Sitting of 28 January 1991

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

    Housing Developments
    Mr. Steen: To ask the Secretary of State for Energy what statutory provisions cover consultations between the electricity industry and a developer prior to new house building developments.
    The Parliamentary Under-Secretary of State for Energy (Mr. David Heathcoat-Amory): There is no statutory requirement for formal consultation in the relevant electricity or planning legislation.
    Mr. Steen: Is my hon. Friend aware that new houses throughout the country are being built close to underground cables and overhead wires and without a guarantee of adequate supplies? That happens because there is no statutory requirement to consult the electricity industry. However, there is a statutory requirement to consult the National Rivers Authority before planning permission is granted. Will my hon. Friend say something to my constituents who are regularly plunged into darkness when the local sub-station is overloaded? Too many houses are being built without consultation with the electricity industry with the result that local electricity boards cannot cope despite all their efforts.
    Mr. Heathcoat-Amory: It is sensible for developers to consult the electricity companies before proceeding, to ensure adequacy of supply. But I assure my hon. Friend that the suppliers can levy reasonable charges on developers to recoup the cost of the necessary transmission lines and plant to service new developments. The charges do not fall on my hon. Friend's constituents.
    Mr. Tony Lloyd: As it is in new buildings that thermal efficiency is most advantageously applied, why is there no statutory requirement on developers to consult not only electricity suppliers but other energy suppliers to ensure that houses have the maximum energy efficiency?
    Mr. Heathcoat-Amory: The energy efficiency requirements for new houses are covered in the building regulations, which were updated and improved in April last year. They should improve the thermal efficiency of new houses by about 20 per cent.

    Electricity Privatisation
    Mr. Squire: To ask the Secretary of State for Energy what is the level of proceeds of the sale of the 12 regional electricity companies.
    The Secretary of State for Energy (Mr. John Wakeham): The sale of the 12 regional electricity companies will raise some £8 billion, more than £5 billion from the sale of the shares and almost another £3 billion from the injection of debt into the companies.
    Mr. Squire: Does my right hon. Friend agree that the high level of those figures is significant and reflects the great success of all those involved in what was a difficult flotation? In view of that large sum, will he suggest to my right hon. Friend the Chancellor of the Exchequer that at least some of the money could be spent advantageously on energy efficiency schemes both on their own merits and as a way of meeting global warming problems?
    Mr. Wakeham: I agree with my hon. Friend about the success of the sale. Privatisation in itself has several advantages for energy efficiency. First, the Electricity Act 1989, under which the companies were privatised, places an obligation on them to promote energy efficiency. Secondly, the creation of competition and a downward pressure on fuel prices should substantially improve energy efficiency. My ministerial committee, set up as a result of the Government's environmental White Paper, is pursuing many other avenues of energy efficiency.
    Dr. Kim Howells: Is the Secretary of State aware that a large tranche of shares in South Wales Electricity was bought by the Welsh water authority and that, given the way things are going with the sale of the regional electricity companies, we are liable to end up with Wales plc, which cannot be a vast improvement on the monopolies that preceded privatisation?
    Mr. Wakeham: Of course, the sale of the shares took place after the companies were put into the private sector. All the regulations were drawn up in accordance with stock exchange rules. As the hon. Gentleman knows, a golden share operates in the company. It would not be right for me to say anything further at this stage.
    Mr. Morgan: Even before the Government have received most of the proceeds of the sale of the regional electricity companies, we are once more being softened up by the aerial bombardment of "Star Trek" before the land invasion of the generating companies begins with the production of the pathfinder prospectus on Friday. Will the Secretary of State confirm that one thing that he has learnt from the disaster of the sale of the electricity distribution companies is that if one keeps back 40 per cent. and underprices 60 per cent., one has some hope of making up some of that underpricing two years later when one sells the remaining 40 per cent?
    Mr. Wakeham: The hon. Gentleman is an observer of the scene, but not a wholly dispassionate one. I do not accept his strictures on the sale of the regional electricity companies. I do not accept that they were underpriced or that the sale of the generating companies will be underpriced. We shall take proper care to ensure that the price struck is fair to taxpayers and investors. Naturally, the fact that we are selling only 60 per cent. rather than 100 per cent. will have to be taken into account.

    Oil Exploration
    Sir Anthony Durant: To ask the Secretary of State for Energy what is the progress of the 12th round of offshore licensing.
    The Parliamentary Under-Secretary of State for Energy (Mr. Colin Moynihan): I am delighted to say that we have received 115 applications covering 81 blocks in the 12th round of licensing. In addition, 37 companies have applied for acreage covering a further 66 blocks in the separate frontier round for the difficult areas north and west of the Shetland islands.
    Sir Anthony Durant: Will my hon. Friend welcome the co-operation between the Government and private enterprise on this venture in the North sea? What would be the effects if the interventionist policies of the Labour Opposition were put into effect in the North sea?
    Mr. Moynihan: This is my hon. Friend's first question since his knighthood and I am sure that the whole House will wish to congratulate him. It is undoubtedly true that a stable, fiscal regime, predictable and well-established criteria for licensing and an oil and gas market that maximises private sector investment are the keys to economic success. Some of the interventionism in the oil and gas market which the Labour party has made it clear that it would deploy would be counterproductive to the success record of the 1980s continuing into the 1990s.
    Dr. Godman: Our interventionist policies concerning the safety of men and women who work on rigs and platforms are far superior to those that the Government put into practice.
    On the licence negotiations, must not companies satisfy the Government about the environmental impact of their work? If so, could not the Government institute some of the recommendations in Cullen at this stage of the negotiations—for example, recommendation No. 17 on page 390 of the Cullen report which talks about the need to implement safety regulations and goal-setting objectives? Why do not the Government introduce some of those recommendations now?
    Mr. Moynihan: First, there is no question about the Government's commitment to implementing measures that will enhance safety in the North sea. The Government have been quick to respond fully to the Cullen report and to make it clear that safety is the No. 1 priority and that the recommendations will be implemented in full.
    If the hon. Gentleman connects his specific point with his first point about interventionism, he will note that Lord Cullen recognised that it was vital that private sector operators should provide a safety case for each platform and should set up a safety audit and that, working with our outstanding inspectorate, they should have the assistance of the public sector to ensure that we enhance safety in the North sea.
    As for environmentally sensitive blocks, the operators in the licensing round who wish to develop those quadrants must ensure that their environmental case is sound and persuade my colleagues in the Department and Ministers that that is the case.

    Gulf War (Ecological Consequences)
    Mr. Dalyell: To ask the Secretary of State for Energy if he will make available the detailed evidence on which he dismissed the scientific warnings given by Professor Paul Crutzen, head of the atmospherics physics department of the Max Planck Institute in Mainz, and Dr. Abdullah Toucan of the Massachusetts Institute of Technology, principal scientific adviser to King Hussein of Jordan, about the carbon monoxide, carbon dioxide, sulphur dioxide, hydrocarbon and photo-chemical smog results of the war in the middle east; and if he will place his detailed technical evidence in the Library.
    Mr. Wakeham: I did not dismiss the warnings of possible fires at Kuwaiti oil fields or criticise particular scientists, but I thought it right to make available the advice that I received on the environmental implications of such fires. That has been followed up by a study by the Meteorological Office which has been placed in the Library of the House.
    Since then Saddam Hussein has set on the course of deliberately polluting the waters of the Gulf, which is a gross act of environmental terrorism, and I believe that the whole civilised world will deplore that action. My right hon. Friend the Secretary of State for the Environment will be making a statement about it later this afternoon.
    Mr. Dalyell: Will the Secretary of State put the detailed evidence that he had from his Department in the Library? Is not it the case that the Government cannot say that they were not warned of the pumping of oil into the water to which the right hon. Gentleman referred? During the Consolidated Fund debate on 19 December, at column 403, I spoke for 55 minutes and gave a specific warning. Surely it is negligent of Ministers not to have taken precautions. As a senior member of the War Cabinet, will the Secretary of State consider the activities and the frivolous answers from that silly little boy, the hon. and learned Member for Grantham (Mr. Hogg), who masquerades as a Minister of State at the Foreign Office—
    Mr. Speaker: Order. The hon. Gentleman is spoiling his question.
    Mr. Wakeham: I think that these matters deserve more serious treatment than the hon. Gentleman appears to be giving them. I am sure that no one has ever underestimated the possibility of serious environmental terrorism. In the case to which the hon. Gentleman referred, I made accessible the best advice available to me on the environmental consequences. The report of the Meteorological Office has been put in the Library.
    It is absolutely clear that the fact that Saddam Hussein is capable of environmental terrorism of this kind—
    Mr. Dalyell: The Government were warned, but did nothing. Why did not the Government do anything?
    Mr. Wakeham: The Government were well aware of the threat. The fact that Saddam Hussein is capable of such environmental terrorism shows, once again, how essential it is that Kuwait should be freed from his grasp. It is because of that man that we have taken our action.
    Dr. Michael Clark: Does my right hon. Friend know whether Saddam Hussein was given such warnings and information about environmental pollution? Does he

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    know whether Saddam Hussein submitted himself to questions on this matter in the Iraqi Parliament? What evidence exists to show that Saddam Hussein took notice of those warnings or the concern of his parliamentary colleagues?
    Mr. Wakeham: My hon. Friend makes his point well. I add only that Saddam Hussein is well aware of the damage that he is doing to the world. That is why his actions are even more criminal than they would be if he were ignorant of such matters.
    Mr. Simon Hughes: As the right hon. Gentleman represents his Department in the War Cabinet, can he tell the House what advice and consultations he and his colleagues have had with European Community Commissioners and Ministers and the United Nations Environment Programme so that the full implications of the environmental risk in the middle east is at all times in the forefront of not only politicians' minds, but those of the military?
    Mr. Wakeham: There have been discussions and consultations among the allies, as well as wider discussions. My right hon. Friend the Secretary of State for the Environment will come to the House at 3.30 to make a proper statement.

    Domestic Heating
    Mr. Harry Greenway: To ask the Secretary of State for Energy if he will evaluate the respective cost of house heating by gas, electricity and oil; and if he will make a statement.
    Mr. Heathcoat-Amory: The cost of heating a house will vary according to the size and type of dwelling, the level of insulation, the comfort level required and the type of heating and fuel used. But the weekly cost of heating an average three-bedroom house by gas, electricity and solid fuel has been estimated at f10·25, £15·50 and £12·10 respectively.
    Mr. Greenway: I thank my hon. Friend for those figures, which will be helpful to people seeking to find the best way in which to heat their homes. Will my hon. Friend take steps to make better information available to people who need to make such decisions as there is precious little current information about?
    Mr. Heathcoat-Amory: I agree with my hon. Friend about the need to give accurate advice on this matter. He will be pleased to know that the new home energy efficiency scheme, which gives grants to low-income households, provides advice of this nature. We also have a new campaign to give information to those improving their houses or moving house, backed up by leaflets available from my Department. I shall ensure that my hon. Friend is sent a copy.
    Mr. Pike: Although these measures are welcome, will the Minister ensure that bodies selling heating appliances explain their thermal efficiency and running costs in a way that is understandable to the person buying them—because much of the official language that is used is not understandable to the purchaser?
    Mr. Heathcoat-Amory: We are pursuing the idea of an energy labelling scheme for such appliances. Clearly we
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    should like it to be compatible with schemes being worked up in other European countries so as to promote free trade too.
    Mr. Holt: Does my hon. Friend agree that, despite the new building regulations, we are still light years behind our European colleagues? Would not it be better if the Government legislated to stop the building of new houses, with single-glazed windows and inadequate insulation, so that people would have cheaper bills irrespective of whether they were for oil, gas or electricity? That would stop the present position, which is nonsensical in this modern day and age.
    Mr. Heathcoat-Amory: Our building regulations compare favourably with those of other European countries, but I agree about the need to improve the thermal efficiency of new houses. In April last year we improved the building regulations and raised standards, We shall see how that goes down generally and then consider the possibility of further improving the regulations in the next round.
    Mr. O'Hara: Is the Minister aware that in the judgment of Sheikh Yamani the interruption of supplies of oil from Iraq and Kuwait need not have—indeed, has not had—a major impact on the world's supply of oil? Does he therefore agree that the major fluctuations in the price of oil since the start of the Gulf crisis represent exploitation of that crisis for profit by the major oil companies? Will he conduct an urgent investigation into those activities?
    Mr. Heathcoat-Amory: I do not agree with the hon. Gentleman's analysis of the oil market; but I can confirm that oil stocks remain generally high.

    British Coal
    Mr. Batiste: To ask the Secretary of State for Energy what was the annual average increase in British Coal's productivity between 1961 and 1979, and between 1979 and 1989.
    Mr. Knowles: To ask the Secretary of State for Energy what was the annual average increase in British Coal's productivity between 1961 and 1979, and between 1979 and 1989.
    Mr. Wakeham: The average annual increase in the corporation's productivity between 1961 and 1978–79 was 2·5 per cent., and the average annual increase between 1978–79 and 1988–89 was 6·3 per cent.
    Mr. Batiste: Given the outstanding improvement in performance that my right hon. Friend has just described, does he agree that the single greatest constraint within which British Coal must still operate is the fact that it is in the public sector? Does he agree with the new year resolution expressed by Mr. Malcolm Edwards, commercial director of British Coal, that he will seek at the earliest opportunity the separation of the coal industry from the machinery of government so that its managers can concentrate on the interests of that industry alone?
    Mr. Wakeham: I agree with both points. There has been a significant improvement in British Coal's productivity, for which I pay tribute to it, but that productivity must continue to improve if British Coal is to hold its own in a competitive market.

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    I agree that the privatisation of British Coal is a desirable objective; it is a commitment of the Government and it will be done in the next Parliament.
    Mr. Knowles: Will my right hon. Friend confirm that, even so, in the lifetime of this Government British Coal's productivity has been almost double that of the previous two decades?
    Mr. Wakeham: Yes, certainly. British Coal's productivity is up 85 per cent. on pre-strike levels, which is excellent progress. It recently achieved an impressive weekly record output of just over 5 tonnes per man shift.
    Mr. Allen McKay: Does the Secretary of State agree that output per man shift depends on the number employed, and that the figure has increased only because of the number of miners who have been made redundant? As to privatisation, will the Minister assure the House and people outside it that in the unwelcome event of British Coal's being privatised, existing arrangements for concessionary fuel supplies or cash in lieu will remain in force?
    Mr. Wakeham: It is not for me to speculate about the privatisation that will occur during the next Parliament. All obligations to employees will be a proper matter for consideration at the appropriate time.
    Mr. Redmond: Does the Secretary of State accept that the Government are behaving in a stupid and irresponsible manner by not having a national energy plan? There is no point in increasing production if market forces are to dictate the amount of coal that the country produces. If it is left to market forces, we shall not meet the needs of the British people.
    Mr. Wakeham: I am not sure that the hon. Gentleman is right. The best way to meet the energy requirements of the nation and of the world is to encourage diversity of supply and that is the basis of the British plan.
    Mr. Barron: Does the Secretary of State accept that any further loss of contracts between British Coal and the generators after 1993 will be viewed as a very poor reward for the miners who have increased productivity in recent years? What action are the Government taking to stop the dumping of foreign coal in Britain, in the interests of not only British Coal but the nation?
    Mr. Wakeham: The Government have done more than any other to assist the industry by giving it financial support, and for the first time ever British Coal has long-term contracts with its customers, the generators. It therefore has the best opportunity of securing further long-term contracts, and it will do so because it has the potential to be the supplier of choice. That is the best way of securing the industry's long-term future.

    North Sea Oil and Gas
    Mrs. Margaret Ewing: To ask the Secretary of State for Energy if he will make a statement on North sea oil and gas developments presently under consideration by his Department.
    Mr. Moynihan: Draft plans for 11 new or incremental oil and gas development projects in the North sea are currently under detailed consideration by my Department.
    Mrs. Ewing: Given the extent of the developments to which the Minister referred, is his Department taking steps to ensure that contracts for the steel pipelines and production and exploration platforms required will be allocated to domestic steel mills? In particular, did the Department establish any contact with the Scottish Development Agency when it prepared its report on the future of Ravenscraig, Clydesdale and Dalzell, when the agency could have pointed out the potential contracts that would arise from the new developments?
    Mr. Moynihan: In the marketplace, suppliers will win contracts only if they deliver top-quality products within specification and on time. The capability to undertake work for the pipeline to which the hon. Lady refers does not exist in the United Kingdom at present because of the quality and thickness of pipes required. On the positive side, I assure the hon. Lady that all three jackets under consideration for Everest, Lomond and the separate riser platform have been awarded to Highland Fabricators. Of course, we take note of the success, or otherwise, of United Kingdom suppliers in that sector.
    Mr. Brandon-Bravo: As oil and gas sources are finite and should be conserved, can my hon. Friend the Minister comment on the Government's support and hopes for the future of converting coal into fuel oil? I refer particularly to the Point of Ayr project, which I and a number of my hon. Friends visited last Friday.
    Mr. Moynihan: On the second point, I am sorry that I was not with my hon. Friend when he made his visit and I shall follow that up in writing. On the first point, my hon. Friend is right to refer to the importance of a sensitive and sensible policy when it comes to the depletion of oil and gas reservoirs. In that context, we pay special care to ensure that the licence rounds, which have been taking place on average every two years in the offshore oil and gas sector, reflect the need for a sensible depletion policy in the long term.

    Alternative Energy
    Mr. Burns: To ask the Secretary of State for Energy if he will make a statement on his Department's investment in alternative sources of energy.
    Mr. Moynihan: Energy paper 55 "Renewable Energy in the UK: The Way Forward" set out my Department's strategy for the development of renewable energy sources. My Department's provision for research and development into renewable energy for this financial year is £20·3 million. This is due to increase by 20 per cent. in the next financial year.
    Mr. Burns: May I thank my hon. Friend for that answer? Would I be right in saying that, rather than simply mouthing platitudes about the need for renewable energy, his Department has provided the expenditure, which has doubled during the past 12 years, to ensure that we meet that challenge?
    Mr. Moynihan: My hon. Friend is absolutely correct. More than simply highlighting the importance of research and development, in which we have invested, my hon. Friend will be aware that we achieved a first by establishing a marketplace, through the non-fossil fuel obligation, to allow renewable projects which are both

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    environmentally acceptable and economically competitive to come on stream. I am sure that, like me, my hon. Friend welcomes the fact that 75 such projects were eligible in the first NFFO tranche and we hope that many more will be successful in the years to come in future tranches.
    Mr. Mullin: Is not the truth that, historically, the hon. Gentleman's Department has been as deeply in hock to the nuclear industry as the Department of Transport has been in hock to the road lobby? Will the Minister give us an assurance that he has now established with civil servants that they should take a serious and long-term interest in alternative sources of energy, and not sit around working out ways to sabotage research on the subject?
    Mr. Moynihan: I reject the hon. Gentleman's last comment, but I welcome the fact that he recognises that the Government have a clear commitment to ensure that renewable energy sources come on stream and that they must be environmentally acceptable, as well as economically competitive.
    Mr. Mullin: What about Salter's duck?
    Mr. Moynihan: From a sedentary position the hon. Gentleman refers to Salter's ducks. I am sure that, like me, he will welcome the fact that both parties have accepted that an independent review should be undertaken. Its findings will be carefully considered. The Government do not wish to put any hindrance in the way of renewable technology that can come on stream and is commercially competitive, as well as environmentally beneficial.
    Mr. Rost: Can my hon. Friend confirm that the best way that he can further help renewables is by increasing the number of power generation projects that he sanctions in the second tranche of the non-fossil fuel obligation, especially waste incineration into energy projects, which will also help the environment?
    Mr. Moynihan: I totally agree with my hon. Friend. I very much hope that, across the range of renewable energy technologies, many projects will come forward in the second tranche of the NFFO and that they can meet the criteria. The more projects that come forward, the more they will be welcomed by the Government.
    Mr. Dobson: Does the Minister agree that if we wasted less energy in Britain we would depend less on imported fuel from the Gulf and other insecure sources of supply? Will he make it a top priority to save energy, to develop alternative sources and to use coal, oil and gas produced here in Britain? To that end, will he instruct the generating companies to abandon their preposterous plans to import more oil, gas and coal and will he make them concentrate instead on energy saving rather than energy sales?
    Mr. Moynihan: I am always pleased to agree with the hon. Gentleman when it comes to energy matters, especially on energy efficiency and energy-saving policies, and to that end I agree with the thrust of his remarks. As regards oil and gas, of course we should like increased production and we should like to ensure that we do not need to become an importer. However the reality, which I know that he accepts, is that in recent months production has had to be restrained, despite world demand for increased production before the Gulf crisis, because of the importance of safety and of ensuring that topside emergency shutdown valves are in place. Safety has been
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    the top priority and that is the reason why production has not been at the highest possible level, as we should have liked.
    Mr. Butler: Will my hon. Friend summarise the current state of the Mersey barrage project?
    Mr. Moynihan: The Mersey Barrage Company reported to me last week. That report explained further the extensive discussions in which the company had engaged to analyse cost-benefit assessments in each Government Department as a result of meetings that it had held with those Departments. A further meeting will take place before Easter. We shall then assess the economic feasibility of the project, as well as the detailed scientific research that has accompanied it. Our aim is to give it as much support as possible, as long as it is commercially viable and meets all the important environmental criteria.

    Oil Exploration
    Mr. Michael Brown: To ask the Secretary of State for Energy how many exploration and appraisal wells were drilled on the United Kingdom continental shelf in 1990.
    Mr. Moynihan: During 1990, 224 exploration and appraisal wells were started on the United Kingdom continental shelf. This is the first time since UKCS activity began that drilling in a single year has exceeded 200 wells.
    Mr. Brown: Does my hon. Friend agree that that is a remarkable figure? Can he confirm that it is the highest since North sea exploration began back in 1964, and will he also confirm that the only threat to this expansion comes from the prospect of a Labour Government, who might again start intervening in the North sea with state-run corporations and set back the magnificent achievements of 1990?
    Mr. Moynihan: I entirely accept the thrust of my hon. Friend's argument—not least because the success that led to what he rightly described as the highest number of exploration well starts since the 1984 record of 109 is evidence of continuing confidence in the United Kingdom continental shelf. That confidence is wholly dependent on a stable fiscal regime, a comprehensive licensing regime and the opportunity for the private sector to excel where it excels best—in the marketplace for the development of oil and gas within the UKCS, and in exports. Any interventionism or return to state-owned control would be extremely damaging to that success story.
    Mr. Dobson: If the Minister thinks that the Tories' record in the North sea is such a wonderful success, how does he explain the fact that, last year and the year before, we were net importers of fuel?
    Mr. Moynihan: First, we were not net importers in cash terms. Secondly, as I have already told the hon. Gentleman—I am surprised that he did not take the point in my response to his last question—safety considerations had to lead to shutdowns and to working conditions for production that were less than optimal for maximum recovery. An example is the present need to handle dead rather than live crude. It was vital that Lord Cullen's recommendations be implemented as matter of urgency, and that the all-party agreement on topside valves be put in place, even if that meant that production would not

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    reach the levels that the hon. Gentleman would have liked. I am surprised that he does not know the answer to his own question.
    Mr. Moss: Will my hon. Friend confirm that last year was the first year of about six in which this country was a net importer of energy?
    Mr. Moynihan: Let me reinforce what I said to the hon. Member for Holborn and St. Pancras (Mr. Dobson). We were not a net importer in cash terms: furthermore, given the total activity on the UKCS, there is no doubt that we can and will increase production. Our net position will not be under threat once the essential safety work is completed. We shall then have not only high levels of production, but a safer North sea in which to operate.

    Energy Conservation
    Ms. Primarolo: To ask the Secretary of State for Energy if he will make a statement on the Government's policy for energy conservation.
    Mr. Wakeham: We continue to promote the adoption of cost-effective energy efficiency measures through a range of programmes and other services offered by the Energy Efficiency Office. A number of new initiatives, including the ministerial group on energy efficiency, were announced in the White Paper on the environment and we are now working to carry these forward.
    Ms. Primarolo: Is the Secretary of State aware that an estimated 6·6 million households suffer from fuel poverty as a result of inefficient fuel heating systems? Does he agree that the lessons learnt from the Gulf crisis and war and the fight over oil, combined with this Government's inefficient approach to energy conservation, mean that a national programme for energy conservation and energy use is urgently required if we are to address the country's energy problems?
    Mr. Wakeham: I agree this far with the hon. Lady—that there is a continuing need for greater energy efficiency. We estimate that about 20 per cent. of all the energy used in this country is wasted. However, we have made some progress. During the last 10 years gross domestic product has increased by 25 per cent. while our energy consumption has remained virtually unchanged. Both commercial and domestic energy efficiency are important. That is why the Government have introduced a home energy efficiency scheme. Grants are provided for basic insulation measures and advice is available for low-income households. We have built on the success of the community insulation project that led to the insulation of about 850,000 low-income homes.

  THE ARTS

    Welsh National Opera
    Mr. Maclennan: To ask the Minister for the Arts what representations he has received on its financial position from Welsh National Opera.
    Mr. Michael: To ask the Minister for the Arts what representations he has received about the future funding of the Welsh National Opera.
    The Minister for the Arts (Mr. Tim Renton): I have received a large number of representations on behalf of Welsh National Opera. Helpful discussions have taken place between the Arts Council of Great Britain, the Welsh Arts Council and the Welsh National Opera, together with a further detailed review of the company's financial position and planned touring commitments in England. I am informed that at its meeting on 30 January the Arts Council of Great Britain will consider a recommended increase in its grant to the Welsh National Opera of between £200,000 and £300,000 in 1991–92 and the two subsequent years.
    Mr. Maclennan: Although I recognise that enhancement fund expenditure is primarily a matter for the Arts Council, does the Minister accept that when it was set up it was recognised that Ministers would be interested in how the money was spent? The Welsh National Opera's quality is appreciated far beyond the bounds of the Principality and particularly in the midlands, where its excellence is widely acknowledged. Would the Minister regard it as an infringement of the arm's-length principle if he were to add his personal approval of the Welsh National Opera's work? Is he happy about the progress of the discussions to which he alluded? I was pleased to hear that a substantial increase in the WNO's grant is being considered.
    Mr. Renton: Yes, of course I am delighted to endorse the artistic quality, repertoire and singing of the Welsh National Opera. I approve and endorse the general criteria under which allocations are made from the enhancement fund. However, the individual allocations are traditionally an Arts Council responsibility. The hon. Gentleman may have forgotten that the Welsh National Opera received £175,000 from the Welsh Arts Council's part of the enhancement fund. At the Art Council's meeting next Wednesday a decision will be taken on whether to increase further the Welsh National Opera's touring grant.
    Mr. Michael: I welcome the Minister's positive response and also the endorsement of the Welsh National Opera by Scotland as well as by England. Does the Minister agree that it is important that the limited budget available to the Welsh Arts Council for other aspects of the arts in Wales should not be eroded to meet the Welsh National Opera's shortfall? Does he also agree that we hope his answer means that there will be a positive outcome for the Welsh National Opera without any such erosion, which would threaten the other arts in Wales?
    Mr. Renton: I do not want the other arts in Wales to be threatened. The Welsh Arts Council received about £750,000 from the enhancement fund. If it has decided that part of that money should be given to WNO, essentially for its work in Wales, that is a perfectly proper decision for it to take. I remind the hon. Gentleman that WNO is receiving a general increase of more than 8 per cent. in its grant for the year ahead and a 11·5 per cent. increase in its touring grant—in addition to the sum that the Arts Council will consider this Wednesday. On that basis, the hon. Gentleman, who has campaigned actively on this matter, should not cry foul too often.
    Mr. Cormack: I thank my right hon. Friend for his remarks. Will he convey the views that have been expressed this afternoon to the chairman of the Arts Council and tell him that there would be widespread

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    disappointment not only in the Principality but throughout this country if this excellent company had to close? We all expect—[Interruption]—or at least, most outside Hayes and Harlington expect, the Arts Council to do the right thing on Wednesday.
    Mr. Renton: I thank my hon. Friend for his support, which does not surprise me. I understand what he means about the widespread support for the WNO. Even the hon. Member for Bolsover (Mr. Skinner), who is not in his seat today, put his name to an early-day motion confirming, I think, "the brilliance of the singing and repertoire of the WNO". That shows that, although that Bench below the Gangway is empty this afternoon, the WNO's message has reached far in the land.
    Mr. Dicks: Many people in this country will still wonder why this subsidy from public funds is going to these organisations, wonderful though they may be. Will he tell the people of this country that he is thinking twice about the amount of money that is given to the arts from public funds—an amount that is increased per annum?
    Mr. Renton: I thank my hon. Friend for his comments. Perhaps he might like to get in touch with the hon. Member for Cardiff, South and Penarth (Mr. Michael) and have a good discussion on the subject. Generally, I am told that not enough money is being given to the arts. In successive public expenditure rounds, both my predecessors managed to obtain settlements in excess of the rate of inflation.
    Mr. Dicks: Shame.
    Mr. Renton: As in opera, it is always helpful to have someone crying "Shame" from the gallery. It reminds one that there is another voice.
    Mr. Fisher: I welcome the Minister's statement, which appears to resolve the Welsh National Opera crisis—that should never have been allowed to happen in the first place—and his assurance that that money will not be given at the expense of other Welsh Arts Council clients. But will he explain, first, whether his office will contribute money directly to the settlement and, secondly, whether the other companies that received a cash standstill budget or a cut of 9 per cent. in real terms—the Bristol Old Vic, the Lyric, Hammersmith, the Black Theatre Forum, the Three Choirs festival, the Eastern Orchestral Board, the Liverpool Playhouse and the Everyman theatre—will receive the same just settlement as Welsh National Opera?
    Mr. Renton: I suggest that the hon. Gentleman reads an article written by Ian Brown, the drama director of the Arts Council, in last week's edition of The Stage. It is headed, "Keep Calm in a Crisis"—a message that the hon. Member might learn to advantage. He says that it is not the Arts Council's job to come to the rescue willy-nilly of every provincial theatre that gets into trouble, no matter whether it has put on the right programme for its customers or whether it is receiving local authority support. That message must be taken on board throughout the country. The settlement to WNO does not mean any direct money from my office.
    I disagree with the hon. Gentleman's comment that this should never have happened in the first place. The Arts Council, rightly, has again crawled over the touring plans
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    of WNO and has reached the conclusion that it should try to make a little more money available—a lot more money available—if that is what its council agrees on Wednesday.

    Arts Funding, Scotland
    Dr. Godman: To ask the Minister for the Arts when he last met members of the Scottish Arts Council to discuss funding for the arts.
    Mr. Renton: I had a meeting with the chairman of the Scottish Arts Council, Sir Alan Peacock, on 11 December.
    Dr. Godman: My question concerns a subject which was close to the heart of my late dear friend Norman Buchan. Will the Minister discuss with the Secretary of State for Scotland how public-sector support might be provided in respect of those crafts that will be denied support from the "Design by Scotland" agency which is to be set up in April? It should be pointed out that, south of the border, support is provided in respect of identical crafts. All that I seek is parity of support for Scots craftsmen and craftswomen.
    Mr. Renton: I am very interested in which the hon. Gentleman has just said. Indeed, if he feels that crafts in Scotland are not being supported where comparable crafts in England are, and if he writes to me giving the details —and provides my right hon. Friend the Secretary of State for Scotland with a copy of his letter—I shall be very happy to look into the problem with a view to finding out the reason for it.
    Dr. Blackburn: Will my right hon. Friend, particularly in the context of these questions, reflect on a most important issue? I refer to the rolling programme of funding that was introduced by his predecessor, which received the full acclamation of the arts world. I hope that my right hon. Friend shares my view that ministerial intervention in the funding of the arts would be quite wrong, particularly in Scotland.
    Mr. Renton: I am not quite sure whether my hon. Friend means that as a rebuke. He is such a kindly man that I think it hardly likely. Like him, I was, of course, delighted when my predecessor set up the rolling programme. One of the difficulties is that some of our clients do not think that the inflation expectation is realistic. Certainly the rolling programme is set in concrete for the time being, and it would be quite wrong for me to try to disturb it.

  CIVIL SERVICE

    Ethnic Monitoring
    Mr. Janner: To ask the Minister for the Civil Service whether he will make a statement regarding the progress of his Department's ethnic monitoring policy.
    The Minister of State, Privy Council Office (Mr. Tim Renton): All Departments and agencies, including my own Department, are implementing the programme for action on race, which incorporates ethnic monitoring.
    Mr. Janner: Does the Minister agree, as his predecessor so clearly did, that it is unacceptable that so few people from ethnic minorities reach the higher echelons of the civil service? Will he please undertake, as his predecessor

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    so rightly did, to make the most energetic efforts to ensure that the policy is not just something on paper—but that it is implemented?
    Mr. Renton: This matter is very close to the heart of the hon. and learned Gentleman. It is true that black and Asian people are under-represented at senior level across the civil service, including my own Department. We wish to increase equality of opportunity, but, as the hon. and learned Gentleman will agree, it is most important that those who reach the higher grade should do so on the basis of merit and not because of their sex or their ethnic background. We hope that, by virtue of the programme of action that we published recently, every Department will have been reminded of the need to give ethnic minorities every possible opportunity to reach the higher grades if that is what they merit.
    Mr. Soames: Is my right hon. Friend aware that in the United States of America positive discrimination of the kind advocated by the hon. and learned Member for Leicester, West (Mr. Janner) has proved to be a total disaster? Does he agree that it would be quite improper, and totally against the interests of the very high-quality civil service that we have in this country, to allow promotion on any basis other than merit?
    Mr. Renton: I hesitate to come between my hon. Friend, who is also a Sussex neighbour, and the hon. and learned Member for Leicester, West (Mr. Janner). Of course, my hon. Friend is right in suggesting that positive discrimination in favour of people of a particular colour or sex would be wrong. What we seek to achieve is equality of opportunity—in simple terms, that the best available person, regardless of skin colour or sex, should get to the top.

    Terrorism
    Mr. Dalyell: To ask the Minister for the Civil Service what representations he has had from the civil service trade unions about the problems posed by potential terrorism originating in the middle east for civil service installations in Britain.
    Mr. Renton: None, Sir.
    Mr. Dalyell: What extra money has been allocated for the defence of such installations? What help will be given to airlines? Some are reeling from the change in the number of passengers they carry, to the extent that they have had to cut back on the orange juice and second cups of tea and coffee that they give passengers for breakfast. That is the position of the airlines and it has been graphically illustrated.
    Mr. Renton: I do not think that questions about the number of orange juices or cups of coffee comes under the province of my Department in any sense. Mine is a strange Department—a duet between the civil service and the arts —but it is not as strange as that. If the hon. Gentleman wishes to ask about the costs of the installations, he must refer such questions to either my right hon. Friend the Secretary of State for Defence or my right hon. Friend the Secretary of State for the Environment, who will make a statement in a few minutes.
    Mr. Peter Bottomley: Does my right hon. Friend agree that it would be more convenient for the civil service,
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    unions and Ministers if people did not drop chemicals on the Kurds, did not go to war with Iran, at a cost of 1 million Muslim lives, and did not start taking over other independent states such as Kuwait?
    Mr. Renton: Although that is not within the province of my Department, I can without hesitation say yes to all my hon. Friend's propositions.
    Dr. Godman: Installations in Scotland require the same protection as that given in England and Wales. I do not make this point out of parochialism. I remind the right hon. Gentleman that the appallingly dreadful terrorist organisation, the Irish Republican Army, does not carry out terrorist activities in Scotland; hence some installations there may be regarded as soft targets.
    Mr. Renton: I listen with great care to the hon. Gentleman. Precautions are in place to protect civil servants, no matter where they are based in the United Kingdom, against the current threat of terrorist attack. That applies whether they are in Scotland or in England or whether the terrorist attacks are by the IRA or by other organisations.

    Executive Agencies
    Mr. Hind: To ask the Minister for the Civil Service if he has any plans to create more "next steps" agencies; and if he will make a statement.
    Mr. Renton: The "next steps" initiative continues to make excellent progress; 34 agencies have now been established, and we expect that number to rise to 50 by this summer. By the end of the year we expect "next steps" will apply to about half the civil service.
    Mr. Hind: My right hon. Friend has made great efforts to achieve this progress, whereby half the civil service will be involved in "next steps" agencies. That is welcome. Most Conservative Members would welcome management of Government services according to private sector discipline. Does my right hon. Friend recognise that it is important that many of these agencies are placed in parts of the country other than the south-east, particularly in areas where unemployment is high? Will he do all that he can to achieve that target?
    Mr. Renton: I thank my hon. Friend for his opening remarks and I fully agree with the second half of his comments. We have a vigorous programme for relocating civil service departments, whether they are moving into agencies or not, in other parts of the country. I was involved in that when I was a Home Office Minister and I shall aim for its continuation while I have my present responsibilities.
    Dr. Marek: When I asked the Minister a question three weeks ago, he answered me courteously, but he answered a completely different question. I ask the right hon. Gentleman to concentrate his mind and to let the House know whether he will meet representatives of the civil service unions to discuss the morale and finance problems in the present lacklustre housing market of civil servants who have been compulsorarily relocated because these "next steps" agencies have been set up.
    Mr. Renton: If the hon. Member for Nottingham, North (Mr. Allen) had turned up this afternoon, I would

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    have specifically answered that question. Of course, I should be delighted to meet leaders of the civil service trade unions at the appropriate time if they wish to see me. I have already met certain representatives of the Institution of Professionals, Managers and Specialists. I shall continue to meet such representatives at the appropriate moments when we have something to discuss.
    Mr. Butler: To ask the Minister for the Civil Service if he will make a statement on progress under the Government's "next steps" agencies initiative.
    Mr. Renton: I refer my hon. Friend to the answer that I gave to my hon. Friend the Member for Lancashire, West (Mr. Hind).
    Mr. Butler: Will any of the "next steps" agencies be relocated to Warrington or Runcorn?
    Mr. Renton: At this stage, I can tell my hon. Friend only that the Liverpool passport office is trying out team-working arrangements which may lead to an increase in the number of staff at that office, that the resettlement agency, working with Knowsley council, is developing alternative hostel facilities and that Companies House has opened a satellite office in Manchester. All those developments are very close to the area in which my hon. Friend is interested and I hope that there will be further developments.
    Mr. Campbell-Savours: Would not "next steps" status be better for the transport section of the Crown Suppliers? Will the Minister assure me that that section will not be sold to a civil servant who has been the subject of a full
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    investigation by the Crown Suppliers and who has been found to have committed three disciplinary offences? Can the right hon. Gentleman assure me that that person will not be allowed to buy the transport section of the Crown Suppliers?
    Mr. Renton: If the hon. Gentleman cares to write to me about the matter, I shall see that it is looked into in great detail.
    Mr. Ian Bruce: Will my right hon. Friend examine carefully all the agencies that we now have in south Dorset? The Admiralty research establishment is to go into the defence research agency. He should also consider the Atomic Energy Authority, the dockyards and various other developments. Will my right hon. Friend try to ensure that if the organisations are passed over to individual managements, care is taken to ensure that they do not all decide at the same time to relocate 8,000 jobs in two years from the very small Weymouth and Portsmouth area? I should be most grateful if my right hon. Friend would examine that matter carefully.
    Mr. Renton: I fully understand my hon. Friend's point, and it is a good point. Naturally, he does not want a lot of employment to move out of his area quickly and all in one go. In my experience, relocation in the civil service does not exactly happen overnight. It happens over a great many years, allowing plenty of time for the local Member of Parliament to make full representations about the effect of relocation on his constituency. I hope that, with his customary assiduity, my hon. Friend would do that if there were any likelihood of all the civil service departments or agencies moving in one go.

The Gulf (Oil Pollution)
3.32 pm
The Secretary of State for the Environment (Mr. Michael Heseltine): Mr. Speaker, with permission I will make a statement about the United Kingdom response to the environmental damage taking place in the Gulf.
The oil spill in the Gulf appears to be the largest ever. It is 35 miles long by 10 miles wide. It appears to contain some 8 million barrels of oil and it is moving down the Gulf at 15 to 20 miles per day. Words are inadequate to condemn the callousness and irresponsibility of the action of Saddam Hussein in deliberately unleashing this environmental catastrophe.
There is a threat to desalination plants and fresh water supplies, to birds and other wildlife, to fish, sea mammals and shellfish, and to local communities dependent for their livelihoods on the sea.
With our allies, the United Kingdom is playing a full part in the world's response to this abomination.
First, we must stem the flow of oil. The United States has already acted on this decisively and, we believe and hope, effectively.
Secondly, we must assess the way in which the oil may flow so that we can assess likely consequences. Action is in hand in the Gulf itself to do that. To supplement it, United Kingdom scientific resources are already being mobilised. Existing computer models at the Meteorological Office and Proudman oceanographic laboratory are being urgently adapted to help give the best possible predictions of the likely behaviour of the slick in the Gulf.
Thirdly, we need to assess possible effects on marine life. The United States is already sending experts. The Natural Environment Research Council is co-ordinating urgent work to bring together here in the United Kingdom information that we have on marine life and effects that could be useful in the Gulf.
Fourthly, in common with other countries, the United Kingdom is taking practical steps to help to protect desalination plants and sensitive coastal areas and inlets. The airlift of an initial 70 tonnes of equipment from the stores maintained by the oil industry will go ahead today, with a further flight tomorrow. Further material will be available if needed. My right hon. and learned Friend the Secretary of State for Transport is looking sympathetically at requests that we have received from the Saudi Government for the loan of small numbers of skilled pollution control experts and advisers. We anticipate being able to respond later today. The Department of Transport will meet European Community colleagues tomorrow to consider whether the Community should send in its standing task force of national experts on oil pollution response. We shall be urging strongly that it should do so.
For the longer term, the United Kingdom is considering now how it will be able to help with the clean-up and restoration of the habitats and human settlements affected once it is safe to do so. We are making arrangements to assess and bring together the contribution that United Kingdom bodies outside Government, whether public, private or voluntary, can make.
The first responsibility for dealing with the environmental problems facing the Gulf lies with the Gulf states themselves. We do not yet know what final form the arrangements for co-ordinating their efforts will take: matters are still developing fast. But, whatever they may
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be, the United Kingdom stands ready to play its full and immediate part. We shall be in touch later today with Saudi Arabia and the other states most closely involved with a first indication of the help that we can offer.
Meanwhile, the United Nations Environment Programme is today announcing its intention to take a lead on improving environmental communications and co-ordinating technical expertise. I have been in touch with UNEP to establish what we can offer by way of expert staff or other help.
On Wednesday, the Environment Ministers of the Organisation for Economic Co-operation and Development meet in Paris. I shall be calling then for all OECD members to respond to this disaster and to take action according to their experience, equipment and skills to offer help to the Gulf states likely to be affected. But there is a wider issue. It is not only war that creates risks. It seems important to recognise the ongoing dangers of environmental calamity which arise from time to time which go way beyond national frontiers.
I mean to raise with OECD colleagues the proposal that we should set up a working party to recommend what more effective preparations we could undertake to cope with these disasters. I have in mind that there should be a register setting out available expertise and available facilities on which affected nations could draw in times of crisis. In this context, we shall be pressing for an early conclusion to the work already in hand in the International Maritime Organisation to put into effect a full-scale international convention on preparedness and response in relation to oil pollution and to set up regional centres to pool resources.
The whole House will be appalled at the environmental damage threatening the Gulf. The Government are determined to do all they reasonably can to assist those faced with the consequences of this outrage. We also intend to inject a new urgency into consideration of the wider issues raised by environmental threats that require co-ordination above the national level.
Mrs. Ann Taylor: I thank the right hon. Gentleman for his statement and the information that he has provided today. I am sure that all hon. Members will agree that any deliberate destruction of the environment, particularly on this scale, is a desperate act which cannot be justified and which could in itself be considered a war crime.
Will the Secretary of State clarify the position with regard to the source of the pollution? It seems clear that the major source of the pollution is the Sea Island oil terminal which has been opened deliberately by the Iraqis. What assessment has been made of any environmental consequences of allied attacks on oil tankers in the area that were reported last week? There has been a great deal of speculation and counter accusation about that point.
The Secretary of State said that expertise and help will be sent from this country. We welcome that, because we have a great deal of high quality and varied expertise, which should be utilised now and when the conflict is ended.
Will the Secretary of State ensure, however, that the technology and advice that are given are appropriate not only to the problem of oil pollution but to the ecosystem in that area? The right hon. Gentleman must be aware that, on occasions, clean-ups can cause more problems. Will the Secretary of State ensure also that the help that we

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can give is offered quickly and in advance of any discussions about who should pay for that work? Can the Secretary of State tell us more about the problems of and the potential threat to water supplies in Saudi Arabia and the rest of the area as a result of the crisis?
There is an urgent priority to protect the desalination plants, but we must bear in mind the fact that the toxic components of oil, PAHs—that is, polycyclic aromatic hydrocarbons—are potentially dangerous in the long term. They can cause cancer and can create a serious hazard. Does the Secretary of State know whether the Government of Saudi Arabia and other areas in the region have the capacity to monitor toxins of that kind? This might be one direct way in which this country could help by providing expertise.
Finally, does the Secretary of State agree that, this weekend, we saw the environment used as a weapon in war by Saddam Hussein and that, whatever the military consequences of that may or may not be, the main victim of the attack has been the environment itself, which leaves every one of us, wherever we may live, much the poorer?
Mr. Heseltine: I thank the hon. Lady very much for the welcome that she has given to what we have said. Our view is that the deliberate decision to open five tankers is responsible for the seepage that has caused such devastation. The second point that the hon. Lady asked me about is whether the solutions that we are applying will preoccupy themselves not only with the oil problems but with the ecosystem of the Gulf. I can give her that assurance. We have significant expertise in this country. That leads me to the hon. Lady's third point, which is whether we will ensure that such help is available quickly. We have made the offers. The expertise that we possess is known, and we shall make it obvious to those who might have recourse to it that that help is available.
On cost, the Saudis have already agreed to pay for the shipment of supplies that is either just about to leave or has already left for the Gulf. My own Department took a small decision to absorb costs within it yesterday, but the broader issues are clear. The environmental threat is the key issue, and the question of apportioning responsibilities for payment will be dealt with as a secondary priority to that, although one cannot lose sight of the matter entirely.
Water supplies in the individual countries concerned are more appropriately a matter for the Governments of those countries. It would not be right for me to try to speculate on how the Saudis or any of the other countries involved feel about the threat to their desalination plants. Monitoring toxins is a matter that comes within what I have already said—in so far as we have expertise, that expertise is available.
Sir Bernard Braine: If one adds the uprecedented and deliberate assault on all the peoples—mainly Muslim—living in the Gulf region to the mass murder two years ago of thousands of Iraqi Kurds by the monster Saddam Hussein, and adds to that the deliberate rape and destruction of a small, independent and peaceful state, is it too early to ask that the international community should start to think in terms of bringing that man, if he survives, before an international tribunal so that, for all time, those monstrous crimes should be recognised and abhorred?
Mr. Heseltine: I am sure that everyone shares my right hon. Friend's indignation at the outrage that has taken place, but it would not be appropriate for me to speculate on the wider issues that he raises.
Several Hon. Members rose—
Mr. Speaker: May I ask hon. Members to confine their questions to the statement and not to bring in wider issues.
Mr. Simon Hughes: May I thank the Secretary of State for his statement and for the British Government's offer to assist in the rescue operation? I also welcome the news that UNEP will take the lead in co-ordinating the international rescue. I am sure that the whole House shares his view that, whatever the dispute over territory and whenever there is a resort to arms, such an attack on the environment is inexcusable and unjustified in all circumstances.
It seems that the immediate concern is that the experts are able to do their jobs efficiently and are protected from injury and death. Could he lead the way to an international agreement that such experts receive the same immunity as the Red Crescent and Red Cross, so that in future we have an international environmental agency which can protect the environment in the same way as the Security Council has sought to protect the peace?
Mr. Heseltine: The hon. Gentleman raises an interesting and important matter, which will undoubtedly be given consideration in the international forums in which such matters are discussed.
I thank the hon. Gentleman for what he said about the UNEP initiative. Dr. Tolba, the executive director, will issue a statement today explaining his intentions. I understand that a team is to go to the Gulf immediately to seek better communications in the light of the sporadic information about the environment that is available. The team will be headed by a British citizen, Dr. Michael Gwynne, the head of UNEP's global environment monitoring system. Another team of technical experts on oil spills will work particularly closely with the Saudi authorities.
Mr. Robin Squire: For the avoidance of doubt, will my right hon. Friend confirm from the Dispatch Box that all the evidence that the Government have suggests that the oil slick is the result of a deliberate act and did not follow from some inadvertent accident resulting from the hostilities? At the forthcoming OECD meeting, will he underline the fact that many of us in Britain expect the fullest co-operation from each of the members of that organisation in this non-military but vital endeavour to save whatever aspects of nature can still be saved?
Mr. Heseltine: I am extremely grateful to my hon. Friend. I repeat that it is our view that five tankers were deliberately opened to cause the spillage. I shall bear in mind what my hon. Friend said about the activities that will flow from the OECD meetings. Today I started the process of contacting my colleagues in the organisation with that in mind.
Mr. Tony Benn: Is the right hon. Gentleman not aware that warnings by King Hussein and others that this would be the inevitable consequence of war made to the Government at the very beginning? Does he accept that it is not convincing to suggest that, when allied

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military planes destroy installations in Iraq, it is a military triumph, but that, when this weapon is used, it is an act of environmental terrorism? Is he not aware that all modern warfare, involving the bombing of civilians, with the casualties that follow, and modern technology, is an organised act of terrorism? Does he agree that the sooner that the war is brought to a conclusion, the sooner lives can be saved and the environment protected?
Mr. Heseltine: Everybody will share the right hon. Gentleman's view that the war should come to an early conclusion. The easy, quick and effective way in which that can happen is for Saddam Hussein to withdraw his forces from Kuwait. The House will not lose sight of the fact that the right hon. Gentleman appears to condone the awfulness of what is happening. It is obvious that, unless we are prepared to resist and confront this man, he will have the opportunity to blackmail us with any technique at his disposal.
Mr. Jonathan Aitken: May I first thank my right hon. Friend for an admirably swift and comprehensive response to this tragedy? Does he agree that this environmental and vicious act of war by Saddam Hussein is likely to be particularly devastating because the Gulf is an enclosed and shallow sea, in which little self-cleansing by tides and waves is possible? Does he agree that speed is of the essence in the cleaning-up operation, because the huge oil slick must be prevented from turning into even more devastating sludge and foam? Is my right hon. Friend aware that the priority appears to be skimming equipment and nets, particularly in areas of intake for desalination plants?
Mr. Heseltine: I very much support what my hon. Friend has said. The equipment that is on its way from this country includes equipment of that sort. It is indicative of the speed with which we think this matter must be addressed that we have got this process under way as quickly as we possibly can. My hon. Friend is perfectly right to say that the ecosystem of the Gulf does not self-purify with the speed of much deeper, rougher waters. That adds to the urgency of the situation.
Mr. Peter Shore: This is an evil and reckless act by an evil and reckless man. [HON. MEMBERS: "Hear, hear."] Can we be told a little more about the effect on the desalination plant? I know that this presents difficulties, but if the right hon. Gentleman could tell us what percentage of the Saudi water supply is potentially at risk if the desalination plants are affected, it would be helpful.
Mr. Heseltine: A high proportion of Saudi water comes through desalination plants, but it would not be appropriate for me, as a Minister in an allied Government, to give indications of the sorts of problems with which the Saudis themselves should most properly deal.
Mr. Barry Field: I am sure that my right hon. Friend is aware that the Isle of Wight leads the world in the manufacture of skimming technology and clean-up equipment, such as the frogmat boom. Can he reassure the House that, if necessary, the troops will be allowed to assist the company on the Isle of Wight to ensure that the equipment is flown directly from Bembridge airport to the
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Gulf? Can he confirm the Government's position on stockpiling mechanical equipment in future, as we have seen that the ecosystem of the Gulf is so delicate that dispersants cannot be used?
Mr. Heseltine: I am sure that we would wish to give every facility to the urgent despatch of equipment, if one felt that the narrow, additional number of hours required to move equipment between one airport and another in the United Kingdom was time-critical. My hon. Friend can feel reassured that, before we take a decision about the use of an airport, we shall be satisfied that we are not prejudicing the undertaking to which we are committed by moving equipment to a different airport from the one which he suggested. Stockpiling is, in the first instance, for the coastal states concerned. The broad issue of how much countries are prepared to deploy in resources for this purpose must be for them, but I hear clearly what my hon. Friend has to say.
Mr. Tam Dalyell: Why is the House of Commons surprised that this dreadful and catastrophic thing has happened? [HON. MEMBERS: "We are not."] Were we not told repeatedly by scientists and, specifically, in c. 403 on 19 December during the Consolidated Fund Bill debate, of the ecological consequences of a military option? The pumping of oil into the Gulf was predicted as it was predictable. Is this not a case of sheer ministerial incompetence? Why are the 70 tonnes of equipment not there already? These Ministers are not competent to run a war.
Mr. Heseltine: The hon. Gentleman will realise that there have been many warnings of many environmental threats as a result of what Saddam Husein can do. The issue is coping with them as effectively as necessary and we are taking those steps. The countries whose coasts are most affected are those who, outside the war zone, are bound to take the lead in such a circumstance. That process is now under way.
Mr. Dalyell: The Government were told, told, told.
Mr. Heseltine: If the hon. Gentleman understands the full implications of this matter, he will know that this House has clearly expressed its determination to resist Saddam Husein in his illegal occupation of Kuwait. There were bound to be risks associated with that process. Not to have confronted Saddam Hussein would have led to larger and more damaging risks in future.
Mr. Anthony Steen: I wonder whether the Secretary of State remembers that, last May, 1,100 tonnes of oil were spilt into the English Channel as a result of the holing of the Rose Bay outside Brixham in south Devon and that it took six Dakotas spraying for four or five days on top of that oil slick, a number of ships with vacuum cleaning equipment to filter the oil through the ships and clean it, as well as thousands of volunteers to clean up the coast, to deal with the problem. Was anything learnt from that experience? I wonder whether it has been estimated how many Dakotas and such ships, as well as volunteers, would be needed to clean up the slick in the Persian Gulf?
Mr. Heseltine: There is one vital point about which my hon. Friend will want to think: the slick is in a war zone. The House will doubly regret the fact that, yesterday, when allied aircraft inspected the slick, they were fired

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upon by Iraqi ground forces. I am afraid that it is a question not of considering what use we can make of Dakotas or volunteers, but of how we deal with the slick once it moves from the military war zone into an area where civilian forces can be deployed.
Mr. Bernie Grant: Will the Secretary of State accept that we are all concerned about the environment, and that we are not prepared to take any lectures from Conservative Members about that?
Will he confirm that, however disastrous the environmental effects of the oil spillage, they are not as disastrous as the effects of bombing innocent civilians in Iraq? Is he also concerned about the effects on the environment of bombing chemical and nuclear factories in Iraq? Given Saddam Hussein's threat to bomb the deep wells in Kuwait, what steps has the right hon. Gentleman taken to prevent that disaster?
Mr. Heseltine: The most effective answer is to remove Saddam Hussein from Kuwait, and that is precisely what we are doing. The hon. Gentleman must bear carefully in mind the fact that those chemical factories, which are the source of such anxiety, have already been used by Saddam Hussein in attacks on his own people. The risks exist, and that is one reason why we must take his threats so seriously. There is no escape from the implications of that, as the House, by overwhelming majority, has recognised.
Mr. Patrick Thompson: Following this appalling and uncivilised act, my right hon. Friend will be aware that many individuals and organisations throughout the country have volunteered support and help. What response can my right hon. Friend give those people?
Mr. Heseltine: I am very grateful to my right hon. Friend for raising that matter. We have been very impressed with the number of people from environmental movements, and other citizens, who have offered help. We would have expected no less in the circumstances. We have asked the Nature Conservancy Council to co-ordinate the applications that we have received to see what capabilities lie behind them, so that, when it is considered safe and appropriate for such facilities to be drawn upon, we shall be in a position to offer them to the Gulf states.
Mr. David Winnick: Has not this act of undoubted environmental terrorism, together with all the other crimes committed by those who run the regime in Iraq, shown that, once again, we can expect nothing better? What has occurred has not weakened, but strengthened, the resolve of the British people that this war must be seen through to the end until the Security Council resolutions have been duly implemented and Kuwait is free of enemy occupation.
Mr. Heseltine: I think that the hon. Gentleman speaks for the whole House; I wish only that it was not apparent that some of his hon. Friends have different views. The fact is that Saddam Hussein has used chemical weapons against his own people, he has attacked innocent Israeli citizens to try to widen the war, and he has unleashed an environmental disaster on the Gulf. Anyone who now fails to understand the urgent need to remove the threat of that man by driving his forces from Kuwait simply does not understand the nature of the man himself.
Mr. Nicholas Soames: In the midst of this awful disaster, will my right hon. Friend pay tribute to the exceptional skill of the American pilots who bombed and destroyed the manifolds at the pumping station yesterday?
Mr. Heseltine: I am sure that the whole House would welcome the opportunity to do precisely that. The environmental disaster already exists, but it could have been a great deal worse if we had not been able to stop the flow.
Ms. Joan Ruddock: In a radio interview this morning, the Secretary of State was asked for his response to Jordan's request for a ceasefire to clear up the oil. He said that Saddam Hussein, having been capable of letting loose the oil and destroying the environment, would of course do much worse if he had a nuclear capability. Because this disaster was predicted, I ask the Secretary of State to tell us what information he has about the environmental consequences of destroying Iraq's nuclear capability on the ground, and to tell us the environmental consequences of the use of any one of the 700 nuclear warheads on American ships in the Gulf.
Mr. Heseltine: The hon. Lady will want to bear in mind the consequences of Saddam Hussein having a fully developed nuclear capability, the dangers of which would greatly outstrip the much lower dangers that flow from the question that she asked. The fundamental question is: does the hon. Lady believe that we should give in to blackmail of any sort—nuclear, chemical or environmental? Once the dictators of this world get the impression that giving in is on offer, there will be no stopping the price that they seek to extract.
Mr. Anthony Beaumont-Dark: Does my right hon. Friend accept that this is an environmental crime unique in its enormity and that Opposition Members—fortunately, they are few—who do not join the whole House in condemning Saddam only encourage this evil man to continue his fight?
Mr. Heseltine: I very much hope that Saddam Hussein will draw no such conclusion, because my clear understanding is that the overwhelming majority of Opposition Members are as appalled as my right hon. and hon. Friends and I are by what has happened. We hear from a small and wholly unrepresentative minority among the Opposition.
Dr. Dafydd Elis Thomas: As a member of that unrepresentative minority, may I ask the Secretary of State to accept that I have been condemning Saddam Hussein for more than 10 years, arid that I will continue to do so?
I condemn the environmental damage done to his own people through chemical weapons and the environmental damage to the whole Gulf through the oil spillage. The right hon. Gentleman has been telling the House that that environmental damage is an acceptable risk in the prosecution of this war, from the point of view of the Government—
Mr. Beaumont-Dark: Of course it is.
Dr. Thomas: The hon. Gentleman clearly endorses that viewpoint. How much more environmental damage does the Secretary of State regard as an acceptable risk?

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Finally, we welcome the moves through UNEP, and the OECD initiatives, but why should we have to wait for an act of war like this before such international co-operation takes place?
Mr. Heseltine: I do not regard the risks as in any sense acceptable, but they were not created by the allies. They exist because Saddam Hussein has built up a chemical and conventional capability on an horrendous scale and he is now building a nuclear capability on an even larger scale. The hon. Gentleman must face the logic of that. He either thinks it right that Saddam should do that and is prepared to live with it, or he joins those of us who believe that this man poses threats that are unacceptable and that the United Nations stand is therefore wholly right.
Mr. Phillip Oppenheim: Is not the implication behind the remarks of those who are now falling over themselves to tell us that they told us so that we should have given in to Saddam Hussein's blackmail? Does not this brutal and vicious act, which will result in the suffering and deaths of hundreds of thousands of creatures in the Gulf, show what an evil man Saddam is? Will not the wildlife of the Gulf probably prove to be ultimately his most enduring and innocent victims?
Mr. Heseltine: I very much share my hon. Friend's anxieties and hope that his forebodings will not come to pass. That will depend on our being able to cope with the environmental risks expeditiously. I also agree with the first of my hon. Friend's observations. Once one has come to conclusions about the nature of the man, about his military capability and about how he is ruthlessly prepared to use it, one can take only one logical decision: it is the one that we have taken—to withstand this man's determination to occupy Kuwait.
Mr. Alan W. Williams: May I bring the Secretary of State back to what my hon. Friend the Member for Linlithgow (Mr. Dalyell) said about warnings of this disaster? Does he recall the Secretary of State for Energy, a member of the War Cabinet, telling us on 4 January that
"suggestions of a global environmental disaster are entirely misplaced"?
That was the Government's response to those warnings. Now that there is an oil slick 20 times the size of that from the Exxon Valdez, what are the possibilities of Iraq re-starting the flow of oil despite the bombing; and will the Government now take seriously the warnings given by Saddam Hussein months ago that he would set fire to the Kuwaiti oilfields?
Mr. Heseltine: Of course, one was very aware of the warnings that came from many people. The only implication of accepting them was that one was prepared to be blackmailed by anyone who had the power to carry out such threats. That position is not one that we are prepared to tolerate. The hon. Gentleman referred to the observations made by my right hon. Friend the Secretary of State for Energy following the extreme forecasts from Jordan. My right hon. Friend was speaking about the firing of oil wells. I spent part of last Friday morning at the Hadley centre for climate prediction and research, when it
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was quite apparent that the advice of which my right hon. Friend spoke is supported by world-class expert opinion in this country.
Mr. Kenneth Hind: Does my right hon. Friend accept that many people in this country feel that a man who shows such contempt for human life, wildlife and the environment should himself become a target in the war, and ought to be removed—as that is the one way that we can protect lives, preserve the environment in the Gulf, and avoid any similar acts in future?
Mr. Heseltine: My hon. Friend, I know, expresses a view that is widely shared. However, the Government are committed to upholding United Nations resolutions, and the military judgments that flow from them must be accounted for by my right hon. Friends the Secretary of State for Foreign and Commonwealth Affairs or Secretary of State for Defence. I am here to talk about the environmental issues that are the subject of my statement.
Several Hon. Members rose—
Mr. Speaker: Order. I must protect the business that is before the House, but I will allow questions to continue for a further 10 minutes. Otherwise, I may have to impose a 10-minute limit on speeches in the subsequent debate. I ask hon. Members to ask brief questions on the statement only, and not on wider issues.
Mr. D. N. Campbell-Savours: May I, as a supporter of the implementation of the United Nations resolution that unfortunately but inevitably led to the war, put it to the Secretary of State that my hon. Friend the Member for Linlithgow (Mr. Dalyell) raised a very valid point? In the light of his warnings, why did not the allied forces bomb the tank facilities on the seafront at Kuwait that feed the sea pipeline from which much of the oil has flowed? If that pipeline had been bombed several days ago, it would have prevented the environmental disaster that my hon. Friend predicted.
Mr. Heseltine: I am not sure whether the world would have understood if, by bombing such a pipeline, we ourselves had been responsible for the spillage that flowed into the Gulf as a result. Although the scale of the disaster would have been much lower, it would have put a totally different construction on our attitudes towards the preservation of the environment.
Sir Antony Buck: Does my right hon. Friend agree that the simple message is that it does not pay to give in to blackmail of whatever type—and that we are here confronted with ecological blackmail? Can our armed forces assist in cleaning up that awful catastrophe?
Mr. Heseltine: At this moment, no British service men are involved in the environmental consequences or their abatement. It is a matter for the military commanders on the ground to decide whether or not it is appropriate for them to become involved.
Mr. Harry Ewing: Is the Secretary of State really telling the country that, despite everything that he learned during his time as Secretary of State for Defence and the vast experience that he gained during his time as a national service man, he was so naive that he did not imagine that such a catastrophe would occur? Does he now acknowledge that it is a consequence of war of the

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type that, over the past four or five weeks, he and his colleagues firmly denied would arise? The Secretary of State talks about Saddam Hussein using chemical weapons on his own people, but has he conveniently forgotten that he was a member of the Cabinet that gave Saddam Hussein £1 billion after he had used chemical weapons against his own people?
Mr. Speaker: Briefly, please.
Mr. Ewing: The right hon. Gentleman makes certain accusations against my hon. Friends—but he should look home, to his own record.
Mr. Heseltine: I think that the hon. Member has completely misunderstood the British Government's approach towards Saddam Hussein's build-up of armaments. There are no grounds whatsoever for the allegations that he has made. If he asked me, "Were these risks and the warnings built into the risk of war?", the case is only answerable in the affirmative, but what conclusions does one draw from that? There is only one conclusion —that one cannot allow oneself to be subjected to nuclear, chemical or environmental blackmail.
As to how one copes with the individual warnings, given that there are a legion of them, it must be a matter for the individual countries concerned, or for the allies, to determine how best to deal with the situation. At the moment, there are no grounds for saying that we could have got equipment into the area faster than we are now doing. It is a war zone, and it is not possible to treat the oil slick in the way that we would have treated it in ordinary peacetime circumstances.
Mr. Henry Bellingham: Further to the question asked by my hon. Friend the Member for Norwich (Mr. Thompson), is the Secretary of State aware that a number of small businesses in East Anglia may well have the technology to help clear up the consequences of this appalling act of eco-terrorism? Will he ensure that those small businesses are given every encouragement by his Department.
Mr. Heseltine: My hon. Friend will understand that we have widely publicised our response, and we have made it clear that we shall do all that we can to help the Gulf states in these circumstances. It would be appropriate for small businesses to show some of the enterprise for which they are characteristically admired, by coming forward with their own offers.
Mr. Harry Cohen: This oil pollution is clearly an environmental outrage for which Saddam Hussein is primarily responsible, but, will the Secretary of State, who went to the War Cabinet meeting this morning, comment upon the article in The Observer yesterday by Julie Flint, which says:
"US bombers attacked two tankers at a Kuwaiti oil terminal on Tuesday."
Is that true, and can we have an assurance now that the allies will not bomb any more tankers?
Mr. Heseltine: I have told the House that the oil slick and the appalling problems that we now have to confront, flowed from the deliberate release of oil from five tankers. That is what the responsibility amounts to. I do not think that it is proper for me to give answers to what could easily
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turn out to be questions of military judgment in confused circumstances. If that has to be confronted, it will be accounted for.
Mr. Jacques Arnold: Are not oil tank farms of this sort fitted with fail-safe systems to stop such spillages; furthermore, are they not fitted with earthwork systems to contain any such spillages? If that is the case, is it not absolutely clear that this incident was deliberate, and was yet another example of the absolute inhumanity of that repulsive regime?
Mr. Heseltine: My hon. Friend comes to the heart of the matter. There is no doubt in our minds that this was a deliberate act, with appalling environmental consequences for the Gulf.
Mr. Win Griffiths: At the meeting which the Secretary of State had this morning, did the team around the table discuss an Australian-manufactured chemical called Sokerol, which is marketed in Europe by a company in my constituency? The company made the Ministry of Defence an offer before the Gulf war started to make the chemical available because, unlike most chemicals, it is an oil-absorbent, which is non-toxic, non-carcinogenic and completely biodegradable. Was that discussed, given the fact that many warnings were issued about what might happen in the Gulf?
Mr. Heseltine: We did not discuss specifically any particular chemical at any meeting I have had today. We determined to draw together all the best information and all the offers that we had received, to evaluate them in so far as we have the capacity to do so, and then to inform the Gulf states of where we can help. I will ensure that the chemical to which the hon. Gentleman refers is put forward for special consideration to ensure that we have not overlooked anything.
Mr. Simon Burns: In the light of the despicable ecological devastation caused in the Gulf over the past few days, will my right hon. Friend accept that his comments earlier today about the possibility of a ceasefire to allow time for clearing up were particularly welcome? Will he now confirm, fairly and squarely, that a ceasefire would not save one bird, one fish or any lives, or ensure that the Gulf spillage could be cleared up? Quite simply, it would play into the hands of Saddam Hussein, and achieve nothing else.
Mr. Heseltine: I could not have put it more effectively. It seems clear to me that a man with Saddam Hussein's record, if given any respite, will claim credit for it; and the respite will do nothing to undermine his ability to start all over again the moment that hostilities begin.
Mr. Tony Banks: However the tragedy occurred, it amounts to a crime against the planet. It is worth reminding the Secretary of State and the House that, when the Opposition were telling the right hon. Gentleman what a maniac Saddam Hussein was, the British and American Governments were cuddling up in bed with the monster. That is what this is really all about.
Will the Secretary of State pledge that all the necessary resources will be made available to the volunteers from animal welfare groups who are prepared to go into the Gulf, even while it is a war zone, to try to rescue some of the animals that are now victims of the collective insanity of man?
Mr. Heseltine: When talking about crimes, the hon. Gentleman should concentrate more of his effort on talking about the criminal who perpetrated the crimes.
It would be entirely wrong for us to suggest to the military commanders the introduction of a civilian presence of the environmental nature suggested by the hon. Gentleman. This matter must be judged by the military commanders, in the light of the circumstances. The presence of such people would immediately mean that the military would have to look after them, protect them and spend a great deal of their time ensuring that there was no enhanced risk to them; that would not be justified in the circumstances.

Points of Order
4.16 pm
Mr. Max Madden: On a point of order, Mr. Speaker. Is it not extraordinary that the Secretary of State for Defence should have announced yesterday, on the radio, fundamental and important changes in the war aims of the British Government in the Gulf? He made it clear that, even if Iraq withdrew from Kuwait, allied forces would launch a ground and air attack on Iraq if it was perceived to maintain a military threat. That is clearly a major change in Britain's war aims; yet the House of Commons is being given no opportunity to question the Secretary of State—or, indeed, the Prime Minister—about such an important matter.
I therefore ask you, Mr. Speaker, to reconsider the application that I made to you earlier for an emergency debate on the war aims of the British Government in the Gulf, arising from the exchanges that have taken place today on a very narrow but nevertheless very important subject. I urge you, Mr. Speaker, to allow such a debate to take place, if the Government are not—
Mr. Speaker: Order. That is plainly cheating. As the hon. Gentleman knows very well, I explained to him when he came to see me—as he has raised the matter, let me say that he did come to see me about it—why it would not be possible for me to do as he asked, as it would be an abuse of our procedures.
Mr. Simon Hughes: On a point of order, Mr. Speaker. About three months ago, I raised with you—you dealt with it sympathetically—the question of where the division lay between the responsibilities of the Department of the Environment and those of the Foreign and Commonwealth Office, in relation to international environmental matters.
Given that there will clearly be opportunities in the House for requests to question Ministers and to table questions, I wonder whether the Secretary of State for the Environment could consult his colleagues in the FCO and the Ministry of Defence. Perhaps a note could be issued explaining which Department should most appropriately deal with matters that fall within such a confused area of responsibility.
Mr. Speaker: I am sure that the hon. Gentleman's remarks will have been heard by the Secretary of State for the Environment, and by those on the Front Bench who are responsible for such matters.

Points of Order

  STATUTORY INSTRUMENTS, &c.
  Mr. Speaker: With the leave of the House, I will put together the three motions relating to statutory instruments.
  Mr. Tam Dalyell: On a point of order, Mr. Speaker.
  Mr. Speaker: Order. I am on my feet.
  I will put the three motions together.
  Ordered,
  That the draft Unfair Dismissal (Increase of Compensation Limit) Order 1991 be referred to a Standing Committee on Statutory Instruments, &c.
  That the draft Unfair Dismissal (Increase of Limits of Basic and Special Awards) Order 1991 be referred to a Standing Committee on Statutory Instruments, &c.

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  That the draft Employment Protection (Variation of Limits) Order 1991 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. David Davis.]
  Mr. Dalyell: On a point of order, Mr. Speaker. What could be more urgent and definite than the war aims in which we are now involved? If it is said—I understand that it is said—that confusion is being created, that is a judgment that may or may not be made; but if ever an application under Standing Order No. 20 should be—
  Mr. Speaker: Order. The hon. Gentleman is on this subject every day. It is a continuing matter. I have to take into account all relevant matters and decide whether something has happened that is so urgent that the business before the House should be disrupted for this day or for tomorrow. I have made that judgment.

Orders of the Day

  Ports Bill
  Order for Second Reading read.
  4.19 pm
  The Secretary of State for Transport (Mr. Malcolm Rifkind): I beg to move, That the Bill be now read a Second time.
  As an island nation, Britain has a particular interest in the welfare of its ports and harbours. Much of the economic activity of the nation depends on these ports being able to deal with the tremendous demands that are made upon them. Even though the Channel tunnel will become available during the next 10 years, 85 to 90 per cent. of our trade either into or out of the United Kingdom will still be dealt with by our ports and harbours. It is important, therefore, to ensure that our ports and harbours are able to adapt to the changing needs of our economy and to cope efficiently and competitively with the many problems and challenges that they will face.
  Until recently, our ports and harbours were unable to do that. They had been subjected over the years to antiquated, old-fashioned and anomalous legislation that defined their status. Restrictive practices and other difficulties also limited their modes of operation. During the 1980s, therefore, an important Government objective was gradually to change all that so that ports and harbours could face the future with confidence and with a structure that had been adapted to meet the modern needs of the society in which we live.
  In 1983 Parliament approved the privatisation of Associated British Ports. Despite Opposition predictions, that has been a great success. A thriving employee share ownership scheme operates in the ports that were privatised. A large majority of the employees, including the dockers, are shareholders in the companies for which they work. They have seen the benefits that privatisation has brought to those ports.
  Dr. Norman A. Godman: Where does the Clyde Port Authority Bill, which appears to be securely anchored in the other place, stand in relation to clause 1? Will the sponsors of that Bill be advised by Ministers and their officials to throw it on the scrap heap because of the provisions of clause 1?
  Mr. Rifkind: No such advice will be given to the sponsors of that Bill or to the sponsors of the Tees and Hartlepool Port Authority Bill which is going through this House. Those private Bills were sponsored by the port authorities in question. It is entirely for them to decide whether they wish either to continue with their Bills or to wait and then use the provisions of this Bill.
  Mr. Harry Ewing: The Secretary of State referred to the success of the 1983 legislation. Will he define what success there has been in the Scottish ports? Throughout the 1970s, 75 per cent. of all goods that were manufactured in Scotland were exported through Scottish ports. However, those exports are down to 25 per cent. At Grangemouth in my constituency, the number of dock workers has declined dramatically. They are struggling to

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  find enough work to fill the day. Where is the success of the 1983 legislation to which the Secretary of State has just referred?
  Mr. Rifkind: The combination of the 1983 legislation and the ending of the dock labour scheme gave a tremendous boost to the prospects of the port industry throughout the United Kingdom. The fact that the Forth and Clyde port authorities—the two largest in Scotland—are among those most anxious to be privatised shows the opportunities that they believe are available.
  One of the major benefits of the privatisation of Associated British Ports is that, unlike its predecessor, it has been able to use and develop its land for non-port purposes and to diversify its activities where that made sense. The result is a spate of schemes for the regeneration of old docks for recreation, housing and other facilities, thereby benefiting not only the local community but the company. It is right that those benefits should be recognised.
  Subsequent to that privatisation was the ending of the dock labour scheme. The hon. Member for Kingston upon Hull, East (Mr. Prescott) prophesied doom and disaster if that measure was taken forward. He said:
  "We believe that the Bill will be damaging to the ports industry and will bring a return to casual working."—[Official Report, 17 April 1989; Vol. 151, c. 105.]
  Mr. John Prescott: I am glad that the Secretary of State mentioned that, because most reports show that it has been happening. Fifty per cent. of labour is now working for casual rates in many ports, exactly as I predicted. The Secretary of State seems to be as badly informed as were previous Secretaries of State.
  Mr. Rifkind: I was waiting for the hon. Gentleman to promise that the next Labour Government would reinstate the dock labour scheme, such have been its benefits to the national economy.
  The hon. Gentleman knows that the main consequences of the change have been entirely beneficial. We have seen, for example, an end to overmanning. The 50 per cent. net reduction in the number of dock workers in ex-scheme ports shows the gross inefficiency of those ports under the previous arrangements. Productivity in some ports has increased by 50 to 100 per cent. since the ending of demarcation disputes and the introduction of new flexibility. There is now competition among ports, which provides a faster turnround, and lower rates and benefits the whole economy. I should have thought that the hon. Gentleman would particularly welcome the revival of trade in historic ports such as Hull, which has reopened its container terminal and will reopen the Alexandra dock subsequent to these reforms.
  The trust ports, of which there are more than 100 in various parts of Great Britain, have a curious and anomalous status. Some hon. Members might find it useful if I say that trust ports are independent statutory bodies established under local legislation. They are not owned by anybody except the state, nor are they accountable to anybody. Their status is a strange limbo which makes them neither properly public nor properly private, answerable neither to the shareholders nor to the Government.
  Mr. Frank Doran: I am intrigued by the Secretary of State saying that trust status is anomalous. Why are the Government so keen to press our hospital service into trust status if it has such an anomalous legal position?
  Mr. Rifkind: The hon. Gentleman makes an interesting comparison, but he should appreciate that trust status for a port is an anomaly that results from a historical accident; it is not intended to give greater control to those who operate the ports in order to ensure their proper operation.
  Mr. Michael Carttiss: My right hon. and learned Friend said that trust ports are answerable to no one, but does he accept that a number of them, notably the one in my constituency, Great Yarmouth, which has its origins way back in the 17th century, are very much answerable to someone—the community that they serve? Although I do not disagree with the general theme that my right hon. and learned Friend will expound, I want him to offer more praise to trust ports for their accountability to the communities that they serve.
  Mr. Rifkind: I have no doubt that trust ports have done their best, within the constraints of the legislation and of the structures under which they are required to operate. I am not sure that I can agree with my hon. Friend that trusts are answerable to the local community. They are not elected by the local community or indeed, by anybody else. In some cases the Secretary of State for Transport appoints the chairman and all the board members; in others he appoints a minority of the members. In many cases, the appointments are entirely in the hands of others.
  In no case of which I am aware is a trust board entirely answerable to the local community. Whether in the public sector or in the private sector, boards will, I hope, be sensitive to the interests of the local community. However, I do not think that that sensitivity can be described in the terms used by my hon. Friend a moment ago. Indeed, in the case of some appointments I am required to consult other parties. All this is laid down in the local legislation for each trust port. There are over 100 such ports and, although many of them are very small, they form a major component of the ports industry. They include many of the largest ports in the country—London, Medway, Forth, Dover and Tees and Hartlepool.
  Mr. Michael Stern: My right hon. and learned Friend has described the anomalous nature of the trust ports. It would appear that in many cases they have not been fully answerable to the community, as they are supposed to be. Does my right hon. and learned Friend agree that this is entirely applicable also to municipal ports such as Bristol, part of which I represent? Is not it regrettable that, for legal reasons—and for legal reasons only—municipal ports cannot be given the same benefits as trust ports are about to be given?
  Mr. Rifkind: I accept that some municipal ports are in a situation similar to that of the ports covered by this Bill. However, as they can already achieve privatisation through harbour revision orders, legislation such as this is not necessary for their transfer to the private sector.
  Mr. Barry Field: Does my right hon. and learned Friend agree that, where municipal ports exceed the turnover figures set out in the Bill, there is no provision for a Secretary of State to give directions?
  Mr. Rifkind: That is certainly the case. Obviously municipal ports are controlled by the municipality, but there is an option for their transfer to the private sector. That is why it was not thought appropriate to deal with them in this Bill, which is concerned with all ports that have trust status.
  Mr. David Martin: Portsmouth is a municipal port. One difficulty is that local authorities do not have the money to develop ports as they should be developed if they are not to be sold. Brittany Ferries and others would like to invest millions in local authority ports, but they could not acquire shares unless there were some sort of half-and-half arrangement on the way to privatisation which would enable them to reap the benefits of private money doing precisely what municipal ports at present cannot do. In such cases there should be more flexibility.
  Mr. Rifkind: I am sure that many local authorities will allow their ports to be transferred to the private sector, thereby securing many of the significant benefits that will be available to the trust ports. This would enable them fully to develop their potential and to respond to the commercial environment in which, as large businesses in their own right, they must operate. It would give them access to share capital as well as loan capital. It would make them more attractive, as partners, to companies that might wish to go forward in joint venture. It would enable them to stimulate the development of land surplus to their requirements which, under current legislation, they are sometimes unable to do. It would make it easier for them to diversify their activities, thereby ensuring their viability in years to come. It would make them more accountable.
  I emphasise that at the present those ports are not accountable to anyone. If they were companies in the private sector, they would have to be conscious of the need for accountability. Finally, transfer to the private sector would introduce the prospect of substantial employee share ownership. That is not just a theoretical option; as we have seen in the case of Associated British Ports, it is one of the major benefits of the privatisation scheme.
  Mr. Robert Hughes: Will the right hon. and learned Gentleman confirm that the trust ports have access, under conditions, to grants for capital works through the Secretary of State for Scotland or through the appropriate English Minister? The Bill seems to be silent on this point, but does not it follow logically that, if the trust ports become private companies, they will no longer have access to Government loans? What benefit is that to the ports?
  Mr. Rifkind: That is a theoretical question. Apart from the Port of London authority—for which there is different provision in the Bill—there have been virtually no examples of grants or financial assistance from Government to any trust port in recent years. The hon. Gentleman should bear that in mind.
  I am conscious of the fact that one of the main criticisms from certain quarters relates not to the Bill as a whole but to that part of the Bill which permits the
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  Secretary of State in certain circumstances to require a trust port to bring forward a privatisation scheme, and I shall address my remarks to that.
  I emphasise that previous privatisations, almost without exception, have not been enabling measures but have been compulsory measures. The Government and Parliament have said that such and such an industry will be privatised in a particular way and privatisation has not been expressly subject to the consent of an individual company or industry. The Bill is an exception, in that it is primarily an enabling measure. It does not say that all the trust ports will be privatised, as happened in previous privatisation measures. The Bill already recognises that many different circumstances affect individual ports and therefore that it would not be appropriate or wise to have a single policy which automatically and without further consideration applied to all the ports in Great Britain.
  I do not dismiss out of hand the concern that has been expressed in certain quarters, nor do I say that it is unreasonable, unjustified or unnecessary. The Government have recognised that concern in their response and in drafting the Bill. The Bill enables the trust ports to come forward with proposals for privatisation.
  In our view, and we hope in Parliament's view, it will be considered in the public interest that the trust ports, especially the larger ones, will enter the private sector and thereby be able to benefit fully from the opportunities that that will provide.
  Mr. Stuart Bell: I am grateful to the Secretary of State for spending some time on this issue. As I understand it, clause 9 enables the Secretary of State, after an initial period of two years, to give a direction requiring the authority to bring forward a scheme for the purposes of a transfer. Will the right hon. and learned Gentleman explain that clause?
  Mr. Rifkind: I am drawing attention to that point. Generally speaking, and unlike previous privatisation Bills, the Bill is an enabling measure. A fallback power enables the Secretary of State to require a particular trust port to be privatised, but even that power is not unqualified—it is hedged around with all sorts of requirements and preconditions. First, the use of that power cannot be contemplated until two years after the passage of the legislation. Secondly, it can be contemplated only in respect of those trust ports with a turnover of more than £5 million a year. That figure will not be unchanging, but will be indexed to ensure that the real purpose behind that restriction continues for a number of years.
  These conditions mean that, although there are about 100 ports round our coastline, only 14 will be subject to even the possibility of being required to be privatised against their wishes. The vast majority of ports do not see that as a potential risk because of their small turnover.
  Mr. David Harris: Will my right hon. and learned Friend publish the list of 14 ports? He may already have done so by way of written answer, but I should be grateful for that information.
  Let me ask a question about fishing ports? How will the level of turnover—the £5 million requirement—be assessed? I take it that the £5 million relates to the turnover of the port trust itself rather than to total fish sales, which might come under the umbrella of the harbour commissioners. Am I right in thinking that the £5 million

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  relates to the revenue that the trust receives from the sales rather than to the sales themselves? In respect of fishing ports, that is most important.
  Mr. Rifkind: I confirm that the £5 million refers to the turnover of the trust port itself.
  My hon. Friend asked which trust ports will be affected by the potential power of compulsory privatisation. They are the ports with the largest turnover—London, Dover, Tees and Hartlepool, Medway, Forth, Tyne, Ipswich, Clyde, Harwich, Aberdeen, Milford Haven, Poole, Lerwick and Blyth. Those are the only ports affected at present, although turnover will be subject to indexation, and other ports may come into the category if their turnover increases in years to come.
  Mr. John Ward: My right hon. and learned Friend has been so generous in giving way that I, too, am tempted to intervene. He will be aware that the Poole harbour commissioners control an area of about 10,000 acres. We are anxious that, under any new legislation, the present environmental standards and regulations protecting the area against exploitation—at present, the whole harbour is designated a site of special scientific interest —should apply. Will my right hon. and learned Friend confirm that that will be so whatever he may recommend by way of privatisation for all or part of the harbour?
  Mr. Rifkind: I am well aware of my hon. Friend's interest in Poole harbour and its future. I can give him the assurance that he seeks. Any requirements in respect of conservancy matters and environmental issues that affect the existing trust ports will equally affect any successor private sector port. The ports will be subject to exactly the same legislation and will have exactly the same obligations. Moreover, we have the precedent of Associated British Ports, whose conversion from public sector to private sector status has led to no diminutions either in obligations or in standards of behaviour on environmental protection.
  I was explaining to the House the preconditions for compulsory privatisation: two years must have elapsed and the port must have a turnover of at least £5 million. There is an additional factor. If, after the two years, the Secretary of State for Transport wishes to require a port to bring forward a privatisation scheme, that scheme will be subject to consultation with the port authority and with other interested parties. My successor or I would wish to listen carefully to any considerations that might be put before us, and to arguments as to why privatisation might be inappropriate given local circumstances. Therefore, it would not automatically follow that other ports falling within the category would be privatised. That would depend on the response of the port and of other local interests.
  Mr. Tim Janman: Let me raise two points from the opposite direction. First, can my right hon. and learned Friend assure the House that, in Committee, he will consider reducing the £5 million cut-off to £1 million, thus bringing in a further eight ports? Will he also consider reducing the two-year period to one year, as that seems much more realistic?
  Secondly, Belfast is one of the largest trust ports in the United Kingdom, with a turnover of £10 million. Once
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  again, Northern Ireland has been excluded from important legislation and an important trust port has been missed out. Even if it means introducing a separate Bill, will my right hon. and learned Friend consider the possibility of giving Belfast the same opportunities as the trust ports included in the Bill?
  Mr. Rifkind: On the latter point, I would want to take into account the views of my right hon. Friend the Secretary of State for Northern Ireland. On the first point, we shall naturally listen with great interest to the arguments made in Committee and we shall consider amendments, including amendments tabled by my hon. Friend in an attempt to make the opportunities even more widely available, which is clearly what he wishes.
  Mr. Robert Hughes: Will the Secretary of State say more about the criteria for invoking the compulsory privatisation clause? As the right hon. and learned Gentleman will know, the matter has been discussed widely over a considerable period. What would the right hon. and learned Gentleman say to the majority of the commissioners of the port of Aberdeen who were appointed by him in his previous incarnation as Secretary of State for Scotland, who represent commercial and industrial interests in the city of Aberdeen and who have solemnly declared that they are opposed to privatisation because they see no need for it? Why does the Secretary of State want to go against his own business friends?
  Mr. Rifkind: No decision about Aberdeen could be taken until at least two years after the enactment of the Bill. We would then wish to consider the circumstances at the time and to hear not only the port authority's conclusion but the reasons for it. We should want to consider whether they were valid reasons that needed to be taken into account or whether they reflected a misunderstanding of the likely implications of privatisation. It is premature for the hon. Gentleman to assume that Aberdeen will be a candidate for compulsory privatisation and to expect to know what the relevant consideration may be at some time in the future.
  Let me deal with the proposals concerning the Port of London authority.
  Mr. James Wallace: I am sure that the right hon. and learned Gentleman, who was Secretary of State for Scotland in his previous incarnation, is well aware that Lerwick harbour trust had succeeded both in diversifying its port business and in developing its surplus land. Clearly, such achievements are possible under the auspices of the trust port as presently constituted. Will the right hon. and learned Gentleman confirm that the Government would not stand in the way of trust ports seeking to increase their powers and to develop in that way merely because they had not opted for privatisation?
  Mr. Rifkind: The hon. Gentleman will appreciate that one of the problems that the trust ports face is the great difficulty involved in extending their powers. They are constituted under trusts which lay down their powers and responsibilities. A number of ports have been prohibited or inhibited from developing what would otherwise be the normal commercial activities of a company seeking to make the best use of the assets available to it in respect of surplus land. For Lerwick and for other ports, the

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  privatisation option provides the most attractive way of releasing opportunities and does not entail any dangers of that kind.
  The Bill deals with the Port of London authority separately and in a manner different from the other trust ports. The Bill provides for the privatisation of a trust port in its entirety, except in the case of the PLA. The PLA is empowered under the Bill to sell off its commercial docks at Tilbury, but it will retain its conservancy and other statutory functions as regards the River Thames as a whole.
  In concluding that this is the right course to take for the PLA, we have had in mind three factors peculiar to London. The first is the sheer size of the area for which the present PLA is responsible: 150 km of river from Teddington lock to well seaward of the Medway estuary and Clacton-on-Sea. The second is the very wide range of regulatory functions that the PLA undertakes compared with other port authorities, including in particular the regulation of public passenger traffic on the Thames. The third is the place and role of the river in the capital city —for example, in its use for state occasions and by royalty.
  I know that the PLA welcomes the proposals. The House will wish to know that the proceeds from the sale of Tilbury will go towards repaying to the Government the PLA's outstanding debt and repayable grant.
  The Bill also includes provisions about navigational aids in harbour authorities' areas. These will correct an anomaly whereby some harbour authorities are financially responsible for all navigational aids in their areas and others are not. Where the harbour authorities are not responsible for those aids, the general lighthouse authorities—Trinity House in England and Wales, the Northern Lighthouse Board in Scotland and the Commissioners of Irish Lights in Northern Ireland—are. The Bill makes it possible for those responsibilities to be transferred from the general lighthouse authorities to the local ports.
  Let me outline the specific provisions of the Bill. Part I deals with the privatisation of trust ports in general. Clause I defines a trust port by excluding other categories of harbour authority. It also excludes the Port of London authority from the provisions of part I. It empowers trust ports to set up a successor company to which the property, rights, liabilities and functions of the trust port may be transferred.
  Clause 2 provides for the property, rights, liabilities and functions of the trust port to be transferred to the successor company on the coming into force of a transfer scheme to be made under this part of the Bill. Part I of schedule 1 contains supplementary provisions which relate to all transfers under this clause.
  Clauses 3 and 4 oblige a successor company, once the trust port's undertaking has been transferred to it, to issue securities of the company to the trust port as and when the trust port directs it to do so. The trust port is obliged to dispose of the whole of its holdings in the successor company at the time and on the terms that it thinks fit.
  Clause 5 lays down that a trust port may not exercise any of its powers under clause 3 or clause 4 without the consent of the appropriate Minister. The clause also empowers the Minister to give the trust port authority directions about the exercise of those powers. In most cases in this context, the appropriate Minister will be the Secretary of State for Transport. But for fishery harbours in England he will be the Minister of Agriculture, Fisheries
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  and Food, and for similar harbours in Scotland and Wales, the Secretaries of State for Scotland and for Wales, respectively.
  Clause 5 enables Ministers to approve the price at which a port is sold and also to whom it is sold. The Government will therefore be able to ensure that a fair price is paid for each port and that will be a main consideration of Government in considering ports' proposals for sales. In the Government's view, competitive bidding will be the best means of ensuring that a fair price is paid for each port. However, we also recognise the aspirations of many in the trust ports to carry out management and employee buy-outs. Such buy-outs give the work force the opportunity of participating directly in the benefits of privatisation and of acquiring a stake in their own business. We wish to encourage such management and employee buy-outs and are considering how to give effect to some degree of preference for them. Clause 6 contains supplementary provisions to the preceding clauses.
  Clause 7 provides for the Minister to dissolve the authority once its functions have been discharged. Any remaining property, rights and liabilities of the trust port authority will then be transferred to the successor company. Those will include the proceeds of the sale of securities in the company, after payment of the Government levy and capital gains tax.
  Clause 8 lays down the procedure to be followed by trust ports in making schemes for the transfer of their undertakings to successor companies. The trust port will need to submit a scheme to the Minister. The trust port will be required to advertise the fact that a scheme has been made and to notify its employees and those persons who have a locus in the appointment of members of the trust port authority; and it will be required to make copies of a scheme available for inspection. Representations regarding the scheme may then be made to the Minister within a period of 42 days from the date of advertisement. The Minister then considers whether to confirm the scheme, with or without modifications, and such confirmation will be given by means of an order.
  Clause 9 gives the Secretary of State the reserve power to direct a trust port to make a transfer scheme. I have already said why that is a flexible proposal which takes into account the particular concerns that have been expressed by hon. Members and also by ports.
  Clause 10 sets out the annual turnover requirement to which I have already referred. Clause 11 empowers the Secretary of State to make a transfer scheme of his own where he considers that a scheme which a port authority has been directed to make is unsatisfactory.
  Clause 12 provides for a 50 per cent. levy to be charged on the proceeds of sale of the trust port's successor company. Hon. Members who followed the progress last year of the two private Bills promoted by the Clyde and the Tees and Hartlepool port authorities will be familiar with the concept and with the case for it. A similar 50 per cent. levy is chargeable on disposals under those two private Bills through the provisions in sections 115 to 120 of the Finance Act 1990. The trust ports have no legal owner except the state.
  In the absence of a levy, therefore, the purchaser of the port would receive back the entire proceeds of the sale along with the port itself. It would be difficult, to put i t mildly, to justify a windfall gain of such a scale going to the

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  buyer, especially as we should aim for a level playing field between newly privatised trust ports and ports already in the private sector.
  Mr. Kenneth Hind: I wholly support what my right hon. and learned Friend is trying to achieve, but as a supporter of the abolition of the dock labour scheme, I see what he is doing as a further logical step to free our ports. Will he give us an indication of how he will give the remaining 95 trust ports the opportunity to become privatised which I believe is the appropriate place for those ports in the marketplace?
  Mr. Rifkind: Every one of those ports will have the opportunity to be privatised under the provisions in the Bill. The only distinction between those ports and the larger ones is that the Secretary of State could not compel them to bring forward privatisation schemes unless they had a turnover of more than £5 million a year. However, all the ports that so wish may come forward for privatisation under the Bill, and we should be happy to encourage them to do that.
  Mr. Spencer Batiste: Will my right hon. and learned Friend clarify the tax and levy position? From what he has described, it seems that there will first be a 50 per cent. levy and then a capital gains tax assessment on the proceeds remaining. The balance of that money will go back to the authority and will ultimately be passed back to the purchaser. Is there not a more simple way of netting all that so the original bid can reflect the real sums involved instead of there being a complex scheme which leaves a certain amount for the Government, in the knowledge that the rest will return at the end of the day to the people making the bid?
  Mr. Rifkind: I should be happy to hear any suggestions from my hon. Friend for an even simpler way of dealing with these inevitably complex matters. It is important that there be a clear distinction between the levy and capital gains tax. They are based on different concepts and they are obligations for different reasons. I am not sure that there is a simpler way, but if my hon. Friend has any proposals, we should be very happy to consider them sympathetically.
  Mr. Bell: I am grateful to the Secretary of State for explaining why in clauses 12 and 15 we are talking about a 50 per cent. levy. On 15 March 1990 the Minister for Shipping and Public Transport said, in relation to the Tees and Hartlepool Port Authority Bill, that the reason for taking 50 per cent. was that
  "there is a general rule that, when assets acquired or approved by a non-Exchequer Body with the aid of Government grants are disposed of, an appropriate proportion of the proceeds should go to the Exchequer."—[Official Report, 15 March 1990; Vol. 169, c. 749.]
  In the case of Tees and Hartlepool, the reason was that grants had been given 20 years ago. The Secretary of State referred to a level playing field, but he is now changing the goal posts.
  Mr. Rifkind: The fact that grants have been paid is an important factor. However, even if no grants had been paid, it would be wrong for the entire value of the ports to revert to the purchaser who might have had no previous involvement in those ports.
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  When reflecting the public interest, the Government should be able at least to participate in the benefits that flow from the privatisation of those ports, and the proposal meets that public interest requirement in a fair and acceptable way. The only example where that was not the case was the privatisation of the Trustee Savings bank. That was unique in that it reflected the many millions of people who already had a direct interest in the TSB through their savings. That was a unique form of privatisation. In every other case it has been right and proper for the public, through the Government, to expect a share of the proceeds from the privatisation.
  Mr. Richard Holt: While we are considering Tees and Hartlepool, will my right hon. and learned Friend confirm that the additional levy referred to in clause 16 is not part and parcel of the Tees and Hartlepool privatisation and therefore would not be introduced retrospectively for land sales by the Tees and Hartlepool authority which at the moment are excluded?
  Mr. Rifkind: My hon. Friend is referring not to the 50 per cent. levy but to the possibility of a clawback on the disposal of any surplus land. Such a proposal is not contained in the Tees and Hartlepool Port Authority Bill which my hon. Friend is helping to guide through the House at the moment.
  In the past, the taxpayer has contributed to the development of at least some of the trust ports, although on a relatively modest scale. We consider that it would be right to leave part of the proceeds of sale with the buyer as an additional incentive for privatisation, and we believe that a 50 per cent. levy establishes a fair balance between the interests of the taxpayer and those of the new owners of the port.
  Mr. Holt: May I press my right hon. and learned Friend for an answer? I appreciate that he has recognised that I am piloting a private Bill through the House, but he did not answer my question. Quite simply, it was whether the Government have any intention at this very late stage, bearing in mind that the Tees and Harlepool Port Authority Bill will receive a Second Reading in the House of Lords tomorrow, to insert a clause into the Tees and Hartlepool Bill similar to that which my right hon. and learned Friend is introducing into this Bill for all other trust ports?
  Mr. Rifkind: We have no intention of making any changes to the Bill that my hon. Friend is bringing forward in connection with those matters. Obviously, as this Bill goes through the House, we shall have to see whether improvements or changes are required, but we have no intention at the moment of making the changes to which my hon. Friend referred.
  I draw hon. Members' attention to one difference between the levy provisions in this Bill and those in the Finance Act. Under the Finance Act, the levy is chargeable either on the proceeds of sale or on the market value of the port, whichever is the greater. Under this Bill, the levy will be charged only on the proceeds of sale. That is because, under this Bill, the Government will be able to ensure that the port is sold for a fair price and there is therefore no need for the market price provision. That change will add greater certainty to the sum on which levy and capital gains tax will be chargeable, since it will be on the proceeds that capital gains tax also will be chargeable.

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  Clause 13 sets out the arrangements for the payment of the levy. Clause 14 sets out the arrangements for the provision of the information which the Secretary of State will need for the purposes of the levy. Clause 15 provides that the levy paid will be allowable as a deduction against capital gains tax liability, and makes other supplementary provision relating to the levy.
  Clause 16 provides for the Secretary of State to make an order for a levy of 50 per cent. on any gains from the disposal of land by the successor company within 10 years of the transfer of property to the successor company. The details of the clawback provision to be made under this order, and on precisely what types of transaction it will bite, are still being considered. That clawback provision will be a further element in establishing a proper balance between the interests of the taxpayer and those of the new owners of the privatised ports. It will be some discouragement to anyone who might intend to purchase a port merely for purposes of land speculation.
  Clause 17 is supplementary.
  Mr. Harry Barnes: Apart from the point mentioned by the hon. Member for Langbaurgh (Mr. Holt), how close is part Ito the Tees and Hartlepool Bill and the Clyde Bill? The Secretary of State said that there were similarities. Certainly, in connection with the successor company and the 50 per cent. clause, there is much overlap. The Tees and Hartlepool Bill and the Clyde Bill were encouraged and assisted by the Department of Transport. It seems rather strange that the Bill is making progress in the House of Lords when this umbrella provision could apply to Tees and Hartlepool and Clyde.
  Mr. Rifkind: Obviously, this Bill is to ensure that we do not need a private Bill every time one of the 100 ports in the United Kingdom may wish to bring forward privatisation measures.
  Mr. Barnes: What is the difference?
  Mr. Rifkind: There are two differences between this Bill and the provisions of the private Bills. One is the absence of clawback provisions in the private Bills, and the second is that the 50 per cent. levy in the private Bill falls on either the price received or the market value, whichever is higher. I have been explaining that, in the case of this Bill, the levy falls on the proceeds. We do not need to have the market value consideration, because it is an open competitive process.
  Part II is concerned with the sale by the Port of London authority of the port of Tilbury. Clause 18 empowers the PLA to establish a company to take over the Tilbury undertaking. Clause 19 provides for the PLA to submit to the Secretary of State a scheme for the transfer o f the Tilbury undertaking to that company. The Secretary of State's confirmation of such a scheme, with or without modifications, will be given by means of an order made by the Secretary of State. The statutory functions of the authority, to the extent that they relate to the undertaking to be transferred to the new company, will be transferred with it, subject to any exceptions made in the scheme.
  Clause 20 is supplementary to the provisions in clause 19. Some of the property to be transferred to the Tilbury company would have required a works licence had it been owned by anyone other than the Port of London
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  authority. Under clause 21, such licences will be deemed to have been granted to the Tilbury company on the date on which the transfer of property takes effect.
  Clause 22 empowers the authority to dispose of the securities of the Tilbury company, subject to the consent of the Secretary of State, who will be empowered to give the PLA directions concerning the disposal. Clause 23 enables the Secretary of State to direct the authority to form a company and to submit a transfer scheme for the Tilbury undertaking. That power will be available to the Secretary of State two years after enactment of this Bill.
  Part III contains the provisions about navigational aids in harbour authorities' areas to which I referred earlier, together with certain supplementary provisions. Clause 25 confirms that harbour authorities have power to mark arid to light their harbours and that they are to be regarded as local lighthouse authorities. The clause prevents the general lighthouse authorities from installing lighthouses, buoys or beacons in the area of a harbour authority unless they are aids to general navigation. Clauses 26, 27 and 28 cover similar detailed matters.
  Clause 29 makes provision about the tax treatment of companies formed under parts I and II and of shares and debentures issued by them. Clause 30 makes provision for certain exemptions from stamp duty. Clauses 31 to 36 make various supplementary provisions, including the extent to which the Bill will apply to Northern Ireland.
  Mr. Peter Viggers: Will my right hon. and learned Friend undertake to bring the merits of the Bill o the attention of my right hon. Friend the Secretary of State for Northern Ireland? I am concerned that, with some exceptions, the Bill does not apply to Northern Ireland. There are important ports in Lame, Warrenpoint and Londonderry, but I am particularly concerned about Belfast.
  When I was responsible for industry in Northern Ireland, the firms of Short Brothers and Harland and Wolff were privatised, and the Belfast harbour board is a substantial landowner, with Harland and Wolff and Shorts as its tenant. We have an anomalous situation in which a trust is the landlord of a privatised company. In that case in particular, it is most important that Belfast should be enabled to take advantage of the privatisation that is indicated in the Bill.
  Mr. Rifkind: I am grateful to my hon. Friend for intervening because he enables me to give an answer that will please him and many of my hon. Friends. Although the provisions of the Bill do not apply to Northern Ireland with regard to these matters because they are reserved for the Northern Ireland Office under its own system, it is my right hon. Friend's intention to introduce similar measures for the benefit of Northern Irish ports. Clause 35(3) of this Bill will enable it to apply the levy provisions in respect of any similar measures introduced in Northern Ireland in a similar way. Ports in Northern Ireland will be able to have similar facilities available to them, as my hon. Friend hopes.
  The measure should be seen as a further stage in the modernisation of the ports of the United Kingdom. The reforms that were introduced in the 1980s, in particular the privatisation of Associated British Ports and the ending of the dock labour scheme, made an enormous difference to the ability of our docks to cope effectively and impressively with the needs of the late 20th century. It is important that

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  the trust ports should also have those opportunities. The provisions in the Bill will not only ensure the public interest but ensure that ports throughout Britain will be able to respond in a way that will meet their aspirations, which will benefit not only the companies but, equally important, all who work for them.
  5.7 pm
  Mr. John Prescott: The Secretary of State's speech contained much rhetoric but not many facts. I appreciate that a new Secretary of State for Transport is not always able to ascertain the full facts of what has occurred and must therefore rely on the advice of his Department. That may be dangerous in this case, so I shall point out some of the relevant facts of the matter.
  There are always grounds for change in the ports industry; the argument is about the nature of that change and the purpose of it. My maiden speech was about the port of Hull and the shipping and maritime industry, which hon. Members know to be my background. I have heard debates on the docks industry for more than 20 years, and I have seen how the Government's policy has developed.
  The Secretary of State was correct to point out that all the other measures that have come before the House, including the dock labour scheme and the privatisations, are part of the Government's strategy. It is a ports policy —the Government have not stood on the side. They clearly have a strategy and have seen a need to privatise the port industry, to deregulate it, to break up trade union organisations, to deny workers' rights, and then to proceed to sell off for development the land assets of many ports. The Bill represents the conclusion of that policy.
  The Secretary of State has rightly put the Bill into a proper political context. There are provisions on the navigation lights system, which, as anyone who knows anything about the industry is aware, has been a vexed matter for an awfully long time. It is not properly organised. Historically, it has been organised badly. Those provisions will not find much opposition among Labour Members. We think that they will probably represent a better way of dealing with the problem.
  It could be argued—indeed, Lord Rochdale said this in his investigation into the ports industry—that the trust ports have certain difficulties. But Lord Rochdale did not conclude that they should be privatised. He said that certain laws could be changed, such as the rule on the ports' borrowing requirements, and that the structure of the companies could be changed. He said that that could be done by order. He did not say that it would necessarily need one big Bill. However, I concede that, if the Government want to make a general principle applicable to all trust ports, it is better to do so in one piece of legislation, rather than by presenting separate Bills to the House.
  When the Tees and Hartlepool Port Authority Bill and the Clyde Port Authority Bill were before the House, the Minister said that the Government sought to deal with the matter through public legislation, rather than private Bills. That makes good sense. It is a good argument.
  What is the Government's clear intention in the Bill? Is it simply to create a better and more efficient ports industry, as the Secretary of State claimed at a conference
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  last week? In his introductory remarks, the Secretary of State was asked why, if it was a historical accident that trust ports were set up, the same principle had been applied to hospitals and port authorities. He did not answer the point clearly. It is the same principle. The new bodies will be appointed by the Secretary of State. They will not be accountable, yet he is breaking up the existing bodies because he feels that they are not accountable.
  Trust ports did not arise by historical accident. There is one significant difference between what he proposes and what was originally intended when trust ports were set up. Trust ports were seen as a way of serving the community's needs. They were not intended to be used as profit-making centres. They were intended to meet the needs and service requirements of the whole community. They are non-profit-making organisations. The argument is about whether a non-profit-making port or a port that exists solely for profit is better for the community. At the heart of that argument is the desire for access to valuable land on which an awful lot of profit can be made. Indeed, it is possible to make a killing. In the Bill, the Government go out of their way to make sure that they will get a share of the booty when the ports are privatised.
  Mr. Holt: All the trust ports have different historical backgrounds, so it is not possible for the Secretary of State, to state the history of trust ports from the Dispatch Box. The historical origin of my trust port of Tees and Hartlepool is that the Government of the day wanted somewhere to bunker their ships and needed to ensure that there was a navigational channel as far as Stockton, and that sailors were supplied with the goods and victuals required in the event of war. The hon. Gentleman makes a silly statement.
  Mr. Prescott: If the hon. Gentleman believes that that is a contradiction of my view, he simply shows how ignorant he is of the purpose of the ports. He said that his port was set up as part of a public policy to meet a community's needs and to serve a national interest. The motive was not profit but the need to meet the nation's interest. Those who set up the bodies said that the ports should not exploit their position at the expense of others who wished to use the port. What the hon. Gentleman said fits in with the definition that I gave. Perhaps he will carefully examine his own port and determine why it was created. The Secretary of State made another point that I shall deal with in detail. It is a controversial matter. He quoted my speech of—I cannot remember the year.
  Mr. Nicholas Baker: 1983.
  Mr. Prescott: I thank the hon. Gentleman. It was my speech on the dock labour scheme. It could not have been 1983.
  Mr. Rifkind: 1989.
  Mr. Prescott: Yes—1989. I should have known not to rely on Whips, or at least Conservative Whips. That is not divorced from the matter with which I am dealing. In my speech in 1989, I said that the circumstances of workers would deteriorate if the Dock Work Bill was passed. The Bill was about workers' conditions. The workers' conditions have deteriorated. Casualisation has taken place in the industry, as people predicted. I know of 25 ports where casualisation has occurred since the dock labour scheme was abolished. Several of them are in

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  Scotland, so I should have thought that the Secretary of State would know about them. They include Dundee, Greenock and Leith.
  There was a switch from the registered dock labour scheme to casual labour, sometimes at the rate of £2·50 an hour. People are hired by the day or half day. I expressed the fear that that would happen. I also said that workers would not be represented by trade unions in negotiations. That has happened in most ports around the country. According to the law, apparently an employer can recognise a trade union but he is not required to negotiate with it. That is what Associated British Ports has done throughout the industry.
  There are many examples of where conditions have deteriorated. Under the dock labour scheme, training and health and medical facilities were provided. Such facilities are no longer provided in many ports. I said at the time that that would be one of the consequences of repealing the dock labour scheme. I was correct. The Secretary of State claims that what has happened contradicts what I predicted. He is wrong. If he tours the ports and asks questions, he will find that what I told him was correct.
  I do not want to leave the Secretary of State with the impression that we do not concede the argument that some reform is needed. We conceded that the dock labour scheme needed some changes. As the Secretary of State must be aware, the Labour Government attempted to reform it. Two Labour Members abstained, and the reforms and the legislation fell.
  The Minister for Shipping and Public Transport (Mr. Patrick McLoughlin): Will the hon. Gentleman give way?
  Mr. Prescott: No. I want to put this on the record.
  As Opposition spokesman on transport I was involved in discussions with Mr. Finney—one of the notorious people involved in the matter. He was then director general of the British Ports Federation and director of the National Association of Port Employers. I sought to tell him that there was room for negotiation and discussion. I suggested that we should put the deal on the table. I was prepared to talk to all parties. I understood that he was prepared to talk to the employers, but he said that no one would talk. I believe that they were prepared to talk.
  I heard no more from Mr. Finney. Clearly, it was not necessary for him to communicate further because he was carefully planning to abolish the scheme. As he said in his document, he
  "masterminded the highly successful campaign to end the Dock Labour Scheme, co-ordinating political activity"
  for it. Yet he was telling me at the time that he did not intend to abolish the scheme. I shall come to Mr. Finney in a moment. He was one of the architects of the Government's abolition of the scheme. The Government are set to make an awful lot of money out of it, but I shall come to that point later.
  I have not argued and the facts do not suggest that the Labour party does not concede the need for some change. In many of my speeches I have called for a ports policy. The Government do not believe in a ports policy. They do not believe in planning in the ports or any other industry. That is their position. Yet the inquiries conducted by Lord Devlin and Lord Rochdale concluded that it was necessary to have a consistent investment policy to meet the national interest, and that that required some planning framework, whether for investment or the development of ports.
  Mr. Janman: Will the hon. Gentleman give way?
  Mr. Prescott: No. I have no desire to give way -to the hon. Gentleman.
  Mr. McLoughlin: Why not?
  Mr. Prescott: He is such a small man. He will be out at the next election, so I do not want to waste any time.
  I have always advocated some form of change in the ports, but the Bill must be seen against the background of the past 10 years of Government policy for the ports industry. The first approach was made by the former Secretary of State for Transport, the right hon. Member for Sutton Coldfield (Sir N. Fowler). When he became Secretary of State, he argued that there would be no interference with the ports. He said that he was not prepared to make any money available to the industry and did not intend to throw money at the problem. He said that there would be no public subsidy whatever. Then the Government began to dismantle the National Ports Council, which was set up by a Tory Government after the Rochdale committee report.
  The Secretary of State began to notice the problem of increased capacity in the industry and of shipowners playing off port against port. There were many examples of that, but I do not have time to go into the details. The Government then proposed privatisation and to do away with public ownership, as they did with the British Transport Docks Board. It is now readily agreed that the Government sold it off for a song. If the Bill contains any evidence that the Government have learnt any lessons, it is the clause that allows them to obtain at least some value from the betterment of land whichwill take place at a later stage. That is one improvement. At least the taxpayers —the Government claim to act on behalf of the taxpayers —will now receive some of that value instead of losing hundreds of millions of pounds as they did in the price that was set for the British Transport Docks Board.
  The Bill is concerned largely with the trust ports. I hear that there is no legal definition, although there is a qualification about that. No doubt we can discuss that in Committee. The problem is similar to the old one with the Trustee Savings banks. They are a special form of bank, as we said in our debate on their privatisation, just as trust ports are a special form of port. There are publicly owned ports, privately owned ports and trust ports. The argument is that they could be kept that way.
  The argument that trust ports should be kept to meet community needs, rather than used for profits and their assets exploited to the advantage of those who own them, is legitimate and should be considered. The Government do not want to put the emphasis on service. They believe that the community's needs will be met through the pursuit of profit and competition. The case has not been proven, either through the privatisation of the bus service or some railway facilities, that competition, privatisation and the pursuit of profit meet social and community needs. That is at the heart of the difference between this side and the Government on these matters.
  It has been useful to have a copy of what I thought was the Secretary of State's Second Reading speech at the Waterfront conference a week ago. He spelled out what he considered to be the Bill's aims. In his speech today he confirmed that the policy is to promote and develop the viability of competition in the industry. He feels that that is the best way forward. Therefore, the Bill is to remove the

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  constraints on the trust port status. What are those constraints? I hear that these ports have difficulty raising money, and I read what Rochdale said about it.
  I should like to have more evidence from the Secretary of State—this is probably best dealt with in Committee —about the kind of constraints that have prevented them from developing. Many have grown to become large ports and have been able to meet much of their investment requirements. Therefore, the Secretary of State must show us that they were effectively constrained. I am far from accepting that point. Nevertheless, we should perhaps deal with the constraint which Lord Rochdale depicted. It could be dealt with in different ways. Rochdale gave some examples, and the Minister acknowledged that there was an alternative path.
  The Government's philosophy is to leave the way open to competition, price and the market system. Anyone who has read the Rochdale and Devlin reports will know their analysis that competition led to the ports competing so much on price that they did not invest. Port investment was run down to such an extent that Tory and Labour Governments had to pump millions of pounds into the docks industry to modernise it. That had nothing to do with labour conditions; it simply had to do with investment in the ports industry. That is admitted by all the reports that are there for everybody to see—reports which resulted from inquiries set up by Tory Governments.
  Mr. Roger Moate: The hon. Gentleman seems to be relying a great deal on the Rochdale and Devlin reports. Although his memory for dates is a bit wobbly today, can he remind us when those reports were published? I have forgotten, and I should like to see whether he is up to date with this industry.
  Mr. Prescott: The Rochdale report came out in 1966. The inquiry was appointed by a Tory Government.
  Mr. Janman: That was a quarter of a century ago.
  Mr. Prescott: Well, at that time the argument was whether we could simply leave the matter for the market to decide, and Rochdale said no, it was against the national interest. So Tory and Labour Governments invested a lot of money in the industry. That is why the Secretary of State is claiming that he wants to take 100 per cent. from the PLP because a lot of money was given to the PLP. The debt runs to about £145 million. Nevertheless, the argument has been waived and the Government have moved from that position.
  Mr. Ward: Wrong again—not the PLP, the PLA, the Port of London Authority.
  Mr. Prescott: Great. The hon. Gentleman will for ever last on that seat.
  The debt is a problem which the Secretary of State acknowledges. The very policy that the Secretary of State advocates will be based on the same philosophy that created such problems before.
  The Secretary of State said today that if the ports were released, they could expand capacity. The problem in the British ports industry has always been excess capacity and how to deal with it. The problem has been how to deal with not having to reproduce the investments in the ports or,
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  indeed, introduce expensive infrastructure into each of the ports. It is a real problem. In Europe there is no problem about planning the industry and making sure that only certain ports develop and fit in with regional and economic development. That is normal for Governments of the left and right in Europe. Over here, there is an ideological difference about whether there is a role for Government. Here, the Government's only role is to intervene and try to get the money. Our dispute with the Government is that their approach could lead us to the same problems to which that philosophy led us before.
  I have given the example of the dock labour scheme. It was introduced to end casual labour. As soon as it was abolished and everything about maximising profit and cutting wages came in, we ended up with a casualised scheme.
  The explosion in the industry came when everybody was forced down to poor working conditions. That is what led the Government to set up the Devlin commission. The Tories have always set up these commissions into what is going wrong, things have always gone wrong because of the private sector's handling of the situation, and the commission always come up with recommendations that the Government must intervene to put the industry on a proper footing.
  Mr. Barry Field: Can the hon. Gentleman explain to the House why dockers who were previously registered under the scheme, at Southampton now say that they do not wish to return to the scheme as they are better off working at Southampton in enhanced financial circumstances?
  Mr. Prescott: The BTDB, which is now Associated British Ports, came to an agreement that there could be a labour co-operative in that area. The co-operative decided to provide the labour because the port authority decided to get out of doing that. That is another feature of the privatisation of ports which Rochdale pointed out. The port authorities did not do anything about hiring labour. It was all left to private companies, which led to many conflicts.
  In Southampton, a co-operative deal was struck with the workers, who set up their own company. There is no consistency about that, of course. In Hull, the authority dismissed most of the workers from the scheme. Many of the workers got together and offered a co-operative arrangement, but the authority refused to reach agreement with them. The policy is not consistent, but I presume that that is why the workers in Southampton feel that they have got a better deal.
  I am not against workers wanting control over their working conditions. It means that they work a scheme and try to deal with their labour conditions. The Bill supposedly suggests that the shares might go to workers in some sort of employee share ownership plan. That is a bit of icing on the cake. At the end of the day, the sale of the trust ports will be determined by the Secretary of State. He has already said that a fair price will be determined and that bidding will be competitive. That will create problems. The corporate structures, the corporate raiders, the big companies, will come in to buy the ports because they can see the land value involved. They will probably just want to take the assets and leave the rump or whatever is left of the port. Under the Secretary of State's formula, it will be possible to do that.

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  Anybody who has looked at management-worker buy-outs knows that the problem for them is that they cannot raise enough money to purchase the company. Many corporate raiders come along and offer much more than the value of the company because they see the advantage of that. That does not lead to worker co-operation and worker shareowning; it leads to big companies owning more of the ports and eliminating the competition.
  Mr. Ronnie Campbell: Does my hon. Friend remember that, when we were involved in the privatisation of the Tees and Hartlepool Port Authority Bill, Mr. Hackney, who was the director of the port, said that, once it was privatised, he would buy other ports on the same coast?
  Mr. Prescott: I am sure that that is so. Ports are bought mainly to ensure that they do not provide competition. Anyone who has looked at the evidence from the deregulation of aviation in America will see that a few big companies have taken over the small ones. Big companies dominate the industry. The Secretary of State might believe that it is against the national interest to have big corporations taking over more and more of these ports and perhaps we should hear his policy on that in Committee. Once one holds a view on that, it is a policy of national interest—a Government policy to have an idea of what sort of port industry is wanted.
  The Bill is solely about selling to those who will pay most. That may well undermine the Government's alleged intention that a lot of ports providing competition is the best way forward. That kind of policy causes us concern. A lack of thinking about port policy dominates most of the Government's approach to the Bill.
  The dock labour scheme has been mentioned a great deal, and I am sure that we will hear a great deal more about it. What makes me particularly annoyed about the Government's approach to the scheme is not that the Bill makes similar promises to what was promised on the Dock Work Act 1989. I am thankful for the paper produced for the Waterfront conference that points out that in one of the clauses the Government guarantee that trade unions will be recognised, that there will not be any unfair dismissals, that there will be the right to consultation and that the Bill is not anti-union. Frankly that is what was said about the dock regulation scheme. It did not mean a damn thing. The guarantee in the Bill will be no more protection for the workers in the industry than that given when the dock labour scheme was abolished. If the Government claim to be concerned about conditions in the industry they should address that problem.
  There is a conspiracy against the port industry motivated by those who want to make an awful lot of money. The Waterfront conference, which was addressed by the Secretary of State, was set up by the Waterfront Partnership. It was organised by Nicholas Finney, lain Dale and Peter Cropper. It is interesting to note that each of those men claims with pride to have been the architect of the "successful" campaign for the abolition of the clock labour scheme. One of them used to be director of the Conservative research department, and another worked as a researcher for Tory Members of Parliament. What we have is three Tories out to make a few bob from the industry.
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  At one time, Mr. Finney was the director general of the British Ports Federation. He acted in bad faith when he told me that he was prepared to talk about the renegotiation of the dock labour scheme when, at that time, he was actively involved with Ministers in its abolition. Two weeks before its abolition, the then Prime Minister made it clear that she had no intention of so acting, and its abolition appeared to be a surprise to her.
  It is interesting to compare the then Prime Minister's statement with the evidence given by the Department of Transport to the Public Accounts Committee. The Department was asked why the assessment of the costs or the abolition were five times greater than the Department had estimated. The Department replied that it had had to hurry the thing through. I do not know why the Department gave that reason for having to pay so much. All three previous Secretaries of State attended lunches with representatives of the port industry and made it clear that they agreed to the abolition of the dock labour scheme within five years. That was said despite denials issued in the House.
  We now know that there was close co-operation between the Department of Transport and the three gentlemen of Waterfront Partnership. They were involved in the abolition of the dock labour scheme, but they now appear to have become involved in the privatisation of the trust ports. Those three gentlemen are now about to set up a consultative organisation to tell people how best to deal with the trust ports. No doubt that will be a remunerative exercise and they will make a lot of money. I, as the Opposition spokesman, have sought the views of the PLA, and the British Ports Federation, but I have received no response. Perhaps I should go to the Waterfront Partnership to discover the views of the owners in the industry.
  Mr. Janman: The hon.Gentleman keeps on talking about making money and Mr. Finney. As a result of the abolition of the dock labour scheme, the only things that are making money are British ports and, therefore, British industry and our country. That has happened because the turnround time in the ports has been reduced by half. Tilbury in my constituency has had similiar success. The productivity of its container division has increased by 87 per cent. The ports are making money not only for themselves and their workers but for Great Britain plc.
  Mr. Prescott: I have no doubt that the hon. Gentleman is quite happy for people to be paid £2·50 an hour for eight hours on the docks. He would not work for that money, but such pay is one of the consequences of the abolition of the dock labour scheme.
  In Hull, I spent a long time arguing with the BTDB. Stupid Treasury rules deployed by Labour and Tory Governments did not allow the ports to use their land as they wished. They were also subject to external financial limits that prevented them from borrowing to develop. Labour and Tory Governments made a mistake by listening to the damn Treasury civil servants and they did not have the intelligence to change the system. The hon. Member for Thurrock (Mr. Janman) should understand that it is only because of subsequent changes that the ports are making money.
  I have never argued that there is no room for change in the industry—in the past, I was involved in trying to reach new agreements on such changes. There were unacceptable

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  practices in the industry. I made my dislike of those practices known when we discussed the dock labour regulation scheme. I did not like the fact that dockers' sons always got a job and with preferential treatment. I have always made my criticisms known.
  One of the benefits of the document produced by the Waterfront Partnership was that it enabled me to read the paper produced by Mr. Prebble of the New Zealand Government. He is a Transport Minister and he came to see me to talk about problems associated with docks. When the New Zealand Government sought to deregulate the port industry they declared their intention for change and entered discussions on how best to achieve that. Despite the controversial nature of those changes, they were made with agreement.
  It is also interesting to note that the New Zealand Government were able to bring about a 50 per cent. reduction in the dock labour force, but that it cost them just £20 million. When our Government made similar changes, it cost £135 million. The Public Accounts Committee, not surprisingly, has attacked the Government for being so stupid with taxpayers' money and throwing it at people.
  The Government should have negotiations with the unions in the industry and others who are willing to talk, but they have got together with people who want to get to the cash. It is all about getting access to the land and the booty. The Bill has nothing to do with ports policy or fairness and justice in our industry. It is simply about how to rob trust ports of their money, land and associated assets.
  The port employers may have got the Government to agree to the repeal of the port trusts, but now they are shocked that the Government want to take a share. I agree with the Secretary of State's suggestion that the Government should get some of the cash—I would prefer to suggest that it should be the community that gets the cash. There is no reason why the rewards from the sale of a particular port should not go to its local authority. That money does not necessarily have to go to the taxpayer; the local community has a right to some of the cash. I do not suggest that those local authorities should receive 50 per cent. of the cash—I should be happy to see them receive 100 per cent.
  In the formula announced by the Secretary of State, the share received by the Government slides about from 50 up to 100 per cent.—that is what is worrying the employers. Those employers thought that they had done all the work and would get all the booty. They have done various deals, but the Government have now introduced a levy by which they will take 50 per cent. of the cash.
  The Secretary of State has gone even further, however, by taking reservation powers. He does not want to be involved with the tiddlers; he wants to deal with those ports that have a turnover of £5 million. He is interested in the 12 biggest ports, which command 63 per cent. of the trade—that is where the money is. If those ports do not want to change willingly, the Secretary of State will impose those changes. Now we have a port policy.
  The Government's policy is not directed towards achieving the best investment and standards in the country's interests; it is directed towards getting the booty and a share of the land. The Government are committed
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  to that policy because the Financial Secretary to the Treasury has told us that he wants £5 billion a year from privatisations. That is Government financial policy up to 1994, and they have lined up all manner of public sector facilities to be sold off. The Bill has nothing to do with port policy. Yet again, Treasury policy is being imposed on the ports. That policy has done more damage to our ports, under Labour and Tory Governments, than anything else.
  The Bill is an attempt to reach the £5 billion target. The Government talk about giving the workers shares, but what a load of nonsense. Workers and managements will be unable to bid against P and 0 and BTDB—they want to buy up the ports. They will succeed, and then they will cut out the competition. What will be Government policy then? Perhaps we shall find another Lord Rochdale in the 1990s who will tell us what to do with our port policy. That is the future offered by the Government.
  I warn the Secretary of State—this will send shivers down his spine—that there will be a clawback. He reserves the right to do more, and says that it must be done in the first two years, which brings us within reach of the time of the next Labour Government. If I am appointed Secretary of State for Transport—who knows?—the right hon. and learned Gentleman will have left me great flexibility to deal with these ports. The Secretary of State will leave me tremendous powers to deal with all of them. I warn him that those powers will be used to go much further than he anticipates.
  I have said nothing about harbours and navigation—we can discuss them in Committee. The same goes for the Port of London Authority, which is treated separately in the Bill. My experience of that authority shows that it is still savagely anti-union and that it has worsened conditions in the industry. That does not inspire confidence in an improvement in working relationships in the industry. The authority does not bother to communicate with Opposition Members or to tell us what it thinks about a Bill such as this.
  There has to be an alternative. We shall scrutinise the Bill and what we inherit when we come to office. We believe that the Bill has nothing to do with port policy, and such a policy must be developed. Most European countries have one, after all. The policy must integrate our infrustructure: roads, railways and the gateways to the water must be linked with the rest of the country. The whole system must be co-ordinated; decent labour practices must be introduced; we must recognise the International Labour Organisation obligation that we are supposed to recognise, and the EC social charter.
  We shall look into all those aspects when we come to power. All that the Bill does is allow the Government access to the wealth in the land involved. It will worsen the conditions of the workers. I have predicted that correctly before and I predict it again now. On all these grounds, Opposition Members will vote emphatically against the Second Reading.
  5.41 pm
  Mr. John Ward: Unlike the hon. Member for Kingston upon Hull, East (Mr. Prescott), I remain confident that my right hon. and learned Friend will continue to issue regulations to the ports for some years to come.
  I want to express the concern of my constituents about the possible effects of this Bill on the port of Poole. It is

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  perhaps inevitable that the Government should adopt a blanket approach to privatisation of the ports, but I hope to show that the ports covered by the Bill are not all the same, and to persuade the Minister that account should be taken of local variations and, above all, of the wishes of local people.
  The port of Poole has been described as a textbook trust port. A port of some sort has been there since Roman times, and its fortunes have varied. Sometimes, as in the days of the great sailing ships, it has prospered due to the north American trade. At other times it has declined, as when deep-water ports such as Southampton were built to take the new steam ships.
  In 1895, an Act of Parliament set up the Poole harbour commissioners to
  "conserve, regulate and improve the Port and Harbour of Poole".
  This they have done for nearly a century, and I pay tribute to the way in which they have balanced the needs of industry, leisure and fishing over the years.
  The commissioners have followed a programme of modernisation and development, not always uncontroversially but always after consultation, and with a sensitivity which could act as a model for any such authority.
  We now have a successful cross-channel-style port with regular scheduled freight and passenger roll-on roll-off ferry services to the Channel Islands and Cherbourg, as well as a conventional cargo operation which handles bulk cargoes and steel. But to many of us who live in Poole, that is only a relatively small part of the story.
  The present harbour commissioners also protect the environment of the second largest natural harbour in the world. It covers some 10,000 acres and is a haven for many waders and wildfowl. The whole harbour is designated a site of special scientific interest. Brownsea island and a large area south of the harbour in the constituency of my hon. Friend the Member for Dorset, South (Mr. Bruce) are owned by the National Trust, and there is an on-going management plan agreed by the local authorities and other bodies concerned with the harbour.
  Up to 10,000 small boats and windsurfers are estimated to use Poole harbour during the year, and it is the present harbour commissioners who agree the reasonable mooring rates with the various yachting organisations.
  In and around Poole harbour, we have western Europe's largest onshore oilfield. The operator, BP, has spent a tremendous amount of time on scientific studies to establish how to carry out the development of Wytch Farm with the minimum of disruption to the environment.
  The House will shortly be asked to consider a private Bill to establish an artificial island near Poole to recover oil from a large area, and the present harbour commissioners are accepting even now new responsibilities in conjunction with the local authorities to ensure that the oil operations are suitably supervised and controlled.
  Poole harbour is also the base port for a thriving commercial fishing fleet, and it provides landing and marketing facilities for boats from the surrounding area. Currently, there are 138 registered vessels based at Poole, whose port benefits from its central position, coupled with good communications, particularly for the export of fish to the continent.
  Besides the usual catches of fish, Poole is the base for a thriving and expanding shellfish industry, which is providing employment opportunities for younger fishermen. Poole harbour was recently designated as one of the
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  nursery areas, for the important bass fisheries. New EEC legislation is due to come into force in 1993, and it will certainly have an effect on the local industry. Negotiations are currently in progress between the southern sea fisheries district and both the Poole harbour commissioners arid Poole borough council to ensure that the right facilities are available.
  Those involved are confident that, with the Poole harbour commissioners running the port, a satisfactory solution can be found, but they are concerned that a private company might well have a different outlook. Fishing is important to the local economy and provides employment for several hundred people, but the industry can operate effectively only with the full and active support of the port authority.
  In this haven of peace and tranquility, we have now received our copy of the Government's Ports Bill. I must say right away that I agree with the principle of privatisation. Numerous examples show that industries which have been nationalised have prospered even beyond expectations when they have been privatised, and this has proved that the drain on taxpayers' money which some of these industries represented can be stopped.
  My point about the Bill is that there are different types of port, and that we should not attempt to curb the individuality of those which are successful by applying a blanket policy of privatisation. Some ports are operated by local councils, using money provided by local community charge payers and taxpayers, and some of them are prime candidates for privatisation to avoid inefficiency and waste. Under such circumstances, privatisation must be attractive to the local population.
  However, I have already explained that Poole is a trust port and, as such, is not a drain on the funds provided by community charge payers and taxpayers. It is self-supporting, and the present system run so successfully by the Poole harbour commissioners has proved how a method conceived by local people can evolve to safeguard the unique local environment. It is precisely the unique qualities of the port of Poole that I am trying to highlight.
  As I have said, I am convinced that privatisation is the best way forward for some ports, but Poole already has a successful, thriving port without it being a burden on the local community.
  By making full use of the income from those using the port, the Poole harbour commissioners have safeguarded the environmental attractions of the harbour, to such an extent that it is enjoyed to the full not only by the local population, but by the many hundreds of thousands of visitors who come to Poole each year.
  Why, then, should we change the status quo? I have yet to be approached by anyone in Poole who wants our port to be privatised. Local people are happy with the way that things are, and are satisfied that their best interests are served by the harbour commissioners—most of whom are local men.
  The obvious solution to the dilemma would be to remove the element of compulsion from the Bill. I raised the question of compulsion in connection with privatisation with my right hon. Friend the former Secretary of State during Question Time on 26 November, and I remain convinced that privatisation should not he compulsory.
  I fully understand and welcome the fact that, in introducing this Bill, the Government want to provide a quicker and simpler mechanism for the privatisation of

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  ports, rather than applications being subject to the time-consuming and costly option of a private Bill. Some ports are already pursuing private Bills of their own, and I am glad that those who want to privatise their ports will be helped considerably by the Bill. However, I still fail to see the merit in compelling successful ports that have the overwhelming backing of local people to privatise their operation simply because that is what some other ports wish to do.
  While the principle of privatisation is, quite rightly, one of the mainstays of this Government's policies, so too is the principle of freedom of choice—and I cannot see how that this latter principle applies to the Bill. Nevertheless, if it is felt that privatisation must take place, the Government should acknowledge that special conditions ought to apply to some ports.
  A precedent for such a course of action has already been set by the way in which the Port of London authority is to be dealt with. The PLA is responsible for the whole of the river frontage, but the vast majority of that area is not a working port, so only Tilbury docks is to be privatised under the Bill. In Poole, the working docks comprise about 50 acres—only a tiny fraction of the total area of the harbour, which covers some 10,000 acres. That is much larger than the area that is to be left with the PLA in respect of London.
  If privatisation must apply, I suggest that a similar compromise could be achieved and a levy charged on the privatised port in order to provide the money required for the upkeep of the rest of the harbour. Poole is not a deep harbour, and dredging and maintaining it costs a considerable amount of money.
  My hon. Friend the Minister for Shipping and Public Transport has kindly agreed to visit Poole, to see for himself the situation there. I assure him of a warm welcome, and of a very comprehensive briefing about both Poole harbour and local opinion on the Bill. I thank him in advance for taking the time to visit us, and for at least listening to our point of view.
  I hope that my hon. Friend will come to Poole with an open mind. Perhaps, during his visit, he will be able to provide us with a convincing reason why the port of Poole should be privatised, as no one has yet managed to do so. It seems that this will be a case of privatisation for the sake of privatisation—not because there is any local need or desire for the port to be privatised, but because all ports are to be lumped together for the sake of some sort of harmony of policy.
  I therefore put the following questions to my hon. Friend the Minister. If privatisation is to be forced on us, how are we to protect the environment? How do we ensure that local people benefit, as they have for many years, from their greatest local asset? How do we ensure that the port is not taken over by asset-strippers or by those who will wish to maximise profit at the expense of the environment, the activities of fishermen and small boat owners, and the whole local population—who benefit from the present balanced approach to management?
  As trustees of a unique and beautiful harbour, the Poole harbour commissioners continually strive to achieve a harmonious existence between the numerous and often conflicting recreational, environmental and commercial
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  interests of the harbour. In addition, the commissioners must adhere to a continuing programme of planning and investment to maintain a viable port.
  I hope that I have said enough to show the grave concern felt in Poole and the surrounding area about the port and harbour falling into the hands of a commercial organisation whose sole motive will be to make a profit for its shareholders—or, worse still, into the hands of an asset-stripper who could, in a short time, ruin the work that has been accomplished over many years to protect Poole and its surroundings.
  Surely there can be no finer system of port administration than the unsubsidised, self-financing trusteeship of Poole. Those of us who live there simply cannot understand why the Government seem intent on compulsory privatisation.
  5.56 pm
  Mr. Robert Hughes: No Government have been more dogmatic or ideologically blinkered than the present Administration, and the Bill proves how difficult it is for a leopard to change its spots. It is a relic from the Thatcher era, and it comes before the House only because of the policies embarked on by the former Prime Minister, which no one can find a way of reversing.
  It is strange how quickly the zeal for privatisation has faded. I expected from the hon. Member for Poole (Mr. Ward) a rip-roaring defence of the Bill and of privatisation, together with a demand that the Government should go even further. The hon. Member for Thurrock (Mr. Janman), who has left his place, suggested that allowing two years before privatisation is too long, and that the minimum qualifying turnover of £5 million is too large. The hon. Gentleman made a rapid exit from the Chamber. Perhaps he had advance warning of the speech of the hon. Member for Poole, but I understand that he is consulting Nick Finney. Fair enough—he is perfectly entitled to do so.
  Mr. Hind: A number of my hon. Friends who remain in the Chamber think that two years is too long, and are concerned that the remaining 95 ports may be allowed to do nothing and will not develop, in order to avoid pressure for privatisation. Perhaps the door should be open to all 115 ports, rather than just to those which have a turnover of more than £5 million a year.
  Mr. Hughes: Now that the hon. Gentleman has made his intervention, perhaps he also will make a rapid exit from the Chamber.
  Mr. Holt: On a point of order, Madam Deputy Speaker. I object to any hon. or right hon. Member consulting someone who is in the Chamber but not on the Floor of the House when they are supposed to be in their place. I voice that objection whenever such an action is taken by a Labour Member, so I must do so also in the case of a Conservative Member. I ask you, Madam Deputy Speaker, to draw attention to that undesirable practice.
  Madam Deputy Speaker (Miss Betty Boothroyd): The hon. Member for Langbaurgh (Mr. Holt) has himself drawn attention to it. His concern will have been noted by hon. Members and will, of course, be recorded in the Official Report.
  Mr. Hughes: I do not want to interfere in private and difficult matters, but the hon. Member for Langbaurgh (Mr. Holt) raises a serious issue, and I hope that the hon. Member for Thurrock will desist from taking further advice in that way. No one could object if he chose to have a cup of tea with Mr. Finney downstairs.
  No one has made any real case for the Bill. There are deficiencies in the trust ports legislation, and certain problems remain to be resolved. However, the Minister did not identify one port as being inefficiently managed or serving its area badly, making it necessary to introduce such legislation. Such deficiencies as exist could easily be remedied by minor statutory changes to free up trust ports that are bound by existing legislation that is too onerous.
  The Bill clearly illustrates the narrowness of the Secretary of State's approach. There is no need for privatisation. I am advised by the Aberdeen harbour board that it totally opposes the Bill—especially the clause that imposes compulsory privatisation after two years. The board has discussed the Bill at length. The concept of privatised trust ports has been with us for some time. It has not come out of the blue, so it has been possible to give it mature consideration before reaching a point of view.
  Conservative Members may be interested to know the membership of the Aberdeen harbour board. On 1 January 1991, it comprised two representatives of Grampian regional council, Councillor A. Main and Councillor A. Stuart. One representative is nominated by Aberdeen district council, Councillor H. E. Rae; one is nominated by Aberdeen chamber of commerce, Mr. D. Paton; one is nominated by the Scottish Trades Union Congress, Councillor R. R. Webster.
  The following members are appointed by the Secretary of State, after consultation—after consultation with the fishing industry: Mr. Patrick Lynch, managing director of North Star Fishing Company Ltd.; after consultation with the Aberdeen chamber of commerce on export and import of cargoes: Mr. Michael Horsfall, managing director of North Eastern Farmers Ltd.; after consultation with the Aberdeen Base Operators Association, operators of the oil base: Mr. Roderick Mathieson, managing director of Wood Group Offshore Ltd.; after discussion with the United Kingdom Offshore Operators Association, the oil-related interest: Mr. Keith Allan, technical operatons director of Shell Expro (Aberdeen); after consultation with the cargo-handling interests: Mr. Ramsay Pirie, the managing director of John Cook Agencies Ltd.; after consultation with the Institute of Chartered Shipbrokers, shipowner or agent: Mr. Tony Peers, managing director of Seaforth Maritime Group.
  The direct nomination of the Secretary of State, without statutory consultation, is Mr. John W. Cradock, who is a local businessman, and the general manager is Mr. Barclay Braithwaite. There is a total of 13 board members and if hon Members care to make the calculation, they will find that eight of the 13 are from commerce and industry and clearly look after their own interests—that is quite proper—but mainly the interests of the port and the region served by Aberdeen harbour board.
  Hon. Members are entitled to ask how Aberdeen harbour board has discharged its responsibilities. For a number of years, Aberdeen has funded all port development out of revenue. In the past decade, it has spent £27 million on port maintenance and development.
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  The board expects to spend a further £37 million in the next 10 years and to fund it from strong cash reserves and existing borrowing powers.
  Aberdeen has no surplus land. Practically all its land is taken up by port facilities. The small amount of land which is not used by the port is leased to a local shipyard, A. and P. Appledore. The ownership of that land is extremely important, as it prevented the previous company, Aberdeen Shipbuilders, from asset-stripping the shipyard when it went into liquidation, having run up enormous debts in a short time. This is not the occasion to go into how those debts accummulated in such a short period, or to comment upon the financial irresponsibility demonstrated by the owners of that shipyard. I shall pass that subject by for the moment.
  Aberdeen harbour board, under its current constitution, has powers to diversify into port-related work if it so wishes. Aberdeen is run in an extremely businesslike fashion. In 1988, the harbour board made a profit of £2 million, after tax, on a turnover of £10 million. That is a pretty good return of profit on turnover after tax, and in 1990 it is forecast that that return will be exceeded, although we do not yet have the accounts.
  Hon. Members may think that Aberdeen has been able to make reasonable profits by continually increasing charges for use of the port, rather than through efficiency. The truth is that the main ships and goods charges increased by 5 per cent. increase since 1983. Apart from a 5 per cent. increase in 1990, there has been no increase since 1983. That is a pretty efficient output since 1983—Aberdeen has managed to maintain its level of charges and increase profits. I cannot imagine that any private industries, or indeed a privatised port, would manage to do any better.
  Aberdeen has a splendid record; nothing could be used to demonstrate that the port could do better in the hands of a private company. The case speaks for itself.
  The board has considered the matter for many years, but it is totally against the idea of privatisation, and it is concerned that a well-managed port, which looks after local interests, could be bought by an outside agency—outside the Aberdeen area, outside Scotland and even outside the United Kingdom. I am sure the Minister will tell me if I am wrong, but I can find nothing in the Bill which restricts the ownership of British ports to companies which have their headquarters in this country.
  Let us imagine that the port of Rotterdam or some other port suddenly decided to buy Aberdeen port for its own interests. It might simply run down the port over a period of years, suck it dry of profits and go into liquidation, and then we would be in difficulties.
  Mr. Bell: My hon. Friend may be aware that one of the conditions that we were able in Committee to put into the Tees and Hartlepool Port Authority Bill, when that port was privatised, was that the headquarters of the port would always have to remain on the Tees. If that provision is lacking in this Bill, should we not work to incorporate it in Committee?
  Mr. Hughes: I totally agree with my hon. Friend. We certainly need to be sure that the main business is conducted from the ports when they are established. We should go further: we should write a provision into the Bill that no foreign company should be allowed to have an interest of more than a certain percentage in such a

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  company. I do not know whether that should be 10 per cent. or 40 per cent., but the Bill should be worded so that ownership of a huge block of shares would not result in control of the company. One does not have to own 51 per cent. of the shares of a company to control it, because a block of 20 or 30 per cent. of the shares could mean that one would have control.
  Aberdeen is a buoyant port. In the annual report, the chairman says:
  "The cargo handled in 1989 increased to 3·22 million tonnes, the first year in the port's long history that the 3 million tonnes level has been exceeded. The shipping handled also increased to 8·89 million gross registered tonnes. Increases in commercial traffic played a large part in the rising figures, with oil-related traffic remaining strong. The difficult situation faced by the fishing industry in respect of quota reductions was reflected in the noticeable drop in white fish landings."
  I quoted that because hon. Members may well take the view that the reason why Aberdeen is so buoyant is solely because of oil-related work in the North sea—for which we should be grateful. However, ordinary commercial activities in the port have been doing well and increasing. Aberdeen is a splendid port and it is living up to its reputation. Clearly, the Secretary of State should leave well alone.
  When the Minister replies to the debate, will he answer a question which I asked the Secretary of State in an intervention? What would happen to trust ports which hitherto have had access to grants for capital works? The Secretary of State said that that was theoretical. The fact is that, for a number of years, no trust port has had any money from the Government for development. That is not what I call theoretical. It is the practical effect of how the Government have dealt with their relationship with trust ports.
  Setting out a prospectus is quite a different matter. In the Bill, we must make the position clear about grants for capital developments to prospective purchasers of trust ports. They must be clearly told—I believe that this is intended in the Bill—that, once they become private companies, they will be dependent upon the market for raising money for capital work, either through revenue or borrowing. My question must be answered in the House.
  The Bill had nothing to do with ports policy— Conservative Members understand that only too well—but everything to do with the problems that the Government have got themselves into over the abolition of the dock labour scheme. I do not want to go over all the ground again; let me simply say that I have some sympathy with my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott). We all had discussions with the port employers and others involved in industry, and they all said that they were not going hell for leather to ensure the abolition of the dock labour scheme.
  I well remember having discussions, as Labour's transport spokesman, with Nick Finney, director of the National Association of Port Employers—NAPE. I hope he will not feel that I have broken a confidence—not that it matters much now; it is all water under the bridge. He asked me, before the general election of, I think, 1983—elections come and go so quickly—whether I would be prepared to use my good offices to set up a "consultation conference" involving both employers and unions, to discuss the deficiences of the dock labour scheme and the
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  possibility of improving it in a way that would allay the dockers' fears about casualisation and uncertainty of employment. It was felt that the two sides could be brought together for the good of ports policy and the nation in general. Then, suddenly, we were presented with a Bill to abolish the scheme.
  The Government estimate that, in the two years following enactment of the Bill, they will gain £30 million to £50 million from the levy. It has been explained, quite properly, that no one knows how many ports will opt for privatisation, and that the proceeds are therefore also unknown; but £30 million to £50 million is considered a reasonable estimate. Other estimates, however, put the value of the trust ports much higher: some think that, given existing sales and the future development value of land that is sold off, the levy could make the Government as much as £200 million. I do not know the true figure, but I should like to hear the Secretary of State's prediction of the values and the long-term gain.
  The Bill is designed for the sole purpose of recouping some of the losses resulting from the abolition of the dock labour scheme, which was disastrous for the Government's coffers. The Minister may shake his head, but we were solemnly told at the time of the abolition Bill that the cost to the Government would be approximately £25 million —and that would be the Government's share; the other £25 million, representing the total cost of redundancy payments, would be met by the employers.
  The only trouble was, a nice, fat, juicy loophole was left in the Bill. If a stevedoring company went into liquidation, who picked up the tab? The Government had to pick up 100 per cent. of the redundancy costs, not just the amount that they had promised; they had to pay the employers' share as well. That juicy little loophole cost the Government an estimated £135 million, five times the estimate in the Bill.
  That is financial mismanagement of the grossest kind. If a local authority, having estimated that a measure would cost £25 million, acted so badly and irresponsibly that the eventual cost was five times as much, it would be hauled through the courts and its members disqualified for life —but not this Government: they get away with such behaviour by sweeping it under the carpet as though it were some minor peccadillo that could be easily forgotten.
  What did the Government say when challenged—by, I believe, the Public Accounts Committee—about their gross underestimate? Their lame excuse was, "Well, we took the Bill through in a hurry, and the financial costs were difficult to predict." That came from a Government who try to pretend that they can conduct their business better than the Labour party, and that the taxpayer's finances, rather than tame ideology, are the first thought in their mind. The truth is that the Bill is intended to recoup money and cover up the deficiencies of the past.
  At its best, the Bill could be described as a scatter gun, intended to resolve a problem that no one has ever spelt out. Such problems can be dealt with in other ways. No example has been given of a single trust port whose circumstances required the introduction of such legislation. The existing deficiencies could easily have been sorted out by other means; the Government should take account of the national interest. Nothing has been said about port strategy or port organisation, apart from the Secretary of State's throwaway remark that ports would still be needed after the opening of the Channel tunnel. That was a

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  brilliant flash of insight: I suspect that it was furnished by the excellent QC's mind that he brings to bear on such issues.
  Of course there will still be ports when the Channel tunnel is in operation; but, as the Secretary of State well knows, the tunnel will have a major influence on port developments in this country. He has said nothing about that. I believe that the Bill is completely unnecessary, and full of blinkered ideology: I shall certainly vote against it.
  6.16 pm
  Mr. Michael Carttiss: First, let me welcome the Bill and congratulate my right hon. and learned Friend the Secretary of State on making such progress so early in 1991. Secondly, I join other hon. Members in expressing my concern about the notion of the Exchequer's taking 50 per cent. of the proceeds of any sale of shares in a privatised port. I do not quarrel with the notion of a 50 per cent. clawback on the sale of land owned by a port; I see the validity of that, and understand my right hon. and learned Friend's argument justifying a half share in the proceeds from the disposal of shares. Nevertheless, I am not happy about the position, and I should like to say more about it later.
  My third point concerns the turnover figure of £5 million, which I think should be rather lower. A turnover of £1 million would bring in only another eight or nine ports, so a lowering of the figures would not be significant. My right hon. and learned Friend the Secretary of State has said that he intends to apply index-linking and that the £5 million turnover is not intended to bring in other ports by virtue of the effects of inflation; he says that the figure will rise, but, as I said, I should prefer it to be lowered.
  Opposition Members have expressed their objections. It gives me great joy to be able to quote my very good friend, the socialist chairman of Great Yarmouth borough council's economic development committee, who welcomed the prospect of the privatisation of the port of Great Yarmouth. I have a cutting from a local newspaper to that effect. My friend was also the Labour party candidate for Great Yarmouth in the general election. If he had won, there is no doubt that he would have done nearly as good a job for the constituency as I do; let us leave aside the fact that the election of a Labour Member of Parliament for Great Yarmouth would of course mean a Labour Government, a disaster which I am sure none of us will ever have to contemplate.
  To be fair, John Cannell, the chairman of Great Yarmouth borough council's economic development committee, believes that the ideal solution would be for the port to be municipalised. If a Labour Government were returned to power, he says that he would press them to allow local authorities to run ports. Such an odd view would find little favour elsewhere in Great Yarmouth. John Cannell said:
  "The port authority would need to have the confidence of its major users in relation to the policies that have been carried out over the years. What interests us as a borough council is that the changes to the port should be of benefit to the town as it is the major source of revenue."
  All of us in Great Yarmouth agree about that. I repeat what John Cannell said:
  "The changes to the port should be of benefit to the town as it is the major source of revenue."
  The report draws attention to the £5 million turnover and ends by saying:
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  "At present Yarmouth's turnover is about £.4–5 million, but Mr. Cannell"—
  my Labour opponent in 1987—
  "added that this governmental figure could be subject to amendment in the future."
  His positive approach is in marked contrast to the negative approach that is always adopted by the hon. Member for Kingston upon Hull, East (Mr. Prescott) when transport issues are discussed.
  I welcome the Bill. However, I do not believe that to privatise everything is good. Some take the view that if something moves, or even stands still, it should be privatised. I have not liked that element of Conservative party thinking during the last 20 years.
  Mr. Robert Hughes: What has happened to the Thatcherite zeal that the hon. Gentleman exhibited at the last election? The manifesto promised to privatise everything that moved. Why has he suddenly changed his mind?
  Mr. Carttiss: I have not suddenly changed my mind. Like me, the hon. Gentleman is a member of a political party. Therefore, one tries to persuade one's party to do the things in which one most firmly believes. However, the speed and direction in which one goes may be slightly faster than one likes. I do not know how any hon. Member can criticise me by saying that I am less than enthusiastic about every privatisation measure. Such a curious intervention deflects me from my main point and will incur your wrath, Mr. Deputy Speaker, if I say too much about it.
  My hon. Friend the Member for Poole (Mr. Ward) said that he objected to the element of compulsion in the Bill. He asked for more flexibility. He suggested that we should take more account of local circumstances and views. He made an eloquent appeal to my hon. Friend the Minister for Shipping and Public Transport. If the privatisation of the ports brings the benefits that my right hon. and learned Friend the Secretary of State outlined—and I believe that it will—those benefits should be self-evident. Local people should be allowed to decide for themselves. It is an enabling Bill. My right hon. and learned Friend is allowing time for discussions to be held. My port is not covered by the Bill.
  Mr. McLoughlin: Any trust port can become a private company. The only element of compulsion, as the Bill is drafted, applies to those ports with an annual turnover of more than £5 million. The Bill as drafted will not prevent the port of Great Yarmouth from seeking privatised status.
  Mr. Carttiss: I am grateful to my hon. Friend for his helpful intervention.
  Mr. John McAllion: If the hon. Gentleman is satisfied that there will be compulsion only when a port has a turnover of more than £5 million, will he withdraw what he said about being in favour of the £5 million limit being lowered so that his port of Great Yarmouth can also be compulsorily privatised?
  Mr. Carttiss: I expressed sympathy with the strong arguments advanced by my hon. Friend the Member for Poole when he applied them to Poole. His arguments have merit and should be examined. However, unlike my hon.

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  Friend the Member for Poole, I should not be averse to an element of compulsion if ports have a turnover of less than £5 million.
  The port of Great Yarmouth currently reinvests its entire annual surplus of £1 million in quayside piling, costing £8,000 per metre. It has a rolling programme that covers its 8,000 m of quay. It also reinvests its money in the provision of plant to encourage the handling of general cargo. Tomorrow morning, the port authority will officially open a warehouse that it has provided to generate more cargo traffic in Norfolk. Such port facilities do not always attract an immediate return on the initial investment. They may not therefore be an obvious subject for privatisation. The trust port is concerned about long-term developments that may not lead to immediate investment returns but that nevertheless should be carried out in the interests of the community.
  The trust port ploughs all its surplus income back into the port to create facilities for port users. The first priority of a private company is its shareholders' dividends. After a compulsory purchase, a problem might arise if a single user bought the port. I refer to a private company, a group of ports, a property developer or a foreign purchaser. There would be no certainty that the paramount interests of the community could be protected. That is one reason why the statutory port trust was established in the first place. The Bill's enabling and reserve powers provide no protection. We may need to consider that point further in Committee.
  We should consider what happened when the former statutory water company in Great Yarmouth was privatised. It is now under French ownership. The last thing I want is the French buying up the port of Great Yarmouth. They bought Great Yarmouth and Lowestoft water company and merged it with Essex water company. The one thing that we dislike in Yarmouth more than having the water company owned by the French is the fact that it is now called Suffolk Water plc.
  Mr. Janman: For the past two or three years, the water that has come out of our taps in Essex has been French-owned and has not seemed any the worse for it. Will my hon. Friend expand further on what he means by benefits to the community? Surely the main objective of a port is to ensure that it benefits its customers. Conservative Members believe that the best way of achieving that is for management to be accountable to shareholders. To enable them to pay a better dividend, management will try to maximise profits by giving customers a better service. Why does he think that those two things are not compatible?
  Mr. Carttiss: I am grateful to my hon. Friend, who will have an opportunity to make his speech and to enlarge on his concerns. I am talking about the possibility of a single company purchasing a trust port and operating it in its own interests.
  Great Yarmouth is the major port on the east coast for the offshore oil and gas industries. It services oil rigs in the southern sector of the North sea. The northern sector is serviced by Aberdeen, which developed and blossomed from our experience in Great Yarmouth. The oil and gas industries and the shipping that serves them are vital to the operation of the port. I would not want an offshore oil company to buy the port and to make the offshore
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  industry the pre-eminent concern of the port. That might be in the interests of shareholders, but it would not be in the interests of the community for the port to lose its general cargo-handling activity.
  One of our major port users is the roll-on/roll-off ferry between Great Yarmouth and Scheveningen, the port of The Hague. Two ships daily are run by the Maersk Company-owned Norfolk Line. Although I would be pleased for it to be more involved in the port, I would not want the port to be run for the benefit of the ferry and to the exclusion of the important work of the offshore industry.
  Lowestoft has become the major fishing port in our area. However, companies that operate oil rigs, gas platforms or roll-on/roll-off ferries are not interested in fishermen. In the interests of the community, the port must have some commitment to those fishermen. That deals with the points of my hon. Friend the Member for Thurrock (Mr. Janman), but I shudder to think what would happen if the French took over.
  The General Council of British Shipping has written to most hon. Members. In its letter, it expresses its concern that
  "ports may exploit their monopoly position over their captive customers in order to maximise revenue. Oil refineries and other waterside industrial plant are effectively totally captive."
  It makes a further point that is relevant to the point that I have been making:
  "There is likely to be a trend towards port takeovers and concentration, thus reducing further the restraining influence of inter-port competition. Already about one quarter of UK seaborne trade is handled by the private company Associated British Ports."
  The neighbouring port of Lowestoft, six or seven miles south, is owned by Associated British Ports. The port of King's Lynn, in the constituency of my hon. Friend the Member for Norfolk, North-West (Mr. Bellingham), who is working diligently in front of me in support of the Department of Transport, is owned by Associated British Ports. I do not object to King's Lynn or Lowestoft being owned by Associated British Ports, and I am sure that it has done a marvellous job, but it would not be good for Yarmouth and the three or four other ports that operate on the east coast to be part of that one group.
  I was grateful to my right hon. and learned Friend the Secretary of State for allowing me to intervene when he said that trust ports are not answerable to the Government. That is one of their good features. Anything that is not answerable to the Government, of whatever particular hue, must be commended. I was sent here to ensure that the number of things that are answerable to the Government are reduced. It is one of my unhappinesses that, despite being an absolutely rabid Thatcherite, over the past 10 or 11 years we have been too much inclined to increase the role of Government, which does not fit with some of the things that we are supposed to be doing.
  The Secretary of State said that trust ports are not answerable to the Government. That is a damned good thing. I object most strongly, therefore, to the 50 per cent. levy on the proceeds. The Government have done absolutely nothing for the port of Great Yarmouth in its more than 500 years of existence. We have not had a penny piece from them. We even have difficulty getting money for flood protection. Much of the work that is done shoring up

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  the quaysides is related to the flood protection of Great Yarmouth, in particular the low-lying area that we know as Cobholm.
  We have hell's own job—excuse my language; I should say that we have great difficulty, but people in Yarmouth will understand what I mean—in getting enough money from the Anglian water authority, as it was, and the Ministry of Agriculture, Fisheries and Food for essential flood protection work. The cost of that has been borne by the port of Great Yarmouth. The Government are saying, "We want you to be commercial, more energetic in the private enterprise field," and they want 50 per cent. of the money when they have not given us a penny.
  In Committee or on Third Reading, I shall quote Members of Parliament for Great Yarmouth who have complained about the failure of successive Kings and Queens, from Elizabeth I onwards, to put a penny piece into the port of Great Yarmouth. Indeed, in the time of Henry VIII we had to contribute to the port of Dover.
  Clawing back money from land sales is fair enough—the port of Yarmouth has no land to sell because it belongs to the borough council—but for the Government to claw back 50 per cent. of the proceeds when they have never done a thing for the port of Great Yarmouth is quite wrong, and I shall oppose it until the very end, although I am delighted to support the general aims of the Bill.
  Several hon. Members rose—
  Mr. Deputy Speaker (Sir Paul Dean): Order. Many hon. Members wish to speak in the debate. I hope that those who are called will bear that in mind.
  6.38 pm
  Mr. Stuart Bell: I am grateful for being called so early and to follow the hon. Member for Great Yarmouth (Mr. Carttiss), who made an interesting and fluent speech on behalf of his constituents. I was struck by his remark that he would shudder to think what would happen if the French took over the port of Great Yarmouth. We in Tees and Hartlepool would shudder to think what would happen to any Frenchman who tried to take over the port of Hartlepool, given what allegedly happened there to a Frenchman during the Napoleonic wars. They hanged him, but, as it happened, it turned out to be a monkey.
  When the hon. Gentleman referred to Henry VIII, I was reminded of how the House had chided my hon. Friend the Member for Kingston-upon-Hull, East (Mr. Prescott) for his reference to the Rochdale report. "How far back was that?" my hon. Friend was asked. The answer is 25 years. Surely my hon. Friend may be forgiven for going back 25 years when an hon. Member has just gone back to the time of Henry VIII. I am sure that the Government will not seek to claw anything back from the port of Great Yarmouth —should it be privatised—in respect of the time of Henry VIII. In the case of Tees and Hartlepool, they clawed back 50 per cent. and then capital gains tax on some very small amounts paid in the early 1960s.
  The interesting point, the real thrust of this debate, concerns how the Government have lost their way in relation to privatisation. My hon. Friend the Member for Kingston-upon-Hull, East, in his peroration, touched on this point. The Government now see privatisation as a source of finance rather than as ideology. They see
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  privatisation as a means of financing their own recession rather than as a means of bringing free market benefits to the community.
  Mr. Moate indicated dissent.
  Mr. Bell: The hon. Gentleman protests. Let him look at the facts. I am glad to see the hon. Member for Thurrock (Mr. Janman) in his place. He made a very important intervention during the speech of the Secretary of State
  —a point touched upon briefly by the hon. Member for Lancashire, West (Mr. Hind), who, although he is not in the Chamber at the moment, will probably we well and truly involved in the Committee stage debate.
  The Secretary of State pointed out that the Bill would make possible the privatisation of 14 major trust ports —in fact 12, as Tees and Hartlepool and the ports of the Clyde are already being privatised via the private Bill route. The hon. Member for Langbaurgh (Mr. Holt), with his usual diligence, has been sitting through this debate. He has pointed out that the Tees and Hartlepool Port Authority Bill will have its Second Reading debate in another place tomorrow.
  Ports that have an annual turnover of £5 million will not fall within the terms of clause 9, which, according to the explanatory and financial memorandum,
  "enables the Secretary of State, after an initial period of 2 years, to give a direction requiring the authority to bring forward a scheme for the purposes of"
  privatisation.
  That brings me back to a point made by the hon. Member for Thurrock. In an intervention the hon. Gentleman asked the Secretary of State to consider introducing in Committee stage an amendment to reduce the amount from £5 million to £1 million and to reduce the period from two years to one year. There is no doubt that the hon. Gentleman—I give him credit for this—was wearing his ideological running shoes. It is an ideological point. It would be perfectly right for an ideological Government to reduce the period to one year, and the amount to £1 million. However, the Secretary of State was not wearing his ideological shoes; he was wearing the running shoes provided by the Treasury. His speech was a Treasury speech. The Treasury has made its calculations.
  Mr. Janman: The hon. Gentleman mentioned my earlier intervention. What is the whole crux of this operation? It is not simply about the Treasury getting as much money as it can; as the hon. Member for Kingston upon Hull, East (Mr. Prescott) said, it is about what to do to encourage investment, productivity and competitiveness in the ports industry. If one thinks that having plcs—the other two options being trusts and fully nationalised ports—would be the best way of achieving increased investment, surely there is no need to delay the matter. In addition, as many ports as possible should be compelled to come forward in the shortest possible period and take up the benefits of such a structure.
  Mr. Bell: The hon. Gentleman anticipates a great deal of what I am going to say. I have been trying to make the point that trust ports did not previously have constraints. Indeed, they were able to invest. They were able to benefit the local community and there was never any need for an ideological commitment to privatisation. I shall deal with all these points at a later stage.
  Obviously the Treasury made its calculations. It calculated, no doubt correctly, that the real money lies in

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  the assets and in the capital gains tax of the 12 major trust ports rather than in the other 100 or so ports, small as they are—my hon. Friend the Member for Kingston on Hull, East called them minnows—that are also covered by the Bill. If the Secretary of State is still an ideologue of the free market—perhaps his years as Secretary of State for Scotland diluted that commitment—he may well take the advice of the hon. Members for Thurrock and for Lancashire, West, both of whom, I hope, will be on the Standing Committee. If the Secretary of State is ideologically committed, he will accept the suggestions.
  Of course, the money that is available in the case of the 100 or so trust ports, less the 12 to which I have referred, is so small that the Treasury is not required to intervene. Therefore, the Secretary of State will not intervene. But the Treasury has gone a little further in its thinking and its analysis. It saw the prospect of 50 per cent. of assets going and the prospect of capital gains tax on the remaining 50 per cent., and now it sees the prospect of a clawback provision in respect of the sale of land. In this regard, I shall deal later with the intervention of the hon. Member for Langbaurgh.
  Clause 16, according to the explanatory and financial memorandum,
  "makes provision for a levy on gains accruing to a successor company as a result of certain disposals of any land or interest in land that is transferred to the company".
  We see the Treasury very much at work here—in respect of the 50 per cent., in respect of the capital gains tax and, now, in respect of the sale of land by the successor company.
  The hon. Member asked the Secretary of State whether this clause would affect the legislation privatising the port of Tees and Hartlepool. He wanted to know, in short, whether there would be a clawback provision. The Secretary of State's answer, to which we shall hold him, was that there would not be. Thus there is possibly some reward for Tees and Hartlepool for having taken the private Bill route of privatisation.
  But the hon. Member for Langbaurgh may not have seen the other side of the assurance. The fact is that the levy will be based on the price only—not on the price of the market value. The situation may turn out to be that, while the 50 per cent. levy in respect of ports privatised under this legislation is based on price only—the Secretary of State was very clear about that point—it may be on price or on market value in the case of Tees and Hartlepool. Thus, there may be a loss for Tees and Hartlepool. In that case, the port may find that what it gains on the swings of the clawback it will lose on the roundabout of market values.
  I wish to develop a theme mentioned by my hon. Friend the Member for Kingston upon Hull, East. In his peroration, he talked about the Treasury getting its hands on the booty. As I am a little more romantic, I shall refer to pots of gold rather than booty. The Treasury sees pots of gold dotted around the country. It realises that we are in a recession and that its receipts from taxation are falling. On another occasion the Minister for Shipping and Public Transport told us that the Government did not have sufficient legislative time to introduce a Bill to privatise the trust ports. However, when the Treasury saw the benefits, the Government were suddenly able to find the time. So I
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  am not entirely uncomfortable with the argument that there is not the unseen hand of Adam Smith but certainly the unseen hand of the Treasury behind these proposals.
  Mr. McLoughlin: The point that I was making at the time to which the hon. Gentleman refers was indeed that the Government did not have time for a public Bill. However, we are now in a new Session of Parliament, and this proposal was included in the Gracious Speech. That does not detract from what I said at the time of the passage of the private Bills.
  Mr. Bell: Let me quote what the Minister said:
  "It is still our intention to bring forward Government legislation on trust ports at the earliest convenient opportunity. But given the pressure on the legislative programme, private legislation is the only way by which these ports can quickly be converted into fully fledged private sector enterprises."
  On that occasion the Minister was talking as a member of a Government who had too tight a programme to permit intervention by way of a new Bill. When we were talking in the House about the Tees and Hartlepool privatisation, no one suggested that 50 per cent. of the authority's assets would be taken from it, and the hon. Member for Langbaurgh, who sponsored that Bill, knows that full well. Treasury counsel said in Committee that the Treasury proposed taking 50 per cent. of the assets.
  I accept that privatisation is a legitimate part of the Government's programme. They won a general election on that mandate. As I repeated in the House on 15 March,
  "The concept of privatisation is legitimate. It was an ideological commitment that the Conservative party made at the time of the 1979 election."
  The former Minister for Aviation and Shipping, now Minister for Shipping and Public Transport, said that the Government wanted 50 per cent. of the assets because of Treasury input many years ago through grants, and that it was therefore legitimate for the Treasury later to say that it wanted to claw back some of the money. I disagree with the principle that some small grants given in the 1960s should result in 50 per cent. of a company's assets being taken from it.
  The Secretary of State was able to handle my intervention when I said that the situation had changed. He said that it would be wrong for a successor company to have the full benefit of a 100 per cent. sale of assets. But 50 per cent. of those assets are going to the Government. The Government want to ensure that the Treasury will not be undernourished because of the sale of the trust ports. Clause 9 enables the Secretary of State, after an initial period of two years, to give a direction requiring an authority to bring forward a scheme
  "for the purposes of a transfer".
  The Secretary of State will not be happy with the value set upon such a company unless he is satisfied that that is its proper value. The Treasury will get its 50 per cent. and is working hard behind the scenes.
  The Tees and Hartlepool port authority may have a lot to answer for. Ideological commitment made the former Secretary of State for Transport say that he wanted the trust ports to turn themselves into companies and to go private. On 15 March 1990, the present Minister for Shipping and Public Transport said:
  "That was why, as has been mentioned already, about a year ago my right hon. Friend the Member for Southend, West (Mr. Channon), when he was Secretary of State for

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  Transport, encouraged trust ports which saw benefits in turning themselves into companies to bring forward their own private Bills."
  The Tees and Hartlepool port authority followed that encouragement and moved forward on the privatisation road. It may have a lot to answer for, but little to show for its precipitate move to beat its competitors—the purpose behind the Tees and Hartlepool Port Authority Bill. The Bill that we are debating may reach the statute book before the Tees and Hartlepool Port Authority Bill, notwithstanding the fact that its legislative start means that it will be considered in the other place tomorrow night. The authority has spent hundreds of thousands of pounds on this procedure—money held in trust for the state.
  We have heard much about the state owning the trust ports. The state is you, Mr. Deputy Speaker, and me and other hon. Members. We are the beneficiaries of having trust ports and of a system going back 180 years, as the hon. Member for Langbaurgh reminded us, and we are the beneficiaries of stable ports. The Secretary of State told us that 90 per cent. of our imports still come through the trust ports. The Tees and Hartlepool port authority has thrown away hundreds of thousands of pounds on its privatisation Bill, to little effect, as is shown by the fact that we are debating this enabling Bill only a few weeks after the Tees and Hartlepool Port Authority Bill completed its proceedings in the House of Commons.
  The hon. Member for Great Yarmouth talked about 50 per cent. which I would point out, in the case of the Tees and Hartlepool authority, lest we lose ourselves in percentages, comes to £32 million. In addition, there will be a loss on the capital gains. The Government's ideology of free enterprise and a free market is being set aside and the Treasury is putting its long arm into the pockets of the trust ports. That does not bode well for the other 12 trust ports, including Newcastle and Blyth, which are likely to be privatised over the next two years.
  In introducing the Bill, the Secretary of State talked about a constraint on the activities of trust ports. He was reading again from his brief, but he must have overlooked an exchange on Second Reading of the Tees and Hartlepool Port Authority Bill. The hon. Member for Langbaurgh was making the same point as the Secretary of State, but my hon. Friend the Member for Stockton, North (Mr. Cook) said:
  "in 1984–85, the port authority did not feel that it was bound by the alleged restriction and invested in property, finance, aviation, air travel, timber importing, transport, display signs, storage, security fencing and engineering."
  All those investments were carried out by Tees and Hartlepool as a trust port. We made the point then, as we do again tonight, that the trust port had the authority to carry out all that investment, if it wished—even in a fish and chip shop, a business to which the hon. Member for Langbaurgh has already referred.
  So that the record is clear and we all know the role of the present Minister for Shipping and Public Transport, I shall again quote from his speech on 15 March 1990, when he said:
  "There is a general rule that when assets acquired or improved by a non-Exchequer body with the aid of Government grants are disposed of, an appropriate proportion of the proceeds should go to the Exchequer."—[Official Report, 15 March 1990; Vol. 169, c. 733–62.]
  That rule was set side, as was shown by statements by Treasury counsel in Committee on the Tees and Hartlepool Port Authority Bill and then in the proceedings on the Finance Bill, when the hon. Member for
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  Berwick-upon-Tweed (Mr. Beith) played an important role. Sections 115 to 120 of the Finance Act 1990 extend this principle.
  As I said in an intervention in the speech of my hon. Friend the Member for Aberdeen, North (Mr. Hughes), in Committee on the Tees and Hartlepool Port Authority Bill we won a commitment from the authority that its headquarters would be on Teesside. We welcome that commitment, and in Committee on this Bill we shall look for a similar commitment in respect of other trust ports. It is not good enough to create a framework in which the ports can be taken over by successor companies which, as my hon. Friend the Member for Aberdeen, North said, may have their headquarters in Amsterdam. Even though the trust ports are privatised, we want a local community spirit, which can be achieved by a provision in the Bill stating that an authority's headquarters should be where the port is situated.
  In referring to the 14 ports, the Secretary of State touched on the Tyne, which is an important port. If it is privatised, we shall look for the same assurances for which we looked in the debate on the Tees and Hartlepool Port Authority Bill. We shall want to know what assurances there are that shares will go to staff and to local pension funds. We welcome the emphasis on employee participation, but 50 per cent. of the work force lost their jobs because of the abolition of the dock labour scheme. The concept of the docker—a proud profession going back over 100 years—was replaced by the concept of the unskilled labourer.
  Mr. Holt: I know of the hon. Gentleman's keen interest in this matter, and both he and the people of Teesside know of mine. Will the hon. Gentleman take it from me that I have yet to receive one letter from an employee of the Tees and Hartlepool port authority objecting to the private Bill that I sponsored?
  Mr. Bell: I think that it was President Nixon who coined the phrase "the silent majority". Perhaps the silent majority were not communicating with the hon. Gentleman.
  I worked hard to ensure that those who were unhappy with the proposals following the abolition of the dock labour scheme received proper redundancy money and could retire from the profession in which they had worked happily for many years, enjoying the exercise of their skills. We shall be looking for the worker participation to which I have referred if proposals are advanced in respect of the Tyne.
  When the Minister winds up, he may wish to touch on this question: what emphasis was placed, in the Government's study of the Bill, on the development of commerce and jobs following the privatisation of the trust ports? Did those factors enter into the reckoning? Has there been any indication of what the prospects will be? The hon. Member for Thurrock referred to that matter earlier. We shall be calling for all that information when we examine the Bill in Committee.
  My hon. Friend the Member for Aberdeen, North said that the Bill was the legacy of the Thatcher years, and clearly it is. It is a hard-faced Bill dealing with financial rather than with port matters. However, it may bring to an end—I am sure that you, Mr. Deputy Speaker, would welcome this—the corruption of the private Bill procedure that characterised the Thatcher Administration. The then

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  Minister for Aviation and Shipping told the House frankly, honestly and clearly that the matter was properly the subject of Government legislation but that, as no Government time was available, the private Bill route had had to be taken.
  That corruption of the private Bill procedure cost the House many hours of debate and much tension and aggravation. It will cause the same reaction in the other place. The same happened with the Clyde Port Authority Bill. I hope that that corruption of our procedures is now a thing of the past and that the new Administration will not so take the House of Commons for granted as to corrupt our proceedings in that way.
  As my hon. Friend the Member for Kingston upon Hull, East said, the Government's ideological commitment to privatisation is enfeebled and diluted and their policy has not necessarily succeeded. As my hon. Friend the Member for Workington (Mr. Campbell-Savours) once said, any fool can sell assets at half their value. The Government are now insisting on getting the full value of the assets so that the Treasury can take its 50 per cent. and so that they can nibble away at the financial consequences of the recession. In ideological terms, the Bill is poor and ill thought out. The Minister knows as well as I do that it is a Treasury measure—a financial measure which arises from the Finance Act 1990. That is why the Opposition will vote against it.
  7.4 pm
  Mr. David Shaw: In principle, I welcome the Bill, which has much to commend it to my constituents. It is certainly important to my constituency, as 10,000 people there are employed in work relating directly or indirectly to the activities of Dover port.
  Dover is a most successful port and I commend its management and employees for the successful way in which it has grown up in the past decade and more. It has coped with the enormous expansion of trade that has resulted from the Government's policies and is extremely efficient, dealing with twice the volume of traffic—in terms of tonnage and of passengers—that it dealt with 10 years ago. Dover has invested a considerable amount in information technology to ensure that it is a modern port with modern facilities to provide for the speedy transfer of passengers and to enable them to enjoy all that it has to offer.
  The port is indeed an enjoyable area. New restaurant and shopping facilities have been provided to ensure that passengers' holidays and recreational visits are as enjoyable as possible. Both for the lorry driver transferring freight abroad and for the passenger looking forward to his or her holiday, it is an extremely successful port.
  Dover's interests in privatisation are numerous. In particular, we should bear in mind the policy of the local council as Dover prepares itself for the changes that are likely to result from the opening of the channel tunnel. It is the council's policy to expand tourism and leisure opportunities in Dover and east Kent, and that expansion cannot take place without the greater freedom resulting from privatisation of the port. Various developments have been proposed for Wellington docks and parts of Dover port, and privatisation, or the transfer of the port's undertakings to a limited company, will facilitate them. I
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  look forward to the potential that Dover will enjoy if privatisation enables us to develop the leisure and tourism facilities that will make us a successful area over the next 20 or 30 years.
  Access to financial markets will be improved in respect of companies that are privatised. There will be considerable opportunities for expanding the port and its undertakings and operations. Such access to capital may not be so readily available to ports that remain trust ports.
  With the channel tunnel coming on stream in 1993, the timetable is a particular problem for Dover, and I understand that the Minister has said publicly that Dover may not be forced to privatise at the same rate as ports elsewhere. If the channel tunnel has not yet opened, and if it is not known how much trade will be taken away as a result of its opening, it will be difficult to issue a prospectus or tender document. With the channel tunnel offering such an expensive route to the continent, however, we hope to keep the vast majority of our trade, if not all of it. We certainly intend to fight hard in the competitive marketplace to ensure that that happens.
  The other aspect of the privatisation measure that needs to be tested in Committee—I look forward to hearing what the Minister has to say about it—is the hope that management and employees may bid successfully for many of the ports' undertakings. It is important to ensure that there is a level playing field. When we examine the 50 per cent. levy and the financial structures, we may find that there is not, and that management and employees will not have the same opportunities to buy the port as ferry companies or other corporate bodies. Especially in respect of ports as important to the local community as Dover is, it will be important to ensure that each of the interested parties has a fair opportunity to submit a successful bid.
  I am also concerned about the 50 per cent. levy. I differ from Opposition Members because I believe that the levy is a small amount of money. The amount of money that the levy will raise is inconsequential within the totality of Government spending. There are always some Government Departments—we know which ones and I do not need to name them—that always look for the last £10 million, £15 million, £20 million or £30 million. However, we must bear in mind the fact that the ports have been paying a great deal by way of corporation tax over the years and a great deal of national insurance contributions have also been paid.
  As hon. Members have said, the Government have done quite well out of the ports and they do not deserve to be sticking their little hand into the pot on this occasion. I remain to be convinced whether the levy should be 50 per cent. or whether it should exist at all. Ministers must examine their consciences—and perhaps a bit more than their consciences—before they claim that the levy is right and proper in the circumstances.
  Mr. Ron Brown: Does the hon. Gentleman accept that the Government are justifying a form of asset stripping by proposing the levy? That is clearly unacceptable to the Opposition, and I am sure that it is unacceptable to many Conservative Members. The Bill will be challenged and I hope that the next Labour Government will have proposals about public ownership to ensure that those assets are returned to the community.
  Mr. Shaw: I disagree with the hon. Gentleman about asset stripping. My major concern is whether the

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  Government will achieve their objective of constructing a level playing field between, on the one hand, the employees who might want to bid with management to own the port in which they work and, on the other, a company which might be able to enjoy tax advantages. A company with that potential might be able to make a higher bid. I hope to examine that point further and to take advice from outside about it. The Government should take such advice, too.
  In most privatisations the Government normally appoint a financial adviser and they determine the financial structures with the assistance of that adviser. The adviser is usually an eminent merchant bank or firm of accountants which has expertise and experience in that area. I hope that my hon. Friend the Minister will tell us about the extent of the financial advice that has been taken and whether that advice was on the industry in general or on individual ports.
  Although some ports might be able to afford a 50 per cent. levy and such a levy might be appropriate for some ports, the levy might be inappropriate for ports such as Dover, bearing in mind the fact that considerable capital expenditure will be required over the next decade to keep Dover at the forefront of the market and in a position in which it can compete successfully against the channel tunnel.
  Mr. Janman: My hon. Friend is homing in on an important point. When I first examined the Bill, my gut instinct about the levy was the same as that expressed by him. However, if the levy was reduced, more cash would appear on the balance sheet of the new company. Would that increase the price that would have to be paid, thus making it more difficult for an employee-management buy-out, which, I believe from my hon. Friend's comments, both he and I would want to be encouraged?
  Mr. Shaw: I accept that point, but from my experience of accountancy and mercant banking, it would be possible for a bidder to put up quite a lot of cash, for quite a lot of cash to enter the balance sheet and then for that cash to be returned, especially if the funding arrangements used some form of debt, debenture stock or even redeemable preference shares. As a result, the cash might not be left in the port's balance sheet. Instead, it might be removed by the controlling purchaser. I believe that we should all consider the matter in greater detail. By the time that the Bill reaches Committee, we will have had an opportunity to take more financial advice from the various bodies interested in the Bill and to examine what the levy means for capital structures.
  I want to look at some long-term projections about what might happen to the port in my constituency and the effect of the levy on the price that might be paid for the port. If the levy was lower, there might be higher bids for the port. However, a lower levy might not change the bidding process at all. As most people with experience of share valuations will know, valuations tend to be based on profits and the amount of extra cash entering a balance sheet would, in this instance, have only a marginal effect on the valuation of ports that are relatively profitable. In the case of Dover, the extra few million pounds would probably not be as significant as the overall value of the port, which might be £50 million or £60 million. I am worried about the levy. We must consider what effect it might have.
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  I have seen calculations which show that the port authority could make capital losses when transferring the port's undertakings into the port company. If capital losses were made, would that loss be offset against the corporation tax paid by the existing harbour board or authority, or would it be usable as a capital loss in the subsequent company? That would mean an uneven playing field for the corporate bidder for a port against the management and employee buy-out. The Government might be thwarted in their declared aim of trying to ensure that management and employees have a beneficial opportunity of purchasing the port.
  Mr. Ted Leadbitter: Last year I spent three and a half hours in the House debating the privatisation of ports and, in deference to other hon. Members, I will not be making a speech tonight.
  In March 1988 the Secretary of State for Transport made it clear that he was unhappy about the responses to the privatisation of the trust ports. Dover and many other ports were not keen on privatisation because under the legislation there were no powers to invest, expand and improve and there were no inhibitions on competition between ports. However, when I referred to the 50 per cent. levy last year as a rip-off, Conservative Members —including the Minister—interpreted the levy not as a take for the Treasury, but as a gain for the port.
  I cannot understand the dichotomy in that thinking. The hon. Member for Dover (Mr. Shaw) is genuinely expressing concern, but the Government's official stance last year was that what was left was a gain for the port authority. I have news for the hon. Gentleman. In addition to the 50 per cent. levy, another 17·5 per cent. in the form of taxation must be taken into account. That means that well over 65 per cent. will be removed when the sale of those ports takes place.
  Mr. Shaw: I am sure that the hon. Gentleman and most other hon. Members will appreciate that the gist of my point is that the Government are entitled, on behalf of the taxpayer, to put their snout in the trough. However, in this instance we want to ensure that the amount that the Government take from that trough is limited to a fair amount and that something is left for those who work in and expect to make a livelihood from the port over the next decade or so.
  I was worried when the 50 per cent. levy was passed by Parliament last year, although, at that time, there was no question of its affecting my port. I believe that we must consider the point carefully now and discover whether the Government have the right figure. We must also consider the implications. So far, I have seen no financial projections that consider the implications and what might happen.
  Mr. Frank Haynes: If I remember rightly, the hon. Gentleman was a member of the Committee that considered the Electricity Bill. I remember the Government's proposals on the electricity industry levy, but I do not remember the hon. Gentleman supporting what we said about the levy. However, he is now seizing the opportunity more or less to say to the Government, "Come off it. You are charging too much." The hon. Gentleman never said a flipping word in Committee about the levy on the electricity industry. Why is he facing two ways?
  Mr. Shaw: The hon. Member for Ashfield (Mr. Haynes) and I spent many enjoyable hours together in Committee considering the Electricity Bill. He knows full well that my view at the time was that the Opposition had absolutely no credibility in their case on electricity privatisation. The Opposition's arguments have failed and they have been proved to be totally wrong by the fact that 12 million people in this country wanted a bit of the electricity privatisation. That was a substantial number.
  Mr. Haynes: But at the same time, we strongly recommended that the nuclear side should not be privatised. The hon. Gentleman went along with the privatisation of the nuclear side of the industry, but, finally, the Government decided to back off and take it out. What about that, then?
  Mr. Shaw: Although that is not strictly relevant to the Bill—
  Madam Deputy Speaker (Miss Betty Boothroyd): Order. I hope that the hon. Gentleman will not go down that avenue this evening.
  Mr. Shaw: I would not dream of going down that path. Under socialism, the true costs of the nuclear industry were not known. It was only later, after the Bill had been considered in Committee, that the Conservative Government and the Conservative party managed to discover the true costs—
  Madam Deputy Speaker: Order. The hon. Gentleman is now abusing the time allotted to him. Perhaps he will continue with his Second Reading speech.
  Mr. Leadbitter rose—
  Mr. Shaw: I take your point, Madam Deputy Speaker. I was hoping to give way one more time. I hope that the hon. Gentleman will forgive me if I do not.
  Mr. Leadbitter: On that point.
  Mr. Shaw: I shall give way very briefly.
  Madam Deputy Speaker: I hope that it is relevant.
  Mr. Leadbitter: The hon. Gentleman knows that I chaired the Committee that considered the Electricity Bill. I heard not a single word of criticism about the take. The hon. Gentleman is expressing reservations about this Bill. I respect that, but he is voicing his concern only because the matter affects Dover, which he represents.
  Mr. Shaw: I assure the hon. Gentleman that electricity and the port of Dover affect Dover and my constituents. The different issue in this case is that the electricity levy was of nowhere near the same significance or proportion. It was for a totally different purpose. Here we are involved with something substantial—50 per cent. It is a capital up-front payment.
  The other point which is different is that, in the case of the electricity privatisation, I was satisfied that the Government had financial advisers, I was satisfied with the figure work that was going into it and I was satisfied with the way in which the Government presented the privatisation. I hope to be satisfied with the way in which the Government are handling this privatisation. I am satisfied with most aspects of the Government's presentation of the privatisation argument, but I remain to be convinced on the issue of capital structures and the
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  effect that the 50 per cent. levy, which is substantial, will have. If I am selected to serve on the Committee, I shall be able to make substantial points to the Minister about the 50 per cent. levy and whether it should be changed.
  Another oddity of the Bill is that it does not address the monopoly powers of the Crown Estate Commissioners who own land offshore. In the case of some ports that land offshore may be within the port. In the case of Dover, which has no great land mass outside the port or even inside the harbour area, when it wants to expand, within the port or harbour walls but under water, the land must be reclaimed with the express written approval of the Crown Estate Commissioners. They do not sign the letter or give their approval for nothing. From research that I have undertaken, I know that they make a request for a substantial contribution—that is a monopoly power—over land that is obtained without any competition. The land price often has no relationship to land prices that one may pay elsewhere.
  I should like to hear whether the Minister believes that, if ports are to operate in a private sector manner and on full commercial terms, the Crown Estate Commissioners should be able to hold a privatised port to ransom. Will the Minister consider amendments to the Bill or a way of ensuring that the Crown Estate Commissioners cannot distort the price of, often, a small piece of land underneath the sea, which is vital if a port needs to expand or develop its operations?
  Overall, the Bill is good for ports and good for the port of Dover and the people of Dover, but one or two matters must be examined in Committee, and we will need to be convinced on those points.
  Mr. Leadbitter: On a point of order, Madam Deputy Speaker. I have listened with great interest to the submission of the hon. Member for Dover (Mr. Shaw) and his concern about the 50 per cent. levy. He made a strong plea, did he not, for the levy to be examined again? I do not understand how the House is expected to receive such a submission when, on 15 March 1990, the hon. Gentleman is recorded as actually voting for the 50 per cent. when we considered the Tees and Hartlepool Bill.
  Madam Deputy Speaker: That is a debating point; it is certainly not a matter for the Chair.
  7.26 pm
  Mr. James Wallace: Several hon. Members, in particular Conservative Members, have expressed a willingness to serve on the Committee. That must come as a reassurance to the Whips, but several reservations have been expressed. If hon. Member's votes follow their voices, it will lead to some constructive Committee debate.
  I share the concern of the hon. Member for Dover (Mr. Shaw) about the monopoly position of the Crown Estate Commissioners. According to harbour trustees and fish farmers in my constituency, the Crown Estate Commissioners exact considerable sums in respect of operations on their land. There is precious little evidence of what they put into it in return. If the hon. Gentleman tables amendments in Committee relating to the Crown Estate Commissioners, hon. Members will have a useful dialogue on that point.
  My hon. Friends and I do not have any objection to the enabling parts of the Bill. We realise that the bulk of the

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  United Kingdom's trade—about 92 per cent. of our exports and imports—still uses our ports. Therefore, ports clearly play an important role in our economy. All my hon. Friends supported the Government in the ending of the national dock labour scheme. We believed that it would enable many of our ports to become more competitive. Competition between United Kingdom ports is a good spur to offering better facilities.
  We are also aware that there is considerable competition between United Kingdom ports and those of our continental partners—I refer in particular to the south-east of England—and anything that adds to the ability of our ports to be more competitive and provide valuable services must be to our advantage. We should not forget the potential of ports on our west coast. With the opening of the channel tunnel, they could provide an entry into the European Community, particularly if the Government are prepared to support the north and Scotland and provide them with decent rail links.
  Our general support for the enabling provisions of the Bill reflects the fact that those who opted for private legislation have become frustrated, and no doubt many other ports that wish to opt for privatisation have not chosen to do so because they have seen how private Bills tend to get bogged down.
  This is probably not the place to discuss private legislation procedure. Suffice it to say that it is not satisfactory in all respects. This enabling Bill should ease the passage of ports which wish to be privatised.
  I note that clause 8 provides for representations to be made to the Secretary of State once a scheme has been proposed to him by a port which wishes to enter the private sector. I shall be interested to hear from the Minister what considerations will be relevant in determining whether the Secretary of State's consent should be given. One anxiety shared by many people is that, if predators, who are perhaps major port users, hid to such an extent that they gain effective control of a port, they will use that power to discriminate against other potential port users who may be their competitors. I shall be interested to know what considerations will be taken into account when representations are made to the Secretary of State.
  As many hon. Members have already said, perhaps the most offensive and potentially damaging part of the Bill is that which provides for the compulsory privatisation of ports. Ports with a turnover of more than £5 million per annum may be forced to privatise. The Secretary of State said that several safeguards, as he called them, had already been written into the Bill.
  First—a measure not entirely welcomed by Conservative Members—there would be no compulsory privatisation order within the first two years of the Bill becoming an Act. The £5 million threshold would be index-linked and there would be prior consultation. I accept that those safeguards are better than nothing, but if, after considering the matter and noting that the way to privatisation of a port had been simplified, a trust port decided that it did not wish to go down that road, the matter should he left there.
  A port may reach that decision for good reasons, including not least the interests of the community served by the port. Ports should not come under pressure from central Government to privatise if they do not wish to do
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  so. To have that cloud or threat hanging over them even in the first two years may inhibit a port from pursuing ventures that it wishes to take on.
  The Secretary of State gave reasons why ports would be attracted to privatisation. He mentioned access to share capital for port development, development of surplus land, diversification of port business, clearer accountability and emphasis on profitability and the possibility of employee share ownership schemes.
  My constituency interest in the Bill is that the Secretary of State could compel Lerwick harbour trust to privatise. In 1989, its turnover was £5·5 million, so it comes within the ambit of clause 9. The harbour trust was established in 1877 by the traders and merchants of Lerwick to oversee the maintenance and management of the port and harbour. In the past 20 years, Shetland has faced challenges and opportunities for development, and Lerwick Harbour Trust has responded.
  Let us take the criteria set down by the Secretary of State. The trust has found funding by both investing its profits and raising money through the banks. It has shown resourcefulness and imagination in developing its land and diversifying its activities. If the House listens to the activities that the Lerwick harbour trustees have undertaken, it will see what they have achieved in addition to their statutory harbour duties and providing facilities for the oil and fishing industries and for ferries.
  The trustees have managed to lease warehouse space to haulage firms and fish farmers. They have used some of their land for farming: 1,000 sheep are maintained on 1,400 acres. The trustees have invested in a 64-bedroom hotel in Lerwick, which was opened some six years ago by the right hon. Member for Ayr (Mr. Younger) when he was Secretary of State for Scotland. The trustees have provided important car parking facilities in the centre of the town. Many of my constituents grumble about the price charged, but everyone can accept that car parks in the centres of towns are a valuable facility.
  The trustees have been instrumental in the past 12 months in developing a large herring and mackerel processing factory, which employs about 100 people. The facilities in the factory are state of the art and of the highest quality and standard. Those activities have been undertaken by a trust port. The trustees have shown that they can develop land and diversify their activities without recourse to privatisation. I accept that there are problems with employee participation—which, as some hon. Members will be aware, my party has long espoused. I hope that no tax or other restrictions will be placed on trust ports—if they wish to continue as trusts—developing profit-sharing schemes in which employees can participate.
  The Secretary of State also mentioned accountability. The Lerwick harbour trustees are six Islands councillors, three harbour ratepayers and three representatives of local shipowners. Half the trustees are democratically elected representatives of the community, and subject to all the pressures of which we are well aware. Harbour ratepayers and local shipowners are accountable to their peers in the harbour and the local business world. There can be no question but that, if they made feeble decisions or failed to take commercially based decisions, they would soon come under a great deal of pressure.
  We may be asked to give up that accountability for the accountability of the harbour board of directors to their shareholders, many of whom would be anonymous, with no knowledge of or interest in the business of the harbour.

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  We would be asked to give up a real accountability for an arrangement which notionally provides more accountability but in practice provides far less.
  The Government's proposals recognise the need to seek profitability, but fail to recognise the need to take into account community interest. Compulsory privatisation of the ports would fail to provide for the community interest. The Secretary of State did not address the fact that many ports take into account the interest of the community, which is the way in for imported goods and the way out for exported goods. I have already mentioned the fish processing factory built in my constituency. The harbour trust was very much involved in setting it up. It brought together the expertise in the harbour—the fish processors and the fishermen of the community. It bonded that together and provided a valuable service and employment within the community.
  If we had a company solely engaged in seeking profit, many activities which benefit the community as a whole would be lost. The trust is a valuable asset to a local community which is forced to capitalise on every possible asset. Its privatisation would be a great loss to that community. That is why we do not wish to see compulsion. I hope that the Government will take such considerations into account if it crossed their mind to implement the clause which would force unwilling harbour trustees down a road which they did not wish to travel. As several hon. Members have said, what is true of Lerwick harbour trust is also true of harbour trusts in many other parts of the country.
  I note from the financial memorandum that the Government expect to raise between £30 million and £50 million from the levy in the first two years after the Bill becomes an Act. Will corporation tax be applied to any transfer of assets under the Bill which could be classed as a capital gain? That would undoubtedly lead to an increase in the 50 per cent. net proceeds of sale.
  We have heard various reasons why the figure of 50 per cent. was chosen. The Secretary of State said the levy would be 50 per cent. of the proceeds of sale, whereas, under the Finance Act 1990, it could be up to 50 per cent. of market value. One of the consequences of the Finance Act distinction was that up to 3 per cent. of the total proceeds could be discounted if shares were sold to employees below value. Do I understand that there is no reference to that in this Bill and nothing in it to lessen the Government's commitment to encouraging employee participation, albeit that even 3 per cent. appeared rather limited?
  Why this levy? In previous debates, the Secretary of State told us that there had already been pay-outs in terms of Government grants. In previous debates, my hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) challenged the Minister and asked what proportion of Government grant gave rise to a 50 per cent. levy. The Minister was unable to answer, and moved away from that ground. We are now told that it is to disallow unfair competition between different ports, and if there is a windfall profit, it must be taxed.
  I wish I could hear what Tory Members would say if a Labour Government introduced a tax on profits at 50 per cent. to achieve social justice between competing parties. No doubt they would see that as rampaging socialism.
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  Why should the Treasury have its snout in the trough just because some extra money is going round? The hon. Member for Dover seemed to accept that that was quite reasonable, but then said that the sum involved was inconsequential. It may be inconsequential to the Treasury, but it is consequential to the local communities from where it comes.
  Why must the money go to the Treasury? Why can it not go to some local common good fund of the local authorities for investment in infrastructure related to the port? If we are to have successful port developments, they will undoubtedly require better services, including roads. Local authorities will come under pressure to provide those services. If they can get a nest egg or some windfall profit to help with that investment, surely it would be a better use of the funds than for the funds to go back into the coffers of the Treasury.
  The final part of the Bill relates to lights and navigational aids. It is clear where this move has come from. Many hon. Members on both sides have opposed the ever-increasing pressure on increasing lights dues. No doubt an opportunity has been seized to reduce lights dues by removing some of the responsibility to harbour authorities in the hope that different harbour authorities will be competitive and will not try to pass on the full additional costs to the shippers, and that some saving will be made to the shipping companies.
  Again we are faced with further duties being imposed on local authorities and harbour authorities without necessarily the revenue or the income with which they can carry these out, unless they pass the costs on with higher harbour charges. Will the Minister consider the possible unfair competition between different ports? A port such as Peterhead needs few navigational aids, but ports along a long length of river, such as the Forth or the Clyde, will inevitably need far more navigational aids. As a result, they may well be at a disadvantage. Those ports will have to pick up a far greater level of responsibility than those where there will be few navigational aids.
  I am also aware that many of the navigational aids on the Yell Sound for Shetland and the Pentland Firth for Orkney which are within the respective councils' harbour areas are not necessarily navigational aids for shipping using the port and harbour facilities. They are general aids for through traffic. Clause 26(1)(b) may well cover that point, and navigational aids for through shipping may not become the responsibility of the local harbour authority. I suspect that that is covered, but confirmation would be welcomed. Otherwise, the harbour authorities could face a considerable bill as years go on, particularly in the years after the revenue from oil developments declines.
  The enabling provisions of the Bill are welcome. They will facilitate the procedures for ports that wish to take advantage of this. The provisions which compel ports are not in the interests of the communities served by the ports, and for that reason my hon. Friends and I will vote against the Bill.
  7.44 pm
  Mr. Barry Field: May I put your mind at rest, Madam Deputy Speaker, by informing you that the white confetti falling past your Chair is a late attempt by Hansard to give you a white Christmas?
  Madam Deputy Speaker: I have had confetti thrown at me in a former capacity as a bridesmaid, but never, alas, as a bride.
  Mr. Field: I am sad to hear that, Madam Deputy Speaker, gazing, as I do, on your delightful form when you occupy that Chair.
  I am disappointed that the hon. Member for Kingston upon Hull, East (Mr. Prescott) is not in his place. Anybody who heard his speech could not help but be reminded of prehistory. There is talk on the Isle of Wight of building a dinosaur museum, and I was rather hoping that I might be able to nominate him for inclusion.
  The hon. Gentleman made two specific points which should be answered. First, he said that the abolition of the dock labour scheme was an attack on workers' rights, and that it led to the depression of their wages. The House will recall that I mentioned the dock workers in Southampton who have said publicly that they are happy with the abolition and that they have gained considerably financially.
  It is on the record of the House that the Transport and General Workers Union did not oppose the privatisation of the trust ports. I am delighted to see the Parliamentary Under-Secretary of State for Scotland, the hon. Member for Eastwood (Mr. Stewart) in his place because, during debates on the Finance Bill, he talked about this 50 per cent. levy. He also played a part in piloting the Clyde Port Authority Bill through the House. I think I am right in saying—I am sure that he will put me right if I am wrong—that the Scottish TGWU did not object to the Bill, nor did the local authority, which is Labour-controlled. Remarkably, that great den of prehistory, the Labour party, objected to it. That shows how adrift it is in continuing to speak against this legislation.
  Secondly, when the hon. Gentleman attacked my dear friend Nicholas Finney, it enabled me to conclude that he was two sandwiches short of a picnic. Mr. Finney has been a marvellous advocate of the British ports industry. He has done much to further its competitiveness. If his hand is behind the Bill, it will definitely be better as a result.
  The hon. Gentleman answered a query that I had. The other day the, Waterfront Partnership conference to discuss the British ports industry was attended by the French. The French Government are taking a serious interest in what is happening in this country because they are concerned about their dock labour scheme and the rundown and dilapidation of their docks. They are looking to the example set by Great Britain and the Conservative Government in this legislation which is beginning to transform our entire ports industry. I hope that the Waterfront Partnership will advise the French Government when they come to privatise their ports industry. I should point out that France has a socialist Government. That shows, yet again, what a remarkable pace-setting piece of legislation this is.
  The delegates at the conference were not confined to France. They came from Spain, Italy, Portugal, Estonia, Russia, Australia, Finland and Sweden—all to hear what marvellous work we are doing. I had thought that they all came to hear my right hon. and learned Friend the Secretary of State give a most excellent speech in the remarkable manner with which he delivered an extraordinary tour de force to the General Council of British Shipping at its centenary dinner. That certainly earned him the admiration of all his Conservative
  722
  colleagues there. Thanks to the hon. Member for Kingston upon Hull, East we now know that none of that was true. Apparently everyone came to see the "infamous" Nicholas Finney.
  I should declare an interest in the Bill. I am a member of the Company of Watermen and Lightermen. It took two Acts of Parliament to subdue that company—it ignored the first—because it was so unruly. That company is based on the Thames.
  Tonight is a remarkable opportunity for a humble Back Bencher who had a part in drafting the Bill. In the Finance Bill Committee, I suggested to the Treasury that there should be a clawback on property redevelopment within 10 years of privatisation of the ports. That is the normal condition in commercial transactions. The device is often used if the land sold has property redevelopment potential. If such an arrangement had been used in the past, it would have saved the Government from a number of difficulties such as those connected with the Royal Ordnance sale and Rover. I suggested that arrangement because I believed that the 50 per cent. levy that the Treasury was seeking on the equity of the trust ports on privatisation arose from its concern about cashing in on the property assets.
  At the time I did not realise that we would shortly have a Scottish Secretary of State for Transport—the Scots have a well-known interest in all finance. The Bill contains two 50 per cent. clawbacks—one for the property development potential and one which was sought by the Treasury. I agree with hon. Friends who say that we do not expect the Government to have their cake and eat it. I a m anxious that the Treasury should continue to push for the clause that gives it a 50 per cent. share of the equity, or the proceeds, on privatisation.
  I share the concern expressed by my hon. Friend the Member for Dover (Mr. Shaw) at the amount of money demanded by the Crown Estate Commissioners. The solution is available to all hon. Members who share that concern—they can apply for membership of the House of Commons yacht club, which is an all-party organisation. I am the secretary of that club, and this Wednesday we are having a meeting to discuss the concern felt among harbour authorities about the demands placed upon them by the Crown Estate Commissioners.
  The hon. Member for Kingston upon Hull, East spoke of the restraints on the owners of trust ports. He was concerned that those owners would be unshackled as a result of the Bill. The best equivalent example that I can cite to the hon. Gentleman which should answer his concern is the Building Societies Act 1986. Before that Act building societies were required to perform in a particular way. They could invest only in gilt-edged securities and they had to keep a certain level of reserves in liquid assets. After that Act, however, a tremendous number of assets were freed up. Building societies now offer cash machines, cash cards and a network of facilities never available before. The trust ports will experience similar freedom.
  The Bill will enable the trust ports to move from the treacle of trust ownership to the free-capital market. It will ensure that those ports' assets are made to work harder and that existing and future investments will have to be justified. The trust ports handle about half British overseas trade. In 1989 they imported and exported 480 million tonnes of goods worth £162 billion. Each trust port has its own Act of Parliament and is run by a stultifying mixture of executive officers and Government appointees which stems from the old tradition of public involvement in port

  723
  facilities. The Government began to dismantle such involvement with the privatisation of the British Rail Sealink harbours and Associated British Ports and, subsequently, the abolition of the dock labour scheme. Those changes have contributed to a renaissance in our port industry.
  The success of the Government's policy can best be demonstrated by the fact that, before the abolition of the dock labour scheme, Associated British Ports employed 1,700 dockers. Today it employs just 30, while it has seen a 10 per cent. increase in traffic.
  As the House knows, I chaired the Tees and Hartlepool Port Authority Bill. I asked the Library to compare the tonnage and traffic performance of Associated British Ports post-privatisation with that of the trust ports. In every case, Associated British Ports had out-performed the trust ports since privatisation. That is yet another reason for the Bill.
  The hon. Member for Orkney and Shetland (Mr. Wallace) spoke about buoyage and suggested that he knew where the provisions relating to that had originated. I can tell the House exactly the origin of those proposals—I suggested them to the Department of Transport and Nicholas Finney. I have pursued that cause for many years.
  If we had implemented such a measure when we privatised Associated British Ports considerable benefit would have accrued to the taxpayer. In the Solent, for example, we would have pushed out the harbour limits from the Needles to Nab tower. If we had had such foresight that change would have removed the cost of buoyage from the taxpayer or from Trinity House. The cost of that buoyage and the light dues would have been transferred to the owners of Associated British Ports. However, Trinity House is still responsible for the buoyage. It is also worth noting that, remarkably, in the midst of the Gulf conflict, the Admiralty still lays some of the buoys in the Solent. One may ask why on earth the Admiralty is involved in such action in 1991. The buoys in the Solent are there to aid navigation, but they are principally used as yacht racing marks.
  Trinity House has responsibility for buoyage and it must deal with the anomaly posed by the Port of London authority—perhaps the Minister is aware of similar anomalies in the Northern Lighthouse Board. The PLA has had its navigation marks in the Thames, free of charge, but at a cost to the rest of us, since it was granted a charter from Henry VIII. It is iniquitous that the rest of us should pay for that buoyage and the light dues when they are provided free for the PLA on the Thames, despite the fact that the PLA is an asset-rich organisation. I am delighted that that matter has been addressed in the Bill.
  There is one singular omission from the Bill—it makes no mention of the port of Sharpness in the constituency of my hon. Friend the Member for Stroud (Mr. Knapman). I have my hon. Friend's permission to mention his constituency interest tonight.
  I have a particular interest in the port of Sharpness because it is owned by the British Waterways Board. Such ownership is an anomaly. I take that interest because someone regularly sends me "Inland Water Transport News" which is published each month. That someone has decided that, one day, the Solent will be made into a canal.
  724
  One day Sharpness may want to be privatised, and it may get into the £5 million bracket. We should not allow the Bill to proceed without clearing up the anomaly of Sharpness, the only port owned by the British Waterways Board.
  My hon. Friend the Member for Stroud would be here tonight were he not Parliamentary Private Secretary to one of our ministerial colleagues at the Ministry of Defence. Even now, my hon. Friend is playing an active part, as we would wish, in assisting matters relating to the Gulf war.
  The Bill is silent about pilotage exemption certificates. The Minister will know that with the help of the General Council of British Shipping I took on the issue of the exploitation by Portsmouth harbour, a municipal port, of such certificates. The legislation never intended them to be revenue-producing. The Port of London authority is also abusing the legislation. When a ship master has completed his six voyages which allow him to reapply for a pilotage exemption certificate, and his seventh voyage takes him a mere 100 yards further upriver than his previous six voyages, he will not be allowed to guide the ship upriver without employing a pilot. That is clearly contrary to the legislation, which was intended to liberalise. Some port authorities are using the legislation to raise revenue, although it was intended to free the movement of ships in our ports and rivers and allow them not to employ pilots if they regularly call at certain ports.
  Mr. Eddie Loyden: Conservative Members seem to disregard the fact that pilotage is a safeguard for ships, which require the expertise of pilots with local knowledge. Why are Conservative Members always trying to remove these safety standards? We have them in every industry and they contribute to the safety of those who work there; and they are in the general interests of the ports.
  Mr. Field: Because the people of the Isle of Wight have been going back and forth to Portsmouth harbour since time immemorial. Portsmouth never charged for pilotage for the docking of ferries from the Isle of Wight until the introduction of this legislation. Portsmouth harbour authorities even tried to charge for the supply of a pilotage exemption certificate for the Gosport ferry. Does the hon. Gentleman really suggest that the Mersey ferry should be charged every time it crosses the Mersey? Of course it should not, and that is the sort of nonsense that I am talking about.
  To return to navigation lights, I hope that officials in the Department will carefully examine any schemes that emerge to ensure that nearby headlands are included and can be included under the legislation in locations where they are not the main points of navigation. I refer, for instance, to St. Catherine's, Start point and Portland bill. In that way we shall push out the harbour limits and get as much as possible out of control and regular maintenance by our light authorities. In that way, we can effectively reduce light dues and make our ports more competitive.
  The Government should take another look at the thorny issue of the 50 per cent. clawback. It is proper that the Government should safeguard themselves by means of the clawback on land development, but it is wrong of them to say that they do not own the trust ports and have no interest in them—so they must be the subject of private Bills—and then to say that they own 50 per cent. of them

  725
  and want some money for the taxpayers' purse. In this respect I do not want to align myself too much with my hon. Friend the Member for Great Yarmouth (Mr. Carttiss), whose predecessor deprived the Isle of Wight of a famous resident by signing his death warrant and sending King Charles up to London to be executed.
  Given the excellent work that Scottish Ministers have done to ensure that CalMac is, as far as possible, a profitable company, it is extraordinary, now that we have a well-known Scotsman as Secretary of State for Transport, that the Department of Transport still subsidises the Woolwich ferry and leaves it free of charge. That should not continue; it is time the Woolwich ferry was privatised.
  8.4 pm
  Mr. Frank Doran: My hon. Friend the Member for Aberdeen, North (Mr. Hughes) spoke at length about the situation at Aberdeen harbour, and I should like to develop some of his points. He made it clear that the harbour is efficient and profitable. In the last reported financial year, its turnover was just over £10 million, and profit after tax was in excesss of £2 million. In the past 10 years, £27 million has been invested in refurbishing the harbour, which has been virtually rebuilt, and all the money came from the board's own resources.
  The harbour is an efficient operation, serving the needs of local communities not only in my constituency and that of my hon. Friend the Member for Aberdeen, North but in the whole of north-east Scotland, including the constituency of the hon. Member for Orkney and Shetland (Mr. Wallace). The harbour is a vital part of the community's infrastructure.
  The views of the harbour board are therefore relevant to this debate. We have heard a great deal from Conservative Ministers about the need for an enterprise culture and to open up harbours and ports to market forces. Such forces already apply in Aberdeen, but the board, which mainly comprises representatives of the business community and users of the port, has made a strong plea to the Government and to me that it be allowed to remain as a trust.
  I have received a letter from the chief executive of the harbour board; it is strong stuff, and it says more than I can about the position of the harbour and how important it is that it should retain the flexibility with which its present status provides it. The letter is dated 24 January 1991 and signed by R. B. Braithwaite, general manager of Aberdeen harbour and chief executive of the board:
  "My board have carefully considered the subject of privatisation and concluded that there are no benefits to be gained for Aberdeen harbour and there are significant dangers for some port users. Taking the points in the press release :"—
  a press release from the Department of Transport dated 17 January 1991, in which the Secretary of State announced the publication of this Bill—
  "'enhance the prospects of port development by giving them access to share capital.' We have, for a number of years, funded all port development from our own revenue. Some £27 million has been spent in the last decade on port maintenance and development. We envisage our future positive cash flow, together with our strong cash reserves and present borrowing powers, quite adequate to fund planned future development (currently estimated, as indicated in the Chairman's statement to the 1989 Annual Accounts at £37 million over the next 10 years). We have, therefore, no need of share capital."
  726
  The next purpose raised by the Secretary of State in the press release was
  "to stimulate the development of surplus land. Most trust ports are restricted to development for port purposes.' As you will be aware, we have no surplus land. All our land is of necessity heavily utilised in port operations to handle our increasing traffic levels."
  The third purpose is to
  "'enable port undertakings to diversify their businesses.' We at present have powers within our constitution to diversify into port related businesses. The Board, in running such an active regional port, has no wish or need to diversify into businesses not related to the port. Should we, however, wish to do so in the future we could promote a Harbour Revision Order to give us greater powers (as has been obtained by other ports such as Blyth)."
  The Secretary of State's next purpose is
  "to bring about clearer accountability and greater emphasis on profitability."
  The general manager's letter continues:
  "As was stated in my Chairman's letter to Lord Brabazon, the Board is accountable both in law and through its membership. The purpose of the port is primarily to serve all port users, and, therefore the commerce, industry and people of our region. It was for this purpose that the trust status, with its legal accountability, was created, and it is every bit as relevant today in a strong regional port such as Aberdeen. In addition, Aberdeen operates in a competitive market environment and has to respond to customers' requirements. In this respect, we are accountable to our customers in the same way as a private company. An accountability that has more real meaning in the operation of a business than accountability to shareholders. The fallacy of the shareholder accountability argument has often been demonstrated, for example, by the recent Guinness and Ferranti situations.
  With regard to profit, we do place emphasis on running the harbour on a businesslike"—
  Madam Deputy Speaker: Order. I shall be grateful if the hon. Member will paraphrase from the letter, rather than quote from it at length.
  Mr. Doran: With respect, Madam Deputy Speaker, I am drawing to the end of the letter, and I did emphasise how important I thought it was to put it fully on the record. It makes its points very emphatically, and I would like them entered into the record rather than attempt to paraphrase them in my own words.
  Madam Deputy Speaker: I hope that the hon. Member is reaching the end of the letter. In general, the House is not very tolerant of long quotes, and right hon. and hon. Members are expected to paraphrase, and not weary the House in this way. The hon. Gentleman may think that it is important to quote extensively from the letter, which I am sure is relevant, although it does not improve the quality of debate. I trust that he will soon reach its conclusion.
  Mr. Doran: I will, Madam Deputy Speaker—and I may add that it will make for a shorter speech from me.
  Madam Deputy Speaker: That is very welcome news.
  Mr. Doran: The letter continues:
  "With regard to profit, we do place emphasis on running the harbour on a businesslike and commercial basis. We have built one of the most modern and efficient ports of our size in Europe which is also profitable. You will see from our 1989 accounts that we made a profit after tax of over £2 million on our £10 million turnover, and these figures will be exceeded for 1990."
  The general manager adds that the port gives high priority to the service provided to its users—a much higher priority

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  than profit, whereas a private company would place much greater emphasis on that aspect. The harbour's substantial profits are all ploughed back into the port.
  The board's decision to reject the privatisation proposal was unanimous, despite the fact that its membership comprises mainly local business people and port users. Therefore, the general manager's letter accurately reflects the board's own view.
  Aberdeen port sees itself as responsive to local needs. Over the past 10 years, it has needed to react dramatically to the increase in harbour use brought about by the growth in the oil business and changing habits in the fishing industry. It has coped well, and it has no wish to privatise. I admit that the harbour may welcome the flexibility offered by the Bill, but the fear that it will be compelled to privatise is increased by Government statements.
  The points made by the harbour's general manager in the letter from which I have just quoted were presented also in his letter to the Secretary of State in November. He received a reply from Lord Brabazon, Minister for Aviation and Shipping, dated 22 November 1990. The general manager made it clear that there was no wish for privatisation, set out the arguments against it, and asked the Government to justify their use of the reserve power.
  Lord Brabazon replied:
  "It would therefore be a matter of concern if the number of ports coming forward quickly with privatisation schemes was very small and if no further schemes seemed to be in prospect."
  The Government are already anticipating failure, as Lord Brabazon's letter makes clear.
  Even though I object to the philosophy behind privatisation, I accept that the Government may want to provide extra flexibility in the form of another option, but my harbour authority and I find repugnant the element of compulsion. Lord Brabazon's reaction was amplified in a speech made on 23 January by the Secretary of State, when he addressed the Waterfront Partnership conference:
  "The very differing circumstances of those ports even above the threshold are recognised. A decision to use the reserve power will only be taken after full consideration with any individual port; and the commitment to consult is written into the Bill."
  The Secretary of State repeated that assurance today, and made much of the requirement to consult that is written into the Bill.
  Like many other hon. Members, I am currently in the midst of a consultation process on whether my local hospital should apply for trust status under the new health service legislation. The hospital's unit manager has already made it clear every time that he has been asked to confirm his position that, whatever may be the outcome of the consultations, he is determined to make an application for trust status anyway. The harbour board is very aware of the attitude that is being adopted in relation to that process of consultation, which it believes is encouraged by the Scottish Office. Therefore, there is no great expectation that the process of consultation promised by the Bill will be any fairer.
  That suspicion is given credence by remarks made by the Minister for Shipping and Public Transport at a press conference on 17 January when, referring to the reserve power, he said:
  "The Government would be disappointed if only one or two ports came forward quickly to privatise. The Government would used the reserve powers for the 14 trust ports"—
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  including Aberdeen—
  "unless there were good reasons for not doing so."
  No suggestion there of consultation, or of anything other than compulsion.
  Protection needs to be provided for harbours such as Aberdeen, which has proved successful, has met changing needs, and is properly serving its local community. When the Secretary of State was pressed today on public interest, he seemed to accord it a much lower priority—as does the Bill. When I pressed him on his reference to the anomaly of trust status, he responded with a comment about modern business needs. The Secretary of State ignores the public responsibilities that are placed on trusts, and which will not easily be passed into private hands.
  Historically, our harbours and ports were community facilities. In Scotland, they were usually controlled by local authorities or by direct grant to commissioners under the Crown. Later, they were controlled by private orders that clearly set out the duties and responsibilities of the Commissioners, trusts or local authorities responsible for them. Those bodies were charged with protecting the public interest, regulating the harbours, and developing their facilities to the benefit of the local community. Aberdeen has done all three very well.
  After close scrutiny of the Bill, the Aberdeen harbour board is concerned about the extent of public protection that will remain under privatisation. I confess to not having studied the Bill line by line, but my brief examination of it gives rise to several concerns. Clause 2(2), which concerns the transfer of undertakings, states:
  "(b) all functions conferred or imposed on the authority by any statutory provision of local application; are transferred to … the successor company."
  There is no mention there of whether the new companies' first priority will be to serve the interests of the public or its shareholders. Neither is that aspect covered by the supplementary provisions with respect to tranfers that are specified in schedule 1. The Government should clarify what priority is to be given to public interests.
  Earlier, mention was made of pilotage. In Aberdeen, harbour pilotage is compulsory for safety reasons. However, it is expensive, and may be seen as a disincentive to possible customers.
  There are some unprofitable operations in Aberdeen harbour. We have one of the largest fish markets in Britain and it is vital to the local community. In my constituency, about 3,500 jobs depend upon the import and sale of fish at the harbour. If a profit-orientated company came along and decided that the market was no longer profitable and either increased charges, which because of the profit margins in the industry at the moment might put a lot of people out of business, or scared fishing boats away to other ports—there has been a lot of that recently, as there is a lot of competition in that area of the industry—those 3,500 jobs would be put at risk.
  What obligations will be imposed upon the private company so that that wider issue would be considered in Aberdeen? The fishing industry is crucial for the local community, and no less important than all the other activities of the harbour, and it must be preserved; but it does not make a profit. Where will that come in the scale of priorities?
  I do not see anything in the Bill which provides for the insolvency of any of the companies. I know that Aberdeen harbour has gone through hard times and that other harbours suffer from time to time. What will happen, and

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  who will protect the public interest? If a company goes bust, where are the reserve powers? There is nothing in the Bill to deal with that. Will the Secretary of State keep responsibility to operate the harbour to ensure that it operates, or impose some other body which can operate it? Will he recreate the trust? In that situation, what would his reserve powers be? While dealing with the principle of the Bill, the Minister needs to explain those issues. Genuine concerns exist on this side of the House and they have been well expressed by all Opposition Members who have spoken.
  I am speaking on behalf of local interests, but I know that my concerns can be applied to virtually every harbour in the country, and I know that Aberdeen harbour is not unique in its opposition to reserve powers. Of the 14 harbours which may be targeted and which come within the terms of the Bill, as I understand it at least nine oppose the measure. These are serious issues, which demand a response from the Government.
  8.21 pm
  Mr. Patrick Nicholls: I fully support the Bill. It seems to me to be the logical next step, following on from the abolition of the dock labour scheme, which I was involved in when I was at the Department of Employment. The scenarios put forward in opposition to the scheme at that time proved wholly ill founded, and I have no doubt that some of the fears and the comments that we have heard tonight about what will happen in the port industry if this measure goes ahead will prove equally ill founded.
  I shall bear in mind your strictures, Madam Deputy Speaker, about time and the fact that other hon. Members will wish to speak. Therefore, I intend to confine my remarks to certain matters of detail which concern me.
  The explanatory notes on the Bill state that clause 16
  "makes provision for a levy on gains accruing to a successor company as a result of certain disposals of any land or interest in land that is transferred … The levy is charged on disposals made within a period of 10 years after the date of transfer and is charged at the rate (subject to change by order) of 50 per cent. of the amount of the gain."
  The details of the Bill provide for clawback to be levied on "deemed disposals" where the value has been enhanced—for example, where planning permission has been granted for change of use, but where no cash proceeds have changed hands. Obviously, the Government hope that trust ports will come forward with privatisation schemes without delay, but I have no doubt that, if they want that to happen, the Government will have to accept some narrowing of the incidence of clawback in at least four basic respects.
  First, clawback should apply only on cash disposals of land which yield a gain. Secondly, clawback should be limited to genuine windfalls. Thirdly, the base cost for clawback must be clarified. Finally, the time limit for the application of the clawback should be set at five years, at the most, and certainly not at 10 years, which is provided for in the Bill.
  Let me clarify those points. Clawback cannot be made to apply to gains arising on "deemed disposals" without risking serious policy reverses, and especially by frustrating economic regeneration. Worse still, if there are distressed sales in a bad market simply to raise money to pay the levy, it could cripple the successor company. The irony is that we have been down that path before.
  Let us think back to Labour's development land tax experiment in the 1970s, which confirmed the total
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  impossibility of collecting a betterment levy when no cash had been realised. That point was made on Third Reading of the Development Land Tax Bill in 1976. My right hon. Friend the Member for Hertfordshire, North (Mr. Stewart), who subsequently had a distinguished career in Government, especially in the Treasury, pointed out in that debate to our hon. Friend the Member for Hove (Mr.. Sainsbury).
  "My hon. Friend … referred to the structure of this tax and the fact that, because of the deemed disposal, it would fall to be paid, in many cases, before the funds were received either, in the case of a capital investment, before the value was realised or, in the case of a trading operation before the profits accrued."
  He concluded, and I commend these words to my hon. Friend the Minister who will be winding up the debate:
  "We believe that this is a fundamental weakness in the tax itself."—[Official Report, 12 July 1976; Vol. 915, c. 215.]
  My right hon. Friend was right on that occasion, and the same is true now. That analogy is on all fours with the situation that we are now considering. It seems to me that it would be wholly wrong to try to revive today the concept of "deemed disposals". That should have no part whatsoever in the policies being advocated by the Government side of the House.
  On windfall profits, it seems to me absolutely imperative to restrict clawback to cash disposals which result from windfall profits obtained by changes in planning use, which were not contemplated—that is the key point—at the time of the sale of the successor company. Exemptions should be permitted on all trading operations within the successor companies.
  If one obtains a profit through normal trading activity—not involving a disposal of land to realise cash—it should not be regarded as a suitable case for clawback. The base cost for calculating clawback should be the full market value of the land in question at the date of privatisation.
  I fully accept—on this at least, I am completely ad idem with my hon. Friend the Minister—that the Government have to act in the interests of the taxpayers, and that, if at all possible, the taxpayers should realise that the Government are acting in their interests. However, if we are to make any sense of this at all, we have to start with a recognition that, by proposing competitive tendering as the basis for selling a trust port, the Government are already ensuring that the price paid for a port reflects the full market value of its assets. At the moment, I do not see that reflected in the Bill. The potential development value of a port's surplus land will be taken into account by bidders, whether or not planning permission has been applied for.
  The pathfinder prospectus for electricity privatisation envisaged original cost as the base value of the calculation of clawback in certain cases of land disposal or betterment. It follows from what I have said that that base cannot be applicable in the case of trust ports by virtue of the interposition of the levy on proceeds which—although I would not expect my hon. and right hon. Friends to concede it—is a particularly cunning device of Government, because in many cases it will produce a 100 per cent. levy, rather than a 50 per cent. levy.
  If time permitted, I could show how that would come to pass. Suffice it to say for the purpose of my argument this evening that the only reasonable basis for trust ports is full market value on privatisation day. The reason for

  731
  that is that it is only by choosing that point that the Government will avoid what is effectively piling tax upon tax.
  Let me say in passing, although it is an extremely important point, that a great deal of care will have to be taken to ensure that there is no overlap between clawback tax and capital gains tax. This is an argument which should appeal to my hon. and right hon. Friends on the Front Bench, because using the basis of original cost will only serve to build large amounts of potential tax liability into the original flotation. That will have a correspondingly depressing effect on the bids submitted by potential buyers and hence on the point of sale proceeds.
  I accept the Government's obvious concern—concern which has been expressed in differing ways by hon. Members on both sides of the House this evening—that it is conceivable that a port might attract the attention of an asset stripper, or someone who does not intend to carry on business there in the traditional way of the port. It seems to me, however, that there is a limit to how far the Bill can go to protect against that possibility without doing serious damage to its own intentions. Let me put it simply: all potential clawback devalues the port concerned at the point of privatisation, with all the attendant effects on the Government's possible proceeds.
  Obviously I do not wish to suggest that clawback has no place in such arrangements. Surely, however, it can play a part only in the event of a complete windfall: when a gain on land has accrued to a port in a way that no one could reasonably foresee at the time of privatisation, and—this is an important "and"—when that gain has been realised by sale. As I have said, the question of deemed disposals should have no place in our deliberations.
  Finally, let me deal with the issue of the time scale. Even a five-year period for clawback will bear heavily on management and employee-buyout buyers, who will be obliged to exploit land potential quickly because of the high gearing that they will probably have incurred in mounting a bid in the first place. Clawback should be restricted to a maximum of five years from the date of privatisation; a 10-year post-privatisation period would certainly not be appropriate.
  Mr. McLoughlin: Two years.
  Mr. Nicholls: My hon. Friend says, "Two years," on the basis that politics may be the art of the possible; however well briefed he may be, I do not think that he will be able to argue about a five-year maximum when he winds up the debate, and I can imagine a case being made for two years. There are precedents for the approach that I recommend: I am thinking of, for instance, the Scottish Development Agency.
  Those are all detailed points; had time allowed, I would have expanded on them. I do not, of course, expect detailed answers tonight, but they are all obvious points of concern to anyone with a knowledge of the ports industry. My right hon. and hon. Friends must have already reflected on them, at least in outline. Although I do not expect my hon. Friend the Minister to go into details on this occasion, I hope that I will hear something about the Government's provisional thinking, rather than another recitation of the time-honoured formula—recited by myself on occasion—that runs, "All these points are
  732
  extremely interesting, and will be borne in mind and considered in due course." Mine are all obvious points, but they are none the worse for that. As I have said, I hope that my hon. Friend will at least share his provisional thinking with me.
  I am, of course, aware that the detailed operation for clawback will have to be set out in a statutory instrument following the enactment of principal legislation. Let me emphasise, however, that my proposals cannot be seen as peripheral: they go to the heart of the Bill, and I feel that it is no exaggeration to say that, while the Bill could still be the success that it deserves to be if they are not adopted, if we get this wrong we will entirely defeat its purposes. It would be a grim irony if—because of a failure to pay attention to points that the Government must, to some extent, have considered already—we managed, in dealing with this excellent measure, to snatch defeat from the jaws of victory.
  8.33 pm
  Mr. Tony Worthington: I am sorry that I could not be here earlier to hear the Secretary of State explain the Bill; I hope that he did not deal with all the points that I intend to make.
  I oppose the Bill because it is so narrow. There is much more to a port than the commercial interest—the profit-and-loss account. The Clyde port authority, for instance, is not concerned merely with the city of Glasgow; its responsibility extends down into Ayrshire and across to the island of Arran, and takes in all the surrounding sea lochs, too. Obviously, there will be conflicts between commercial, leisure and land interests.
  Mr. Ieuan Wyn Jones: We in Wales have similar concerns about the commercial aspects of privatisation. Often, the sort of action that is favoured by Conservative Members is against the interests of the local community, whose interest in the running of the ports should come first.
  Mr. Worthington: That should certainly be taken into account. I do not want to return to the issues raised during the debates on the Clyde Port Authority Bill, but, for example, the port of Glasgow is a highly artificial creation: it exists only because of the persistent dredging in the area. A small private company might decide that, in commercial terms, it was not worth continuing to dredge the port: if its interest was confined to the land on the banks, it would be happy to throw away the river that means so much to local people.
  Major philosophical issues lie behind the Bill; I wish, however, to dwell on one or two points. This will earn me no favours from the Opposition Front Bench, but I consider this Bill superior in many respects to private Bills such as the Clyde Port Authority Bill and the Tees and Hartlepool Port Authority Bill. Why should the safeguards in this Bill be denied to the Clyde? The Government seem to have listened to Opposition criticism of the Clyde and Tees and Hartlepool authorities, and written safeguards into this Bill as a result; they are not in those private Bills, however.
  Under clause 5, the disposal will be supervised by the Government. I do not like the present Government, but I feel that, if what I regard as a public asset belonging to the community is to be disposed of, it should be done in a way that includes some parliamentary safeguard. The present

  733
  members of the Clyde port authority, who established the way in which the authority was to be privatised, were set up as the key figures in the launching of the successor company. Clearly, such an arrangement contains the potential for a considerable conflict of interests.
  An obvious example is the valuation of assets. If I am the seller of the assets, it should be in my interest to obtain the maximum possible price; if I am the buyer, it is in my interest to pay the lowest possible price. If, however, I am both buyer and seller—as is happening with Clyde port authority—it will lead to an ambiguity of interests that should not arise in any Bill that is dealt with in the House of Commons. I am glad, therefore, that this Bill provides for a supervisory role for the Minister—who, in the case of a Scottish Bill, would be the Secretary of State for Scotland. That is another improvement: for the first time, responsibility for a Scottish port will be transferred from the rather distant care of the Department of Transport to the Scottish Office. If I am wrong, I am sure that the Minister will deal with the point.
  Mr. McLoughlin: The Secretary of State for Transport will decide these matters. If it should be a fisheries question, it will be decided by the Minister of Agriculture, Fisheries and Food.
  Mr. Worthington: I am grateful for that clarification. My point, however, is that a Minister of the Crown can examine the structure of a company set up by a port authority and say that it is or is not in order. No safeguard whatsoever is provided in the Clyde Port Authority Bill. The port authority members will decide who obtains the shares. They will decide how the company is to be privatised. It is completely wrong that no safeguard should be included in the Clyde Port Authority Bill.
  As for clause 8, the schemes set up by the relevant port authority will lead to the submission of copies of the memorandum and articles of the company. The safeguards that are provided in this Bill are not to be found in the Clyde Port Authority Bill or in the Tees and Hartlepool Port Authority Bill. The people who were appointed by the Department of Transport and who happen now to be port authority members will set up a successor company in the way that they see fit.
  Neither I nor any other hon. Member nor any member of the public will be able to bid for shares in the company. Only the present members of the port authority can buy shares in the privatised company. That is not good enough. There may be a dispute as to whether the port authority belongs to the nation, but what is not in dispute is that the port authority does not belong to the port authority members. They should not be able to set up a company, for whatever reason, as they see fit without control being exercised over them by the public and by Parliament.
  I welcome clause 16, which refers to windfall profits. All hon. Members agree that people should be deterred by regulation from becoming members of the company if they have no commitment to the area or to the workers in that company. They should not be allowed to pick up a great deal of money simply because the assets were undervalued, thus leading to the market price greatly exceeding the previous valuation. I applaud the Government for introducing safeguards to prevent windfall profits from being made. Why is not a similar safeguard included in the Clyde Port Authority Bill? The Minister recognises that,
  734
  when ports are privatised, certain rules should be followed. If such a safeguard is good for all the other ports—London, Aberdeen, Great Yarmouth and so on—it should be good for the Clyde, too. Safeguards should be written into the Bill to cover the way in which a company is set up, and a similar provision should be written into the Bill to cover windfall profits.
  I hope that the Minister will say something about how the Clyde Port Authority Bill and this Bill will work in tandem. The Clyde Port Authority Bill is being considered in the other place. As the Government have such a large majority, it will eventually be passed. This Bill will be considered in this House and then in the other place and it, too, will eventually be passed. It is possible that this Bill will be passed first, but it is more likely that the Clyde Port Authority Bill will be passed first and will receive Royal Assent.
  This Bill lays down how a port authority is to be privatised. It says:
  "'Relevant port authority' means any body which is a harbour authority, other than one within subsection (4) below."
  It excludes any company having a share capital, a local authority, the British Waterways Board, Associated British Ports and the Port of London authority.
  The Bill lays down the means by which a port authority should be privatised. At that time, the Clyde port authority may not have been privatised. It may not by then have become a company with a share capital. Does that mean that the Clyde Port Authority Bill has no validity because this subsequent Bill lays down that this is the way in which a port authority should be privatised?
  8.46 pm
  Mr. Tim Janman: I am pleased to have caught your eye, Mr. Deputy Speaker, because you will know that the largest trust port in the United Kingdom is in my constituency. I refer to the very fine port of Tilbury. I give a warm welcome to the Bill. Its objective is to free all trust ports in Great Britain, including Tilbury, from the constraints that trust port status places upon them.
  Tilbury is the largest trust port in the country. Moreover, it is the finest port in the country. I am immensely proud to represent it and the many men and women who live in my constituency who work in it. Tilbury, with a turnover of £45 million a year, is trying to compete against Hamburg, Rotterdam, Antwerp and Felixstowe, but it is having to do so with one hand tied behind its back. An organisation that is not truly commercial has to try to compete with commercial organisations. It is hampered by the constraints of its trust port status.
  The hon. Member for Kingston upon Hull, East (Mr. Prescott) rightly said during his comments—the hon. Member for Middlesbrough (Mr. Bell) called it a peroration and I am not sure whether that was a compliment or an insult—that the crux of the debate should be about what is best for the ports industry in this country. It should be about the best way to make sure that all our ports use their resources most effectively to make sure that they are as profitable and productive as possible and to increase employment in the ports. It comes down, therefore, to whether we think that the best status for a port is to be in the public sector—whether through the national Government or a local authority—or to be a trust port or a plc.

  735
  If our ports are to be provided with a combination of maximum flexibility, through access to share and loan capital, and to have removed constraints that exist with trust port status, but are to maintain the initiative and ability to react quickly to the marketplace, which is not possible when anything is in public ownership, trust ports should be made plcs. That will be the most intelligent course and the best way forward for our ports industry. Then all our ports can plan to use their resources and to invest in the most forward-looking, flexible and intelligent way.
  My hon. Friend the Minister knows from his visit to Tilbury about a week ago that not only the management but many of the employees are keen and enthusiastic about a management-employee buy-out. They fear being taken over by an unknown quantity. Although I do not necessarily agree that their fears are well founded, they exist and it would be dishonest of me to pretend that they do not. I should like a management-employee buy-out of Tilbury and every docker to have a stake in the ownership and future of the port. I should like Tilbury dock to be given to the dockers. That has been the essence of the populist-capitalist philosophy that the Government have pursued for 11 years. I very much hope that that will be the eventual outcome for the port of Tilbury and its employees.
  If that occurs, it will enhance the already high motivation that has been apparent from docker up to chief executive since the abolition of the appalling dock labour scheme. It is important to say that Tilbury's main asset is its work force, whose structure, commitment and expertise have improved enormously since the abolition of the dock labour scheme. The management of the port has invested heavily in training and has made excellent industrial progress. As I said when I intervened in the speech of the hon. Member for Kingston upon Hull, East, productivity records are continually being broken. Before the abolition of the dock labour scheme, I would not have read in a local newspaper of new productivity records being set in Tilbury. Every month or so, I see such welcome publicity in my local newspaper.
  Tilbury is a major national trading asset. It will be enhanced if the objectives of the Bill, which I support and welcome, are met.
  But—I now come to the "but"—as the Bill stands, will those objectives be met? I agree with my hon. Friend the Member for Dover (Mr. Shaw) and my hon. Friend the Member for Teignbridge (Mr. Nicholls), who made an excellent speech, that several unnecessary and spurious obstacles in the Bill will slow and hamper its objective of plc-ising, if I may create a new "ising" term, trust ports in the United Kingdom.
  My first concern, as I hinted earlier, is why on earth there should be a two-year wait before the Secretary of State can use his reserve powers to force the reluctant management of some trust ports to remove themselves from their current moribund and static status into the exciting and challenging world of the marketplace, free from the constraints that they hide behind under trust port status. I agree that one cannot go from A to B overnight and that time must be available to work out how one will get from A to B, but one year would be a perfectly
  736
  reasonable period for the management of a trust port that genuinely wished to move to the status of a plc to get from A to B. Two years is twice as long as is necessary.
  My second worry is why the Bill limits the cut-off point at £5 million. My hon. Friend the Member for Great Yarmouth (Mr. Carttiss) agreed that the figure should be £1 million. In Committee, the Government should accept an amendment allowing an order-making power so that the figure can be reviewed with a view to reducing it to less than £1 million after the Bill has become law and in the light of experience. By reducing it to £1 million, another eight ports can be included immediately. I am pleased that, at the £5 million point, Belfast will have the opportunity of becoming a plc under separate legislation.
  My third worry is about the consultation aspects of clause 8. Either we want to privatise these ports or we do not. I hope that the Government will consider exactly what consultation and representation from the locality mean. If that means consultation on how changing the port from a trust to a plc is achieved, I am in favour of that—I am in favour of as many ideas and perspectives on how that can be achieved and brought into play as possible—but I would not want the Secretary of State to be taken off on a lot of irrelevant tangents that are put forward to frustrate the Bill's objectives. I am happy for consultation to remain in the Bill if it is consultation about how. I hope that it will be limited to how, and not extended, as it seems to be, to whether, the change in status from trust port to plc status takes place.
  My fourth concern about the Bill is the levy, about which we have heard much. I support what my hon. Friend the Member for Dover said. As my hon. Friend the Minister knows, the 50 per cent. levy does not apply to the port of Tilbury. Fifty per cent. of the proceeds of the sale of the port of Tilbury will go to the Port of London authority, which will pay off debts that it owes to the Government, and I welcome that.
  I am concerned that, for the other ports, this is simply the Treasury trying to get its sticky fingers on money that it should not have. The remarks of my hon. Friend the Member for Dover were interesting. One would not want to reduce the levy if it would mean—theory points to this, but it will not necessarily be borne out in practice—that the sale price would be higher than it would be otherwise, thereby discouraging management-employee bids. As I said earlier, my hon. Friend the Minister will know that I am keen on preference being given to management-employee buy-outs.
  Provided that lowering the levy does not contradict in practical terms or go against that objective, I would urge my hon. Friend the Minister to see whether the levy can be abolished or significantly reduced. As my hon. Friend the Member for Teignbridge said, in reality the 50 per cent. levy on sale price could mean that a 100 per cent. levy is put on market value, which simply is not on.
  My fifth concern about the Bill is the clawback procedure, which is quite startling. When my hon. Friend the Minister replies to the debate, will he clarify the definition of "gain"? Whatever the percentage of the clawback, it should be applied only to the quantum gain in the value of the land vis-a-vis its original value when the port was first bought by the new company. When the competitive bid is made for the port, the value of all the land in the geographical area covered by it will be included

  737
  in the price that the successful bidder makes for the port. It would be double counting to have clawback on the total value of land that is sold.
  It seems to me that one of the benefits of the legislation will be the release of surplus land at the larger ports, such as Tilbury—land which is currently being put to no use. Irrespective of how productive or efficient many of the larger ports are, and irrespective of how much more successfully they will be able to take on their competitors when they become plcs, the fact is that the industry has changed considerably since the second world war. With reducing numbers of people and the disappearance of outdated equipment, there is land that is genuinely surplus.
  Of course, the Bill must contain provisions to discourage the sort of land speculation to which my hon. Friend the Member for Teignbridge referred. We do not want to see whole ports being bought up and, two years later, turned into housing estates. If that should happen, the asset of a port would be lost. On the other hand, we do not want the new owners of ports to be prevented from selling land that is genuinely surplus and could be used for another purpose—whether industry or, in the south-east, much-needed housing. The Bill, as it stands, runs the risk of resulting in a long and unnecessary delay in having land sold and then put to productive use.
  Mr. Ian Bruce: Does my hon. Friend agree that there is a danger in having a time limit of 10 years? A new owner, five years after acquisition, might decide that some land was surplus and might decide to leave it for another five years in order to get full value. Would not that be a great disincentive to getting the land quickly into productive use?
  Mr. Janman: It certainly would. My hon. Friend has simply re-emphasised a point that I may have laboured. Of course, my hon. Friend the Member for Teignbridge has been tainted by service in the Government. He suggested that the clawback should apply after 10 years. I suggest that it should apply after two years, and that the level should be only 35 per cent.—a fairly good figure, as it is, I think, the current level of corporation tax—rather than 50 per cent.
  If the stagnant land at many of our ports—land which will continue to be surplus after the passage of the Bill —is to be brought into productive use, we must get the balance right. We must protect our ports. We must ensure that they do not cease to be ports as a result of land speculation. At the same time, we must not put up a barrier to incentive for new companies to get rid of surplus land that is never going to be needed for port activity.
  The Bill contains hurdles that serve the vested interests of those moribund managements that fear the freedoms and disciplines of the marketplace and the accountability to the shareholders that will come about once they become plcs. That is why I say that we must not have a £5 million limit. We must compel more of these ports to become plcs. We know that that will result in more effective use of these resources, from the point of view of both the port and the national interest. That is the whole reason behind the Bill. At present, while some of these moribund trust port managements fiddle, many of the ports remain under-utilised. Our objective must be to turn as many trust ports as possible into plcs as quickly as possible.
  738
  I support the Bill because, in my judgment, it will eventually benefit every member of the Tilbury work force. I want to see the port of Tilbury become the most successful, most dynamic and most diverse port in northern Europe. I am absolutely convinced that this legislation, for which I shall vote, will see that objective achieved.
  9.4 pm
  Mr. Ronnie Campbell: As the Member for the constituency of Blyth Valley, I shall speak about. the port of Blyth. It is a very old port. It was a submarine base during the war and was one of the largest exporters of coal during the 1930s, the 1940s and the 1950s. It is one of the 14 ports that have been mentioned, having a turnover of between £5·5 million and £6 million. That, of course, is unfortunate for the port itself. It has a work force of about 2,000, including those engaged in port-related occupations. The port authority has a vested interest in ensuring that what happens is in those people's interests. For the past 120 years, the port has received. £200,000 in Government grants, which says a lot for the 50 per cent. rip-off in the Bill. Governments have given little to Blyth.
  Last Friday evening, the local authority, the county authority, my hon. Friend the Member for Wansbeck (Mr. Thompson)—whose constituency borders the harbour— and I had a meeting with the harbour commission which runs Blyth port. We feared the Bill. The commission told us that it did not want the port privatised. Blyth is a fairly big port with many modern facilities. It has always looked forward, even when it lost the coal trade because of the closure of most of the mines in the area. It has a lot going for it. The harbour commissioners are not raging socialists. They are not like me, but I am the Member of Parliament for Blyth Valley and I take their advice. Some of the men and women on the commission have been running the port for a long time and have much more idea of how the port would run after privatisation than I have.
  Who will buy and take over the port? Much has been said about that. I was on the Committee on the Tees and Hartlepool Port Authority Bill. When asked whether the port authority would buy into other ports if the Bill became law, the chief executive said that it would certainly buy other ports on the coast. The harbour commissioners are afraid that that could happen and that Tees and Hartlepool plc would be able to buy into Blyth.
  Some people may say that Tees and Hartlepool plc would make a good job of Blyth. Blyth has two roll-on/roll-off facilities to deal with paper from Finland. The Tees and Hartlepool port authority is building a second roll-on/roll-off facility, so nothing would stop it closing the facility at Blyth and bringing the work to Tees or Hartlepool. The plc would take over Blyth and leave it desolate.
  Blyth has always made a small profit, but if it does not get sufficient turnover, it will die. It has a bill of £2 million a year for dredging because the harbour contains a lot of silt. The harbour commission has looked for and bought land. It is all very well saying, "Sell the land to anyone who comes along," but what will happen if the land is sold to a company like McDonalds, which sells buns and beefburgers, but someone else comes along and says, "I

  739
  want to build my factory next to the river"? Does the authority say, "Sorry, we have just sold the land to McDonalds"? What will happen to the land then?
  One has to plan harbours. Ports authorities have to keep land in reserve in case an industrialist knocks on their door and says, "I want a bit of land to build a factory for my exports or imports." Harbour planning does not involve selling land to whoever comes along and giving it to the highest bidder. Ports such as Blyth, which are on the fringes, are there waiting to be sold off and asset-stripped. That, at any rate, was the fear expressed to us on Friday night by the harbour commissioners—men who have spent their lives dealing with the harbour and who operate according to its traditions.
  If that happened, Blyth would stand to lose 2,000 jobs, and that would be a great loss. Not many years ago, just after the miners' strike, the pit went through the review procedures and was closed, with the loss of more than 1,000 jobs. The Government gave us nothing to replace those jobs. With the exception of a few new jobs at factories in the industrial complex at Camlington, those jobs have never come back to Blyth. I hope that there will be no asset-stripping but, if there is, more jobs could be lost to the Blyth area.
  The harbour commissioners told my hon. Friend the Member for Wansbeck and me that they feared compulsory privatisation because the port's turnover is at the £5 million mark. In respect of such ports, the Secretary of State should examine the consequences of privatisation and consider what has been achieved. If he did that with Blyth, he would not bother to privatise because things are going along very nicely, thank you.
  9.10 pm
  Mr. Michael Irvine: My constituency port—Ipswich—has prospered during the past decade. It has taken advantage of its geographical position and its generally good industrial relations to expand and develop. It may surprise hon. Members to learn that Ipswich is now the sixth largest container port in the country—behind only Felixstowe, London, Southampton, Hull and Liverpool. That excellent performance is a tribute to the management of the port of Ipswich and to all who work in it.
  Ipswich has done well as a trust port, but I believe that, with proper safeguards, privatisation could bring it further benefits. I emphasise the need for proper safeguards, because there are hazards. I have no quarrel with the kind of takeover which has as its aim the strengthening and development of a port. That kind of takeover can clearly bring economic benefits, but there are two kinds of takeover which we definitely need to deter. The first is a takeover of the asset-stripping variety, in which a predator comes along concerned only with property values and with no interest in the port as such. Such a predator can all too easily damage and even kill off a perfectly viable port. The danger is particularly great in the south-east of England. We all know to what unrealistic levels property values rose two or three years ago. With property values now so depressed, that danger has temporarily disappeared, but the risks will reappear as soon as the property market recovers.
  740
  I am glad that my right hon. and learned Friend the Secretary of State gave some indication that he was aware of those risks. In his opening speech, he rightly recognised that different circumstances affect different ports and that some are much more at risk of an asset-stripping takeover than others. He should take account of that in exercising his powers under the Bill.
  The levy or clawback provided under clause 16 will act as a deterrent to asset-stripping. In so far as it is a deterrent, I welcome it. However, it is important to remember that the clawback provision could hamstring a privatised port which plans to expand and modernise its facilities and wishes to sell the assets that are surplus to its requirements in order to finance that expansion and modernisation. We must not allow such plans for expansion to be held back. Clause 16 gives the Secretary of State considerable discretion over how he operates the clawback. I hope that he operates it to discourage asset-strippers, but not so as to hobble ports that want to sell assets to raise money to invest in improvements.
  The second kind of takeover that must be guarded against is that made with the intention of eliminating a competitor port. Abolition of the dock labour scheme has greatly increased competition between ports. Quite a few ports in the new competitive climate might be only too glad to eliminate competition by means of a takeover. The principal safeguard in the event of that sort of takeover bid would be the Monopolies and Mergers Commission. However, when we consider the Bill in Committee, the threat posed by that sort of takeover should be very much in our minds.
  I was glad to hear my right hon. and learned Friend the Secretary of State say that he was considering how best to encourage management-employee buy-outs, and that he had it in mind to provide a degree of preference for those buy-outs. There is a great deal of interest in a management-employee buy-out among those who work in the docks in my constituency. In deciding what degree of preference to accord such a buy-out, I hope that my right hon. and learned Friend will remember that the enthusiasm and commitment which would be generated by a management-employee buy-out would immensely improve efficiency and flexibility. That would bring benefits not just to the managers and employees, but to shippers, consumers and the economy as a whole. There is a great deal to be said for management-employee buy-outs.
  9.17 pm
  Mr. Eddie Loyden: I have been very interested in this debate and in particular in the speeches of Conservative Members, because those Conservative Members who represent constituencies with ports are showing more caution about the Bill than are those who do not represent ports. There is good reason for that.
  Many trust ports share my belief that there is no justification for the Bill. The port transport industry has recently undergone a further upheaval with the abolition of the national dock labour scheme. People who praise the legislation which abolished the scheme should bear it in mind that at that time the Secretary of State for Transport and his Ministers promised that the abolition of the scheme would enhance the ports because land would

  741
  become available to developers which at the time was not available as a result of the strictures placed on it by the national dock labour scheme.
  There is no evidence that such enhancement has occurred in the port of Liverpool. It was also claimed that the abolition of the dock labour scheme would result in the creation of 50,000 jobs in and around the ports industry. Will the Minister tell us what has happened to those jobs or when that objective will be realised? It is clear that that prophecy has not been fulfilled. It was a fraud on the part of those who made that speculation.
  The ports of Britain are still a key sector of British industry. Therefore, the House should pause to think what would happen in circumstances in which our ports went completely outside the accountability that now exists. The port transport industry, shipping and trade, have been at the heart of Britain's economy for centuries. I accept that many changes have taken place in the pattern of world trade. In particular, the development of the European Economic Community has transformed the trading patterns of this and many other countries. None of us can foresee what changes may take place in future. The Government have disregarded the retention of a port transport industry with accountability to this place.
  There is evidence also that interrelated industries such as shipping have been disregarded by the Government. Over the years, the British merchant fleet has been reduced to virtually nothing. That, too, has been at the heart of Britain's economy. There is no justification for the Government treating those industries in such a cavalier fashion.
  The truth of the matter is made clear by hon. Members whose interest hinges on who is to get the rich pickings from the Bill—for example, land speculators. Many ports are in exactly the same position. Speculators in the port transport industry are not concerned about the industry. If there are rich pickings, that is where their interest lies, and they do not care about the future of the ports. Many hon. Members do not realise that a port is not comprised only of docks.
  There are also river approaches, bays and so on. They must be subject to conservancy, buoyage and lights, which places a burden on the port transport industry. What will happen to such safeguards if and when ports are taken over by those who will not reinvest? Conservative Members know that they are interested in land for speculation which will go to the highest bidder for whatever purpose. That has been the Government's policy over the past 11 years.
  Conservative Members tell us of the success over the past 11 years of the capitalist enterprise system. We are in the middle of a grave recession. Is that the success story of the past 11 years? The Government still pursue with vigour the ideology that they have followed for the past 11 years. At the moment, attention is being diverted to events in the Gulf. When the problems in the Gulf are over, people will again realise that the economy of this country should be on the agenda.
  Conservative Members have no right to tell us of their successes of the past 11 years. That success story has brought about rising unemployment, damaged British manufacturing industry base and caused a grave recession. Conservative Members have a blatant cheek to lecture us on the benefits of the port scheme.
  Mr. Ian Bruce: Will the hon. Gentleman give way?
  Mr. Loyden: I have very little time, so I shall not give way.
  Several Members have rightly asked what safeguards there will be against predators. What does the legislation say about such safeguards? What provision will there be in the Bill to safeguard conservancy and the buoyage and lights of the ports? How will the legislation ensure that the ports are not sacrificed to money grubbers who come into the port to buy land cheaply and dispose of it at great profit to any bidder who comes along? Such people have no interest whatever in the port industry. That is a great danger for the ports.
  We cannot leave the ports in the hands of this Government. I sincerely hope that my hon. Friends on the Opposition Front Bench are making note of what is happening in the ports. We shall expect a dramatic change in the attitude of the next Labour Government to the port. transport industry. The industry needs accountability.. There is too much at stake to allow the ports of Britain to be run by any Tom, Dick or Harry who comes along and makes a bid for a port. I hope that the Minister will talk straight to the House and that in Committee the matters raised tonight will be properly considered and debated.
  9.25 pm
  Ms. Joan Walley: My hon. Friend the Member for Liverpool, Garston (Mr. Loyden) admirably illustrated the detailed concerns of Opposition Members about the ports industry and how it should fit into an integrated transport system. I have not heard Conservative Members express the same detailed concerns this evening.
  Until now we have been forced to debate the merits of privatising trust ports in respect of particular ports—Clyde and Tees and Hartlepool. We discussed their privatisation under the pretext that it was private business. Yet throughout those debates Opposition Members knew that the private Bills were really Government measures introduced in response to Government pressure.
  If there is still any doubt about that, we need look back no further than the Committee proceedings of the Finance Bill last year. Government amendments made it clear that the new private legislation would be out of the question unless it was accompanied by changes in the financial arrangements. The amendments passed assured the Government of receiving half the proceeds from the sale of the assets which, until then, were assumed to belong to local interests and the local community which had built up and developed the local trust ports undertakings, albeit with some grant from Government many years ago.
  Only when the Treasury had spotted the pots of gold of which we have heard this evening did the Government make time for what had until then masqueraded as private Bills to be converted into a public Bill. Now at last we have the opportunity to debate the underlying principles of trust port privatisation. The comments by my hon. Friend the Member for Aberdeen, North (Mr. Hughes) at the beginning of the debate underlined the fact that no real case has been made for privatising trust ports.
  There will be time in Committee for the Opposition to oppose this privatisation measure. The time that will be available compares well with the limited amount of time in Committee on the two private Bills. Procedural problems thwarted real debate. Presumably the many Conservative Members who have spoken tonight will ask to serve on the

  743
  Committee. Perhaps they will join the Opposition in tabling some amendments. It seems that a majority of those who have spoken favour the proposals that we suggest rather than this blatant privatisation measure.
  Mr. Ian Bruce: Will the hon. Lady give way?
  Ms. Walley: No, because time is short.
  Does the Minister agree that the private legislation currently going through Parliament was made redundant as soon as the Government announced their intention—[Interruption.]
  Madam Deputy Speaker: Order.
  Ms. Walley: I am aware that many hon. Members—[Interruption.]
  Madam Deputy Speaker: Order. The hon. Lady should be given a proper hearing.
  Ms. Walley: I am aware that many hon. Members wanted to speak and for that reason I do not intend to give way. It is important that the Minister has an opportunity to reply to the many points that have been made.
  Has the private legislation going through Parliament been made redundant since the Government announced their intention—[Interruption.]
  Madam Deputy Speaker: Order. Only one debate can take place in this Chamber at a time, and the hon. Lady is speaking at the moment.
  Ms. Walley: Indeed, Madam Deputy Speaker, and that debate is about the privatisation of the trust ports.
  When the Minister replies will he tell us whether the Bill makes redundant the legislation currently before Parliament? We believe that it was made redundant as soon as the Government announced their intention to find time this Session to introduce this enabling legislation. During the debate, we have heard that there are serious anomalies. The point was made with particular reference to the Clyde Port Authority Bill.
  The passage of private legislation to date has been a severe abuse of parliamentary procedure and of Finance Bill Committee procedure, and a waste of public money. [HON. MEMBERS: "Why?"] Because two concurrent pieces of legislation have left us with an anomalous situation. The Government have not clarified where this leaves the Clyde Port Authority Bill and the Tees and Hartlepool Port Authority Bill.
  The Government have no scruples about blurring the distinctions between what belongs to a local community and what belongs to taxpayers. They have no scruples about using taxpayers' money to reward future shareholders. That is clear from every other privatisation of public assets. As with the Trustee Savings bank, where ownership could not be clearly identified, they are blurring the distinction now with the trust ports.
  My hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) began by showing that the Bill was about money and asset stripping, and the rest of his speech bore that out. Just like last year, when the then Chief Secretary to the Treasury had to move quickly on 15 March, and had to introduce new clause 67 to the Finance Bill on 3 July 1990 to safeguard the Government's financial interests in the privatisation that was then going
  744
  through Parliament, this measure is about finance. It has nothing to do with transport, other than that it is the Secretary of State for Transport who is presiding over the sale of public assets. If he cares about transport, he should be safeguarding the trust ports. Even the definition of trust port is now about how much money such a port makes and how much its turnover is. It has nothing to do with transport infrastructure.
  What have we heard from Government Members about the importance of trust ports and their place in an integrated transport system, where investment in the local infrastructure complements and underpins the national transport infrastructure, rather than undermining it? The main body of the Bill is about financial arrangements. Under this privatisation, it will be more important to pay the privatisation tax, to pay the levy and to invest in property than to invest in the local ports and build them up to serve the interests of the local community and economy.
  So far, the Second Reading debate has failed to spell out the implications for trust ports. They can be bought by companies with scant interest in their operation as ports. We should remember to look at the comments of my hon. Friend the Member for Aberdeen, South (Mr. Doran) about fishing interests. Companies will want to buy the trust ports to strip them of their assets. In doing so, they will increase the profitability of other companies in which they may already be involved. Those companies will have no commitment to run the ports for the local area. The Government are obsessed with profits, but at least those considering the Tees and Hartlepool Port Authority Bill have managed to wring from the Minister a commitment that that port authority will seek a local office in the area that the new plc will serve.
  The Secretary of State said that the trust ports will be free to privatise, but even the British Ports Federation acknowledges that privatisation is not the answer to the development needs of some trust ports.
  Mr. Ian Bruce rose—
  Ms. Walley: I shall give way in a moment.
  When the Minister replies, he should say whether all the ports will be dealt with in the manner spelt out by the Secretary of State when he spoke of his commitment to compulsion.
  Mr. Bruce rose—
  Ms. Walley: In view of the time, I had better proceed.
  Mr. Bruce: But the hon. Lady said that she would give way.
  Ms. Walley: I shall give way if the hon. Gentleman's point relates to compulsion.
  Mr. Bruce: I am grateful to the hon. Lady for giving way so gallantly. In view of what she just said, can she confirm whether it is Labour party policy to take back all the ports into trust status and to reintroduce the dock labour scheme, which many of her Back-Bench colleagues would love?
  Ms. Walley: I can only say that much depends on the timetable and the likely date of the general election. We shall consider the situation when we know that timetable.
  Tonight we have heard a lot about level playing fields. We have been told that the Government have a stated

  745
  intention of introducing such a level playing field in terms of all ports—municipal, plc or trust. The hon. Member for Dover (Mr. Shaw) made particular reference to that. Perhaps the Minister can tell us what has happened to the draft European directive on state aids to ports, which was published in 1989, but has not seen the light of day since. Do not many continental ports receive massive subsidies for the development of new facilities? Where does that leave the concept of level playing fields?
  The hon. Member for Great Yarmouth (Mr. Carttiss) said that that port had not received a penny piece from the Government. That contrasts unfavourably with those infrastructure subsidies—they are not ruled out under the treaty of Rome—which other European countries give to develop their integrated transport structures. Most European Governments recognise that ports are part of the essential infrastructure, and they heavily subsidise their operating costs and investments. The Government, in comparison, do not have the same attitude.
  The Bill is a further step towards establishing ports as business entities that provide their own resources with the minimum of state or local authority support. Trade will naturally be directed to the subsidised ports. The Government should be warned that, under the new arrangements, our ports could be taken over by European competitors. That would make the prospects for the British economy, already suffering from recession, even worse. I agree with my hon. Friend the Member for Middlesbrough (Mr. Bell) that the Standing Committee should consider an offers ceiling on the amount that foreign companies can invest in the plcs which replace the trust ports. In Committee, I hope that the Government will consider what happens when the successor companies go bankrupt, a problem to which my hon. Friend the Member for Aberdeen, South drew attention.
  The lack of reference in the Bill to an integrated transport policy is matched only by an omission of health and safety considerations and the need for an integrated environmental policy. Subsidiary companies will take over existing responsibilities, but Conservative Members and the Government have expressed little concern about conservancy and the detailed operations in the ports—maritime access, channels, lights, buoys, navigational aids, sea locks, breakwaters, docks, quays and reclaimed land. We need a regulatory body of some sort. During proceedingts on the Bill to privatise the water industry we heard a great deal about the need for such a regulatory body, and after much pressure on the Government we ended up with the National Rivers Authority. Have the Government any proposals for a similar body to deal with these issues?
  How do the Government intend to resolve the potential conflict between a profit-maximising port operator and his responsibility for safety and conservancy? When the directors of the holding company and the statutory corporation are members of each other's boards, independence must be doubtful. How does the Minister envisage that the newly identified environmental objectives such as safe and environmentally sound management of the waste generated by ships in port and contingency plans for cleaning up spillages will be paid for under the new financial arrangements for trust ports?
  Given the maritime and navigation security changes about which the Minister is consulting even now, what arrangements does he have in mind for security under the new plcs in the ports?
  746
  Trust ports have been responsible to their local communities; they have served local interests; and they have served the port industry. Today many Conservative Members have said that they agree with privatisation in principle, but that they do not want it for the port or constituency that they represent. In view of the decision announced by the Government on 4 December 1990—
  Mr. Janman: Will the hon. Lady give way?
  Ms. Walley: I will not, because there is no time.
  Fifty-six national health service trusts were to be set up precisely to look after local issues and to enable local decision-making to go ahead—
  Mr. Janman: On a point of order, Mr. Speaker—
  Mr. Speaker: Is it a point of order or of frustration?
  Mr. Janman: It is a point of order. Is it in order for the hon. Lady to mislead the House by claiming that many Conservative Members are against the Bill, when that is clearly not so?
  Ms. Walley: The Minister knows full well what 1 meant. He is the one who will have to deal with Conservative Members who do not fully support the proposals in the Bill.
  The case for the privatisation of the trust ports has not been fully made; the case for a national strategy, in the ports industry is, however, overwhelming. The Bill does not give us such a strategy, and that is why we shall vote against it.
  9.42 pm
  The Minister for Shipping and Public Transport (Mr. Patrick McLoughlin): We have heard a confusing set of arguments from Opposition Members today. Listening to the first part of the speech of the hon. Member for Kingston upon Hull, East (Mr. Prescott), I had the impression that he was going to support the Bill, but then his arguments, as usual, became more confused. At one point he mentioned how trust ports are serving the community; at another, he said that a Labour Government would want to direct certain ports and invest huge sums in them. But how would ports not lucky enough to have been selected by that Government be able to serve their communities under the interventionist policies of the hon. Gentleman?
  The hon. Member for Kingston upon Hull, East referred several times to the Rochdale committee, which sat more than 20 years ago and is thus not very relevant to the port industry today.
  The hon. Gentleman suggested that the Bill's sole purpose is to maximise some £5 billion for the Treasury. We expect the Bill to raise between £30 million and £50 million in its first year of enactment, so we shall have to look elsewhere to maximise a return of £5 billion.
  The hon. Member for Stoke-on-Trent, North (Ms. Walley) referred to the Aviation and Maritime Security Act 1990. There will be no exemptions in respect of private ports, because that legislation covers them, too. Any regulations that the inspectors consider necessary will be applied to those ports, as to others. However, when we consider that Act, it was made very clear that we would scrutinise the individual circumstances of each port, as they are all, by their very nature, different from one another.

  747
  I did not imagine that I would find myself agreeing with the hon. Member for Liverpool, Garston (Mr. Loyden), who said that he wanted to see the Government out of the ports. However, I agree. I want to see the Government out of the ports, and for them to become part of the private sector, as fully fledged independent bodies subject to no Government interference in the appointing of their boards. The only point on which I would part company with the hon. Member for Garston is that I want to see all Governments kept out of the ports, which I want to see thriving in the private sector.
  Mr. Ian Bruce: My hon. Friend says that he wants all Governments kept out of ports. Will he extend that philosophy and introduce a clause that will keep all councils out of ports as well? Weymouth is not a trust port but is owned by the council. It was a profitable port when the Conservatives lost control of the council some years ago—but for 1991, the council is budgeting for an income of £400,000 and a subsidy of £750,000. What will the Government do about that?
  Mr. Prescott: The hon. Gentleman should tell the truth.
  Mr. McLoughlin: As my right hon. Friend the Secretary of State explained, the Bill does not embrace local authority ports because they can be subject to privatisation under existing provisions. There is an important distinction to be drawn between local authority and trust ports.
  Mr. Ian Bruce: On a point of order, Mr. Speaker. I distinctly heard—and I am surprised that you did not—the hon. Member for Kingston upon Hull, East (Mr. Prescott) shout "Tell them the truth." I did tell the truth.
  Mr. Speaker: That is a frivolous point.
  Mr. McLoughlin: The Bill has two particularly unusual features. First, we are not seeking to privatise a single organisation—as we did, for example, in the case of British Airways. Nor are we seeking to privatise a finite and specified group of such bodies, as in the case of the electricity industry. Instead, our main objective is to lay down a framework that any of the trust ports will be able to use in selling themselves into the private sector, without the need to promote their own private Bills. I hope that I can reassure my hon.Friend the Member for Great Yarmouth (Mr. Carttiss) by confirming that his port could come within the scope of the Bill as drafted, but not within the scope of the compulsion clauses—on which I shall comment later.
  Secondly, the Bill is concerned with bringing fully into the private sector substantial bodies that have no direct owners and which can only be described as being owned only by the state. That gives rise to the issue, which some hon. Members find very interesting, of whether there should be a Government levy. By restricting the levy to 50 per cent., we are providing a substantial incentive to the trust ports to come forward for privatisation. That incentive is over and above the benefits that privatisation will itself bring to the ports and which my right hon. and learned Friend the Secretary of State described in opening the debate.
  The benefits are such that the Clyde and Tees and Hartlepool port authorities brought forward their own
  748
  Bills to privatise themselves before the opportunity arose for the Government to introduce the present Bill in its programme. It will be for those two authorities—I hope that this answers the question of the hon. Member for Stoke on Trent, North—to decide whether to press on with their private Bills or to withdraw them and seek privatisation through this Bill. I could well understand it if they took the view that they are likely to secure the benefits of privatisation more quickly by pursuing their private Bills than by waiting for the enactment of the Ports Bill and seeking privatisation thereafter.
  If I may revert for a moment to the levy, hon. Members will see that the levy provisions in the Bill include, in clause 12(5), the possibility for the Secretary of State, with the consent of the Treasury, to vary the rate of levy. There is a similar possibility in the provisions about the clawback of part of the gains from subsequent land developments.
  I noted the arguments put forward by a number of my hon. Friends about the time scale for the clawbacks. I think that at least three or four of my colleagues, including my hon. Friends the Members for Teignbridge (Mr. Nicholls), for Thurrock (Mr. Janman) and for Dover (Mr. Shaw), mentioned that issue. Obviously, we shall return to it in Committee, when we may want to discuss it in greater detail.
  Mr. Moate: I am most grateful to my hon. Friend. Does he agree that virtually everyone who has caught the Chair's eye today and some of those who did not—even though we represent the largest ports in the United Kingdom—has expressed support for the management-employee buy-outs and believes that the Secretary of State should give preference to such schemes? If he finds that the levy and clawback proposals militate against such buy-outs in favour of outside investment groups, will he undertake to discuss revising those rules with the Treasury so that, in every case where they are proposed, sensible schemes from management and employees would prove to be the winners?
  Mr. McLoughlin: I am very sympathetic to the idea of management-employee buy-outs. That goes along the line that the Government have developed in the many privatisations that we have steered through the House. That line will ensure that—
  Mr. Robert Hughes: On a point of order, Mr. Speaker. Is it in order for the Minister to show such discourtesy, instead of addressing the House?
  Mr. Speaker: I had not noticed. I think that the Minister was addressing one of his hon. Friends on the Benches below the Gangway.
  Mr. McLoughlin: I was saying that we hope that privatisation of the trust ports will continue with Government policy, which has meant that, through various privatisation measures, people who have worked in those industries for many years can play a proper role and start to own some of them. That is where our policy diverges so greatly from that of the Opposition, who are only interested in the state owning and people having no rights and powers in their own industries.
  My hon. Friend the Member for Faversham (Mr. Moate) referred to management-employee buy-outs, and I am keen on that idea. The hon. Member for Kingston upon Hull, East has opposed every privatisation measure which has been brought before the House by the

  749
  Government. The Conservative party have given rights to workers in industries, whether they are state-owned or, as in this case, trust ports, so that they can own part of the industry in which they work and which is so much a part of their livelihood.
  If I may revert for a moment to the levy, hon. Members will see that the levy provisions in the Bill include, in clause 12(5), the possibility for the Secretary of State, with the consent of the Treasury, to vary the rate of levy. There is a similar possibility in the provisions about the clawback of part of the gains from subsequent land developments. That is in clause 16(6). I should explain the intention here. As I have explained, the Government believe that the 50 per cent. rate of levy is a fair one. We intend to apply that rate in all cases. But we believe that it would be a mistake to have to look to further primary legislation to make it possible to vary the rate. It would be wrong to speculate at this stage in what circumstances the Government might wish to do this, but it is, I think, a sensible precaution to have these provisions in the Bill.
  It may be sensible if I elaborate on the question of ownership of the trust ports, which has been a matter of some significance in the framing of the Bill. I should make it clear from the outset that no one is arguing—certainly not the Government—that trust ports are not the direct owners of their assets and property. What is at issue is the ownership of the trust ports themselves. Hon. Members may recall that it was decided in another place in July 1987 that the Trustee Savings bank belonged to the state. This followed the passage of the Trustee Savings Banks Act 1985. The same principle applies to the trust ports.
  Following that judgment in another place, the National Audit Office pointed out that it was open to the Government to consider whether parliamentary approval should be sought to enable the Crown to assume some measure of ownership of the Trustee Savings bank. The same considerations apply in the case of the trust ports; it is therefore for Parliament to decide who should benefit from the sale of the ports.
  The Government, however, took none of the proceeds from the privatisation of the TSB. How, then, do they justify taking a 50 per cent. levy in the case of the trust ports? The trust ports are similar to the TSB in that they are trusts owned by the state, although not, of course, by the Government; but they are different from the TSB in a number of important respects. We consider that those differences justify the passing of a share of the proceeds to the Exchequer.
  The ports themselves are, I think, concerned about several main issues in the Bill. The first is the levy on the sale of the ports, about which enough has already been said; the second is the clawback on gains from the development of land. As I have said, we shall deal with that point in a separate order and we shall welcome the views of the port industry. Another point of concern relates to when the Secretary of State will use his powers of compulsion. We decided on the two-year delay because we feel that it allows the ports substantial period during which to see the benefits of privatisation. Some ports already see those benefits, and will privatise quickly.
  I take the points made by the hon. Member for Orkney and Shetland (Mr. Wallace), and my hon. Friends the Members for Poole (Mr. Ward) and for Dover, about the anxieties felt by certain ports. We appreciate the importance of considering the ports individually and we shall take part in consultations before any decisions are
  750
  made. I was pleased to hear from the hon. Member for Orkney and Shetland that his party would be supporting the Bill—[Interruption.] I gather that he did not say that; I am not really surprised.
  I was interested to read the following in Lloyd's List International not long ago:
  "If you do not understand the question, sit on the fence —that seems to be the motto of the UK's Liberal Democrats when it comes to dealing with ports.
  Only last year their 17 MPs managed to split three ways in the votes over abolishing the Dock Labour Scheme and now, it seems, ports privatisation is causing them a few problems as well.
  In March, five Liberal Democrats voted against the Tees and Hartlepool Port Authority Bill. So far so good. But this week five Liberal Democrats voted in favour of an almost identical Bill—seeking to privatise the Clyde Port Authority.
  What is more, two MPs"—
  the hon. Member for Berwick-upon-Tweed (Mr. Beith) and the hon. and learned Member for Fife, North-East (Mr. Campbell)—
  "voted in different lobbies on each occasion. Even more surprising is the fact that their transport and shipping spokesman … did not vote …
  The Liberal Democrats Press office seemed as perplexed by the issue as their MPs. When asked about a reason for the change of heart, back came the reply, 'I haven't got a clue.' Pressed further on the issue, the answer changed to 'such is life'."
  Mr. Wallace: Will the Minister give way?
  Mr. McLoughlin: The hon. Gentleman knows that I have not time to give way, although I am as keen as anyone else to find out the true views of the Liberal Democrats.
  We have had an interesting debate. I look forward to the Committee stage of the Bill, when we shall be able to argue about some of the detailed points raised by a number of hon. Members. There is no doubt that the Bill is greatly wanted by a number of ports throughout the country: it will free them from the constraints under which they suffer as trust ports. The demand is clear; two ports have already introduced private Bills—which, as a number of hon. Members have pointed out, have already taken up a good deal of parliamentary time.
  The Bill is the right way in which to privatise trust ports. Its passage will represent an important first step in the development of the ports industry. It is an important Bill, which marks a positive step forward for the ports industry. Without Government interference, the ports will be able to get on with the job. I commend the Bill to the House.
  Question put, That the Bill be now read a Second time:—
  The House divided: Ayes 260, Noes 204.

  Division No. 48]

  [at 10.00 pm

  AYES

  Adley, Robert

  Bennett, Nicholas (Pembroke)

  Aitken, Jonathan

  Benyon, W.

  Alexander, Richard

  Bevan, David Gilroy

  Alison, Rt Hon Michael

  Biffen, Rt Hon John

  Amess, David

  Blackburn, Dr John G

  Amos, Alan

  Blaker, Rt Hon Sir Peter

  Arbuthnot, James

  Body, Sir Richard

  Arnold, Jacques (Gravesham)

  Bonsor, Sir Nicholas

  Arnold, Sir Thomas

  Boscawen, Hon Robert

  Ashby, David

  Boswell, Tim

  Banks, Robert (Harrogate)

  Bottomley, Peter

  Batiste, Spencer

  Bottomley, Mrs Virginia

  Beaumont-Dark, Anthony

  Bowden, Gerald (Dulwich)

  Bellingham, Henry

  Bowis, John

  Bendall, Vivian

  Boyson, Rt Hon Dr Sir Rhodes

  751

  Braine, Rt Hon Sir Bernard

  Hawkins, Christopher

  Brandon-Bravo, Martin

  Hayes, Jerry

  Brazier, Julian

  Hayhoe, Rt Hon Sir Barney

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

  Hayward, Robert

  Bruce, Ian (Dorset South)

  Hicks, Robert (Cornwall SE)

  Buck, Sir Antony

  Higgins, Rt Hon Terence L.

  Burns, Simon

  Hill, James

  Burt, Alistair

  Hind, Kenneth

  Butler, Chris

  Hogg, Hon Douglas (Gr'th'm)

  Butterfill, John

  Holt, Richard

  Carlisle, John, (Luton N)

  Hordern, Sir Peter

  Carlisle, Kenneth (Lincoln)

  Howarth, Alan (Strat'd-on-A)

  Carrington, Matthew

  Howell, Rt Hon David (G'dford)

  Carttiss, Michael

  Hughes, Robert G. (Harrow W)

  Chapman, Sydney

  Hunter, Andrew

  Chope, Christopher

  Irvine, Michael

  Churchill, Mr

  Jack, Michael

  Clark, Rt Hon Alan (Plymouth)

  Jackson, Robert

  Clark, Dr Michael (Rochford)

  Janman, Tim

  Clark, Rt Hon Sir William

  Jones, Gwilym (Cardiff N)

  Clarke, Rt Hon K. (Rushcliffe)

  Jones, Robert B (Herts W)

  Colvin, Michael

  Kellett-Bowman, Dame Elaine

  Conway, Derek

  Kilfedder, James

  Coombs, Anthony (Wyre F'rest)

  King, Roger (B'ham N'thfield)

  Coombs, Simon (Swindon)

  King, Rt Hon Tom (Bridgwater)

  Cope, Rt Hon John

  Kirkhope, Timothy

  Cormack, Patrick

  Knapman, Roger

  Couchman, James

  Knight, Greg (Derby North)

  Cran, James

  Knight, Dame Jill (Edgbaston)

  Critchley, Julian

  Knowles, Michael

  Currie, Mrs Edwina

  Knox, David

  Curry, David

  Lang, Rt Hon Ian

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

  Latham, Michael

  Devlin, Tim

  Lawrence, Ivan

  Dicks, Terry

  Leigh, Edward (Gainsbor'gh)

  Dorrell, Stephen

  Lennox-Boyd, Hon Mark

  Douglas-Hamilton, Lord James

  Lester, Jim (Broxtowe)

  Dover, Den

  Lilley, Peter

  Dunn, Bob

  Lloyd, Sir Ian (Havant)

  Durant, Sir Anthony

  Lloyd, Peter (Fareham)

  Eggar, Tim

  Luce, Rt Hon Sir Richard

  Emery, Sir Peter

  Lyell, Rt Hon Sir Nicholas

  Evans, David (Welwyn Hatf'd)

  McCrindle, Sir Robert

  Evennett, David

  MacGregor, Rt Hon John

  Fallon, Michael

  MacKay, Andrew (E Berkshire)

  Field, Barry (Isle of Wight)

  Maclean, David

  Fishburn, John Dudley

  McLoughlin, Patrick

  Fookes, Dame Janet

  McNair-Wilson, Sir Patrick

  Forsyth, Michael (Stirling)

  Madel, David

  Forth, Eric

  Malins, Humfrey

  Fowler, Rt Hon Sir Norman

  Mans, Keith

  Franks, Cecil

  Maples, John

  Freeman, Roger

  Marshall, John (Hendon S)

  French, Douglas

  Martin, David (Portsmouth S)

  Fry, Peter

  Mates, Michael

  Gale, Roger

  Maude, Hon Francis

  Gardiner, Sir George

  Mawhinney, Dr Brian

  Garel-Jones, Tristan

  Maxwell-Hyslop, Robin

  Gill, Christopher

  Mayhew, Rt Hon Sir Patrick

  Glyn, Dr Sir Alan

  Meyer, Sir Anthony

  Goodhart, Sir Philip

  Mills, Iain

  Goodlad, Alastair

  Miscampbell, Norman

  Gorman, Mrs Teresa

  Mitchell, Andrew (Gedling)

  Greenway, Harry (Ealing N)

  Mitchell, Sir David

  Greenway, John (Ryedale)

  Moate, Roger

  Gregory, Conal

  Montgomery, Sir Fergus

  Griffiths, Peter (Portsmouth N)

  Moore, Rt Hon John

  Grist, Ian

  Morrison, Sir Charles

  Ground, Patrick

  Morrison, Rt Hon Sir Peter

  Grylls, Michael

  Moss, Malcolm

  Gummer, Rt Hon John Selwyn

  Mudd, David

  Hague, William

  Nelson, Anthony

  Hamilton, Hon Archie (Epsom)

  Neubert, Sir Michael

  Hamilton, Neil (Tatton)

  Newton, Rt Hon Tony

  Hampson, Dr Keith

  Nicholls, Patrick

  Hannam, John

  Nicholson, David (Taunton)

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

  Nicholson, Emma (Devon West)

  Hargreaves, Ken (Hyndburn)

  Norris, Steve

  Harris, David

  Onslow, Rt Hon Cranley

  Haselhurst, Alan

  Oppenheim, Phillip

  752

  Page, Richard

  Speller, Tony

  Paice, James

  Spicer, Sir Jim (Dorset W)

  Patnick, Irvine

  Spicer, Michael (S Worcs)

  Patten, Rt Hon John

  Squire, Robin

  Pattie, Rt Hon Sir Geoffrey

  Stanbrook, Ivor

  Pawsey, James

  Stanley, Rt Hon Sir John

  Peacock, Mrs Elizabeth

  Steen, Anthony

  Porter, Barry (Wirral S)

  Stern, Michael

  Porter, David (Waveney)

  Stevens, Lewis

  Portillo, Michael

  Stewart, Allan (Eastwood)

  Powell, William (Corby)

  Stewart, Andy (Sherwood)

  Price, Sir David

  Sumberg, David

  Raison, Rt Hon Sir Timothy

  Summerson, Hugo

  Redwood, John

  Tapsell, Sir Peter

  Rhodes James, Robert

  Taylor, Ian (Esher)

  Riddick, Graham

  Taylor, John M (Solihull)

  Ridley, Rt Hon Nicholas

  Taylor, Teddy (S'end E)

  Ridsdale, Sir Julian

  Tebbit, Rt Hon Norman

  Rifkind, Rt Hon Malcolm

  Thompson, Patrick (Norwich N)

  Roberts, Sir Wyn (Conwy)

  Thorne, Neil

  Roe, Mrs Marion

  Thurnham, Peter

  Rossi, Sir Hugh

  Tredinnick, David

  Rost, Peter

  Trippier, David

  Rumbold, Rt Hon Mrs Angela

  Viggers, Peter

  Ryder, Rt Hon Richard

  Wakeham, Rt Hon John

  Sackville, Hon Tom

  Walker, Bill (T'side North)

  Sainsbury, Hon Tim

  Waller, Gary

  Shaw, David (Dover)

  Wheeler, Sir John

  Shaw, Sir Giles (Pudsey)

  Widdecombe, Ann

  Shaw, Sir Michael (Scarb')

  Wilshire, David

  Shephard, Mrs G. (Norfolk SW)

  Wood, Timothy

  Shepherd, Colin (Hereford)

  Young, Sir George (Acton)

  Shepherd, Richard (Aldridge)

  Younger, Rt Hon George

  Shersby, Michael

  Skeet, Sir Trevor

  Tellers for the Ayes:

  Smith, Tim (Beaconsfield)

  Mr. Nicholas Baker and

  Soames, Hon Nicholas

  Mr. David Davis.

  NOES

  Abbott, Ms Diane

  Cousins, Jim

  Adams, Mrs. Irene (Paisley, N.)

  Crowther, Stan

  Allen, Graham

  Cryer, Bob

  Archer, Rt Hon Peter

  Cummings, John

  Ashdown, Rt Hon Paddy

  Cunliffe, Lawrence

  Ashley, Rt Hon Jack

  Dalyell, Tarn

  Ashton, Joe

  Darling, Alistair

  Banks, Tony (Newham NW)

  Davies, Rt Hon Denzil (Llanelli)

  Barnes, Harry (Derbyshire NE)

  Davies, Ron (Caerphilly)

  Barron, Kevin

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

  Battle, John

  Dewar, Donald

  Beckett, Margaret

  Dixon, Don

  Bell, Stuart

  Dobson, Frank

  Bellotti, David

  Doran, Frank

  Benn, Rt Hon Tony

  Dunwoody, Hon Mrs Gwyneth

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

  Eadie, Alexander

  Benton, Joseph

  Evans, John (St Helens N)

  Bermingham, Gerald

  Ewing, Harry (Falkirk E)

  Bidwell, Sydney

  Fatchett, Derek

  Blair, Tony

  Faulds, Andrew

  Blunkett, David

  Fearn, Ronald

  Boateng, Paul

  Field, Frank (Birkenhead)

  Boyes, Roland

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

  Bradley, Keith

  Fisher, Mark

  Bray, Dr Jeremy

  Flynn, Paul

  Brown, Gordon (D'mline E)

  Foot, Rt Hon Michael

  Brown, Nicholas (Newcastle E)

  Foster, Derek

  Brown, Ron (Edinburgh Leith)

  Foulkes, George

  Buckley, George J.

  Fraser, John

  Caborn, Richard

  Galloway, George

  Campbell, Ron (Blyth Valley)

  Garrett, John (Norwich South)

  Campbell-Savours, D. N.

  George, Bruce

  Canavan, Dennis

  Gilbert, Rt Hon Dr John

  Clark, Dr David (S Shields)

  Godman, Dr Norman A.

  Clarke, Tom (Monklands W)

  Gordon, Mildred

  Clelland, David

  Gould, Bryan

  Clwyd, Mrs Ann

  Grant, Bernie (Tottenham)

  Cohen, Harry

  Griffiths, Nigel (Edinburgh S)

  Cook, Robin (Livingston)

  Griffiths, Win (Bridgend)

  Corbett, Robin

  Grocott, Bruce

  Corbyn, Jeremy

  Harman, Ms Harriet

  753

  Haynes, Frank

  Meacher, Michael

  Heal, Mrs Sylvia

  Meale, Alan

  Henderson, Doug

  Michael, Alun

  Hinchliffe, David

  Michie, Bill (Sheffield Heeley)

  Hoey, Ms Kate (Vauxhall)

  Mitchell, Austin (G't Grimsby)

  Hogg, N. (C'nauld & Kilsyth)

  Moonie, Dr Lewis

  Home Robertson, John

  Morgan, Rhodri

  Howarth, George (Knowsley N)

  Morley, Elliot

  Howells, Geraint

  Morris, Rt Hon A. (W'shawe)

  Howells, Dr. Kim (Pontypridd)

  Morris, Rt Hon J. (Aberavon)

  Hoyle, Doug

  Mowlam, Marjorie

  Hughes, John (Coventry NE)

  Mullin, Chris

  Hughes, Robert (Aberdeen N)

  Murphy, Paul

  Hughes, Roy (Newport E)

  Nellist, Dave

  Hughes, Simon (Southwark)

  Oakes, Rt Hon Gordon

  Illsley, Eric

  O'Brien, William

  Ingram, Adam

  O'Hara, Edward

  Janner, Greville

  O'Neill, Martin

  Jones, Ieuan (Ynys Môn)

  Orme, Rt Hon Stanley

  Jones, Martyn (Clwyd S W)

  Patchett, Terry

  Kaufman, Rt Hon Gerald

  Pendry, Tom

  Kennedy, Charles

  Pike, Peter L.

  Kinnock, Rt Hon Neil

  Powell, Ray (Ogmore)

  Lamond, James

  Prescott, John

  Leadbitter, Ted

  Primarolo, Dawn

  Leighton, Ron

  Quin, Ms Joyce

  Lestor, Joan (Eccles)

  Radice, Giles

  Lewis, Terry

  Randall, Stuart

  Litherland, Robert

  Redmond, Martin

  Livingstone, Ken

  Rees, Rt Hon Merlyn

  Lloyd, Tony (Stretford)

  Reid, Dr John

  Lofthouse, Geoffrey

  Richardson, Jo

  Loyden, Eddie

  Robertson, George

  McAllion, John

  Robinson, Geoffrey

  McAvoy, Thomas

  Rogers, Allan

  McCartney, Ian

  Rooker, Jeff

  Macdonald, Calum A.

  Rooney, Terence

  McFall, John

  Ross, Ernie (Dundee W)

  McKay, Allen (Barnsley West)

  Rowlands, Ted

  McKelvey, William

  Ruddock, Joan

  McLeish, Henry

  Sheerman, Barry

  Maclennan, Robert

  Sheldon, Rt Hon Robert

  McMaster, Gordon

  Shore, Rt Hon Peter

  McNamara, Kevin

  Short, Clare

  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)

  Soley, Clive

  Martin, Michael J. (Springburn)

  Spearing, Nigel

  Martlew, Eric

  Steinberg, Gerry

  Maxton, John

  Stott, Roger

  754

  Strang, Gavin

  Wigley, Dafydd

  Straw, Jack

  Williams, Rt Hon Alan

  Thomas, Dr Dafydd Elis

  Williams, Alan W. (Carm'then)

  Turner, Dennis

  Wilson, Brian

  Vaz, Keith

  Winnick, David

  Wallace, James

  Wise, Mrs Audrey

  Walley, Joan

  Worthington, Tony

  Wardell, Gareth (Gower)

  Wareing, Robert N.

  Tellers for the Noes:

  Watson, Mike (Glasgow, C)

  Mrs. Llin Golding and

  Welsh, Michael (Doncaster N)

  Mr. Ken Eastham.

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

BUSINESS OF THE HOUSE
Ordered,
That, at this day's sitting, the Ways and Means Motion may be proceeded with, though opposed, until any hour.—[Mr. Neil Hamilton.]

PORTS BILL [MONEY)
Queen's Recommendation having been signed—
Resolved,
That, for the purposes of any Act resulting from the Ports Bill, it is expedient to authorise the payment out of money provided by Parliament of any expenses incurred by a Minister of the Crown in consequence of the provisions of the Act.—[Mr. McLoughlin.]

WAYS AND MEANS

  PORTS BILL
  Resolved,
  That, for the purposes of any Act resulting from the Ports Bill, it is expedient to authorize—

  (1) a levy on disposals of—

  (a) securities; or

  (b) rights to require the issue of securities;

  of any company to which the undertaking of a harbour authority is transferred under the Act;

  (2) a levy in respect of gains accruing to such a company on disposals of land which is the subject of such a transfer or of interests in such land or in land in which an interest transferrred by such a transfer subsists;

  (3) the payment into the Consolidated Fund of all payments of levy under the Act, interest on unpaid levy and penalties in respect of levy.—[Mr. McLoughlin.]

Financial Services
10.15 pm
The Minister for Corporate Affairs (Mr. John Redwood): I beg to move,
That the draft Financial Services Act 1986 (Delegation) Order 1991, which was laid before this House on 19th December, be approved.
The purpose of the order is to give to the Securities and Investments Board a power parallel to that of the Secretary of State for Trade and Industry under the Financial Services Act 1986 to take action against an individual who may be making money or causing investors to lose money while contravening the conduct of business provisions under that legislation. The SIB has a power parallel to the DTI under the FSA to take such restitution orders against authorised persons or appointed representatives. The order would give it a similar power to take action, where appropriate, against people who are not authorised.
This is a small transfer of additional power which will enable the SIB to pursue one or two extra cases. In the interests of good regulation, I commend the order to the House.
10.16 pm
Ms. Marjorie Mowlam: I welcome the order and the enhanced powers for the SIB that will result. Why has the Minister brought forward this parallel power for the SIB and DTI now? The Financial Services Act was introduced in 1986. Why has the order come forward now, rather than in 1988, 1989, or 1990? One must assume either that the SIB needed this power before, and without it has been functioning inefficiently, or that the DTI had the power and has not used it efficiently. Either the SIB has not had the full powers necessary to do its job or the DTI has not been doing its job. It would be useful if the hon. Gentleman would explain why he finds it necessary to introduce the order after so many years.
This is just another tinkering with the Financial Services Act. Because of the speed with which the legislation was introduced and the way in which it was cobbled together, we continue, week in, week out, to have these difficulties.
Mr. Tim Smith: "We"?
Ms. Mowlam: I mean "We". Last week, I talked to people in the City and to a unit trust group and asked them about the FSA's function. Giving an example of Government tinkering and the difficulties that have resulted since the legislation was introduced, they said that, since June 1989, they have had 24 consultative papers from the SIB, including three major ones, 90 changes to the SIB rulebook, 14 updates to the rulebook for the Investment Management Regulatory Organisation, two complete rewrites of the IM RO rulebook, and an attempt to rewrite the rulebook in simpler language.
Mr. Smith: What is wrong with that?
Ms. Mowlam: The hon. Gentleman asks what is wrong with that. We have these changes month in, month out because of the way in which this cobbled together financial services legislation was introduced by the Government. The order is just another elastoplast applied by the Government to the SFA. The Government should be
756
considering the surgery that will be needed to make the SFA work more efficiently for industry and investors as we move toward a single European market.
We must place the order in the context of Europe and the legislation that we hope will come as we move towards a single market. We hope that five directives will be in place to allow the single market to move forward in the 1990s. The order deals with fraud and protecting investors' money. As the previous financial debate was too early in the Minister's view, it would be useful if he would explain why we have not yet had a consumer directive from Europe. It is needed desperately. The Economic and Finance Council and similar organisations tell me that, although this small delegation order deals with one aspect of fraud in relation to investors and the City, we have no chance of having a consumer directive in place at the same time as the investment services, capital adequacy and other directives.
I dread to think what will happen, come the completion of the single market, when a Spanish investor is working through a French company with a subsidiary in Britain. Supposedly, home rules will function in those circumstances. Does the Minister really believe that that will constitute consumer protection in the 1990s? The Minister feigns support for consumer protection, but, as yet, we have seen little evidence in the European negotiations that that will be forthcoming in 1992.
Let me ask the Minister to clarify five points. First, why now? Secondly, will the Minister confirm that the present delegation order has nothing to do with the difficulties at Hamilton House? I understand that many investors await compensation following the problems and difficulties of Hamilton House and that the Securities and Investments Board is having trouble dealing with their problems because it has been waiting for months for the response from the Department that would allow the investors to get their money back. The worry is that, as a result, directors are taking money out of the country, and that money that could be recouped by restitution under an order such as this has not been obtained. Is Hamilton House at the back of the Minister's mind? Is that why he feels it necessary to delegate powers concurrently to the SIB and the Department?
Thirdly, will the powers that will be given to the SIB concurrently with the Department apply only to restitution of directors as individual unauthorised persons under the Financial Services Act, or will they also apply to accountants and solicitors? Who will the order, and the powers delegated to the SIB, cover?
Fourthly, will the order apply to cases such as Polly Peck and Levitt? If so, will it be used by the SIB; if not, why has not the Department used its powers already?
Fifthly, there have been reports in the press recently that many members of the Financial Intermediaries, Managers and Brokers Regulatory Association are concerned that, because of the cost of compensation—particularly in the Levitt case, if that cost proves to be very high—the association will not be able to pay the necessary compensation. Does the order have something to do with the SIB and Levitt's difficulties? What is the Minister's response to those at FIM BRA who say that, if the Levitt case results in great demands for money, the present compensation scheme will not be able to handle those demands, or that, if it does, it will be at the expense of

757
independent intermediaries whose payments into the compensation scheme are at present higher than their payments for membership of FIMBRA?
Will the Minister come clean on those issues and explain what relation the order has to our regulatory system?
10.23 pm
Mr. Anthony Nelson: It is an honour to follow the hon. Member for Redcar (Ms. Mowlam). The House respects the way in which she has followed these matters and her careful and close interest in them. She does a great service to the minutiae of the Financial Services Act 1986 by following up these matters and fulfilling her remit so well.
I welcome the order, which marks a further stage in the transition towards the transfer of power from the Secretary of State to the Securities and Investments Board. When the Financial Services Act was passed, many of us envisaged an increasing devolution of supervisory powers down to the SIB and we recognised that it had to be a tried and tested procedure.
I see in his place my hon. Friend the Member for Beaconsfield (Mr. Smith), who played such a formative role in these matters. I think that he would agree that the careful balance that has been struck between self-regulation and central supervision has stood the test of time. The Government have been right to ensure that the Securities and Investments Board does not run before it can walk. In fact, the SIB has a creditable record, and I believe that the devolution of parallel responsibility for investigating the contravention of the status of authorised person or appointed intermediary represents an important devolution of power.
As, in the end, it comes down to people and to those who are authorised to conduct investment businesses, it is a great vote of confidence in the SIB that the Government and the Secretary of State are prepared to devolve this particular power. The order is not a technical or sidelining measure. It is an important reflection of the progress, responsibility and success of the SIB and the policy that the Government have enunciated and pursued since the enactment of the Financial Services Act 1986. I congratulate my hon. Friend the Minister on presenting the order today.
10.25 pm
Mr. Tim Smith: I, too, welcome the introduction of the order. I asked the Library how many orders had been made under the Financial Services Act 1986. I was told that this is the 61st order on the Library computer, which lists the orders subject to affirmative and negative resolutions and also commencement orders.
The flexibility of the Financial Services Act 1986 is demonstrated in the fact that it is possible to make such changes, which may simply be tinkering. However, each change is in response to new circumstances. The financial services industry is continually producing new products and it is inevitable that we will have new regulations. Regulations that simplify life for investment businesses are particularly welcome.
Ms. Mowlam: To what new product or simplification is the order related? It strikes me that the reality has not changed.
Mr. Smith: I was not suggesting that this order was before us as a result of a new product. The scene is changing, and the idea that we can have permanent rules and regulations is not realistic. The market is constantly changing, and it is inevitable that the rules and regulations made under the Financial Services Act will change in response. It is not realistic to suppose that we will have a long period during which there will be no changes to the rules. There are many proposals on the stocks at the moment which deal with new investment products—for example, unit trusts that allow people to invest in futures. I am not suggesting that this order deals with such a change. I shall be interested to hear my hon. Friend the Minister respond to the hon. Member for Redcar (Ms. Mowlam) and tell us why the order has been introduced today, because I cannot answer that.
As my hon. Friend the Member for Chichester (Mr. Nelson) said, it is right that as the SIB becomes more experienced, more powers should be passed to it. As my hon. Friend said, that is a recognition of the fact that the SIB has made progress and is now widely respected. A mark of that was the award in the new year's honours list of a knighthood for Sir David Walker, which I welcomed. That was good news.
My only complaint about the order relates to the explanatory note. It would have been nice if the explanatory note covered what my hon. Friend the Minister said in his opening remarks. It is a typical explanatory note, in that it tells us nothing about the order. I had to look up the relevant sections in the Financial Services Act to discover what the order did. The explanatory note should be what it says and not a circuitous civil service effort that tells us nothing that we did not already know.
10.27 pm
Mr. John Greenway: None of us wants to prolong our proceedings. I agree that the order makes further progress towards the devolution of powers to the SIB. I do not want to speak specifically about the order, but instead to take this opportunity, as the hon. Member for Redcar (Ms. Mowlam) did, to voice one or two other concerns relating to the financial services industry generally.
I want to state first how much the people in the financial services industry in this country recognise the stand that my hon. Friend the Minister has taken in respect of the European Community directives, particularly on capital adequacy rules. It will come as no surprise to hon. Members to learn that, as the people who work in the industry trundle off to bed tonight, they are thinking not about the order that we are considering, but about their future in relation to what will happen to capital adequacy. I encourage my hon. Friend to continue his fight.
When we discussed this matter right after the summer recess, my hon. Friend the Minister said that too many people were caught by the current interpretation of the exemption rules. I hope that my hon. Friend will continue to press that matter. Without question, European Community directives pose a serious threat to the viability of the independent financial adviser in the next decade. It would be sad if that competitive industry, which is at the heart of what we wish to see in Europe, were destroyed in

759
the name of creating a European single market. I know that my hon. Friend recognises those matters, and I hope that he will continue to pursue them robustly.
The order also raises another matter to which the hon. Member for Redcar referred—the continuing problem of the compensation scheme. As my hon. Friend the Minister knows, I firmly believe that investor protection continues to be the Achilles' heel of the financial services industry. It is increasingly to the credit of the Financial Services Act 1986 and the Government's persistence with the measure that we have begun to expose people who should not be in the industry because they cannot be trusted to look after investors' money.
Dr. Lewis Moonie: There are many more around.
Mr. Greenway: However many there may be, the financial services legislation has created a mechanism that has exposed those who are dishonest in a way that the old Prevention of Fraud (Investments) Act 1958 never did. For that reason, everyone in the industry recognises that there have been benefits from financial services legislation.
The corollary is that, in putting the compensation arrangements in place, we are in danger of threatening the existence of the independent sector which we wish to protect. Above all, I am concerned that the likely demands on independent financial advisers, small firms, and on people who are regulated by the Financial Intermediaries, Managers and Brokers Regulatory Association or by the Insurance Brokers Registration Council to contribute to the compensation scheme could be such that they will either be driven out of business or will seek to become tied agents to protect their livelihoods. That would not be good for investor advice in the long term.
I do not expect my hon. Friend to respond to my comments tonight—I have raised a wider subject—but I am sure that he will understand that the debate provides an opportunity to remind him and the House that there are widespread concerns within our financial services industry about these matters. I am sure that my hon. Friend will understand why I felt that I should raise them.
10.32 pm
Mr. Anthony Beaumont-Dark: The Financial Services Act 1986 was introduced with the best of good intentions. I do not know whether it has actually worked, but it has been proved to be hugely costly. The costs run into hundreds of millions of pounds, but still the Levitts, the Polly Pecks and hundreds of other crooks still seem to get through. It is not that the Act is too strong—in some ways it is too weak. One of the great problems is that we have a system in which, before ne'er-do-wells can be brought to book, they must go through a vastly expensive and time-consuming legal system.
The Americans have something to teach us. Under their set-up, without having to go through their courts—their court process is much more long-winded than ours—they can fine people considerable sums. Salomons was fined $1·3 million the other day because of its ne'er-do-wells. That is a good thing.
If we should do anything, it is to make sure that, without all the vast expense, we give more confidence to
760
the individual. It is not the Government's fault if crooks abound. Given the right backing, the City is one of the best policemen of itself that there has ever been. Let us take compensation. When the stock exchange was only individual stockbrokers, it literally guaranteed all its clients against loss due to the malfeasance of any stockbroker, but today the limit is £40,000. Yet the cost of malpractising brokers is about 20 times more than it was before the Financial Services Act 1986 was introduced.
The Financial Services Act 1986 may be a step in the right direction but how much does it genuinely support and defend the small investor? Investors still seem to lose tens of thousands of pounds to crooks. People such as Adam Faith are allowed to continue giving advice in the Mail on Sunday. We all know what his advice is worth. It is worth what someone will pay him for it. Financial journalists should be much better controlled. Unless we bring them to book and keep much tighter control of them, including those who tip—most people who tip have bought for themselves beforehand—we shall not progress. The Act deserves support, but there is still an awfully long way to go.
10.35 pm
Mr. Redwood: I am grateful to my hon. Friend the Member for Chichester (Mr. Nelson) for his helpful comments in support of the Securities and Investments Board and this transfer of powers and to my hon. Friend the Member for Beaconsfield (Mr. Smith) for his favourable comments on the way in which the Government have progressively transferred powers to the SIB so that it can do the job that was envisaged for it when the House passed the Financial Services Act 1986—the FSA. I take note of his comments on explanatory notes. I, too, prefer explanatory notes that are intelligible and give all the information required. I shall certainly seek to achieve that next time.
My hon. Friend the Member for Ryedale (Mr. Greenway) was right to worry about threats to independent financial advisers in Britain which may be posed by certain draft European directives. He can rest assured that, if there is anything that I can do to stop those unfortunate drafts being passed, I shall do so. Anything that he, as a powerful advocate for that sector, and his friends in the sector can do to put our joint case to Brussels and make sure that enough member states support our just cause, will be welcome. We must make a combined effort to make sure that our case is fully understood time and again in Brussels so that the directive can come out in the right shape.
My hon. Friend the Member for Ryedale will be pleased to know that the Government are strongly committed to a strong independent sector for financial advice. He may have seen some reference in the past few days to my speech and a press release on the subject of commissions. That is another issue of importance to independent financial advisers. Both he and my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) made the powerful point that the best protection for honest members of the profession—the vast majority—must be by the regulators finding the crooks and those guilty of misdeeds as quickly as possible in order to limit the losses, prevent hardship to retail customers and prevent the image of the entire industry being tarnished by the few wrongdoers.

761
That is the purpose of the Financial Services Act regime. As my hon. Friends have said tonight, there is evidence that such people are being found more quickly and that stronger action is being taken now that we have the regime. Both my hon. Friends can rest assured that I shall do anything in my power to make sure that the small minority who are guilty of misdeeds are brought to book, and that the regulators follow them as swiftly and completely as possible.
The hon. Member for Redcar (Ms. Mowlam) asked several questions. She asked why we were bringing these powers forward now. It is now that the SIB has requested the transfer of the powers. That is as good a reason as any. We have progressively transferred powers to the SIB as it has sought them. It has sought this important power and we are happy for it to have it. The SIB may have cases that are appropriate for this treatment.
The hon. Lady asked me about a specific case. She must know that I will not tell her about any specific case in such a sensitive area. It is no help to the regulators to alert people to possible actions against particular businesses. I shall stick to my usual practice of making no comment on individual regulatory cases, for the good reason—I hope that she approves—that it would only make the task of the regulator more difficult.
Ms. Mowlam: I accept the point, however frustrating that may be at times. Can the Minister see that the logic of his argument without specific cases is that, if he grants this power concurrently to the SIB now, it is because it has asked for it? The SIB must have asked for the power because it feels that it needs that power to do the job efficiently. If the power at present lies with his Department, one must conclude that the Department is not doing its job efficiently.
Mr. Redwood: That logic does not work. Now or in future, the SIB will know in detail about cases which the DTI has left it to handle, where it thinks that the particular power would be useful. It would be an unnecessary expense and a waste of time and trouble to transfer all that information, interrupt the investigations or transfer the intelligence when it would be easier for the SIB to do the task. The hon. Lady's smile shows that she well understands that that is how this works in practice and why the proposal has come forward now.
Mr. David Shaw: Keep her smiling.
Mr. Redwood: To keep the hon. Lady smiling may be difficult, but it brings us naturally on to the subject of her lunches. I am glad to hear that she is now lunching in the City and learning about the important challenges facing the City.
The hon. Lady asked why there had been so many consultative papers from the SIB and changes in the rule books. It is because this is a dynamic industry, with constant changes in the range and style of products and services, which therefore raises new challenges to the regulators. The regulators want to hear what the City practitioners and the retail interests have to say about these proposals before regulating, so they issue consultative papers. There have been changes in the rule books for that reason, and because the SIB has introduced its new settlement which is designed to produce shorter, simpler, more intelligible rule books. That required the
762
revision of the old ones, which were not satisfactory. I am sure that the hon. Lady, like me, will welcome that revision.
As for this being elastoplast, that is a silly image to choose. I wonder what surgery the hon. Lady is proposing. I ask her in every debate what this drastic surgery is that she would like to apply to the Financial Services Act.
Dr. Moonie: It is none of the House's business.
Mr. Redwood: So may it stand. It cannot be a serious criticism of the Government's policy if the alternative is not on offer and the House is not to be told what it may be.
The hon. Lady asked whether the action could take place against directors only, or also against others. She will be pleased to know that it could be taken against anyone who contravenes the FSA in the way specified in the order. That could include accountants or lawyers breaking the conduct of business rules and profiting by so doing. She can rest assured that this applies not just to directors, but to anyone who undertakes crooked work at the expense of the public.
The hon. Lady asked about the costs of compensation. I understand some of the worries of FIM BRA members in that connection. The main protection against unreasonable escalation of the compensation fund must be tight regulation to detect these things as early as possible, to nip them in the bud before they become expensive.
Mr. John Greenway: Does my hon. Friend agree that there is a problem—I entirely take his point about not wanting to deal with specific cases—with some recent frauds that have come to light in which losses have been incurred before the Financial Services Act was put in place? Given the Government's extremely generous response to the losses incurred by clients of the Barlow Clowes affair, does he accept that the Government will have to think carefully about how these people should be compensated for losses incurred before the regulations were brought into force?
Mr. Redwood: The question of who is eligible for compensation under the new regime is for t he compensation fund. There may be cases that should be taken up with it on behalf of those who are seeking compensation. It is not for the Government to specify, as we do not run that fund.
As to whether the Government should do anything along the lines of the action taken in relation to Barlow Clowes, my hon. Friend will remember that there were special circumstances in that case. The most important point was the ombudsman finding against the Government. In the light of that and the number of people who had been affected, together with the concern expressed in the House about the matter, the Government decided to make the ex-gratia payment. I do not think that we can accept that, in all cases where there have been losses of any kind, at any date in the past, the Government should automatically make such payments. On that issue, I fear that I cannot help my hon. Friend as much as he would like.
I hope that I have answered all the questions raised, and I commend the order to the House.
Question put and agreed to.
Resolved,

763
That the draft Financial Services Act 1986 (Delegation) Order 1991, which was laid before the House on 19th December, be approved.

STATUTORY INSTRUMENTS, &c.

  VALUE ADDED TAX
  Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &c.).
  That the Value Added Tax (Construction of Dwellings and Land) Order 1990 (S.I. 1990, No. 2553), dated 13th December 1990, a copy of which was laid before this House on 17th December, be approved.—[Mr. John M. Taylor.]
  Question agreed to.

  NORTHERN IRELAND
  Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &c.).
  That the draft Road Traffic (Amendment) (Northern Ireland) Order 1991, which was laid before this House on 18th December, be approved.—[Mr. John M. Taylor.]
  Question agreed to

Gas-powered Vehicles
Motion made, and Question proposed, That this House do now adjourn.—[Mr. John M. Taylor.]
10.45 pm
Mr. Tony Speller: I have already received two reactions in advance of my speech tonight on the possibilities of natural gas or hydrogen gas as a future fuel for vehicles.
The first reaction came from Mrs. Halliday, a lady whom I have never met and probably never shall. She telephoned me to say that, during world war two, methane-driven cars were used and that, in Wolverhampton, taxis ran on gas supplied by British Oxygen. I did not know that, and I am grateful to Mrs. Halliday for her helpful comments. I cannot say the same about the rather pathetic efforts of a local newspaper that managed the headline
"Chicken Dung Plan to Foil Saddam".
I have read and respected that paper for many years, and it is a pity that it can treat such a serious subject in such a flippant manner.
The majority of my speech relates to research that has been conducted in the United States. It is more fearful of oil shortages than the United Kingdom, for understandable reasons. When the United States had its first oil shock a few years ago, many Americans started to think about alternatives to total dependence on fossil fuels. Two thirds of the oil consumed in the United States is burned by motor vehicles, but at present there are no practical substitutes for oil. American experts say that the most likely alternatives to gasoline or diesel will be methanol, compressed natural gas and electricity.
The essence of the problem is the general lack of knowledge on the subject. In Britain, when a problem goes away, we tend to forget about it until it recurs. The problem about oil has resurfaced now because of the Gulf conflict.
As environmental problems become more serious, and are taken more seriously, natural gas becomes a more important fuel than those of us who use it for our central heating and cooking have ever thought. Apart from the sun, wind and water power, natural gas is by far the cleanest source of energy. It could be the fuel of the future for motor vehicles, which are the greatest cause of pollution on our streets now.
A refrigerator can run on electricity, kerosene or gas. It may surprise people to learn that most bits of machinery, including motor cars, can be run on such energy sources. We are used to conventional cars that use regular or unleaded petrol, or diesel. Most of us are aware that various forms of gas, mostly methane and gases derived from sewage, have been used in the past to power vehicles. I accept that such ventures have been undertaken mostly out of curiosity or to promote a particular enterprise. For some years, Anglian Water has used escort vans powered by its home-produced gas. Such project have been experiments rather than serious operations.
Electric milk floats are common, but no one has ever produced a battery sufficiently compact, swift to charge and sufficiently powerful to take a full sized vehicle on the road for the normal distance required in the working day.
Why gas? At this time of the Gulf war, which is at least partly oil-related, there is every logic in looking for a basic

765
fuel for vehicle propulsion that has its source in those countries that do not want to be dependent upon oil from the middle east.
In future, electricity generation will turn largely to gas in a co-generation role as opposed to the previously more conventional coal, or the long expected, but frankly distrusted, nuclear power.
In the past, everyone has assumed that gas, a finite substance, would run out at the end of this century or not far into the next century. For basically commercial reasons, gas stocks have always been underestimated. There is no doubt now that supplies in Europe alone are enough to keep us going well into the middle of the 21st century.
Gas is far less damaging to the environment than coal, or petroleum products. If I seem to swing between electricity generation and vehicle propulsion, that is simply because, for far too long, we have lived under a rather stratified form of science which assumes that energy for electricity generation comes from coal or nuclear and that energy for motor cars comes from petroleum products. When pressed, experts may accept that there are possibilities in gas or electric or even steam-driven vehicles, but these are considered unimportant, almost amusing, relics of past research.
The problem with new ideas is always that no one knows whether they will work in practice, even though they work in theory. So it was with gas vehicle propulsion. But no longer, although I was surprised to have to travel to Minnesota to find such propulsion not only acceptable but becoming almost mandatory at state level as a method of economic and environmentally sound propulsion.
In the USA, with its speed limit of 55 miles an hour, gas propulsion is acceptable, and I find it similar to diesel. Certainly gas-propelled vehicles have slower acceleration, but they have a good cruising speed and excellent fuel economy.
Ingenuity is the hallmark of the new gas engineer. In Minnesota, gas spigots are installed free of charge in people's garages if they possess a gas-powered car. They drive in at night, fill up overnight and drive off next morning without needing to fill up at a service station.
New service stations are now required to have facilities to fill up vehicles with gas as well as with diesel or petrol. That is all very sensible, but by and large none of these things have happened or even been accepted in this country as yet.
I chair the all-party alternative energy group, which is not against any form of power generation but which is much in favour of conservation—that famous fifth fuel—and the use of fuels which are efficient, economic and low in pollutants. Alas, I do not expect in my time to be able to offer the House a water-propelled car, but one day H20 may be split into hydrogen and oxygen and we shall get our gas fuel, if not from the tap, then at least from a local source.
I submit that gas propulsion is not only not eccentric but the logical future method of propulsion. It is economical to use, although I have no doubt that my right hon. Friend the Chancellor would soon slap the equivalent of a petrol tax on if it became a standard fuel. But my argument in favour of Government support, and Government consideration is also a request to the private commercial sector to consider whether it should not look at something unusual but not illogical. We have gone from theory to practice. For many years, we have been able to
766
convert petrol-driven cars to gas, with a bulk cylinder filling the boot. Indeed, one of my hon. Friends has run a vehicle twice around the clock using gas. Yet I suspect that hon. Members did not know that or realise that the effect had been achieved.
For years, this conversion method has worked, and now the Americans are building cars with engines designed to run on gas. That is the logical way forward. General Motors has manufactured such a car, codenamed GMC 3500, I believe. Toronto Transit uses 40-seater buses that run entirely on natural gas.
Mrs. Sandra Hale, commissioner of administration in Minnesota, has said:
"The Mideast crisis has made energy conservation fashionable again but, in Minnesota state, good energy conservation never went out of fashion. When our Country's petroleum supplies were threatened in the 1970s, Governor Rudy Perpich initiated energy conservation measures that carried the State through the crisis. These measures became a permanent part of State operations because they made sense for the longer term. The results have been impressive."
Energy-efficient compact vehicles predominate. Minnegasco is the local natural gas distributor in Minnesota. With its help, more than 20 commercial fleets have been converted to natural gas propulsion.
Also in the United States of America, the solar energy research institution in Golden, Colorado, is working on clean fuels such as the hythane system, whereby natural gas is blended with hydrogen towards an ultimate clean vehicle fuel. Nearer home, according to Automotive Engineering, May 1990, BMW is researching hydrogen-powered engines for some of its luxury cars. It will take a long time to make the full transition, but the beginning is there.
In the United Kingdom, British Gas recently acquired—with good timing, in view of my debate—Consumers Gas of Ontario, Canada's largest gas distribution company. British Gas is far from being some dreary old utility. It is now a huge international group seeking, treating and selling gas worldwide. Its chairman, Mr. Bob Evans, is a frequent visitor to the House, and confirms that the new company is fully committed to caring for the environment. He intends to spend $30 million in Canada on research and development, much of which will concentrate on the use of gas to power vehicles.
There are other good things to come. The Ricardo Group, a British research and development company, claims that natural gas is a high-quality engine fuel, and that existing petrol engines can be easily converted to use it. But that is the past. The group is now testing prototype gas bus engines on behalf of the co-Nordic natural gas project. This involves a consortium of five major Scandinavian urban bus companies, with the tightest emission controls anywhere in the world. There is already acceptance that the system works, and people are experimenting—but not shouting the news as loudly as I would like. British Gas, the leader, has been in the field for many years, and is now committed to research and development.
Mr. Colin Shepherd: I am grateful to my hon. Friend for allowing me to put a question to him in his very interesting debate. As he said, I have been running my car on liquid petroleum gas for 13 years to remarkably good effect in terms of engine wear, and of feeling clean environmentally. However, it has been enormously frustrating to see the negative pricing policy adopted by

767
retailers, plus the Government's negative taxation policy, lead to a steady reduction in the number of outlets, so that liquid gas is now hardly available throughout the country. I am fortunate that I still have access to it.
Does my hon. Friend agree that British Gas and others must develop an aggressive, competitive and outgoing positive policy, and should educate retailers of the advantages? Above all, the Government must adopt a positive taxation policy that will result in it being in the interests of the public to use that alternative and very effective fuel.
Mr. Speller: I can only agree with my hon. Friend, and I thank him for his endorsement of the policy that I suggest.
The Government showed great sense in their tax policy on unleaded fuel—which, although it may be more expensive to produce, is cheaper to buy. That was the first good sign. If interests such as British Gas are serious—I believe they are—they will have to develop a countrywide distribution system, though probably starting in London and the south-east. If that is not done, the whole concept will come to naught.
Manufacturers must follow the lead of General Motors and acknowledge the need for clean-fuel cars. Britain and the whole of Europe are now prepared to talk clean motoring as well as just plain motoring.
It would also be good to be independent of oil supplies from the middle east and to lower particulate emissions. Although Britain has its own oil resources, it has even greater gas resources. I ask my hon. Friend the Minister not for cash—which makes a pleasant change these days—but to support such research as may be sought. On the commercial side, it is important for the Government not just to make an appraisal of the possibilities but to level the playing field between the various forms of motor fuel. I believe that gas is the logical fuel of the future. We have it. It should be cheaper. It is certainly cleaner—and it makes good sense to many of us to use it.
10.59 pm
The Minister for Roads and Traffic (Mr. Christopher Chope): I congratulate my hon. Friend the Member for Devon, North (Mr. Speller) on obtaining this debate, because he has made a stimulating contribution on a subject of which many hon. Members are blissfully ignorant. I am sure that in the years to come many people will read his speech and will say that, as chairman of the all-party alternative energy group, he has yet again made a valuable contribution. Certainly gas-powered vehicles are an interesting subject and one that we must take seriously in our search for more environment-friendly road transport.
At present, the Government are targeting vehicle emissions. We are successfully encouraging the use of unleaded fuel and we have recently agreed in the European Community, tough emission standards for all types of new car which will take effect from the end of next year. We are now seeking much tighter standards for lorries. Later this year we shall introduce a totally new emissions check into the MOT test to encourage people to keep their engines in tune.
Alternative fuels are a good example of an area where one needs to consider the trade-off between the advantages
768
and the disadvantages. Solving one environmental problem by switching from one fuel to another can often create another—or there may be an economic penalty. The objective must be to get the balance right in each case. So what role do we see for alternative fuels?
A very wide range of alternative fuels is in principle possible, but there are no panaceas. It is necessary to consider not only the environmental benefits but other factors, such as the practicality of the fuel for road vehicle use, availability, refuelling and supply infrastructure and cost. The possibilities include LPG, natural gas, electricity and hydrogen, among others. Some of those are already in use to a limited extent in some countries—for example, natural gas in New Zealand and electric vehicles in this country, where by world standards we have a large fleet of electric vehicles. Others, such as hydrogen, are at the experimental stage.
The Government recognised many years ago the benefits of natural gas as a clean, convenient fuel for domestic and industrial use. Since the exploitation of resources in the North sea began in the early 1960s, gas production has increased steadily. In 1989, 45 billion cu m was being produced from 28 offshore gas fields and one onshore field, at a value of about £2·1 billion. Four new offshore fields began production in 1989. There are reserves of between 560 and 1,770 billion cu m, which is estimated to be between 10 and 30 years' consumption at the current rate of 55 billion cu m per year.
Recently, concerns about global warming have focused attention on the use of fuels such as natural gas instead of the conventional fossil fuels, oil and coal. These fuels have low carbon-to-hydrogen ratios and produce less carbon dioxide, the principal greenhouse gas.
The successor companies to the Central Electricity Generating Board—PowerGen and National Power—are considering projects to generate electricity from natural gas using energy-efficient combined cycles of gas and steam turbines. A number of other companies are making similar plans in competition with PowerGen and National Power.
As my hon. Friend will know, the Road Vehicles (Construction and Use) regulations permit the use of gas as a fuel for road vehicles, but the only type of gas allowed by the regulations at present is liquefied petroleum gas. This can be stored in liquid form at comparatively low pressures—about 250 psi—and has been used as a fuel in motor vehicles for many years, but not in large quantities, at least in this country.
The use of any other gaseous fuel in road vehicles is prohibited by the regulations. This is because the detailed requirements cater only for gases at the sort of pressure found in LPG systems.
Mr. Colin Shepherd: Will my hon. Friend recognise and look into the argument that I tried to make in an intervention on my hon. Friend the Member for Devon, North (Mr. Speller)—that liquid petroleum gas has not been more widely used in this country, as compared with Holland and western Canada, because the taxation structure has been wrong, and the Government have had a large role in the lack of uptake of gas-powered vehicles?
Mr. Chope: I shall certainly look into that. It is a responsibility of my right hon. Friend the Chancellor of the Exchequer. I know that my hon. Friend has first-hand knowledge of this subject. I am sure that my right hon.

769
Friend the Chancellor will be interested in his experience, and I will ensure that these comments are drawn to his attention.
Compressed natural gas has to be stored at very much higher pressures—up to 3,000 psi—and compressed to very high pressure to store reasonable quantities in the vehicle. This requires much stricter standards for safe storage and use. That is why the number of vehicles using CNG is very small, and the number of special approvals that we have given is also very small. If the demand for the use of CNG were to increase, we would have to consider an amendment to the Road Vehicles (Construction and Use) Regulations, setting out standard specifications for the gas systems to be used.
We permit reputable organisations to experiment with CNG in road vehicles, but they must apply to the Department of Transport for approval, with details or the gas system that they propose to use, its design specifications and how they propose to inspect and test it. At present, to my knowledge, three organisations hold such approvals, with 29 vehicles running on the roads. In the past, some have experimented with gas reclaimed from waste disposal areas, but all are now obtaining their supplies from the gas mains.
British Gas plc recently said that it wishes to promote the use of CNG in road vehicles, and it is setting up an organisation for that purpose. As my hon. Friend said, it is currently setting up field trials in the United Kingdom which will make use of experience in the Netherlands and Canada—the latter arising out of the recent acquisition of Consumers Gas. A great deal of work will need to be done before any results become apparent, but my officials are working in collaboration with British Gas to formulate suitable specifications for the gas system for inclusion in the regulations. Early developments in this market are likely to be in relation to commercial vehicle fleets having the relevant characteristics, and that is where the important environmental benefits will be most evident. I must stress, however, that it will be a long time before vehicles running on CNG are commonly available for the private motorist.
Natural gas has advantages, in that it is abundant and its CO2 emissions can be about 30 per cent. lower than those of petroleum fuels. However, natural gas, or methane, is itself a greenhouse gas, and must be compressed or—in what are at present rare cases—liquefied when used in vehicles. One survey taking possible methane losses and compression and liquefaction into account puts the relative greenhouse emissions of natural gas used in vehicles at 19 per cent. lower for CNG and 15 per cent. lower for liquefied gas, compared with those in vehicles using conventional fuel.
But that advantage is largely offset if account is taken of performance and space standards. That stems partly from the weight and space penalties associated with storage of CNG in the vehicle, and the likelihood that any transition to CNG vehicles would involve dual fuelling, so that cars use petrol or CNG.
Mr. Speller: I am interested to know why a vehicle running on gas must be able to run on petrol as well. No one has suggested that a vehicle that runs on petrol should also be able to run on gas. I hope that my hon. Friend will also mention the great advantage of independence from suppliers in the middle east.
Mr. Chope: There is certainly no reason why a vehicle should not run solely on CNG, but, if the supplies are not readily available, it is understandable that many vehicle owners will want dual fuelling. As, during the transition, only a limited amount of CNG would be available, most vehicle owners would demand dual-fuelling facilities.
New petrol-fuelled cars will soon be much cleaner, with the introduction of stringent limits which will reduce noxious emissions by about 80 per cent. compared with the current limits. A petrol engine meeting those new standards would require accurate fuel management and a catalytic converter, but would produce lower noxious emissions than one powered by natural gas without a catalytic converter. There is no fundamental technical reason why cars using natural gas cannot be designed to meet the new emission limits, but clearly any relative percentage differences between fuels will then be of much less importance in absolute terms, as only very low emission levels are permitted.
In the case of heavy-duty engines for lorries and buses, the very low levels of particulates associated with natural gas may prove a useful advantage, but the CO2 advantage in use relative to diesels is lower. Operators of such vehicles are very sensitive to range and cost factors, but in some countries CNG has been used to a limited extent in bus fleets. Some fleet operators may find the special refuelling facilities and operating costs worth while, and the drawbacks of reduced load space and reduction in performance acceptable for their particular operations.
But even in countries where CNG has established a reasonably large presence numerically, the vast proportion of vehicles still use conventional petroleum fuels. On that basis, it is likely that the vast majority of vehicles in the United Kingdom will continue to use petrol and diesel in the medium term. The small proportion of the fleet using natural gas would have a limited benefit in reducing CO2 emissions, but that would not be a complete solution.
My hon. Friend mentioned the desirability of alternative sources of energy. The point is well taken, but we must have regard to practicalities and, with the best will in the world, I do not think that it would be possible at present to convert the whole British vehicle fleet to take CNG, although, if my hon. Friend has his way, it will come about sooner rather than later.
Mr. Colin Shepherd: Is it not a question of the whole process being incentivised, to use a horrible word? If those who set the parameters wish there to be an increase in the use of alternative fuels, a structure must be devised for it, just as happened with unleaded fuel—to great effect.
Mr. Chope: My hon. Friend has a point, but the point made by hon. Friend the Member for Devon, North was that in Minnesota there is quite widespread use of CNG.. I understand that the tax on petrol in the United States is much lower than it is here. Therefore, one cannot necessarily say that in the United States there is an incentive to use CNG which does not exist here. Due to the higher petrol taxation in this country, one might expect there to be greater incentive to use CNG.
This is a welcome debate, and I am grateful to my hon. Friend the Member for Devon, North for his positive contribution to it. Improvements in the efficiency of conventional vehicles, which constitute the vast majority of the fleet, still offer the greatest potential benefits in helping to limit CO2 and other emissions from road

771
transport. We wish to encourage the development of vehicles powered by currently unconventional sources of energy. We see some long-term potential for CNG vehicles in our continuing efforts to improve the environment.
772
Question put and agreed to.
Adjourned accordingly at eleven minutes past Eleven o'clock.

HOME DEPARTMENT

  Magistrates Courts
  Mr. Rooker
  To ask the Secretary of State for the Home Department if he will give an estimate of the cost of setting up and running the agency for administering the magistrates courts centrally, as suggested by his Department's scrutiny committee; and what are the comparisons with existing costs.

  Mr. John Patten
  Coopers and Lybrand Deloitte was appointed last year to prepare such an assessment. Its report was completed in September and I refer the hon. Member to the copy that was placed in the Library at the time.

  Police Searches
  Mr. Vaz
  To ask the Secretary of State for the Home Department if he will call for a report from the chief constable of Leicestershire on the circumstances surrounding the search of the home of the hon. Member for Leicester, East's constituent Mr. Peach, of 15 Rushey close, Leicester.

  Mr. Peter Lloyd
  I understand from the chief constable of the Leicestershire constabulary that there is no record of a search being made of the home of Mr. Peach at the address given.

  Women's Issues
  Mr. Andrew Bowden
  To ask the Secretary of State for the Home Department what is the total annual cost of convening the ministerial group on women's issues.

  Mrs. Rumbold
  I regret that this information is not readily available and could be provided only at disproportionate cost.

  Mr. Andrew Bowden
  To ask the Secretary of State for the Home Department how many staff are on the secretariat of the ministerial group on women's issues.

  Mrs. Rumbold
  At present servicing the ministerial group is part of the duty of five members of staff, the equivalent of three and a half full-time posts.

  Prison Boilers
  Mr. Butler
  To ask the Secretary of State for the Home Department what is the total oil-fired boiler capacity within Her Majesty's prisons.

  Mrs. Rumbold
  The information requested could be obtained only at disproportionate cost. However, in the year 1989–90, 41·6 per cent. of the total energy used in Her Majesty's prisons was derived from oil, representing 609,440 megawatt hours. Virtually all this would have been produced by oil-fired boilers.

  Criminal Procedure (Insanity) Act
  Mr. Bowis
  To ask the Secretary of State for the Home Department if he will review the Criminal Procedure (Insanity) Act 1964 with particular reference to the length of time people may be detained without trial; and if he will make a statement.

  Mr. Kenneth Baker
  The Government have reviewed the 1964 Act in the light of recommendations made by the Butler committee on mentally abnormal offenders which reported in 1975. The Government recognise that it is desirable to amend the Act by providing for an examination by a court of the case against an accused person found unfit to plead. Under the provisions of the Mental Health Act 1983, a person admitted to hospital following a finding of unfit to plead under the provisions of the 1964 Act may apply to a mental health review tribunal for his discharge in the first six months of his detention and at specified intervals thereafter.

  Age of Consent
  Mr. Bowis
  To ask the Secretary of State for the Home Department if he will give the age of consent in each European Community country for heterosexuals, male homosexuals and female homosexuals; and if he will say what consideration he is giving to the possibility of harmonising such laws within the European Community.

  Mr. John Patten
  The information requested is not readily available and I will write to my hon. Friend. But the treaty of Rome authorises no harmonisation role for the European Community in this sort of area.

  Television Licence Fee (Evasion)
  Mr. Corbett
  To ask the Secretary of State for the Home Department how many women were committed to remand centres by individual name in 1989 and 1990 for the non-payment of fines for evasion of the television licence fee, detailing in each case the amount of the fine, the length of imprisonment and whether other offences of a similar or different nature were considered at the same time; and whether he will estimate the cost to public funds of imprisonment in each year.

  Mrs. Rumbold
  The information requested is riot available centrally and could be provided only at disproportionate cost.

  Broadcasting Ownership
  Sir John Wheeler
  To ask the Secretary of State for the Home Department what representations he has received following his announcement on 4 December 1990 about his proposed supplementary broadcasting ownership rules; and if he will make a statement.

  Mr. Kenneth Baker
  I have received a number of representations from hon. Members and others about the proposals in my announcement on 4 December relating to dual ownership of Channel 3 licences. Some of those who wrote to me supported these proposals, but a number urged me to consider restricting co-ownership of licences for adjacent areas. I have now decided that, in addition to the proposals that I set out in that announcement, it will initially not be possible for a single person to control two
  371
  licence areas that are contiguous. Two licence areas will be deemed to be contiguous if they are adjacent with a significant land border between them. This restriction will last only until the beginning of 1992. Between then and the end of 1993 all takeovers of Channel 3 licences will, by virtue of section 21 of the Broadcasting Act 1990, be prohibited unless they have the prior approval of the Independent Television Commission. Thereafter, it will be possible for a licensee to acquire a contiguous neighbour through takeover, provided that the two licences in question were not both in respect of areas designated as large.

  Broadcasting (Sporting Events)
  Sir John Wheeler
  To ask the Secretary of State for the Home Department what list he has drawn up for the purposes of section 182 of the Broadcasting Act 1990.

  Mr. Kenneth Baker
  Following consultation with broadcasters, the rights holders of the events concerned, the Sports Council and the Central Council of Physical Recreation, I have drawn up a list including 10 events. These are the same as the events included in the list drawn up for the purposes of section 14 of the Cable and Broadcasting Act 1984 which were set out in a written answer on 12 July 1985. They are:

  (1) The Commonwealth Games when held in the United Kingdom.

  (2) Cricket Test Matches involving England.

  (3) The Derby horse race.

  (4) The FIFA World Cup Finals.

  (5) The FA Cup Final.

  (6) The Grand National horse race.

  (7) The Olympic Games.

  (8) The Oxford and Cambridge Boat Race.

  (9) The Wimbledon Tennis Championships.

  (10) Additionally in Scotland, the Scottish FA Cup Final.

  I am continuing to consult the interests concerned over possible changes to the list and will announce my conclusions in due course.

  Bomb Scares
  Mr. Cartwright
  To ask the Secretary of State for the Home Department what advice is given to police forces about how they should involve the owners and/or

  Table 2

  Strength by police division (at 31 December)

  1982

  1983

  1984

  1985

  1986

  1987

  1988

  1989

  1990

  A Division

  Police

  479

  452

  488

  490

  509

  497

  504

  491

  490

  Civilian

  —

  —

  —

  116

  138

  136

  133

  135

  138

  B Division

  Police

  378

  361

  369

  375

  385

  386

  386

  397

  392

  Civilian

  —

  —

  —

  90

  98

  97

  97

  101

  107

  C Division

  Police

  378

  364

  380

  380

  378

  386

  388

  383

  392

  Civilian

  —

  —

  —

  87

  108

  112

  112

  107

  110

  D Division

  Police

  453

  448

  454

  453

  443

  438

  456

  446

  455

  Civilian

  —

  —

  —

  78

  89

  83

  82

  82

  83

  E Division

  Police

  281

  283

  284

  286

  285

  299

  300

  294

  298

  Civilian

  —

  —

  —

  56

  57

  57

  56

  54

  54

  372
  managers of (a) private property and (b) public property when searching for explosive material during a bomb scare.

  Mr. Lloyd
  [holding answer 24 January 1991]: Advice is given to police forces by the crime prevention centre at Stafford. However, the nature of the advice given by police forces will depend on local circumstances and needs. Crime prevention officers are attached to all forces and they will be glad to give advice to anyone who seeks it on the searching of buildings for explosive material during bomb scares.

  Police Statistics
  Mr. Redmond
  To ask the Secretary of State for the Home Department if he will call for a report from the chief constable for the number of personnel employed by South Yorkshire police authority(a) in total and (b) for each division or equivalent, for each year since 1979, distinguishing civilian personnel separately.

  Mr. Peter Lloyd
  The tables show the available information. No records were kept of the strength at divisional level before 1982 or of civilian staff strength at divisional level before 1985.

  South Yorkshire Police

  Table 1

  Police and civilian strength (at 31 December)

  Police

  Civilian

  Total

  1979

  2,644

  863

  3,507

  1980

  2,842

  891

  3,733

  1981

  2,874

  800

  3,674

  1982

  2,875

  768

  3,643

  1983

  2,858

  789

  3,647

  1984

  2,873

  871

  3,744

  1985

  2,850

  818

  3,668

  1986

  2,846

  939

  3,785

  1987

  2,934

  947

  3,881

  1988

  2,941

  977

  3,918

  1989

  2,941

  1,004

  3,945

  1990

  2,981

  1,020

  4,001

  373

  1982

  1983

  1984

  1985

  1986

  1987

  1988

  1989

  1990

  F Division

  Police

  285

  277

  284

  281

  286

  293

  304

  304

  304

  Civilian

  —

  —

  —

  54

  62

  60

  63

  65

  64

  Headquarters

  Police

  569

  646

  558

  524

  524

  555

  560

  577

  594

  Civilian

  —

  —

  —

  335

  387

  402

  434

  460

  464

  Recruits in training

  52

  27

  56

  61

  36

  80

  43

  49

  56

ATTORNEY-GENERAL

  Private Summons
  Mr. Redmond
  To ask the Attorney-General what guidelines he has issued to the Treasury Solicitor on his appearance at magistrates courts for hearings relating to applications for private summons taken out against Government Ministers.

  The Attorney-General
  None. The Treasury Solicitor handles such matters in accordance with the ordinary arrangements for the representation of Government Ministers in relation to legal proceedings by or against them in an official capacity.

  Mr. Redmond
  To ask the Attorney-General what was the cost to public funds of the appearance of the Treasury Solicitor at a hearing in Bath and Wansdyke magistrates court in 1990 relating to an application for a private summons taken out by Diana Francis and Joan Staines against the right hon. Member for Finchley (Mrs. Thatcher).

  The Attorney-General
  The cost to public funds was £796·80.

  Marital Rape
  Mr. Carrington
  To ask the Attorney-General what powers are available to the prosecuting authorities where the anonymity of a victim of marital rape is prejudiced as a result of publication or broadcast of the name of the accused.

  The Attorney-General
  Under section 4 of the Sexual Offences (Amendment) Act 1976, as amended by section 158 of the Criminal Justice Act 1988, after a person is accused of a rape offence it is an offence to publish or broadcast matter likely to lead members of the public to identify a woman as the complainant in relation to that accusation. The publication or broadcast of the name of a husband accused of raping his wife is likely in particular cases to lead to the identification of the complainant. The prohibition applies during the whole of the woman's lifetime, unless the courts make a specific direction to the contrary. It is a defence that the woman has given written consent for the matter to appear, but the defence is not available if any person has unreasonably interfered with her peace or comfort with intent to obtain the consent. The maximum penalty is a £2,000 fine.

  Attendance Allowance
  Mr. Hinchliffe
  To ask the Attorney-General what was the average waiting time from the appeal being made against an attendance allowance decision and the appeal decision for the years 1988, 1989 and 1990.
  374
  The Attorney-General
  The office of the social security commissioners does not record information on the average waiting times for decisions on appeals in relation to individual categories of benefit.

PRIME MINISTER

  Lithuania and Latvia
  Mr. Alex Carlile
  To ask the Prime Minister if he Will make direct representations to the President of the Soviet Union concerning recent actions by the Soviet Government in Lithuania and Latvia; and if he will make a statement.

  The Prime Minister
  We have made our concerns known very clearly to the Soviet authorities, both bilaterally and in conjunction with partners and allies. There should be no doubt of our condemnation of the actions of Soviet troops in Vilnius and Riga and their tragic consequences. We call urgently on the Soviet authorities to withdraw their troops and to negotiate seriously with the elected authorities in the Baltic states.

  Lobby Reporters
  Mr. Kirkwood
  To ask the Prime Minister if he will change the terms under which parliamentary lobby reporters are briefed by his press secretary so that information may be attributed to the Prime Minister's office in place of Government sources.

  The Prime Minister
  I have at present no plans to do so.

  Saudi Arabia (Mail)
  Mr. Beith
  To ask the Prime Minister whether he will take steps to ensure that mail can be got through to United Kingdom civilians working in Saudi Arabia from their families, using military postal facilities if necessary and where possible.

  The Prime Minister
  In spite of delays caused by difficulties with air services, the Post Office is making every effort to operate the best possible service to Saudi Arabia and mail is getting through. The Ministry of Defence would be willing to consider what help it could provide, if this becomes necessary.

  Royal Prerogative
  Mr. Allen
  To ask the Prime Minister (1) if he will bring forward proposals to institute a system for notifying(a) Parliament and (b) the electorate when the royal prerogative has been exercised;

  (2) if he will make it his policy to introduce legislation to ensure that the authority of Parliament is required for (a) the declaration or continuation of war and (b) other exercises of the royal prerogative;
  375
  (3) if he will bring forward legislative proposals to introduce ministerial responsibility to Parliament for the powers currently exercised by the royal prerogative.

  The Prime Minister
  [holding answer 25 January 1991]: No.

  Mr. Allen
  To ask the Prime Minister what arrangements exist for the Prime Minister to be notified when the royal prerogative is used.

  The Prime Minister
  [holding answer 25 January 1991]: With very few exceptions, the royal prerogative comprises powers that are now exercised by Ministers subject to the constitutional conventions.

  Declaration of War
  Mr. Allen
  To ask the Prime Minister (1) what would be the effects of an official declaration of war on the maintenance of an Iraqi diplomatic capability in the United Kingdom;

  (2) whether the United Kingdom is at war with Iraq;

  (3) what representations he has received concerning parliamentary consideration of the declaration of war.

  The Prime Minister
  [holding answer 25 January 1991]: The United Kingdom is not in a state of war with Iraq. British forces are engaged, together with the armed forces of Kuwait and other coalition partners, in hostilities against Iraq under the authority of the United Nations Security Council. The rules of international law applying in cases of armed conflict apply to these hostilities, notably the Geneva protocol of 1925 and the four Geneva conventions of 1949. We will observe our obligations under those treaties scrupulously and expect the Government of Iraq to do the same.

FOREIGN AND COMMONWEALTH AFFAIRS

  Advisory Companies
  Mr. Foulkes
  To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to his answer to the hon. Member for Carrick, Cumnock and Doon Valley of 17 January,Official Report, column 571, if he will list the wide range of groups from which he seeks advice on presentational aspects of policy; which of them are paid and which unpaid; what are their terms of reference in each case; and if he will make a statement.

  Mr. Hurd
  A complete list of all groups from which the FCO seeks advice could be compiled only at disproprtionate cost. The following are illustrative examples:Mr. E. R. I. Allan OBE, is employed as a consultant to advise on British official participation in international exhibitions.
  The British Atlantic Committee and Peace Through NATO advise on the presentation of defence and

  Maintained school leavers in England Aggregation over 1987, 1988, 1989 Percentage of leavers with grades A-C at GCSE/O-level/CSE

  Modern foreign languages

  Mathematics

  English

  Local education authority

  rank

  rank

  rank

  Barking

  5·3

  (95)

  17·5

  (93)

  25·8

  (95)

  Barnet

  25·8

  (4)

  44·5

  (1)

  50·5

  (4)

  Bexley

  14·5

  (47)

  33·6

  (16)

  41·3

  (32)

  Brent

  14·8

  (44)

  27·0

  (63)

  39·0

  (44)

  Bromley

  18·1

  (19)

  33·1

  (22)

  43·8

  (18)

  376
  disarmament issues. This advice is informal and unpaid although BAC and PTN do receive grant aid from the government.
  Hariri Page were commissioned in 1990 to advise on methods of evaluating information work overseas, including market research techniques, targeting, training and reporting procedures.
  Moon Communications has recently completed a consultancy on the management of FCO publications. This included the production of a design manual to ensure consistency of presentation, advice on specific publications and technical assistance on visual presentation.
  Shandwick PLC have provided advice on an informal and unpaid basis on public and media response to the Gulf Crisis. Young and Rubicam have provided advice on public perceptions of the crisis on the same basis.

  Latvia
  Mr. Vaz
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on his recent meeting with the Soviet ambassador about the situation in Latvia.

  Mr. Douglas Hogg
  My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs summoned the Soviet chargé on 21 January to underline our concern over the actions of Soviet troops in Riga on 20 January which resulted in a number of deaths. He again urged the Soviet authorities to withdraw their troops from the streets in the Baltic republics and to engage in serious negotiation with the democratically elected authorities in the republics.

EDUCATION AND SCIENCE

  Reading Standards
  Mr. Bellotti
  To ask the Secretary of State for Education and Science what studies have been undertaken into the connection between standards of reading in primary schools and borrowing levels of books from public libraries; and if he will make a statement.

  Mr. Eggar
  I am aware of no such studies.

  GCSE
  Mrs. Currie
  To ask the Secretary of State for Education and Science if he will list the proportions of pupils gaining grades A to C in General Certificate of Secondary Education in (i) English, (ii) mathematics and (iii) a modern language in 1990, by rank order of education authority.

  Mr. Fallon
  Information for 1990 is not yet available. The table gives information for leavers from maintained schools, for each local education authority, aggregated over the three years 1987–89.
  377

  Modern foreign languages

  Mathematics

  English

  Local education authority

  rank

  rank

  rank

  Croydon

  14·3

  (50)

  26·8

  (66)

  39·5

  (41)

  Ealing

  11·1

  (82)

  27·0

  (62)

  32·1

  (79)

  Enfield

  18·8

  (16)

  33·3

  (19)

  42·1

  (27)

  Haringey

  10·8

  (84)

  19·3

  (91)

  29·9

  (89)

  Harrow

  18·1

  (18)

  41·0

  (3)

  55·2

  (1)

  Havering

  12·7

  (68)

  29·7

  (46)

  39·3

  (42)

  Hillingdon

  12·0

  (73)

  31·6

  (32)

  37·8

  (54)

  Hounslow

  15·7

  (38)

  30·4

  (42)

  40·3

  (39)

  Kingston upon Thames

  20·8

  (9)

  32·6

  (27)

  50·3

  (5)

  Merton

  17·6

  (24)

  30·1

  (44)

  38·3

  (50)

  Newham

  9·0

  (92)

  18·9

  (92)

  29·0

  (91)

  Redbridge

  13·8

  (54)

  30·1

  (45)

  38·2

  (51)

  Richmond upon Thames

  23·2

  (6)

  36·0

  (10)

  44·3

  (15)

  Sutton

  29·1

  (1)

  43·7

  (2)

  50·3

  (6)

  Waltham Forest

  9·7

  (90)

  16·2

  (95)

  26·2

  (93)

  Birmingham

  12·2

  (70)

  21·2

  (84)

  32·9

  (77)

  Coventry

  11·5

  (79)

  25·1

  (72)

  34·8

  (67)

  Dudley

  16·0

  (35)

  28·0

  (55)

  36·8

  (63)

  Sandwell

  8·1

  (93)

  16·5

  (94)

  26·1

  (94)

  Solihull

  20·5

  (10)

  34·6

  (13)

  45·8

  (11)

  Walsall

  14·0

  (53)

  24·2

  (76)

  34·8

  (68)

  Wolverhampton

  11·6

  (75)

  20·8

  (86)

  32·5

  (78)

  Knowsley

  3·9

  (96)

  14·4

  (96)

  18·9

  (96)

  Liverpool

  10·8

  (83)

  20·6

  (88)

  31·2

  (84)

  St· Helens

  13·5

  (59)

  26·9

  (64)

  33·1

  (76)

  Sefton

  16·3

  (34)

  29·4

  (48)

  43·3

  (20)

  Wirral

  17·1

  (27)

  29·6

  (47)

  40·8

  (38)

  Bolton

  16·7

  (30)

  33·3

  (18)

  43·0

  (23)

  Bury

  14·4

  (49)

  35·3

  (12)

  43·1

  (22)

  Manchester

  9·9

  (89)

  20·1

  (89)

  28·3

  (92)

  Oldham

  13·3

  (64)

  22·2

  (82)

  29·0

  (90)

  Rochdale

  10·5

  (85)

  25·1

  (73)

  34·7

  (69)

  Salford

  12·2

  (72)

  24·7

  (75)

  37·7

  (56)

  Stockport

  16·9

  (29)

  33·1

  (24)

  46·9

  (8)

  Tameside

  14·4

  (48)

  30·7

  (39)

  41·1

  (34)

  Trafford

  26·1

  (3)

  35·8

  (11)

  44·1

  (16)

  Wigan

  19·2

  (15)

  33·1

  (23)

  40·9

  (36)

  Barnsley

  10·3

  (86)

  23·3

  (77)

  30·5

  (87)

  Doncaster

  11·2

  (80)

  26·8

  (65)

  31·7

  (81)

  Rotherham

  14·7

  (45)

  25·7

  (70)

  34·4

  (70)

  Sheffield

  13·7

  (57)

  25·0

  (74)

  37·6

  (57)

  Bradford

  13·4

  (61)

  20·8

  (85)

  31·3

  (83)

  Calderdale

  13·2

  (65)

  22·8

  (78)

  34·2

  (71)

  Kirklees

  17·6

  (25)

  27·2

  (60)

  37·8

  (53)

  Leeds

  14·5

  (46)

  25·2

  (71)

  34·0

  (75)

  Wakefield

  11·5

  (78)

  22·3

  (81)

  31·3

  (82)

  Gateshead

  10·1

  (78)

  22·1

  (83)

  30·4

  (88)

  Newcastle upon Tyne

  12·2

  (69)

  20·7

  (87)

  31·8

  (80)

  North Tyneside

  13·7

  (56)

  28·0

  (54)

  39·7

  (40)

  South Tyneside

  12·9

  (67)

  27·9

  (57)

  34·2

  (72)

  Sunderland

  9·7

  (91)

  22·4

  (79)

  31·0

  (85)

  Inner London Education Authority

  10·1

  (88)

  20·1

  (90)

  30·8

  (86)

  Avon

  15·6

  (39)

  30·2

  (43)

  42·1

  (26)

  Befordshire

  14·2

  (51)

  27·9

  (56)

  39·0

  (45)

  Berkshire

  21·3

  (7)

  36·3

  (9)

  44·4

  (14)

  Buckinghamshire

  26·8

  (2)

  39·1

  (5)

  49·2

  (7)

  Cambridgeshire

  20·2

  (12)

  30·8

  (37)

  41·2

  (33)

  Cheshire

  17·8

  (21)

  30·6

  (40)

  41·6

  (30)

  Cleveland

  13·6

  (58)

  29·2

  (51)

  36·5

  (65)

  Cornwall1

  14·2

  (52)

  33·1

  (21)

  45·7

  (13)

  Cumbria

  15·3

  (41)

  32·5

  (29)

  36·9

  (62)

  Derbyshire

  13·4

  (62)

  28·8

  (52)

  36·9

  (60)

  Devon

  13·3

  (63)

  29·3

  (49)

  39·2

  (43)

  Dorset

  17·8

  (22)

  31·5

  (33)

  42·2

  (25)

  Durham

  11·2

  (81)

  26·0

  (69)

  35·7

  (66)

  East Sussex

  15·9

  (36)

  33·5

  (17)

  45·7

  (12)

  Essex

  17·4

  (26)

  34·2

  (14)

  41·6

  (28)

  Gloucestershire

  19·8

  (13)

  32·7

  (26)

  43·9

  (17)

  Hampshire

  16·4

  (32)

  34·1

  (15)

  41·6

  (29)

  Hereford and Worcester

  16·7

  (31)

  30·8

  (36)

  42·4

  (24)

  Hertfordshire

  21·3

  (8)

  36·9

  (7)

  46·8

  (9)

  Humberside

  13·8

  (55)

  26·7

  (67)

  34·1

  (73)

  Isle of Wight

  7·2

  (94)

  22·3

  (80)

  34·0

  (74)

  Kent

  18·0

  (20)

  32·5

  (30)

  41·0

  (35)

  Lancashire

  15·9

  (37)

  30·5

  (41)

  38·3

  (49)

  Leicestershire

  11·5

  (77)

  29·2

  (50)

  38·6

  (47)

  Lincolnshire

  16·9

  (28)

  31·4

  (34)

  38·1

  (52)

  378 379

  Modern foreign languages

  Mathematics

  English

  Local education authority

  rank

  rank

  rank

  Norfolk

  13·4

  (60)

  32·5

  (28)

  37·8

  (55)

  North Yorkshire

  23·8

  (5)

  36·6

  (8)

  45·9

  (10)

  Northamptonshire

  11·6

  (76)

  26·5

  (68)

  36·9

  (61)

  Northumberland

  15·1

  (42)

  32·8

  (25)

  41·6

  (31)

  Nottinghamshire

  12·2

  (71)

  27·1

  (61)

  36·5

  (64)

  Oxfordshire

  16·4

  (33)

  31·8

  (31)

  40·8

  (37)

  Shropshire

  17·7

  (23)

  31·1

  (35)

  43·3

  (21)

  Somerset

  15·5

  (40)

  30·7

  (38)

  38·5

  (48)

  Staffordshire

  13·2

  (66)

  272

  (59)

  37·0

  (59)

  Suffolk

  11·9

  (74)

  27·7

  (58)

  37·0

  (58)

  Surrey

  19·8

  (14)

  39·6

  (4)

  52·9

  (2)

  Warwickshire

  18·4

  (17)

  33·2

  (20)

  43·6

  (19)

  West Sussex

  20·3

  (11)

  38·1

  (6)

  50·5

  (3)

  Wiltshire

  14·8

  (43)

  28·7

  (53)

  38·7

  (46)

  ENGLAND

  15·3

  29·4

  38·9

  1 Includes the Isles of Scilly.

  Local Authority Borrowing
  Mr. Matthew Taylor
  To ask the Secretary of State for Education and Science if he will list the increase or decrease in local authority borrowing power for education for each local education authority for the next financial year in order of(a) cash magnitude and (b) as a percentage of last year's borrowing power.

  LEA

  Changes between 1990–91 and 1991–92 Annual Capital Guidelines in order of cash magnitude

  LEA

  Difference between 1990–91 and 1991–92 Annual Capital Guidelines in order of percentage change compared to 1990–91 Annual Capital Guidelines

  £000s

  Percentage

  Leeds

  13,810

  Leeds

  539

  Essex

  8,315

  Kingston

  386

  East Sussex

  8,149

  Kirklees

  212

  Kent

  7,563

  Hounslow

  181

  Derbyshire

  6,678

  Wolverhampton

  164

  Dudley

  5,900

  Dudley

  164

  Oldham

  5,093

  Gateshead

  163

  Lancashire

  4,265

  Oldham

  149

  Rochdale

  3,994

  Bromley

  117

  Hampshire

  3,193

  Lewisham

  104

  Wigan

  3,085

  Rochdale

  98

  Tower Hamlets

  3,078

  East Sussex

  95

  Newham

  3,016

  Croydon

  88

  Oxfordshire

  2,850

  Northumberland

  81

  Lincoln

  2,629

  Brent

  80

  Kirklees

  2,581

  Oxfordshire

  76

  Buckinghamshire

  2,580

  Wigan

  70

  Northampton

  2,460

  Westminster

  64

  Staffordshire

  2,268

  Sunderland

  63

  Suffolk

  2,067

  Essex

  60

  Durham

  1,987

  Buckinghamshire

  57

  Bromley

  1,972

  Newham

  54

  Surrey

  1,820

  Bury

  54

  Gateshead

  1,758

  Manchester

  53

  Cumbria

  1,699

  Ealing

  53

  Manchester

  1,635

  Bexley

  52

  Northumberland

  1,583

  Enfield

  50

  Nottinghamshire

  1,451

  Newcastle

  49

  Wolverhampton

  1,285

  Surrey

  49

  Lewisham

  1,280

  Stockport

  48

  Sunderland

  1,188

  Kent

  47

  Kingston

  1,035

  Derbyshire

  46

  Hounslow

  977

  Durham

  40

  Croydon

  935

  Northampton

  40

  Newcastle

  768

  Tower Hamlets

  40

  Enfield

  655

  Nottinghamshire

  39

  Bexley

  649

  Lincoln

  36

  Stockport

  619

  Staffordshire

  36

  Birmingham

  589

  Suffolk

  26

  380
  Mr. Fallon
  The information requested is shown in the table. No conclusions should, however, be drawn from a comparison of annual capital guidelines received by an LEA in any two years. Our distribution of annual capital guidelines is made on the basis of the consistent application of objective criteria and each LEA's annual capital guidelines reflects the extent to which its plans for spending on schools and colleges match these criteria in the year in question.
  381

  LEA

  Changes between 1990–91 and 1991–92 Annual Capital Guidelines in order of cash magnitude

  LEA

  Difference between 1990–91 and 1991–92 Annual Capital Guidelines in order of percentage change compared to 1990–91 Annual Capital Guidelines

  £000s

  Percentage

  Brent

  546

  Hampshire

  24

  Hereford and Worcestershire

  526

  Tameside

  24

  Ealing

  473

  Lancashire

  23

  North Yorkshire

  470

  Cumbria

  21

  Bury

  440

  Isle of Wight

  18

  Sutton

  390

  Barking

  18

  Isle of Wight

  351

  Hammersmith

  18

  Tameside

  335

  Sutton

  13

  Shropshire

  263

  Bolton

  12

  Westminster

  244

  North Yorkshire

  11

  Coventry

  218

  Coventry

  11

  Hammersmith

  188

  Calderdale

  10

  Calderdale

  147

  Warwickshire

  9

  Somerset

  142

  Hereford and Worcestershire

  8

  Warwickshire

  137

  Birmingham

  6

  Bolton

  97

  South Tyneside

  5

  South Tyneside

  94

  Shropshire

  4

  Barking

  88

  Walsall

  3

  Walsall

  41

  Somerset

  3

  Sefton

  32

  Sefton

  1

  Wirral

  25

  Wirral

  1

  City1

  2

  Hertford

  -0

  Hertford

  -2

  Harrow

  -2

  Harrow

  -17

  West Sussex

  -3

  Islington

  -69

  Norfolk

  -3

  Barnet

  -85

  Bradford

  -4

  Norfolk

  -100

  Cornwall

  -4

  Haringey

  -114

  Islington

  -6

  West Sussex

  -124

  Humberside

  -7

  Solihull

  -128

  Solihull

  -8

  Hillingdon

  -135

  Barnet

  -10

  Isles of Stilly

  -204

  Cheshire

  -10

  Cornwall

  -280

  Haringey

  -10

  Kensington

  -300

  Cleveland

  -11

  Wandsworth

  -304

  Hillingdon

  -12

  Lambeth

  -328

  Salford

  -12

  Sandwell

  -334

  Avon

  -13

  Cleveland

  -350

  Kensington

  -14

  Bradford

  -377

  Bedfordshire

  -18

  Richmond

  -435

  Wandsworth

  -18

  Bedfordshire

  -436

  Gloucester

  -19

  Salford

  -467

  Sandwell

  -20

  Doncaster

  -485

  Wiltshire

  -21

  North Tyneside

  -536

  Lambeth

  -22

  Camden

  -537

  Hackney

  -24

  Rotherham

  -550

  Berkshire

  -27

  Cheshire

  -557

  Richmond

  -31

  Hackney

  -613

  Dorset

  -32

  Humberside

  -633

  Rotherham

  -35

  Avon

  -707

  Cambridge

  -35

  Redbridge

  -825

  Camden

  -38

  Knowsley

  -907

  Leicester

  -38

  Sheffield

  -1,057

  Devon

  -41

  Barnsley

  -1,077

  Liverpool

  -41

  Berkshire

  -1,218

  North Tyneside

  -42

  Dorset

  -1,249

  Sheffield

  -44

  Wiltshire

  -1,283

  Knowsley

  44

  Gloucester

  -1,475

  St. Helens

  -44

  St. Helens

  -2,243

  Waltham

  -49

  Merton

  -2304

  Redbridge

  -52

  Wakefield

  -3119

  Doncaster

  -56

  Greenwich

  -3,173

  Barnsley

  -57

  Waltham

  -3,274

  Wakefield

  -58

  Havering

  -3,936

  Trafford

  -61

  Liverpool

  -3,979

  Merton

  -64

  Southwark

  -4,171

  Havering

  -67

  Leicester

  -4,232

  Southwark

  -77

  Cambridge

  -4,693

  Greenwich

  -82

  Devon

  -5,269

  Isles of Stilly

  -93

  Trafford

  -5,765

  1 CITY percentage not possible as 1990–91 ACG £0,000, 1991–92 ACG £2,000.

  382 383
  Note: It is important to note that Solihull, Cornwall and Tower Hamlets are to receive additional allocations as Supplementary Credit Approvals in 1991–92.

  Solvent Abuse
  Mr. Hinchliffe
  To ask the Secretary of State for Education and Science what action he has taken in schools to discourage children from the abuse of solvents and lighter fuels; and if he will make a statement.

  Mr. Fallon
  The orders for national curriculum science and technology require that pupils should understand the risks associated with abuse of solvents, their effects on the human body and the need for their safe storage and use. More broadly, the National Curriculum Council has recommended that solvent and other substance misuse should be a key component in schools' health education programmes. The Department of Education and Science is supporting up to £7 million LEA expenditure in 1990–91 on preventive health education, including education about solvent abuse; and has contributed funding towards the production of a schools' video and other resources on this subject. The Department has also issued guidance to LEAs and schools on the safe handling of volatile substances.

  BA Fine Art Courses
  Mr. Alex Carlile
  To ask the Secretary of State for Education and Science how many undergraduate places were available on full-time BA fine art courses in each of the years 1979 to date; and if he will make a statement.

  Mr. Alan Howarth
  Information is not held centrally on the number of places which, within the total resources at their disposal, institutions decide to make available.

  Discretionary Awards
  Mr. Fatchett
  To ask the Secretary of State for Education and Science if he will give the value for each local education authority, in 1990 prices, of discretionary awards for the years 1979–80, 1984–85 and the latest available year.

  Mr. Eggar
  The data requested are shown in the table.

  £ thousands

  Local education authority

  1979–80

  1984–85

  1988–89

  Barking

  310

  520

  546

  Barnet

  1,412

  1,039

  493

  Bexley

  656

  758

  363

  Brent

  2,268

  3,752

  2,819

  Bromley

  905

  714

  805

  Croydon

  810

  771

  948

  Ealing

  1,518

  943

  1,425

  Enfield

  572

  458

  556

  Haringey

  85

  1,158

  2—

  Harrow

  742

  537

  518

  Havering

  806

  537

  514

  Hillingdon

  897

  654

  485

  Hounslow

  563

  362

  228

  Kingston upon Thames

  327

  189

  203

  Merton

  375

  201

  345

  Newham

  513

  1,050

  885

  Redbridge

  951

  631

  440

  Richmond upon Thames

  830

  641

  646

  Sutton

  663

  386

  307

  Waltham Forest

  760

  593

  753

  ILEA

  17,703

  19,635

  18,962

  Birmingham

  1,698

  1,022

  1,653

  Coventry

  972

  1,077

  650

  384

  Local education authority

  1979–80

  1984–85

  1988–89

  Dudley

  509

  551

  1—

  Sandwell

  658

  849

  1,010

  Solihull

  414

  313

  431

  Walsall

  585

  366

  1,202

  Wolverhampton

  377

  479

  384

  Knowsley

  959

  1,528

  1,111

  Liverpool

  2,213

  2,914

  2,689

  St. Helens

  295

  312

  744

  Sefton

  635

  673

  672

  Wirral

  1,035

  1,643

  1,445

  Bolton

  1,109

  1,315

  1,063

  Bury

  871

  955

  1,225

  Manchester

  2,764

  2,026

  2—

  Oldham

  390

  782

  838

  Rochdale

  619

  414

  732

  Salford

  972

  1,160

  780

  Stockport

  1,271

  618

  1,085

  Tameside

  468

  437

  360

  Trafford

  600

  576

  884

  Wigan

  814

  225

  415

  Barnsley

  611

  739

  1,229

  Doncaster

  788

  865

  778

  Rotherham

  1—

  323

  116

  Sheffield

  1,661

  2,600

  4,178

  Bradford

  2,207

  2,306

  2,702

  Calderdale

  487

  490

  555

  Kirklees

  1,403

  2,438

  2,738

  Leeds

  1,852

  1,881

  2,999

  Wakefield

  457

  987

  2—

  Gateshead

  490

  408

  501

  Newcastle upon Tyne

  788

  478

  460

  North Tyneside

  905

  1,158

  1,049

  South Tyneside

  383

  435

  650

  Sunderland

  881

  1,447

  1,397

  Isles of Scilly

  50

  1

  1

  Avon

  2,479

  3,732

  5,228

  Bedfordshire

  1,245

  1,021

  1,380

  Berkshire

  1,451

  2,060

  2,748

  Buckinghamshire

  1,670

  1,512

  1,676

  Cambridgeshire

  1,514

  1,576

  1,560

  Cheshire

  2,967

  4,196

  4,600

  Cleveland

  1,321

  2,577

  3,397

  Cornwall

  1,765

  508

  2,316

  Cumbria

  1,479

  2,197

  3,013

  Derbyshire

  1,910

  3,364

  2,932

  Devon

  3,920

  4,773

  5,077

  Dorset

  2,278

  3,222

  4,014

  Durham

  728

  1,487

  1,693

  East Sussex

  3,387

  1,094

  1,265

  Essex

  12,925

  4,519

  4,190

  Gloucestershire

  2,569

  2,999

  2,857

  Hampshire

  6,662

  4,836

  6,172

  Hereford and Worcester

  1,559

  1,554

  1,310

  Hertfordshire

  3,589

  3,212

  3,694

  Humberside

  3,309

  4,526

  4,456

  Isle of Wight

  468

  476

  481

  Kent

  6,081

  1—

  4,787

  Lancashire

  3,725

  7,221

  6,748

  Leicestershire

  2,276

  4,696

  5,691

  Lincolnshire

  1,254

  2,401

  2,340

  Norfolk

  3,433

  2,754

  2,693

  North Yorkshire

  3,924

  6,747

  4,572

  Northamptonshire

  1,720

  1,352

  1,085

  Northumberland

  1,185

  1,473

  591

  Nottinghamshire

  3,671

  5,776

  4,408

  Oxfordshire

  1,605

  1,323

  1,715

  Shropshire

  1,503

  1,721

  1,813

  Somerset

  1,133

  961

  1,460

  Staffordshire

  279

  2,913

  2,820

  Suffolk

  2,296

  2,403

  2,323

  385

  Local education authority

  1979–80

  1984–85

  1988–89

  Surrey

  4,020

  2,121

  1,912

  Warwickshire

  1,795

  1,661

  1,487

  West Susses

  2,064

  1,323

  40

  Wiltshire

  1,962

  2,397

  1,919

  Notes to table:

  1. The data are based on ROI spending returns submitted by local authorities in England to the Department of the Environment.

  1 denotes cases in which authorities did not enter a sum on their spending returns. 2 denotes that data are not available because no spending return was received.

  3. The data relate to spending on discretionary awards as currently categorised for the purpose of the spending returns, that is, spending on awards made under Section 1(6) or Section 2 of the Education Act 1962 (as amended) other than awards to 16–19 year olds.

  4. The data have been repriced to 1990–91 prices using the current GDP deflators.

  Teachers' Pay
  Mr. Fatchett
  To ask the Secretary of State for Education and Science what assessments have been made by his Department of the likely impact on(a) teacher recruitment, (b) teacher retention and (c) wage rates of a decision by an individual local education authority to leave the national machinery for the determination of teachers' pay and conditions.

  Mr. Eggar
  The Government believe that individual local education authorities should be free to determine the pay and conditions of their teachers locally, subject to approval by the Secretary of State of a proposal from the authority to that effect. I should expect such an authority to take account of local prospects for recruitment and retention in setting salary levels.

  Charging Regulations
  Mr. Fatchett
  To ask the Secretary of State for Education and Science when he expects to publish his Department's survey of the implications of the charging regulations under the Education Reform Act 1988; and if he will make a statement.

  Mr. Fallon
  I refer the hon. Member to the reply that I gave to him on 21 November 1990,Official Report, column 117. The results of the survey will not now be available until February.

  Marine Science and Technology
  Mr. Pawsey
  To ask the Secretary of State for Education and Science when he expects to respond to the report of the co-ordinating committee for marine science and technology, published in 1990.

  Mr. Kenneth Clarke
  I have today sent a copy of the Government's response to the committee's chairman. I have arranged for copies of the response to be placed in the Libraries of both Houses.

OVERSEAS DEVELOPMENT

  Bangladesh
  Mrs. Clwyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Her Majesty's Government's response to the report of the European Court of Auditors on European Community aid to Bangladesh; and what action will be taken by the United Kingdom as a result.
  386
  Mrs. Chalker
  I have read with interest the European Court of Auditors' report on European Community aid Ito Bangladesh and the Commission's response to that report. A number of the criticisms contained in the ECA report reflect our own concerns about the need for improvements in the Commission's overall systems and practices. We shall pursue these concerns vigorously through the existing committee structure and in our bilateral contacts with the Commission.

  Namibia
  Mr. Bowis
  To ask the Secretary of State for Foreign and Commonwealth Affairs what support he is currently giving to new and expanding businesses and other job-creation schemes in Namibia.

  Mrs. Chalker
  At the request of the Namibian Government, we have focused our assistance initially on education and police training. We are now exploring with the Government of Namibia the scope for assistance to other sectors and, in doing so, will take careful account of the possibilities for employment creation. I shall discuss our aid to Namibia with members of her Government during my two-day visit this week, and on my return report to the House if progress has been made.

  Afghanistan
  Mrs. Clwyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs how much aid Her Majesty's Government gave in 1989 and 1990 for(a) Afghan refugees in Pakistan and (b) humanitarian and development needs within Afghanistan; what plans he has for future aid; and what estimates he has of the total aid provided by international donors in 1989, 1990, and commitments for 1991, for the support of Afghan refugees in Pakistan.

  Mrs. Chalker
  British aid for Afghan refugees in Pakistan, and for humanitarian and development needs within Afghanistan, is provided through the United Nations High Commissioner for Refugees, the International Committee of the Red Cross and non-governmental organisations. Amounts provided in 1989 and 1990 are set out in the table. No decisions have yet been made on allocations for 1991.

  1989 £ million

  11990 £ million

  Afghan refugees in Pakistan

  4·8

  3·2

  Humanitarian and developmental needs within Afghanistan

  2·5

  1·1

  1 estimate

  Decisions on future aid will be made in the light to f developments in Afghanistan and the needs of the refugees.

  Details of total aid provided by international donors for Afghan refugees in Pakistan are not available. The following figures for 1989, the latest year for which figures are available, have been provided by the major international agencies:—

  1989 (US$Million)

  UNHCR

  In Pakistan

  37·4

  In Afghanistan

  3·3

  387

  1989 (US$Million)

  Voluntary Repatriation Scheme

  13·1

  ICRC

  For activities within Afghanistan and in Pakistan Swiss Francs (million)

  38

NATIONAL FINANCE

  Bloodstock
  Mr. Bellotti
  To ask the Chancellor of the Exchequer what assessments he has made of the implications for the bloodstock breeding industry of the changes to the administration of value added tax due to be introduced in January 1993; and if he will make a statement.

  Mrs. Gillian Shephard
  The Government are keenly aware of the problems which the bloodstock industry faces after 1992 due to the very low rates of VAT for bloodstock in France and Ireland. My right hon. Friend the then Paymaster General had discussions with representatives of the industry in November and I shall continue those discussions following a meeting which is to take place between the Horseracing Advisory Council and officials to consider possible solutions to the industry's perceived future difficulties.

  Income Tax
  Mr. Cohen
  To ask the Chancellor of the Exchequer what rise in income tax would be required to raise £3·6 million per day.

  Mr. Maude
  A yield of £3·6 million per day would be equivalent to an annual yield of about £1,300 million. Raising the basic rate of income tax by 1 p would yield about £2 billion in a full year.

  Mr. Redmond
  To ask the Chancellor of the Exchequer by how much income tax would have to be raised to cover expenditure of £1,008 million per calendar month.

  Mr. Maude
  A yield of £1,008 million per calendar month would be equivalent to an annual yield of about £12,100 million. Raising the basic rate of income tax by 6p would yield about £12,500 million in a full year.

  Mr. Bowis
  To ask the Chancellor of the Exchequer what is his estimate for(a) the increase in revenue from income tax and (b) the increase in revenue from VAT, in the event of a 1p reduction in basic rate of income tax; and what is his estimate for the same tax revenues in the event of a 1p reduction in higher rate of income tax.

  Mr. Maude
  The direct effects of a 1p change in the basic rate of income tax and a 1p change in the higher rate of income tax are given in chapter 4 of the 1990 autumn statement (Cm 1311). Estimates of the wider effects of tax changes depend on the economic model used and on assumptions about other economic policies.

  Personal Incomes
  Sir Ian Gilmour
  To ask the Chancellor of the Exchequer what was the percentage of personal income taken by(a) income tax, (b) national insurance contributions, (c) domestic rates/community charge and (d) value added tax, in 1979 and 1990.

  Mr. Norman Lamont
  Figures are not yet available in respect of 1990 for these items. The percentages in 1979 and 1989 are given in the table:

  As a percentage of total personal income

  1979

  1989

  Income tax

  12·7

  12·2

  National insurance contributions

  6·8

  7·5

  Domestic rates/community charge

  2·1

  2·7

  Value added tax

  4·1

  5·4

  Tax and Benefit Systems
  Mr. Evennett
  To ask the Chancellor of the Exchequer what consideration he has given to the integration of the tax and benefit systems; and if he will make a statement.

  Mr. Maude
  This was discussed in chapter 6 of the 1986 Green Paper "The Reform of Personal Taxation" (Cmnd 9756). I cannot, however, anticipate my right hon. Friend's Budget statement.

  Taxation
  Mr. Nicholas Brown
  To ask the Chancellor of the Exchequer if he will estimate, on the same basis as the ready reckoner published in the autumn statement, the effect on a one-earner, two-child family of spending in 1991–92 the same sum on(a) a cut in the basic rate of income tax, (b) raising income tax thresholds above their indexed levels, (c) raising child benefit assuming (i) no change in income support and family credit rates and (ii) corresponding changes in income support and family credit rates.

  Mr. Maude
  [holding answer 21 January 1991]: The effects of the various changes to income tax and child benefit on a married man on average earnings with two children are given in the table. In a full year each of the changes would cost £1·95 billion, the cost of a 1p cut in the basic rate of income tax. Estimates are based on projections of the 1988–89 survey of personal incomes in line with forecasts in the autumn statement.

  Increase in income after tax1 compared with indexation in 1991–92 for a married man2 on average earnings3 with two children

  £ per week

  (a) 1p cut in basic rate

  2·34

  (b) Increase in main income tax allowance

  1·68

  (c) Increase in child benefit

  (i) £6· 30 per week per child4

  12·60

  (ii) £3· 07 per week per child5

  6·14

  1 Disregarding any change to entitlement to social security income-related benefits except in item (c) (ii).

  2 Assumed to have no reliefs and allowances other than the personal allowance and the married couple's allowance.

  3 Average earnings assumed to be £334·1 per week.

  4 Assuming no change in income support and family credit children's rates.

  5 Assuming corresponding changes in income support and family credit children's rates.

  Local Government Finance
  Mr. Beith
  To ask the Chancellor of the Exchequer what are the Treasury's current assumptions on the level of local government current spending in England, Scotland and Wales in 1991–92, showing how much of this is financed by central Government grant, non-domestic rates and community charge, both gross and net of rebates, indicating the assumed default rate for community charge.

  Mr. Mellor
  [holding answer 24 January 1991]: No assumptions have been made about the level of local authority current spending in 1991–92. But the Government have given an indication of the amount of revenue expenditure they believe would be appropriate for that year (total standard spending in England and Wales, and Government-supported expenditure in Scotland). The table shows this spending, together with the planned level of aggregate external finance, split into grant and non-domestic rate payments.

  £ million

  England

  Scotland

  Wales

  Total Standard Spending1

  39,000

  5,447

  2,433

  Financed by:

  —Aggregate External Finance

  26,050

  4,353

  1,936

  of which

  Non-domestic rates

  12,408

  1,347

  525

  Grant

  13,642

  3,006

  1,411

  —Community charge (gross)

  12,950

  1,094

  497

  1 Government Supported Expenditure in Scotland.

  These calculations do not require any assumption about non-collection of the community charge. The latest estimate of the cost of community charge benefit in 1991–92 in Great Britain is just over £2 billion.

  Mr. Blunkett
  To ask the Chancellor of the Exchequer, pursuant to his answer of 17 January to the hon. Member for Gedling (Mr. Mitchell),Official Report, column 562, what are his estimates of the savings on community charge benefit in 1991–92 as a result of the introduction of the community charge reduction scheme.

  Mr. Mellor
  [holding answer 24 January 1991]: Some £300 million.

  Mr. Ralph Howell
  To ask the Chancellor of the Exchequer if he will tabulate, giving the date and amount in each case, any funds which the Treasury has made available to lessen the impact of the community charge since its inception and the total cost to date.

  Mr. Mellor
  [holding answer 21 January 1991]: Table 21.4.2 of the Government's expenditure plans 1990–91 to 1992–93 (Cm. 1021) details transitional grants in Great Britain which have been made available as part of the introduction of the new local government finance regime. Table 21.4.4 shows funding under the community charge benefit scheme. Updated tables are due to be published in early February in the supplement to the autumn statement. Announcements to date have been:

  April 1989

  Adjustment to income related benefits to assist community charge payments £500 (GB).

  19 July 1989

  Inner London education Grant 1990–91 £100 million.

  Low rateable value areas grant 1990–91 £100 million.

  390

  11 October 1989

  Low rateable value areas grant to be aggregated wit h Area protection grant from 1991–92 onwards. 1991–92 £400 million, 1992–93 £200 million, 1993–94 £85 million (England).

  Transitional relief scheme for chargepayers, 1990–91 £300 million (England).

  Community charge benefit for 1990–91 £2 billion.

  Other income related benefits £0·5 billion.

  6 November 1989

  Transitional relief scheme (Wales) for 1990–91 £17·5 million.

  13 November 1989

  Additional grant of £30 million for Scotland 1990–91 to protect against withdrawal of the safety net.

  19 July 1990

  Transitional relief scheme for 1991–92 raised from £260 million to £570 million (England).

  23 July 1990

  Transitional relief (Wales) for 1991–92 and 1992–93 to be £20 million.

  25 July 1990

  Additional area protection grant (Scotland) for 1991–92 £15 million.

  17 January 1991

  Community charge reduction scheme. Additional funding 1991–92 of £1,200 million (England), £65 million (Scotland) and £42 million (Wales).

  Media Advisory Service
  Mr. Fisher
  To ask the Chancellor of the Exchequer (1) whether the media advisory service is now operational;

  (2) what role the media advisory service has in liaising with the Ministry of Defence;

  (3) if he will list the members of the media advisory service;

  (4) how many personnel, and at what grade, are employed by the media advisory service;

  (5) what is the remit of the media advisory service; and under what guidelines does it operate;

  (6) if he will describe the role of the media advisory service in relation to reports from the Gulf.

  Mr. Maples
  [holding answer 25 January 1991]: The: media advisory service has not been activated during the: present Gulf conflict. Its remit is to provide advice to media editors in time of tension and war. Personnel are not. allocated to the media advisory service until it is activated. However, two members of staff of the Central Office of Information are engaged in the development of the service; one grade 5 and one senior executive officer.

AGRICULTURE, FISHERIES AND FOOD

  Farm Bankruptcies
  Mr. Alex Carlile
  To ask the Minister of Agriculture, Fisheries and Food how many farmers were declared bankrupt in each of the years 1979 to date; and if he will make a statement.

  Mr. Curry
  Figures for bankruptcies in England and Wales for the agricultural and horticultural sectors from 1979 to date are as follows:
  391

  No. of bankruptcies

  per centage of total bankruptcies

  1979

  55

  1·7

  1980

  50

  1·3

  1981

  70

  1·5

  1982

  78

  1·5

  1983

  98

  1·5

  1984

  155

  2·0

  1985

  136

  2·1

  1986

  130

  1·9

  1987

  172

  2·4

  1988

  162

  2·1

  1989

  142

  1·7

  11990

  136

  2·2

  1 first half.

  Note: Figures from 1983 onwards were set out in 'Business Briefing' published by the Association of British Chambers of Commerce dated 9 November 1990. Previous figures were published in 'British Business' dated 29 April 1983 and 22 January 1982.

  The balance sheet from British agriculture remains strong with liabilities representing less than a fifth of total assets.

  Fisheries Regulations
  Mr. David Porter
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement about the disparity of fines for offences committed against fisheries regulations; and what plans he has for an overall sentencing framework for such offences.

  Mr. Curry
  The Department is currently reviewing the maximum level of fines for a number of fisheries offences to see whether they need increasing. The penalties imposed for fisheries offences within the maximum are a matter for the courts whose sentencing will take into account the circumstances of individual cases, including any factors pleaded in mitigation.

  Mr. David Porter
  To ask the Minister of Agriculture, Fisheries and Food what discussions he plans to have with his EC counterparts on a coherent overall sentencing policy for offences committed against fishing regulations; and if he will make a statement.

  Mr. Curry
  Member states are responsible for the enforcement of EC fisheries regulations in their territories and fisheries limits and impose penalties for offences under national legislation.

  Environmentally Friendly Farming
  Mr. Morley
  To ask the Minister of Agriculture, Fisheries and Food what steps he will be taking to ensure that any system of direct payments per hectare will achieve environmental goals as well as social ones.

  Mr. Curry
  As my right hon. Friend the Minister made clear in his reply to my hon. Friend the Member for Bosworth (Mr. Tredinnick) on 23 January, at column 247. we intend, in negotiations on any proposals for changes to the common agricultural policy, to argue for the closer integration of agricultural and environmental policies.

  Mr. Morley
  To ask the Minister of Agriculture, Fisheries and Food if he will make representations to the EC Commission to ensure that the regulation EC COM(90)366 makes provision for member states compulsorily to introduce measures to ensure the 392
  continuation of environmentally friendly farming practices and the option of allowing the introduction of a scheme to reduce plant protection and fertilise inputs.

  Mr. Curry
  In line with our policies for designating environmentally and nitrate-sensitive areas, we favour an approach that permits the member states to target the provisions in EC(COM)366 at those areas where they would be likely to achieve the greatest environmental benefits.

ENVIRONMENT

  City Grant Scheme
  Mr. Blunkett
  To ask the Secretary of State for the Environment what was the total Government money awarded under the city grant scheme, breaking down the sum for each year and indicating how much was awarded by urban development corporations for each year; and how many jobs have been created under the city grant scheme.

  Mr. Portillo
  The amounts of city grant approved in each financial year since the scheme's introduction in May 1988 are shown in the table. The approvals from my Department in total, including projects not yet completed are expected to provide over 21,600 jobs and those from the urban development corporations over 9,400.

  Year

  £ million1

  £ million2

  1988–89

  29·055

  18·327

  1989–90

  72·636

  11·0

  31990–91

  42·330

  25·485

  Total

  144·021

  54·812

  1 City Grant from Department of the Environment.

  2 City Grant from the urban development corporations.

  3 to date.

  Local Authority Debt
  Mr. Simon Coombs
  To ask the Secretary of State for the Environment if he will list the non-metropolitan district councils in England, in ranking order of their indebtedness, in the last year for which figures are available, with the figures for their debt and their population.

  Mr. Key
  I have today arranged for the available information to be placed in the Library.

  Community Charge
  Mr. John Carlisle
  To ask the Secretary of State for the Environment what information he has received from Mid-Bedfordshire district council as to the number of those liable for community charge who have not yet received any demand for payment.

  Mr. Key
  No information is collected centrally on the number of community charge demands sent out by local authorities.

  Mr. Redmond
  To ask the Secretary of State for the Environment if he will issue his Department's community charge practice notes to all current members of valuation and community charge tribunals.
  393
  Mr. Portillo
  Each valuation and community charge tribunal has copies of the Department's practice notes on the community charge, which can be consulted by tribunal members if necessary.

  Mr. Battle
  To ask the Secretary of State for the Environment how much it costs to administer the collection of 20 per cent. poll tax payments due from those on income support.

  Mr. Key
  The total cost of collecting the community charge in the English local authorities is budgeted to be £413 million in 1990–91. Information is not available on the costs of administering the collection of community charges from those on income support.

  Mr. Burns
  To ask the Secretary of State for the Environment how many individuals have qualified for community charge transitional relief in Chelmsford in the current financial year to the latest available date.

  Mr. Key
  Relief grant claim forms from the local authority indicate that 16,500 charge payers in Chelmsford have benefited from transitional relief this financial year.

  Mr. Burns
  To ask the Secretary of State for the Environment (1) how many individuals are liable to pay the community charge in Chelmsford in the current financial year;

  (2) how many individuals have not paid any community charge in Chelmsford in the current financial year to the latest available date.

  Mr. Key
  Information reported by the local authority shows 117,000 people to be liable to make a payment in respect of a personal community charge by 31 December 1990; of these 4,000 had not made a payment.

  Mr. Blunkett
  To ask the Secretary of State for the Environment if he will publish a table showing (i) the assumed poll tax he has assigned to each local authority for 1991–92 for the purposes of the community charge reduction scheme and (ii) the actual poll tax levied by each authority in 1990–91.

  Mr. Portillo
  [holding answer 24 January 1991]: I am placing in the Library copies of a table showing the average personal community charge for each English authority in 1990–91 and the community charges which it is proposed should be used for calculating community charge reductions in 1991–92. In most cases the latter charges are derived from an authority's average personal community charge for 1990–91 adjusted to take account of the change in support per adult resulting from the replacement of the safety net and low rateable value areas grant by area protection grant. However, for a number of authorities such a calculation, if applied, would produce a charge less than the figure used as the basis of the calculation of transitional relief this year—the lower of an authority's 1990–91 actual and assumed personal community charges. In these cases, the 1990–91 figure for calculating transitional relief is to be used.

  In all cases if the figure derived in the way described above is greater than the personal community charge set by the relevant authority for the financial year beginning on 1 April 1991, we propose that the latter should be used for calculating entitlement to a community charge reduction.

  Glass and Glazing Federation
  Mr. David Nicholson
  To ask the Secretary of State for the Environment when he last met the Glass and Glazing Federation to discuss(a) quality of workmanship and possible warranty or guarantee schemes and (b) glazing companies which cannot repair unsatisfactory work because they have gone into liquidation; and if he will make a statement.

  Mr. Yeo
  My right hon. Friend has not met the Glass and Glazing Federation. However, my officials did so on 14 June 1989 to discuss these matters.

  Environment and Development Conference
  Mr. Battle
  To ask the Secretary of State for the Environment whether he will be consulting nongovernmental organisations and national bodies to assist in his preparations for the United Nations 1992 conference on environment and development.

  Mr. Trippier
  I refer the hon. Member to the reply gave on 10 December to the hon. Member for Gordon (Mr. Bruce), at column 266.

  ASRA Housing Association
  Mr. Cartwright
  To ask the Secretary of State for the Environment what steps he is taking to ensure that the London borough of Greenwich observes the conditions on nomination rights contained in his Department's consent of 27 November 1990 for the disposal of land at the rear of 52 to 86 Ceres road, SE18, to the ASRA (Greater London) Housing Association.

  Mr. Yeo
  It is the responsibility of the district auditor to keep under review the legality of an authority's transactions.

  Countryside Stewardship Scheme
  Mr. Morley
  To ask the Secretary of State for the Environment what are the nature conservation objectives of the countryside stewardship scheme; and what assessment he has made of the scheme's likely contribution to the fulfilment of international obligations under the EC Council directive on the conservation of wild birds—79/409/EEC—and the Berne convention on the conservation of European wildlife and natural habitats.

  Mr. Trippier
  Details of the countryside stewardship scheme are being worked up by the Countryside Commission in conjunction with my Department, the Ministry of Agriculture, Fisheries and Food and the Nature Conservancy Council. The scheme is intended to enhance and recreate valued English landscapes and wildlife habitats and to improve opportunities for people to appreciate and enjoy them. The commission is very aware of the need properly to integrate nature conservation considerations with those of landscape and access and involved the Nature Conservancy Council in the design of the scheme from its inception.

  The commission hopes to be in a position to start inviting applications to the scheme by late spring this year. Initially, countryside stewardship is likely to target chalk and limestone grasslands, heathland, waterside landscapes, coastal land and possibly some upland areas.
  395
  It is hoped that the scheme will, among other things, assist in conserving and recreating habitats of importance to species covered by the EC Council directive on the conservation of wild birds and the Berne convention on the conservation of European wildlife and natural habitats.

  Recycling
  Mr. Janman
  To ask the Secretary of State for the Environment what are his Department's criteria for recycling and recovery; and what is being done to encourage each, in light of forthcoming obligations outlined in the EC directive on waste management.

  Mr. Baldry
  The Government's criteria for recycling and recovery are that they should take place where it makes environmental and economic sense to do so. Our policy and actions on these matters are set out in chapter 14 of the White Paper "This Common Inheritance"—CM 1200.

  Mr. Janman
  To ask the Secretary of State for the Environment what provisions are required in contracts entered into by waste collection authorities and recyclers in respect of retention by a county council or waste disposal authority offering recycling facilities for the same materials.

  Mr. Baldry
  None. Section 14(2) of the Control of Pollution Act 1974 allows waste collection and disposal authorities to agree the extent to which the former may retain waste for re-use or reclamation. Section 48(2) of the Environmental Protection Act 1990 will replace that provision with a permission for any waste collection authority to retain waste for the purpose of recycling unless the waste disposal authority has made arrangements with a contractor for recycling that waste and has served notice on the collection authority accordingly. Waste disposal authorities do not acquire more than a small proportion of household or commercial waste direct from the producers of the waste; most is handled first by the waste collection authority or a private waste collection company.

  Bed-and-Breakfast Accommodation
  Mr. Robert Hicks
  To ask the Secretary of State for the Environment how many representations he received in response to his consultation paper about business rating and bed-and-breakfast accommodation; what was the balance of the various proposals outlined and submitted; and the details of the options he considered prior to his final decision.

  Mr. Portillo
  We received 246 responses to the consultation paper. Taking into account the weight of responses from groups and bodies as opposed to individuals, the majority were in favour of an exemption for bed-and-breakfast operators who intended to offer accommodation in their own homes for up to six people. There was also majority support for the qualification that the exemption should apply only where use of the dwelling for bed and breakfast was subsidiary to its use as a residence. Besides the proposals set out in the consultation paper, we considered all options that were put to us in the responses.

  Enterprise Zones
  Mr. Tony Banks
  To ask the Secretary of State for the Environment if he will provide a table showing the cost to the Exchequer of enterprise zones in 1989–90 and the tax income forgone in 1989–90 for each enterprise zone.

  Mr. Key
  [holding answer 22 January 1991]: Compensation for rate revenue forgone by local authorities is listed in the table. The latest available estimate for capital allowances is £70 million for 1987–88; this figure is only a broad indication based on several assumptions and cannot be split between individual enterprise zones.

  Compensation for rates revenue forgone in 1989–90

  Enterprise zone

  £ million

  England

  Allerdale

  0·168

  Corby

  4·623

  Dudley

  5·329

  Glanford

  0·229

  Hartlepool

  1·263

  Isle of Dogs

  16·776

  Middlesbrough

  1·106

  North East Lancashire

  2·424

  North West Kent

  4·764

  Rotherham

  2·656

  Salford/Trafford

  9·194

  Scunthorpe

  4·683

  Speke

  2·581

  Telford

  4·141

  Tyneside

  14·099

  Wakefield

  1·745

  Wellingborough

  1·831

  Wales

  Delyn

  0·763

  Milford Haven

  0·756

  Swansea

  3·038

  Scotland

  Clydebank

  12·747

  Inverclyde

  Invergordon

  0·246

  Tayside

  1·902

  Northern Ireland

  Belfast

  3·426

  Londonderry

  1·133

  UNITED KINGDOM TOTAL

  92·073

  1 Not available separately.

  Planning Inquiries
  Mr. Jessel
  To ask the Secretary of State for the Environment if he will institute procedures to ensure that in future in the event of any planning inquiry resulting from a call-in of a planning application where it is known or believed that both the applicant and the local planning authority are in support of the application, leading objectors to the application are given informal or formal notice of the date of the inquiry no later than the applicant and the local authority.

  Sir George Young
  [holding answer 25 January 1991]: It is normal practice to give official written notification of the date for an inquiry into a called-in planning application to all interested parties at the same time. It is necessary, though, to contact the applicant and the local planning authority beforehand in order to agree a date and venue for the inquiry. My right hon. Friend has no plans to alter these arrangements.

  Reservists (Community Charge)
  Ms. Mowlam
  To ask the Secretary of State for the Environment what is the liability of reservists with regard to the poll tax during the period in which they are in the Gulf.

  Mr. Key
  [holding answer 25 January 1991]: The advice issued to local authorities by my Department on 5 November 1990 about the community charge treatment of armed forces personnel serving in the Gulf indicated that it should also be applied to reservists. This would in general mean that their liability to the personal community charge should cease on the day that they are posted abroad and that no attempt to enforce payment of any sums outstanding in respect of their liability up to the date of posting should be made until their return. A copy of this advice has been placed in the Library of the House.

  EC Funding
  Mr. Blunkett
  To ask the Secretary of State for the Environment what proportion of European regional development fund grant received by area in Britain has gone to(a) finance debt redemption and (b) establish projects; and if he will make a statement.

  Mr. Leigh
  I have been asked to reply.

  I take it that the question relates to grants for local authority capital projects, which form the majority of ERDF grants in the United Kingdom,

  Section 63(4) of the Local Government and Housing Act 1989 requires local authorities in England and Wales in effect to apply capital receipts from the ERDF to debt redemption. The immediate effect of receipt is therefore a cash benefit.

  However, local authority capital programmes are, by virtue of ERDF grants, larger than they otherwise would be. Indirectly, therefore, ERDF grant finances additional capital expenditure.

  The issue raised by the hon. Member's question, seeking to distinguish between debt redemption and investment, does not therefore arise.

TRANSPORT

  Civil Defence
  Mr. Bill Michie
  To ask the Secretary of State for Transport if he will give details of the delays to work on underground accommodation which resulted in an underspend on his Department's civil defence budget for 1989–90; when he expects the work to be completed; what is his current estimate of expected total overall expenditure on this work; and what is the purpose of the accommodation and the nature of the work to be carried out on it.

  Mr. McLoughlin
  The funds granted were for building works and other services in existing underground accommodation which would be used, in crisis and war, by personnel concerned with supply and transport. The work was delayed pending a review of the use of the accommodation. A revised scheme is expected to be completed by 31 March 1991 at a total cost of £625,000.

  Petrol Tankers
  Mr. Pawsey
  To ask the Secretary of State for Transport (1) how many people are killed or injured each year as a result of accidents involving petrol tankers;

  (2) how many accidents occur each year involving petrol tankers.

  Mr. Chope
  I regret that the information requested is not available because the standard report form, STATS19, completed by the police for accidents involving personal injury does not identify petrol tankers as a specific category of vehicle.

  Mr. Pawsey
  To ask the Secretary of State for Transport what proposals there are to require the strengthening and protection of petrol tankers to prevent rupture in the event of a road traffic accident.

  Mr. Chope
  None of which I am aware; all designs for petrol tankers must be approved by the Health and Safety Executive.

  Mr. Pawsey
  To ask the Secretary of State for Transport what representations he has received about the safety of petrol tankers.

  Mr. Chope
  None in the last two years.

  Hazardous Loads
  Mr. Redmond
  To ask the Secretary of State for Transport if he will list the number of accidents involving the rail transportation of hazardous and inflammable materials that have taken place within a 50-mile radius of Doncaster, for each of the last 10 years.

  Mr. McLoughlin
  Her Majesty's railway inspectorate does not have information readily available in the form requested. The following figures, for the period 1984–89, are for train accidents occurring in eastern region within 50 miles of Doncaster in which it is possible to identify that dangerous or inflammable goods were carried on the train. Figures for incidents before 1984 are not available.

  Dangerous

  Inflammable

  1984

  2

  —

  1985

  —

  1

  1986

  —

  4

  1987

  —

  1

  1988

  1

  1

  1989

  —

  —

  1990

  1

  1

  1 Details not yet available.

  Light Rapid Transport Systems
  Mr. Matthew Taylor
  To ask the Secretary of State for Transport if he will list the local authorities which have consulted his Department about undertaking feasibility studies and planning light rapid transport or metro systems.

  Mr. McLoughlin
  Apart from the passenger transport executives in Greater Manchester and South Yorkshire, whose light rail projects are already under way, passenger transport executives and local authorities have been in touch with the Department about light rapid transit projects in a number of areas including the West Midlands,
  399
  Leeds, Avon, Cleveland, Chester, Croydon, Guildford, Leicester, Nottingham, South Hampshire, Southampton and Stoke-on-Trent.

  Mail Movements
  Mr. Fearn
  To ask the Secretary of State for Transport whether his Department has carried out any environmental studies into the impact of the Post Office's recent decision to move short-distance mail by road instead of rail.

  Mr. McLoughlin
  No. This was a commercial matter for the Post Office and British Rail.

  Black Country Spine Road
  Mrs. Maureen Hicks
  To ask the Secretary of State for Transport when an announcement is to be made on the results of the review of the black country spine road.

  Mr. Chope
  The report has not yet been received. When it is, it will be considered as quickly as possible.

  Rail Investment
  Mr. David Porter
  To ask the Secretary of State for Transport whether he will make it his policy to evaluate the public service obligation grant to make it more specific in application, rail line by rail line; and if he will make a statement.

  Mr. Freeman
  The current system of paying a single national public service obligation grant reflects the requirement on BR to maintain a service which is comparable generally with that existing on 1 April 1988. The day-to-day management of services and the precise level of service to be provided on individual lines is a matter for BR. The Department regularly considers whether this system is appropriate. However, there are no current plans to change it.

  Rail Deaths
  Mr. Fearn
  To ask the Secretary of State for Transport whether any inquiry will be conducted into the deaths of rail passengers who fell from InterCity trains when doors opened; and if he will make a statement.

  Mr. Freeman
  I refer the hon. Member to the answer given by my hon. Friend the Member for Derbyshire, West (Mr. McLoughlin) on 5 December last,Hansard, Vol. 182, column 118. British Rail thoroughly investigates all incidents of this nature and makes its reports available to Her Majesty's railway inspectorate.

  West Coast Main Line
  Mr. Fearn
  To ask the Secretary of State for Transport what plans have been put to him for improvement of the west coast main line; and if he will make a statement.

  Mr. Freeman
  British Rail is continuing to develop plans for the west coast main line and has not yet put specific investment proposals to the Department.

  Trains (Overbooking)
  Mr. Fearn
  To ask the Secretary of State for Transport how many representations he has received in the last year concerning the safety implications of overcrowding and double booking on British Rail trains; and if he will make a statement.
  400
  Mr. Freeman
  The Department of Transport received around 4,000 letters about British Rail in the last year, some of which raised questions about various aspects of overcrowding. Precise figures could be provided only at disproportionate cost.

EMPLOYMENT

  Training and Enterprise Councils
  Mr. Atkinson
  To ask the Secretary of State for Employment how old the information is about local unemployment provided by the employment service to local TECs.

  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.

  Mr. Atkinson
  To ask the Secretary of State for Employment if he will make a statement on the relationship and co-ordination between the employment service and local TECs.

  Mr. Jackson
  The employment service and training and enterprise councils share a common purpose in helping local labour markets to run efficiently. It is vital that local employment service managers and individual TECs establish a relationship based on the closest possible co-operation to ensure that we maximise the contribution that each can make.

  Most TECs have been operating for only a short time. However, there are already many excellent examples of collaboration to build on which will support a fully co-ordinated approach to the delivery of Government employment, training and enterprise programmes and services at the local level. I know that the employment service is committed to helping TECs succeed and I am encouraged by the response by individual TECs and the very constructive dialogue which has emerged.

  The Government will continue to take a very keen interest in this important area.

  Disability
  Mr. Atkinson
  To ask the Secretary of State for Employment if he will list recent measures to encourage blind people and the registered disabled to obtain skills or to find employment; and if he will make a statement.

  Mr. Jackson
  People with disabilities, including visual handicaps, can register as disabled if they want to work and have a reasonable prospect of being able to obtain and keep work. Registration is open to unemployed people and to those in employment. My Department provides a wide range of services and schemes specifically designed to help people with disabilities to obtain training and to find and keep employment and develop within it. In addition, the general employment and training schemes and services provided by the Department often make special provision for people with disabilities. Some provision is specifically aimed at people with visual handicaps.

  My Department has recently undertaken a wide-ranging consultation exercise to obtain views on how to make the Department's services more effective for people with disabilities and we are presently considering responses. We are also consulting widely about the range

  401
  of special schemes that we provide for people with disabilities, including special help for people who are visually handicapped and for people who are registered disabled.

  My right hon. and learned Friend announced in November that, from this April, unemployed people with disabilities will be given priority access to the Department's main employment and training programmes. These programmes include job clubs and the job interview guarantee scheme, both of which are to be expanded and have been shown to have considerable potential in helping people with disabilities.

  In October we launched a new symbol which can be used by employers to show publicly that they are committed to good practices and to encourage people with disabilities in seeking and keeping employment.

  Self-employed People
  Mr. Dewar
  To ask the Secretary of State for Employment what was the change, in numerical and percentage terms, in the number of self-employed people in(a) Scotland and (b) Great Britain between 1979 and the latest year for which figures are available.

  Mr. Jackson
  The information is as follows:

  Self-employed change between June 1979 and September 1990

  Actual (000's)

  Percentage

  Scotland

  90

  56·3

  Great Britain

  1,515

  82·2

  Earnings
  Mr. Dewar
  To ask the Secretary of State for Employment what are the average weekly earnings of full-time male employees in(a) Scotland and (b) Great Britain.

  Mr. Jackson
  The information requested is published in table 12 of part A of the 1990 new earnings survey report. A copy of the report is in the Library.

  Mr. Dewar
  To ask the Secretary of State for Employment what are the hourly rates of pay for(a) part-time female manual employees and (b) part-time female non-manual employees, in (i) Scotland and (ii) Great Britain.

  Mr. Jackson
  Information on average gross hourly earnings for the groups specified is published in table 180 of part F of the 1990 new earnings survey report. A copy of the report is in the Library.

  Equal Opportunities
  Mr. Wray
  To ask the Secretary of State for Employment what support Her Majesty's Government are giving or planning to give to both sides of industry to enable them to take full advantage of a work force estimated to comprise 45 per cent. women by the year 2001.

  Mr. Jackson
  The Government are firmly committed to the principle of equal opportunities for women and men and will continue to encourage both sides of industry,402
  through education and training, to do all they can to help women reach their full potential. Employers are being urged to adopt family-friendly policies to attract and retain the women they will need.

  Training
  Mr. Atkinson
  To ask the Secretary of State for Employment if he will list recent measures taken by him to encourage industry to reinvest in training; and if he will make a statement.

  Mr. Jackson
  Many of our policies on training are designed to encourage effective investment by employers in training. The establishment of training and enterprise councils in England and Wales, and local enterprise companies in Scotland, has put employers in the lead in transforming attitudes towards training and enterprise locally. TECs and LECs are developing new approaches to encouraging employers to invest more effectively in training. TECs have recently been given new freedoms to use their substantial public resources more flexibly to this end. My right hon. and learned Friend the Secretary of State has also launched "Investors in People", a new standard for effective investment in skills by employers.

  These and other measures will reinforce the increasing commitment by employers to training, demonstrated by the substantial growth in recent years in the number of employees receiving training shown by the labour force survey.

  Job Interviews
  Mr. David Porter
  To ask the Secretary of State for Employment if he will make it his policy to amend the rules for covering the cost of the unemployed travelling for job interviews to take account of seasonal jobs lasting less than 12 months.

  Mr. Jackson
  The travel-to-interview scheme aims to secure permanent jobs for unemployed people by improving the match, in the economy, between labour supply and demand, encouraging unemployed people to apply for jobs beyond daily travelling distance which they would not otherwise have considered. It is through focusing the scheme on permanent jobs that I believe the greatest impact can be obtained from the resources available and I do not therefore think it right to change the rules so as to bring seasonal jobs into scope.

  Braille
  Mr. Tom Clarke
  To ask the Secretary of State for Employment how many braille terminals and printers for personal computers which can be operated on a stand-alone basis or linked as work stations to larger stations there are in his Department.

  Mr. Jackson
  [holding answer 22 January 1991]: My Department devolves much responsibility for purchasing equipment to individual managers. Comprehensive records are not kept centrally, so a definitive reply could be provided only at disproportionate cost. I can provide the following information.

  There are three braille terminals and four braille printers for personal computers which can be operated on a stand-alone basis or linked to larger systems. In addition,

  403
  there are at least 14 personal computers with attachments, such as speech synthesisers, which facilitate their use by visually handicapped staff.

  My Department also provides other specialised equipment for use by visually handicapped staff but which does not involve the use of personal computers. This equipment includes devices for producing braille print.

TRADE AND INDUSTRY

  EC Funding
  Mr. Blunkett
  To ask the Secretary of State for Trade and Industry if he will publish in full the areas of Britain that are classified as(a) objective 1, (b) objective 2 and (c) objective 5b, as shown in the allocation of European regional development fund money; and if he will make a statement.

  Mr. Leigh
  The areas of the United Kingdom designated for objectives 1, 2 and 5(b) of the European Community structural funds are as follows:

  Objective 1
  Northern Ireland.

  Objective 2
  The Assisted Areas of Great Britain, except those designated for Objective 5(b) and the following travel-to-work areas (TTWAs)—Birmingham (part), Bridgend (part), Cardiff (part) Cinderford and Ross-onWye, Corby, Coventry and Hinckley (part), Dudley and Sandwell (part), Kidderminster, Sheffield (part) and Whitby.
  The remainder of Greater Manchester; Nottingham City (UPA); Midlothian Local Authority District (LAD) and part of East Lothian LAD; and the following TTWAs: Alnwick and Amble, Alfreton and Ashfield (part), Burnley, Burton on Trent (part), Castleford and Pontefract, Chesterfield, Goole and Selby (part), Mansfield, Pendle, Retford, Stirling (part), Wakefield and Dewsbury, Whitehaven and Worksop.

  Objective 5(b)
  The Highlands and Islands Development Board area; The intermediate areas of Galloway, comprising Stranraer, Newton Stewart and Stewartry TTWAs; The counties of Dyfed, Powys and Gwynedd, excluding the assisted areas adjacent to West Glamorgan and Gwent—which are designated for Objective 2—and the part of the Conwy and Colwyn TTWA in Gwynedd;
  The assisted areas of Devon and Cornwall.

  The Commission is understood to be considering whether to review the objective 2 list, pursuant to regulation (EEC) No. 2052/88, article 9(6). The Government believe that there should be no changes to the list at present.

  Office Furniture
  Mr. Bellotti
  To ask the Secretary of State for Trade and Industry (I) why his Department has awarded its new Buckinham Palace road offices' furniture contract to a manufacturer outside the United Kingdom;

  (2) what are his criteria for the awarding of office furniture contracts within his Department.

  Mr. Leigh
  My Department is concerned to buy goods and services which meet its specifications at the best price. In view of our treaty commitments to the EC and GATT, the country of origin could not be of primary concern in the assessment.
  404
  Mr. Bellotti
  To ask the Secretary of State for Trade and Industry if he will make a statement on the present economic situation in the office furniture manufacturing and supply industry.

  Mr. Leigh
  In recent years the office furniture manufacturing industry has expanded strongly. The performance of the industry in future will be influenced both by developments in the economy generally and by the extent to which it meets the needs of its customers.

  Municipal Mutual Insurance Ltd.
  Mr. Snape
  To ask the Secretary of State for Trade and Industry if his Department collects any statistics regarding the number of claims made by local authorities on behalf of their residents against Municipal Mutual Insurance Ltd., and the outcome of such claims.

  Mr. Redwood
  No. The return to my Department identifies the number of claims by class of business, but they are not analysed between types of policyholder.

  Mr. Snape
  To ask the Secretary of State for Trade and Industry if he collects statistics about premium payments from local authorities to Municipal Mutual Insurance Ltd.

  Mr. Redwood
  No. The returns to my Department do not identify the source of premium payments.

  Film Industry
  Mr. Tom Clarke
  To ask the Secretary of State for Trade and Industry what is Her Majesty's Government's policy for encouraging the film industry in the United Kingdom.

  Mr. Leigh
  The Government provide annual support including £2 million for British Screen Finance Ltd., £1·75 million for the national film and television school and £75,000 for the Scottish production fund and are setting up the European co-production fund, with £5 million over the next three financial years. We also support the British Film Institute, the Scottish Film Council, the Arts Council's film activities in Northern Ireland and training. The Government participate in the European Community's EDIA programme and the audio-visual EUREKA programme.

  Home Accident Surveillance System
  Mr. Wilshire
  To ask the Secretary of State for Trade and Industry when he expects to publish the annual report on the home accident surveillance system.

  Mr. Leigh
  The annual report for 1988 has been published and I am placing copies in the Library of the House.

  Engineering Steel Exports
  Dr. Marek
  To ask the Secretary of State for Trade and Industry what figures he has available for the latest period for engineering steel exports; and what were the comparable figures one year previously.

  Mr. Leigh
  [holding answer 25 January 1991]: "Engineering steel" has no precise definition within United Kingdom product classifications. It has been approximated in the table by the tariff codes 72.13–72.15, 72.28.30 and 72.28.60:
  405

  Engineering Steel Exports

  Tonnes '000s

  £ million

  January to November 1989

  1,012

  302

  January to November 1990

  1,231

  376

  Increase (per cent.)

  21·6

  24·6

  British Technology Group
  Mr. Gordon Brown
  To ask the Secretary of State for Trade and Industry if he will list for each year since 1979(a) the profits of British Technology Group and (b) the returns to the Exchequer from (i) profits, (ii) sales and (iii) levies.

  Mr. Lilley
  [holding answer 25 January 1991]: The profits before tax and the returns to the Exchequer from the National Enterprise Board and the National Research Development Corporation are shown in the tables.

  National research development corporation

  Profits before tax and amounts paid to Her Majesty's Government

  £ millions

  Profit before tax

  Dividends

  Tax paid

  1979

  12·92

  —

  3·55

  1980

  11·85

  2·00

  5·25

  1981

  8·42

  —

  1·71

  1982

  10·39

  —

  4·45

  1983

  2·33

  —

  3·98

  1984

  5·18

  —

  0·93

  1985

  7·82

  2·00

  2·16

  1986

  7·54

  2·00

  4·80

  1987

  3·40

  2·89

  0·89

  1988

  6·22

  1·00

  0·62

  1989

  7·53

  7·92

  1·70

  1990

  9·51

  2·61

  2·27

  Note: The 1989 dividend figure includes a special payment of £6 million made under direction from the Secretary of State.

  National Research Development Corporation

  Value of shares and loans in private companies held at 31 March 1990

  £ thousands

  Cost on acquisition

  Current book value

  Company

  Shares

  Loans

  Total

  Shares

  Loans

  Total

  Agricultural Genetic Eng. Ltd.

  3,755

  0

  3,755

  3,755

  0

  3,755

  Polysystems Ltd.

  0

  656

  656

  0

  0

  0

  EFI Materials Ltd.

  285

  0

  285

  0

  0

  0

  York Ltd.

  293

  0

  293

  293

  0

  293

  Deductive Systems Ltd.

  124

  0

  124

  0

  0

  0

  Ferranti Creditphone Ltd.

  1,341

  0

  1,341

  1,341

  0

  1,341

  COTAG International Ltd.

  50

  0

  50

  0

  0

  0

  XTEC Ltd.

  140

  0

  140

  0

  0

  0

  Lynx Group Ltd.

  4

  0

  4

  4

  0

  4

  International Business Software Ltd.

  201

  194

  395

  201

  194

  395

  Laser Monitoring Systems Ltd.

  21

  0

  21

  11

  0

  11

  Sindex Speech Technology Ltd.

  75

  5

  80

  0

  0

  0

  Prosys Ltd.

  500

  0

  500

  500

  0

  500

  World Press Centre (London) Ltd.

  125

  0

  125

  125

  0

  125

  Time & Data Systems Ltd.

  40

  0

  40

  40

  0

  40

  Defense Technology Enterprises Ltd.

  102

  224

  326

  2

  0

  2

  PERCOM Ltd.

  100

  0

  100

  100

  0

  100

  Tangram CAE Ltd.

  87

  0

  87

  0

  0

  0

  Straflo Ltd.

  14

  0

  14

  0

  0

  0

  Thermal Conversion UK Ltd.

  378

  115

  493

  0

  0

  0

  Mupor Ltd.

  10

  0

  10

  0

  0

  0

  Biomedical Sensors Ltd.

  0

  225

  225

  0

  125

  125

  Torotrak Holdings Ltd.

  380

  2,177

  2,557

  127

  1,049

  1,176

  University of Warwick

  0

  50

  50

  0

  50

  50

  Hovercraft Development Ltd.

  153

  0

  153

  153

  0

  153

  Future Group Ltd.

  600

  0

  600

  0

  0

  0

  406

  National Enterprise Board

  Profits before Tax and Amounts Paid to HMG

  £ millions

  Profit before Tax

  Interest and Dividends to HMG

  Tax Paid

  Net (payments to) Receipts from HMG

  1979

  (9·76)

  30·00

  0·83

  253·21

  1980

  1·52

  12·13

  0·47

  1(10·51)

  1981

  (59·09)

  2·85

  2·54

  1(1,263·58)

  1982

  3·89

  0·32

  0·08

  3·03

  1983

  0·23

  0·17

  0·43

  32·83

  1985

  51·97

  0·18

  0·40

  (166·45)

  1986

  5·18

  0·00

  5·76

  (30·00)

  1987

  4·64

  0·00

  0·39

  (34·04)

  1988

  5·68

  26·50

  2·82

  0·00

  1989

  0·59

  22·00

  1·26

  0·00

  1990

  1·23

  0·00

  0·06

  0·00

  1 Excludes £17·4 million written off under sec. 3(i) Industry Act 1981.

  2 These items are dividends paid on the Board's PDC.

  Notes:

  1. The financial year end for the Board was changed from the 31 December to the 31 March in 1985. The figures for 1985 are therefore for a 15-month period. All other figures are for 12-month periods ending on 31 December until 1983 and on 31 March thereafter.

  2. The last column Titled "Net (Payments to) receipts from HMG" are the net movements on Public Divident Capital (PDC) and Loans from the National Loans Fund (NLF). By 31 March 1987 the NEB had repaid all but £4,775—50 of its "PDC" and "NLF" funding.

  Mr. Gordon Brown
  To ask the Secretary of State for Trade and Industry if he will list all shares held by British Technology Group in private companies and (a) their original value when acquired and(b) their current value.

  Mr. Lilley
  [holding answer 25 January 1991]: The value of shares held and loans made by the National Development Corporation in private companies at 31 March 1990 are shown in the table. The National Enterprise Board's one live investment is 100 per cent. of the shares of Oakwood Loan Finance Ltd. which cost 1·5 million and are currently held at that value.
  407

  Cost on acquisition

  Current book value

  Company

  Shares

  Loans

  Total

  Shares

  Loans

  Total

  FBM Carbon Ltd.

  55

  0

  55

  0

  0

  0

  INOTEC Ltd.

  26

  0

  26

  0

  0

  0

  8,859

  3,645

  12,505

  6,651

  1,418

  8,069

WALES

  Corlan Housing Association
  Mr. Morgan
  To ask the Secretary of State for Wales when he expects to make a statement on the housing association consultancy and advisory service report into the causes of the collapse of the Corlan housing association.

  Mr. Nicholas Bennett
  I refer the hon. Gentleman to the answer I gave him on 17 December.

  Mr. Morgan
  To ask the Secretary of State for Wales (1) if he will discuss with the chairman of Tai Cymru the housing association consultancy and advisory service report into the collapse of the Corlan housing association and Tai Cymru's approval under section 9 of the Housing Act 1980 of Corlan's acquisition of land from Helical Bar Ltd. in 1988–89;

  (2) if he will discuss with the chairman of Cardiff Bay development corporation his role in the financial collapse of the Corlan housing association.

  Mr. Nicholas Bennett
  I have not discussed these matters with the chairmen and I assume that the hon. Gentleman is not seeking to ascribe responsibility for the financial collapse of Corlan to the chairman of the CBDC. The Department will naturally be consulting Housing for Wales and Cardiff Bay development corporation before we make a statement.

  Mr. Morgan
  To ask the Secretary of State for Wales (1) whether he has issued any new guidelines to Tai Cymru on the method of monitoring land acquisitions and disposals by Welsh housing associations under section 9 of the Housing Act 1980;

  (2) what representations he has had from housing associations regarding the system of monitoring by Tai Cymru of land acquisitions and disposals in Wales under section 9 of the Housing Act 1980;

  (3) if he has discussed with the chairman of Tai Cymru the reasons for its approval under section 9 of the acquisition of land by Corlan housing association from Helical Bar Ltd., in 1988–89;

  (4) what consultations he has had with the chairman of Tai Cymru regarding the court injunction it applied for against the HTV Wales "This Week" programme on the collapse of the Corlan housing association.

  Mr. Nicholas Bennett
  I have had no such discussions. Housing associations do not require the consent of Housing for Wales to acquire land where they do so without the benefit of housing association grant. Section 9 of the Housing Act 1980 refers to a secure tenant's right to mortgage under the right-to-buy provisions. The hon. Gentleman presumably intends to refer to section 9 of the Housing Associations Act 1985: the consent of Housing for Wales is required to any disposition of land by a registered housing association. Taking out a mortgage on land constitutes a disposition.
  408
  I understand that the Corlan housing association entered into a contract to buy the land referred to in November 1989. The association was under no legal obligation to seek Housing for Wales's approval of this acquisition and did not do so. At the end of January 1990 the association applied to Housing for Wales for section 9 consent to take out a mortgage on the land it had already purchased.

  I have received no representations from housing associations relating to the granting of consents by Housing for Wales for the disposition of land under section 9 of the Housing Associations Act 1985. In May 1990 Housing for Wales substantially revised its internal procedures for handling those applications for section 9 consent that do not form part of an application for housing association grant. No new guidelines have been issued to Housing for Wales in this matter. As to the future, I refer the hon. Gentleman to the reply I gave him on 17 December.

  Housing for Wales was not a party to the injunction to which the hon. Gentleman refers.

  Lowland Farmers
  Mr. Geraint Howells
  To ask the Secretary of State for Wales what steps he proposes to take in order to assist lowland farmers in Wales; and if he will make a statement.

  Mr. David Hunt
  I recognise the importance of lowland farmers in the structure of Welsh agriculture. I will continue to seek to ensure that these farmers, along with others, are able to compete effectively and on equal terms with their counterparts elsewhere in the Community.

  Beef Sector
  Mr. Geraint Howells
  To ask the Secretary of State for Wales how many beef cows there are in Wales; what were the corresponding figures for the last five years; and if he will make a statement about future prospects for the beef sector.

  Mr. David Hunt
  The information is as follows:

  Number of beef cows in Wales at June:

  Year

  Number

  1990

  203,912

  1989

  194,266

  1988

  182,267

  1987

  178,769

  1986

  172,931

  1985

  174,586

  Note: Figures are for both main and minor holdings.

  The beef market continues to be underpinned by the special intervention arrangements at a cost of some £8 million a week currently; the suckler cow premium has been extended to include small milk producers, and producers in the less-favoured areas will benefit from the increase in the rate for 1991 which is at the maximum level permitted by the EC; and beef producers will also continue

  409
  to benefit from the higher rate of beef special premium following the green pound devaluation agreed at last year's price-fixing.

  Steel Industry (Job Losses)
  Mr. Worthington
  To ask the Secretary of State for Wales how many jobs were lost in the steel industry in Wales between 1979 and 1984.

  Mr. David Hunt
  Comprehensive information detailing separately the number of jobs lost or created in the industry are not available. Combined data from the British Steel Corporation and the Iron and Steel Statistics Bureau show that there were 55,000 jobs in the steel industry in Wales at the end of December 1979. In 1984 the figure was 22,000.

THE ARTS

  Greater London Arts Association
  Mr. Cohen
  To ask the Minister for the Arts when he intends to meet the interim board of the Greater London Arts Association to discuss the future of the arts in London.

  Mr. Renton
  I have no plans at present to meet the governing committee of Greater London Arts to discuss the administration of arts funding in London.

  Regional Exhibitions
  Dr. Kim Howells
  To ask the Minister for the Arts what funds have been earmarked by his office to help regional arts organisations to promote and organise touring exhibitions of paintings and sculpture drawn from permanent collections.

  Mr. Renton
  Government support for the promotion of organised touring exhibitions is channelled through the travelling exhibitions unit of the Museums and Galleries Commission and the visual arts department of the Arts Council. The MGC travelling exhibitions unit and the Arts Council visual arts departments are expected to spend £210,000 in the current financial year.

  Enhancement Fund
  Mr. Haynes
  To ask the Minister for the Arts what guidelines he gave to the Arts Council for the use of the new enhancement fund.

  Mr. Renton
  The Government set out the overall objectives of the enhancement fund. These were to strengthen leading arts organisations and enhance further their current high standards, and at the same time to improve business and financial planning and to provide challenge, where appropriate, for matching funds from other sources. I subsequently approved the detailed criteria that the Arts Council proposed to use in deciding upon the allocation of awards to individual organisations.

  Mr. Tony Banks
  To ask the Minister for the Arts what guidelines he gave to the Arts Council for the use of the enhancement fund among clients of the Greater London Arts association.

  Mr. Renton
  I refer the hon. Member to the answer that I gave earlier to a question from the hon. Member for 410
  Ashfield (Mr. Haynes). The criteria that the Arts Council applied to clients of Greater London Arts were the same as those that I approved for general application.

  Music Hall
  Mr. Harry Greenway
  To ask the Minister for the Arts if he has any plans to encourage financial support out of public funds for music hall; and if he will make a statement.

  Mr. Renton
  I understand that the Arts Council, through which Government funds for the performing arts are channelled, has no specific plans to provide funds for music hall. The Arts Council knows that it has a very small but devoted following and, together with the regional funding bodies, will consider any individual applications for financial support.

  National Railway Museum
  Mr. Adley
  To ask the Minister for the Arts when he intends to visit the national railway museum; and if he will make a statement.

  Mr. Renton
  I hope to visit the national railway museum in York in the near future. I met the keeper of the national railway museum during an enjoyable and informative visit I made to the science museum in South Kensington on 17 January.

CIVIL SERVICE

  Executive Agencies
  Mr. McAllion
  To ask the Minister for the Civil Service if he will make a statement on progress under the Government's "next steps" agency initiatives.

  Mr. Renton
  The "next steps" initiative continues to make excellent progress; 34 agencies have now been established, and we expect that number to rise to 50 by this summer. By the end of the year we expect that "next steps" will apply to about half the civil service.

  Trade Unions
  Mr. Allen
  To ask the Minister for the Civil Service when he next intends to meet the leaders of civil service trade unions to discuss morale.

  Mr. Renton
  I intend to follow the practice of my predecessors and meet civil service trades union representatives as appropriate.

  Mr. Skinner
  To ask the Minister for the Civil Service when he last met the leaders of trade unions representing the civil service to discuss changes to civil service conditions of work and employment.

  Mr. Renton
  I have not yet met the civil service trade union leaders to discuss civil service issues. I shall, of course, do so as appropriate. I did, however, meet representatives of the Institution of Professionals, Managers and Specialists on Monday 21 January for discussions on heritage funding issues and the national museums and galleries.

SCOTLAND

  Fishing
  Mr. Wilson
  To ask the Secretary of State for Scotland if he will list, with port of registration, the Scottish-registered fishing vessels affected by the eight-day tie-up rule; and if he will make a statement.

  Mr. Michael Forsyth
  It is not appropriate to publish what would be regarded as commercially sensitive information about individual fishing vessels. However, the skippers, or agents, of all active Scottish-based licensed fishing vessels have been informed individually by letter issued by the Scottish Office Agriculture and Fisheries Department on 16 January whether or not, on the basis of the Departments' records, their vessel is expected to be affected by the new regime. The table shows the estimated number of vessels affected by the scheme based in each fishery district.

  Base District

  Number of Vessels in Scheme

  Aberdeen

  15

  Arbroath

  7

  Ayr

  2

  Buckie

  44

  Campbeltown

  1

  Eyemouth

  25

  Fraserburgh

  59

  Kinlochbervie

  1

  Lochinver

  3

  Lossiemouth

  47

  Macduff

  40

  Mallaig

  —

  Oban

  —

  Orkney

  12

  Peterhead

  66

  Pittenweem

  20

  Shetland

  26

  Stornoway

  —

  Ullapool

  —

  Wick

  16

  Total

  384

  Manufacturing GDP
  Mr. Maxton
  To ask the Secretary of State for Scotland what is the provisional estimate for(a) 1988 and (b) 1989 of Scotland's contribution to the United Kingdom manufacturing gross domestic product, excluding continental shelf.

  Mr. Allan Stewart
  The table shows the estimated gross domestic product for manufacturing industries at factor cost in current prices for Scotland and the United Kingdom for 1988 and 1989. The continental shelf makes no contribution to the gross domestic product of manufacturing industries.
  412

  Gross domestic product of manufacturing industries at factor cost: current prices

  Scotland

  United Kingdom

  Scotland as a percentage of the United Kingdom

  £ million

  £ million

  per cent.

  1988

  7,245

  91,196

  7·9

  19891

  7,781

  97,380

  8·0

  1 provisional.

  Source: Central Statistical Office.

  Foxes
  Mr. Malcolm Bruce
  To ask the Secretary of State for Scotland whether he will provide a breakdown of moneys allocated to Scottish fox destruction clubs since 1979.

  Mr. Michael Forsyth
  The information is as follows:

  £

  1979–80

  20,633

  1980–81

  17,084

  1981–82

  22,071

  1982–83

  25,079

  1983–84

  24,563

  1984–85

  33,023

  1985–86

  33,714

  1986–87

  36,639

  1987–88

  39,854

  1988–89

  47,649

  1989–90

  58,981

  1990–91

  147,000

  1 estimated.

  Mr. Malcolm Bruce
  To ask the Secretary of State for Scotland whether he will give consideration to the research of Dr. Ray Hewson of Aberdeen university on fox control when allocating funds to fox destruction clubs in 1991–92; and if he will make a statement.

  Mr. Michael Forsyth
  My right hon. Friend is currently considering the report of Dr. Hewson's research and reactions to it which he has received. He will make his views known once his consideration of the report and of further material promised in it has been completed.

  Salmon
  Mr. Home Robertson
  To ask the Secretary of State for Scotland if he will instruct the Salmon Advisory Committee to make an assessment of criteria for sufficient salmon returning to spawn in Scottish rivers and to draft guidelines for the proper management of net fisheries in rivers and estuaries and publish that information for the guidance of all concerned with the implementation of section 39 of the Salmon Act 1986.

  Mr. Michael Forsyth
  No. The review of east coast salmon netting is being undertaken by Fisheries Ministers. Work on the review is being completed. It is hoped to present the report to Parliament, as required by section 39 of the Salmon Act 1986, shortly.

  The Salmon Advisory Committee has a full programme of work on other matters.

  Cardiac Surgery
  Mr. Michael J. Martin
  To ask the Secretary of State for Scotland what steps he is taking to reduce the waiting list of those patients awaiting heart bypass surgery in Scotland.

  Mr. Michael Forsyth
  Since central funding began in 1983, the number of heart bypass operations performed in Scotland has increased from 853 to 1,500 by December 1989. Between January and September 1990 1,074 heart bypass operations were carried out–the latest available information. This financial year, the three health boards involved have received £15·7 million for cardiac surgery services—9·5 million to Greater Glasgow, £4·9 million to Lothian and £1·3 million to Grampian. Aberdeen royal infirmary is being funded to enable it to increase its throughput from an initial level of around 50 patients a year to 300 a year by 1992. This year Greater Glasgow health board has received an additional allocation of £467,000 from the waiting list fund initiative specifically to treat an extra 80 cardiac surgery patients.

  On 24 January I announced a further increase in funding for the systematic expansion of the Scottish cardiac surgery programme, as the Government will provide £374,470 more to Lothian health board for this purpose during 1990–91. Having carried out 579 open heart operations in the first nine months of 1990–91, the board is well on its way to meeting its target for the year. This additional funding will further enhance the work at the royal infirmary of Edinburgh and contribute to an even better performance to reduce waiting times for surgery.

  The new centre to provide heart transplant surgery to be established in 1991–92 at the royal infirmary, Glasgow, which I announced on 14 January, will be a valuable addition to services already being provided in the field of cardiac surgery. It will have the capacity to carry out not only heart transplants but other cardiac procedures.

  Sheltered Placement Scheme
  Mr. McMaster
  To ask the Secretary of State for Scotland if he will publish a table showing the level of expenditure on the sheltered placement scheme for each of the Scottish regional councils; and if he will make a statement.

  Mr. Allan Stewart
  Information about local authority expenditure on sheltered placements is not held centrally. However, the Employment Service contributes 75 per cent. of the cost to local authorities of providing sheltered employment. On the basis of claims made by regional and islands councils the Employment Service has estimated its contribution to the cost of providing sheltered placements in 1989–90, the latest year for which data are available. Details set out exclude data in respect of Borders regional council which has yet to submit details of its claim for support in respect of 1989–90.

  Regional and island council

  Amount of Employment Service contribution £

  Central

  27,000

  Dumfries and Galloway

  31,000

  Fife

  325,000

  Grampian

  150,000

  414

  Regional and island council

  Amount of Employmet Service contribution £

  Highland

  129,000

  Lothian

  30,000

  Strathclyde

  143,000

  Tayside

  42,000

  Orkney

  13,000

  Shetland

  25,000

  Western Isles

  16,000

  Given the grant rate these sums can be taken as representing three quarters of total expenditure on sheltered placements by the authorities concerned. The balance of each authority's expenditure on sheltered employment will be expenditure on sheltered workshops.

  Nurses
  Mr. Galbraith
  To ask the Secretary of State for Scotland whether, under Project 2000, the students' rostered service contribution is supernumerary or part of the standard services manpower.

  Mr. Michael Forsyth
  Project 2000 students will be supernumerary throughout their three-year training, but will be required to deliver a rostered service contribution which will normally amount to 1,000 hours and take place in the third year of the programme.

  Lithotripsy
  Mr. Galbraith
  To ask the Secretary of State for Scotland what proposals there are for a lithotripsy service in the west of Scotland.

  Mr. Michael Forsyth
  The Scottish lithotripsy service is operated by Lothian health board at the Deaconess hospital in Edinburgh and treats patients referred from all over Scotland and the north of England. Demand for treatment from within Scotland would not justify the establishment of a second centre at this time.

  School Catchment Areas
  Mr. Norman Hogg
  To ask the Secretary of State for Scotland what advice he has given to education authorities on parental rights when school catchment areas are subject to rezoning; and if he will make a statement.

  Mr. Michael Forsyth
  In terms of the Education (Publication and Consultation Etc.) (Scotland) Regulations 1981, education authorities are required to publicise and to consult parents and other interested parties on any proposals to amend a school's delineated area.

  Mr. Norman Hogg
  To ask the Secretary of State for Scotland if he will list his powers to determine school catchment areas; what advice he has given to education authorities in this respect; and if he will make a statement.

  Mr. Michael Forsyth
  My right hon. Friend has no such powers, nor has he offered advice to education authorities on this matter.

  Sandeels
  Mr. Wallace
  To ask the Secretary of State for Scotland whether the existing monitoring programme of sandeels will continue during any proposed closure of the Shetland sandeel fishery and following any subsequent reopening of the fishery.

  Mr. Michael Forsyth
  Continued monitoring of this stock by present methods and at the present level cannot be justified by comparison with other priorities in the maritime laboratory's research programme. If, following consultation, the fishery remains closed and stocks subsequently show signs of recovery, the case for monitoring will be reassessed.

  Mr. Wallace
  To ask the Secretary of State for Scotland what consideration has been given by his Department to the duration of any proposed closure of the Shetland sandeel fishery; and if he will make a statement.

  Mr. Michael Forsyth
  While a final decision on the management arrangements for the Shetland sandeel fishery in 1991 is subject to consultation with interested 416
  parties, a consultation paper issued on 24 December 1990 proposes that the fishery be closed until spawning stock levels recover. It is not possible to predict how long this will take.

  Mr. Wallace
  To ask the Secretary of State for Scotland whether he has any plans to make financial provision to enable those recently engaged in the Shetland sandeel fishery to convert to fishing alternative stocks during the proposed closure of the fishery.

  Mr. Michael Forsyth
  No. Those fishing vessels normally involved in the Shetland sandeel fishery already fish for other species.

  Mr. Ian Stewart
  To ask the Secretary of State for Scotland when the right hon. Member for Hertfordshire, North may expect to receive an answer to his letter dated 28 September 1990 concerning sandeel fishing.

  Mr. Michael Forsyth
  [holding answer 23 January 1991]: Further to my reply of 23 January, we have now received a copy of the right hon. Member's letter and my noble Friend Lord Strathclyde replied today.

  Education Spending
  Mr. Worthington
  To ask the Secretary of State for Scotland what were the financial consequences of his discussions on capital spending limits for education authorities announced in his revenue support statement on 17 January.

  Mr. Michael Forsyth
  Final decisions on the distribution of the available resources have still to be taken. Authorities will be informed within the next few weeks of their capital consent allocations for 1991–92 and the two subsequent years.

  New Primary Schools
  Mr. Norman Hogg
  To ask the Secretary of State for Scotland what criteria he applies to authorising the construction of new primary schools in urban areas; what advice he has given to education authorities in this respect; and if he will make a statement.

  Mr. Michael Forsyth
  Decisions on the provision of new schools are for the education authorities. They must consider any proposals on their individual merits and my right hon. Friend has issued no guidance to authorities on the criteria they should apply.

  Medical Compensation
  Dr. Godman
  To ask the Secretary of State for Scotland what was the amount of money paid by each of the health boards in 1990 in relation to medical compensation cases; and what was the average award.

  Mr. Michael Forsyth
  Given the small number of cases in certain health boards, it is not appropriate on the grounds of confidentiality to publish the information in the form requested. The total amount of compensation payments, including claimants' costs, for all boards in 1990 was £1,364,446 and the average award, including claimants' costs, was £17,953.

  Environmentally Sensitive Areas
  Mr. Wallace
  To ask the Secretary of State for Scotland whether he will list areas of Scotland which he has identified for future designation as environmentally sensitive areas; and if he will make a statement.

  Mr. Michael Forsyth
  A review of the environmentally sensitive area scheme is due to be completed in 1991. Meantime there are no plans to designate further areas in Scotland.

  Environmental and Nature Conservation
  Mr. Wallace
  To ask the Secretary of State for Scotland what are the terms of reference of the Scottish working group on education with regard to environmental and nature conservation matters.

  Lord James Douglas-Hamilton
  I have placed a copy in the Library of the House, together with a list of members of the group.

  Alcohol and Drug Misuse
  Mr. Hood
  To ask the Secretary of State for Scotland if he will list the voluntary organisations which have received help to combat alcohol and drug misuse, in the last financial year, giving in each case the amounts given.
  418
  Mr. Michael Forsyth
  [holding answer 20 December 1991]: Full details of the support given by health boards to local voluntary organisations concerned with alcohol and drug misuse are not held centrally. However, over £2 million was set aside in the health programme in 1989–90 specifically for the support of drug misuse services and a substantial proportion of this sum was used to support the work of voluntary organisations.

  In addition, support was given to voluntary organisations concerned with alcohol and drug misuse from centrally held funds under section 16B of the National Health Service (Scotland) Act 1978, section 10 of the Social Work (Scotland) Act 1968 and the Local Government Grants (Social Need) Act 1969 (the urban Programme). Details of assistance given under these provision are on folllows:

  Organisation

  Amount (1989–90) £

  Scottish Council on Alcohol

  142,190

  Scottish Drugs Forum

  48,800

  Drinkwise Orkney

  13,360

  Church of Scotland (Designated Place, Inverness)

  6,730

  Glasgow Council on Alcohol

  (1) Barlinnie Addiction Project

  10,522

  (2) Hostels project

  29,124

  Ayrshire Council on Alcohol

  63,444

  Renfrew Council on Alcohol

  38,229

  Anchor House (Perth)

  23,064

  Aberdeen Council on Alcohol

  50,995

  Falkirk Drug and Solvent Abuse Project

  16,015

  Aberdeen Drugs Action Outreach Project

  22,350

  West Edinburgh Support Team

  25,841

  East End Drug Forum (Glasgow)

  61,980

  Inverclyde Drugline

  43,879

  St. Enoch's Drug Rehabilitation Programme

  82,237

  West Lothian Drug Education Project

  24,898

  Total

  703,678

  Postal Services
  Sir David Steel
  To ask the Secretary of State for Scotland whether he will take steps to ensure that postal service names and areas and local government names and areas in Scotland are brought into alignment.

  Mr. Leigh
  I have been asked to reply.

  Decisions concerning aspects of the day-to-day running of the Post Office, such as those relating to the designation of postal addresses and postcodes, are operational matters for the Post Office. It would not, therefore, be appropriate for me to comment on this matter in detail. However, I understand that postal addresses are sorting and routing instructions for the Post Office, allowing mail to reach its destination from any part of the country by the fastest and most economical route. They are not intended, therefore, to describe particular geographical locations, nor to correspond with geographical or political boundaries.

  Outmigration
  Mr. Maxton
  To ask the Secretary of State for Scotland what was the total net civilian outmigration from Scotland in the 12 months ended June 1990.

  Mr. Michael Forsyth
  I refer the hon. Member to the answer given on 14 January 1991 at column 427.

ENERGY

  Energy Conservation
  Mr. Flynn
  To ask the Secretary of State for Energy what proposals he has to strengthen his Department's energy conservation programme.

  Mr. Wakeham
  I refer the hon. Member to the answer I gave to the hon. Member for Bristol, South (Ms. Primarolo) earlier today.

  British Coal Enterprise Ltd.
  Mr. Favell
  To ask the Secretary of State for Energy what is his estimate of the number of new job opportunities created by British Coal Enterprise Ltd. since 1984.

  Mr. Heathcoat-Amory
  I understand that British Coal Enterprise Ltd. has helped create some 68,000 new job opportunities, nationwide, since its inception in 1984.

  Mr. Anthony Coombs
  To ask the Secretary of State for Energy what estimated funding has been allocated to British Coal Enterprise Ltd. since 1984.

  Mr. Heathcoat-Amory
  Since 1984 this Government have made available some £60 million to British Coal Enterprise Ltd. to assist it in its job creation activities.

  Middle East Oil
  Mr. Tony Banks
  To ask the Secretary of State for Energy what contingency plans exist to safeguard and conserve oil supplies in the light of events in the middle east.

  Dr. Michael Clark
  To ask the Secretary of State for Energy what plans he has to ensure the continued availability of petroleum products to retail customers in the context of the Gulf crisis.

  Mr. Wakeham
  There are ample supplies of oil at present. The United Kingdom maintains a range of contingency plans and is playing its full part in the measures announced by the International Energy Agency which are being reviewed by the governing board today.

  UKAEA Police
  Mr. Cohen
  To ask the Secretary of State for Energy if he will make a statement on the work of the UKAEA police.

  Mr. Heathcoat-Amory
  The latest annual report of the chief constable of the United Kingdom Atomic Energy Authority constabulary was published in August 1990. Copies are available in the Library of the House.

  Miners' Strikes
  Mr. Andy Stewart
  To ask the Secretary of State for Energy what was the level of output lost through industrial disputes in the coal industry in 1978–79; what was the level lost in 1989–90; and if he will make a statement.

  Mr. Wakeham
  The level of output lost through industrial disputes in the coal industry in 1978–79 was 1·5 million tonnes, and in 1989–90 was 600,000 tonnes.

  Piper Alpha
  Dr. Godman
  To ask the Secretary of State for Energy what consultations have been held between his Department and interested parties following the publication of the report of the public inquiry into the Piper Alpha disaster.

  Mr. Moynihan
  Intensive discussions are proceeding with other relevant Government Departments about the transfer of responsibility for offshore safety to a new division of the Health and Safety Executive.

  My right hon. Friend has met representatives of the AEU and I have met the UK Offshore Operators Association. In addition, the content and implications of Lord Cullen's report have been discussed in a number of more general meetings with various groups in the oil industry.

  Gulf War (Ecological Consequences)
  Mr. Alan W. Williams
  To ask the Secretary of State for Energy, pursuant to his statement earlier this month on the possible environmental consequence of igniting the oilfields of Kuwait, whether any studies have been carried out by his Department on this matter.

  Mr. Wakeham
  My Department has consulted the Meteorological Office and has contributed appropriately to its study.

  Electricity Generation
  Mr. Pawsey
  To ask the Secretary of State for Energy of how many independent electricity generation projects he has been made aware.

  Mr. Ground
  To ask the Secretary of State for Energy of how many independent electricity generation projects he has been made aware.

  Mr. Heathcoat-Amory
  My Department is aware of around 20 major independent electricity generation projects which have been made public. My Department has also been advised, in confidence, of a number of other proposals, but it will be for the companies concerned to decide when to make public the details.

  Coal Imports
  Mr. Barron
  To ask the Secretary of State for Energy if he will estimate the amount of coal imported for electricity generation for the years 1992–93 and 1993–94.

  Mr. Heathcoat-Amory
  We do not make such estimates.

  Mr. Allen
  To ask the Secretary of State for Energy when he next intends to meet the chairman of British Coal to discuss the job implications for British Coal of the level of imports.

  Mr. Skinner
  To ask the Secretary of State for Energy when he next expects to meet the chairman of British Coal to discuss coal imports; and if he will make a statement.

  Mr. Heathcoat-Amory
  My right hon. Friend meets the chairman of British Coal regularly to discuss all aspects of the coal industry.

  Unleaded Petrol
  Mr. Roger King
  To ask the Secretary of State for Energy what was the increase in market share of the sale of unleaded petrol in 1989; and what was the increase in other EC countries.

  Mr. Butcher
  To ask the Secretary of State for Energy what was the increase in market share of the sale of unleaded petrol in 1989; and what were the figures in other EC countries.

  Mr. Moynihan
  The market share of unleaded petrol increased rapidly in the United Kingdom during 1989—from 4 per cent. in January to 28 per cent. by December, an overall market share of 19 per cent. for that year. The United Kingdom share has subsequently increased to 38 per cent. in December last year.

  The United Kingdom Petroleum Industry Association estimates that in 1989 the market share of unleaded petrol in other European Community countries was as follows: West Germany 59 per cent., Denmark 57 per cent., Netherlands 37 per cent., Luxembourg 21 per cent., Belgium 19 per cent., Eire 7 per cent., France and Italy 2 per cent., and Spain and Portugal 0·5 per cent.,

  Sales of unleaded petrol in Greece were negligible.

  Rural Electricity Supply
  Mr. Amos
  To ask the Secretary of State for Energy if he will meet the Director General of OFFER to discuss the supply of electricity to remote rural areas.

  Mr. Heathcoat-Amory
  This is a matter for the supply companies concerned, within their statutory and licence obligations. The director general is empowered to determine disputes over the terms or conditions of supply.

  Gas Inspections
  Mr. McMaster
  To ask the Secretary of State for Energy if he will bring forward proposals to enable the Director General of OFGAS to ensure that no charges are levied on the consumer for action taken by British Gas officials inspecting domestic premises where there is a suspicion or risk of danger to the safety of the consumer.

  Mr. Moynihan
  No. British Gas is already obliged under its authorisation to make safe all gas escapes free of charge and to provide safety checks free of charge for older or disabled customers living alone.

  British Coal
  Mr. Eadie
  To ask the Secretary of State for Energy when he appointed a new chairman of British Coal; what terms of reference he gave him regarding the future of the industry; and what will be his yearly salary.

  Mr. Heathcoat-Amory
  The new chairman of British Coal, Neil Clarke, was appointed from 1 January 1991. In accordance with the normal arrangements for nationalised industries his objectives are being agreed with him and these will be announced in the near future. Mr. Clarke's salary is £225,000 per annum. The appointment is not pensionable and his remuneration therefore includes an element in lieu of pension.

  Electricity Privatisation
  Mr. Morgan
  To ask the Secretary of State for Energy what licence fees have been paid in respect of the use of "Star Trek" copyright material used in the television advertising campaign for the flotation of the electricity generating companies of England and Wales; and to whom.

  Mr. Heathcoat-Amory
  The licensing arrangements entered into between Collett Dickenson & Pearce and Paramount Pictures are commercially confidential.

  Mr. Morgan
  To ask the Secretary of State for Energy for what part the licence fees for the use of the "Star Trek" copyright in the advertising campaign for the flotation of the generating companies of England and Wales have accounted in the total costs of that advertising campaign.

  Mr. Heathcoat-Amory
  The licensing arrangements are commercially confidential. It is not Government policy to give advertising budgets in advance of flotations. All expenditure, including marketing, will be reported to Parliament in the usual way.

  Sizewell Computer Software
  Mr. Morgan
  To ask the Secretary of State for Energy what consultations he has had with, and representations from, the chairman of Nuclear Electric regarding the impact of developments in respect of the Controbloc P20 computer software system for the external financing limit in respect of the Sizewell B nuclear power station.

  Mr. Heathcoat-Amory
  Difficulties with the Controbloc P20 computer software system have only recently arisen as a result of a review by Electricité de France (EDF). Whilst this is a matter for Nuclear Electric plc, I am advised that NE is currently reviewing the position with a view to ensuring that there is no impact on the overall construction schedule for Sizewell B.

  Renewable Energy
  Mr. Janman
  To ask the Secretary of State for Energy what is his Department's definition, by category, of renewable energies; and if he will list separately, by category, the ways in which the Government's recent legislation will assist each, financially and through statute.

  Mr. Moynihan
  Energy Paper 55 published by Her Majesty's Stationery Office in 1988, copies of which are in the Libraries of both Houses, lists renewable energy technologies by economic classification. Those electricity generation technologies which are close to commercial application such as landfill gas, waste incineration, wind and hydroelectricity are eligible for contract at an above-market price under the non-fossil fuel obligation. Procedures are in hand to make the second non-fossil fuel obligation renewables order later this year.

HEALTH

  Ambulance Services
  Mr. Spearing
  To ask the Secretary of State for Health, pursuant to his written answer of 21 January concerning response times for emergency ambulance services, if he will state the standards applicable to Greater London(a) before and (b) after the relaxations there mentioned.
  423
  Mr. Dorrell
  Since 1974 the response standards applicable to the area covered by the London ambulance service have been:

  Percentile

  Minutes

  50

  7

  95

  14

  Under the new classification the 50 percentile time is 8 minutes; the 95 percentile time is unchanged.

  Blood Donations
  Mr. Allen
  To ask the Secretary of State for Health what is the percentage by gender of blood donated over a similar period(a) up to the Gulf war and (b) since the Gulf war.

  Mr. Dorrell
  This information is not available.

  Personal Social Services
  Mr. Ashley
  To ask the Secretary of State for Health when guidance will be issued on the powers and duties of local authorities to charge for personal social services; and which organisations he will be consulting.

  Mrs. Virginia Bottomley
  Appropriate guidance on the powers and duties of local authorities in relation to charging for personal social services will be issued well before local authorities take over full responsibilities for community care in April 1993. Local authorities will be consulted before such guidance is issued.

  Mr. Hinchliffe
  To ask the Secretary of State for Health if he has any proposals to bring forward legislation to remove the responsibility for personal social services from local government.

  Mrs. Virginia Bottomley
  There are no plans to do so.

  NHS Trusts
  Mr. Michael
  To ask the Secretary of State for Health what body will become responsible for the purchase of health services within the area of each of the district health authorities in England listed in his answer of 21 January becoming a trust on an all-authority basis in April 1992.

  Mrs. Virginia Bottomley
  In all districts, district health authorities will be the purchasers of hospital and community health services for their residents. Where they exist, GP fund holders will have responsibility for purchasing a prescribed range of medical services for their patients.

  Fluoride
  Mrs. Maureen Hicks
  To ask the Secretary of State for Health what evidence he has about reduction in dental decay as a result of the addition of fluoride to drinking water.

  Mr. Dorrell
  Evidence in this country of the efficacy of fluoridation of drinking water is well documented. For example, two studies in 1987 compared samples of 14-year-old children in fluoridated south Birmingham and non-fluoridated Bolton and samples of five-year-old children in fluoridated Newcastle and non-fluoridated south Northumberland.
  424
  In the study of south Birmingham 32 per cent. of children there were shown to be free of caries compared with only 19 per cent. in Bolton. In the study of Newcastle and Northumberland 50 per cent. of the children in the fluoridated area were free of caries compared with only 32 per cent. in the non-fluoridated area. It was also found that in Northumberland 37 per cent. of the children had five or more carious teeth compared with only 16 per cent. in Newcastle.

  Mrs. Maureen Hicks
  To ask the Secretary of State for Health what evidence he has available on whether the adding of fluoride to drinking water represents any health risk to the individual.

  Mr. Dorrell
  There is no evidence to show that increasing the level of fluoride in drinking water to the optimum concentration of one part per million has any adverse effect upon health. This has been confirmed repeatedly by groups of scientific experts. Major reviews of the extensive scientific literature have been undertaken by the World Health Organisation, the Canadian Public Health Association, the US National Academy of Sciences, the Australian National Health and Medical Research Council.

  The safety of fluoridation of water supplies has been reviewed by the Royal College of Physicians, the DHSS working party on fluoridation of water and cancer and the Government's independent expert medical and scientific advisory committees on mutagenicity and carcinogenicity of chemicals in food, consumer products and the environment.

  Abortion
  Ms. Harman
  To ask the Secretary of State for Health whether he has issued any instructions about the provision of abortion in those districts which have reduced their abortion services;

  (2) what plans he has for reducing geographical inequalities in the provision of abortion services.

  Mrs. Virginia Bottomley
  The level of gynaecological provision including abortion, like any other provision within the national health service, is decided by individual health authorities. The Government believe that such decisions are best taken locally in the light of authorities' first-hand knowledge of local needs and priorities and competing claims on resources.

  Ms. Harman
  To ask the Secretary of State for Health if he will list the ratio of NHS to non-NHS abortions in each regional health area by place of usual residence for each year since 1985.

  Mr. Dorrell
  The information requested has been placed in the Library.

  Ms. Harman
  To ask the Secretary of State for Health how many abortions were paid for by the NHS under agency arrangements in 1988, 1989 and 1990, by place of usual residence;(a) in each regional health authority and (b) in each district health authority.

  Mr. Dorrell
  Information on terminations performed in individual district health authorities cannot be released on grounds of confidentiality. Data for terminations in regional health authorities are shown in the table. The latest full data year available is 1989.
  425

  Number of terminations to residents of England and Wales carried out in each regional health authority (RHA) under agency arrangements by RHA of usual residents, 1988, 1989

  RHA of usual residence

  RHA of termination

  Year

  England and Wales

  Wales

  Northern

  Yorks.

  Trent

  East Anglian

  North West Thames

  North East Thames

  England and Wales

  1988

  9,357

  5

  2

  445

  795

  3

  1,036

  27

  1989

  9,200

  4

  3

  438

  88

  3

  1,240

  29

  Wales

  1988

  0

  0

  0

  0

  0

  0

  0

  0

  1989

  0

  0

  0

  0

  0

  0

  0

  0

  Northern

  1988

  0

  0

  0

  0

  0

  0

  0

  0

  1989

  0

  0

  0

  0

  0

  0

  0

  0

  Yorkshire

  1988

  420

  0

  0

  420

  0

  0

  0

  0

  1989

  435

  0

  0

  434

  1

  0

  0

  0

  Trent

  1988

  723

  0

  2

  23

  698

  0

  0

  0

  1989

  8

  0

  3

  3

  2

  0

  0

  0

  East Anglian

  1988

  0

  0

  0

  0

  0

  0

  0

  0

  1989

  0

  0

  0

  0

  0

  0

  0

  0

  North West Thames

  1988

  0

  0

  0

  0

  0

  0

  0

  0

  1989

  0

  0

  0

  0

  0

  0

  0

  0

  North East Thames

  1988

  9

  0

  0

  0

  0

  0

  7

  1

  1989

  7

  0

  0

  0

  0

  0

  3

  1

  South East Thames

  1988

  371

  0

  0

  0

  1

  0

  5

  2

  1989

  438

  0

  0

  0

  0

  0

  3

  7

  South West Thames

  1988

  1,318

  0

  0

  0

  0

  0

  1,012

  24

  1989

  1,504

  0

  0

  0

  0

  2

  1,226

  21

  Wessex

  1988

  751

  1

  0

  0

  0

  0

  0

  0

  1989

  704

  1

  0

  0

  0

  0

  0

  0

  Oxford

  1988

  0

  0

  0

  0

  0

  0

  0

  0

  1989

  0

  0

  0

  0

  0

  0

  0

  0

  South Western

  1988

  0

  0

  0

  0

  0

  0

  0

  0

  1989

  0

  0

  0

  0

  0

  0

  0

  0

  West Midlands

  1988

  5,762

  4

  0

  0

  96

  3

  12

  0

  1989

  6,100

  3

  0

  1

  85

  1

  8

  0

  Mersey

  1988

  1

  0

  0

  0

  0

  0

  0

  0

  1989

  2

  0

  0

  0

  0

  0

  0

  0

  North Western

  1988

  2

  0

  0

  2

  0

  0

  0

  0

  1989

  2

  0

  0

  0

  0

  0

  0

  0

  RHA of termination

  Year

  South East Thames

  South west Thames

  Wessex

  Oxford

  South Western

  West Midlands

  Mersey

  North Western

  England and Wales

  1988

  591

  24

  682

  354

  95

  5,296

  1

  1

  1989

  613

  42

  646

  390

  81

  5,618

  3

  2

  Wales

  1988

  0

  0

  0

  0

  0

  0

  0

  0

  1989

  0

  0

  0

  0

  0

  0

  0

  0

  Northern

  1988

  0

  0

  0

  0

  0

  0

  0

  0

  1989

  0

  0

  0

  0

  0

  0

  0

  0

  Yorkshire

  1988

  0

  0

  0

  0

  0

  0

  0

  0

  1989

  0

  0

  0

  0

  0

  0

  0

  0

  Trent

  1988

  0

  0

  0

  0

  0

  0

  0

  0

  1989

  0

  0

  0

  0

  0

  0

  0

  0

  East Anglian

  1988

  0

  0

  0

  0

  0

  0

  0

  0

  1989

  0

  0

  0

  0

  0

  0

  0

  0

  North West Thames

  1988

  0

  0

  0

  0

  0

  0

  0

  0

  1989

  0

  0

  0

  0

  0

  0

  0

  0

  North East Thames

  1988

  0

  0

  0

  1

  0

  0

  0

  0

  1989

  1

  1

  1

  0

  0

  0

  0

  0

  South East Thames

  1988

  329

  2

  9

  1

  2

  20

  0

  0

  1989

  380

  15

  15

  1

  2

  15

  0

  0

  South West Thames

  1988

  262

  16

  0

  4

  0

  0

  0

  0

  1989

  232

  17

  0

  5

  0

  1

  0

  0

  Wessex

  1988

  0

  6

  672

  4

  66

  1

  1

  0

  1989

  0

  9

  629

  2

  62

  1

  0

  0

  Oxford

  1988

  0

  0

  0

  0

  0

  0

  0

  0

  1989

  0

  0

  0

  0

  0

  0

  0

  0

  426 427

  RHA of termination

  Year

  South East Thames

  South west Thames

  Wessex

  Oxford

  South Western

  West Midlands

  Mersey

  North Western

  South Western

  1988

  0

  0

  0

  0

  0

  0

  0

  0

  1989

  0

  0

  0

  0

  0

  0

  0

  0

  West Midlands

  1988

  0

  0

  1

  344

  27

  5,275

  0

  0

  1989

  0

  0

  1

  382

  17

  5,601

  1

  0

  Mersey

  1988

  0

  0

  0

  0

  0

  0

  0

  1

  1989

  0

  0

  0

  0

  0

  0

  2

  0

  North Western

  1988

  0

  0

  0

  0

  0

  0

  0

  0

  1989

  0

  0

  0

  0

  0

  0

  0

  2

  Ms. Harman
  To ask the Secretary of State for Health if he will list the number of abortions for resident women of England and Wales carried out(a) in NHS premises, (b) by agency arrangements and (c) in the private sector in 1985, 1986, 1987, 1988, 1989 and 1990.

  Mr. Dorrell
  The data are shown in the table. The latest full data year available is 1989.

  Number of terminations by category of premises (a) NHS (b) private sector1 (c) agency, England and Wales 1985–89 England and Wales residents

  Year

  NHS

  Private sector

  Agency

  1985

  65,176

  69,996

  5,929

  1986

  67,451

  73,349

  6,819

  1987

  69,442

  78,708

  8,041

  1988

  69,103

  89,838

  9,357

  1989

  70,722

  90,541

  9,200

  1 All non-NHS minus those performed under Agency arrangements.

  Ms. Harman
  To ask the Secretary of State for Health what instructions or advice his Department has issued to health authorities in the past 10 years on the provision of NHS abortion services.

  Mrs. Virginia Bottomley
  The Department discussed the findings of the Royal College of Obstetricians and Gynaecologists' report on late abortions in England and Wales in 1985 with regional general managers and regional medical officers and health authorities were encouraged to improve their administrative referral systems. The chief medical officer and chief nursing officer issue circulars and letters to all doctors and nursing officers about aspects of abortion treatment and care when appropriate.

  Ms. Harman
  To ask the Secretary of State for Health if he will estimate the proportion of the cost of an NHS abortion accounted for by the legal requirement for two doctors to assess and certify a patient's eligibility under the terms of the Abortion Act 1967.

  Mrs. Virginia Bottomley
  Information is not available in the form requested, but the estimated revenue cost of an abortion in NHS hospitals is £200.

  Part III Accommodation
  Ms. Harman
  To ask the Secretary of State for Health if he will list(a) by social services authority and (b) for each of the last three years, the number of people on waiting lists for part III accommodation.

  Mrs. Virginia Bottomley
  It is for each local authority to determine in individual cases if residence in part III home 428
  is appropriate. Information about the number of people who approach local authorities seeking this type of care is not available centrally.

  Ms. Harman
  To ask the Secretary of State for Health if he will list(a) by social services authority and (b) for each of the last three years (i) the average age of people in part III accommodation and (ii) the average age of people on admission to part III accommodation.

  Mrs. Virginia Bottomley
  This information could be only partially obtained and then only at disproportionate cost.

  Leicestershire Health Authority
  Mr. Latham
  To ask the Secretary of State for Health whether he will make a statement on funding, through the Trent region, for the Leicestershire health authority.

  Mr. Dorrell
  The Government announced on 16 January an increased initial allocation to Trent regional health authority for 1991–92 of 10·5 per cent. The regional health authority expects to be able to inform Leicestershire district health authority of its initial allocation for 1991–92 in a few weeks.

  NHS Doctors
  Mr. Robin Cook
  To ask the Secretary of State for Health what was the number of doctors employed by the national health service in each year since 1974.

  Mrs. Virginia Bottomley
  The information requested is given in the following table.

  National health service doctors in England

  Year

  All staff

  1974

  49,107

  1975

  55,629

  1976

  57,167

  1977

  58,502

  1978

  60,001

  1979

  61,554

  1980

  63,130

  1981

  64,612

  1982

  65,991

  1983

  66,910

  1984

  67,282

  1985

  68,194

  1986

  68,839

  1987

  69,532

  1988

  70,995

  1989

  72,446

  Notes to the table:

  Figures relate to hospital and community health service medical staff

  429
  holding permanent paid and honorary appointments as at 30 September each year and general medical practitioners as at 1 October each year.

  Prior to 1975 comparable community health service medical staff figures are not available and are therefore not included. With the national health service reorganisation on 1 April 1974 the responsibility of this service was transferred from local authorities and the DES to the national health service.

  Dental Treatment
  Mr. Robin Cook
  To ask the Secretary of State for Health what was the average charge for dental treatment, in cash and constant prices, in each year since 1979.

  Mr. Dorrell
  The table shows (in column 2) the average cash charges for dental treatment provided under general dental services in England in each financial year since 1979. The constant prices (in column 3) convert the cash prices to their 1989–90 equivalent.

  Average dental charge paid by NHS patients paying the full proportion of the charge

  (1) Financial year

  (2) Cash price £

  (3) Constant price £

  1979–80

  6·83

  13·69

  1980–81

  8·88

  15·50

  1981–82

  10·33

  15·96

  1982–83

  12·54

  18·09

  1983–84

  13·62

  18·78

  1984–85

  14·72

  19·32

  1985–86

  16·67

  20·75

  1986–87

  17·56

  21·14

  1987–88

  18·43

  20·04

  1988–89

  19·84

  21·10

  1989–90

  25·02

  25·02

  Mr. Robin Cook
  To ask the Secretary of State for Health what was the proportion of dental treatment costs met by charges to patients in each year since 1979.

  Mr. Dorrell
  The proportion of the cost of dental treatment, provided under general dental services in England in each year since 1979, met by charges to patients was as follows:

  Calendar year

  Total cost

  Amount paid by Patients

  patient charge as a percentage of total cost

  1979

  303,684,708

  63,393,432

  20·87

  1980

  389,766,235

  89,567,462

  22·98

  1981

  454,565,184

  110,809,324

  24·38

  1982

  510,473,259

  135,713,892

  26·59

  1983

  553,051,518

  154,084,986

  27·86

  1984

  604,598,780

  167,650,236

  27·73

  1985

  634,860,271

  189,747,707

  29·89

  1986

  698,446,424

  216,927,756

  31·06

  1987

  772,798,504

  233,924,375

  30·27

  1988

  881,697,114

  270,184,733

  30·64

  1989

  930,070,732

  361,931,301

  38·91

  1990

  984,607,527

  382,676,509

  38·87

  Community Care
  Mr. Hinchliffe
  To ask the Secretary of State for Health which section is responsible within his Department for drafting the guidance for the implementation of the community care proposals.
  430
  Mrs. Virginia Bottomley
  The community services division (branch 4) is responsible to Ministers for implementation of our community care proposals. This division prepared the policy guidance which was issued in November 1990, with extensive support from the social services inspectorate, social services and health managers and professionals and other outside experts. Individual items of practice guidance are being prepared by the social services inspectorate, practitioners and academic and consultancy experts. Each is prepared within the overall implementation framework and is approved by Ministers.

  Eye Tests
  Mr. Robin Cook
  To ask the Secretary of State for Health what was the number of sight tests undertaken in each of the last nine quarters.

  Mrs. Virginia Bottomley
  Statistics on NHS sight tests paid for by the general ophthalmic services are collected on a six-monthly basis. The figures for the latest available two years are as follows:

  Great Britain

  Sight tests paid for (millions)

  April 1988—September 1988

  6·641

  October 1988—March 1989

  7·754

  April 1989—September 19891

  23·828

  October 1989—March 19901

  2·210

  April 1990—September 19901

  32·358

  1 After entitlement to NHS tests restricted to priority groups.

  2 Includes 1·8 million tests conducted before April 1989.

  3 Provisional.

  Since 1 April 1989 many people who are not entitled to NHS sight tests (about two thirds of the population) have had private sight tests. The Department collects no figures relating to these tests: however, an independent NOP survey commissioned by the Department indicated that the total number of sight tests (private and NHS) during the first quarter of 1990 was at the level that could have been expected if trends up to 1987 had been projected forward.

  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
  The concept of "real national disposable income" is not used in United Kingdom national accounts. The table gives NHS and HCHS expenditure for the years requested as a proportion of United Kingdom gross domestic product.
  431

  Total NHS (UK) spending and hospital and community health services' spending as a percentage of personal disposable income

  Total NHS Gross Expenditure

  Total NHS Gross Expenditure as a percentage of gross domestic product

  Total hospital and community health services'1 Gross Expenditure

  Total health and community health services'1 Gross Expenditure as a percentage of gross domestic product

  £ million

  £ million

  1987–88

  21,653

  5·0

  16,383

  3·8

  1988–89

  24,067

  5·0

  18,145

  3·8

  1989–90

  25,986

  5·0

  19,646

  3·8

  1990–91

  29,055

  5·2

  22,073

  4·0

  1 New definition of HCHS expenditure which will be used in the forthcoming departmental report. Includes Family Health Services Authority administration, Disablement Services Authority and family health service cash-limited spending.

  Health Authorities (Capital Charges)
  Mr. Robin Cook
  To ask the Secretary of State for Health if he will publish his initial estimates of the capital charges for each district health authority.

  Mr. Dorrell
  The information requested is not held centrally. Regional health authorities in England have supplied the following estimates of the capital charges they expect to receive from their directly managed units in 1991–92.

  Region

  Expected capital charges receipts (£000)

  Northern

  122,306

  Yorkshire

  131,579

  Trent

  164,201

  East Anglian

  85,591

  North West Thames

  181,837

  North East Thames

  230,072

  South East Thames

  185,775

  South West Thames

  139,009

  Wessex

  137,538

  Oxford

  118,274

  South Western

  100,987

  West Midlands

  228,143

  Mersey

  65,738

  North Western

  184,011

SOCIAL SECURITY

  Energy Efficiency
  Mr. Pendry
  To ask the Secretary of State for Social Security what specific measures his Department has taken to promote energy efficiency; what further measures his Department intends to take to promote energy efficiency; and by what amount and what percentage of its total energy bill his Department's energy bill has been reduced over the past year.

  Mr. Jack
  The Department is committed to supporting the Government's initiative aimed at reducing consumption on the civil estate by 15 per cent. over the next five years. Performance measures have recently been introduced, and additional resources have been allocated to 432
  setting targets monitoring them and identifying opportunities for further investment. An allocation of £562,000 has been made for the financial year 1991–92, in addition to sums which will be spent as an integral part of building refurbishment and new construction projects. Particular attention is being given to boiler replacement and improvements to lighting using high-frequency, low-energy fluorescent and ultrasonic controls.

  The Department appointed a full-time energy manager in 1987 and has since developed a number of initiatives to improve energy efficiency in the 1,000 buildings which we wholly or partially occupy. The main achievements have been:
  —a staff publicity campaign, including a poster competition and features in the staff magazine,
  —over £100,000 invested in replacing tungsten lighting with compact fluorescent lighting,
  —over £100,000 invested in a variety of small scale initiatives including the installation of heating and lighting controls, false ceilings and high-efficiency fluorescent fittings.

  Prior to April 1990, the Property Services Agency was responsible for maintenance of the Department's buildings and undertook the bulk of investment for energy efficiency improvements, for which figures are not available.

  Over the four financial years 1986–87 to 1989–90, after adjustment for area, price and weather, energy consumption in the Department increased from £9·10 million to £10·09 million (an increase of 10·88 per cent.), with an increase of £1·12 million (12·49 per cent.) in 1989–90 over 1988–89. Within these figures consumption of boiler fuels declined by 12 per cent. over the four-year period. There was, however, a substantial increase in electricity consumption as a consequence of the introduction of the Department's operational strategy computerisation programme.

  Although the Department of Energy has primary responsibility for providing advice and grants on energy efficiency, our Department is supporting the promotion of the home energy efficiency scheme launched on 1 January this year. The scheme is funded by the Department of Energy but administered by the neighbourhood energy action voluntary group. Posters and leaflets are to be made available in social security offices, and the Department's officers providing information and advice services will be made aware of this scheme.

  Social Fund
  Mr. Darling
  To ask the Secretary of State for Social Security what advice he has issued to local offices in connection with the criteria for making community care grants for clothing to former prisoners other than those with illness or handicap; and if he will make a statement.

  Mr. Scott
  Advice on making community care grants is issued to local offices in the form of guidance contained in the "Social Fund Manual", a copy of which is in the Library. It is for the social fund officer to decide on the merits of each individual application.

  Child Benefit
  Mr. Battle
  To ask the Secretary of State for Social Security if he will publish figures showing(a) what percentage of public expenditure on child benefit goes to families with equivalent income below the mean and (b)

  433
  what percentage of families receiving child benefit have equivalent incomes below the mean, after housing costs in both cases.

  Mr. Jack
  The proportion of families receiving child benefit with household incomes below the mean of equivalised income after housing costs has changed little since 1979 and remains in the region of 70 per cent. About 74 per cent. of total Government expenditure on child benefit went to these families.

  Mr. Darling
  To ask the Secretary of State for Social Security if he will consider making applications for child benefit more widely available through post offices, citizens advice bureaux and other public places.

  Mr. Jack
  There are three different claim forms for child benefit; one for a first child, another for newly born subsequent children and a third for other children who join the family. These forms are available from any social security office on request by post, telephone or personal call. In addition, leaflet FB8 "Babies and benefits", which is widely available to expectant and nursing mothers, contains a coupon which can be used to obtain the appropriate form. These arrangements, which are kept under review, are intended to ensure that claimants receive the correct form.

  Income Support
  Mr. Redmond
  To ask the Secretary of State for Social Security if he will list for each of his Department's offices in the Doncaster area(a) how many people in receipt of income support are having deductions made at source for community charge arrears and (b) how many people are having deductions made from income support for social fund loan repayments; and what is the number of people common to both (a) and (b).

  Miss Widdecombe
  The latest available information is as follows:

  Deductions from income support

  Social fund recoveries

  Community charge

  Doncaster East

  1,264

  0

  Doncaster West

  1,478

  0

  Wath on Dearne

  1,155

  0

  Mr. Dewar
  To ask the Secretary of State for Social Security what percentage of the population in(a) Scotland and (b) the United Kingdom, is dependent upon income support.

  Miss Widdecombe
  The information requested is as follows:

  Percentage of the population dependent upon income support

  Per cent.

  In Scotland

  15·7

  In Great Britain1

  12·6

  1 Information for the United Kingdom is not available.

  Sources:

  Income Support figures: Annual Statistical Enquiry May 1989.

  GB population figures: OPCS

  Scotland population figures: General Register Office. (Scotland).

  Mr. Hinchliffe
  To ask the Secretary of State for Social Security what arrangements are made for the payment of 434
  income support to individuals employed by companies which close down for holiday periods who receive no pay during such periods.

  Miss Widdecombe
  Income support is available to people who are on unpaid holiday only if they normally work, on average, fewer than 24 hours a week. Anyone on compulsory unpaid holiday, including a person who normally works 24 or more hours a week and does not have enough money to tide him over until his next payday may be able to get a social fund crisis loan, if this is the only means of avoiding serious risk to his health and safety.

  Local Government Finance
  Mr. Burns
  To ask the Secretary of State for Social Security how many individuals have qualified for community charge rebates in Chelmsford in the current financial year to the latest available date.

  Miss Widdecombe
  The information requested is not available, but at 30 November 1990 around 14,000 individuals were in receipt of community charge benefit in Chelmsford.

  Source: Housing and Community Charge Benefit Management Information System November 1990 quarterly count of claims; and the Family Expenditure Survey-based analyses.

  Benefit Claimants
  Mr. Fatchett
  To ask the Secretary of State for Social Security what is, on the latest available figures, the number of claimants in receipt of(a) income support and (b) unemployment benefit, who are, at the same time, following an approved course under the 21 hours rule.

  Miss Widdecombe
  The rule enables unemployed claimants in receipt of income support to follow part-time education courses. The information requested is not available.

  Social Fund
  Mr. Loyden
  To ask the Secretary of State for Social Security what were the main purposes/items for which crisis loans were awarded from the social fund; and what is the average value of such loans.

  Mr. Scott
  Information relating to 1988–89 and 1989–90 is available in the Secretary of State's annual reports, copies of which are in the Library. Information relating to 1990–91 to 31 December is shown in the table.

  Awards

  Average amount £

  Furniture and household items

  32,694

  214

  Rent in advance

  7,507

  114

  Living expenses (general)

  157,950

  35

  Living expenses (alignment)

  154,973

  34

  Clothing/footwear

  5,907

  91

  Others

  13,256

  64

  TOTAL

  372,287

  55

  Mr. Loyden
  To ask the Secretary of State for Social Security what percentage of income support claimants are having deductions made for the repayment of social fund loans in each of his Department's offices on Merseyside.
  435
  Mr. Scott
  The information requested is in the table.

  Local Office

  Percentage

  Belle Vale

  14·9

  Bootle

  14·5

  Breckfield

  14·3

  City

  21·5

  Crosby

  12·7

  Edgehill

  15·0

  Garston

  13·7

  Huyton

  19·0

  Kirkby

  15·8

  Norris Green

  16·7

  Toxteth

  15·7

  West Derby

  16·1

  Mr. Loyden
  To ask the Secretary of State for Social Security what were the main purposes items for which budgeting loans were awarded from the social fund; and what is the average value of such loans.

  Mr. Scott
  Information relating to 1988–89 and 1989–90 is available in the Secretary of State's annual reports, copies of which are in the Library. Information relating to 1990–91 (to 31 December) is shown in the table.

  Awards

  Average value £

  Furniture and household items

  364,470

  231

  Washing machine

  18,579

  208

  Bedding

  14,667

  137

  Clothing/Footwear

  37,901

  138

  Others

  24,013

  177

  Total

  459,630

  217

  Community Care Grants
  Mr. Loyden
  To ask the Secretary of State for Social Security what percentage of community care grants are paid to each of high, medium and low priority groups; and for what purposes the community care grants were paid in percentage terms for each category.

  Mr. Scott
  Information is not available for the number of grants paid as high, medium or low priorities.

  The table shows the number and percentage of grants paid for the main types of purpose for April to December 1990. Information relating to 1988–89 and 1989–90 is contained in the Secretary of State's annual reports, which are in the Library.

  Awards

  Percentage of total community care grants

  Furniture and Household Items

  102,316

  56

  Washing Machines

  8,329

  5

  Home Improvements/Repair/Maintenance

  3,085

  2

  Removal Expenses

  6,533

  4

  Travelling Expenses

  29,714

  16

  Clothing/Footwear

  22,309

  12

  Others

  10,951

  6

  Total

  183,237

  100

  436
  Note: Percentages do not sum due to rounding.

  Cold Weather Payments
  Mr. Menzies Campbell
  To ask the Secretary of State for Social Security whether he will conduct a review of criteria used to allocate cold weather payments to consider additional factors including storm conditions and wind chill.

  Mr. Scott
  In consultation with the Meteorological Office, we have recently reviewed the working of the cold weather payments scheme and are satisfied that the most important factor in measuring cold weather is air temperature. It would be extremely difficult to incorporate additional factors such as storm conditions and wind chill into a scheme which is intended to be simple to operate and easy to understand.

  Mr. Menzies Campbell
  To ask the Secretary of State for Social Security whether he will revise the requirements that temperatures remain below freezing for seven consecutive days in order to qualify for a cold weather payment.

  Mr. Scott
  No. The scheme gives extra help towards higher heating costs resulting from a sustained period of cold weather. A period of seven consecutive days where the average daily temperature is 0 deg. C (freezing point) or below is a reasonable indication of this.

  Gulf Crisis
  Mr. Meacher
  To ask the Secretary of State for Social Security what benefits will be available to service men injured during the Gulf war; and for war widows and their dependants.

  Miss Widdecombe
  Service men who are injured as a result of the hostilities in the Gulf, and the widows and dependants of those who die as a result of service, will be eligible for pensions and allowances in accordance with the normal provisions of the armed forces pension schemes, administered by the Ministry of Defence and the war pensions scheme, administered by this Department. They may also be eligible for social security benefits.

  Housing Benefit
  Mr. Arbuthnot
  To ask the Secretary of State for Social Security if he is yet in a position to announce how housing benefit transitional payments will be treated in April.

  Miss Widdecombe
  We have made it clear from the beginning that housing benefit transitional payments will be reduced as increases in other benefits make them less necessary. We have decided on a flat rate reduction of £3 in these payments from April. The vast majority of recipients will still gain overall in cash terms from the uprating as other social security benefits are being increased by amounts significantly larger than in April 1990.

  Single Parents
  Mr. Bradley
  To ask the Secretary of State for Social Security what is the total benefit entitlement of an unemployed single parent with two children aged under five years.
  437
  Miss Widdecombe
  [holding answer 14 January 1991]: On the assumption that the qualifying conditions for each benefit are met and the entitlement to each is taken up, the benefit of an unemployed lone parent with two children aged under five years would be made up of child benefit, one-parent benefit and income support. The income support would be calculated as follows:

  Applicable amounts

  £

  Adult personal allowance

  36·70

  Child's personal allowance

  12·35

  Child's personal allowance

  12·35

  Family premium

  7·35

  Lone parent premium

  41·0

  72·85

  Less income

  Child Benefit (2 x £7·25)

  14·50

  One Parent Benefit

  5·60

  Income Support payable

  52·75

  The lone parent would also be entitled to housing benefit to meet any eligible rent and community charge benefit to cover 80 per cent. of the community charge. Those who are owner-occupiers may receive help with mortgage interest payments through income support.

  The children would also be eligible for free welfare foods assumed to be worth £2·10 per child per week.

  Families on income support also get extra help by virtue of their automatic entitlement (passport) to free prescriptions, exemption from dental and optical charges and help with patients' fares to hospital.

  Income Maintenance Benefits
  Mr. Battle
  To ask the Secretary of State for Social Security what provisions exist for employees to receive income maintenance benefits during a period of compulsory unpaid holidays at their place of work; and how many people are affected by them.

  Miss Widdecombe
  [holding answer 17 January 1991]: People who normally work fewer than 24 hours a week can claim income support, or an increase in income support if it is already in payment, during a period of compulsory unpaid holiday. For those people who are normally working 24 hours or more a week and have a dependent child, family credit is available. Family credit is awarded for 26 weeks and remains in payment if an unpaid holiday falls within the period of the award. Information about the number of people affected is not available.

  War Widows
  Mr. Flynn
  To ask the Secretary of State for Social Security (1) what will be the percentage increase in April in the combined value of children's allowance and child benefit payable to a war widow for the first child and each subsequent child in the family;

  Uprating date1

  Value of child benefit plus children's allowance £

  Average real value at April 1990 prices over the period2 3 £

  Real value at April 1990 prices at date of uprating2 £

  Value as percentage of average gross weekly earnings4 Percent.

  November 1979

  14·00

  26·88

  29·07

  12·3

  November 1980

  15·35

  26·20

  27·64

  11·4

  November 1981

  16·10

  25·05

  25·89

  10·8

  November 1982

  17·10

  25·40

  25·88

  10·6

  November 1983

  17·45

  24·68

  25·19

  10·1

  438
  (2) whether war widows will benefit from the £1 increase in child benefit in April;

  (3) what was the combined value of children's allowance and child benefit for the child of a war widow at current and April 1990 prices and as a percentage of average earnings, in November 1979 and as a percentage of average earnings, in November 1979 and at each subsequent uprating date; and what was the reason for any fall in real value since November 1979; and

  (4) what method is used to calculate the annual uprating of war widows' children's allowance, and whether it has changed since 1979.

  Mr. Jack
  The present method of operating war widows' children's allowance follows that established by the last Labour Government. This method entails increasing the basic war widows' children's allowance by the increase in the retail prices index, deducting any cash increase in child benefit and adding an amount of £1·86 which was added as a transitional measure in 1977 by way of compensation to war widows for the loss of their tax allowance during the phasing in of child benefit.

  War widows will receive the proposed £1 increase in child benefit in April. Like other child dependency increases payable under the Social Security Act 1975, the method of uprating war widows' children's allowance entails deducting any cash increase in child benefit. Thus, from April, these allowances will be increased to £13·65 for the first qualifying child and to £14·65 for others, representing an overall cash increase of £1·25 for each child. The percentage overall increase in April for both the first and each subsequent child will be 6·05 per cent.

  Children's allowances are only one element of support for war widows and their families. Since 1979 several important improvements have been made to the overall position of war widows. In 1979 war widows' pensions were made tax free; in 1984 a new tier of age allowance was introduced for those over 80; in 1988 the disregard on war pensions for income-related benefits was increased to £5 and to £10 in 1990. In 1990 pre-1973 war widows were awarded special payments of £40 a week. These, too, were tax free and are also totally disregarded for the purpose of calculating entitlement to income-related benefits. Both war widows' children's allowances and war widows' pensions have consistently been set at preferential rates compared to those applicable to national insurance widows and children.

  Since 1983 pensions and social security benefits have been uprated annually in line with the retail price index.

  The table shows values of children's allowance and child benefit for the child of a war widow at current and April 1990 prices and as a percentage of average earnings.
  439

  Uprating date1

  Value of child benefit plus children's allowance £

  Average real value at April 1990 prices over the period2 3 £

  Real value at April 1990 prices at date of uprating2 £

  Value as percentage of average gross weekly earnings4 Per cent.

  November 1984

  17·90

  23·90

  24·62

  9·6

  November 1985

  18·55

  23·96

  24·19

  9·3

  July 1986

  18·65

  23·54

  23·93

  8·8

  April 1987

  18·85

  22·96

  23·16

  8·4

  April 1988

  19·25

  22·13

  22·76

  7·8

  April 1989

  19·85

  21·16

  21·73

  7·4

  April 1990

  20·65

  —

  20·65

  7·0

  1 Uprating dates refer to the children's allowance. For all but the first date they are also the uprating dates for child benefit.

  2 Using general index of retail prices.

  3 Average real values at April 1990 prices are calculated over the period between uprating dates (eg November 1979-October 1980).

  4 The source of the earnings is the New Earnings Survey and the estimates used up to November 1982 are those for full-time working adults aged 21 and over whose earnings are unaffected by absence. From November 1983 the source remains the New Earnings Survey but is in respect of all full-time workers on adult rates whose earnings are unaffected by absence.

  War Pensions
  Mr. Meacher
  To ask the Secretary of State for Social Security if he has any plans to reduce and end the war pensions welfare service and the homecraft service.

  Miss Widdecombe
  There is absolutely no question of withdrawing the war pensioners' welfare service and we shall certainly not agree to anything that would damage the interests of war widows and war pensioners. The report of a routine management review of the war pensioners welfare service last year suggested no changes in the number of chief welfare officers and welfare officers, but recommended some reductions in the number of support staff and the withdrawal of the homecraft service. No decisions have been taken on these recommendations. The central advisory committee on war pensioners is being consulted about them and has agreed that a joint working party on which war pensioners' interests will be represented, should be set up to review the aims and future of the homecraft service. There will be further consultation with the central advisory committee about the welfare service later this year.

DEFENCE

  Electoral Registration
  Mr. Steen
  To ask the Secretary of State for Defence what steps he is taking to ensure that service men are given equal voting opportunities with the rest of the electorate.

  Mr. Archie Hamilton
  The electoral registration arrangements for service personnel allow those in the United Kingdom to vote in person, by post or by proxy at parliamentary and local government elections. Service personnel based overseas, like other British citizens living overseas, may vote only by proxy at parliamentary elections. All new recruits are advised of the service electoral registration arrangements and service personnel are regularly reminded of their existence to encourage them to register so that they can exercise their right to vote.

  Gas Masks
  Mr. Battle
  To ask the Secretary of State for Defence which company was awarded the contract to provide gas masks for British troops in Iraq.

  Mr. Alan Clark
  None. Masks have been provided from stock for troops in the Gulf.
  440
  Mr. Battle
  To ask the Secretary of State for Defence whether the filter on the gas masks issued to British troops contains any asbestos.

  Mr. Alan Clark
  The filter on the respirator used by British service men does not contain any asbestos.

  Gulf War (Reporting)
  Mr. Martyn Jones
  To ask the Secretary of State for Defence what guidelines were issued to BBC Radio in England and Wales for reporting of matters concerning the conflict in the Gulf.

  Mr. Archie Hamilton
  Two types of guidelines have been produced. The MOD "Media Ground Rules" have been issued to British journalists in the Gulf, and "Guidance on the Release of Information" has been issued to media editors in the United Kingdom. Copies of both these documents were placed in the Libraries of both Houses on 9 January.

  Irradiated Food
  Dr. David Clark
  To ask the Secretary of State for Defence, further to his answer to the hon. Member for South Shields on 17 January,Official Report, column 546, what estimates he has about the costs of irradiated food; and if he will make a statement.

  Mr. Archie Hamilton
  It is estimated that irradiation of food would increase the cost of processed food by between 5p and 15p per kilogram, dependent on the type of food to be processed. Given the competitive tendering methods the MOD applies to the procurement of food, it is unlikely that MOD would purchase irradiated food, as it would generally be more expensive than food processed by conventional means.

  Gulf War
  Mr. Marlow
  To ask the Secretary of State for Defence if he will list those units on standby for the Gulf.

  Mr. Archie Hamilton
  My right hon. Friend has already announced the deployment of the first battalion, Coldstream Guards to the Gulf to undertake prisoner handling duties. They will be assisted in their duties by two additional battalions, from the Royal Highland Fusiliers and the Kings Own Scottish Borderers, who will deploy shortly. We are also deploying a half squadron of Buccaneer aircraft from RAF Lossiemouth to enhance
  441
  allied precision bombing capability. Any additional deployments of forces to the Gulf will be announced as appropriate when they arise.

  Military Hospitals
  Mr. Menzies Campbell
  To ask the Secretary of State for Defence (1) what is the nursing establishment of each of the military hospitals in the United Kingdom; and how many vacancies there are in the establishment, at what grades;

  (2) what is the total number of nurses employed in military hospitals in the United Kingdom and at what grades.

  Mr. Archie Hamilton
  My noble Friend the Parliamentary Under-Secretary of State for the Armed Forces will write to the hon. Member.

  Mr. Menzies Campbell
  To ask the Secretary of State for Defence if he will list the names and locations of all military hospitals in the United Kingdom.

  Mr. Archie Hamilton
  There are eight service hospitals in the United Kingdom which are located at:
  442

  Name

  Location

  Royal Naval Hospital, Haslar

  Gosport, Hants

  Royal Naval Hospital, Stonehouse

  Plymouth

  Cambridge Military Hospital

  Aldershot, Hants.

  Queen Elizabeth Military Hospital

  Woolwich, London

  Duchess of Kent Military Hospital

  Catterick, Yorks.

  The Princes of Wales (RAF) Hospital, Ely

  Ely, Cambridgeshire

  The Princess Mary's RAF Hospital, RAF Halton

  Halton, Bucks.

  Princess Alexandra Hospital, RAF Wroughton

  Wroughton, Wilts.

  Mr. Menzies Campbell
  To ask the Secretary of Stale for Defence how many agency nurses have been employed in military hospitals in the last five years for which information is available; and what were the costs of doing so.

  Mr. Archie Hamilton
  The information requested is not held centrally and could not be obtained without disproportionate cost.

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

Cabinet Papers 1960: Future Policy Study
Lord Carver Lord Carver asked Her Majesty's Government:
Why the 1960 Cabinet papers (CAB134/1936 and 937) relating to the Future Policy Study have not been released for access at the Public Record Office with other Cabinet papers of the same dates.
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, records may be retained or closed for periods longer than 30 years under appropriate sections of the Public Records Act 1958, as amended in 1967. It has been the practice of successive Administrations not to disclose the contents of such records or to comment in detail on the reasons for witholding them. I am, however, satisfied that the records referred to are properly withheld in accordance with the established criteria which were set out in paragraphs 24 to 31 of the 1982 White Paper, Modern Public Records (Cmnd. 8531).
Lord Carver: My Lords, I thank the noble and learned Lord for that not wholly unexpected Answer. Is he aware that these papers are of considerable interest to students of contemporary history? The preliminary papers—the 1959 papers—of this study were released on 1st January 1990, and the brief to the then Foreign Secretary on the final report, which summarises the whole report dated 15th March 1960, was released this year. Neither shows that any of the subjects for which papers are normally retained were included in the study. Will he therefore make arrangements to have the retention of the papers reconsidered? Will he further initiate a comprehensive review as to why so many papers are being retained beyond the 30-year limit for reasons which those who are interested in these matters think are of doubtful validity'?
The Lord Chancellor: My Lords, my understanding is that not all the papers relating to this project in 1959 were released in full last year. I understand that Cabinet Papers 134/1936 include papers covering the latter part of 1959. As to the other matters, what I have endeavoured to do is to apply faithfully the published criteria which were set out in the 1982 White Paper. Whether particular documents fall into these classes is necessarily a matter of judgment. However, I believe that that judgment is reasonably exercised. Of the documents which are selected for permanent preservation in the Public Record Office, no more than 2 per cent. are subject to extended closure. It is natural that attention is focused on the ones in respect of which extended closure is claimed, but I am informed that, in percentage terms, that is 2 per cent. of the
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total. It may be that the overall appreciation to which the noble and gallant Lord has referred is not entirely justified by a full examination of the facts.
Lord Campbell of Croy: My Lords, is my noble and learned friend satisfied that the criteria which he mentioned are observed with consistency by those who have to carry out the weeding of these documents as the 30-year point is being approached?
The Lord Chancellor: My Lords, I am assisted in this matter by a team of inspecting officers of the Public Record Office. They endeavour to perform these functions with the degree of consistency that one would expect of a comparatively small team.
Lord Jenkins of Putney: My Lords, can the noble and learned Lord help us a little? Is it not quite understandable that the documents themselves to which these exchanges have referred should be the subject of agreement or disagreement as to whether they should or should not have been released? Is it not desirable that noble Lords who do not know anything about this subject should at least be told what the Question and Answer have been about?
The Lord Chancellor: My Lords, to answer that question requires me to remind your Lordships of the Question on the Order Paper. Noble Lords will see there what the Question is about. I believe that the Answer is reasonably related to that.
Lord Mishcon: My Lords, without being quite so occult as the noble and learned Lord has just been, is it not a fact that the Future Policy Study was set up by Mr. Macmillan, as he then was, in order to see what the position of this country and indeed the world might be 10 years hence; namely, in 1970? In view of the fact that, if my summary is correct, that is what the Question is all about, is it not strange that any papers relating to such a matter should be the subject of security and so on in this year of grace? Does not the noble and learned Lord agree that a freedom of information Act is called for?
The Lord Chancellor: My Lords, the question of whether a freedom of information Act would be helpful in such circumstances is rather different from the Question which appears on the Order Paper. The policy in relation to the application of existing legislation was set down in the 1982 White Paper. We seek to apply that consistently. The fact that a study was set up for a specific purpose does not necessarily mean that matters which were looked at in the course of the study may not fall under those criteria. I believe that has happened in this case.
Lord Teviot: My Lords, is my noble and learned friend aware that I served on his predecessor's advisory council for nine years some time ago? I agree with what he said but, in regard to the noble and gallant Lord's Question, will my noble and learned friend please further explain what are the particular criteria which apply? For example, can he say whether they are of a personal or political nature, or whatever? Such an explanation would be most helpful to the noble and gallant Lord and also to the House.
The Lord Chancellor: My Lords, the criteria applying to Section 5(1) of the Act are: first, exceptionally sensitive papers the disclosure of which would be contrary to the public interest, whether on security or other grounds and including the need to safeguard the revenue. It will not be a surprise for noble Lords to learn that that consideration was relevant to these papers; secondly, documents containing information supplied in confidence, the disclosure of which would or might constitute a breach of good faith. I do not think that that particular criterion applied in the case of these documents. The third is, documents containing information about individuals, the disclosure of which would cause distress and embarrassment to living persons or their immediate descendants. That is a criterion which could well be important in this case.
I should perhaps point out that as soon as the noble and gallant Lord had tabled the Question I invited the relevant official from the Public Record Office to look again at these documents. It is in the light of the advice I received that I remain of the view that the criteria have been properly applied.
Lord Beloff: My Lords, does my noble and learned friend agree that an unusual use—as many people would think—of these powers of withdrawal is all too likely to encourage the clamour for a freedom of information Act, with which I would wholly disagree? Does he further agree that, so long as the United States has a Freedom of Information Act and we are so restrictive about documents other than those concerning national security, it is all too likely that our recent history will be written from American and not British archives, which cannot do us much good?
The Lord Chancellor: My Lords, the considerations to which my noble friend referred reinforce the need to apply the published criteria with care. That is what we seek to do. However, I remind him that I said that of the documents which are selected for permanent preservation in the Public Record Office, no more than about 2 per cent. are subjected to extended closure.
Lord Strabolgi: My Lords, why is it necessary to spare embarrassment to the descendants of the persons concerned when they are not spared such embarrassment in biographies?
The Lord Chancellor: My Lords, it may be that the public should have a higher standard in protecting people from unnecessary embarrassment than some biographers may have. At all events, that criterion is the one which I apply and which is set out in the White Paper. I must say that it seems to me to be a reasonable criterion.
The Lord Privy Seal (Lord Waddington): My Lords, I am aware that the House is enjoying this Question, but 11 minutes have elapsed and perhaps we should move on.

Homelessness
2.50 p.m.
Baroness Fisher of Retinal Baroness Fisher of Retinal asked Her Majesty's Government:
What guidance to assess and deal with homelessness they give to those housing authorities where housing stock has been transferred.
Viscount Astor: My Lords, councils are obliged to assist homeless people under the provisions of Part III of the Housing Act 1985 even when they have transferred their housing stock. However, before the Secretary of State will consent to the transfer of a council's housing stock to another landlord he has to be satisfied that the council will be able to continue to meet its homelessness duties. The code of guidance to the homelessness legislation, to which councils must have regard, helps them carry out those duties.
Baroness Fisher of Rednal: My Lords, I thank the Minister for that Answer. How does a local authority pay for the homeless when the properties that it has transferred are no longer its responsibility? What does the local authority then do with homeless families? Does it cast them on to other local authorities which have not got rid of their housing stock?
Viscount Astor: My Lords, local authorities have benefited from the receipts of council house sales. The noble Baroness will be aware that local authorities can use 25 per cent. of their housing receipts to finance new capital expenditure on renovations, improvements or new homes.
Lord Dean of Beswick: My Lords, how does the Minister suggest that local authorities, most of which have a greatly increasing incidence of homelessness, should deal with their responsibilities now that their housing stock has shrunk due to the Government's housing policy, which includes the withholding of capital assets that the Minister has just mentioned? If local authorities were allowed increased access to those capital receipts, they could once again start to build houses.
Viscount Astor: My Lords, the total housing public expenditure programme remains large. Public expenditure on housing next year, including local authority self-financing expenditure from receipts, will amount to well over £8 billion. Your Lordships will be aware that there is a Question on the Order Paper next week which asks whether the Government will remove the restrictions on local authorities. I expect that during the discussion on that Question, the noble Lord's question will be asked.
Baroness Flather: My Lords, does my noble friend agree that the homelessness pressures are greatest in London and the South East, and that the problem continues mainly because of the over-use of bed-and-breakfast accommodation about which something needs to be done?
Viscount Astor: My Lords, I entirely agree with my noble friend. That is why the Government have targeted £300 million on London and the South East,

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where the worst problems exist, to alleviate the plight of families forced to live in temporary bed-and-breakfast accommodation. The additional resources have been made available to local authorities and housing associations for schemes to bring their empty stock back into use. Our prime objective is, as I have said, to reduce the use of bed-and-breakfast hotels as temporary accommodation for homeless families.
Lord Stallard: My Lords, does the Minister accept that his replies to these questions have been interesting, but that he has not answered the Question on the Order Paper? The Question asks, "what guidance to assess and deal with homelessness" the Government give to local authorities. The Question is not the one that we have asked a thousand times before and to which we have received the same reply about using 25 per cent. of revenue. Will the Minister deal with the Question on the Order Paper?
Viscount Astor: My Lords, a code of guidance is being revised and currently has been sent out for consultation with the local authority associations. The deadline for written comments is 31st January. We aim to issue the revised document shortly. Our experience to date has shown that there have been no problems with regard to local authorities fulfilling their homelessness duties where stock has already been transferred.
Baroness Fisher of Rednal: My Lords, I thank the Minister for elaborating upon his original Answer, but does he accept that two thirds of the homeless families registered with local authorities are located outside London and are spread throughout all of our industrial cities?
Viscount Astor: My Lords, yes, the problem is not necessarily confined to London. However the rural housing programme, announced by the Minister for Housing on 9th November, amounts to £50 million of credit approval for local authorities to provide, through housing associations, houses for rent in rural areas.
Lord Dean of Beswick: My Lords, what advice do the Government give local authorities in rural areas which, because of their political complexion, supported the forced sale of council houses and now find themselves without any stock with which to deal with homelessness, and which are now complaining about the Government's policy?
Viscount Astor: My Lords, the Government welcome the transfers in principle provided they conform to the department's guidelines. They fit in well with the enabling role in housing that the Government envisage for local authorities. They are also in line with the Goverment's objective of providing wider choice in rented housing.

Vietnam: Aid and Technical Assistance
2.55 p.m.
Baroness Ewart-Biggs Baroness Ewart-Biggs asked Her Majesty's Government:
Whether they will increase aid and technical assistance to the Vietnamese government.
Lord Reay: My Lords, the Government are providing financial support to British nongovernmental organisations for projects in Vietnam. We also expect to make a substantial contribution to the major EC repatriation and reintegration assistance programme for returning boat people over the next 2½ years. We have no immediate plans to begin a bilateral aid programme, but we are keeping that question under review.
Baroness Ewart-Biggs: My Lords, while I am grateful to the Minister for the small encouragement he gave in his Answer, does he agree that Vietnam's poverty, underdevelopment and high unemployment are all a result of the United States' trade and investment embargo? Does he further agree that any development aid going to the Vietnamese, with all their talents and abilities, would be constructively used and would also help to strengthen our efforts to liberalise their economic policies? Why do Her Majesty's Government's economic policies towards Vietnam continue to be so closely aligned with those of the United States of America?
Lord Reay: My Lords, I doubt whether the situation can be explained as simply as the noble Baroness suggests. The aid programme with which we are involved is a substantial one. The EC programme will total 122 million units of account—that is to say, approximately £86 million—over the next two years. That is a considerable programme.
Baroness Ewart-Biggs: My Lords, will the Minister answer my question? Why does Britain continue to align its policies with the United States' trade and investment embargo, and its veto on IMF and World Bank loans to Vietnam?
Lord Reay: My Lords, we have our own policy on aid to Vietnam which I have already outlined.
Lord Lyell: My Lords, I understand that Vietnam's population is about 65 million. Despite what was said in the previous question, does my noble friend agree that aid should be channelled towards that possible new market, especially in Ho Chi Minh city, which is of course Vietnam's leading commercial centre?
Lord Reay: My Lords, my noble friend makes two good points. Ho Chi Minh city is a matter that we have in mind although we have no immediate plans.
Lord Molloy: My Lords, the Minister mentioned the boat people. That problem causes Vietnam grave concern. It also causes grave concern to Hong Kong. I was a member of a parliamentary delegation that visited Hong Kong a few months ago. The Hong Kong Government, and their colleagues in Vietnam, are of the opinion that much more assistance should be provided by the United States because it, more than anyone else, created the problem.
Lord Reay: My Lords, I do not answer for the United States' Government from this Dispatch Box. I answer for Her Majesty's Government, and our policy is the one that I have outlined.
Lord Boyd-Carpenter: My Lords, is not this country's capacity to provide overseas aid for Vietnam much restricted by the high cost of our expenditure on the Gulf operations and the paltry measure of support that we are receiving towards those operations from our European friends?
Lord Reay: My Lords, my noble friend is introducing other matters which he will have an opportunity further to pursue later in the week.
Lord Boyd-Carpenter: My Lords, I asked my noble friend whether that high expenditure to which we are committed reduces the amount available in aid for Vietnam. Will he please answer that question instead of reproaching me for raising a different matter?
Lord Reay: My Lords, I have absolutely no wish to reproach my noble friend and have no intention of doing so. The aid which we are committed to give to Vietnam has not been affected by recent events.
Lord Cledwyn of Penrhos: My Lords, we have considerable responsibilities in Hong Kong. Will the Minister confirm that there are already 53,000 economic emigrants from Vietnam in Hong Kong? As I understand it, the number is increasing. In these circumstances, is it not vital, looking towards 1997, that we make a positive approach to the IMF and the World Bank to see whether money can be obtained from that source?
Lord Reay: My Lords, the noble Lord the Leader of the Opposition is correct: there are nearly 52,000 boat people currently in Hong Kong. That is about 10 per cent. fewer than the peak figure. It is extremely important that as many as possible of these people should return to Vietnam. In pursuit of that objective, the aid programme is carried forward.
Lord Cledwyn of Penrhos: My Lords, is it true that the numbers are increasing and that they increased in the last quarter of 1990?
Lord Reay: My Lords, the noble Lord is correct. The total arrivals in December 1990 and January 1991 —this month and last month —were 200 per cent. higher than last year.
Lord Bonham-Carter: My Lords, does the noble Lord agree that the problems to which the noble Lord, Lord Cledwyn of Penrhos, and the noble Baroness, Lady Ewart-Biggs, drew attention, involving refugees and economic under-development as well as poverty, would be greatly alleviated if the United States were to remove their embargo? If, as the noble Lord stated, we have our own policy towards Vietnam, might it not be good for us to bring pressure to bear upon, or at least request, the Government of the United States to change their policy on that matter?
Lord Reay: My Lords, our objective is the repatriation of all non-refugee Vietnamese boat people by the implementation of the comprehensive plan of action that was agreed by the international community. With respect to the United States, Secretary of State Baker has said that they will use their best endeavours to help us achieve that aim.

Riga: Shootings
3.2 p.m.
Lord Hylton Lord Hylton asked Her Majesty's Government:
What protests they have made to the Government of the USSR following the recent shootings of civilians by Soviet forces in Riga, the capital of Latvia.
Lord Reay: My Lords, we have condemned the killings and made strong representations to the Soviet authorities. My right honourable friend the Foreign Secretary summoned the Soviet chargé d'affaires on 21st January to underline our concern and to repeat our call on the Soviet authorities to withdraw their troops and to negotiate seriously with the elected authorities of the Baltic states.
Lord Hylton: My Lords, I thank the noble Lord for his Answer. Does he not find quite unacceptable the combination of 19 deaths, the beating of Lithuanian soldiers in the presence of arrested British journalists, and the new, additional powers for the KGB? Will the Government press for compensation to be paid to the families of those killed and injured?
Lord Reay: My Lords, we deeply deplore the actions of the Soviet troops in Riga and the tragic consequences. We call on the Soviet authorities to refrain from further coercion or repressive measures. Compensation is a matter for the Soviet authorities.
Lord Cledwyn of Penrhos: My Lords, everyone agrees that the way to resolve the problem is through negotiation. In view of the meeting which is to be held between the Soviet Foreign Minister and Secretary of State James Baker, can the noble Lord confirm that Her Majesty's Government are in touch with the United States Administration on the issue? Can he say whether we are also in touch with our colleagues, our partners in the European Community, with a view to making representations directly to President Gorbachev and no one else?
Lord Reay: My Lords, I entirely agree with the first point made by the noble Lord the Leader of the Opposition. We encourage all concerned to put every possible effort into working for a negotiated settlement. As regards consultations with our partners, we and our partners in the European Community decided to suspend implementation of a major part of our co-operation with the Soviet Union in response to the use of force in the Baltic states.
Lord Kennet: My Lords, can the noble Lord say anything about an apparent contradiction in our policy which may cause trouble? On the one hand we, in common with many other countries, never recognised the absorption of the Baltic states into the Soviet Union. On the other hand, we have just signed a treaty, which was also signed by the Soviet Union, stating that borders in Europe may not be changed except by consent. The question arises: whose consent? If the Baltic states were to turn to us and say, "Our consent is sufficient to change the border of the Soviet Union", what shall we say?
Lord Reay: My Lords, the noble Lord raises a question that goes wider than the Question on the Order Paper. We support the right of the Baltic peoples to determine their own future. We call on both leaderships to reach a negotiated settlement.
Lord Hailsham of Saint Marylebone: My Lords, can my noble friend confirm my recollection that originally the three Baltic states were forcibly incorporated and as a direct result of the Stalin-Hitler pact? We have never recognised that incorporation.
Lord Reay: My Lords, I believe that my noble and learned friend is entirely correct.
Lord Stoddart of Swindon: My Lords, does the noble Lord agree that it would be unfortunate if, as a result of the actions of the Soviet Union in the Baltic states, the summit meeting next month did not go ahead or is misunderstood and perhaps affects our operations in the Gulf? Are Her Majesty's Government making any representations to Mr. Bush that he should continue with the summit?
Lord Reay: My Lords, I do not have the answer to that question. I shall look into it and let the noble Lord know the position.
Lord Hylton: My Lords, negotiations have been mentioned both today and last Thursday. Do the Government recognise that negotiations between the Baltic states and the USSR are not negotiations between equals? Will the Government therefore press for the withdrawal of Soviet forces and for a status for the Baltic republics somewhat similar to that of Finland?
Lord Reay: My Lords, as I said, we have called on the Soviet authorities to refrain from coercion or repressive measures. I do not believe that I can go further than that. As to the outcome of any settlement, it is not for us to make any pronouncements on that.
Lord Renton: My Lords, do the Government accept that until 1939 these three small countries were democratic, economically viable, neutral and the people in them happy? Is it the Government's intention to do whatever is within their limited power to restore that fortunate situation?
Lord Reay: My Lords, we are doing everything possible to bring pressure to make sure that there is a negotiated outcome.
Lord Jenkins of Putney: My Lords, is the noble Lord aware that fascism and anti-semitism were rife in the Baltic states and there are currently signs of a recurrence?
Lord Reay: My Lords, that is another Question.

Agricultural Holdings (Scotland) Bill [H.L.]
3.7 p.m.
The Earl of Strathmore and Kinghorne: My Lords, on behalf of my noble and learned friend Lord Fraser of Carmyllie, I beg to introduce a Bill to consolidate the Agricultural Holdings (Scotland) Act 1949 and other enactments relating to agricultural holdings in Scotland. I beg to move that the Bill be now read a first time.
Moved, That the Bill be now read a first time.—(The Earl of Strathmore and Kinghorne.)
On Question, Bill read a first time, and to be printed.

Civil Jurisdiction and Judgments Bill [H.L.]
Lord Mackay of Clashfern: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.
Moved, That the order of commitment be discharged.—(The Lord Chancellor.)
On Question, Motion agreed to.

Caravans (Standard Community Charge and Rating) Bill
3.9 p.m.
Lord Denham: My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Caravans (Standard Community Charge and Rating) Bill, has consented to place her prerogative and interests so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
The Parliamentary Under-Secretary of State, Department of the Environment (Baroness Blatch): My Lords, I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read a third time.—(Baroness Blatch.)
Baroness Hollis of Heigham: My Lords, this is a curious Bill which should never have been necessary. When the Government introduced the poll tax, three forms of financial liability were available to levy on caravans. Those were the personal community charge, which is rather like the charge paid by the ordinary householder; the standard community charge, which is levied on owners of second homes; and the non-domestic rate, which is the charge levied on commercial businesses.
This is the Government's third attempt to try to get the financial liability on caravans correct. Mr. Chope, the Minister in another place, introduced the first

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version offered by the Government in February 1988. At that time it was suggested that all caravans that were a person's main or sole residence should be liable to a personal charge. Those who inhabited other caravans that comprised second homes or were touring or commercial letting caravans should pay the standard charge; in other words, the line was drawn between residential use on the one hand and leisure use on the other. It was decided that leisure users should pay a standard charge. However, after complaints were received from the caravan society, the Minister drew up a different boundary line. The boundary was no longer drawn between residential and leisure caravans, but between static and mobile caravans. The answer to the question of when a second home is not a second home is when the caravan or its occupants move. However, that decision generated further problems because those caravan residents who paid a personal charge, those caravan residents who paid a standard charge, and those residents who paid a business rate were all on the same site, and caravan residents did not know which charge they had to pay.
In this Bill the Government have tried to draw the boundaries for a third time. It has been decided that if there is year-round occupancy, the residents should pay a personal charge. However, if there is irregular or intermittent occupancy—this applies when a caravan is used as a second home or is let commercially—a business rate should be levied. We do not object to this third attempt to define what caravan residents should pay. However, I suggest to the Minister that the problem of boundaries and definitions will not go away. We said this on Second Reading and in Committee and we are saying it again today.
If the line is drawn between residential caravans, whose owners are liable for the personal charge, and all other leisure caravans, including second homes and holiday caravans whose residents pay a business rate, what grounds are there for not treating holiday chalets in the same way? Holiday chalets may share the same site as caravans. They are the same size as caravans, and they may have the same or a lesser value. They make use of the same limited facilities as caravans, but residents of chalets will pay a standard charge which in many cases will be three or four times higher than the non-domestic rate.
In 1988 the Government promised to brigade chalets with caravans and treat them similarly. However, they have not done so and they are not doing so in this Bill. They are pulling chalets and caravans further apart. It is not good enough to say that caravans are mobile, because many are no more mobile than chalet homes. Nor is it good enough to say that caravans are chattels, because chalets deteriorate in the same way. I suggest that to get rid of one anomaly by introducing another cannot be a sensible way of proceeding.
The first proposal of the Government on this matter was consistent although unfair. The second proposal was fair but unworkable. The third proposal may be workable but I suggest that it is inconsistent and probably unfair. We on this side of the House do
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not oppose the Bill, because it removes a significant financial burden from many elderly people and families on a modest income for whom their caravan is their second home and hobby. However, I suggest that the losers will be the local authorities. Local authorities will lose the standard charge they would have collected from second home caravans. That would have been a useful supplement for that element of the poll tax which they find they are unable to collect. Local authorities under this Bill will not only lose income but will also have to refund the income they have so far collected due to a government change of policy.
Local authorities will have to cover the administrative costs and overheads of adjusting their registers. The loss may be as much as a third of a million pounds this year for one small local authority. That will have to be borne out of the poll tax. The Government are entitled to change their mind three times but they should not expect local authorities to pay for that privilege.
The Government have the parliamentary time to amend the poll tax in this Bill and, apparently, in a second Bill which will appear next week, and in a third Bill on enforcement in a few weeks' time. Therefore I suggest that they should be looking not just at the transitional arrangements that have been announced by the Minister but also at the 20 per cent. payment by students, young people and the elderly, which costs more to collect than it brings in. I further suggest that the Government should consider a non-domestic rate which breaks the link between the local business community and the local authority. The Government should look again at the inadequate central grant, which fails to fund essential services such as education and training, community care or police authorities. The situation in police authorities was referred to in a recent Question.
I suggest that all the tinkering in the world and the Bill this week, the Bill next week and the Bill in a few weeks' time will not make the poll tax a viable, fair and just tax. Its time is up and I hope the Minister will recognise that.
Baroness Blatch: My Lords, I shall try to bring the House back to the Bill we are discussing. The noble Baroness has ranged far and wide beyond the boundaries of the Bill under discussion.
The matter of chalets was raised by noble Lords during our earlier discussion of the Bill and was also dealt with in another place. All the points that the noble Baroness has raised have been dealt with in detail.
We are not seeking to change the boundary between rating and the community charge, merely to correct the specific inadequacy in the present legislation. The question of disadvantaging chalet owners does not arise therefore. The definition of "caravan" to which the noble Baroness referred and to which this Bill applies is set out in other legislation which is not at issue.
As your Lordships will recognise, the Bill is a technical measure which puts right the anomaly created when we amended the local government

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finance legislation in 1988. It has been discovered that our amendment designed to honour an earlier commitment to place holiday caravans in non-domestic rating does not in fact do so. The owners of many holiday caravans—perhaps as many as 100,000 —are liable for the standard community charge.
Our announcement that we would legislate to correct the position and provide that any sums of standard charge already paid would be refunded, was warmly welcomed by the caravan industry and caravan owners in general. The part repayment of any standard charge paid last financial year will also be welcomed in Scotland, together with the powers to extend the derating of caravans, which will continue the process of harmonising rateable values throughout Great Britain. As I have said, all the points that the noble Baroness has raised have been dealt with. I commend the Third Reading to the House.
On Question, Bill read a third time, and passed.

Statutory Sick Pay Bill
3.18 p m.
Lord Denham: My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Statutory Sick Pay Bill, has consented to place her prerogative and interests so far as they are affected by the Bill at the disposal of Parliament for the purposes of the Bill.
Bill read a third time.
Clause 2 [Small employers' relief]:
Lord Stanley of Alderley Lord Stanley of Alderley moved Amendment No. 1:
Page 2, line 40, leave out from beginning to end of line 16 on page 3 and insert:
("be defined by regulations by reference to the aggregate of the employer's and the employee's contributions payments for any prescribed period, such aggregate to be reviewed annually having regard to the increase in earnings and the effect of any such increase on the amount of contributions payments.
(1D) Regulations shall prescribe the payments of statutory sick pay that entitle a small employer to small employer's relief in respect of any particular payment, and that entitlement shall be determined by reference to the number of weeks for which the employer has been liable to pay statutory sick pay in respect of the employee in question in a prescribed period.
(1E) The first regulations made under this section shill prescribe that the amount of the aggregate of the employer's and the employee's contributions payments, and the number of weeks for which the employer has been liable to pay statutory sick pay in respect of the employee in question shall be in accordance with the following table:—

Aggregate contributions in the previous contributions year

Number of weeks before small employers' relief applies

less than £15,000

6

less than £10,000

3

less than £5,000

0."")

The noble Lord said: My Lords, this amendment seeks to help small businesses such as corner shops or village post offices. In Committee my noble kinsman Lord Henley promised to table an amendment to help these small businesses as he fully acknowledged the need to do so. He did that at Report by tabling an amendment which is now included in the Bill. It relies
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on two factors: first, the amount of national insurance contributions paid by a business in one year, which my noble kinsman indicated would be £15,000; and, secondly, excluding any benefit for a period, which the Government indicated would be eight weeks.
My noble kinsman made great play of the Government's generosity, in particular regarding the suggested figure of £15,000. That was misleading since it included employees' contributions, and the Government gave no indication as to whether the figure might be uprated in the future. The amendment deals with that point, but I shall leave it to the noble Lord, Lord Carter, to explain it to your Lordships.
It is the suggested eight-week delay before the concession to a small employer comes into effect that is totally and utterly unacceptable and makes the concession useless. It is not a concession. It merely takes away what was intimated by the £15,000 limit on national insurance contributions.
If I have the courage of my convictions I should say that there are tricks in all trades except horse dealing and this offer, both of which are all tricks. Why is that so? First, as the noble Lord, Lord Carter, stated at an earlier stage, in 30 years of employing 40 employees he has had only four cases when any employee has been absent for more than eight weeks. I have farmed since 1954—I have never had such a case.
Secondly, my noble kinsman Lord Russell gave an example of all six employees being killed in a car crash. That was ridiculed by our noble kinsman Lord Henley, who missed the point. The point is this. What about the small business, farm or corner shop which employs only one person? Every time that one employee is sick the amendment of my noble kinsman Lord Russell applies, because the employer has lost all of his workforce. As a result, not only does he have to pay statutory sick pay but he also has to find someone to take the place of that one employee.
No large employer is likely to face the problem of his entire labour force being absent simultaneously or even 50 per cent. absence. However, that can and does happen frequently to the small business employing, say, two men. I repeat, when only two people are employed and one is sick that represents a 50 per cent. cut in the labour force. One man sick in a labour force of one represents a 100 per cent. cut in labour force. In both of those cases the Government's so-called concession would not apply until they had been sick for eight weeks—which, as I have already said, never happens.
It is therefore with those two points in mind—the extreme rarity of eight weeks' sickness and the likelihood of a small business having 50 per cent. to 100 per cent. of its employees off sick for less than eight weeks—that we have tabled the amendment. In doing so we have understood and sympathise with the problem that the Government face in trying to control expenditure, and we have tried to give help where help is most needed.
We have reduced the level of national insurance contribution offered by the Government to compensate for shorter periods of recoupment. At Committee stage your Lordships gave widespread support for a shorter period than eight weeks. We have therefore

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reduced that period to six weeks. That is a comparatively minor adjustment. However, as that limit is manifestly unfair to the smaller business whose national insurance contribution in the year is, say, only £10,000, we have reduced the waiting period before recoupment for those businesses to only three weeks. Finally, and most important of all, we have dealt with the very small businesses which pay only £5,000 in national insurance contributions by providing that for them recoupment is immediate.
To sum up, in broad terms the amendment states that those employing an average of five employees should receive full recoupment of statutory sick pay at six weeks. Those employing three people should receive it at three weeks, and those employing only one should receive full recoupment, as they do now, immediately sickness occurs.
In drawing up the amendment we have bent over backwards to recognise the Government's shortage of cash and to direct help where it is most needed. As I have explained, the smaller the business the greater the need for full recoupment of statutory sick pay.
As I did not prepare the amendment—the National Farmers Union did so—I hope that your Lordships will agree that it is ingenious and fair to both government and small employer. Moreover, if the Government can monitor a scheme relating to national insurance contributions of £ 15,000 it is just as easy, or easier, to monitor a scheme for contributions of £5,000 or £10,000. I beg to move.
The Chairman of Committees (Lord Aberdare): My Lords, if the amendment is agreed to I cannot call Amendments Nos. 2, 3 or 4.
Lord Carter: My Lords, I am very pleased to add my name to the amendment and to support it from this side of the House. The House will be aware that we worked extremely hard at Committee and Report stages to devise a means of giving relief to the small employer which would be effective, simple to administer and would meet all of the Government's objectives and objections.
The new clause dealing with small employer relief introduced by the Government at Report stage recognised the need for the relief. However, in our view it is essential that the terms on which the small employer relief is operated is spelt out on the face of the Bill. The amendment does that.
The noble Lord, Lord Stanley, has explained admirably the purpose and effect of the amendment. It will not remove but will reduce the burden on small employers at a time of recession. It will help to reduce the possibility of small employers refusing to employ people with a sickness record or with disabilities. It also meets, but by no means fully, the concerns and objections expressed by the multitude of organisations which oppose the Bill. We have been pressed strongly to make the amendment much tougher, but we have resisted that pressure and come forward with what we believe is a very reasonable proposal.
I should like to return for a moment to the effect of the Bill as drafted on the employment of disabled people. We have been told by the Disability Alliance
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that their rights workers receive numerous calls for help from people who receive or who have had problems in obtaining their statutory sick pay, or, worse still, have been dismissed as a result of a long spell of illness. If those problems are already occurring when employers receive full reimbursement of the cost of administering the scheme, we can only fear what will happen and assume that the problem will become much more widespread when employers have themselves to foot a proportion of the bill. Your Lordships have increased the proportion of rebate from 80 per cent. to 91 per cent., but even at that level we feel that there could still be a problem. That is why the amendment is so important.
The flaw in the argument that we have heard from the Government at various stages of the Bill regarding the employment of disabled people is that it does not deal with the healthy or fit employee who develops a serious condition during his employment. The Disability Alliance points out that its rights service regularly comes across people who have been refused statutory sick pay or who have been dismissed during a protracted spell of illness.
We know that two out of five people with disabilities work in small firms, whose record in terms of good employment practice tends not to be very good. Therefore, in firms of that size disabled people are likely to be even more vulnerable than the average. For that reason, too, we feel that the amendment is important.
I believe we have agreed to group all of the amendments together except the Government's and the drafting amendments. If I may, I will refer also to Amendment No. 2, the wording of which is picked up in Amendment No. 1. Amendment No. 2 would insert after "employer's contributions" the words
"such amount to be reviewed annually having regard to the increase in earnings and the effect of any such increase on the level of employers' contributions".
The amendment deals with a very important point that we touched upon at the Report stage but did not attempt to clarify. The purpose of the amendment is to clarify the situation regarding the level of national insurance contributions used to define a small employer.
Before dealing with the amendment, perhaps I may deal with a drafting point directed at the language of the Bill. I think the Minister will welcome the chance to make this point clear. On page 2, line 46, reference is made to
"the amount of the employer's contributions payments for any prescribed period".
The Minister has already confirmed that throughout the Bill whenever the level of national insurance contributions is referred to it shall mean the total of employers' and employees' contributions. However, I am advised that in view of the way in which the phrase in line 46 is drafted it could be taken to mean the employer's contributions only. I have followed the wording of the Bill in Amendment No. 2, but the wording in Amendment No. 1 is much clearer; it refers to
"the aggregate of the employer's and the employee's contributions".

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I ask the Minister either to explain the point for the benefit of the House or to agree that the Bill would be much clearer if it used the words:
"aggregate of the employer's and employee's contributions".
To return to the burden of the argument on Amendment No. 2, as we know the national insurance contributions are calculated as a percentage of earnings and are paid by employer and employee. It is entirely clear that, although the percentage may not alter, the absolute amount in terms of the pounds of contributions will increase as earnings increase. Obviously, as earnings go up, even though the percentage remains the same, the total amount of employer and employee contributions paid over to the Government will increase. With an upper limit of £15,000 of small employer relief as suggested by the Government at the last stage of the Bill, or indeed the level of aggregate contributions as set out in Amendment No. 1, the Government have only to leave the limits each year where they are—£15,000 or whatever—and more and more small employers will automatically be listed above the limit as earnings increase. That is a matter of simple arithmetic.
In an ideal world the Government would undertake to uprate the limit annually, and we did consider putting down an amendment to achieve that effect. However, continuing the sweetness and reasonableness with which we have behaved throughout our deliberations on this Bill, we have put down Amendment No. 2 which we are sure the Minister will wish to accept. We ask the Government to review annually—not to uprate; and to have regard to the increase in earnings—not to take it into account. Indeed, it is the same procedure as is used on child benefit, which is reviewed annually but as we well know it is certainly not increased annually.
We believe that the Government should have the duty spelt out on the face of the Bill to look at the limit of the national insurance contributions which affects the eligibility for small employer relief. We are not requiring that they uprate it every year, but we feel that they should be asked to review it every year.
The drafting of the amendment may not be perfect because of the haste with which the Bill has been pushed through the House. I had to draft it myself without the benefit of external advice. I understand that it would be difficult for the Government if they accepted the spirit of the amendment, even though the drafting was not perfect, to amend the Bill in another place if the words were not on the face of the Bill. If the Minister agrees with the sense of the amendment, I believe that the House must accept the amendment to enable the Government, if they wish, to redraft with better wording in another place.
With those words, I should like to say that we support Amendments Nos. 1 and 2.
3.30 p m.
Earl Russell: My Lords, I am delighted that my noble kinsman Lord Stanley of Alderley, has tabled this amendment. When we debated the Bill on Report there was widespread feeling in the House that we had not yet done enough for small businesses. Though the House clearly thought that the amendment I then
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moved went too far, I also picked up a considerable sense that the amendment moved by the Government had not gone far enough.
The noble Lord, Lord Boyd-Carpenter, in a delightfully free translation from Horace, described it as a very small amendment. That is exactly right. I entirely agree with everything that my noble kinsman Lord Stanley of Alderley said about the eight-week limit. That will reduce the effect of the government amendment to a level which is in effect nugatory. In addition, for the National Farmers' Union, among others, the national insurance contributions will have rather less effect next year than my noble kinsman the Minister quite rightly said they will have this year. The current pay round will clearly take a number of employees from the 0.4 rate of concession to the 0.05 rate of reduction, so the national insurance reductions will be worth a great deal less.
That underlines the importance of what the noble Lord, Lord Carter, said about index-linking. It also underlines what I have said about the effect of this Bill in creating a wages stop. But I do not need to quantify the smallness of the government amendment; the Government have already done it. The first amendment with which we began in Committee was costed by the Government as likely to be worth £45 million. The amendment of my noble kinsman the Minister was costed as being worth £2 million. That is not half a loaf; it is not quite one-twenty-secondth of a loaf. Indeed, it is small enough to be not even appropriately expressed in fractions of a loaf; it would be better expressed as crumbs from a rich man's table.
I am also particularly delighted by the device of the taper in the amendment of my noble kinsman Lord Stanley of Alderley, because one of the disadvantages of any sudden cut-off point is that it could create for a rising small business a disincentive to expand. The sliding scale concession does not have that effect to anything like the same degree.
If you look at the figures of the risk of exceptional incidence of sickness, they have a taper which I think very closely matches the taper in my noble kinsman's amendment. According to the calculations of the Library in another place, the risk of double the average incidence of sickness in a business of five employees is 25 per cent.; for 10 employees it is 10 per cent.; and for 20 employees it is 5 per cent. My noble kinsman Lord Stanley of Alderley has achieved the effect of making the relief greatest where the risk is also greatest, which seems to me to be exactly what we should have been working for.
Finally, I shall quote from a letter that I received this morning from the Building Employers Confederation who are clearly following the Bill very closely. First, it agrees —I find its agreement here highly significant—with the fears expressed about the disability allowance and the effect of the Bill on the employment of disabled people. That confederation is perhaps better able to judge this matter than any of us. The letter says that:
"There will be a disincentive for smaller employers to take on workers with a perceived poor sickness record thus reducing the employment possibilities of the chronically sick and disabled".

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The building employers appreciate that this will not depend on statistics of which a great many employers may not be aware but on perceptions; and there the effect may be more unfortunate.
Finally, the confederation comments on my noble kinsman's amendment:
"This amendment is not in itself expensive or radical. Its modesty comes in response to the Government's determination not to make a realistic compromise with all those voices which have pointed out the dangers inherent in the Bill as it stands. It is a small measure—but it does offer some measure of security to those most vulnerable".
The confederation seeks your Lordships' support for the amendment; and so, my Lords, do I.
Lord Jenkin of Roding: My Lords, I understand that the House will be considering my Amendments Nos. 3 and 4 in this group of amendments. Perhaps I may add a few words to what has already been said. I begin by thanking my noble friend for responding fully to the requests made from all sides of the House that there should be further consultations with the outside interests before this Bill reaches the statute book. My noble friend has been as good as his word. Among others, Mr. Mendham of the Forum of Private Business spent two hours with my noble friend's officials last Wednesday examining many aspects of the definitions and measurements that we are endeavouring to get right in the circumstances of this Bill for the protection of the smallest businesses. I thank my noble friend for that.
Perhaps I may just add in parenthesis that that meeting discussed an amendment put forward by Mr. Mendham and his colleagues, which does not appear on the Marshalled List. I saw it only this morning although I was telephoned over the weekend and told that it was on its way. The amendment has some attraction and—I hesitate to use the words—is user-friendly.
If I have a complaint about Amendment No. 1 in the name of my noble friend Lord Stanley of Alderley it is that although it may well be administrable by the Department of Social Security, from the point of view of small businesses to have a series of different thresholds and different rates makes it appear very complicated for them. One must bear in mind what my noble friend said about the ability of small businesses even to claim to know about the 1985 relaxation for national insurance contributions on statutory sick pay. That is a factor to which a great deal of weight must be given.
On Wednesday an amendment was discussed which seemed to me to have the supreme merits of simplicity and user-friendliness. I have a suspicion that that amendment may well come before another place when this Bill returns there. At this stage all I ask is that my noble friend and his right honourable friend should consider it seriously and sympathetically because it seems to me to deal with many of the difficulties with which we have been wrestling. In the meantime we have to deal with the amendment tabled on Report by my noble friend, to which a number of amendments have now been put forward.
My Amendments Nos. 3 and 4 are directed to a rather different aspect of how one measures the point
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at which a small employer becomes entitled to 100 per cent. and not just 80 per cent. recoupment. On page 3, in subsection (1D) paragraphs (a) and (b), my noble friend has left himself two alternatives. One is to measure the threshold by reference to the sickness of one employee. Each employee is considered separately and when the employee's sickness reaches eight weeks —or, as my noble friend suggested, six weeks—that should be the trigger that gives 100 per cent. reimbursement. The alternative, in paragraph (b) at line 12, is to consider the employees in aggregate. That seems to me to be infinitely the better solution. If one bears in mind that the recompense and the reduced national insurance contribution happen anyway, and that the statutory sick pay which has to be paid out happens anyway, surely what is important is the point at which that employer finds himself well out of the average and having to pay more than is recouped by the national insurance contribution. The fact that it happens to be spread over two or perhaps three employees, or that it happens to one employee, in the last resort is surely irrelevant. As I said at Report stage, if an employee is off sick for eight weeks that triggers the relief, so from then on the employer gets 100 per cent. reimbursement. What is the difference between that and two employees being off for four weeks? All the other figures are exactly the same but it is not until one of those employees is off for eight weeks that the clause bites and the 100 per cent. rate of reimbursement applies.
In a sense this is a probing amendment because, as I said, my noble friend left himself the option to act through either the individual employee or the aggregate of the statutory sick pay paid. I intend to urge my noble friend, with all the eloquence that I can command, to agree that paragraph (b) is an infinitely preferable solution. I have adopted the mechanism of requiring that it is that paragraph which should be built into the regulations and not give him the option.
The case for my amendment is absolutely overwhelming. Indeed, I am assured that it would be perfectly workable on the forms used by small employers to calculate their net payment to the social security at the end of the month for the full contributions less the reimbursements. There is absolutely no reason why it should not be done on the basis of the aggregate. I beg my noble friend to do that. If he does not, I think that the charges that have been laid against the Front Bench will stick. The Government want to give relief to small firms but the way in which it has been done will not have that effect. It will only be minimal and in only the most exceptional cases will anybody get relief. That charge will be a true one and I shall be sorry to hear it.
There has been agreement from all sides of the House that whatever else happens to this Bill there should be an effective relief for above average sickness experienced by the employees of small employers. If my noble friend can give some reassurance on that point I, for one, will be greatly relieved.
3.45 p.m.
Lord Carter: My Lords, before the noble Lord sits down, although the point that he makes is a good one is it not the case that even if the Government were restricted under paragraph (b), all that they have to do is make the total amount for each individual employee the same as eight weeks sick pay? Surely one is then back with the same problem.
Lord Jenkin of Roding: My Lords, I did not attempt to say what the figure would be. Clearly it would be different for different numbers of employees, but that is the employer's responsibility and there is a limit for that. If it were done by reference to national insurance contributions, in the same way as for the definition of small employers, that would be a perfectly workable basis. However, it seems to me clear beyond peradventure that we cannot take the individual employee, and only when he reaches the threshold. One must consider the experience of the employer with all his employees as a whole in the relevant period.
Baroness Phillips: My Lords, I should like to support my noble friend on the first amendment and again make a plea to the Government on behalf of small shopkeepers. I mix with small shopkeepers a great deal and can assure the House that the high street is rapidly running out of shops. To start with, there is the property tax, which is an appalling imposition on small businesses. Many people, especially older people and young mothers with children, depend on small shops. I remind the Government, as I have done before, that those small shopkeepers are voters who supported the Government. They are the people who believed that the Government were going to help small businesses.
This is yet another illustration of groups of traders who will disappear from business. It is a very sad and serious affair. We plead with the Government to realise that not only will they damage many people but they will damage their hopes in the next election.
Lord Boyd-Carpenter: My Lords, I was interested and glad to hear my noble friend Lord Jenkin say that there have been discussions with the Government about ways of dealing with the acute problem of small employers. My noble friend went so far as to say that floating about somewhere is a possible amendment which might drift into another place. Obviously the possibility of that occurring must have a bearing on the way in which some of us will look at the amendments, if and when they come to a Division. I shall be grateful if my noble friend Lord Henley will confirm whether that is the situation and would tell the House what such an amendment will embody. That factor may affect our judgment and decision in respect of the amendment now before us. It is in the interests of the House and of the Government that we should be told about it. I am sure that my noble friend understands extremely well the fact that Members on all sides of the House feel strongly about the small employer.
Leaving aside the general question, to which we may come on the Motion that the Bill do now pass, in respect of increasing the costs to employers, there is
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the especially acute problem of small employers. I do not need to labour it because it has been emphasised so strongly. Briefly, the problem is that if one employs only one or two people and one or two go sick that is a disaster and will dislocate one's business most seriously. If in addition the Government refuse to refund what must be paid in statutory sick pay, they will really be hitting a man when he is down. That position is acute and is a real problem, particularly in the countryside. The noble Baroness, Lady Phillips, referred to small shops, but the problem applies equally to small farmers. As has already been disclosed, the National Farmers Union is among the many organisations which are distressed by the Bill, in particular by the position of the small farmer.
It is for my noble friend Lord Henley to enlighten your Lordships about the Government's intentions in this respect. I am sure that he has taken on board the fact that many Members of your Lordships' House are reluctant to leave the Bill as it stands without a firm assurance that it will be improved in another place. I shall listen with enormous interest, as always, to my noble friend's reply.
Lord Mottistone: My Lords, there are many provisions that I should have liked to see included in the Bill but in default I support the amendment tabled by my noble friend Lord Stanley of Alderley. Indeed, I like the look of the amendment tabled by my noble friend Lord Jenkin of Roding. However, it cannot be moved if Amendment No. 1 is incorporated in the Bill.
I thank my noble friend Lord Henley for having met with the representatives of the CBI and with Mr. Mendham of the Forum of Private Business to whom my noble friend Lord Jenkin referred. It appears that Mr. Mendham's scheme has not received favourable acceptance because it is not reflected on the Marshalled List. Can the Minister explain the reason for that? Is it because his officials were unable to undertake a full evaluation of the proposed scheme? Might the amendment be included at a later stage of the Bill? The general line of Mr. Mendham's proposal is better than that in the amendments now before the House. However, we might work towards it by accepting Amendment No. 1 in the meantime.
I am grateful to my noble friend for fitting in discussions with the CBI. However, there were only two or three days involved; that was hardly time for anyone to consider anything seriously. I received my brief from the CBI today. Normally I find it helpful to give my noble friend a copy of any brief so that at least his officials can advise him on how best to answer me. I did not have time to do so because the process has been rushed.
It became apparent during the course of the discussions with the CBI last week that the Government intend to lay the regulations in the second half of February. It is almost 1st February and, therefore, we have a fortnight before the regulations are to be laid. I cannot believe that there is time for the discussions necessary in order to ensure that the best interests of the small firms to whom the amendment

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relates will be dealt with. Neither can I believe that the interests of companies generally will be adequately dealt with as a result of this great rush.
I should like my noble friend to answer three questions. Why have Mr. Mendham's proposed amendments not seen favour? Will they see favour at a later stage? Does my noble friend believe that between now and the middle of February he will have the time to take part in discussions with all those people who have serious advice to give?
Lord Rippon of Hexham: My Lords, I wish to follow up the point made by my noble friend Lord Mottistone. I too have received various memoranda from the National Farmers Union and the Forum of Private Business. It appears that more time is necessary for consultation. The more I have listened to the debates the more I have become convinced that the Government would have been wise to listen to my noble friend Lord Boyd-Carpenter and to withdraw the Bill. I shall say nothing about its merits, its effects upon small businesses, or its appalling timing. However, I can see no case whatever for putting before your Lordships what increasingly becomes another welter of chaotic verbiage which, if we are honest, we find great difficulty in understanding as will everyone else. It will provide yet another complexity with which small businesses must deal.
My noble friend Lord Jenkin of Roding referred to the Forum of Private Business and expressed his gratitude to the Department of Social Security for having listened to all the arguments. However, I note that in his letter to me Mr. Mendham states that he fears that the Government have had insufficient time completely to evaluate and cost our proposals. He asks me, as perhaps he has asked other noble Lords, to press the Government to keep an open mind pending the appearance of this little measure in another place. I am sure that many noble Lords agree with my noble friend Lord Boyd-Carpenter, who said that our attitude towards the amendment will depend on the Minister's response.
4 p.m.
The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley): My Lords, my noble friends Lord Jenkin of Roding and Lord Boyd-Carpenter have referred to a mythical additional government amendment that is floating about. There are no government amendments other than the two which appear in my name on the Marshalled List—
Lord Jenkin of Roding: My Lords, I apologise for having been so obscure as to mislead my noble friend. No one suggested that there was another government amendment. It was suggested that a proposal had been put forward by the Forum for Private Business and discussed with the Government's officials. However, as was said by my noble friend Lord Rippon, the problem is that there has been insufficient time to
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discuss the matter properly before today's proceedings. There is no other government amendment. I had hoped that there would be, but clearly there is not one as yet.
Lord Henley: My Lords, I had gathered that. I was going on to say that I imagined that my noble friend was referring to Mr. Mendham's amendment. I shall make a few brief comments upon that. At this stage I cannot say anything about what another place may do, but earlier in our proceedings I paid tribute to the time and effort which Mr. Mendham has expended in producing his scheme. Although it is ingenious, it would apply to all employers, which we do not believe is the right way forward. As the House will know, my officials met Mr. Mendham last week and we have examined his scheme very carefully. A number of problem areas have led us to rule it out: namely, the difficulties associated with apportioning an annual incidence of sickness on a monthly basis; the fact that the formula does not work well for employers with only one employee; and the belief that the scheme would be perceived as very complicated by many small employers.
I now turn to the amendments which we are discussing. I have listened very carefully to all that has been said. As the House will appreciate, the amendments moved by my noble friends Lord Stanley and Lord Jenkin propose opposite solutions to the method of determining small employers' relief and, hence, entitlement to 100 per cent. reimbursement. Amendment No. 1 in the name of my noble kinsman would relate eligibility to the number of weeks for which an individual employee has been sick and would rule out—I stress that—the aggregate method favoured by my noble friend Lord Jenkin. My noble friend's amendment would provide precisely the opposite. Neither group of amendments would retain the option of the alternative method. There is clearly a difference of view on the method which should be adopted, a difference which I believe extends wider than this House. I shall have more to say about that later in my speech, as I shall about the subject of consultation, because of the difference of views as to which method should be adopted.
First, I shall concentrate my remarks on Amendment No. 1. Although I do not want to make too much of this, I have to tell noble Lords that the first part of the amendment is defective and my legal advisers have informed me that it would be unworkable.
This stems from a misunderstanding by my noble kinsman as to the need to refer specifically to employees' contributions. I recall that on Report the noble Lord, Lord Carter, asked me whether the £15,000 contribution threshold incorporated both the employers' and the employees' portion of the national insurance contribution. The noble Lord will remember that I indicated by nodding that it did.
The noble Lord, Lord Carter, returned to that matter and has drawn my attention to line 46. However, again I give him the assurance as regards the reference in line 46 on page 2 that "employer's contributions" means employer's and employee's.

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There is no need to identify these separately because the definition of "employer's contributions payments" in the main legislation is:
"any payments which the employer is required to make in discharge of any liability in respect of primary or secondary Class 1 contributions".
It does, therefore, encompass both the employer's and employee's elements of the contribution. The same point relates to Amendment No. 6 in the name of the noble Lord, Lord Carter. However, I appreciate the time constraints that applied in tabling amendments for consideration today and I understand the intention behind the amendment.
Amendment No. 1 would preclude the use of the number of employees as the definition of a small employer. As I made clear on Report, the Government have a strong preference for using the contribution threshold in this respect and I am delighted that in moving this amendment noble Lords have accepted that approach. But it seems only fair to ensure that the House is aware that one of the effects of this amendment would be to remove the enabling power permitting the regulations to relate the definition to the number of employees. I shall have something to say towards the end of my remarks about the Government's proposals to consult on the content of the regulations and—despite the Government's preference, which was endorsed by the House on Report—whyit might be worth while to keep all our options open in the primary legislation.
I now move on to the substantial point made by the noble Lord, Lord Carter, in relation to the annual review of the contribution threshold, which we propose should determine whether an employer falls to be treated as a small employer. In this case perhaps I may speak also to Amendment No. 2.
Of course the Government accept that the value of the £15,000 threshold—I use the figure I gave on Report—will decline in real terms unless we raise it. This is precisely one of the reasons why we are taking power to change the amount in regulations rather than in primary legislation. We do not think, however, that it would be helpful to employers to commit ourselves to increasing the limit each year mechanically in line with an index if that gives an awkward figure. It would be much more sensible for the threshold to rise when appropriate to some rounded sum; for example, a multiple of £1,000.
Another factor is that we may not necessarily want to restrict any change to the contributions threshold; it may be that there are other elements of the scheme which we shall wish to look at—something which any statutory requirement relating solely to the threshold could pre-empt us from doing. We need to keep a flexible approach.
Having said that, I was minded to accept Amendment No. 2 in the name of the noble Earl, Lord Russell, the noble Lord, Lord Carter, and my noble friend Lord Stanley of Alderley. However, I am advised that it is defective and would not achieve its intention. By relating the amendment to "such amount" it places a duty on the Government to review the amount of national insurance contributions paid
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by employees and employers rather than the threshold which determines whether an employer can be treated as a small employer. That is obviously not the intention. Therefore, I cannot advise the House to accept the amendment. However, as I said, I certainly undertake that the threshold will be reviewed every year.
The second subsection of Amendment No. 1 provides that the regulations should prescribe the point in time at which small employer's relief should click into operation for employers, by relating this to a prescribed number of weeks during which a particular employee has been sick. The House would not expect me to disagree with this. Clause 2 already provides for that at paragraph (1D)(a). I welcome this but, as I said earlier, it rules out the possibility of using the aggregate method based on the workforce as a whole as advocated by other amendments. In their turn, they rule out the method of relating that to the number of weeks for which a particular employee has been sick.
The third paragraph, the new subsection (1E), of the amendment sets out the meat of the proposals. As my noble kinsman has explained, under these proposals small employer's relief would begin to bite at different stages of an employee's sickness depending on the amount of contributions payments in the previous year. Where that figure was below £5,000 per annum, the employer would be able to recover 100 per cent. of all the SSP paid out; where it was between £5,000 and £10,000, after an employee had been sick for three weeks; and where between £10,000 and £15,000, after sickness had lasted six weeks.
I appreciate that noble Lords have sought to meet a number of the points that I made on Report by structuring the provision in this way. The intention is to assist particularly the smaller employer and the Government have made it clear that is also our intention. Indeed, subject to certain provisos which I will come to directly, we are not against a graded system of this kind if it is perceived by the small business interest generally as the best way to proceed.
My noble kinsman, my noble friend Lord Stanley and some of the organisations representing small employers have asked whether the Government are prepared to agree to a shorter number of weeks—that is, shorter than the eight weeks which I said the Government had in mind—if the contribution threshold was pitched at a level lower than £15,000. We should certainly look at any scheme put to us and, subject to financial and operational constraints, the Government do not rule out that possibility after the consultation process has taken place. Our minds are not closed to such a possibility. I may come to this when I refer to the consultation exercise later.
Turning to the probing amendments of my noble friend Lord Jenkin, I should like to give the assurance for which my noble friend asked: we have not ruled out using the aggregate payment of SSP as the determining factor. That is why the power to do just that remains in Clause 2. Indeed, we have been looking at possible schemes. I know that my noble friend appreciates that it would not simply be a matter of setting a threshold of 'x' amount of the SSP and

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once that had been reached the small employer would qualify for 100 per cent. reimbursement. That would be manifestly unfair. It could mean that the very small employer would have to reach an excessive number of weeks before he qualified.
Turning to the question of consultation, as I have said, there are a number of different possible approaches that we intend to pursue. That is why we intend to engage in a consultation process. During Report stage my noble kinsman Lord Russell said that the Government had not decided what we wanted to do, and he suggested that it might be better if I could come back to the House at Third Reading when we had decided. It is not that the Government are being indecisive. I have clearly stated our preferences, and I stress that they are only preferences. But it is clear that there are strong differences about which would be the best course to take. These have shown themselves in this House, with some noble Lords favouring a scheme based on number of weeks of sickness per employee, as in Amendment No. 1, and others a scheme based on the aggregate number of weeks of sickness, as in my noble friend Lord Jenkin's Amendments Nos. 3 and 4. There have also been variations suggested in other places on both schemes. A similar uncertainty is also being manifested outside the House. Some noble Lords may know that since the Report stage either I or my officials have seen a number of organisations, as I am pleased to say my noble friend Lord Jenkin stressed. We have seen the CBI, the Forum of Private Business, and the National Farmers Union, and have spoken to others on the telephone.
Although time is of the essence, as has been said many times on this Bill, which is why I fear the consultation process will be a short one, the Government feel very strongly that it would be unwise to write precise provisions in the primary legislation in the way that my noble kinsman's amendment does. We must leave it open for those to be prescribed in regulations so that we can get a system which is user-friendly—to use an expression of my noble friend Lord Jenkin—not just for the department, important though that is, but much more importantly user-friendly for the small businesses so that they can have a system that they can operate. There is no point in bringing forward a concession for small businesses if the concession is unusable by the small businesses themselves.
We have been giving careful consideration as to the representations made since the Government's proposals for small employers were announced. We have taken into consideration the arguments from all sides that there should be more consultation with the relevant organisations before the regulations are made. Therefore, the Government have decided to run what I must describe as a short consultation exercise. Our intention is to put forward alternative schemes, one based on weeks of sickness per employee and one using the aggregate sickness of the workforce as a whole. We shall be asking for comments on both preference and practicality. It is important that the scheme must be user-friendly. I stress that we want to
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provide, within financial and other constraints, the simplest and most practical scheme for employers to operate.
A number of your Lordships—in fact, I think I could fairly say many Members of this House—have criticised the Government for not consulting business in advance of this Bill. Both my right honourable friend the Secretary of State and I have explained why that was not possible. But we believe that there is time, albeit that such time will be very short as the regulations will need to be laid next month, to have some limited consultation on the small employer's relief scheme. I hope that the House will agree that this is the best way forward.
I have given a number of reasons why the Government cannot accept my noble kinsman's amendment or that of the noble Lord, Lord Jenkin, not least of course the decision to consult on alternative schemes which I have just announced. In the light of that I hope that my noble kinsman will feel able to withdraw his amendment.
4.15 p.m.
Lord Stanley of Alderley: My Lords, I do not think that I have ever heard in your Lordships' House such a statement from the Minister showing that he had not made up his mind and could not make up his mind. Perhaps I may deal with a few points made earlier.
First, my noble friend Lord Jenkin pointed out that he would like some form of aggregation. The snag with that is that if someone employs only one person he cannot aggregate. However, I agree with my noble friend that the Government should compensate the small employer who suffers above average sickness. As I have said, eight weeks is too high. We believe that average sickness, or excessive sickness with respect to small employers, is somewhere around three weeks.
My noble friend Lord Boyd-Carpenter mentioned the mythical amendment which we have not seen. I understand the point that he has made. My noble kinsman Lord Henley referred to it. Certainly, if the Government find in another place that this is an acceptable way forward I see no reason why they should not do that there, but at present the Government have done nothing to make your Lordships feel that they will look at this problem, apart from consulting, which so far has produced absolutely nothing, as is evident from the remarks made by my noble kinsman Lord Henley.
I entirely accept the point made by my noble friend Lord Rippon that it would have been much better if the Bill had been sent back to where it came from and redrafted so that we could have got it right, but unfortunately that is not the position. We are left here with no concession whatever to the small business. It would be irresponsible of us not to insert something to make the Government concentrate their minds in another place. I do not wish to go into my village shop having done nothing about this.
My noble kinsman brought out one or two other points, one of which concerned the defectiveness of the first part of the amendment. The noble Lord, Lord

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Carter, dealt with that. It can perfectly well be put right in another place, and my noble kinsman is making a mountain out of a molehill.
Finally, my noble kinsman went back to numbers. I almost cried. We suggested numbers to start with and my noble kinsman said at Committee stage, "No, we won't have numbers. We'll have National Insurance contributions". So I have to leave the farm, go off and look out my advisers, and go back to National Insurance contributions. Then my noble kinsman said today, "No, I think we might have numbers now". Really, I sometimes despair. I will not continue, because we have been on this matter for long enough, but if the Government cannot make up their mind your Lordships should make up their mind for them. They can change the amendment in another place, but let the other place have a chance to look at the problem of the small employer.
By supporting the amendment noble Lords will be helping the very small employer. We must remember the village shop, the post office and the small farmer. The village shop and the post office do more than just sell baked beans and stamps; they perform a social service to the community. If your Lordships support that, I hope that your Lordships will follow us into our Lobby. I commend the amendment to the House.
4.19 p.m.
On Question, Whether the said amendment (No.1) shall be agreed to?
Their Lordships divided: Contents, 128; Not-Contents, 84.

Division No. 1

CONTENTS

Acton, L.

Graham of Edmonton, L.

Addington, L.

[Teller.]

Airedale, L.

Grey, E.

Allerton, L.

Grimond, L.

Ardwick, L.

Hampton, L.

Auckland, L.

Hanworth, V.

Aylestone, L.

Harris of Greenwich, L.

Birk, B.

Hatch of Lusby, L.

Blackstone, B.

Hayter, L.

Bonham-Carter, L.

Henderson of Brompton, L.

Bottomley, L.

Hollis of Heigham, B.

Boyd-Carpenter, L.

Holme of Cheltenham, L.

Brain, L.

Houghton of Sowerby, L.

Brightman, L.

Hunt, L.

Broadbridge, L.

Hutchinson of Lullington, L.

Bruce of Donington, L.

Hylton, L.

Carter, L.

Hylton-Foster, B.

Cledwyn of Penrhos, L.

Jeger, B.

Clinton-Davis, L.

Jenkins of Hillhead, L.

Cockfield, L.

Jenkins of Putney, L.

Cocks of Hartcliffe, L.

Kearton, L.

David, B.

Kennet, L.

Dean of Beswick, L.

Kilbracken, L.

Derwent, L.

Kinloss, Ly.

Donaldson of Kingsbridge, L.

Kinnaird, L.

Dormand of Easington, L.

Kirkwood, L.

Ellenborough, L.

Knollys, V.

Elliot of Harwood, B.

Lauderdale, E.

Ennals, L.

Leatherland, L.

Erne, E.

Listowel, E.

Ewart-Biggs, B.

Llewelyn-Davies of Hastoe, B

Ezra, L.

Lloyd-George of Dwyfor, E.

Falkland, V.

Longford, E.

Fisher of Rednal, B.

Lovell-Davis, L.

Galpern, L.

Lucas of Chilworth, L.

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Malmesbury, E.

Russell, E.

Margadale, L.

Sainsbury, L.

Masham of Ilton, B.

St. Albans, Bp.

Mason of Barnsley, L.

Salisbury, M.

Mayhew, L.

Saltoun of Abernethy, Ly.

Mersey, V.

Serota, B.

Milverton, L.

Shackleton, L.

Mishcon, L.

Shaughnessy, L.

Molloy, L.

Shepherd, L.

Monckton of Brenchley, V.

Stallard, L.

Monson, L.

Stanley of Alderley, L. [Teller.]

Morton of Shuna, L.

Stedman, B.

Mottistone, L.

Stoddart of Swindon, L.

Mulley, L.

Strathspey, L.

Nelson, E.

Taylor of Blackburn, L.

Nicol, B.

Terrington, L.

Ogmore, L.

Thomson of Monifieth, L.

Orr-Ewing, L.

Thorneycroft, L.

Palmer, L.

Thurlow, L.

Peston, L.

Tordoff, L.

Phillips, B.

Turner of Camden, B.

Pitt of Hampstead, L.

Underhill, L.

Porritt, L.

Varley, L.

Rankeillour, L.

Wallace of Coslany, L.

Renton, L.

Walston, L.

Richard, L.

Whaddon, L.

Rippon of Hexham, L.

White, B.

Rochester, L.

Wilberforce, L.

Roskill, L.

Williams of Elvel, L.

Ross of Newport, L.

NOT-CONTENTS

Alexander of Tunis, E.

Hives, L.

Arran, E.

Hood, V.

Astor, V.

Hooper, B.

Barber, L.

Howe, E.

Belhaven and Stenton, L.

Jenkin of Roding, L.

Beloff, L.

Johnston of Rockport, L.

Belstead, L.

Killearn, L.

Bessborough, E.

Kimball, L.

Bethell, L.

Long, V.

Blake, L.

Luke, L.

Blatch, B.

Lyell, L.

Blyth, L.

Mackay of Clashfern, L.

Boardman, L.

Macleod of Borve, B.

Borthwick, L.

Mancroft, L.

Brabazon of Tara, L.

Merrivale, L.

Brigstocke, B.

Mountevans, L.

Brougham and Vaux, L.

Mowbray and Stourton, L.

Butterworth, L.

Munster, E.

Campbell of Alloway, L.

Nugent of Guildford, L.

Campbell of Croy, L.

Onslow, E.

Carnegy of Lour, B.

Oppenheim-Barnes, B.

Carnock, L.

Orkney, E.

Cavendish of Furness, L.

Pearson of Rannoch, L.

Clanwilliam, E.

Peyton of Yeovil, L.

Constantine of Stanmore, L.

Reay, L.

Cottesloe, L.

Renwick, L.

Crickhowell, L.

Skelmersdale, L.

Davidson, V. [Teller.]

Slim, V.

Denham, L. [Teller.]

Stevens of Ludgate, L.

Eden of Winton, L.

Strange, B.

Elibank, L.

Strathmore and Kinghorne, E.

Elliott of Morpeth, L.

Sudeley, L.

Erroll of Hale, L.

Swansea, L.

Glenarthur, L.

Thomas of Gwydir, L.

Gray of Contin, L.

Trefgarne, L.

Grimthorpe, L.

Trumpington, B.

Hailsham of Saint Marylebone, L.

Ullswater, V.

Vaux of Harrowden, L.

Hankey, L.

Waddington, L.

Harmsworth, L.

Wade of Chorlton, L.

Haslam, L.

Whitelaw, V.

Henley, L.

Wolfson, L.

Hesketh, L.

Resolved in the affirmative, and amendment agreed to accordingly.
4.27 p.m.
[Amendments Nos. 2 to 4 not moved.]
Lord Henley Lord Henley moved Amendment No. 5:
Page 3, line 16, at end insert:
("(1E) A statutory instrument containing (whether alone or with other provisions) regulations under subsection (1C) or (1D) above shall not be made unless a draft of it has been laid before Parliament and approved by a resolution of each House."").
The noble Lord said: My Lords, in moving Amendment No. 5 I shall speak also to Amendment No. 7.
The House will recall that at Report stage my noble kinsman Lord Stanley successfully prevailed upon me to accept his amendment making all the regulations made under the powers of this section subject to the affirmative resolution procedure, instead of only the first of such regulations.
At the time I said that I reserved the right to come forward with the Government's own amendment should my noble kinsman's amendment prove defective. As I explained to him by letter, the parliamentary draftsman has advised that this is indeed the case and has redrafted the provision as Amendment No. 5. This is in substitution for my noble kinsman's amendment, which is deleted from the Bill by Amendment No.7.
I apologise to my noble kinsman but do, of course, assure him and the House that the amendment I have now brought forward meets the intentions of his amendment. I beg to move.
Baroness Turner of Camden: My Lords, I rise from these Benches to thank the Minister for presenting this amendment this afternoon. We are grateful to him for tabling the amendment, which complies with the promise that he gave to the House at Report stage.
On Question, amendment agreed to.
[Amendment No. 6 not moved.]
Lord Henley Lord Henley moved Amendment No. 7:
Page 3, line 26, leave out subsection (4).
On Question, amendment agreed to.
4.30 p.m.
Lord Henley: My Lords, I beg to move, That the Bill do now pass.
Moved, That the Bill do now pass—(Lord Henley.)
Lord Carter: My Lords, when the Bill was introduced it was a one-clause Bill. I wonder whether the Government then imagined the kind of trouble that they were going to run into when the Bill was hastily introduced following a deal between the Chief Secretary of the Treasury and the Secretary of State for Social Security.
The Government must be congratulated. It is a feat of political skill to get the CBI, the Institute of Directors, the NFU, the National Federation of the Self-Employed and the Small Businesses, the Forum of Private Business, the Disability Alliance, the Labour Party and a substantial number of Government Back-Benchers in the same lobby against the Government. I stated at Second Reading the Bill is a bad one and that it should be withdrawn.
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However, this House has improved the Bill to some extent. The rebate in statutory sick pay has been increased from 80 per cent. to 91 per cent., which will give some help to employers. The removal of the infamous Henry VIII clause is a very satisfactory constitutional improvement. Today we have helped to concentrate the mind of the Government on small employer relief.
The Bill is a rather forlorn relic of Thatcherism, combining a lack of consultation in the early stages with ramming the Bill through both Houses at breakneck speed. I cannot understand the need for such speed. The Government's programme is not overloaded and they are looking round for things to do; yet the Bill has taken only a few days between each stage in this House, and in the other place there was one day between Second Reading and Committee. Only two to three weeks has been left for the consultation period. We should be told the reason for the breakneck speed with which the Bill has been handled. The Government could demonstrate that they have turned over a new leaf by accepting the amendments.
My strictures concerning the Bill do not extend to the noble Lord, Lord Henley. He has been courteous and helpful. Problems with the timetable and delays in producing information were not his fault. All noble Lords know, especially with the number of lawyers in this House, that any advocate can handle a good case, but it takes a very good advocate to handle a bad case. The noble Lord has borne up remarkably well considering that nearly all noble Lords, with the possible exception of the noble Lord, Lord Jenkin of Roding, have been critical of the Bill and have asked the Government to withdraw it. In our view, the Bill is a bad Bill, but it is leaving here in better shape than when it came to us.
Earl Russell: My Lords, we all know that speaking is like swimming: it is a lot easier to do it with the tide than against it. My noble kinsman the Minister throughout the passage of the Bill has been speaking against the tide. He has discharged that responsibility with distinction, grace, good humour and every merit permitted within the limits of his brief. I congratulate him.
I have been delighted to work on the Bill with my noble kinsman Lord Stanley of Alderley. I hope that my noble kinsman will not misunderstand me, but I was reminded of Adam Smith in the clerihew:
"who was disowned by all his kith but backed through thick and thin by all his kin."
The Bill has been very considerably improved. I am pleased that the question of small businesses will be referred back to another place for further consideration. I am not convinced that any of us have got the matter right. This is the best amendment that I have seen, but I should like to see a larger exception than that which has been considered by the Government. We have given them a chance to think about that matter and I hope that they will do so.
I was delighted to see the amendment moved by the noble Lord, Lord Mottistone, in relation to increasing the amount of statutory sick pay to 91 per cent. The

477
Government are left with a dilemma. They can either pass the Bill in a form which is acceptable to this House or they can pass the Bill in a form which achieves its original purpose. They cannot do both. It is clear what conclusion they ought to draw from that situation.
I am particularly pleased to see the amendments relating to the deletion of the Henry VIII clause. This House used to be known as the watchdog of the constitution. It is a function to which it is well suited. I hope that not only will the amendment be accepted but that we shall get fewer such clauses in the future. More thought should be given to the recommendation of the Donoughmore Scott Report, that there should be printed with the explanatory memorandum an explanation of why such a clause is necessary. Like the notices that state, "Is your journey really necessary?" one can ask: is the Henry VIII clause really needed?
I fear that I must blame my honourable friend Mr. Bellotti for the Bill. It is the result of a certain concession that was made in relation to child benefit, in order to claw back some of the spending. The chronology of the matter strongly suggests that the concession on child benefit was the result of the victory of my honourable friend Mr. Bellotti at Eastbourne. My honourable friend had the distinction of getting 1 billion pounds out of the Treasury before he had even made his maiden speech, a distinction that might make most of us green with envy and one which makes it difficult to argue that a vote for the Liberal Democrats makes no difference.
In that context, if we are victorious in relation to the amendments in another place I hope that we will not have to face this argument again in relation to another benefit. I agree with the argument that used to be put by the late Lord Seebohm, who will be much missed in this House. He stated that one of the strongest arguments for uprating child benefit is the argument for fiscal equity between those with children and those without. Therefore, the proper way to finance increases in child benefit is by taxation to the point where the concession becomes fiscally neutral, where it achieves an equitable effect between people with children and people without.
The Treasury has been much mentioned in the Bill. The Treasury represents something that is very deep in our national culture. I should like to tell the House a story in order to illustrate the point. A certain American senator, a former Rhodes Scholar and millionaire, regularly received letters from his American alumni association. He did not open them because he was a busy man, but sent them cheques for 30,000 dollars. He wondered why he never received such letters from his English college at Oxford. He finally received a letter from Oxford, reached for his chequebook and was just about to write a cheque for 30,000 dollars when he thought that he should look to see what the going rate was. He opened the letter, which was a dunning letter from the college bursar for a buttery bill of two shillings and sixpence that dated from his undergraduate days. He wrote them a cheque
478
for thirteen pence. That is the culture from which the Treasury grows; it is penny wise, pound foolish. The Bill is a very good example of that point.
We should think about what the Bill has told us about our political system. I hesitate to say that the Bill has been carried through another place by the votes of the Conservative Party because it seems to me to offend the principles of the Conservative Party as deeply as it offends the principles of the other two parties. The noble Lord, Lord Boyd-Carpenter, speaks as eloquently for Conservative principles as anyone I know, and having listened to the noble Lord I am encouraged in that conviction. It would be more accurate to say that the Bill was carried through another place by the votes of the Court and Treasury party.
In fact, ever since the 18th century the influence of the Executive on another place, exercised through the means of patronage, has been a great deal stronger than English mythology leads us to believe. It is a Treasury Bill. The Prime Minister has taken on the job of proving that he is his own man. I wish him luck with it, but he needs to prove it, not only in relation to his predecessor but also in relation to the department in which he has served almost all his ministerial career. He needs to prove that he is not the Treasury's poodle. At some time he must do that by a dramatic gesture: what better gesture than by withdrawing this Bill?
My Lords, 1066 and All That commented on speculation about the reasons for the execution of Sir Walter Raleigh, that he was executed for being left over from the previous reign. That is what I hope the Prime Minister will do to this Bill.
4.45 p.m.
Lord Boyd-Carpenter: My Lords, I look upon this Bill at this stage more in sorrow than in anger; sorrow because to me, an enthusiastic supporter of our present Administration, it is singularly disagreeable to have to exercise a vote against one of their measures. I say that frankly. The substance of the Bill and the way the Government as a whole have handled it make it difficult for any of us to justify our support for it. Such support would seem inconsistent with our duties as a revising Chamber. The House would not have been doing its duty had it left unamended the Bill as it came to us.
I shall not bore the House by recapitulating what some of us have said at earlier stages of the Bill. However, what has emerged particularly clearly this afternoon is the complete lack of consultation with those concerned before the Bill was introduced. Indeed, my noble friend Lord Henley said that it was not practical to have consultation before then. We all know that it was introduced during the expenditure round as part of a deal between my right honourable friend the Chief Secretary to the Treasury and my right honourable friend the Secretary of State for Social Security. Having served for quite lengthy terms in both those offices, I have some understanding of their problems. However, in a desire to adjust expenditure figures—a very proper and reasonable

479
desire—it was quite extraordinary to ignore the fact that outside organisations would be interested and would expect to be heard in advance.
The result has been—certainly as reflected in my postbag —a larger amount of criticism of the Government from a larger number of organisations than I personally have received in the 19 years I have been a Member of this House. That criticism has come from organisations as widely dispersed as the CBI, the NFU and the National Association of Citizens Advice Bureaux. All kinds of organisations have protested. While those protests owe something to the substance of the Bill, they also owe a great deal to the fact that the normal procedure of consultation before introducing a controversial Bill was not followed. I hope that what has happened to the Bill in this House will serve as a warning to my right honourable friends in another place and to my noble friend that legislation of this kind should not be introduced without prior consultation with those whom it will affect.
Of course in the end the Government must make a decision. They can ignore the views of those who have been consulted, but it is clear that if one simply fails to consult and launches a measure of this kind upon an unwitting world, one generates more ill feeling and opposition than otherwise would be the case. I hope my noble friend Lord Henley will take back that lesson to discuss with his colleagues. I acquit him at once of any involvement in the matter because, as I have said, we know the history of it only too well.
My basic objection to the Bill, apart from the hardship it will cause in some cases, is that it will increase the costs of employers and of industry. That is beyond dispute. The only argument has been on the degree of increase that will be involved. It has been said already—I will say it once again—that this is the worst time to introduce such an increase in the costs of industry. Whether we are technically in recession or not I do not know, but there has been, understand-ably, some downturn in economic activity. To choose this very moment to increase the costs of industry is an extraordinarily unwise thing to do and flies right in the face of what the Government are doing to industry.
I am only consoled by the fact that the Government as a whole do not apparently share the view expressed by this Bill. Noble Lords may recall that last Wednesday my noble friend Lord Strathmore and Kinghorne answered questions from the noble Lord, Lord Dormand of Easington, about unemployment. I put a supplementary question which produced an interesting reply from my noble friend. I asked:
"My Lords, do not these figures indicate, however, the importance that nothing should be done to increase industrial costs, either by way of trade union action or legislation?" My noble friend replied most satisfactorily:
"My Lords, I can only agree with what my noble friend says". —[Official Report, 23/1/91; col. 222.]
So at least one member of the Government does not believe in increasing industrial costs; and, if I may say so, it is greatly to his credit.
Having said that, I agree with the noble Lord, Lord Carter, about the way in which my noble friend Lord
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Henley has handled this difficult Bill. The House knows that he had nothing whatever to do with its origination but he has handled it with a patience, a skill and a physical stamina which have excited the admiration of all noble Lords. I say to my noble friend that if I were to be charged with a criminal offence of which I was plainly guilty, I would rather be represented by him than by anybody else.
Lord Simon of Glaisdale: My Lords, as noble Lords who preceded me have pointed out, the Bill has been substantially improved both in its social and economic impact and its constitutional aspect. I merely venture to add that that emphasises the importance of your Lordships' constitutional role as a Chamber of Parliament. It is also worth remarking apropos the Henry VIII clause that the amendments which have been agreed could not have been made if the measure had been carried through by regulation, as of course was the effect of the Henry VIII clause.
In many ways the discussion on this Bill has been unsatisfactory. I say that because, as has been pointed out, it really involves a shift of resources in the social security budget; that is, a trade-off between child benefit on the one side and statutory sick pay on the other. However, it is only the latter that we have been able to discuss.
I was pleased that the noble Lord, Lord Jenkin of Roding, reminded us that the social goods are almost infinite but that the funds available to satisfy them are definitely finite. Nevertheless, I did not feel that there was any satisfactory answer given to the noble Lord, Lord Boyd-Carpenter, who said that, whatever the merits of the shift in funds might be at other times, this was an extremely bad time to do it, adding as it does to the costs of industry and commerce.
There is another important factor. In dealing with only one side of the matter—the debit side, so to speak —the noble Lord in charge of the Bill was placed in an extraordinarily difficult position. He was left in solitary command, as it were, of the sullied end of the stick while other noble Lords, quite happily, tugged in succession on the clean end. I am glad that tributes have been paid to the patience shown by the noble Lord.
Perhaps I may say a few words about the constitutional aspect of the Bill. I shall deal first with the Henry VIII clause. It was highly objectionable in itself, all the more so in view of what lay behind it. During the time between the publication of the Donoughmore Report in 1932 and two Sessions ago, there was no attempt to reintroduce Henry VIII provisions. However, suddenly, two Sessions ago Henry VIII provisions were reintroduced in three Bills. These came under strong attack from Lord Elwyn-Jones during discussion of the Children Bill. My noble and learned friend the Lord Chancellor hastened to make concessions. Nevertheless, during the following Session the Courts and Legal Services Bill was introduced and was full of Henry VIII provisions. Again, the Government were forced to make concessions. The two most objectionable provisions were removed and the others were acceptably modified. It is most important to remember what my noble and learned friend said

481
during the proceedings on that Bill. He said that the Government certainly took fully into account the Donoughmore Committee's recommendations.
Under those circumstances, it is extraordinary that such a provision should have reappeared. I hope that what has taken place will be registered and that we shall see no more of these objectionable provisions. Like the affirmative/negative resolution provisions which have also fallen under scrutiny, they represent a tendency to minimise parliamentary control of legislation. I should add that parliamentary counsel should not be blamed for the provisions. The Minister in charge of a Bill is responsible for the Bill, both as regards content and form. I cannot conceive of the Henry VIII provision in this Bill having been introduced, as it was, unless it appeared in heads of instructions to the draftsman.
I should also like to mention the contrast between the negative and the affirmative resolutions. There, again, persistent attempts have been made to minimise parliamentary control. At any rate, the Bill has drawn attention to the recommendations of the Joint Select Committee on Delegated Legislation of 1972 and 1973, which were accepted by the government at the time. I trust that we shall not see those recommendations flouted again in future legislation.
Having said all that, it merely remains for me to say how beneficial and enjoyable it has been for one sitting on the Cross Benches to hear a highly technical Bill of this kind so skilfully debated by experts in the field of social and economic endeavour.
Lord Jenkin of Roding: My Lords, I venture to differ from the noble and learned Lord, Lord Simon of Glaisdale; I do so with the utmost diffidence. I must point out that a Henry VIII clause was introduced in 1965. The then Minister of Power was Fred Lee, who later became Lord Lee of Newton. He introduced a Bill which contained such a clause. As a very new Member of Parliament sitting on the Back Benches, I protested and quoted the Donoughmore Committee's recommendations. Unfortunately, Mr. Lee thought that I was referring to His Majesty's matrimonial affairs, as the Hansard report of the proceedings in Committee records. However, if I remember rightly, we managed to effect a change in the legislation and the Government made a concession.
As the third former Treasury Minister to speak in succession, I should like to take up a point made by the noble Earl, Lord Russell. I am not much given to forecasting, but I think that I can safely say that the noble Earl is most unlikely ever to become a Treasury Minister—Mr. Bellotti notwithstanding. I have but two points to make in this respect, the first of which is an obvious one. Treasury Ministers must ensure that the sums add up. During discussions on earlier legislation in this Chamber there has been much criticism of Treasury intransigence, Treasury limits and the effects of cash limits. However, at the end of the day, it has to be said, as has been recognised on all sides of the House, that the Treasury has somehow to make the books balance. It has to determine the amount of debt which the Government need to repay or the amount that they can afford to borrow. As I have already made clear, I believe that the
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Government were justified in looking for savings from the social security budget. My noble friend Lord Boyd-Carpenter assured the House that he would not rehearse all the arguments. That is also my intention; but, unlike him, I really will not do so.
I move straight to my second point, which is that we have become accustomed—it is something which is now increasingly challenged—to the concept of Budget secrecy. That secrecy stems originally from the days when the Budget's primary interest was increases or reductions in the rates of indirect taxation and the need to prevent people pre-empting the Budget by making substantial purchases and so to that extent frustrating the Chancellor's intentions. One can understand that idea. But over recent years Budgets have frequently introduced major tax reforms. Early examples are the introduction of VAT and the 1971–72 reform of corporation tax. A more recent example is the taxation of husbands and wives. No Chancellor since the noble Lord, Lord Callaghan—he is not in his place—would in his senses announce major taxation changes without publishing his proposals in consulta-tive form and having one or two years of widespread consultations, including perhaps Select Committees from another place, before introducing legislation.
I took part in the debates on VAT and corporation tax. One has followed what has happened since then with husband and wife taxation. There have been many other examples. Even in the Budget field, anticipating major changes by giving opportunities for substantial consultation is now widely accepted. What we have seen here is that the public expenditure round has almost become a matter of quasi-Budget secrecy: nothing must be allowed to get out until the Chief Secretary or the Chancellor stand up in the other place and make a Statement. Even when major changes in legislation are called for, they somehow have to be kept under wraps. That never used to be the case, and I do not believe that it is right. If there are some over-riding reasons why secrecy must be maintained, the Exchequer must recognise that what it announces in November cannot happen by 6th April if controversial legislation is required. The Bill is an example of that difficulty.
Having originally introduced the proposal for a statutory sick pay scheme in return for a reduction in national insurance contributions, I most assuredly do not quarrel with the principle of the Bill, but clearly as the debates have shown—not least those on the relief for small businesses for which I hope I can claim some of the credit —close consultation is required with all the organisations likely to be involved. The problem has arisen because the Government want the savings to take effect from 1st April, 6th April or whenever it is. The regulations must be made shortly so that they can take effect then. I believe that the cost has been greater than the advantage.
I fear that the Government now face some difficult decisions over what to do with the Bill in another place and what to bring back here. Please, let us not elevate the public expenditure round into a second Budget. If

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legislation is required, and that legislation requires consultation, the timing must take account of those facts or the last date becomes worse than the first.
I believe that I hold the record of being the only Back Bencher who has supported the Bill's main principle. I have not broken that duck yet. Nevertheless, I believe that that factor has been at the heart of the trouble. People will accept what they do not like if they have a chance to talk it through. They may then reluctantly feel that if the proposal must happen at least it is happening in a way that they can live with.
5 p.m.
Lord Mottistone: My Lords, I agree with the closing remarks of my noble friend Lord Jenkin. The trouble over the Bill has arisen from the error of judgment made by Ministers and, I believe, officials. Legislation like this involves not just an extra charge on industry but an administrative process in which industry shares the labour with government. That is a concept about which there was a great deal of consultation during the earlier stages and the intermediate stages in 1985. However, it was not a matter that could be used as part of the negotiations with the Chief Secretary to which my noble friend has just referred.
We are mucking about with industry's chances of balancing its books. It is all very well to say that the Treasury must balance its books, but Treasury officials are not sacked in the same way as are people employed by a company that goes bust. I happen to know that there are small firms, some of which I am closely associated with, that are struggling to keep alive at the moment and on which such added costs will bite. They are involved in high-tech industry, and so all the amendments designed to help small businesses will probably not apply to them because of the employees' levels of salaries.
The world is a real one. There has been an error of judgment. The best thing would be to take away the Bill and to start again next time; but on the assumption that our friends in another place do not do that, I implore the Government to stick to the amendments we have put into the Bill and not try to ease them away and think, "Oh, well, we can put it under the carpet and we can have consultations even though there is not enough time for them to be done properly". I desperately hope that the message will be heard not just by my noble friend who I believe has done a good job under difficult circumstances but by his right honourable friend the Secretary of State and the officials in all government departments whose affairs affect industry.
There are many of them. For example, the Home Office is seeking to have pay deductions for maintenance orders enforced statutorily. That is another activity—it may not be a cost—that industry is being required to undertake on behalf of the Government. We cannot continue with such legislation and expect industry to say, "It is all right. We shall do the work. We shall go on helping government", because it will not. Such activities take
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time and labour and cost money. It is important that governments do not ride roughshod over industry. I hope that such a thing will not happen again.
Lord Stanley of Alderley: My Lords, I have never previously spoken in a debate on the Bill do now pass, but on this occasion I feel that I must thank my noble kinsman Lord Henley for his calmness and good temper, which have been in sharp contrast to mine. All I can say is that I do not believe that I can possibly have been as unpleasant to him as my great aunt, Rosalind Carlisle, was to his family a few years back.
Lord Rippon of Hexham: My Lords, perhaps I may make a brief if not so amusing comment. By any test, constitutional, financial, economic or quality of draftsmanship, the Bill reached the House as a thoroughly bad Bill. The extraordinary thing is that it seems to have gone through the other place with hardly any comment. It must be a matter of concern to us that that can happen in another place. It underlines the responsibility that the House has to consider such matters. It may be a better Bill now, but it still needs a great deal of improvement.
I associate myself with everything that has been said about my noble friend Lord Henley. He has done the best that he can. Anyone who has been a Minister in another place is aware how bereft of support Ministers in this House may sometimes be. They are thrown into battle by their departmental Ministers and told to get on with the job and see the Bill through with the words, "We do not want any trouble."
There has been a great deal of trouble over the Bill, and for good reason. It has been attacked by those whom I call "the old loyalists" and, as I might believe them to be, the "new loyalists" as well. I regard the Bill as a project of an old regime. We have been promised a change in the style of government. That means two things to me: first, more consultation with people who may be affected by legislation before the Second Reading of a Bill ever takes place, because we are aware that after the Second Reading of a Bill the Government are immediately on the defensive. They try to defend every point while being forced into making changes by hostile amendments or, sometimes, even by amendments that are intended to be helpful. We must have more consultations with interested parties, as speaker after speaker has said, before legislation affecting them deeply is ever introduced.
The second improvement we must have in the style of government is in the quality of legislation. I entirely agree with everything that the noble and learned Lord, Lord Simon of Glaisdale, said on that subject today and on previous occasions. It was pointed out that it was not just in the Children Bill that Henry VIII clauses were introduced. They have become increasingly common in recent years. The noble Lord, Lord Williams of Elvel, will know that in relation to financial services and local government legislation these points have been made again and again.
There have been too many Bills in the past; I hope that there will be fewer in future. The difficulty is that when a Bill comes before the House it attracts the attention of a certain section and speakers raise points

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in relation to their own measures. However, they do not see the same problem happening over and over again in one field after another. The significance of the Children Bill was that the Henry VIII clause drew the fire of the late Lord Elwyn-Jones and the noble and learned Lord, Lord Simon of Glaisdale. Since then, more and more of your Lordships have been conscious of the importance of the constitutional point and of the inherent dangers in this type of legislation.
I entirely agree with the noble and learned Lord, Lord Simon, when he said that it is astonishing to some of us that, after the discussions that took place on the Courts and Legal Services Bill, the noble and learned Lord the Lord Chancellor did not seize on the point. I believe it is because the noble and learned Lord no longer chairs the legislation committee of the Cabinet which is regarded as a political instrument to get political measures through.
Therefore it is important that we press upon the noble and learned Lord the Lord Chancellor his responsibilities in the matter, the need for him to give effect to what was promised at the time of the Courts and Legal Services Bill that this would never normally happen again. He should have regard to the Donoughmore Report; implementing that report is one way of dealing with the matter. I hope that your Lordships will also consider the suggestion that I have made from time to time that we follow the Australian precedent and set up a committee to examine the legislation from a drafting and constitutional point of view, without considering its politics or its merits, before it comes to the House. Then a wider number of noble Lords would know the issues at stake. That is my final point.
I believe a heavy responsibility now lies upon the noble and learned Lord the Lord Chancellor to examine the legislation with greater care than has apparently been the case in the past.
Lord Harmar-Nicholls: My Lords, I know that it is almost unforgivable for someone to walk into the House towards the end of the discussion on a subject and then to make a contribution. That is what I am doing. It is because nowadays we have no control over transport, the means of reaching the House, as we used to, when our timing could be good. If I had been a former Treasury Minister, no doubt I should not have had thick enough skin to go against protocol and all that goes with it. However, as a former Minister of Works, I am used to getting the job done and wanting it done properly rather than always keeping rigidly to standards.
I am sorry that I was not here in time to contribute on the amendments which have been passed. The only reason I wished to intervene was that I wanted to be certain that, even at this late stage, my noble friend will take into account the recommendations put to him by the Forum of Private Business. We wished to table an amendment but, because of the speed of the passage of the Bill, we missed the opportunity.
However, there is still time before the Bill becomes a statute for the recommendations made by the Forum of Private Business to be taken into account. Members
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of the forum had a worthwhile meeting with my noble friend's officials and they had every reason to believe that there was a certain sympathetic reaction to the point they tried to make. That is of particular help to people owning very small businesses. It meets the problem I tried to describe when I contributed at the Committee stage of the Bill.
The point of my intervention—breaking the rule of not being so presumptuous as to intervene—is that I wanted on the record even at this late stage the assurance in the winding up speech that if the recommendations of the Forum of Private Business are not covered by the amendment passed before I entered the Chamber, in the framing of the regulations and in any further amendments that may be suggested in another place, those recommendations are taken into account. If that is achieved, then it has been worth breaking the rules with the risk of incurring the displeasure of noble Lords.
5.15 p.m.
Lord Henley: My Lords, this Bill has proved an interesting experience for me. During its course, I have been described as standing at the burning Dispatch Box whence all but I had fled—I think that came from my noble kinsman Lord Russell. He now suggests that I dive overboard and swim, either with or against the tide.
I repeat what I said at Second Reading, that this is a modest Bill in its size and effect, even though it leaves the House somewhat larger than when it arrived. Bearing in mind what I said about the previous amendment which was carried against my advice, possibly the Bill leaves us in need of some further improvement. Also, I stress that it is modest in what it seeks to do, although I have received the impression this afternoon and on previous days that not everyone in the House would be in full agreement with me in saying that.
Many Members of the House have spoken during our debates and I thank all of them, if not for their support then for their contributions. I thank my noble friend Lord Jenkin for his steadfast support throughout the debate. Obviously, I cannot mention all those who have contributed, but perhaps I may mention my noble friend Lord Boyd-Carpenter. I am not sure what to make of the praise he offered me in extolling my skill as an advocate. I trust that he will never be charged with an offence of which he is obviously guilty. I am also grateful for the interventions of my noble friend Lord Mottistone and my noble kinsman Lord Stanley on this side of the House and my noble kinsman Lord Russell on the other side. On the Benches opposite, I thank the noble Lord, Lord Carter, and the noble Baroness, Lady Turner.
I wish to pay tribute to the persistence of a number of outside organisations which have taken every opportunity to put their views across to me and my honourable and right honourable friends in another place. Despite their opposition to the main provisions of the Bill, our discussions have invariably been constructive. I have already mentioned Mr. Mendham of the Forum of Private Business who expended a

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great deal of thought and effort in producing his proposed scheme. I explained why I thought that the proposal had problems, but perhaps I may say to my noble friend Lord Harmar-Nicholls that we have looked at it. I explained what I thought was wrong. It must be a matter for another place and its procedures as to whether it considers such a scheme or not.
I thank the CBI, the National Federation of the Self Employed and Small Businesses and the National Farmers Union which have also been heavily involved in putting proposals to me and meeting myself and my right honourable friend the Secretary of State. I hope they will all respond to my offer of consultation on the concession of small employers. I take it that the amendment that the Government brought forward has been somewhat changed but the Government's position must remain open. We shall institute consultation on whatever scheme emerges from another place as soon as possible.
We have had some very full and constructive debates on this short Bill and I do not intend to rehearse all the arguments in detail again now. I accept—that is why the Government brought forward their amendment—that there is a genuinely felt worry about the effect of the proposals in the Bill on employers, particularly small employers with low earners among their employees. That is why my right honourable friend proposed the reductions in national insurance contributions.
Some concern has also been expressed about increased costs for employers. This has been mentioned again and again but I wish to stress once more that the increases concerned are very small. As my noble friend Lord Boyd-Carpenter has said, this is a time of recession. I believe the point has been overplayed that the increases would impose untold additional burdens on the business community.
Some concern has also been expressed about the implications for employees. I wish to stress once more that the measures in this Bill will have no direct effect whatever on employees. I reject the suggestion that employment prospects of disabled people will suffer or that employers will discriminate against their employees. I am confident that there will be no adverse effect for employees as a result of the changed reimbursement proposed in the Bill. However, as I made clear to my noble kinsman on Report, the Government will continue to monitor the situation. I take this opportunity to stress to employers and to the world at large that disabled people do not have a bad attendance record at work.
I repeat that this is a modest Bill. As I have said, it makes small changes to the rate of reimbursement of statutory sick pay. As my noble friend Lord Jenkin has stressed, those small changes have allowed my right honourable friend to make some not insubstantial improvements in other areas of social security provision. However, I do not intend at this moment to be drawn into a debate on the general subject of child benefit. As I have said, my right honourable friend has made some not insubstantial improvements in other areas of social security provision. That is what the
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Government have sought to do in bringing forward these changes in statutory sick pay. I commend the Bill to the House.
On Question, Bill passed, and returned to the Commons with amendments.

Research and Development: ECC Report
5.22 p.m.
Lord Shepherd Lord Shepherd rose to move, That this House takes note of the report of the European Communities Committee, A Community Framework for R&D (17th Report, 1989–90, HL Paper 66).
The noble Lord said: My Lords, no one would question the importance of research and development to the national well-being, or to the Community as a whole. Sub-Committee B decided it would undertake an inquiry into the Commission's proposals for the third Community framework programme for research and development. I trust that report has been helpful to the Government.
I wish to express appreciation to the Select Committee on Science and Technology for allowing three of its members to sit on Sub-Committee B. Those members provided a great deal of information and wisdom during our inquiry. I wish to mention in this regard the noble Lords, Lord Butterworth and Lord Sherfield, and the noble Baroness, Lady Lockwood. I also wish to express my appreciation to our specialist adviser, Professor Roger Williams of Manchester University, and to our clerk, Simon Burton. I hope that, having left that committee, he will find satisfaction in his new responsibilities.
I wish to thank in particular all the witnesses who provided us with the highest quality of evidence. The House is indebted to those witnesses for the information and evidence that they provided.
As I am no longer the chairman of Sub-Committee B, I hope I may say a few words about the quality of the reports that are produced by Select Committees and the way in which your Lordships' House treats them.
The report we are discussing was printed on 26th June—I hope noble Lords will listen to what I have to say. As I have said, the report was printed on 26th June of last year. It comes before the House on 28th January, some six months later. In December I was offered a debate on this report as the first item of business on this day. I do not object in any way to the nature of the business which has preceded this debate. Having been a chief whip some 26 years ago, I understand the difficulties and strains that are placed upon the chief whip in the ordering of business. However, I believe the position of this debate raises a question about what I would call the status of Select Committee reports.
The European Communities Committee has a duty to scrutinise all the proposals of the Commission. That is a heavy task. Taken at its easiest level, it requires a mass of reading to be undertaken. Some proposals can be cleared relatively quickly and the committee can offer rapid support for such measures. However, some of the Commission's proposals

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require an inquiry. Such an inquiry may last days and sometimes weeks. The proposal that we are discussing today required an inquiry that lasted for months.
The House should be indebted to noble Lords for the way in which they support Select Committees. However, the witnesses are the major contributors to reports. They not only give their time but they also involve themselves in considerable expense in the preparation of their evidence. It is also right to say that Select Committees incur the expenditure of considerable sums of public money. Not all the reports of Select Committees are submitted to your Lordships' House for debate. Only those that are considered by the Select Committee in question to be of major public importance are debated in this House.
I suggest most strongly that Select Committee reports should be given a higher status in relation to discussion on the floor of the House. In a sense the reports are treated adversely when compared with Starred Questions. At least Questions are subject to a date which is a spur to government departments to reply to them. I hope that the Minister will convey my suggestions to the noble Lord the Leader of the House, I suggest that we should ask the Procedure Committee to establish a rule which would give these reports a higher status. I make two suggestions in that respect. First, I suggest that in the minutes of your Lordships' House there should be a separate heading for the reports. I believe that at present they are lost in the list of debates for which no day has yet been named. Secondly, and more importantly, the reports should be debated within one month of their publication. There is a duty placed upon our committee to scrutinise the Commission's proposals. If that scrutiny is to have any real effect on Ministers, a debate, if required, should be held at the earliest opportunity. It should not be held, as in the case of this report, some six months later.
The report before the House relates to the Commission's proposals for the third Community framework on research and development. The framework is of a wider compass than previous programmes. The details of the six strategic lines are set out in paragraph 6 of the report. We considered these strategic lines and we agreed with them. I understand that they have been approved by the Council of Ministers. The details of the strategic lines have also been considered by the committee. We reviewed them all with the exception of energy. We have corresponded with Ministers and have obtained a satisfactory response. Consequently, the Council of Ministers has now agreed to those details.
The process of inviting for tender can now proceed. The committee is glad that the programmes are now proceeding along the lines of the report.
In regard to funding we have no dissent. The Commission wanted more; the CBI wanted more; Her Majesty's Government wanted less. Therefore, it must be about right.
In its evidence the Commission advocated that there should be provision for research into the Community's economic and social cohesion. That is
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an important area for research but your committee has serious reservations. We note that funds are available from structural funds. In the view of the committee that is right. However, if they are to be included within the framework programme we strongly recommend that any project should be tested and judged against the scientific and technical excellence of the proposal. I trust that the Government share that view.
The committee examined the administration of the programme, which is set out in Parts 2 and 3. It is a complex web of consultation and decision making between the Council of Ministers, the Commission and the European Parliament. On the face of it it looks cumbersome and bureaucratic. However, in my view it is hard to see how it could be otherwise although we believe that some areas of improvement are possible.
The committee fully supported the criteria for co-operation, under which it is open to industrial companies, universities, and public and private research institutes to make bids together. However, two member states have to be involved and in some specific programmes EFTA countries may be involved provided again that two Community states are involved.
That creates some difficulty. In order to provide a tender to justify funding a great deal of detail is required. There was evidence before the committee that in some cases that is very time-consuming and costly to those who apply and fail to obtain support, a particular cost being that of travel. Your Lordships' committee therefore strongly recommended that a system of pre-screening based on broad outlines should be instituted. If the Commission is interested greater detail could then be provided to justify funding. We believe that that would encourage smaller organisations to apply.
We spent some time considering evidence regarding the criteria on which the Commission would adopt projects. There was some division of opinion among the witnesses, based more on priorities than on direction. However, in the end a consensus emerged. The committee concluded that the Commission should support projects that fell within the following categories: first, those directed towards the development of common standards; secondly, those aimed at solving Community and international problems such as those of the environment; thirdly, those too costly for any member state to undertake on its own; and, fourthly, those projects in respect of which there would be an added value in performing them at Community level rather than at national level.
The reasons for those conclusions are set out in paragraphs 84 and 89. I would isolate only one; namely, the question of common standards, which increasingly becomes critical to the single market. We reported on it previously in our earlier reports and stressed the need for common standards, most recently in our report on air traffic control equipment. I hope that the Government support those recommendations.
Your Lordships' committee also expressed much concern about what is called "near market research." We understood the Commission's and the Government's anxiety that funding on research should not be seen as a subsidy, which would be contrary to the Rome treaty. However, we feel that the calls of industry on this matter should not go unheeded. The problem is that there is no clear line to distinguish near market research from other research. The committee rejected the rigidity of the Commission's definition (set out in paragraph 36) that funding should be cut off at least three years before the project was ready for the market. We urged the case for more flexibility. The Commission has stated its intention to support demonstration projects and should be encouraged to do so. I understand the Government's anxiety, but this is an important industrial matter. It is very complex. I urge the Government not to have a completely closed mind on the subject and to understand the anxieties of industry and the Community interest as a whole.
Your Lordships' committee also took evidence on procedures and the evaluation of projects. Anyone who has been involved with the research councils knows what a difficult subject this is since research is not exactly finite, and very large sums of money are involved. The programme we are now discussing amounts to some £4.2 billion. The Commission admitted that in the early days it was open to severe criticism. However, much has been done to improve the standards and procedures. However, in paragraph 104 we thought it right once again to draw the Commission's attention to the continuing need for proper evaluation, for keeping projects to plan, for closing down projects not proven worthwhile and directing funds to more promising areas. The committee strongly recommended that 1 per cent. of Community research funding should be set aside to provide a proper base for the cost of that evaluation. Again, we should like to have the Government's reaction.
The committee approved the setting up of a committee to provide advice. However, in our view evaluation is best performed by what is called peer review.
I should like to make one last point on procedures. The committee has already acknowledged the steps being taken by the Commission to tighten up its procedures. We welcome the appointment of expert committees and have made some recommendations regarding membership. We believe that more scientists should be employed by the Commission. The committee would welcome assurances that recruitment procedures are sufficiently flexible to attract scientists at all levels of administration.
We believe that the Commission would also gain much by a closer relationship with the various research councils. The present informal arrangements are set out in paragraph 111. There is a case for a more formal relationship between research councils and the management committees. Government officials clearly have a place there, but the committees should be
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strengthened by the appointment of members drawn from industry and the scientific community. Here again we should like the Government's reaction.
From time to time, as a consequence of evidence placed before it, your Lordships' committee has found it necessary to report on matters which may appear domestic—in this particular case how the Government and the Treasury treat funds received in the United Kingdom for various reasons and purposes connected with research and development. That subject has been raised before in this House. In the course of the inquiry we became very disturbed about the effect on research and development in future years should the Government's present policy be continued.
In trying to ascertain what happens the committee came upon two related principles—additionality and attribution. The principle of additionality as it relates to structural funds is enshrined in Community law which states:
"In establishing and implementing the Community support frameworks, the Commission and the Member States shall ensure that the increase in the appropriations for the funds provided for in Article 12(2) of Regulation (EEC) No. 2052/88 has a genuine additional economic impact in the regions concerned and results in at least an equivalent increase in the total volume of official or similar (Community and national) structural aid in the Member State concerned, taking into account the macro-economic circumstances in which the funding takes place".
This provision is intended to ensure that receipts from Community funds, in this case structural funds, are in addition to public expenditure, not in lieu of it; nor should the allocation of Community funds lead to a cut in public expenditure.
The Court of Auditors keeps a watchful eye on additionality, and when considering the case of funding for transport infrastructure in its 1988 report, it concluded:
"In the FR of Germany, Ireland and the United Kingdom, however, the Court's enquiries showed that there was no demonstrable link between the receipt of Community funds and higher spending on transport infrastructure projects".
On the other hand, the principle of attribution is not enshrined in Community law and its interpretation is therefore more subjective. It appears from evidence summarised in Part 3 that the Treasury attributes funds received under Community research and development programmes to individual departmental budgets and in the following annual public expenditure round adjusts those budgets to take account of those Community funds.
Each department has to decide for itself what to do to make the adjustments required by the Treasury in order to take account of the Community funds. Thus, a body which receives Community support can find that if it also receives support from central government in the year following the receipt of Community funds the support received from central government is reduced. In turn, that can have an effect on additionality, but such a reduction can mean that the Community funds received are not fully additional to those national government funds available to individual applicants and may not be additional at all.
The committee has considered carefully the evidence given by HM Treasury and others concerning the principle of additionality and the practice of attribution. The committee concentrated on those issues as they arose in the United Kingdom because it is not clear what the practice is in other member states; though the committee is aware that both tine Court of Auditors and evidence given to the previous inquiry into transport infrastructure identified particular member states in addition to the United Kingdom where there had been criticism concerning these issues.
The most disturbing aspect of the system operated by the Treasury is that it is not independently monitored. The Treasury has made a number of assertions: for example, that in anticipation of Community receipts destined for the public sector, departmental budgets are set higher than they would otherwise have been and that 30p to 35p in every pound of Community funding for research and development is truly additional. But such matters are dealt with under the public expenditure survey procedures and are not open to scrutiny by Parliament or any other external body.
The committee see two problems arising from the Treasury operating in this way. First is the Treasury's claim that attribution is an institutional matter. The Treasury is treating attribution of Community funds as if it were solely a matter for Whitehall, but any matter involving the United Kingdom's relationship with the law-making machinery of the Community deserves scrutiny, notably by Parliament. Whether the arrangement is appropriate in terms of domestic public expenditure is also a matter for scrutiny by Parliament; most suitably by the House of Commons in its scrutiny of departmental votes. Such "inter-nalisation" of the attribution of funds destined for projects supported by research councils also undermines the principles under which research councils operate at arm's length from central government.
The second problem with the Treasury system is that it can often seem to recipients of Community funds that a non-additionality principle operates. Their success in obtaining such funds will appear to lead to a subsequent cut in the budget of a department from which they may—I stress, may—also receive money and possibly a cut in their receipts of United Kingdom public funds, via what the Treasury calls a cascade effect.
The committee is grateful to the Treasury for attempting to explain the system in evidence before it, but a great deal of work still needs to be done to convince the research councils and universities that they will not be substantially disadvantaged by the operation of attribution. In fact, there is no general understanding of how the system operates, or even recognition that it operates at all. The Treasury must make good that failure to communicate, perhaps by organising a series of meetings at key centres of research across the country but, above all else I suggest, before Parliament itself.
In addition to doubts about the Treasury's explanation of additionality and attribution, the committee is seriously concerned by the system itself.
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The Treasury appears not to have taken into account how little it is able to shape policy in Brussels and is insufficiently sensitive to the limited influence that the United Kingdom has as only one voice among twelve. The Treasury does not appear fully to recognise that as successive framework programmes become more important existing public expenditure controls may lead to a growing distortion in the science and technology budget, despite the best efforts of industry, universities and the research councils. One example would be when a university receives Community funds for a project but subsequently finds that central government funds for a project judged to be of higher national importance are cut. Thus, the ability of the science community to set priorities for projects will steadily diminish.
There are also doubts about the effective level of additionality of Community funds. The Treasury suggested that in the case of research and development 30p to 35p in the pound is truly additional, but has given no evidence to justify its choice of this or any other particular figure. In my view the Treasury should produce evidence if that figure is not to be seen as completely arbitrary.
The committee is also concerned that, according to the Treasury, it is a global figure, which implies that for some projects no Community funds are truly additional. The committee notes that the figure was given in relation to those funds primarily going into the private sector, as much of the money under the research and development programme surely will. It finds curious—I should like to hear the Minister's explanation—the Treasury's decision that the private sector includes universities. I find that very difficult to understand.
The Committee is also concerned to find that the situation may well be just as bad in the public sector, for which the Treasury has produced no comparable figure of the level of Community funds which are truly additional. But there is at least one case in the public sector where the level of additionality is unsatisfactory. That is reflected in the Court of Auditors' report which concluded that Community aid for transport infrastructure in the United Kingdom was treated as "appropriations in aid" of the Department of Transport Vote.
One final unsatisfactory feature of the present system is that the Treasury has not interested itself in how other countries handle these matters. There may be little occasion in general for the Treasury to be aware of foreign practices in regard to public expenditure controls, but the case is altered when practices in other countries bear on circumstances in the United Kingdom, as happens with the framework programme. The committee urges the Treasury to remedy that situation by investigating practices elsewhere, in so far as they touch upon the additionality question, and to publish the results.
The committee believes that these matters have not previously been so fully ventilated before a committee of Parliament. The confusion and worries brought out by the evidence to the committee are likely to grow as the Community programme, including framework

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programmes, increases in importance. More importantly, the committee strongly disapproves of the Treasury practice, on its own figures, of only allowing 30p to 35p per £1 of Community funds for research and development to be truly additional. There is clear evidence that research and development in the United Kingdom is already under-funded, as the Select Committee on Science and Technology pointed out. The Treasury's policy only makes matters worse, thus operating against national interests and the needs of industry.
Although the committee accepts that Community funds may not be 100 per cent. additional, in the view of your Lordships' committee the present figure appears to be far too low. This is a matter on which we wish to hear from the Minister. It is a matter of the gravest national concern, in particular for those concerned in research and development. I beg to move.
Moved, That this House takes note of the report of the European Communities Committee, A Community Framework for R&D (17th Report, 1989–90, HL Paper 66).—(Lord Shepherd.)
5.53 p.m.
Lord Butterworth: My Lords, I was one of the three members of the Select Committee on Science and Technology who assisted Sub-Committee B in its inquiry into the framework programme. I should like to express my appreciation of, and admiration for, our chairman, the noble Lord, Lord Shepherd, and congratulate him on the excellent way in which he steered our committee over what proved on some occasions to be a remarkably complex subject.
I should like to confine myself to two areas: first, the choice of subjects to be covered by the different framework programmes; and, secondly, the procedures and practices of the Treasury in dealing with those problems. While there is a general conviction that we ought to be involved in European research programmes, some scientists, frequently very able ones, consider that applications to the Community are not always worth the candle and are too much hassle. First, one has to find a European partner. Secondly, one can only receive a proportion and generally not more than 50 per cent. of the grant needed to carry out a piece of research. Thirdly, overheads are not adequately covered. Finally, the success rate of applications is small, much smaller than the success rate of applications to the major research councils.
On the other hand, the European Community programmes will increase United Kingdom research effort by at least £250 million over the next seven or eight years. Generally, research councils and researchers are anxious that the best value for money should be obtained. Scientists and institutions should use their best endeavours to obtain grants from Brussels, not only because over the years the amount of research money allocated by the Community is likely to be an increasing proportion of the total of public money spent on research, but also because European projects will increase the opportunity for
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interaction with European colleagues in the selected fields and open up an important entry to additional research data. Therefore it is important that we should become more fully involved, making the system as efficient as possible and obtaining the maximum assistance and support from it.
Concern was expressed to the committee that scientists and research councils do not have sufficient influence in identifying the areas to be covered by the different framework programmes. The Community prefers to work through civil servants—its own and those of individual member governments—for it wants to be seen to be acting independently and not simply projecting a consensus of the opinions of different funding organisations. There are plenty of contacts between our scientists and the officials at Brussels at an informal level but a more effective impact could be achieved if the research councils were formally represented on the different advisory committees; for example, CODEST, one of the most important committees, where at present the members are all chosen on an ad hominem basis.
As the noble Lord, Lord Shepherd, explained, Sub-Committee B on a number of occasions recommended and continues to recommend that the Commission must employ more scientists at all levels. A consensus emerged in the committee that projects should fall within four broad categories. The essential point about those categories is that all are attempts successfully to apply the principle of subsidiarity. It is important in the selection of the areas to be supported that the principle of subsidiarity should be applied. On the other hand, it was the view of the committee that in certain areas the framework programme went too far. The committee recommended that the funds should be applied to small and medium-sized enterprises and should promote the Community's economic and social cohesion. I shall return to those words "economic and social cohesion". They are quite important.
The support of small and medium-sized firms is economically important. There are special funds in the Community earmarked for small and medium-sized enterprises and for economic and social cohesion. Those of us who take an interest in the Community recognise the phrase "economic and social cohesion". It is European nonce language for the possibility of establishing funds—I shall not call them slush funds—for the poorer member states of Europe, for stimulating convergence as a prerequisite of economic and monetary union and, as some would add, as one of the steps towards a European federation.
Under the heading "objectives" I wish to mention near-market research. It is rigorously excluded from the aims of European research. Professor Fasella interestingly defined near-market research by stating that the cut-off point in time is at least three years before the project is ready for the market or, in money terms, when one must invest in the final development at least as much as one has already invested to reach that point.
The Commission does not support such research because Article 92 of the treaty on state aid prohibits subsidy disguised as research funding. In Britain our

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policy is not to support near-market research because we consider it to be the responsibility of industry. It is our view that industry should be encouraged to spend much more money on research. Your Lordships have already heard that our committee did not accept the European definition of near-market research. It considered that the Commission should be more flexible having the power to undertake near-market research so that it could deploy funds in that way when appropriate.
That view has important economic consequences. If member states refuse to support near-market research, and if industry—perhaps because of the cost—does less than it should, the ability of the Community to compete with the United States or Japan may be impaired. Perhaps we in the United Kingdom also have been too harsh in the extent of our withdrawal from near-market research. Perhaps our research policy should also become more flexible in that respect, enabling appropriate projects to receive government support even though they are near-market.
I turn briefly to the rules and practices of the British Treasury because they may exert an important influence on the whole planning and strategy of British research. The Community considers that the research funds which it makes available to member countries should be additional to their expenditure and not in lieu of it. Additionality applies to all research grants received from the European Community. In the application of the structural funds a regulation of 1988 specifically makes that requirement.
Our Treasury treats receipts for research from the framework programme differently from the way in which it treats receipts from the structural funds. Therefore, as regards grants from the framework programme full additionality is not allowed. The Treasury justifies that different treatment on the ground that:
"the Government needs to control the public expenditure consequences within the same system and according to the same principles as apply to all other forms of public expenditure; for all public expenditure comes from the same pool of resources and represents the same burden upon domestic taxpayers".
In pursuing that objective the Treasury varies the nature of public expenditure controls according to whether European Community receipts go to the public or to the private sector.
Community receipts for research and development come almost wholly from the framework programme. The UK contributes about 20 per cent. of the total of that programme, which is approximately the same as its contribution to the Community budget as a whole. We receive about 20 per cent. of the total distribution of the framework programme and, therefore, roughly break even. However, approximately 90 per cent. of what is received goes to the private sector. For that purpose the Treasury classifies universities as being within the private sector. It states that for this reason additionality in the framework areas must be treated differently from the way in which it is treated in the structural areas.
The Treasury witnesses assured us that receipts from the structural fund are taken into account when
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departmental programmes are set. Provision for a department which has received a grant from the structural funds can, therefore, be maintained at a higher level than would otherwise be afforded. To that extent true additionality is recognised in its consideration of structural funds. However, when funds are received from the framework programme the Treasury applies the principle of attribution; it attributes such funds to a specific government department. Presumably, funds received by higher educational institutions for basic research are attributed to the DES and funds for industrial research are attributed to the DTI.
In the year in which funds for particular research are received they are truly additional to the researchers. But in the public expenditure round of the following year the government department to which the funds have been attributed may find that its grant is reduced. In fact, the Treasury witnesses confessed to the committee that as regards the framework programme the system is designed to claw back between 65p and 70p in every pound of funds received. Therefore, only 30p to 35p in the pound is truly additional as far as the government department is concerned. The Treasury witnesses emphasised that the clawback is discretionary. At the public expenditure round the relevant government department can always argue that if the clawback is operated hardship and difficulties may be created.
However, because present Community research policy puts more emphasis on pure and basic research, our research councils fear that if the system is operated with full vigour the DES may lose so much grant that it may have to recoup by passing on the cuts to the research councils. Therefore, it could happen that the greater the success of our scientists in obtaining European funds, the more likely it is that British research programmes and their priorities may be blighted and warped. The greater the difference between our research priorities and those of the Community, the greater the danger of the disruption of domestic science priorities.
A very important point is that because this system—preventing full additionality in the case of research grants —is part of the public expenditure round, it is operated, as it were, behind a curtain. It is a bureaucratic exercise not subject to normal parliamentary checks or control and not within the scrutiny of the Comptroller and Auditor General. Your Lordships will find in the Treasury's supplementary written evidence to us a splendid sentence which states:
"This is an institutional matter involving discussions between the Departments concerned, the Treasury and the Cabinet Office".
That is, behind the curtain.
The Treasury was not aware of how other European countries applied additionality to research grants. Certainly in France civil servants often helped scientists to prepare their applications to Brussels and anything received is regarded as truly and properly additional.

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The man on the Clapham omnibus would expect that the contributions made by HMG to Europe would become vested in and owned by the Community and that any grant made by the Community to a British scientist would be truly additional. My friend on the bus would be surprised to learn of the existence of Treasury rules, the operation of which are subject to no democratic controls and are designed to claw back from government departments a large part of the funds which the Community has made available for British research with the object of reducing the burden on the British taxpayer—the man on the Clapham omnibus.
6.12 p.m.
Lord Kirkwood: My Lords, I should like to comment mainly on two aspects of the report: on the funding of research projects in the Community framework programme and on the quality of the work. Before doing that, I should like to say how welcome will be this third framework programme to the scientific community if the funding is indeed additional to domestic funds. I speak as a technologist who has been involved in obtaining a research grant in the second framework programme. There appear to be some important improvements with successive programmes, most notably in the attempts to evaluate the completed work. I understand that the UK has been much involved in trying to rectify that.
I do not think one can quarrel with the criteria used in selecting projects. Among those is the requirement that the work should be too costly for one member state to undertake alone, and that there should be some added value in performing it at Community rather than member state level. On the question of added value, I know this was intended to refer to the technical and scientific content of projects, and that must always be of the highest priority. However, given that, I feel we should not disregard the more intangible benefits as being of added value which can arise from individual scientists, technologists and engineers from different member states coming together, getting to know one another better, and getting to know each other's strengths and weaknesses in a partnership which allows strengths to be drawn upon and weaknesses supported or overcome. This can be to their collective benefit. What is true of individuals, may also be true of institutions from different states. Therefore, the total benefit obtained is greater than the sum of the parts. This is described in the report as strengthening economic and social cohesion in the Community, as we have already heard, and to my mind it is too much underplayed as a valuable objective for the framework programme.
I wish now to turn to funding and the terrible twins—additionality and attribution about which your Lordships have already heard. There is apparently confusion among everyone, even among those directly involved, as to exactly what the terms mean and how they are applied by the Treasury. Given the serious consequences they might have for research in the UK, especially in universities and polytechnics, it is vital that their operation is understood and is transparent
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—a point raised by the noble Lord, Lord Butterworth—and that any misunderstandings are removed. The concepts of additionality and attribution are summarised in the Select Committee's report in paragraph 26. Very simply stated that paragraph appears to mean that Community research grants successfully obtained by UK participants are attributed to the budgets of the appropriate government department. This attribution will cascade down within the department to lower levels, such as research councils, and so reduce the amounts they can spend on their own projects. Consequently, EC funding is not fully additional to those funds already made available for UK research by the Government.
To the extent that there is attribution, there is no additionality in funding. As the present chairman of SERC, Sir Mark Richmond, remarked in evidence to the committee:
"The principle leads to research councils being debited for a programme that they played no part in assessing."
That is a very good summing-up of the situation. Not only is this bad politics, it offends against a basic principle of good management.
There is a further problem in funding, as regards the universities and polytechnics. This is what has been called "the double jeopardy situation" by NERC. It refers to the fact that EC grants never cover 100 per cent. of research costs, and such grants to HEIs would have to be topped up from the UK science budget—that is, by the research councils themselves for projects they may not have supported.
The other question that I wish to discuss arising from the report is the quality both of the assessment of the programme and the projects submitted to the Commission, and the evaluation of the results from the work done. There have been widespread complaints that the scientific and technological community has had little input into the programme. Politics plays too large a part in establishing the direction of research and in the success of particular research proposals. I feel that there are grounds for concern here, even if the problem is more perceived than real. For that reason I would support the Select Committee's recommendation for more scientists to be involved on the advisory committees. The Commission must be encouraged to elicit views from a wider scientific audience, not just from research councils but from scientific and engineering institutions and from individuals. This could also help in the communication of the Community's research programme to the general scientific public. There is much misunderstanding and ignorance about the activities of the framework programme among the scientific public.
There has also been some criticism that the refereeing of projects in the framework programme is of a lower standard than in the research councils and in SERC in particular. Whether this is true or not, it would certainly help to restore confidence if there were a wider pool of referees and the names of those referees were known. There is always suspicion when there are referees whose credentials are not well-established.

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The report also recommends that research councils should have a formal input into the advisory committees responsible for developing the framework programmes. This would seem to make good sense in order to establish some co-ordination of national and European research strategies, particularly if attribution is developed to any extent. However, it has been pointed out that if the same people are allowed to dictate programmes both in the national and in the European arenas, a degree of plurality is lost in the source of research funding. There is always the danger that proposals in areas of unfashionable science, even those of intrinsic merit, can be rejected by the same people at Swindon and then at Brussels. This must be guarded against.
I believe that your Lordships' Select Committee has produced a useful report which highlights important issues of which this House should take careful note.
6.21 pm
Lord Beloff: My Lords, the noble Lord, Lord Shepherd, went out of his way to ask me to take part in this debate, obviously searching for someone who was neither a scientist nor a European to give, as it were, the ordinary Back-Bencher's view of the distinguished labours of his committee. I am pleased to begin by congratulating him and his colleagues upon their achievement.
The delay in our discussing the report, to which the noble Lord, Lord Shepherd, referred, has enabled the report to be overtaken or supplemented by another document from the other place, the Report of the Select Committee on Education, Science and the Arts entitled Science Policy and the European Dimension. Many of the issues, and most of the witnesses, which appear in the report of your Lordships' committee appear again in that volume. As a student of British government rather than of science, I find the comparison between the two documents of very considerable interest.
It is clear that the capacities, scientific background and knowledge of members of your Lordships' committee were very much superior to those available to the other place, with one or two exceptions. On the other hand, the habits of another place—the way in which it operates—make it easier for Members of that place to challenge outright some of the more absurd claims of official witnesses. The trouble with your Lordships' committees is that they are composed not only of specialists but of specialists with very good manners. We are in an area where good manners may actually be a disadvantage.
That aspect becomes obvious in the case of the behaviour of the Treasury, to which all the previous speakers have referred. In the past few years there has been a great deal of research by historians and social scientists as to the reason for Britain's relative industrial decline. I have spent the last 20 or 30 years of my professional life in research relating to that topic. The conclusion to which I came some time ago—I think it has been imparted to your Lordships before, but it is relevant today—was that we can dismiss the usual Correlli Barnett stuff. It is not the fault of the trade unions, the public schools, or the
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hereditary aristocracy; the main drag on Britain has been the Treasury. The Treasury control of the machinery of government in Britain is the main reason why, as the noble Lord, Lord Shepherd, reminded us, science is underfunded, as it was between the wars, and one of the main reasons for our weakness in defence.
As was shown in the report—it has been referred to by my noble friend Lord Butterworth and other speakers—one finds the Treasury claiming that its particular rules for controlling public expenditure behind the backs of Parliament and the public are themselves not subject to challenge; they are something which must be taken for granted, like the law of gravity or the law of diminishing returns. There is no reason for that. No doubt successive generations of Treasury civil servants are indoctrinated with this kind of belief from the moment they enter the portals of the Treasury. They are also indoctrinated—and I thought this was even more shocking in the case of the Treasury's evidence—with the belief that knowledge is not important, that only the rules are important.
The question of what other countries do with funds which come from a common source—whether they practise additionality or attribution, or steal the lot and put it in the pockets of some Minister or his favourite—is of vital concern to the British taxpayer as well as to the British scientific community. Having been asked this question, first, by your Lordships' committee and later on—and therefore with plenty of warning—by the committee in another place, for the Treasury to say that it knows nothing about what goes on abroad is so scandalous that I think it should be noted by your Lordships' House, and I hope it is noted by my noble friend the Minister.
There is an obvious remedy. I hope that one day this House might have a select committee to look at the Treasury, which would be a very good subject for investigation. I have formed the view that no one should be admitted to a senior post in the Treasury who has not had experience of some duration in another walk of life, someone who has met a payroll, to use an American phrase, who has run a business or acquired serious scientific or technical qualifications. As long as we let young administrative trainees imbibe, first, the rules, and then the view that they do not need to know anything, we shall have this kind of situation.
As noble Lords have pointed out in this connection, the main problem arises from the dispute about additionality and attribution, and it is particularly serious because of the absolutely absurd claim that the universities are part of the private sector. There is only one private university, and I happen to have taken part in founding it. All the other universities receive most of their money from the Government and could not operate without grants both from the University Funding Committee and from the research councils. Therefore, for the Treasury to argue that it is putting money in the private sector as though it were somehow or other adding to the profits of some joint stock company is a piece of nonsense which it should never have been allowed to get away with.

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However, we are not here to improve the way in which our affairs are run; we are here to look at the impact the framework will have on the scientific community. If the financial arrangements are such that those who ultimately receive research funds, earmarked by the Community for research projects of a European interest, are liable to lose funds for projects to which they or the research councils would attach greater importance, then it raises the question whether we should contribute 20 per cent. to the European fund or whether it would not be better to have the financing of research in the hands of our own research councils. Where a piece of research clearly required a European partnership the research council could initiate that partnership. There is not much point in taking money out of one pocket and putting it in the other if the other pocket receives very much less than what was put in the first one.
I do not dispute that there must be matters where a partnership between a British and a continental institution for research—whether inside or outside the Community is another matter—is likely to be important. Skills are different; knowledge is different in different countries; expertise is different, and there may always be areas where such trans-national research is important. However, after reading the report and the evidence to the committee I feel that the attitude of the Commission—not staffed by scientists, as has been pointed out—indicates that research is a good thing across the borders; that in some way it contributes to what one might call the European mood. That is a matter for politicians, perhaps for civil servants or the media; it is not something which scientists, who are concerned to discover the truth and find out its practical applications, should rank very highly.
My final point relates to the references made to the bureaucratic difficulties of applications to Brussels, and especially the difficulty of being unaware whether the proposal is likely to result in a grant until a very late stage, to which I attach considerable importance. That is a specific problem. Although I am not a scientist, some of my best friends are and, as anyone who knows scientists knows, a great deal of their time is spent filling in forms applying for grants rather than at the bunsen burner or whatever it is they now use. Anything which cuts down the necessity for heads of departments or of research institutions being taken away from their research and which can help to minimise bureaucratic formalities should be considered with the greatest care.
In the report the committee have raised matters of great concern, both to those worried—as we all should be—that we rank so low in the list of advanced industrial countries regarding expenditure on scientific and technical research; and those who believe—which is why I began with my King Charles' head—that the only way to keep our governing institutions right is to point to weaknesses wherever and in whatever field they appear.
6.35 p.m.
Lord Ezra: My Lords, I associate myself with the tributes rightly paid to the noble Lord, Lord Shepherd, for the way in which he presided over the inquiry whose report we are presently debating. I have the honour to succeed him as chairman of Sub-Committee B and he has set a challenging and daunting standard.
I support what the noble Lord said in his preliminary remarks, which were also echoed by other noble Lords who have spoken, regarding the length of time it has taken before we are able to debate this important report. In making my final preparations to speak in the debate, I was astonished to find that the evidence we heard from the responsible Minister was given in 1989; we are now in 1991. I should have thought that the recommendations made in reports of this kind should be debated by the House within a limited period of time.
The question to which the sub-committee first needed to address itself was the validity of conducting research at the European level. We were not in any doubt about the importance of that. To that was attached the principle of subsidiarity, to which the noble Lord, Lord Butterworth, specifically referred. In other words, the research that we do at Community level should be such that it is better done there than at national level.
The amount of research expenditure as between Community and national level demonstrates that the great proportion of the research we do is at national level—over 90 per cent.; the remaining 10 per cent. is largely at European level, and a small proportion is at what one might call the global level.
There is little doubt that we can gain considerably, particularly with the approach of the single market, from more European research. The committee was right in relating most of its inquiry to facilitating that research once it had been agreed upon. There was general agreement also on the six strategic lines that were selected for the third framework programme. There was agreement that the programme should have started before the second framework ended to ensure some degree of continuity. I was personally concerned that the one area in the third framework programme in which research expenditure seemed to have diminished was energy. The way in which the energy scene has developed and the environmental implications of the improved use of energy indicate that that is an area to which more effort should be given.
The timescale is also important. When we asked Mr. Hogg, the Minister, about this in November 1989 he said, "Yes, but we devoted more expenditure to energy when the crisis was on". Of course he was referring to the last crisis. By the time we debate the report we are in another crisis, and there will be many more crises before we are finished. Therefore, we should look carefully—especially in present circumstances—at the proportions provided for energy research.
There has been some criticism, no doubt partly justified, regarding the so-called Brussels bureaucracy.

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In any distribution of funds, whether done at national level by the Treasury or at European level by the European Commission, there is bound to be the intervention of paperwork. The amount of that paperwork should be reduced as much as possible.
I was struck by a remark made by Sir Mark Richmond, Chairman of the Science and Engineering Research Council, to the House of Commons Select Committee, to which the noble Lord, Lord Beloff, referred. He stated that those who took the trouble to learn the Brussels system found it a rewarding place in which to gain support.
A certain amount of criticism is levelled at Brussels by those who do not take the trouble to learn the system. I can speak from my own experience when I was involved in the affairs of the coal industry. We had to contend with the European steel and coal community and I used to make special efforts to understand the Luxembourg system as it then was. I used to go there frequently and those visits paid off considerably. We were not consulted as to how the system should operate at that time because we were not part of the Community and we might have had different ideas, but we were faced with the fact that it existed. It is important to understand the system and ensure that it works properly.
I do not wish to repeat what has been stated so cogently and vigorously by noble Lords who have spoken on the problems of the additionality and attribution systems. All that I can say is that the Treasury experts admitted that the system can give rise to confusion. I do not know whether it gave rise to confusion in their minds, but it certainly gave rise to a good deal of confusion in the minds of everybody else. The Treasury has many qualifications and qualities and one of them is the ability to devise inoffensive words to describe unpleasant operations. That can be likened to the practice of the ancient Greeks who used to use pleasant words to describe unpleasant natural phenomena in order to placate the gods. Here, the simple word "attribution" means that what we had committed ourselves to provide in addition, we shall remove. That is what the matter comes down to as far as I can see.
We cannot tell whether the calculated 30 pence or 35 pence in the pound finds its way into additional research because the operation is done behind closed doors, as has been mentioned. One might ask why the amount is only 30 or 35 pence. Why is the remaining 60 or 65 pence taken away and where is it taken to? A Select Committee in the other place looked at that question. It was pointed out that the effect of the practice of attribution on UK research priorities could contribute to the cumulative underfunding of research in the UK. In other words, there is an arrangement within the Community to which all countries contribute. We contribute 20 per cent.; we get back approximately 20 per cent. Instead of that 20 per cent. flowing into the research effort in addition to what is voted for national research, a large part of it disappears. The seriousness of that situation has been
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emphasised and I hope that the noble Lord, Lord Hesketh, will be able to explain how this very odd system can be justified.
The problem with which this matter is connected is the general level of UK expenditure on research and development. Some years ago an excellent report was presented by the noble Lord, Lord Sherfield, on the subject of civil research and development in the United Kingdom. Many noble Lords will have taken part in that debate. What then emerged very clearly was that we were lagging noticeably behind our competitors in Western Europe, let alone in other parts of the world, in the proportion of funds that we devoted to research. It was pointed out that whereas the Federal Republic of Germany, France and the Netherlands devoted 1 per cent. of GDP to research, in the United KIngdom it was 0.7 per cent., and that figure included a large amount of defence research.
In July 1990 the SERC compared UK research with the German and French research effort and it found that the amount of expenditure in the UK amounted to no more than three-quarters of that conducted in France and no more than half of that conducted in Germany. Therefore, in the intervening period we do not appear to have caught up. In order to bridge the gap to some degree we ought to have respected entirely the additionality principle to which the UK is totally committed—and yet that commitment has been breached. Therefore it becomes a very serious matter.
The noble Lord, Lord Beloff, in his admirable speech, referred to the fact that the phenomenon of underfunding of research is not a new one. He mentioned the situation between the wars. The situation goes back further than that and could be prolonged into the future. I should like to quote from the Royal Society's year book 1903.
"Expenditure by the Government in scientific research and science institutions, on which industrial prosperity so largely depends, is wholly inadequate in view of the present state of international competition".
I hope that when the report is written in 2003 the same words will not be used, but I fear that in the very little time that is left, that might be the case.
6.45 p.m.
Lord Williams of Elvel: My Lords, the House will be grateful to my noble friend Lord Shepherd, first, for chairing the committee that has produced such a distinguished report and, secondly, for his work over the last three years as chairman of that committee. He is retiring by rotation and the noble Lord, Lord Ezra, will be taking over that position. It is only proper that your Lordships should mark with a certain amount of gratitude the work that my noble friend has undertaken on behalf of your Lordships.
I am sympathetic—I shall say no more—with my noble friend's remarks on the status of the report of your Lordships' committee. It is somewhat odd that there has been such a time lag between publication of the report and the debate. I have been penalised by the system of publishing reports—and I have drawn the matter to the attention of the noble Baroness who is at present sitting on the Woolsack—because a Motion

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appeared under No Day Named but the report which had a number, and which I wanted in order to quote in a debate was not available because it was reserved for a press release. As a Member of this House I thought that I was being deprived of a document that I should have had. Therefore, I am sympathetic to what my noble friend said about according reports from committees of this House a somewhat special status.
The background to the report and to the debate has been described by a number of noble Lords. The noble Lord, Lord Beloff, mentioned the fact that we have been overtaken by a report from a Select Committee of another place which shows that domestic spending on civil scientific research was planned for—and that fact is confirmed by the Cabinet Office review in July 1990. As the noble Lord, Lord Ezra, pointed out, it shows that civil research and development in the United Kingdom is still badly underfunded compared to that of our European competitors. Indeed, the chairman of the Science and Engineering Research Council made the same point both to the Select Committee of another place and our own committee. By way of background, it is worth noting that, although funding of research and development domestically may be falling in real terms, United Kingdom financial support for the European framework programme is growing. We are starting to shift resources from domestic research to the European framework supported research. Admittedly, only about 7 per cent. of government expenditure on civil research and development goes into the European Community programmes, but that expenditure is nevertheless growing while our domestic programme is in decline. There is a lesson to be learnt from that.
I come to the report itself. We join the noble Lord, Lord Ezra, in welcoming the third framework programme. We believe that there is a body of research which is best done at European level. We respect the principle of subsidiarity but we believe that some things are properly done at Community level and by the Community as a whole. The CBI is on record as saying that that role should be larger than it is at present. However, as my noble friend Lord Shepherd said, others believe that it should be smaller. Perhaps the balance is about right, but we shall see.
I accept the criticisms of the noble Lord, Lord Beloff, about bureaucracy. It is much better that we should have less rather than more bureaucracy. On the other hand, I believe, along with the noble Lord, Lord Ezra, that the Brussels system is not well understood by some of our people, particularly scientists and the research councils. I agree with the Select Committee of another place that if the scientific community were closer to the corridors of power in the Commission the results would be very much better and to its advantage. Our research councils could conveniently be part of the advisory process that forms part of decision making in the Commission. That would be to our advantage.
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Many noble Lords have discussed the position of the Treasury. When listening to the noble Lord, Lord Beloff, I assumed that in attacking the Treasury he was, in the proper traditions of the House, attacking Treasury Ministers rather than Treasury officials. It is wrong of us to attack officials. There is parliamentary accountability. Indeed, I have not noticed the noble Lord, Lord Beloff, withdrawing his support from any Chancellor of the Exchequer over the past 12 years, although Chancellors of the Exchequer have been responsible for the Treasury, against which the noble Lord takes such umbrage.
On attribution and additionality, I have nothing to add to the arguments brought forward both by your Lordships' Select Committee and by the Select Committee of another place. The noble Lord, Lord Kirkwood, summed it up very well. He said that, to the extent there is attribution, there is no additionality. The Government appear to have baffled both Houses of Parliament. I have no doubt that the noble Lord, Lord Hesketh, will be able to explain in words which are comprehensible to all your Lordships exactly how the principles of attribution and additionality work and how they will be to the general advantage of the Community and ourselves. We look forward with great interest to his explanation. The report is absolutely right in saying that Parliament must be given powers to scrutinise what is happening. That cannot take place behind closed doors. It is far too important for that.
I turn now to the procedures for the evaluation of projects. I am not entirely convinced about the principle of peer review as recommended by the report. It may be the right system, but I do know that in the accountancy profession in the United States peer review is the way of assessing performance. However, it gives rise to enormous problems of professional jealously and professional nit-picking. I wonder whether that is the right framework in which to evaluate procedures under the framework programme. I accept that there must be an allocation for set-aside for evaluation procedures. Perhaps 1 per cent. of the funding is the right amount.
The noble Lord, Lord Butterworth, referred to near-market research. I have spent just over a week finding out exactly what is meant by that term. The more I look at near-market research the more I come to the conclusion that it is an extremely complex and difficult subject. We should be more flexible, but it occurs to me that it is almost a question of being flexible product by product or project by project. For one product there may be a three year gap between the research point and the market point. For a second product there may be a 10 year gap and for a third a one year gap. All I am saying is that we should look at the possibility of flexibility. Let us not draw a total line at three years. I would not wish to advance any major conclusion without a much more serious study of the subject.
The report also raised the question of the wide range of government departments involved in relationships with the Community. The noble Lord, Lord Hesketh, as a Minister at the Department of

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Trade and Industry, is responsible for the European programmes. The Department of Education and Science has responsibility for the domestic programmes. The DES is the lead department on some of the projects under the framework programme. Indeed, a number of other departments are involved.
The Select Committee of another place recommended that when the Minister from the DTI goes to Brussels to discuss these matters, he should be accompanied by a Parliamentary Under-Secretary of State from the Department of Education and Science. I wonder whether that is the right way to handle the matter. Perhaps we should look again at the possibility of having a Minister for Science with an umbrella role over the multitude of research operations and the five research councils.
A major problem was pointed out by my noble friend Lord Shepherd and the noble Lord, Lord Butterworth. It is a problem with which we shall have to grapple more and more as the Community programme grows larger. The problem is causing a great deal of debate within the scientific community. How do we dovetail the European priorities in research with the national priorities in research? That is a fundamental problem which we need to discuss very seriously. If research councils are to be obliged to cut their budgets on what they regard as being priority projects in order to receive funds on what the EC regard as priority projects we shall certainly face trouble, European Community projects, even framework programme projects, may not fit in with our national priorities. It is an issue which your Lordships, Members of another place and those in the scientific community will have to debate at some length. I do not see a way of getting that dovetailing right at the moment. I am sure it will be a problem for us in the future.
We must return to where we started. The proportion of our gross domestic product devoted to civil research development is insufficient. Civil R&D has been consistently underfunded. Until we have grasped that political fact and until the Chancellor of the Exchequer, who is responsible for the Treasury, grasps that political fact we shall continue to decline as an industrial society.
I conclude by quoting John Mulvey of Save British Science, who welcomed the report of the committee of another place. He said:
"It illustrates that everyone who looks at these problems, be it ourselves, the Royal Society, the House of Lords or now a House of Commons Committee, all come to the same conclusion. How many more reports have to be written before something's done and before it's too late?"
7 p.m.
The Minister of State, Department of Trade and Industry (Lord Hesketh): My Lords, I have listened with great interest to the debate. I should like to respond to the remarks made by the noble Lord, Lord Shepherd, in introducing his most thorough presentation of the issues as he saw them. He referred to the fact that we are debating the issues today even though several months have elapsed since the publication of the report. He most generously referred to the
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difficulties experienced by Chief Whips. I very much appreciate the point that he and other noble Lords made with regard to the position of debates and the priority which such reports are given. I do not believe that the noble Lord would expect a Minister of the Department of Trade and Industry to try to supersede the Procedure Committee of your Lordships' House or the wisdom and enterprise of the Chief Whip's office. Therefore, I do not intend to follow either course. I shall simply pass on the message.
A number of important and stimulating points have been made. The Government welcome this opportunity, albeit a rather belated one, to discuss the report by the European Communities Committee on the EC's research and development framework programme. I beg the indulgence of the House. I intend to take some time to respond to the report as this is the first opportunity that the Government have had to do so. It would therefore be appropriate for me to congratulate the committee on its thorough and painstaking inquiry into the European Community dimension to R&D.
Events have moved on since the publication of the report last June. Detailed negotiations are now well under way on the substance of the specific research programmes. These will put into effect the provisions of the third framework programme, which is the main focus of the committee's inquiry. Although these negotiations have lasted longer than one would have hoped, there is now a good possibility that all the programmes will be adopted and calls for tender issued by this summer. Common positions on three programmes—environment, telematics and marine sciences—were agreed by the Council on 21st December. The UK has participated actively in the negotiations in order to try to ensure that the content and management arrangements for the various programmes reflect our own priorities and objectives as far as possible.
A number of themes have emerged from the discussion this afternoon: the scale and size of the framework programme; the balance between Community research and national programmes; and the effectiveness of EC collaborative research in increasing the Community's industrial competitiveness. I shall try to deal with these in due course, after I have outlined the Government's response to the key conclusions and recommendations of the report.
The aim of funding R&D programmes at the Community level is, of course, to promote greater collaboration between member states' organisations —both industrial and academic, private sector and public sector—and thereby to contribute to the added value of research and development carried out in the Community. A number of the most important programmes are aimed specifically at increasing the EC's industrial competitiveness. I welcome the report's conclusion that the third framework programme should help to achieve that goal. I also welcome its statement that the level of funding for the third framework programme is pitched at a satisfactory level and that the split in funding between the various fields of research reflects priorities which match our national priorities.

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Europe's international competitiveness will only be improved by funding the best projects which Community researchers can deliver. In view of the finite resources available, the Government believe that the overriding criterion for approving project proposals must be that of scientific and technical excellence. In addition we must avoid the unnecessary overlap or duplication of work conducted by member states themselves or through other international means. The provision of funds to organisations from the less favoured regions in the interests of so-called economic and social cohesion in the Community must therefore, as the committee rightly recognises, be subordinate to this objective, especially since there are separate mechanisms for assisting the weaker areas of the Community.
Likewise, small and medium-sized enterprises (SMEs) should not automatically expect preferential treatment, though they certainly have a part to play in the carrying out of highly innovative research. As a result, the Government encourage firms of all sizes to participate in EC framework programmes. We also support the actions which the Commission has taken to promote the participation by SMEs in the framework programme, where it is appropriate for them to do so.
As to whether the Community should support near market research, which many noble Lords mentioned, we have consistently held the view that framework funds should be used for pre-competitive research; in other words, for research into technologies which will underpin the development of whole families of products, rather than to help firms with the actual development of commercial products or processes. That includes demonstration projects. But these should primarily be designed to prove the capability of a particular generic technology or have a connection with the development of common standards or codes of practice. Near market research should be principally a matter for individual firms themselves. In any case, there already exists the EUREKA mechanism which, with the aid of government support, encourages trans-European collaborative research nearer to the market. It is important that the roles of the Community and of national governments are not confused and that their activities in support of R&D are not duplicated. The Government accordingly do not share the committee's view that near market research should be funded under the framework programme and explicit reference is made to this in the Framework III decision.
I should like now to deal, not least in my capacity as Treasury spokesman in this House, with the criticisms in the report directed at the way the budget for EC R&D is attributed to individual departments. After today's debate, I could suggest that it is possibly the reformation and renovation of the Treasury that has been proposed from certain sides of the House.
The main thrust of the committee's concern is that public expenditure control—which the committee and witnesses who appeared before Sub-Committee B recognise as being important—may have a harmful effect on our R&D effort; and that these controls may
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distort the priorities of the scientific community. I hope to explain to the House why the Government do not accept that this is so; and I shall, of course, also deal with each of the more specific conclusions of the report.
There is a very basic reason why the Government cannot accept the committee's conclusion that public expenditure control of the cost of EC R&D worsens the funding of R&D in the United Kingdom. It is that the 1990–94 framework programme will result in at least an additional £250 million of publicly funded support for our national R&D effort.
However, before I deal with that issue—namely, the issue of attribution—it is important that I should give more detail. I recall the points made in the supplementary explanatory memorandum which my predecessor as Minister with responsibility for Community R&D submitted to the committee on 22nd November 1989 and which the committee published with its report. The bottom line is that resources are finite. The United Kingdom's contribution to R&D expenditure financed through the Community budget comes from the same pool of resources and represents the same burden on domestic taxpayers as does direct funding of R&D by government departments.
The approach which the Government have adopted is therefore designed to ensure that public expenditure resulting from EC activities is evaluated and controlled on the same basis as other public expenditure and to contain the consequences for UK public expenditure of significant pressures for growth in Community spending. By doing so, and by placing responsibility on departments for Community expenditure on R&D, our aim is to maximise the quality and value for money of EC R&D; to seek as effective control as possible of spending at the Community level; and to ensure, as far as possible, that the Community's R&D effort complements rather than duplicates domestically funded R&D.
Community R&D has been a particular area of growth, as several noble lords pointed out. As was explained in evidence to the committee, the fundamental principle of public expenditure is that departments are required to bid, and to make a case on value for money grounds, for any expenditure in excess of planned, predetermined levels. Contributions to European Community programmes are no exception to that principle.
The case for additional spending is considered in the annual public expenditure survey. It may be helpful if I outline what is involved, in view of the committee's concern about the basis for the Treasury's evidence that the 1990–94 framework programme will produce £250 million of additional support for R&D in the UK over the next seven to eight years. The attribution arrangements establish the extent to which our contribution to Community R&D has risen above predetermined levels. That means, first, establishing a benchmark against which growth of EC spending—and of our contribution to it—can be measured. The benchmark is, broadly, the level of spending in 1984.

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The Government are prepared to accept that the Exchequer should bear that cost. The discussion in the survey is about the spending over and above that level.
The consequence of our agreement to the 1990–94 framework programme—a decision which required unanimity—was an increase of £750 million over planned levels of public expenditure, because of an increased contribution to the Community budget; but £250 million of that new public expenditure can be met within the benchmark which I have mentioned; and the Government are prepared to accept at least an increase in public expenditure of that level. The reason why that £250 million is the measure of the minimum increased spending on R&D in the UK is merely that we can expect to receive about the same amount from the framework programme as we contribute to it—about £750 million. That addition must be set against the possible reduction, at the outside, of £500 million in direct spending on R&D by government departments.
Thee figure of £250 million—or, as is sometimes said, 30p to 35p in the £1—for additional spending on R&D in the United Kingdom relates solely to the 1990–94 framework programme. That framework programme was the subject of the committee's inquiry. But, as the 1990–94 framework programme comes on stream, it will overlay spending which will continue from the 1987–91 framework programme. The United Kingdom is concurrently contributing to and receiving the benefit of that programme. So, in addressing the committee's conclusion that 30p—35p in the £1 is too low a figure for additional spending on R&D, it may be better to consider the impact of Community spending, and of the attribution arrangements, in relation to framework programme expenditure as a whole rather than in relation to the 1990–94 programme alone.
On that basis, in 1991 the United Kingdom's total contribution to Community R&D expenditure is, in round terms, some £200 million. The contribution which the Government are prepared to accept without corresponding adjustments to domestic expenditure — what I referred to earlier as the Treasury benchmark —is currently about £100 million a year. Of the further £100 million which we currently contribute to the Community's R&D, about £40 million reflects expenditure which is not tied to any department's special responsibilities, or which is offset by receipts by public sector bodies. The discussion in the survey, therefore, concentrates on the extent to which we should meet the remaining £60 million a year cost by an adjustment to departmental expenditure. It is by no means a foregone conclusion that there would be a reduction of that amount. But, on an annual basis, the additional overall spending on R&D in the United Kingdom is in fact much more than the 30p—35p in the £1 which the committee concluded was too low.
Lord Ezra: My Lords, we are much indebted to the Minister for his long, detailed and careful response. It is difficult to follow and we shall all have to read it. If the 30–35p is not correct, can we be told why the figure was given to us by the Treasury?
Lord Hesketh: My Lords, I did not say that it was incorrect. I said that there was an assumption that the figure could be better.
It has been the practice of successive governments not to go into the detail of survey discussions and I hope that your Lordships will understand that I do not intend to go down that path, but it is worth pausing for a moment on the science budget. As the committee, and witnesses who appeared before it, are keenly aware, the 1990–94 framework programme will involve more Community support for research in the area of basic science. It follows from the attribution arrangements that the implication of that growth for the domestic science budget would have been an important factor in the Government's consideration in the 1990 survey of the appropriate size of that budget. The outcome of those deliberations was published in the Autumn Statement. The outcome was that the 1991–92 DES expenditure plans for science (including expenditure financed by EC receipts paid directly to research councils but excluding non-voted public expenditure by the Institute of Plant Science Research) will be £928 million, an increase of £28 million over the equivalent figure for this year. A sizeable element in this year's expenditure relates to the heavy concentration on special items of capital spending. When that factor is taken into account, the expenditure plans for 1991–92 allow provision for science to be maintained in real terms.
In addition to the scale of spending, the committee expresses concern at the risk of distorting the priorities of the scientific community. I note that the burden of the evidence given to the sub-committee concerned the potential distortion of priorities rather than any actual distortion which has taken place, and that there was acknowledgement of the justification for the public expenditure arrangements. However, in considering the risk of distortion we should note also the considerable correspondence between domestic and Community priorities for R&D and that the arrangements for attributing to departments responsibility for particular aspects of Community research are designed to ensure that any adjustments which need to be made as a result of EC expenditure will take place, as far as possible, in the areas which are benefiting from that Community expenditure. That is not to say that there will not be occasions when there is conflict between domestic and Community priorities and the potential for distortion of those of the scientific community. The Government are alive to the risk. It is for just that reason that the public expenditure arrangements provide the scope and flexibility, within the public expenditure survey, for a thorough consideration of the implications for domestic expenditure of Community R&D.
It is because of our public expenditure control arrangements, which place financial responsibility on departments, that we have framework programmes which correspond with our own domestic priorities for R&D. Departments have been closely involved with the development and negotiation of framework programmes. That close involvement by the United Kingdom has been successful in securing successive framework programmes which involve a level of

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spending which we could agree, and a balance of spending which broadly corresponded to our R&D priorities. Having secured that outcome, it seems to me to be entirely reasonable that we should consider whether there should be some adjustment to domestic expenditure to ensure that domestic and community spending complement rather than duplicate each other. Not to have such an examination, with the possibility of the scaling back of direct domestic support for R&D, would be a recipe for duplication and waste.
The committee is concerned that the public expenditure arrangements might lead to applicants who successfully bid for Community funds having their central government grant cut. That view seems to be based in large part upon a belief that the arrangements for attributing part of the cost of Community R&D are connected to the receipt of Community funds and to an adjustment of departmental programmes to take account of those receipts. As was made clear in evidence to the sub-committee, and as I have explained today, public expenditure control is directed to the cost of the UK's increased contribution to the EC budget as a result of the framework programme, rather than to the UK's increased receipts. At the global level, both public and private sector receipts are available to be spent in full. They more than offset any reductions in central government expenditure which might be made because the UK's contribution to the EC budget in respect of R&D exceeded predetermined levels. Thus, there is a powerful incentive to seek Community finance. The evidence is of UK researchers both seeking and receiving substantial support from the Community budget.
Perhaps I may pick up the point which the Committee make about universities being treated as within the private sector. The noble Lord, Lord Beloff, also drew your Lordships' attention to that point. There is no special treatment here. Although they receive substantial support from central government and from the Universities Funding Council, the universities are independent institutions and are classified to the private sector for all purposes in national accounts.
With regard to information requirements the Committee consider that the arrangements have not been explained clearly to interested parties and that the Treasury should explain the operation of the attribution arrangements more widely. The Treasury, in fact, circulates substantial, detailed guidance annually to departments about the operation of the arrangements and the expenditure consequences for departments. The Treasury is always ready to provide such further explanation as departments require. I am sure that the Committee's inquiry and report will also go a long way towards explaining the overall working of the public expenditure arrangements which apply to Community research and development.
However, at the end of the day it is for departments, not the Treasury, to decide the allocation of expenditure in their programmes and the detailed implications of the public expenditure arrangements
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for research institutes. I know that sponsoring departments are always ready to provide considerable guidance about sources of EC funds and applications for them.
As to the Committee's concern about the monitoring of public expenditure control, I have explained that the consideration of the implications for the framework programme is a part of the public expenditure survey process. The Government's decisions on the appropriate levels of public expenditure are published in the annual Autumn Statement. Further detail is given in the departmental reports which this year will replace the departmental chapters of the public expenditure White Paper. The annual review of government funded R&D gives more detailed information about public expenditure on R&D including, from the 1990 review, the indicative UK contribution to the EC budget in respect of R&D.
On the spending side, therefore, there is a great deal of information. The same goes for receipts from the Community. Public sector receipts are normally brought, intentionally, to Parliament's attention in departmental Votes. Indeed, it was just this practice which gave rise to the Court of Auditors' criticism of transport infrastructure receipts, to which the Committee refer, as did the noble Lord, Lord Shepherd. The Court mistakenly concluded that the treatment of these receipts as appropriations in aid indicated that they were not additional. In fact, as was explained to the Court of Auditors and to the sub-committee, gross expenditure on the Vote had been set at a level which took account of EC receipts. To allow a further increase in expenditure, on account of the receipts, would therefore be double counting. Recording the receipts as appropriations in aid, in keeping with normal practice, identifies for Parliament the extent to which the gross expenditure on the Vote is financed by the Community budget.
Finally, in relation to Treasury matters, the committee's report asked specifically about other member states' practices; a point also referred to this evening. It is not at all obviously or necessarily the case that practice in other member states has a bearing on circumstances in the United Kingdom, though I can assure your Lordships that the Treasury is not uninterested in practice elsewhere. But the fact is that there are differences in the circumstances of member states; and detail about the full scale of receipts from the EC budget, and their treatment in other member states is difficult to come by. There is great diversity in member states' planning and control mechanisms. Indeed, some member states appear to be content to operate on the basis of broad targets for the public sector deficit and have a much less detailed planning and control system than our own.
However, it is noteworthy that the majority of member states treat receipts from the EC budget in a way which is at least similar to our own treatment of them; that is, in one way or another they are taken into account in setting domestic programmes which, as a result, are higher. As for contributions to the EC budget, no other member state has a formal mechanism for considering whether increases should lead to reductions in domestic spending. But if they do

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not have a formal mechanism for doing so it still seems that a number of member states allow for just such a possibility.
For example, in France there is no formal mechanism but increases may be taken into account in decisions about domestic spending, particularly in areas of the budget where France can expect to benefit from EC funding. That possibility also exists at least in Germany, the Netherlands and Belgium. In the case of Belgium, there is no formal mechanism, but the initial calculation of departmental budgets involves foreseen expenditure on EC programmes leading automatically to a corresponding reduction in domestic spending on the sector for which the additional contribution was destined. So, in spite of greatly differing circumstances, UK practices in fact find interesting similarities and parallels in other member states.
Those practices are designed to ensure that there is proper examination of the consequences of growth in the Community budget in the proper context for such an examination—the survey. The Government would not accept that they should do otherwise. I suggest that there are signal benefits in that approach. They include rigorous examination of Community spending, encouragement to departments to seek value for money from the EC budget, and to try to shape that budget in ways which meet our own priorities.
What our arrangements do not mean is a worsening of the support for R&D in the UK. On the contrary, there is substantial additional support for it. Nor is there any automaticity in reductions in departmental programmes, but there is a cutting out of duplication and waste. While the onus is on departments to make the case for additional spending, the survey arrangements mean that the Government can look very carefully at the domestic implications of EC spending, including any mismatches which may arise between domestic and Community priorities for R&D.
The report also refers to the need for the European Commission to improve and streamline its procedures for the selection of projects. We entirely agree and have been pressing the point for some time. It is clearly imperative that bureaucracy is kept to the minimum, consistent with ensuring the thorough and objective assessment of project proposals. The Commission is well aware of the importance of making the procedures as clear and simple as possible; to this end they have made substantial efforts to produce publicity and guidance material.
The report raises the crucial issue of project evaluation which was also mentioned by various noble Lords this afternoon. The United Kingdom has taken the lead in insisting that that should be given high priority. There are encouraging signs that the Commission recognises the need to adopt a more rigorous approach than perhaps has been the case in the past. I am sure that the noble Lord, Lord Kirkwood, will be pleased to hear that.
I should also like to say a few words about the report's suggestions for improving the scientific advice available to the European Commission. Again, the noble Lord, Lord Kirkwood, and others, drew this to
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your Lordships' attention. It is right that the Commission should have adequate and up-to-date scientific information so that it can establish sensible priorities for the R&D programmes. However, I am not aware that the Commission is suffering from a lack of specialist advice in this respect. A host of formal and informal channels exist through which the Commission obtains this information. The director general of the Commission which has main responsibility for the programme also employs a significant proportion of scientists and technical experts. The head of one of them is himself a scientist.
Perhaps I may touch very briefly on a few of the points which I have not yet covered and move on to the universal criticism that all noble Lords have placed before your Lordships' House this afternoon. It was best summarised by the noble Lord, Lord Beloff, who to some extent insisted that the Treasury was the root of all evil. He went so far as to make a clear statement that, given the choice between knowledge and rules, there is only one answer. In his case, and I believe in that of many other noble Lords in the House this afternoon, knowledge is better than rules and the nation would be a better place for it.
The noble Lord, Lord Williams of Elvel, pointed out that for 12 years the noble Lord, Lord Beloff, had supported Chancellors who may have paid too much attention to the rules. However, I like to think that the Chancellors of this Government are learning from the advice of the noble Lord, Lord Beloff, and attend to knowledge.
In summing up, I reiterate that this report has made a most useful contribution to the debates surrounding the role of Community R&D and the United Kingdom's interest in this programme. However, it is often the case that even constructive criticism, such as is contained in this report, can overshadow what is already being achieved. The Government are grateful for the report and are grateful that your Lordships have expressed today their feelings and the findings of the report.
7.30 p.m.
Lord Shepherd: My Lords, I propose to be brief. I thank all noble Lords who have participated in this afternoon's debate. It has been most useful. I wish to thank the noble Lord, Lord Hesketh, for his contribution from the Dispatch Box. I hope he will understand when I say that I am a simple fellow. I was confused by the Treasury evidence, even after reading it two or three times, and I am still confused by it. However, I shall read the Minister's speech to see whether the new figures that he mentioned make any difference to the Treasury evidence.
I am grateful to the Minister for the undertaking he gave as regards the comments I made at the beginning of the debate about the way Select Committee reports should be treated. On the complexity of his argument in regard to attribution and additionality, it is interesting that, had the Select Committee sent this report to the House for information, we would have received a reply from the Government, but as we have brought the report before the House for a debate—we have waited six months to do so—we have had to wait

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for an announcement and a defence by the Minister of the Government's position. In such a complex matter we should find some way by which the Government's response to a Select Committee's report could be made available prior to the debate. That would result in a much more satisfactory debate and a much more satisfactory understanding of the Government's position. I shall say no more on that matter. It is a matter for the House itself to take up. The matter will not go away and I leave it to the noble Lord, Lord Ezra, and Members in another place to pursue this important subject. I hope that the House will accept the Motion.
On Question, Motion agreed to.

Physical Education and Sports in Schools
7.33 p.m.
Lord Dean of Beswick Lord Dean of Beswick rose to ask Her Majesty's Government whether they are satisfied with the present level of physical education and sports activities being provided in educational establishments and, if not, what plans they have to deal with the situation.
The noble Lord said: My Lords, I have used the vehicle of an Unstarred Question to bring before your Lordships' House a debate on a subject which I believe has not been adequately dealt with in either House due to the pressure on time. I hope that the Unstarred Question may open the door to a wider discussion in a national context.
Noble Lords may recall that on 16th January I tabled a Starred Question on this subject. Unfortunately I was unable to be present in your Lordships' House on that date and the Question was asked by my noble friend Lady David. She dealt with the Question very adequately and I make no criticism of the Minister who replied on that occasion and who is replying again tonight. However, having looked through the replies that the Minister gave, it is obvious that we were almost chasing our own tails.
One of my main criticisms of the Government in a non-political context is that they do not seem to have given educational establishments at any level any kind of central directive as regards sports activities. I have before me a copy of recent Questions for Written Answer and Oral Questions that have been tabled in another place.
I wish to express my thanks to the Central Council of Physical Recreation for the wide-ranging brief it has sent me on sporting activities, including swimming and athletics. Every sport appears to be covered in that brief. The council sent a document to the National Playing Fields Association on the use of green field areas for sport. That use appears to be diminishing at a rather disturbing rate.
I shall restrict my remarks to two or three points. If the Minister cannot reply to those points tonight, I hope he can transmit the concern of noble Lords on this matter to the Government. Quite recently an article appeared in one of the responsible newspapers on the subject of sport in state schools. The article was
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entitled Crisis on the playing fields but it went far wider than that issue. The article provided some of the most alarming statistical evidence on what we as a nation —not the Government—are allowing to happen at present. The article stated:
"Last year, three times as many school-age children drowned as in 1988 and fewer children have swimming in their curriculum than ever before".
I submit that there must be a relationship between a decrease in swimming lessons and the appalling statistics on deaths by drowning. If we allow the future seed corm of our nation to suffer such a situation, we are entitled to be criticised.
I do not wish to criticise the new Prime Minister. However, the borough of Merton where he was educated will in the near future no longer provide swimming lessons for school children. The newspaper further states:
"as John Major contemplates the death of swimming in his old school, he might care to reflect that Italy has three times as many swimming pools as we do, France seven times and Germany 20 times".
There must be something wrong when we, as a so-called forward looking nation, allow that kind of diminution of facilities to occur.
During my formative years in the early 1930s in Manchester, I lived within a short distance of three public swimming baths. I would be surprised if any of those swimming baths still remained, bearing in mind the deterioration in facilities that has occurred and the lack of funding for new equipment.
When some of the larger comprehensive schools were built 15 to 20 years ago, it was almost standard practice to include a swimming pool for the use of pupils. However, that facility is no longer standard practice because those kinds of schools will no longer be built as the resources are no longer available. That is another area where swimming pool provision is drying up. The newspaper article continues:
"Three years ago, pupils did just over two hours physical education a week. Now it is less than 90 minutes. By the time changing, showering and moving to game facilities is taken into account, they probably spend no more than 70 minutes a week in actual physical exercises. A Government committee have recommended that students should do at least two-and-a-half hours, and most of our European competitors, like Germany and France, do as much as three hours a week".
There is at present a fallacy that the Labour Party is opposed to competitive sport among children. That is absolute nonsense. It is a view that has been expressed by a few people but I believe that competition among children is very healthy and desirable if youngsters are to achieve anything.
The report continues:
"Even if more time was allocated, there is just not the facility. Ten years ago the Government laid down regulations saying schools should have playing fields which can be used for at least seven hours a week. But 15 per cent of schools do not have access to such playing fields and, worse still, as Nigel Hook of the Central Council of Physical Recreation, says: 'Local authorities have continued their policy of selling playing fields and converting them into supermarkets'."
That may be a criticism which can be levelled at local authorities. However, why are they doing that? Because, in the context of what is happening today in education with each school taking on an increasing share of the burden of its financing, land is a valuable asset. Therefore they shortsightedly dispose of the

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land in order to maintain the standard of education. It is sad when local education authorities are placed in such a position.
That problem has a geographical basis. The report says that independent schools in the private sector come out rather better and that there has been an increase in their sports facilities rather than a diminution. The reason is very much like the position regarding council houses. Those living in the best areas will choose that option because the money is available. However, you will not see that happening in the areas controlled by ILEA, or in the centre of Manchester or other conurbations where, unfortunately, deprivation is still rife. Wherever there is a surfeit of land it will be disposed of, to the detriment of the schools. That is a shortsighted policy.
The article mentions a report from South Wales concerning people who studied for and obtained educational qualifications in the teaching of sport. Last year in South Glamorgan, which is a large education authority, 35 students took the teacher training course but only 5 went on to teach the subject. It is strange that 35 people take a course with a view to training people and only five opt to go down that road. What they have been trained for cannot be attractive.
I suspect that the Government have a case to answer here in their general approach to the teaching profession as a whole. A succession of Ministers have got it completely wrong. Unfortunately they have regarded teachers as one of the drawbacks of the education system. Now, however, even the Government are saying that in his unfortunate stewardship of the education of the nation Mr. Kenneth Baker got it completely wrong. Now they are having to discard most of the national curriculum as he saw it.
Only today I received information from students at universities, polytechnics and technical colleges. They asked that they be provided at least with a broad base or support for the type of sport that they want to take part in, whether it is athletics, weight training, squash, tennis or whatever. They also said that despite an increasing student population the available resources are gradually falling.
It is no good any government—whether it is this Government or the next—standing aside and expecting the situation to improve without some specific increase in funding for sport in general. If educational establishments find that allocations from government and the funds they can raise locally are being severely restricted, the first casualty will be sport and physical education.
I could have developed the theme of sport in schools and educational establishments, but this is not the time to do so. This is an Unstarred Question and allows for only a short debate. I am merely trying to start a debate on the wider issues. However, it may be that as a result of what we say tonight the question of sport in our educational establishments will be raised higher up the pecking order and people will begin to talk about it.
I should like to talk about the World Student Games, which are scheduled to take place in Sheffield.
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I shall not prepare a defence of the way things have gone wrong financially in Sheffield. There may have been some miscalculations by the local authority. So far as I am aware, this is the first time that the World Student Games have been attracted to Great Britain. There is no doubt that the games will be a show-piece. I am not making a political point against the Government because I understand that in the other place an all party delegation from Sheffield, including Members of Parliament, saw the Government to ask whether they could provide some form of financial assistance to save the games from collapse. There is a serious danger that they will collapse if some help is not forthcoming.
The issue is rather wider than the Sheffield student games. Anybody who read the sports press at the weekend will see that the FA is starting the machinery to attract a future World Cup competition, with all the money that that brings in, to Great Britain. There has already been one bid from Great Britain to stage the Olympic Games—that submitted by Manchester. I have no doubt that there will be another British bid. There is competition as to who will make that bid. Manchester hopes that it will be Manchester. Mr. Sebastian Coe hopes to launch a London bid. However, if as a nation we let the student games programme for Sheffield fall by the wayside, shall we have any chance at all of getting the World Cup or Olympic Games for this country in the near future? Anybody who thinks that we shall is living in cloud-cuckoo-land.
In your Lordships' House one does not normally speak in absentia. However, the noble Lord, Lord Mulley, who was a member of Parliament for Sheffield for a number of years and is still deeply interested in that city, would have liked to speak in the debate but unfortunately cannot be present and has asked me to convey to the House his views on the subject. I do not know whether the Government can find a vehicle to provide help. Perhaps that could be done through the Sheffield Development Corporation. I ask the Minister to plead with the Ministers in another place who hold the purse strings to look at the matter seriously.
In my opinion, there is no point in expecting our young men and women to compete in future as they have done over the years at European, international or Olympic level with their counterparts from other countries, because it is a well-known fact that, in terms of support from the Exchequer —I am not particularly blaming this Government; it has always happened—we set our sights much lower and dig much less deep into our pockets than our competitors do. I do not believe that it is fair to expect our youngsters to compete unless the resources they are provided with are somewhat similar to those available to their competitors.
I have spoken for long enough in what is a miniature debate, but I hope that what I have said will give the Government, and perhaps the wider public, some thought about what is happening today. To go back to the first point that I made, it is an appalling state of affairs that three times as many children were drowned last year as the year before. I do not know

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whether it is time we looked into the question of compulsory swimming lessons and took away from head teachers in some establishments the right to decide yea or nay.
I hope your Lordships think that my introduction has been worth while, and I look forward to hearing the other noble Lords from various parts of the House who are to speak on this subject.
Lord Lyell: Before the noble Lord sits down, I was interested to hear that he referred to a proposal that the World Cup might be held in Great Britain in, I think, in 1998. I imagine that he was referring to England, because I certainly hope that there will not be a Great Britain football team by 1998.
Lord Dean of Beswick: I did not put any date on it, and I think the noble Lord is being a bit parochial in talking just about the English FA. I know that it is the English FA which will probably make the bid, but I hope that they will have the support of the Scottish and Irish FAs. I am sure that my approach is more likely to attract their support than that of the noble Lord, which is just an English approach, because if there is any way to get a Scotsman's, Welshman's or Irishman's back up it is to tell him that we are talking only about England; he will go elsewhere.
7.48 p.m.
Lord Addington: My Lords, when referring to sport I have something of an advantage over many noble Lords here, in that I am still young enough to go out and get my knees kicked on Saturday afternoons.
Sport in education is a subject which is dear to my heart, having only fairly recently left university where I was very active in Rugby Union football. Rugby Union is a very good example of how sport can get squeezed, for the simple reason that it is a dreadfully complicated sport. It does not have rules but laws which change every two or three seasons in very important respects. Rugby Union is also one of the many national sports we have in this country. It requires at least 30 people to play it properly. You need to have at least one official watching you; you cannot have a little knockabout in Rugby Union; you need to have it controlled.
I would like to refer to some other sports we play in this country. To play Association Football we need a mere 22 players. We need at least one official but, better still, three. We have always played team games and sports in this country and they are hideously complicated to organise. Thus, when the noble Lord says that we spend only 70 minutes actually playing sports in this country, I suggest we look at the matter. It takes 90 minutes to play a game of Association Football; it takes 80 minutes to play rugby under either code. Possibly that describes what the game is like. I hear a comment from the noble Earl, Lord Longford, who sits on my left, to the effect that in schools one can play a shorter game. However, the full game ultimately has to be practised over a full period of time or one will not achieve the best results. I appreciate that in Rugby League football, for
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instance, there is a game of mini-rugby for the younger players but once again it takes time to drill and time to train people.
The point was also made that generally public schools have better sports facilities. That is because state schools are being squeezed in a variety of ways. Teachers are now starting to count their hours. They give less time by the voluntary donation of their lunch hours to out-of-school activities and teaching sport. The noble Lord also mentioned how very few people who have been trained as PE teachers go into teaching PE. I know of six people who in the past four or five years were trained as PE teachers. Three of them now sell sports equipment; two are working in the City and only one is involved in teaching, and that is in a public school. At the moment teaching does not attract many people.
PE teaching has never been the most prestigious profession. I am afraid it has been suffering recently from a great lack of prestige. It is generally coming through that we do not pay teachers enough. If sport is to be properly coached, professionals should do it. We should remember that just because someone is an enthusiastic cricketer it does not mean to say that he can coach well. If we are to compete we need to give people a good basic grounding in skills. We do not want someone else's bad habits to be passed on. That is often seen. I have seen it in my own sporting activities. The weaknesses of one particular teacher's game were reflected in the schools' sides that he coached. We need professionals who can analyse the game and coach it properly.
The Earl of Longford: My Lords, perhaps I may ask the noble Lord a question. Is he suggesting that in schools the boys should be taught by professionals? Would the masters not do it?
Lord Addington: My Lords, I was referring to professional teachers and professional players. In some games if professional players are available and have coaching qualifications I can see no reason why they should not be used.
Higher education does a very good job in reflecting what happens lower down in the schools. The noble Lord referred to swimming. Indeed, the National Union of Students, the British Polytechnic Students' Association, the British Students' Sports Federation and the British Universities Sports Federation all describe not only a great increase in demand for sporting activities and for the use of sporting facilities but also a greater demand for coaching in basic sporting skills such as swimming, how to hold a squash racket properly, and so on. Swimming is a particularly good example because it is not only a sport but a part of physical education that can save one's life. I suggest that not being able properly to hold a squash racket may be quite tiresome, but being unable to swim may be life-threatening.
The same general point can be made that people who are interested in and enjoy a sport will keep themselves fit and able to play that sport. The current fad for aerobics, for instance, if it is a fad, has moved into a competitive area. People are talking about

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holding competitive aerobics. There is some form of judging involved in sport. Aerobics would become a sport if there were some form of judgment involved. But there again, people like to assess themselves.
I suggest that sport will keep people fitter, although there are always people who will burn themselves out playing sport. I have always thought that human bodies are a little like car engines: if abused and pushed too hard, they will burn out but if used sensibly they will last a long time. If we manage to keep people fit, it will mean that we are taking part in preventive medicine. One should keep pushing forward.
In higher education, where new demands are being made, there is an influx of new university students which the universities cannot quite handle. Students are therefore being put in gymnasia. That is a condemnation of the forward planning of various governments of different hues which have felt that there is a need for a greater number of students in higher education. I suggest that it also compounds a problem. Generally speaking, sporting activity is part of a person's social life and affects his quality of life. It is very much so regarded by the younger generation, at least at the moment. We are compounding a situation where there are too many people in higher education establishments for the available facilities. As more students enter higher education there is a greater need for facilities to cope with their demands in their educational life. One also tries out new sports at university—at least that was the case until very recently.
The financial resources available in educational establishments are also becoming the subject of competition. Sport is having to compete with new library books and laboratories. I suggest that a head of faculty quite rightly regards textbooks as slightly more important than a new gymnasium. I remember my noble friend Lord Russell once saying that textbooks were more important than anything up to and including lecturers. I agree that in most cases that is true. However, there comes a point at which the whole standard of student life deteriorates; fewer sporting activities is a reflection of that deterioration.
I support the remarks made by the noble Lord, Lord Dean, on the World Student Games. The World Student Games have traditionally been a springboard for athletes to go forward to higher levels. In the game of rugby—I ask your Lordships to forgive my obsession with the game—we find ourselves using student competitive activities as a springboard to higher sporting levels. The student games are undoubtedly the most prestigious of all such sporting events. Student athletics is probably one of the most prestigious ways forward to international athletics. It has often been the case that new athletes have given a good performance in student games which has given them a way forward.
I suggest that not only is sporting activity beneficial to those who compete in it but it is beneficial to all future students, as it is held up as something in which as a student one ought to compete. Students who have to compete with people who are older than
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themselves, who are more experienced, better technicians and physically better developed than they are, become dispirited. I have mentioned the sport of rugby many times. It is a very good example of what I describe. One needs technical skills. For instance, a forward is not at his best until he reaches his late 20s or early 30s. If students are allowed to play against other students, they benefit from testing themselves against their equals. That means that they can decide whether to go on to compete with others against whom they should be judged. If a player is exceptional at a young age, in playing as a junior against a senior side, it will show. But it should not be only the exceptional player who is encouraged to go on. It should be for everybody to go on and for everybody to take part. Everybody should be able to enjoy sports and physical education.
As a result of developing the ideal of competing against one's equals, we have established the great bastion of free time—Wednesday afternoons. That is being attacked in nearly all educational establishments. Pressure to do well academically, and in some cases shortages of staff, mean that people want to use Wednesday afternoons for teaching. Saturday is the day when most other forms of sport are practised, particularly the forms of sport traditional in our country such as the various codes of football—Rugby Union, Rugby League and Association Football—and in summer the weekends are usually dominated by cricket. The main schools sports in this country, it is suggested, should be moved to Saturday afternoon. On Saturday afternoon most of the more able students will be playing not for their university side but for a local club or even a large national club. A move to Saturday afternoon will deprive students of the advantage of competing against their peers in a group. Once again the exceptional student will be okay. He will go forward. But only one in a hundred will do well at that level and one in 30 may find somewhere good to go to. But how many of the rest of that great number of students will become completely disillusioned with the whole process as a result of having to compete with people who are more polished than they are?
For example, in a team game—we are a country that plays team games—when competing as students against senior people they can organise for longer periods of time together. If they are members of clubs they will not have established themselves at the beginning of the season. The start of the sporting seasons always overlaps with university term times. As most students are not based at home, they have little chance to build up a continuous relationship with a single sporting body or club. I suggest that we must at least provide some backing for that to allow students to carry on in competition with students.
I have spoken for rather longer than I intended and ranged fairly widely. However, I should like to press the noble Lord—I gave him notice of this—to act over the financial arrangements and financial support to be given for the World Student Games. I believe that it is probably the most important sporting event that any

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part of Great Britain will host in the next few years. I look forward to hearing what the noble Lord has to say.
8.6 p.m.
Lord Taylor of Blackburn: My Lords, I too am delighted that the noble Lord, Lord Dean of Beswick, has brought this Question before the House tonight. I go back to the Question on the Order Paper, which is to ask whether Her Majesty's Government are satisfied with the present level of physical education and sports activities being provided in educational establishments and, if not, what plans they have to deal with the situation.
No government would be satisfied with what we have. Any government always want more. It is a question of priorities. I shall deal with a different side of the Question than has been discussed so far by noble Lords on this side of the House. I hope that when the Minister comes to reply he will very seriously take account of all that I say.
I believe that today there are more young people participating in sport than ever before. Certainly, on Saturday and Sunday afternoons I see more people participating than watching. I cannot prove the figures, but when I go down to the fields there seem to be more youngsters playing football. There are now more swimming pools in my part of east Lancashire. That is because, a few years ago, a very enlightened chairman of the local education committee persuaded the Department of Education and Science to provide a swimming pool in more of our schools.
Many schools have playing fields, swimming facilities and gymnasia that they did not possess before the war. But are we getting the best from those facilities? The average school sits for 190 days per year from 9 a.m. to 5 p.m. Much of its equipment and facilities will not be used by the community which lives around the school. No industrialist would think of sinking into an undertaking the amount of capital that we sink in schools. The average sixth-form entry school costs between £8 million and £10 million to build and there is all the equipment in it to provide as well. Are we getting the best out of such facilities? An industrialist would not think of using his facilities for only a limited amount of time; that is for 190 days per year and a limited number of hours each day. He would wish to get the maximum out of his facilities. Many schools are closed at weekends when the facilities could be used for the benefit of the community. The schools have fences around them displaying signs which say, "Keep out". Many such facilities cannot be used because of the groundsmen, the caretaker, the head teacher—
Lord Dean of Beswick: My Lords, if such a restriction is placed on facilities surely that is due not to the groundsman or the headmaster but to the local authority?
Lord Taylor of Blackburn: My Lords, I have had a great deal of experience in local authorities. Many such attitudes boil down to the local people and not to the local authority, but I shall deal with that matter
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later. I am also worried by the fact that in urban areas children play football in the streets and on waste ground while such facilities are available across the street. I could carry on with this argument for a long time.
Changes are now taking place in education with the local management of schools and new governing bodies. I hope, therefore, that there will be a little more enlightenment. It might be said that because such facilities are increasingly being used more money is required. However, if one opens playing fields, swimming pools and the gymnasiums for the use of the community one must pay a little more to the caretaker and other people involved in their supervision. One must achieve the right balance. I believe that local authorities, governing bodies and the Sports Council can assist in that respect.
I have been putting forward that argument for some time. The Sports Council agreed to take part in an experiment with the local authority and the schools in the North-West of England, my part of the country. Where there were arguments about who was responsible for supervising certain establishments the Sports Council said, "We shall be responsible for the supervision if we can use your facilities". The local authority told the schools that it would spend a little more money on insurance in case damage occurred. There was a partnership of the three bodies.
I should like to see the DES using facilities in that way a little more often. It should encourage greater co-operation among the schools, the local education authorities and the Sports Council. I should like to see more facilities but we must ensure that we are making the best use of those we have at present. That would help a great deal with the problem that we now face.
8.13 p.m.
The Earl of Longford: My Lords, my noble friend Lord Taylor made a more practical contribution to the debate than I am likely to make. However, that does not diminish my desire to speak in support of my noble friend Lord Dean. In particular, I support his proposition that there should be more government encouragement for sport of all kinds.
This House is well endowed with leading sportsmen, although not all are present tonight. The noble Lord, Lord Porritt, is an Olympic medallist. The noble Baroness, Lady Burton, would have been an Olympic runner had there been women's games at that time. The right reverend Prelate, the Bishop of Liverpool, captained England at cricket and the noble Lord, Lord Williams, captained Oxford University which is almost as good. There are many eminent athletes including the noble Lord, Lord Aberdare, who was a champion at tennis. I understand from my son-in-law who was at school with my noble friend Lord Peston that the noble Lord was a useful quarter miler. Perhaps we may hear more about his exploits this evening.
My noble friend Lord Dean has produced some disquieting facts about swimming, for instance. We must investigate those facts closely. However, all is not wrong with sport in Britain at the present time. I

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speak tonight as a British representative—my Irish connection can stand to one side. English boxing is going well and we have some world champions. In recent years we have had a fine quota of athletes who have become Olympic champions. We appear to be as good is any other country at golf. With a little luck in soccer we would have won the World Cup. I speak with deference in the presence of the noble Lord, Lord Addington, who is the only Member of this House now playing in first-class rugby.
Lord Wakefield captained England at rugby but he was older when he came to this House. The noble Lord, Lord Addington, can speak with great authority about rugby. No doubt he will look down on me who did nothing more than captain Aylesbury. During the first year in which Aylesbury had a team there were only 15 players. Now there are six teams and, therefore, I do not believe that there is anything wrong with rugby in that part of the world. The British team is immensely powerful. The only danger is that its members are over-keen emotionally. At the end of a match they are unable to meet the press. However, perhaps that sign of their over keenness should be counted as merit.
Cricket, however, is a different case. The last day of the test match will soon be upon us and I understand that we must score 470 runs to win. It must be remembered that last year the captain, Mr. Gooch, scored 330 runs in one innings so nothing is impossible. However, it must be admitted that cricket is not a flourishing game at that level. I think that we take the sport a little too seriously. I hope that the noble Lord, Lord Addington, does not believe that one must live and die for sport because a sportsman is a national hero one day and a national villain the next. For instance, Mr. David Gower, a most gifted cricketer of his time, is now treated as a delinquent. He flicked at a ball outside the leg stump and was caught. Now people treat him almost as though he had committed rape. That is overdoing the enthusiasm for winning at sport. Generally speaking, sport in this country at both the top and lower levels is flourishing compared with any other period during my life.
The only sport in which one has seen a terrible decline at the top level is tennis. In 1930 I saw England win the Davis Cup in Paris. I saw Perry win at Wimbledon. I do not believe that at present there is an Englishman among the top hundred players. Tennis has declined and it is worth asking ourselves why that is so. We all like tennis in theory and love Wimbledon and so forth, but this country has sunk into a low position. Some people say that it is due to the weather. The weather was just as bad in the 1930s so that is no explanation. After all, the weather is not so hot in Sweden and yet their tennis players do so well. That is one aspect of the matter.
This House is well equipped to discuss these matters. There are many sporting people working in this building. Not far from here is a gentlemen who works in the attendants' office who weighs 16.5 stone and is a prop forward who is the terror of the East Sussex circuit. A few yards further along is a lady working in one of the party offices—and I shall not say which one—who scored 60 goals in netball in one
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afternoon. That takes some doing. Also, one of the doorkeepers is a world class mountaineer. Therefore, this building is full of world class sportsmen and women. So we can be cheerful. However, I agree with my noble friend Lord Dean that we should do even better if the Government were wiser and more generous.
8.21 p.m.
Lord Peston: My Lords, I thank my noble friend Lord Dean for asking this Question. I shall not delay your Lordships by going over all the ground again but there are additional points which I should like to make. However, I agreed with one particular point made by my noble friend. This subject is not at all political and I shall not approach it in that way. However, I am disappointed that, given the importance of the topic, no noble Lords from the opposite Benches have found time to speak in the debate this evening. That is rather disappointing.
One specific aspect which I should like to raise is that physical education is a foundation subject in the National Curriculum. As such, it is compulsory and, if I understand the matter correctly, must be assessed. I should like to ask the Minister how much progress is being made on the development of the physical education curriculum and its assessment. Because this subject is part of the National Curriculum, I take it for granted that it will be taught by qualified teachers in exactly the same way as are all the other subjects. Merely because it is called physical education does not mean that it can be taught by anybody. It is no less important and would not have been given a role as a foundation subject had it been less important. That means that it must be taught by trained teachers. I ask the Minister whether appropriately trained teachers are forthcoming in that subject.
I realise that the Minister will not necessarily be able to answer all my questions immediately. However, he will be aware that his right honourable friend the Secretary of State made what I thought was a rather important speech on the National Curriculum as it applied to 14 to 16 year-olds. Essentially, the Secretary of State adopted the view which those of us who took part in the debates on the Education Reform Bill argued in the first place; namely, that the so-called core subjects should be compulsory and there should be greater flexibility in the rest of the curriculum. That was rejected at the time we debated the Bill. However, the Secretary of State now takes that view.
I should like to ask whether, within the more flexible National Curriculum, any thought has been given to making sure that for key stage 4 physical education will still have some emphasis to it. Although I agree that with physical education the earlier the investment the better, one does not wish it to become the kind of subject about which all pupils say, "Now I am 14, I can give it up." Therefore, while I do not withdraw from my view that we need to be flexible, a balance must be achieved between flexibility on the one hand and making sure that proper priority is given to subjects like physical education on the other.

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In that connection, I repeat the question which arose when we discussed this matter a few days ago. Within the education Act I thought that physical education meant something called physical education which was different from sport. It never occurred to me that they were the same. I should like to ask whether they are the same. Secondly, when we were discussing the Education Reform Bill, were we told that sport was part of physical education? My recollection is that we were not. I do not say that there is a hard and fast answer but I should like to know more about that.
En passant, I am delighted that the Minister for Sport is now at the Department of Education and Science. I think that is a good place for him to be. I know him and I have every hope that, apart from doing his job in the narrow sense, he will work hard to ensure that sport receives proper priority in DES thinking.
On the Secretary of State's proposal to introduce more flexibility on key stage 4, my reading of Section 3(4) (a) of the Education Reform Act is that the changes can be made by the affirmative resolution procedure. We specifically wrote that into the legislation. I should be interested to know whether we can be given any indication of when the relevant orders will be laid before both Houses of Parliament, because we shall want to discuss key stage 4 generally at considerable length. That represents a major change in the Act.
Another aspect of the subject which noble Lords have alluded to but at which we have not looked in detail is Section 106 of the Education Reform Act. That is the section which leads on to the question of charging in maintained schools. That must apply not only to ordinary education but also to physical education. As noble Lords are aware, the difficulty is —and I take one example—that local authorities may have to use swimming facilities which they do not necessarily own, or, if they own them, for which a charge is still made. The same rules on not charging pupils still apply. That produces difficulties because it may be argued that it is appropriate to charge young people for swimming lessons. It could be argued that it would be better for them to make a contribution rather than have no swimming lessons at all. That is the nature of the problem. Difficulties as regards charging certainly apply to physical education.
I am well aware of the difficulties and I do not say that the Government are wrong and the rest of us are right. However, as regards local management of schools, which I favour, when under pressure schools which are given budgets will ask themselves what comes first, second and so on. The worry is that it will be decided that the easiest thing to give up—and the noble Lord, Lord Addington, referred to this—is physical education or sport. The noble Lord, Lord Addington, made the point that it is harder to give up text books than almost anything else. I am not criticising the Government in any crude sense. I am aware that if one favours devolution of power one has to accept the consequences of it. Nonetheless, it is a difficult matter, and one that concerns me.
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I was not going to go into the details of any other sports, but since the noble Lord, Lord Addington, referred to—what is the game called?—rugby and he referred to the laws, I wonder whether he remembers the oldest joke about rugby. A sample survey was done on rugby players, asking them about the latest change in the laws. The answers were as follows: 1 per cent. favoured the latest change in the laws, 1 per cent. were against the latest change, and 98 per cent. did not know there were any laws.
My final point concerns the fact that when I was at school most of what was done under the heading of sport was a voluntary activity on the part of teachers. If I may reiterate a point I made when we were discussing the Education Reform Act when it was a Bill, we should not be surprised that if the Government decide to run public services with a business ethos, and also if at the same time they restrict public sector pay in real terms, the outcome will be a decline in voluntary activity. People will cease to do things because they think they should do them. Instead—and this is the weakness of the Government's philosophy, at least of the 1980s although I hope it will change in the 1990s—people, including school-teachers, will simply do what they are paid for. If we are talking about sport, or even about physical education, an ethos of "I'll do what I'm paid for" could come to dominate all this, and we will lose a lot on the sporting side which we had for nothing from voluntary support.
The same applies to me as has applied to all other noble Lords: there is so much more that one would like to say, but, as it is 8.30 this evening, I feel I have said enough. Perhaps I may therefore again thank my noble friend Lord Dean for introducing the Question and say how much I look forward to the Government's Answer.
8.30 p.m.
Lord Cavendish of Furness: My Lords, to say that my sporting career was undistinguished both at school and subsequently would be something of an understatement. Despite that, I do not for one moment underestimate the significance of this evening's debate.
I have listened with considerable interest to the wide range of points made on this important subject. The interest shown by your Lordships demonstrates the concern felt by many people. I can assure your Lordships that the Government also attach great importance to the position of sport and physical education in our schools. I am therefore grateful to the noble Lord, Lord Dean of Beswick, for having raised this matter for debate. Perhaps I may begin by reminding your Lordships as I did a few days ago, and as has been mentioned by the noble Lord, Lord Peston, that the Government's commitment to improving the provision of physical education and sport in schools was recently demonstrated by the move of the Minister for Sport to the Department of Education and Science. I might add, without having any authority to do so, that I think that my right honourable friend the Prime Minister is also

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enthusiastic in this area. I am confident that this closer link between the worlds of sport and education will be of great benefit to both sides.
I find it interesting that the noble Lord's Question refers both to physical education and to sporting activities. It may therefore be helpful if I were to take a few minutes to clarify our terms. I hope this will be of help to the noble Lord, Lord Peston.
The physical education curriculum of schools will always include a significant amount of sport, but PE goes much wider than that and relates to the overall physical development of pupils. It may also include elements not normally associated with sport, such as dance and outdoor pursuits. Physical education also serves to inform young people of the long-term benefits of a healthy lifestyle and regular exercise.
However, many sporting activities take place outside normal school hours. Such activities may rely on what takes place within PE lessons to provide pupils with the necessary skills, but this extra-curricular sport is not part of the formal school curriculum. Its success therefore depends on the willingness of both staff and pupils to participate.
Turning now to the position of physical education in schools, PE is a foundation subject in the new National Curriculum for all maintained schools in England and Wales. This means that it will for the first time be a compulsory part of the curriculum for all pupils aged between five and 16. My right honourable friends the Secretaries of State for Education and Science and for Wales have recently confirmed the place of physical education as part of the compulsory curriculum for pupils in the last two years of compulsory schooling. This decision has been very widely welcomed.
Schools in England and Wales have been required since autumn 1989 to teach physical education to all pupils aged five to 14 for a reasonable time. The Government plan to introduce the statutory requirements for physical education from autumn 1992. These are to be more flexible and less prescriptive than the requirements for other subjects. Nonetheless they should ensure that the pupils receive a balanced programme of physical education throughout their time at school. The National Curriculum Working Group on Physical Education, established last July, is advising the Government on attainment targets and programmes of study for physical education.
I should like to say a word about the working group, the membership of which I believe to be very impressive. It is chaired by the distinguished scholar and sportsman, Mr. Ian Beer, once captain of Combined Universities Rugby Football Club and winner of English rugby caps. His working party includes Steve Ovett and John Fashanu of Wimbledon Football Club fame, as well as industrialists and representatives of the education service. Other members include teachers in primary and secondary education who have personal experience of PE.
On the matter of flexibility that the noble Lord, Lord Peston, raised, the final answer emerges as a result of the findings of that working party. The
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working group's interim report is with Ministers and will be published shortly. I am sorry to say I cannot say more than that. The group's final report is to be submitted to my right honourable friends by the end of June. Indeed, having heard this debate, I am minded to send the working group a transcript of this evening's discussion, if that is in order.
The noble Lord, Lord Dean of Beswick, asked whether the Government were satisfied with the current level of physical education in our schools. As the noble Lord, Lord Taylor of Blackburn, said, no government is ever satisfied with the level of any type of education in our schools. We must always want it to be better. In the case of PE, some schools provide it to an extremely high standard. At the same time, we have to acknowledge that in others both the quality and the quantity of physical education are not as we would wish. But the National Curriculum is all about bringing the standards in all schools up to those of the best. I am confident that this will also apply to physical education in the National Curriculum.
I should like to refute the suggestion that sport as part of physical education has declined in recent years. The nature of the sports themselves may have changed, with diversification into more indoor games and individual and small team sports, but sport still occupies the pre-eminent position in physical education.
The Government are concerned to ensure not only that PE and sport are firmly based within the school curriculum, but also that opportunities for young people to take part in sport outside school hours continue to develop. A number of your Lordships have expressed concern about the decline in extra-curricular sport. The Government accept that this is an issue which needs to be addressed. Indeed, we are addressing it. We are undertaking a wide-ranging review of sport policy. One of the major issues under consideration is the question of the further measures that may be needed to encourage sports participation by young people.
However, before we can provide the answers we need to get to the root of the problem. We have to recognise that over the years there has been a reduction in the amount of time that teachers feel able to devote on a voluntary basis to providing sports opportunities outside school hours for their pupils. That is not to say that this activity has disappeared completely. On the contrary, many teachers continue to be heavily involved, and I pay generous tribute to them.
Nonetheless, there has been a reduction in such activity. There appears to be no single reason for that. In some cases teachers who stopped organising extra-curricular sport during industrial action in the mid-1980s have not started again. In other cases, teachers have been greatly preoccupied with the introduction of the General Certificate of Secondary Education and the National Curriculum. However, we expect that factor to diminish as the National Curriculum settles down.

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The introduction of teachers' directed time increased calls for teachers to be paid for undertaking extra-curricular activities. Traditionally, teachers have been involved in extra-curricular sport on a voluntary basis. We see no reason why that should not continue. However, the Government have given local authorities, and where appropriate school governing bodies, the power to award teachers who take on extra responsibility one of five incentive allowances worth up to £5,500. Organising and supervising sporting activities may be one such responsibility and the opportunity exists for financial recognition to be given.
Another factor may be the pupils. There is now a wide range of opportunities available to young people. Many have Saturday jobs; others take advantage of local community schemes or join the junior sections of their local clubs. We do not wish to discourage those activities, but we must recognise that they may militate against pupils taking part in school-based activities.
The way forward is not to try to turn the clock back to the days when the sporting activities of our young people were the sole responsibility of schools. We need to encourage even greater diversity of provision involving local sports clubs, local industry and organisations such as the Sports Council. I have already referred to our review of sport policy which will be addressing all those questions. Many organisations are contributing their ideas to the review and we intend to publish our conclusions in the summer.
I turn to the specific points raised in the debate. The noble Lord, Lord Dean of Beswick, introduced the debate by saying that we were chasing our tail. The noble Lord may not be entirely satisfied by my remarks, but I hope he feels that we are earnest. I was grateful to the noble Lord for giving me a copy of the Guardian newspaper article. It has some valid points and I take them to heart. On the other hand, it was largely anecdotal. I give it credit also for putting part of the argument for the other side and not painting an entirely pessimistic picture.
With regard to swimming provision, the noble Lord compared Britain with Italy, France and Germany. Another noble Lord compared Britain unfavourably in regard to the hours devoted to sport. I have been unable to verify the facts in the case of swimming provision. I can only speculate. In the case of Italy and France, because of the weather it is more cost-effective to have a swimming pool in the school than it would be here.
The noble Lord, Lord Dean, said that it was Labour policy to favour competitive games. In a Question last week I rather waspishly pointed out that it had not been.
Lord Dean of Beswick: My Lords, I am grateful to the Minister for giving way. I did not have time to make the point that a survey was carried out among local Labour-controlled education authorities. The
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overwhelming majority of replies showed that they were not against the competitive element in school sports.
Lord Cavendish of Furness: My Lords, I thank the noble Lord for that clarification. From my own experience in the 1970s and 1980s I found that it was, for a period, predominantly Labour-controlled councils which were against competitive sport. I do not make a political point. The general change of attitude in favour of competitive sports is something about which we should all be pleased.
The noble Lord, Lord Dean, spoke of the Student Games, as did the noble Lord, Lord Addington. The Government made it clear from the outset that we would not provide direct assistance for the Games. However, the Sports Council, which is funded by the Government, is to contribute £3 million towards them. The Government's clearly stated position has been that, as with other major sporting events, promotional and diplomatic assistance is available but not direct funding. The DoE has already made available £26 million in indirect assistance for projects associated with the Games which met with the normal criteria for the grant. My understanding is that there is no question that the Games will not take place. I would join other noble Lords in being greatly disappointed if they did not go ahead. We hope and expect them to proceed in some form.
The final and most important point made by the noble Lord, Lord Dean, and other noble Lords, concerns swimming and safety. Mr. Moynihan established a working group in May 1990 to look at water sports safety. The group is likely to report in May of this year and it is expected to recommend that all young people should be taught to swim within PE at school. The interim report of the National Curriculum PE Working Group, to which I referred, is also likely to make the same recommendations. It is not for me to say whether there will be funding recommendations made at the same time. The Government recognise the value of swimming being taught as part of physical education. Should either of the working groups make specific recommendations on swimming instruction, these will naturally receive our closest consideration.
In regard to the tragic deaths which occur from drowning, the most up-to-date figures show that in 1989 50 young people died between the ages of five and 15 in accidents compared with 18 in 1988 and 35 in 1987. The Royal Society for the Prevention of Accidents pointed out that the 1989 figure is probably due to that year experiencing an unusually hot summer. It is believed that the underlying trend is still downwards. Another factor I should mention is that it is often the competent and confident swimmer who is most prone to get into trouble. The idea that everyone being able to swim will reduce accidents is not necessarily valid. Young people properly take risks, and that is a factor to be borne in mind.
I was delighted to hear from so expert a participant, especially one so eloquent and well-informed, as the noble Lord, Lord Addington. I have dealt with his

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questions but I shall read carefully what he said and I hope that the report of the debate will be passed to the working group.
The noble Lord, Lord Taylor of Blackburn, spoke of the three-sided angle. I do not believe our department considered the third angle. I shall be pleased to pass on his remarks. He implied also the advantage of dual use of schools generally. The Government have been fully committed for many years to the dual use of sports facilities. As long ago as 1970 Circular 2/70, A Chance to Share, advocated that existing arrangements should be reviewed to ensure that every possible opportunity for dual provision was fully explored. The circular gave guidance also about the way in which schemes could be formulated.
The Government encourage dual use of facilities in schools because it creates closer ties with parents and the local community. It may also be a way of obtaining additional facilities of benefit to pupils outside the education sector and it often generates income and encourages present and former pupils to retain their interest in sport.
The noble Earl, Lord Longford, with characteristic eloquence, added flavour to the debate with vignettes of sporting prowess to be found among Members of your Lordships' House and outside. He mentioned the late Lord Wakefield, who was a neighbour of mine. He must be one of the toughest men I have ever met in my life. I not only saw him water skiing on Windermere in winter in his eighties but I remember also meeting him
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one afternoon when he said that he must go down to the doctor to have six stitches inserted in his forehead before he could dine.
Finally, the noble Lord, Lord Peston, asked about the progress on the curriculum. I believe I have given as much of an answer as I can. He asked if the subject was going to be taught by qualified people. The position will be no different than for other subjects. I hope that I have answered the flexibility point in relation to key stage 4. I am not able to say whether or not an affirmative act is required. I will be very pleased to write to the noble Lord.
Against the argument that local management discourages sport in schools, since LMS is based on numbers of pupils, schools must remain attractive to pupils and parents. A broad spectrum of sport would help that situation and provide an inducement, although I recognise the problems mentioned by the noble Lord.
I hope that I have demonstrated the commitment of the Government to improving provision of physical education and sport in schools: for example, the move of the Minister for Sport to the Department of Education and Science; physical education as a foundation subject in the National Curriculum; and the review of sport policy. Those three highly significant developments will act greatly to the benefit of physical education and the sporting opportunities of young people in our schools.
House adjourned at nine minutes before nine o'clock.

  IRAQI DIPLOMATIC PRESENCE
  IRAQI DIPLOMATIC PRESENCE
  SOUTH AFRICA: SUPPORT FOR RETURNING EXILES
  SOUTH AFRICA: SUPPORT FOR RETURNING EXILES
  SOUTH AFRICA: ASYLUM SEEKERS
  SOUTH AFRICA: ASYLUM SEEKERS
  BRITISH CITIZENS IN SOUTH AFRICA: INCLUSION ON ELECTORAL REGISTER
  BRITISH CITIZENS IN SOUTH AFRICA: INCLUSION ON ELECTORAL REGISTER
  COMMUNITY CHARGE BENEFIT
  COMMUNITY CHARGE BENEFIT
  LOCAL AUTHORITIES' SOCIAL WORK ROLE
  LOCAL AUTHORITIES' SOCIAL WORK ROLE
  SCHOOLS: APPLICATIONS FOR GRANT-MAINTAINED STATUS
  SCHOOLS: APPLICATIONS FOR GRANT-MAINTAINED STATUS
  LOCAL EDUCATION AUTHORITIES: SPENDING
  LOCAL EDUCATION AUTHORITIES: SPENDING