has remained the greatest source of innocent pleasure in my long life.
The arrangements which were working so well and which now seem to be in decline were known as the peripatetic instrument service. That has been built up over the past 30 years by local authorities which have employed visiting instrument teachers (peripatetic teachers) who go around the local authority schools working alongside classroom teachers teaching smaller groups and providing specific individual support for the specially gifted.
Noble Lords will be surprised to hear that up till now Britain has led Europe both in the number of children learning instruments and in the high standards achieved. Local music centres have evolved to provide a superb resource for children from different schools to play and sing together. Many local authorities provide not only instrumental teaching but also a vast range of musical experience within orchestras, bands and chamber groups as well as specialist teaching services. Once again, I can speak from experience. I have two grandchildren who took musical scholarships to Pimlico. Both achieved decent
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amateur status on the violin and cello. A third, without the special advantages of Pimlico, managed to play second desk viola in the excellent London Schools Symphony Orchestra. They were the product of the brilliant teaching of Sheila Nelson, and all of that came free.
There are three dividends to be gained from that system of instrumental teaching. First, there is the discovery and fostering of the really talented. A recent straw poll of 400 players from British orchestras indicated that 285 (71 per cent.) had had the benefit of free instrumental tuition during their school years. In the case of the Bournemouth Sinfonietta, 19 out of 30 said that they would not now be professionals had it not been for the free start they had received. Secondly, those who fail to reach such standards form that large group of happy amateurs who love to nuke music for themselves and to whom it can sometimes be a pleasure to listen. Thirdly, most of the majority who drop out early keep enough interest to listen to some music at concerts, on the radio and so on and enjoy it.
It cannot be right to let such a fruitful series of combined efforts run down and slowly wither away. It looks very much as if that is what is being allowed to happen. I find it impossible to believe that the Government meant or wanted it to happen. However, I fear that it is happening.
We have now been told that there will be no provision of time for the arts in the 14–16 curriculum. Secondly, the local management of schools, combined with the enforced devolution of funding from the LEAs, added to the pains of the poll tax and charge capping, have already produced severe cuts in that broadly based instrumental service and more are expected. At present, I have evidence of drastic cuts in no fewer than 34 local authorities. I shall give one or two examples of the worst. Barnsley has axed 23 posts in the peripatetic service; Bedford and Coventry have sacked their musical adviser; Hillingdon has 12 peripatetic jobs at risk; Manchester has 22 teacher redundancies; St. Helens has sacked 17 peripatetic teachers and closed its music centre, and so on and so on.
However, to be fair, some local authorities are struggling on manfully. My county council (East Sussex) is doing well. Three years ago it provided instrument teaching for just over half its schools. To bring in the other half it has persuaded the parents of existing pupils to put up £20 each so that the teaching can be extended to the other schools It has thus doubled the number of children receiving instrumental teaching, but of course that is not a poor area.
There may be a ray of hope in the fact that in the Prime Minister's constituency of Huntingdon his daughter is learning the clarinet. At least they will not be able to conceal the facts from him. As I have said, my noble friends will paint a no less depressing picture of the state of the theatre in education. We are contemplating, not by any means for the first time under this Government, a major change in organisation and finance, based upon strictly ideological grounds, which has been carried out without serious attention being paid to its secondary and less immediate effects. I do not for a moment

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believe that the planners responsible for local government reorganisation said to the Minister, "At least you will get rid of all that nonsense about Theatre in Education and peripatetic teaching". I do not believe that they have even heard of them. Those two admirable, inexpensive and socially valuable developments will be left by the wayside unless something positive is done.
I can now ask my Unstarred Question of the Minister. Does she agree that those successful and detailed approaches to arts in education are declining and are at risk of disappearing? Does she agree that they are obviously and urgently worth saving? If so, can she give us any idea of how that can be accomplished? Can she at least persuade her right honourable friend to agree to restore one cultural subject as mandatory for the 14–16 curriculum?
7.55 p.m.
Baroness Birk: My Lords, we are all extremely grateful to my noble friend Lord Donaldson of Kingsbridge for asking this Unstarred Question tonight. It is sad that a prime subject which should have been in prime time attracts such a small audience. As the debate will be reported in Hansard and as the Minister is here to reply, we hope that it will go further and receive wider attention. About five hours was rightly spent discussing the health service this afternoon, but a balance must be reached. We were talking about the physical and mental health of a community but its cultural health is equally important and that is what we are discussing.
The new national curriculum which was set out in the Education Reform Act embodied the important principle that all children are entitled to a broad and balanced education. I believe that that meant it should further their cultural as well as their academic and vocational development. The notion of entitlement received wide cross-party support during the lengthy debates we had on the Education Reform Bill in 1988. For the first time, the arts were to form an essential part of every child's education from five to 16. Since the inception of the Act, forward-looking schools have been preparing new courses in arts, design and the performing arts to meet new requirements. Those initiatives were taken in good faith. They are suddenly under threat. The whole future of arts in education is in jeopardy.
It is usually pleasing to find that one is right and can say, "There you are, I was right about that". This is an occasion when I feel sad to say, "Yes, I was right", because during the passage of the Bill in Committee in May and on Report in June, I moved an amendment. It had all-party support. The noble Baroness, Lady Young, put her name to the admendment as did the noble Lords, Lord Gibson, Lord Kilmarnock and Lord Young. My name was first, and I moved the amendment. The amendment proposed to leave out the words "music, art" and insert "the arts".
Everyone believed that that was a simple amendment and one that should have been accepted. Not one voice in the Chamber argued against it except the Minister's predecessor, the noble Baroness, Lady
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Hooper. I do not blame her because she was doubtless following instructions and Government policy. On the first occasion we did not vote. It was about two o'clock in the morning. It was grouped with a great many other amendments covering many different subjects.
On Report I moved the amendment again, this time on its own. Considering it was so late at night, we had an intensive debate. Everyone except the Minister, accepted that sensible, innocent amendment. When we pressed it to a vote at a quarter to one in the morning, unfortunately it was lost by two votes. Such was the feeling at the time. We felt that it was important to widen the field and include not just art and music but the arts. There should have been a forewarning that many problems lay ahead which went even further and deeper.
During the past summer when Mr. MacGregor was Secretary of State, he indicated that there would have to be some form of adjustment in the foundation subjects. Recently the present Secretary of State, Kenneth Clarke, announced a change. It was apparently off-the-cuff, but everything he says sounds as if it is off-the-cuff even though it is not, since he has that air. Certainly his remarks were made without consultation with the arts working parties or any of the working parties on the national curriculum. He threw up the idea that in order to relieve congestion in the curriculum at what is known as "keystage 4"—that means after the age of 14—music and art would no longer be included as part of the entitlement curriculum for 14 to 16 year-olds. My noble friend Lord Donaldson of Kingsbridge pointed out the tremendously grave disadvantages of this move.
It is well known that the status of school subjects after the age of 14 radically influences how they are valued and even how they are taught lower down the school. To make art and music optional at the age of 14 will immediately have the effect of reducing their significance in the eyes of parents and children, as well as in the opinion of the Government who are doing this. It is no use the Government saying, "Yes, of course we take art seriously". All governments say that, but when it comes to it, priorities do not work out that way, there are always more serious subjects to be considered before art. That is the way the funding goes.
Dance and drama are already struggling against the handicap of being subsumed into physical education for dance, and into English, for drama. Yet these are quite different subjects. There may be a link in that PE and dance are both physical. Drama and English are both the art of speaking the English language and it is better if one knows something about drama. Nevertheless, the subjects are entirely different. Dance and drama are performing arts, quite different from English and PE.
The arts have always been undervalued in this country and this will be a further body blow. Up till now—and this will probably continue and there will be no satisfaction—many parents have deliberately tried to choose schools where they know that the arts subjects are taught well. They will be in a great

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quandary if, after children reach the age of 14, in many schools the subjects are no longer demanded and are no longer mandatory. That will completely devalue them.
Further, the move will undermine precisely those principles of breadth and balance that have such importance in the education of adolescents. Their education will become predominantly technocratic and utilitarian at the very time when they look to test their new-found sense of identity against models embodied in the arts, in the great works of fiction as well as in imagination. Such models play an essential part in providing alternative bases for young people in their personal taste and values and by that I mean alternatives to some of the trash values of the commercially generated youth culture. Young people need a cultural and multi-cultural education more than ever in adolescence. I do not say that it should not be open to them to read, see or watch any of the trash they wish because I do not believe in such restrictions. But possibilities of greater value should be available to them so that they have the opportunity to judge and make up their minds. Much of this arose in a different context during the debate on broadcasting.
The arts in schools are further threatened by the LMS, local management in schools, as the noble Lord, Lord Donaldson, mentioned. Local education authorities no longer have the funds to continue to support many of the arts activities for which they were responsible in the past. The poll tax and capping play their part. When schools have to weigh their priorities and whether to spend money on the arts or a new roof or some physical improvement in the school, it is extremely difficult for them.
The noble Lord, Lord Donaldson, gave examples where the theatre and education were failing or were being underfunded and they had to give up. Unfortunately, we all have immense lists of such examples both in music and the theatre. I need only mention two since I do not wish to keep the House with a list of these wretched failures. In Birmingham, the arts and music centres, the youth orchestras, youth theatres, the peripatetic instrumental teachers are all in difficulties or at risk. The audiences at Cannon Hill Puppet Theatre were down 25 per cent. last year; and audiences at the Studio Theatre were down 39 per cent. The Birmingham Hippodrome expressed concern that there have been tremendous falls in school party visits.
In central London, the Bubble Theatre and the Unicorn Theatre for Children have seen school performances cancelled and attendances fall during the past year. These are only a couple of examples which could be multiplied all over the country.
The problem is further compounded by the Education Reform Act's charging policies because the cost of events that take place more than 50 per cent. out of school time can be passed on to parents. Children nonetheless cannot be prevented from going because their parents cannot or will not pay. Therefore if one child's parents do not pay, nobody goes. It is then up to the school. If the school can
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afford the cost, the children can go, but mostly it cannot do so, in which case the whole outing is cancelled.
During school time, events must be free, but we come up against another snag. If that is so, the schools must be able to afford the events. There is no central activity and there is so much devolution away from the LEAs that it is difficult for schools to cope financially.
I fear that we are moving inexorably towards a situation where the arts which are meant to be our common heritage—I agree that that is a hackneyed phrase but it explains exactly what we mean—could become the exclusive province of those who can afford them. That means that fewer people will have the opportunity to develop a lifelong commitment to and participation in the arts. Fewer people will seek employment in the arts because they have not been trained in them. People will not have the chance to develop their innate talents. That will affect the whole position of future patrons of the arts. Often those patrons give to the arts when they acquire some wealth as a result of some art instruction, or an introduction to the arts that they received when they were young. In many cases they wish to give something back to the arts in return for what the arts have given to them.
There will also in future be less generation of wealth through the arts. As a country we have a high reputation for theatre, opera and for our orchestras. That affects the financial wealth of the country and also our cultural heritage. We need to recognise the central role that the arts play in a civilised and civilising education for young people. Education is where a love for the arts starts. If that love is not aroused at a young age, our young people will be like the baby dwarf who did not speak. The other dwarfs said that was because he had never tried to speak. That will be the position our young people will be in because the door to the arts has not been opened for them. The effects of that situation could be more far-reaching than the Government realise. I would not like to think that the Government have acted in this matter with any sense of malice. They have introduced this provision as a cost-saving and time-saving exercise. I believe Ministers, too, have been brought up to believe that arts come at the bottom of the priority table in education.
I join forces with the noble Lord, Lord Donaldson, in asking that the Secretary of State should reconsider his decision to make music and art optional at the age of 14. The Secretary of State should ensure that dance and drama are available too. The latter two subjects are part of the performing arts. The Secretary of State should take note of the views of the working party on the visual arts—I believe that working party has already reported—and of the working party on music. I believe that latter working party is meant to report either today or tomorrow. I hope the Minister will be able to comment on that matter.
The arts must be restored to a secure place within a genuinely broad and balanced curriculum. I do not believe that is asking too much of a Government who always say they place great importance on young

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people's development. If they really mean that, they can try to achieve that objective in a small way. Nevertheless in doing so they will achieve great results.
8.13 p.m.
Lord Birkett: My Lords, I join other speakers in congratulating the noble Lord, Lord Donaldson, on introducing this matter into your Lordships' House. The noble Lord said he wished to discuss three small details in the relationship between the arts and education. Although those are only three pebbles on an immense beach, they are fairly symbolic because between them they emphasise the importance of the arts at every stage of one's life. Obviously when one talks about education, one is talking about the earliest stages of one's life.
The following point has already been made many times, but it bears repeating. I suspect that the arts are the single most civilising influence in our national life. If they are to play the part that they should in our life, a taste for the arts and the vocabulary of the arts should be introduced at the earliest stage.
I can appreciate that there are essential objectives in education which everyone must attain. Everyone must be able to read, write and add up. After those essentials, I cannot think of anything more important in the educational life of a child than a study of our cultural heritage. The nice thing about the phrase "our cultural heritage" is that in the arts it is not just a matter of Britain's cultural heritage. It is not the same thing as the history or the geography of these islands. In the arts the cultural heritage is the world's cultural heritage. The arts are free to range across the entire globe. Music is the most international of all the arts. Certainly the work in the theatre, in music, dance and in all the visual and literary arts is a common heritage for every nation. That should be available to our children too.
Happily I have just become the president of a school which will cope with this matter. It is a new school for the performing arts and technology based at Selhurst in Croydon. The school represents an entirely new endeavour. It is a free school, thanks to the generosity of the British phonographic industry and the funding of the Department of Education and Science. It will be a free state school and it will take children from the ages of 14 to 18. Children in the school will be taught—as they must—the national curriculum, but they will be taught that curriculum via the performing arts. Wherever possible the curriculum will be delivered—I use the fashionable phrase—via the performing arts.
The school will also deal not merely with the arts as performance, and the arts as a taste to be inculcated in children, but also with the background of the arts and the business and technology sides of the arts. The union and legal sides of the arts will also be taught. I speak of my hopes in this venture because the school does not open until the autumn. I hope that the people who follow that education in the arts will acquire the real vocabulary of the world of the arts. The world of
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the arts has always been highly competitive. The existence of the arts bodies has always been unreliable. They are forever threatened in various ways.

If the arts world is both unreliable and competitive and appears to be something of a jungle, I hope that the schooling we intend to give the children at the school will at least give them a map of that jungle so that they understand the world that they are going into. Their education will not be based exclusively on the performance of the arts or a taste for the arts. The school will therefore produce children who do not feel that if they do not become a famous and international performer, they must leave the business altogether. That feeling has been prevalent in the past. People have often felt in the past that either they must become a star such as Yehudi Menuhin, or they must give up the whole thing and become a bus driver.
One can take part in the arts world in many ways, not just as a performer. The arts world requires gifted and sensible administrators, financiers, lawyers and technicians of all kinds. I must not weary your Lordships by constantly referring to the wonders of the school that will open in the autumn, but I believe that that kind of education in the arts will be of real value to those intending to make a career in the arts. Even for those who do not intend to make such a career, the arts must feature as part of the basic curriculum. It is up to educationists who are far more skilled than I to determine how they feature in the basic curriculum and by what legal process that is undertaken. I believe the arts are an essential feature of the entitlement of children to education.
The new school that I have mentioned will concentrate on the technology of the arts. The arts are nowadays as complex technologically as any other business or industry of which I know. It would not surprise me if the technology of the arts were not made one of the technologies which are accepted at all levels of education as a technology in which one can specialise and obtain degrees and qualifications. At the moment that technology is regarded as a rather far out, one-off subject. I believe it should be far more central than it is. It is not only an intriguing subject in its own right, but it also leads one to the arts just as much as a conventional education in literature or music. In future, technology should be more closely linked to the arts than it has been in the past.
During the debates that concerned the abolition of ILEA, I remember very clearly the almost universal concern that was expressed in your Lordships' House that that abolition might lead to the collapse of instrumental teaching in London—that is, the very subject that the noble Lord, Lord Donaldson, has raised tonight—and to the disbandment, or to the creation of problems for, the London Schools' Symphony Orchestra and the other orchestras connected with it.
Members of this House were very helpful and the reply of the noble Baroness, Lady Hooper, was particularly helpful. It was a matter of saving those organisations. The Government and Members of this House were agreed. It would be tragic if in spite of all those good intentions and that endeavour—which

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focused upon London because that was the city that we were dealing with, but was symptomatic of the position in the rest of the country—the teaching of instruments and the very fabric of music in children's lives were to disappear so few years after those debates.
I am chairman of the Theatres' Advisory Council in succession to the noble Lord, Lord Jenkins of Putney, who is to speak later in the debate. That is an umbrella organisation which caters for all elements of the theatre—the managers, the actors, the technicians, the unions. Over the past year or two it has been concerned about what is happening to theatre in schools. It is not simply a matter of Theatre in Education, which has hitherto been highly successful. It is a question of schools regarding the theatre as something that all children can experience through visits to the theatre and visits from actors and technicians. There is overwhelming evidence that school visits to the theatre are becoming fewer and the element of theatre in school life is diminishing.
There are dozens of different causes. There is the famous problem of charge capping. There is also the question of individual responsibility which is now laid upon schools. Although it is for the schools to make their own decisions, somehow it is always the arts subjects which are cut. Those are the subjects which are easiest to cut out. They appear to be peripheral, the icing on the cake, the jam on the top. In fact they are the fabric of our nation. The arts should no longer be the subjects which are dropped in a difficult financial situation.
Is there no way of ensuring that despite charge capping and whatever may happen as a result of recession, our children's entitlement to that vision of the world which the arts can give them is not impaired? Can we not ensure that the arts are not always the scapegoat of finance?
8.23 p.m.
Lord Addington: My Lords, I am somewhat humbled by those who have spoken before me in this debate. My noble friend Lord Donaldson spoke with great authority and knowledge about the teaching of musical instruments. The noble Baroness, Lady Birk, spoke with a great deal of sense about theatre and its place within the arts. We are considering the place of the arts, and in particular the performing arts, in our school system. I shall address most of my remarks to the subject of theatre, principally because unfortunately I am one of the most unmusical of people and come from an unmusical family.
The noble Lord spoke about people being trained in the basics of music. From that pool of people with basic knowledge of a musical instrument come the professionals and the talented amateurs. We must also consider the less competent or even incompetent amateurs who simply enjoy playing a musical instrument, regardless of how annoying that may be to others. When I was at university somebody who lived two doors away had an electric guitar which he attacked with great vigour until the small hours of the morning. He enjoyed himself greatly, at least until the instrument was forcibly taken from him on some
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occasions. He had acquired the basic skill when he was at school when he had been taught how to play the guitar. Thousands of young people in this country acquire a taste for playing a musical instrument. They may not become great exponents of the instrument but at least they gain pleasure from it. They are given enough basic technical knowledge at school to allow them to enjoy it.
It is impossible to enjoy such activities if one is totally incompetent at the instrument. It is rather like playing tennis when one does not know how to play the game; one spends one's time picking up the balls and does not enjoy the game. With a musical instrument one has to be taught the basics before one can do anything with it.
Turning to theatre, there is a danger that in the educational process the drama element is dropped just when young people reach the age at which they can begin to appreciate it. Until the age of 14 young people do not experiment very much. It is a fallacy that young people are adventurous. They tend to conform with their own group and only occasionally shock their elders. I speak as someone who has until fairly recently been guilty of that himself. At the age of 14 young people begin to experiment with certain cultural ideas. From that age they begin to develop more individual tastes in music and no longer slavishly follow the pulp music which is found even at the top of the charts. Cultural education in music means that they can appreciate different types of popular music and does not simply mean classical music. At that age young people need appropriate education.
In the case of drama that is particularly important because at that age people begin to express themselves on a more individual level. It is therefore important that their experience of drama is not restricted to reading plays during English lessons. I can remember that torturous experience. Copies of a play would be handed round the classroom. If by some miracle the teacher managed to get the right person to read the right part the play could become alive. More often there would be a staccato delivery by people with no interest in the part they were playing and who probably were of the wrong sex for the part. They would read, '"Move stage right'.—Oh sorry, Miss, do I read that out?" That does not provide an education in the arts. It is merely reading out something that is not designed to be read even to oneself. One must experience standing on a stage and interrelating with people in order to get an idea of a play. That type of exposure to drama is the classic way of ensuring that young people do not like it. To force someone to do something and to do it badly is the best way of putting them off it. To do that when young people are at an impressionable age will guarantee that they do not look at drama again for years.
The question of the exclusion of cultural subjects from the core subjects of the national curriculum is vital, as the noble Baroness said. If they are not to be taught until the final years they will be regarded as peripheral subjects. There is also a danger that people will insist that children are examined in the subjects. We should merely offer young people the opportunity

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to experience the arts at that stage, with the possibility of an examination if they so desire. However, as academic pressure grows we should make sure that teachers, schools and parents do not put pressure on young people to take exams in inappropriate subjects. Education is not only about exams. We should not make children do too much so that everything suffers. There is a very fine line which has to be drawn and it will vary from school to school and from pupil to pupil.
We should encourage education about education in the arts. We should encourage people to believe that the theatre is for everyone, and not just for other people. The "them and us" syndrome, although a rather dated expression, is probably appropriate here, and is something we should try to avoid instilling in pupils.
Much of what I was going to say has become superfluous in view of earlier speeches. We must try to create a situation where sufficient funds and time are made available for these subjects to be taught alongside the more technical subjects which have been given greater weight in the national curriculum. I do not know whether it is true, as noble Lords have said before me, that the arts are a great civilising influence, but it is certainly a great part of our cultural inheritance that we understand them. We may not like them but we should all understand them. I suggest we make sure that everyone who goes through the school system at least understands them. Let us ensure that when the young people of today and tomorrow say, "I do not like the theatre", at least they know what the theatre is.
8.32 p.m.
Lord Jenkins of Putney: My Lords, we are all grateful to the noble Lord, Lord Donaldson, for introducing the debate. The noble Lord, Lord Birkett, said I was his successor as chairman of the Theatres Advisory Council. That is true. However, I have another successor—the noble Lord who opened the debate. When Jim Callaghan succeeded Harold Wilson as Prime Minister and decided to change the arts Minister, his glance fell upon the noble Lord, so I had to make way for an older man. I do not suppose that at that time either of us felt that one day we would be on slightly different Benches, but speaking in harmony on the same subject.
The noble Lord, Lord Donaldson, in opening the debate, was right when he said that the Government did not intend the consequences of their own actions, but this is par for the course. I do not suppose for an instant that they wanted to have a couple of million unemployed or a record number of bankruptcies after about 12 years of Conservative government. But the consequences of the policies they follow lead not only to major disasters but also to minor ones. Is it relatively unimportant that schools will no longer have the opportunity of entertaining large numbers of children? That is what is happening. For example, in theatre education many fewer children are now having
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the experience of going to the theatre than was the case in the past. The cause of the trouble is the heavy hand of the Government on local authorities.
Another effect of government policy—I do know that it is the cause—is their determination to keep control over all sections of expenditure. The heavy hand of central government deprives local authorities of the ability to do the things they want to do, with the consequence that the political blame sometimes falls upon them rather than upon central government. What I have just described is a typical example of what is happening.
I mention in passing that when Lord Donaldson and I were arts Ministers we had an autonomous area within the empire of education. That is no longer the case. The noble Baroness, in replying to this debate, will be replying for education rather than the arts. However, we have been talking about the arts rather than the relationship between education and the arts. Without putting it forward as a fact, I am wondering whether there has been a less happy relationship between education and the arts under the present Government than was the case at one time. I do not suppose the noble Baroness will tell us if that is the case, but I put forward as a possibility that perhaps this would not have happened if the relationship between education and the arts had been a little bit closer than it is today.
The briefing I have received on this subject has not been confined to the excellent one to which the noble Lord referred in opening the debate: there was also information from a rather unusual organisation called The Performers Alliance, consisting of British Equity, The Musicians' Union and the Writers' Guild. It is probably the employers' most popular trade union, because it exists to promote the organisations within which it exists. Of course, there are occasional quarrels, but on the whole a harmonious relationship exists between these groups of people who work in the arts and those who employ them.
In the opening sentence of their brief, which I am sure would be agreed by all, they state:
"There are few areas in education where the United Kingdom leads the world, but the development of the peripatetic instrumental teaching services run by many Local Education Authorities is one of these".
That accounts for a great deal, because it means that the growth of the theatre and the arts generally over the past few years has not been solely a case of government putting more in. The Government may not have gone as far as many of us would have wished, but we should not deny them credit for having taken on the responsibility of funding the arts. They have not tried to destroy the arts or privatise the National Theatre, and they have recognised there are areas in which government must accept responsibility. Why are they acting as they are? I believe they do not know what they are doing. If the debate serves the purpose intended and the right message is conveyed by the noble Baroness—possibly it will be read in Hansard or picked up from the papers—it may be that some of this can yet be put right. It may be a small thing, but the consequences are grave, not only for the theatre but for music as well.

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The arts generally deserve greater recognition for the part they play in education as a whole. I believe they are essential to a broad, balanced, civilised education. Just as Lord Addington was speaking from an earlier stage I speak from the other end but come to the same conclusion.
The arts activities and trips to theatres and museums are essential to the development of the perception, awareness and sensibility that, whatever our political views, we want to see in a civilised person. We want to see the development of creative, intellectual and social skills, and the arts can help in that. We want people to be able to grasp the enormous possibilities opened to them by a capacity to appreciate the arts. So many people go through life completely unaware of the great things which are open to them. For example, surprisingly, Pavarotti singing "Nessun dorma" on television during the World Cup has introduced a large number of people to the possibilities of opera. Education is necessary. We are trying to introduce this kind of thing at an earlier age and to open people's minds to the possibilities that exist. If that happens, their minds will not be engaged in more trivial and possibly less desirable occupations.
Arts education makes a major contribution to the nation's economic and cultural development, producing artists, entertainers, craftspeople and designers. If at this stage the Government take steps to force local authorities to withdraw the support that is needed, no one else will introduce it. It is not something for which one car obtain a great deal of advertising, sponsorship and so on. It must come from the local authorities. We ask the Government to reconsider this matter and see whether in some way or another the restrictions placed on local authorities and the difficulties put in their way can be removed.
8.40 p.m.
Baroness David: My Lords, I am very glad that the noble Lord, Lord Donaldson, asked this Question tonight. It is very important and pertinent at this moment. If I may say so, I greatly enjoyed his speech. I endorse almost every speech that has been made in this debate with the possible exception of that of the noble Lord, Lord Birkett. I enjoyed a great deal of what he said. His eloquence and enthusiasm for the arts are tremendous. But his advertisement for the City Technology College I cannot entirely accept from these Benches, although I thought that it was a very good advertisement. However, one has to remember that the money that goes from individual sponsors and the Government into these specialised areas is taken from state schools for the most part, just as the grant maintained schools received so much more money for capital expenditure than others. So I have that reservation to make. We shall watch with great interest how this situation develops and how other schools in the area of that college also develop. It is an important area to watch. I want to say that we shall be looking out.
I return to the topic that has been raised by the noble Lord, Lord Donaldson. A great many people in the arts world, and in the music world in particular, feel that a crisis is very near. I hope that this short
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debate will alert the Government—and Mr. Clarke in particular—to the anxieties and fears that exist. I believe that we are in danger of jettisoning an activity which we are extremely good at. As the noble Lord, Lord Donaldson, said, and I do not apologise for repeating it, Britain leads Europe both in the numbers of children learning to play musical instruments and the high standards achieved. In percentage of population Britain has more young people's orchestras, ensembles, bands, groups and choirs than any other European country and certainly rivals the United States. We do not always keep that far ahead of our European partners, so it is something of which we can be proud at the moment. Let its hope that it continues.
The music centres that have evolved through children within one region joining together and benefiting from rehearsing, playing and singing are in danger as the costs are funded by discretionary grant from the LEAs. Not only are LEAs strapped for cash and some are suffering from poll tax capping, having to cut out a great many activities which are not seen as essential, but local management of schools will make a huge difference. When decisions on where to spend and what to spend are made by governing bodies, it is the governing body which will decide what music teaching to buy in.
The overall view that the local authority had will be lost. Only centralised services can manage the provision of expensive and untransportable instruments, selection of highly specialised teachers, the maintenance of instrumental stock and centralised library provision. At the end of last month in Manchester there was a conference chaired by Professor Swanwick of the University of London's Institute of Education. It was called Music in Crisis. There was unanimous agreement among the 200 or more teachers taking part that important elements of British musical provision were being lost.
Attached to the briefings that we have been sent from the National Campaign for the Arts is a fearsome list of LEAs which have reduced their provision and cut their peripatetic teachers. At least 111 posts have already gone and 53 more are under consideration for redundancy. The Manchester forum agreed on two resolutions. The first expressed urgent concern at the threats to LEA music services. It comments on the haphazard way in which instrumental teaching has developed since the 1940s and says that that is mainly due to the lack of any coherent national policy. It says that it is essential to have a structured policy for the future. The second resolution states:
"This Forum urges the DES to ensure that action is taken to plan coherently for the future of regional structures of instrumental teaching and other forms of music-making, with benefit to both schools and the community".
Is the DES paying any attention to those resolutions that have been passed over to it? I hope that the Minister may be able to give some response, although I realise that the forum only took place at the end of last month. Perhaps she can say how soon there might be a response.

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Instrumental teachers are prepared to meet the challenges and want parents and governors to understand the important role that they play. They are ready to work within the national curriculum and to demonstrate that they are not just skilled instrumentalists and musicians but also educators involved in the mainstream education of all children. Music is a national curriculum subject. At the North of England conference early in January Mr. Clarke said—I think my noble friend also quoted him—

"Art and music should be options at key stage 4. I do not believe that it is right for the Government to use the law to compel every single pupil to continue to do these subjects after the age of 14".
I do not know what on earth he thought that his Government were doing during the whole of the passage of the Education Reform Bill when the national curriculum was made legal. In any case, let us contrast that with what his predecessor, Mr. McGregor, said exactly one year previously in January 1990:
"I expect the full range of foundation subjects to be studied by pupils at key stage 4".
We get used to encountering retreats on the curriculum. I suppose that there is a certain pleasure, as my noble friend said, in saying, "We told you so". All the way through the long hours of debate on the Education Reform Bill we begged for greater flexibility. We said that the Government's plans were too prescriptive. The noble Lord, Lord Joseph, supported us. Now predictably the Secretary of State has realised that the number of subjects and the amount of testing and assessment involved are quite impossible to fit into the timetable and are too much to put on teachers. So we constantly hear of changing plans. It was the seven year-olds a week or so ago; now it is the 14 year-olds.
On this side of the House we certainly hope that at least one cultural subject will be mandatory after 14. Otherwise, the broadly based curriculum that is asked for in Section 1(2) of the Education Reform Act will not be met. I want to remind noble Lords of what is said there:
"The curriculum for a maintained school satisfies the requirements of this section if it is a balanced and broadly based curriculum which—
(a) promotes the spiritual, moral, cultural, mental and physical development of pupils at the school and of society".
I hope that the Government will remember that.
So far as concerns the GCSE in music, instrumental tuition and group coaching are essential. For such pupils performance is mandatory. I ask whether there will still be the opportunity to take the GCSE in music. I understand that the recommendations of the music working group are now published and come under fairly severe stricture in an article in The Times today which I believe has already been mentioned. One feels a little despondent about the future when one reads that 19 per cent. of schools have no qualified music teacher teaching music and that 68 per cent. have only one or two specialists, whereas 19.8 per cent. of independent schools have three or more.
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I have spoken chiefly of music teaching. However, Theatre in Education is as much at risk with the resultant narrowing of experience and loss of fun and enjoyment. The noble Lord, Lord Donaldson, referred to that. When considering providing audiences for the future, that is very important. One gets into the habit of going to the theatre. I well remember being extremely moved by a schools' performance at Covent Garden. The enthusiasm of the audience was terrific. It was a wonderful experience.
Many theatres have now seen school attendances diminish by as much as 25 per cent. over the past year. Three Theatre in Education companies have already closed. Others are surviving on loans. How long can one expect that to last? Local authorities are cutting their grants. Will the Government stand by and allow those closures to continue?
There is the question of charges. The charging sector of the ERA has resulted in bookings and attendances falling. Charging for teaching instrumentalists inevitably means that it will be the better off children, the middle class children, who receive the lessons. The noble Lord, Lord Donaldson, gave us the interesting fact that over 80 per cent. of the players in UK orchestras had had free instrumental tuition at school. No wonder Simon Rattle stated in a recent radio interview, "We shall see a great difference in our orchestras in 10 years' time".
I end on a personal note. My sister-in-law is my chief informer on matters musical. She taught at the Saturday courses at Pimlico for the Centre for Young Musicians. She worked for ILEA for a considerable time. She has repeatedly talked to me and written to me of her total dismay about the way matters are changing and the reduction in the service. I am aware that Westminster has taken on the funding for CYM—in case the Minister thinks that I do not know that. I do not know whether the Minister will refer to the Foundation for Young Musicians. However, my sister-in-law states that it is a much cut version from that which was run by ILEA for years. Several big boroughs have opted out. Many children unable to attend CYM Pimlico used to have financial help towards lessons. That has been abolished.
My sister-in-law wrote that London should be proud not only of the standard achieved, but the fact that a vast fraternity—it now numbers in thousands—of inner city children was established. Those children went on at least two holiday courses a year, often abroad. They spent many hours a week outside school hours working and practising rather than in what she called "inner city sin". It was a unique educational project. She concludes, "It's a crime". I agree. ILEA's music was unique.
However, we now have to deal with the situation as it exists. We want to hear from the Minister that the Government are determined that there will not be a similar devastation with reduced service in both music and theatre all over the country. I hope that the DES is aware of the need for action and of the strength of

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feeling which has been expressed tonight. It is remarkable that we have not had a single speaker from the Conservative Benches.
The Government are constantly talking about standards and quality. What about the standards and quality of music and theatre?
8.53 p.m.
The Parliamentary Under-Secretary of State, Department of the Environment (Baroness Blatch): My Lords. I too am grateful to the noble Lord, Lord Donaldson of Kingsbridge, for the opportunity to reaffirm this Government's proven commitment to safeguarding the place of the arts in our schools. I say "proven". As I listened to the debate I felt almost as though I had landed from another planet. It is this Government which after all included music and art as foundation subjects of the national curriculum and which have ensured that all pupils must study them in a coherent and progressive way between the ages of five and 14; and that those who continue with them after that age will do so on the basis of a far more secure foundation than has been available in most schools in the past.
The Government also fully share the admiration which has been expressed here today for the work of local authority instrumental teaching services. We are aware of the crucial part that they have played in enabling hundreds of thousands of children to start to learn instruments; and in bringing those with commitment and talent to the high standards which are demonstrated in so many local orchestras, bands, choirs and other ensembles. It can indeed be said without exaggeration that those standards are the envy of the world.
We have heard today of the fear that these services are now under threat from two major causes: local management of schools and community charge capping. On the evidence we have so far, I do not believe that fear to be justified. The fact is that the effects of local management of schools on these services is not yet clear. Many local authorities still retain central control of the music services, and a variety of schemes for delegated funding are being tested or developed by others.
Where a local authority decides to delegate the funds allocated to its instrumental teaching service to schools, it is by no means self evident that the service will suffer in consequence. Nor need the peripatetic workforce necessarily be disbanded. It is open to the local authority to offer these services to schools and charge the costs to the budgets of those schools who use it. Heads, parents and school governors are just as capable as the remainder of us of recognising a good thing when they see it. Indeed, there is evidence from some authorities which have reorganised their services and introduced charging for instrumental teaching, where previously it was free, that there is now increased take-up and expansion of those services.
I can see no reason why the community charge, and charge capping, should cause long term harm to these services. It is a matter for local authorities to be innovative and enterprising in the ways in which those
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services can be delivered. I was struck by the example that the noble Lord, Lord Donaldson of Kingsbridge, gave us of his young relative who did extremely well, learning music for free in our schools. I believe that he would admit that that free service was offered to all too few children. Because it was free, inevitably, no Government—this or any other—could make that service available as a right to all children. Therefore because provision was made for small numbers of children, there was concern that something needed to be done. In the 1988 Act the clarification for charging for music was made. Again in some authorities that meant an expansion of the service.
As I have said, I can see no reason why the community charge and charge capping should cause long term harm to these services. The instrumental teaching services have been developed and funded by local authorities, and their continuance is a matter for decision by those authorities, in the light of local spending priorities. But those priorities are determined by the views of local people; and we have already seen some evidence that, where the value of music services is perceived and defended by schools, governors and parents, local authorities will think very carefully about how they may be maintained even within a reduced overall budget.
We are not washing our hands of the potential problems, however. As I have said, the Government value the instrumental teaching services very highly, and wish to see them continue. We shall be watching the situation very closely, and in particular where we see examples of effective provision which both meets the needs of schools and ensures efficient central co-ordination of the music services. We shall in informal ways seek to disseminate the good practice involved. It is too soon to reach firm conclusions, since the picture we have at this stage is a confused one with adverse reports from some areas admittedly but also some good ones of business as usual or even expanding from others. My expectation is that after a period of uncertainty while new arrangements are worked out, we shall see a better organised and better publicised service emerge in many areas than has existed in the past.
The noble Lord has also suggested that Theatre in Education programmes in schools are under threat from the same causes. And of course the arguments here are very similar. Once again, we have services which we all admire, and which have gained an international reputation for their high quality. Once again, the picture we have of the effects of local management of schools on Theatre in Education programmes is confused.
What is clear is that if a local education authority gives schools the freedom and the funds to pay for the use of the Theatre in Education service, that need not pose any threat to its future. Schools will decide whether or not to support it, depending on whether they believe it offers good educational value for money. The evidence we have so far suggests that where Theatre in Education companies have made their work relevant to the national curriculum demand for their services has remained high. Where they have

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not done so bookings have fallen away. That supports our view that where the service is valued by schools and parents it should be able to look forward with confidence to the opportunities which local management of schools brings.
Lord Donaldson of Kingsbridge: My Lords, do I understand the Minister to be saying that where theatres in education have decreased in use it is because they have performed badly? The Minister appeared to say that and, if so, it is an important point which will need a great deal of proving.
Baroness Blatch: My Lords, the situation is not so clear cut and I am not saying that. The service has been highly valued. We are dealing with the way in which LMS is working out in local authorities; it is a question of who has the money and who determines whether or not theatre companies will attend schools. Where the service was provided centrally and where there was no cost to the school no consideration was given to whether what was being performed was of particular relevance to the school at the time. Where the school is the purchaser, the customer, of the theatre we believe that there will be better linkage between what is provided by the theatre companies and what the school requires. In many authorities prescription was determined by the local authority centrally or by the theatre company which came along with an offer, as opposed to the school itself having a view about what the local theatre should provide. I am now referring to the customer-provider relationship, but I do not wish to downgrade what the theatre companies were doing. If Theatre in Education was able to float free of the local authorities' control and market its services direct to schools, the linkage would be more fruitful.
We are also being asked whether at least one cultural subject—by which I take the noble Lord to mean music, art, drama or dance—will be made mandatory in the national curriculum after the age of 14. My right honourable friend the Secretary of State for Education and Science has, as the noble Lord is aware, sought and received the views of the National Curriculum Council on how to introduce greater flexibility into the curriculum for 14 to 16 year-olds; that is, those in key stage 4 of the national curriculum. In addition, we have been listening very carefully to the views of teachers who have the task of implementing the new curriculum. It was largely in response to their concerns that the decision was made to reduce the requirements of the national curriculum at this key stage and in particular to make the study of art and music optional for this age group.
I must point out to the noble Baroness, Lady Birk, that a great deal of thinking, listening and consulting took place before the decision was taken. It is not true to say that it came out of the blue. I well remember the discussions on the 1988 Act and the two powerful arguments that were then deployed. One argument was that there should be no prescription; in other words, that there should be total flexibility for the professionals to determine what should be taught in the schools. It was widely argued that prescription was
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not good in terms of telling teachers what to teach children. The noble Baroness spoke of the plea to have the arts included in the national curriculum rather than music and art. That is a debatable point about which one could continue to argue because a relevant issue still exists.
Whether arts or art and music are included as compulsory subjects we should still have the problem that some children will have gone through school without learning music, drawing, drama or theatre. The basic issue remains of whether the arts as a subject should be taught. I believe that we have the best of all worlds. We have art and music as foundation subjects in the national curriculum and we have drama as a compulsory core element of English, which is a mandatory subject to the age of 16. Therefore, three elements of the arts are being taught in the national curriculum—
Baroness Birk: My Lords, I thank the Minister for giving way. My information is that the working parties which are most closely involved in these subjects were not consulted before it was decided that the subjects should be optional. I asked the Minister why that was so. Secondly, she said that these are early days and that we should see how the Act works out. I agree with her but I wish to know why a decision to stop any arts subject being mandatory after the age of 14 has suddenly been made. I believe that it would be best to leave the situation alone and see what happens but to make sure that arts subjects are taught.
Baroness Blatch: My Lords, we asked the National Curriculum Council for advice: the working parties are a constituent part of that council. The art working group has made comments to the Government. We understand that its comment on the optional aspect of music in the national curriculum beyond the age of 14 will form part of the report that will be published tomorrow. The art working group would have liked art to be continued beyond the age of 14.
The noble Baroness asked why we took that action. We did so because of the request for flexibility from the age of 14. There is wide support for flexibility. Part of the debate in 1988 was that it should be considered at the age of 14. I make no apologies for opting for a complete change at the start. There were schools in which children were not taught art, music, science and many other subjects and therefore left school with no knowledge of them. We believe that something radical had to happen. The national curriculum was put in place and we have quickly responded to the call for flexibility and the introduction of some vocational education post 14 years.
We did so because we consider that by the age of 14 pupils are beginning to look beyond compulsory schooling to work, training or further study. Therefore, the rigidity of the 10-subject curriculum at key stage 4 would have restricted the time available for other worthwhile options which lie outside the national curriculum. Our overriding concern was to ensure enough breadth and balance in the 14 to 16 curriculum without sacrificing the variety which is so important as young people begin to mature. We believe that we have achieved this.

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There will also be continuing opportunities for pupils to pursue some aesthetic study at this key stage, and we expect that many will do so. Schools will be expected to continue to offer GCSE courses in music and in art, but such study could also include drama and dance and could be provided either through short single subject or combined subject courses.
Drama will form part of the national curriculum at key stage 4 through its inclusion in the attainment targets and programmes of study for English; but pupils wishing to undertake more specialised study of the subject could do so through a separate GCSE or a combined subjects course which included drama. In our view and in that of many teachers, it is important that pupils of this age should be studying arts subjects, and above all because they want to.
I think the point made by the noble Lord, Lord Addington, was important. Compulsion at any age is not good, but compulsion between the ages of 14 and 16 is particularly difficult, and particularly with these subjects, because compulsion is a problem post 14. I would predict that more young people, having studied arts subjects from the age of five through to 14, are much more likely in key stage 4 to choose them as subjects, because I believe the grounding will be very important. The national curriculum music working group, whose interim report is to be published tomorrow, will be having regard in its further work to the possibility of combining music with other subjects at key stage 4, as of course will the art working group in relation to art.
On the specific points raised by noble Lords and noble Baronesses in the course of the debate, the noble Baroness, Lady David, asked me specifically about the resolution from the Music in Crisis conference, and indeed from any body. We have not received the resolution as yet, neither Ministers nor in the department, but when we do we shall respond to it. I think I have dealt with the point about the Government in retreat.
First, may I welcome the comments of the noble Lord, Lord Jenkins of Putney, and his rare compliment to the Government on their contribution to the arts generally. We have a major department of arts and libraries in government. However, the noble Lord hinted that perhaps there was a problem in the relation ship between the arts department and the education department. There is absolutely no evidence for this suspicion, and I am pleased to tell him that there is a healthy, robust and enthusiastic relationship between the arts department and the education department. We certainly have raised the profile of the arts with this major department. I am entirely confident about the education department, which is the first department of any government to have made the arts a central part of the national curriculum.
The noble Baroness, Lady Birk, was worried about the loss of status of music and arts. Again I have to say that these arts subjects will be compulsory from the age of five to 14. They will be taught in a more regular and coherent way than ever before. Given that they are foundation subjects, we expect that there will be more positive choice of continuing with these subjects
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past the age of 14, given the variety of ways in which young people can either take them to examination, take them as shorter courses or indeed take them as combination courses with other subjects.
The noble Lord, Lord Donaldson of Kingsbridge, mentioned the decline in school visits. On the evidence we have so far, we do not have evidence of a general decline in visits since the law on charging anyway was clarified in the 1988 Act. The evidence we have is that the level of visits seems to depend very much on the attitude of head teachers and the value they place on such visits. We know that in some areas visits have increased in number as a result of the changes. In others they have diminished. Again, our evidence so far suggests that the fluctuation has a great deal to do with the attitude of the schools to such Visits and their value to education.
The noble Lord, Lord Birkett, queried the future of art and music as they impacted on local authority spending. Again I have to say—and it is very repetitive—that whatever happens to local authority spending, art and music will remain a foundation subject for all children from the ages of five to 14. That will continue. Therefore, it pre-empts and prescribes priorities for educational spending. They will, beyond 14, remain an option, and drama will remain a core part up to level 6 in English, which will remain a mandatory subject up to the age of 16.
The noble Lord, Lord Addington, also argued for flexibility. I have told him, and I hope assured him, that we are with him on this issue of flexibility post 14. Just one word on drama in the national curriculum, where I said it is a core element of the teaching of English. It will of course include performance skills, which have been referred to in the debate. It will mean also that all pupils will be required to participate in drama, and role playing is very much an activity that many teachers use as a method of teaching other subjects too.
All pupils will be required to experience live performance —another important point made during the course of the debate. We also say that pupils should have an adequate introduction to drama through its inclusion in the study of foundation subjects, and the opportunity to study it in non-foundation time so as to be able to make an informed choice when considering drama as a subject to be studied either for pleasure or as an option for examination.
The noble Baroness, Lady David, mentioned the foundation for young musicians. As I am sure she is aware, they are being provided with money from the Government for three years only. That is the arrangement. It is a one-off measure taken to secure the continuance of provision previously funded by the Inner London Education Authority. The Government contribution is more than matched by those of the inner London boroughs and by business sponsors.
This has been an important debate. I hope that what I have said will convince noble Lords that the Government believe this subject to be an important part of the national curriculum. It is now central and

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will be an experience for all children to enjoy. The information and advice we are receiving from both the music working group and the art working group will be taken seriously. I am sure that it will produce valuable ideas for attractive and often vocationally-orientated courses. I have every confidence that in the circumstances outlined we shall, over the next few
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years and contrary to what was said in the course of the debate see the arts flourishing in our schools for all age groups as never before.

Namibia Bill [H.L.]
Returned from the Commons agreed to.
House adjourned at sixteen minutes past nine o'clock.

  EASTERN EUROPE: DISPOSAL OF MILITARY EQUIPMENT
  EASTERN EUROPE: DISPOSAL OF MILITARY EQUIPMENT
  EAST TIMOR: ARREST OF FRANCISCO DIAS XIMENES
  EAST TIMOR: ARREST OF FRANCISCO DIAS XIMENES
  MILITARY EQUIPMENT: DISPOSAL UNDER CFE TREATY
  MILITARY EQUIPMENT: DISPOSAL UNDER CFE TREATY
  WAR WIDOWS: PENSIONS FOLLOWING REMARRIAGE
  WAR WIDOWS: PENSIONS FOLLOWING REMARRIAGE
  VIETNAM: TRADE BALANCE
  VIETNAM: TRADE BALANCE
  LET PROPERTY: COMMUNITY CHARGE LIABILITY
  LET PROPERTY: COMMUNITY CHARGE LIABILITY
  AGRICULTURAL TENANCIES: CONSULTATIVE PAPER
  AGRICULTURAL TENANCIES: CONSULTATIVE PAPER
  ENVIRONMENTAL EDUCATION WORKING GROUP, SCOTLAND
  ENVIRONMENTAL EDUCATION WORKING GROUP, SCOTLAND