Sitting of 20 March 1991

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

    GATT
    Mr. Dunnachie: To ask the Secretary of State for Trade and Industry if he will make a statement on progress made in the GATT Uruguay round.
    Mr. Waller: To ask the Secretary of State for Trade and Industry if he will make a statement about the prospects for resumption of negotiations on the Uruguay round of GATT.
    The Minister for Trade (Mr. Tim Sainsbury): The Government greatly welcome the recent resumption of negotiations in the GATT Uruguay round. We hope that the negotiations can now be brought to a successful conclusion as soon as possible. We should like all parties to commit themselves to a deadline of not later than the end of the year.
    Mr. Dunnachie: When does the Minister believe that the European Commission will agree to a new negotiation position on agriculture? What is the United Kingdom's position on the reduction of subsidies for agriculture exports? Does the Minister agree with the Italian Trade Minister, who said that the system of negotiation in Europe is completely hopeless? If he does agree, what does he propose to do about it?
    Mr. Sainsbury: The hon. Gentleman may know that the Commission has accepted a work programme involving negotiations to achieve specific binding commitments on three issues—internal support, market access and export competition. That is what the United States and the major agricultural exporters wanted. I believe that the offer provides considerable scope for the negotiations to move forward to a successful conclusion as soon as possible.
    Mr. Waller: As serious negotiations are not expected to start until June and may not be completed by the end of the year, does my hon. Friend agree that it would be appropriate to extend MFA 4 for a further 17 months? We should bear it in mind that the bilateral agreements that will run out at the end of the year essentially depend on MFA 4, which runs out at the end of July. Many of our European partners and the United States agree that there should be no further concessions on MFA 4. Does my hon. Friend agree that that should also be our position until the new GATT arrangement is entered into?
    Mr. Sainsbury: I assure my hon. Friend that serious negotiations are under way, although they may not bring in the most difficult political decisions until June. I also assure him that we all recognise the need to extend the multi-fibre arrangement in the light of the failure to agree in Brussels last December. However, I would not go as far as to say that an extension of 17 months would be justified now. It is important and necessary to bring the negotiations to a conclusion as soon as possible; there are dangers in not doing so. In those circumstances an initial extension of, say, five months would be more appropriate.
    Mr. Madden: Given that 400 jobs a week have been lost in the clothing and textile industry in the past 12 months, will the Minister give a firm assurance along the lines of the one that he has just given? As textile workers are not only workers with a vested interest in the future of the industry but consumers too, will he make it clear that, if 10 Downing street or the Treasury has any thoughts about extending VAT to children's clothing, they will be strongly resisted by his Department?
    Mr. Sainsbury: I am glad that the hon. Gentleman recognises that all his textile workers, indeed all his constituents, are consumers, because consumers will be the main beneficiaries of a successful outcome to the Uruguay round. We recognise the importance of the textile industry and that is why we welcome the progress that was made last year in the negotiations on textiles, particularly the progress in providing better mechanisms and disciplines for the GATT round, which we have always said must accompany the incorporation of textiles into the GATT.

    Telecommunications
    Mr. Tim Smith: To ask the Secretary of State for Trade and Industry what assessment he has made of the impact that the introduction of the ending of the duopoly in telecommunications, as outlined in his Department's recent White Paper on telecommunications policy, will have on consumer choice.
    The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Peter Lilley): The Government's telecommunications policy will ensure that consumers have the widest possible choice of high-quality services at the most competitive price.
    There will be a wider choice in all aspects of telecommunications from equipment and services to networks themselves.
    Mr. Smith: Has not there been a remarkable transformation in telecommunications over the past decade? Does my right hon. Friend recall that only 10 years ago there was only one supplier of telephones and telephone services and that people sometimes had to wait for weeks or months to get a telephone? Today, any number of companies are providing hardware and telephone lines. Is not that a substantial endorsement of the policies of deregulation, liberalisation and privatisation which the Government have followed?
    Mr. Lilley: My hon. Friend is absolutely right. I recall that at the beginning of the last decade, when British Telecom was still nationalised, about 250,000 people were waiting for more than six months to have lines installed. I am glad to say that the number of people in such a position now is negligible. Not only have the changes been

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    dramatic over the past decade, but, as a result of the liberalisation that we have announced and the greater competition and choice, we foresee even greater changes in the coming decade.
    Mr. Henderson: Will the Secretary of State be honest enough to admit that selling further British Telecom shares has nothing to do with more competition, nothing to do with addressing the 500,000 complaints that British Telecom receives every year or securing the necessary research and development to ensure that new technology is available and that mobile phones will work, and nothing to do with increasing telephone ownership or obtaining more investment, but everything to do with failed dogma and raising money? The Government are going for the loot to try to solve the poll tax fiasco.
    Mr. Lilley: I welcome the hon. Gentleman's question and the prominence that he gives to the Labour party's love of state ownership and its desire to restore British Telecom to nationalised ownership. Nationalisation has nothing to do with choice, the consumer or creating a dynamic industry such as we have created. It would certainly not have made this country the telecommunications hub of western Europe which it has become, with major companies moving their telecommunications headquarters from north America to London to take advantage of the liberalisation that we have created.
    Mr. Gale: Is not there tremendous potential for the development of telecommunications and for the creation of jobs in telecommunications, voice telephony, data and entertainment? Will not that be a growth area in which Britain can take a tremendous lead? Would not the Opposition's plans to renationalise British Telecom destroy those prospects?
    Mr. Lilley: My hon. Friend makes a good point. The jobs created by the proliferation of services built on the back of a liberalised telecommunications regime are important. We already have value-added services on the network, double those of France and Germany, and I foresee a great new source of jobs in the cabling of Britain through the cable television networks as well as an increase in the number of trunk networks following the end of the duopoly regime.

    Shipbuilding
    Mr. Leadbitter: To ask the Secretary of State for Trade and Industry when he next plans to meet the European Commissioner, Sir Leon Brittan, to discuss shipbuilding within the United Kingdom and the EC.
    The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Edward Leigh): My right hon. Friend the Secretary of State will meet Sir Leon Brittan on 22 March to discuss a number of issues. I shall be seeing him tomorrow to discuss shipbuilding issues in particular.
    Mr. Leadbitter: I am glad that the Secretary of State is to see the Commissioner tomorrow to discuss various matters. Is the Minister aware that, as recently as 5 March this year, Lloyd's List published an account showing a dramatic 80 per cent. decline in British shipbuilding in the past decade? Is he aware that Denmark, Italy and Germany have increased their share of the world market in
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    shipbuilding orders, whereas British shipbuilding's share has shrunk to 0·77 per cent? Bearing in mind today's calamitous news about shipbuilding in Barrow-in-Furness, what does the Minister propose to do to encourage our shipbuilding industry, which is one of the finest in the world, to expand? Or is he going to sit on his backside and let the industry decline further?
    Mr. Leigh: The hon. Gentleman's latter point was the serious part of the question. I was sorry to hear the news from Barrow today which is, of course, the result of the company's need to restructure and improve its competitiveness in the face of changing defence requirements. I shall be visiting Barrow on Monday and I shall be able to see at first hand the nature and scale of the problems facing British Shipbuilders Enterprise Ltd. and their likely impact on the local community.
    I repeat that I shall be seeing Sir Leon Brittan tomorrow and I shall discuss with him the aid that we are allowed by the Commmission to give to British shipbuilding. Given that British shipbuilding has restructured so successfully over the past 10 to 15 years—it is now more competitive than it has ever been and is well placed to take advantage of the recent upsurge in shipbuilding orders worldwide—it is clearly in the interests of British Shipbuilders that we phase out subsidies as soon as we can and I shall continue to urge the Commission to do just that.
    Mr. Hill: Does my hon. Friend recall that some years ago—before he was a Minister—there was a European scrap and build scheme, aimed mainly at the safety factor of merchant shipping? In his discussions with Sir Leon Brittan, will he explore the possibility of any part of such a scheme being used to support some of Britain's shipbuilding potential? Rather than wasting vast sums on some social scheme or other, the European Community might introduce a scrap and build scheme to which all the nations could agree.
    Mr. Leigh: That is an interesting suggestion. I shall certainly examine it carefully and, if appropriate, raise it with Sir Leon tomorrow. The Commission permits us to put a subsidy of 13 per cent. on large ships and we subsidise large ships to the maximum extent that we are allowed. I will pursue with Sir Leon any other ways in which we can help British Shipbuilders.
    Ms. Quin: Will the Minister give a clear undertaking to discuss with Sir Leon——
    Mr. Skinner: They have given money to Germany.
    Mr. Holt: Shut up.
    Mr. Speaker: Order. I think that it is better left to me. Ms. Quin.
    Ms. Quin: Will the Minister give a clear undertaking that, when he meets Sir Leon Brittan, he will discuss the catastrophic job losses in Barrow? Will he confirm that, unless action is taken, the losses are likely to occur within two years rather than four years? Can he give the workers in Barrow any hope that some of them will retain jobs in the merchant shipbuilding sector, or does he propose simply to let the decline in that sector continue, as my hon. Friend the Member for Hartlepool (Mr. Leadbitter) suggested?
    Mr. Leigh: I have already said that I shall be raising a number of matters with Sir Leon Brittan tomorrow. I gave a full answer to the earlier question and I have nothing to add—except that we understand that the job losses will take place over four years. I repeat that they are the result of the restructuring deemed necessary by management in the face of changing defence requirements.

    Credit Lending
    Mr. Andrew Smith: To ask the Secretary of State for Trade and Industry what further steps are being taken to curb irresponsible credit lending.
    The Minister for Corporate Affairs (Mr. John Redwood): The Government set out in December 1990 proposals for improved regulations on credit marketing and I am sure that my hon. Friend the Under-Secretary of State for Industry and Consumer Affairs will take the hon. Gentleman's comments as a reply to the consultation document.
    Mr. Smith: In view of the mounting misery caused by irresponsible lending, with mortgage repossessions doubling last year and with the Oxford money advice project in my constituency reporting default actions up by 10 per cent., bailiffs' warrants up by 16 per cent. and bankruptcy petitions up by 88 per cent., is not it time that the Minister took some action? Should not he also launch a rescue package for the many advice centres facing closure as a direct consequence of the Government's poll tax capping policy—in many cases, leaving the people in the deepest debt with nowhere to turn?
    Mr. Redwood: I have just told the hon. Gentleman that the Government have taken action. We have set out proposals to make it clearer to those entering into credit agreements what the rate of interest would be and what the impact would be on their family budgets. I am sure that the hon. Gentleman would welcome those proposals if he read the document and saw what the Government were trying to do. The Government also support various schemes to help those involved in offering advice on consumer debt. That is part of helping the market work. It is most important to have clear disclosure to all those thinking of embarking on new debt and that is precisely what the proposals set out in the consultation document do.
    Mr. Nicholls: Although I dismiss the nonsense that we have just heard from the hon. Member for Oxford. East (Mr. Smith) and pay credit to the steps that the Government have taken in this area, I continue to receive examples in my constituency of offers of credit that are clearly irresponsible and should not have been made. Does my hon. Friend accept that sometimes there is such a disparity in the bargaining position between lender and borrower that the matter must be kept under review? Despite the steps that have already been taken, will the Government continue to keep the matter under review and respond to individual cases that might be drawn to their attention?
    Mr. Redwood: My hon. Friend can have that reassurance. Of course, the Government are watching the matter closely and are involved in consultations with regard to proposals that we believe will go a long way towards remedying the defect that my hon. Friend recognised. In the pre-agreement phase it is most
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    important that the consequences of that agreement should be clear to individuals so that they can understand what impact it would have on their family budgets. I am worried about Labour's proposals, which seem to suggest that people should not be able to borrow in certain circumstances. That could make their position far worse. We want to see responsible borrowing based on a sensible regime of disclosure of the consequences to those thinking of entering into agreements.
    Mr. Nigel Griffiths: Why have the Government failed to implement the proposals in the 1988 White Paper to protect the public against irresponsible extortionate credit deals? With 170,000 people unable to pay bad debts to five and more creditors, why are not the Government commissioning a report from the Office of Fair Trading on extortionate credit agreements?
    Mr. Redwood: The Government are consulting on all those matters at the moment. The hon. Gentleman is quite at liberty to send in his views, which we should be most interested to see. The action that we propose addresses the very issue about which the hon. Gentleman is worried. It would cover advertising and the agreements themselves and deal with matters such as sending details to minors, which we believe is quite wrong and about which there are recommendations in the consultative document. Will the Opposition please read the consultative document and give us the benefit of their advice on it?
    Mr. Alton: While welcoming the consultative document and the remarks that the Minister has just made, may I ask him to accept that the phenomenal growth of consumer credit from £15 billion to £50 billion this year, coupled with the growth of credit cards—2 million are available in Germany compared with 30 million in this country—requires rather more than simply responsible borrowing and probably requires tighter controls on the kind of credit facilities that can be made available? Many families, especially poorer ones, are becoming increasingly indebted and 2·5 million families are now in serious debt.
    Mr. Redwood: The savings ratio has been rising. All Conservative Members welcome that and it shows that the balance between saving and borrowing is improving in the way in which the hon. Gentleman suggests. Is the Liberal Democratic party really suggesting that people should not have access to credit on any basis? Is the hon. Gentleman aware that 84 per cent. of personal borrowing is in the form of mortgages, not in the form of credit cards? The main factor in any credit increase is mortgages, not credit cards.
    Mr. Batiste: Will my hon. Friend rule out of his consultation exercise at this stage any possibility of introducing credit control curbs along the lines advocated by the Opposition? Would not they reduce the amount of credit and competition available for the mass of responsible borrowers and also destroy the credibility of United Kingdom financial institutions, thus making a free gift to their overseas competitors?
    Mr. Redwood: My hon. Friend makes two extremely powerful points. The Labour scheme would not work, because there would be ways of borrowing from banks outside our jurisdiction. However, to any extent that it was effective in limiting some people in gaining access to borrowing, it could be an extremely cruel scheme. People

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    need to borrow. We are trying to make sure that they do so on an informed basis, aware of what impact it will have on their budgets, so that they can come to sensible decisions before committing themselves to undesirable borrowings.

    Electricity Prices
    Mr. Martyn Jones: To ask the Secretary of State for Trade and Industry what discussions he has had with large industrial users of electricity regarding the proposed increases in electricity prices.
    Mr. Redwood: My right hon. Friend the Secretary of State for Energy has met the chairman of ICI to discuss that problem. My right hon. Friend the Secretary of State for Trade and Industry would be happy to hear further representations, but the main responsibility rests with the Department of Energy and with the regulator of electricity.
    Mr. Jones: Of course, the main responsibility rests with the Department of Energy, but I am sure that the Secretary of State for Trade and Industry would be concerned about the effects on large industrial users of increasing electricity prices—much above the already scandalous 13 per cent. being charged to domestic consumers. Is the Minister concerned that that rise is due to the privatisation of a service industry and that, far from helping British industry, it is nailing British manufacturing industry to the wall?
    Mr. Redwood: I do not agree that that is the result of privatisation. It is the result of the costs of generating power and the allocation of those costs to larger industrial users. The hon. Gentleman might like to know that our energy costs for large industrial users are below those of Germany, one of our main competitors.
    Mr. John Browne: Will my hon. Friend confirm that companies are free to negotiate price with the electricity companies and generators and, furthermore, that electricity companies are free to offer discounts or even cash rebates to companies or individuals who invest in energy-saving measures?
    Mr. Redwood: My hon. Friend makes good points. Of course, the idea of opening the market to competition is that large industrial users can think of other ways of gaining the power that they need by involving themselves in generation schemes or by encouraging new generators to enter the market. That is exactly what will happen. I am sure that the hon. Member for Clwyd, South-West (Mr. Jones) will welcome the progress that has been made in letting industry have more choice and control over power sources, quality and price.
    Mr. John D. Taylor: Does the Minister accept that in Germany 35 per cent. of energy supplies benefit industry because they come from lignite mines near Bonn? Does he further accept that British industry would have considerably reduced electricity costs if we developed the lignite mines in the United Kingdom? Such resources would provide much greater energy than those in Iraq.
    Mr. Redwood: The Government welcome the development of any energy sources that improve the supply and cost of energy, subject to the normal planning constraints and the energy policy laid down by the Department of
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    Energy. I am sure that in the new competitive conditions in the energy market more innovation will be a characteristic, although whether it will include what the right hon. Gentleman recommends is a matter for the market, not for me.

    Post Office
    Mr. Janman: To ask the Secretary of State for Trade and Industry what plans he has to denationalise the Post Office and end its letter monopoly.
    Mr. Leigh: The Government remain fully committed to the existence of a national letter service with an affordable, uniform tariff structure available to everyone, including those in rural areas. Girobank has been transferred successfully to the private sector, but no other decisions about structural changes have been taken.
    The Post Office's letter monopoly is a privilege, not a right. Although we keep the options under review, we have no present plans to alter the scope of the monopoly. However, in the event of a cessation or serious disruption to the letter services we would consider suspending it.
    Mr. Janman: My hon. Friend will be aware that since the denationalisation of telecommunications and the introduction of competition to that industry, the price of making a telephone call has gone down in real terms. Is my hon. Friend aware that there will be considerable support on Conservative Benches if, when the Government consider the future of the Post Office, they take close account of experience to date through the privatisation of British Telecom?
    Mr. Leigh: Although one might be able to admire my hon. Friend's radical zeal in seeking to privatise the Post Office, I suspect that it would be unwise at this stage for me to replicate it from the Dispatch Box.
    Mr. Loyden: Recognising the Government's attitude to intervention in these matters, may I ask the Government to take into account the need for a Post Office building programme? Is he aware that in many constituencies pensioners have to queue outside in the cold months of December, January and February to get their pensions and so on? Will he take up that matter with the chairman of the Post Office?
    Mr. Leigh: I am not sure what point the hon. Gentleman was making. Was he saying that he wishes the Post Office to be privatised? I know not. However, 94 per cent. of post offices are already privately run. The point of our continuing review of the Post Office is to improve structures. We are not looking at ownership alone. The most important thing is to improve the service to the public, and that is what we have always been concerned about.

    Economic Priorities
    Mr. Day: To ask the Secretary of State for Trade and Industry what representations he has received from industry about the Government's economic priorities.
    Mr. Lilley: I continue to receive representations from industry supporting the Government's determination to defeat inflation and to create a climate in which enterprise and wealth creation can flourish.
    Mr. Day: Will my right hon. Friend confirm that yesterday's cut in corporation tax reflects the Government's determination to create the right climate in the market for business and, coupled with the Government's determination to drive down inflation still further, represents the real needs of British industry?
    Mr. Lilley: I can, indeed, confirm those points. The reduction in corporation tax that was announced yesterday by my right hon. Friend the Chancellor will be of significant benefit to industry. We already have the most attractive environment for industry of any country in western Europe, which is why we attract more inward investment than any other country in western Europe. Tax is a major part of that and we now have the lowest rate of corporation tax of any country in the EEC.
    Mr. Alex Carlile: Will the Secretary of State explain why one of the Government's economic priorities is to increase unemployment in the retail sector? Does he agree that the increase in value added tax that was announced yesterday is bound to have a significant effect on that sector and will significantly increase the recession in retailing?
    Mr. Lilley: That is absolute nonsense. One of the policies of the hon. and learned Gentleman's party has always been to spread VAT more widely.
    Mr. Ian Taylor: Does my right hon. Friend agree that it can be estimated that a 1 per cent. downward movement in inflation could save British businesses £5 billion? Was not the key announcement in yesterday's Budget, therefore, the expectation that inflation could be down to 4 per cent. by the last quarter of this year? Does my right hon. Friend further agree that that means that, on top of the welcome corporation tax reductions yesterday, the Government are doing the right thing for British industry?
    Mr. Lilley: My hon. Friend highlights an important point. The reduction in inflation that was forecast in the Budget as being faster than was previously expected will be immensely welcome to British industry. It is the key to our economic future and to solving all other economic problems.
    Mr. Gordon Brown: Is not it the case that the day after what the Chancellor called the Budget for business 7,000 redundancies and almost 100 company closures have already been announced? Does the right hon. Gentleman accept that growth is down by 2 per cent. this year, manufacturing output is down by 5 per cent. and investment is down by a massive 10 per cent., which is the worst record in western Europe and the worst in British history since 1932? Why is the interest rate cut that industry needs being delayed? Is not it the case that the Budget does too little, too late to prevent a spring and summer of redundancies, closures and bankruptcies, which is the direct responsibility of this Government's Ministers who have failed?
    Mr. Lilley: The hon. Gentleman plays his normal recorded message to us, unchanged since before the Budget. British industry has responded to the Budget by welcoming it and all its major tax changes, which it considers essential for the future of this country. It is significant that the hon. Gentleman did not even mention them.
    Mrs. Peacock: Has my right hon. Friend received any representations from business men, asking him to introduce an industrial policy similar to that recently outlined by the Labour Opposition?
    Mr. Lilley: No, I have not. On the contrary, I have met many business men who have said that the last thing that they want is men in Whitehall telling them how to govern their companies. They welcome the fact that we are leaving more money in the hands of business so that they can take the decisions on investment, research and development, and training, which will strengthen their companies in the future.

    ICI Fertiliser Business
    Mr. Strang: To ask the Secretary of State for Trade and Industry whether, in view of the response of ICI to the Government's rejection of the proposed sale of its fertiliser business to Kemira Oy, the Government will review the priority that they give to maintaining employment in arriving at such decisions.
    Mr. Redwood: My right hon. Friend will continue to regard competition as the essential matter when deciding his policy on references to the Monopolies and Mergers Commission. As the hon. Gentleman is aware, in its report on the Kemira case, the MMC went into the issue of employment, among several others. When considering that matter, my right hon. Friend looked at the whole report before coming to his conclusion.
    Mr. Strang: Yes, but when hardly a day goes past without a major announcement of an industrial closure somewhere in the country, are the Government really prepared to shut down their productive capacity and destroy the hundreds of jobs that go with it for the sake of their dogma and opposition to state enterprise? Will the Minister confirm that ICI is going ahead with its plan to close down the plants and that in Edinburgh, for example, 140 direct jobs will be lost, not to mention the indirect jobs? What message has the Minister for the employees? Surely the Government must think again when the only alternative is the dole.
    Mr. Redwood: If hon. Members read the report, they will see that the market share of the merged company was predicted to fall to 35 per cent. in a falling market. We are talking about a market with over-capacity and with considerable problems resulting from that. I find it difficult to reconcile that forecast of the market and the market share with the idea that all those jobs and all that plant could have been sustained had the merger gone ahead. My right hon. Friend the Secretary of State had to weigh many difficult matters in coming to his conclusion on the judgment of the MMC, but he decided that the MMC was right in its report, and that is where the matter rests.

    Taxes and Public Expenditure
    Mr. Franks: To ask the Secretary of State for Trade and Industry what representations he has received from industry about taxes and public expenditure.
    Mr. Lilley: My right hon. Friend the Chancellor's Budget is a Budget for business. It has been widely welcomed as such by industry generally.
    Mr. Franks: My right hon. Friend will be aware of the announcement early this morning of projected job losses of 3,000 to 5,000 in the shipyards of Barrow over the next four years. When formulating regional policy involving public expenditure, will my right hon. Friend recognise the inevitable consequences of the peace dividend in places such as Barrow-in-Furness? Will he recognise that, inevitably, his Department will have an increasing role to play in my constituency?
    Mr. Lilley: I share my hon. Friend's concern about the job losses announced in his constituency. As he will have heard, my hon. Friend the Under-Secretary will be visiting his constituency shortly to assess the position. I believe that the measures taken in the Budget will make Britain in general and Barrow-in-Furness in particular more attractive to inward investment and for the development of new businesses. The measures to encourage small businesses will be particularly helpful and the reduction in corporation tax will attract industry to this country. I hope that that will bring benefits rapidly to my hon. Friend's constituents.
    Mr. Gordon Brown: How does the Secretary of State think that it will help struggling businesses if millions of purchases in our high streets and shops are to be subject to an unwanted and unnecessary 2·5 per cent. poll tax supplement? Has he, as Secretary of State for Trade and Industry, made an assessment of the number of jobs that will be lost in textiles, electronics and high streets and shops as a result of the poll tax supplement? Or is it the case that to escape from the poll tax chaos that the Government have created, they are prepared to sacrifice the interests of anyone and everyone?
    Mr. Lilley: The hon. Gentleman is apparently unaware that a transfer of tax from one source to another does not reduce the net purchasing power of consumers. He also has not let the House know how he would raise the taxation necessary for local government. Would he increase income tax instead of value added tax? He and his party will have to come clean about that before the end of Monday.
    Sir Anthony Grant: Is my right hon. Friend aware that the small firms sector gives the warmest welcome to the way in which the Chancellor responded to its representations and that the very last thing that it wants is a return to the conditions that prevailed when the hon. Member for Bradford, South (Mr. Cryer) was Minister responsible for small firms? Will my right hon. Friend convey one other representation to the Chancellor from the small firms for an early reduction in interest rates?
    Mr. Lilley: I welcome the points that my hon. Friend makes. He knows more about small firms than does the whole of the Labour Front Bench put together. He is right that the Budget has been well received by small firms. In particular, the rise in the threshold below which small firms do not have to pay VAT and the fact that my right hon. Friend the Chancellor got that through the European Commission are extremely welcome. I shall convey to my right hon. Friend my hon. Friend's point about interest rates.

    Recession
    Mr. Radice: To ask the Secretary of State for Trade and Industry when he will next meet representatives of the north-east regional CBI to discuss the recession in industry.
    Mr. Leigh: Officials of my Department keep in touch with the north-east regional CBI on a wide range of business matters. The Secretary of State last met John Banham, director general of the CBI, on 5 February 1991 and he next expects to meet Sir Brian Corby, president of the CBI on 11 April 1991.
    Mr. Radice: The Government have just been reminded by my hon. Friend the Member for Dunfermline, East (Mr. Brown) that, according to the Red Book, manufacturing output will fall by 5 per cent. and business investment will fall by almost 10 per cent. in 1991. In that connection, has the Minister noted the comments of the deputy director of the northern regional CBI, who said that there were no measures in the Budget that would help business confidence or investment? Is not that a scathing indictment of the Government's industrial and economic policy?
    Mr. Leigh: The hon. Gentleman's comments are singularly inappropriate on the day after the Budget pumped three quarters of a billion pounds into industry. His comments are also inappropriate because in his district of Derwent, 5,000 jobs were created in the 1980s and because over the past 10 years no less than £3·5 billion of Government aid has been given to the north-east, which was carefully targeted to underpin a new spirit of enterprise. If the hon. Gentleman talked more often to business men in the north-east, as I did at the presentation of the north-east business of the year award, he would know that there is a sea change in attitudes. No fewer than 9,500 new businesses register for VAT every year in the north-east.
    Mr. Holt: Will my hon. Friend take it from me that the words of Opposition Members are typical of the Labour party in the north-east? They for ever talk the region down, even though we have had more Government investment targeted into the area. We are not suffering from the recession that they talk about in such loud voices all the time. With companies such as ENRON bringing a £50 million investment for cheap electricity to the north-east, it is the Government who are bringing into that area the benefits of Conservative Government.
    Mr. Leigh: I agree with my hon. Friend that it is extraordinary that 10 years ago the region was heavily reliant on three declining industries, but is now one of the most vibrant and successful regions in Britain. Why do not Opposition Members speak up for their constituencies and about what is happening in the north-east? I give a pledge to the House. I shall go to the constituency of the hon. Member for Durham, North (Mr. Radice) and talk about York Thermostar creating new jobs in his constituency. I shall talk about Eurosil——
    Mr. Speaker: Order. The Minister should just answer the question that he has been asked.
    Mr. Leigh: I shall also repeat what my hon. Friend the Member for Langbaurgh (Mr. Holt) said. We shall speak up for the north-east on Conservative Benches, even if Opposition Members do not do so.
    Ms. Mowlam: Will the Minister now answer the question put by my hon. Friend the Member for Durham, North (Mr. Radice)? He gave not his view, but that of the CBI in the region. It is not Labour knocking the area. We fight hard in the north-east with the Tory Government. Will the Minister answer the question? What was there in the Budget to encourage investment? He should answer the CBI for a change.
    Mr. Leigh: The hon. Lady asks what there was in the Budget to encourage investment. Did she not listen to the Budget? Does she not know that it put three quarters of a billion pounds into industry? It was one of the best Budgets for business that we have ever had. That is the truth, although she may not like it.

    Companies (Foreign Capital)
    Mr. Harry Greenway: To ask the Secretary of State for Trade and Industry if he will estimate the number of firms established in the United Kingdom with foreign capital during the past year; how many jobs have resulted; and if he will make a statement.
    Mr. Leigh: According to the figures recorded by the Invest in Britain bureau, 1990 was a very successful year for inward investment. There were 340 inward investment projects, which are expected to create 27,000 jobs and safeguard a further 34,000. That demonstrates the continuing confidence in the United Kingdom as a sound and stable economy for inward investment.
    Mr. Greenway: Will my hon. Friend confirm that the United Kingdom attracted £46 billion worth of inward investment in 1988–89, three times as much as France and six times as much as Germany? Does not that confirm what he has said? The climate in the United Kingdom—particularly in Ealing—is just what is needed for inward investors and any other type of investor.
    Mr. Leigh: This is an interesting question: why was inward investment so successful last year that 61,000 jobs were created? Why do investors want to come here? Why are we the No. 1 location? It is because we are an entrepreneurial, hassle-free business environment with the lowest corporation tax in not only the EEC but the G7 countries.
    Mr. Hoyle: How many of these companies intend to undertake research and development in this country? Or are they building purely assembly plants? [Interruption.] Will the Minister listen, for a change? Is the Minister quite happy that we are being treated like a banana republic?
    Mr. Leigh: The hon. Gentleman will have to put aside his Luddite attitudes just once when it comes to inward investment. As is evident in the north-east in particular, inward investment has raised quality. It is interesting that, although such companies account for only 2 per cent. of establishments, they account for a staggering 18 per cent. of net output. They have improved business attitudes and they account for more capital investment than do other companies. They are 50 per cent. more productive than
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    British companies, although we have doubled productivity. Inward investment is good for British companies and for Britain.
    Mr. Viggers: Does my hon. Friend agree that we have been outstandingly successful in winning investment from Japan? More than 1,000 Japanese companies have invested here—representing 40 per cent. of all the investment in the European Community. Does my hon. Friend agree that, to a considerable extent, that investment is predicated upon our membership of the Community, and that it is crucial, if we wish to win further inward investment, that we show complete commitment to achievement of the single European market?
    Mr. Leigh: Yes.

    Timeshare Advertising
    Mr. Michael J. Martin: To ask the Secretary of State for Trade and Industry what further steps he is taking to prohibit misleading timeshare advertising.
    Mr. Leigh: The Director General of Fair Trading made recommendations for changes to the Trade Descriptions Act 1968 to tighten the controls on statements about services and to bring timeshare award schemes within the Act's powers. I announced on 18 February that I had accepted those recommendations in principle. The detail of their implementation will be dealt with as part of the general review of the Trade Descriptions Act currently being undertaken.
    Mr. Martin: I welcome the Minister's reply, but I urge him to hurry up and implement his proposals. Like many people in Glasgow, I received a personal letter. Mine said "Congratulations, Mr. Martin. You have won a holiday." In other cases it was a car or an item of jewellery. I was supposed to report to premises that were rented by the day. One newspaper reported that folk who turned up had to be turned away because these people had run out of jewellery. It is a scandal not only that people are allowed to operate in that way but that local authorities and national bodies are allowed to provide names and addresses for use in that manner. I hope that the practice will be stopped.
    Mr. Leigh: I agree absolutely. [HON. MEMBERS: "What will the Minister do about it?"] We shall amend the Trade Descriptions Act——
    Mr. Foulkes: And put the Bill through all its stages in a day? [Interruption.]
    Mr. Speaker: Order. There seems to be an air of excitement today. I do not know the reason for it.
    Mr. Leigh: We shall amend the Trade Descriptions Act to include award schemes. I should stress that a heavy responsibility rests on the public. I understand that my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) went to one of those award schemes and demanded his Fiesta. Surely the towering presence of my right hon. Friend would put any timeshare tout into full retreat.
    Mr. Michael Brown: I am sure that the hon. Member for Glasgow, Springburn (Mr. Martin) will be delighted

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    with what my hon. Friend has said. However, may I draw my hon. Friend's attention to the Opposition's attitude in Standing Committee B this morning? [Interruption.]
    Mr. Speaker: Order. The hon. Member knows that we are dealing with questions about Government policy.
    Mr. Brown: Does my hon. Friend agree that, this morning, he could have accepted an amendment relating to timeshare——
    Mr. Speaker: No. I am afraid that the hon. Member is out of order. What goes on in Standing Committee may not be discussed on the Floor of the House.
    Mr. Ron Brown: Is the Minister aware that many people are conned by those advertisements and by literature that comes through their letter boxes suggesting that they have won special prizes? For example, I was told that I had won a special and wonderful Volkswagen limousine. As I was very interested, I went to Glasgow to pick up the vehicle. Instead, I received a watch. I protested. I said that I thought that in taking the parliamentary road to socialism we would travel in British cars, but that was not to be. Irrespective of whether I received a watch—incidentally, the watch went to charity—many of my constituents received correspondence similar to that which was sent to me. It is about time that something was done to stop companies abusing their position by kidding people on that they will receive prizes when the reality is that they will not.
    Mr. Leigh: I feel sorry for the hon. Gentleman. I hope that he will not face too many disappointments in his forthcoming career. I understand that boats are offered in award schemes, and that might come in useful for the hon. Gentleman.

    Telecommunications
    Mr. Andrew Mitchell: To ask the Secretary of State for Trade and Industry what assessment he has made of the effects of Her Majesty's Government's telecommunications policies since 1987.
    Mr. Lilley: Since 1987, the effect of the Government's telecommunications policies has been to boost competition, give customers greater choice, encourage innovation and cut prices. That has given us a dynamic telecommunications market which is the envy of the world. The recommendations in the recent White Paper will build on those successes.
    Mr. Mitchell: Will my right hon. Friend mark the enormous contrast between the privatised BT of today, which is reducing the cost of call charges in real terms and has ensured that 96 per cent. of its coin boxes work, with the appalling state of affairs when the industry was nationalised? Then, it took an enormously long time to get any work done if, for example, one wanted a phone installed, charges were doubled in one year and a quarter of all coin boxes did not work. Will my hon. Friend condemn the decision of the Opposition, who have announced that they will renationalise BT after the next general election? Will he note that when those matters were discussed last Thursday during the debate on the Consolidated Fund Bill, only one Labour Member
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    attended to defend the Labour party's policy, presumably because Labour Members generally were embarrassed by what Opposition Front-Bench Members were saying?
    Mr. Lilley: Indeed. I read the report of the debate to which my hon. Friend refers, including the interesting contribution that he made to it. It is significant that Opposition Members did not turn up for it. Perhaps even more significant was their loud applause today for the notion of nationalisation. That is very much on their agenda. I am happy to say that given the opposition of the 1·5 million shareholders and of the many, many more millions of customers, the Labour party will not get a chance to renationalise BT.
    Mr. George Howarth: Will the Secretary of State reconsider his position on the development of the broad-band network? In particular, will he consider allowing British Telecom and Mercury to carry entertainment in such a way that would create 3,000 jobs in my constituency at the BICC factory and 30,000 jobs nationally? That is the way forward with telecommunications, not by way of the bland statements that the Secretary of State made today.
    Mr. Lilley: The House will recall that BT applied for and was allowed franchises for cable television. It has chosen to withdraw from them. Other cable companies are, happily, going ahead with cable television and cabling. BT has introduced on trunk networks about 1·1 million km of optic fibre compared with only 13,000 km before privatisation.

    Manufacturing Output
    Mr. John Hughes: To ask the Secretary of State for Trade and Industry what plans he has to boost manufacturing output in the west midlands.
    Mr. Redwood: We have just had a Budget which sets out many favourable things for business which will help those in the west midlands, as elsewhere. The November 1990 survey by the CBI showed that 80 per cent. of all respondents thought that the prospects for the west midlands were good or very good. So do the Government, and we shall give every sensible support that we can.
    Mr. Hughes: Does the Minister accept that the Budget was an insult to the 107,000 unemployed men and women in the west midlands? Is he aware that this week production has plummeted once more and that since the spring of 1990 it has fallen in terms of value by £20 billion? That has cost the west midlands 306,000 jobs. Is not it time that the Government, and especially the Chancellor of the Exchequer in his Budget, took manufacturing industry seriously?
    Mr. Redwood: The Government take manufacturing industry extremely seriously. There were many measures in the Budget that showed just that. Industry has welcomed the cut in corporation tax and the change in bad debt relief. It has welcomed many other measures in the Budget that will be of great assistance to business in terms of the tax structure and in the way in which taxes are computed. This is a most welcome Budget for business. As my hon. Friend the Under-Secretary has already said, a large amount of money is being given back to the business sector

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    through the Budget as proposed by my right hon. Friend the Chancellor and that will be welcome in the west midlands as elsewhere.
    Mr. Gerald Howarth: Does not my hon. Friend agree that manufacturing industry in the west midlands has been transformed for the better by the Government over the past 12 years and is infinitely better placed to meet the present difficulties? Does he further agree that yesterday's Budget paves the way for further interest rate cuts, which will be even more beneficial to British industry, particularly the manufacturing industries in the west midlands which are so capital-intensive?
    Mr. Redwood: I know that industry has widely welcomed the interest rate cuts so far and we wish to see more progress on inflation and on the development of the recovery that the Chancellor outlined in his Budget statement. It is also true that there has been a recent letter to a leading national newspaper, commenting on how refreshing it is to hear that my right hon. Friend the Secretary of State is such a strong supporter of manufacturing and understands its importance in the modern economy.
    I endorse the views expressed in that national newspaper by the director general of the Engineering Council.
    Dr. Moonie: Will the Minister tell us the forecast for fixed investment in manufacturing industry next year?
    Mr. Redwood: A forecast has been published and has already been mentioned during this Question Time. Investment in manufacturing has declined in recent months, but we look forward to a recovery, as the Chancellor outlined in his Budget speech, as the economy improves.

    GATT
    Mr. Anthony Coombs: To ask the Secretary of State for Trade and Industry if he will make a statement on the reopening of GATT negotiations.
    Mr. Sainsbury: We welcome the fact that a basis for the resumption of negotiations has now been established. We believe that a successful conclusion would provide a valuable non-inflationary stimulus to world trade and investment.
    Mr. Coombs: Does my hon. Friend agree that one of the most important objectives of the current GATT round is to ensure that state subsidies made illegally to other foreign companies, which disadvantage our own companies, are eliminated? To that end, will he look again at the 1984 case of illegal state subsidies paid by the Belgian Government to Beaulieu, Belgium's largest carpet manufacturer, which have so far not been repaid? Does he understand that the House fully supports the Government's stance in urging through GATT that penalties be imposed on national Governments who do not ensure repayment of such illegal subsidies?
    Mr. Sainsbury: My hon. Friend makes an important point because the strengthening of the rules and disciplines of GATT is one of the main purposes of the current Uruguay round. It is one reason why we believe an early, successful conclusion of the round to be important. I also agree that it is most unsatisfactory that the penalties
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    mentioned by my hon. Friend have still not been paid; we are looking to see how we can improve enforcement procedures in the Community.
    Mr. Cryer: Will the Minister press for the extension of the multi-fibre arrangement beyond July this year, when it expires, if GATT does not prove satisfactory? As he knows, 14,000 jobs are directly involved in the textile industry in Bradford. It is a modern and up-to-date industry, in which the work force has co-operated enthusiastically in all the changes and modernisation. Those people deserve a Government who will preserve and develop jobs, but at the moment the Government seem to be letting the industry down—and that is the view of both trade unions and employers.
    Mr. Sainsbury: I am glad to be able to agree with the hon. Gentleman about the efforts that the textile industry has made to invest and to modernise. It is as a result of those efforts that, unfortunately, there have been job losses in some areas. It is important to the industry that the GATT round creates better market access for its exporters and I am glad to say that the industry is a successful exporter.
    Mr. Bill Walker: Will my hon. Friend bear in mind the importance of exports to Scotland, whose export record is even better than that of the Japanese, and in particular how whisky is affected in the negotiations? Will he also bear it in mind that malting barley and grain are essential ingredients in whisky and that without them we could not sell that marvellous product of which over 90 per cent. is exported from Scotland?
    Mr. Sainsbury: I am happy to join my hon. Friend in paying tribute to the exporting success of Scottish industry and commerce. I very much recognise the importance to that success of market access for that excellent product, Scotch whisky. When I talk to my opposite numbers in other countries I seldom miss an opportunity of not only commending the product but urging better market access for it.

    Research and Development
    Dr. Bray: To ask the Secretary of State for Trade and Industry whether his Department is meeting its objective of encouraging industry to increase its funding of research and development.
    Mr. Leigh: My Department is successful in encouraging industry to spend more on research and development. The total of industry-financed R and D has increased by almost one half since 1983 in real terms.
    Dr. Bray: Is not it a matter of great concern that industrial research and development has fallen by 4·7 per cent. according to figures published last week by the Central Statistical Office? Since 1985, the only industry to have increased its research is the chemical industry, with a 41 per cent. increase in real terms. There have been catastrophic falls in R and D of 6 per cent. in electronics, 20 per cent. in aerospace, 39 per cent. in electrical engineering and 40 per cent. in mechanical engineering. Is not that proof positive of the disastrous failure of the Government's industrial policy?
    Mr. Leigh: I hope that the hon. Gentleman will agree that the most valuable research and development in

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    industry is that planned for and funded by industry itself—that has grown by a half since 1983. Of the £7 billion spent on R and D in industry, no less than 73 per cent. comes from industry itself. However, it must be accepted that in some aspects of research and development, such as pre-competitive or collaborative research, particularly in small businesses, there is a role for the Government. My right hon. Friend the Secretary of State has taken a keen interest in such matters and introduced new schemes that are widely welcomed by industry. It will be good to end
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    Question Time by quoting the Confederation of British Industry—[Interruption.] Opposition Members are obviously not interested in the views of the CBI—I thought that they were.
    John Banham wrote to my right hon. Friend on 19 February and said:
    "We were very pleased to hear the announcement of your new £48 million package of aid schemes for small firms … The addition of SPUR to the DTI portfolio and the greater emphasis you are now placing on technology consultancy … another area which we felt required strengthening and will, I am sure, be much welcomed by CBI Members."

Northern Ireland Electricity (Privatisation)
3.32 pm
The Secretary of State for Northern Ireland (Mr. Peter Brooke): With permission, Mr. Speaker, I should like to make a statement about the Government's proposals for the privatisation of the electricity supply industry in Northern Ireland, which are being published today in a White Paper.
In framing my proposals, I have had in mind four main objectives: to introduce competition wherever possible with the aim of achieving the lowest possible prices for consumers; to regulate the industry in a way which will protect consumers' interests and maintain security and safety of supply without being unduly intrusive; to diversify further the Northern Ireland economy through the introduction of enterprising new participants into the power sector; and to encourage participation by employees of Northern Ireland Electricity, as well as electricity consumers in Northern Ireland, in the ownership of the industry.
Competition is the best guarantee of consumers' interests and I believe that there is considerable scope for it to be introduced into the electricity industry in Northern Ireland. Since Northern Ireland Electricity is, at present, a vertically integrated undertaking with an effective monopoly on all aspects of electricity supply in Northern Ireland, this will mean a change in structure. I have concluded that generation must be separated from transmission, distribution and supply and that generating capacity should not be in the hands of a single owner.
I am proposing, therefore, that the four existing power stations will be sold to not fewer than two independent companies. This arrangement should encourage some competition between the existing stations and so provide an incentive for increased efficiency; but the major benefits of competition in generation will come when new power stations are needed. Competition to provide and operate the new stations should create a downward pressure on construction costs and on the price at which power is offered to the suppliers.
The transmission and distribution networks are natural monopolies which it would not be economic to duplicate. They, together with the supply business and the retail shops—that is, the remainder of NIE apart from generation—will remain as a single undertaking, which will have an obligation to supply electricity to consumers. It will meet this obligation by contracting with existing generators for power supplies and, when additional generating capacity is needed to meet rising demand or because of retirement of old power stations, it will seek competitive bids from operators willing to build stations and provide the required amounts of power.
Northern Ireland Electricity's existing power stations will, therefore, be offered for sale to trade purchasers by competitive tender. The transmission, distribution and supply business will be sold by public flotation.
In reaching my decision on the structure of the privatised industry, I considered a number of other possibilities, but I believe that the structure that I have outlined best meets my objective of seeking to introduce the maximum possible competition while minimising the need for intrusive regulation.
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In restructuring the industry, I also wish to facilitate the introduction of competition in the supply of electricity. The existing generators and new entrants to the industry will be able to apply for permission to supply consumers directly but there will be limits on the extent of such supply, at least for an initial period. This is because, given the present characteristics of the Northern Ireland system, the immediate introduction of full-scale supply competition could work against the interests of consumers. In developing my proposals, however, I intend to examine how best to ensure that there is a progressive increase in supply competition in Northern Ireland over time.
I intend to bring forward draft legislation in the near future to enable the electricity supply industry in Northern Ireland to be restructured in the manner that I have described and to provide for its privatisation. The legislation will establish new regulatory arrangements with the aim of encouraging competition, providing incentives for efficiency and ensuring that the resultant gains are fairly shared with consumers. There will be full consultation on the draft legislation and, in view of the importance of the provisions, I am extending the customary six-week period to 12 weeks.
In developing my proposals, I intend to work closely with the industry in order to ensure that the interests of consumers and Northern Ireland Electricity employees are protected. As was the case in Great Britain, employees' rights will be protected during the course of the industry's transfer to the private sector; existing pension arrangements will be safeguarded and the industry's existing negotiating and consultation machinery will remain as it is, although of course the unions and the new owners may wish to make changes in the future.
The White Paper makes reference to the need for new generating capacity in Northern Ireland. The provision of this new capacity will be a matter for the new owners, but the White Paper outlines a number of possibilities, including the acquisition of a supply of gas to the Province for power generation and the provision of an interconnector with Scotland.
The proposals that I have outlined, and which are set out in more detail in the White Paper, are designed further to strengthen the Northern Ireland economy and build on the achievements of the past, while creating a more competitive and efficient electricity industry to meet the future needs of consumers in the Province. They will also afford the people of Northern Ireland and the Northern Ireland Electricity work force the opportunity to invest in their own industry, which has such a vital role in relation to the Province's economy.
Mr. Kevin McNamara: I thank the Secretary of State for making his statement, but the White Paper is one Brooke initiative that we and the people of Northern Ireland could well do without.
It is significant that, in the proposals, the right hon. Gentleman did not seek the approval of the Northern Ireland parties which represent the people of Northern Ireland and which are all united with the Opposition against the general proposition and the hotch-potch of proposals which seems to be coming forward.
The right hon. Gentleman said recently that Britain had no selfish interest in Northern Ireland, but it has. It has a selfish interest in imposing outdated Thatcherite dogma upon the Province. There is only one consolation, and that

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is the irony that the Under-Secretary of State, the hon. Member for Wiltshire, North (Mr. Needham), is having to explain this all away in Belfast this afternoon.
In Northern Ireland, the electricity system is equivalent to only one medium-sized power station in England, yet it is to have imposed upon it another English solution—at least two generating companies and a grid. That is despite all the advice that the Government have received that, if privatisation goes ahead, it should be through one single generating and distributing agency.
Will the right hon. Gentleman confirm that the generating capacity which will go out to tender would cost at least £500 million to replace, but it is unlikely that he will receive more than between £100 million and £150 million—a nice sweetener indeed to PowerGen, Hanson, National Power or whoever happens to get control? It also means that the control of generating capacity in Northern Ireland will pass out of the control of either the Government or the people of Northern Ireland. As for putting things out to sale by flotation of the grid, will the right hon. Gentleman confirm that that will be the only opportunity that the people of Northern Ireland will have to acquire any sort of share in what they already own—the Northern Ireland electricity undertaking?
Will the right hon. Gentleman also confirm that the recommendations in the White Paper are contrary to the advice given by the Northern Ireland electricity board, contrary to the advice given by consultants employed by that board, and also contrary to the initial advice given to the Government by their own consultants—until they were sent away to find new recommendations? Will he confirm that it is also contrary to the independent advice of Coopers and Lybrand Deloitte, which stated that, if privatisation should come about, it should be as one entity?
Can the right hon. Gentleman tell the House whether decisions on the gas pipeline spur, the interconnector with the south of Scotland or reconnection with the Republic will be entirely decisions to be taken by the new owners, or whether there will be any inducements given to the new people to develop those processes, either from the European Community or from the British Government?
Can the Secretary of State confirm that Sir Desmond Lorimer is to be the new chairman of Northern Ireland Electricity, in place of Dr. Schierbeek, whose work was much admired and who advised against splitting up NIE and therefore resigned recently?
Will the Secretary of State accept that the decision to separate the generating system from the distribution system flies in the face of all modern thoughts of conservation? Does he not realise that separate electricity generation and distribution will mean that each company will have a financial incentive to promote energy sales rather than energy savings, which is what we should be looking for?
What will happen to the overseas department? What institutional protection will be given to the consumer against increases in cost in a position which will be monopolistic? More particularly, and on a more immediate matter, what protection will there be for power workers who, once they are employed by privately owned companies, may come under increasing threat from paramilitary forces?
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The right hon. Gentleman's proposals are irrelevant to the economic, social and industrial needs of Northern Ireland consumers. The Secretary of State has already announced the fattening up of the industry by increasing electricity prices last week to make it more attractive for privatisation. However, there is one consolation for the people of Northern Ireland—the time scale proposed by the Government. The incoming Labour Government will have the support of all the parties in Northern Ireland in abandoning these disastrous proposals and working together for an efficient energy policy that will benefit private and industrial consumers in Northern Ireland.
Mr. Brooke: The hon. Member for Kingston upon Hull, North (Mr. McNamara) embarked upon his remarks with a directness which made clear where his views lay. He referred to the congruity of the views of his party and the parties in Northern Ireland, in opposition to these proposals.
Since a central purpose of the proposals is to exercise a downward influence on prices, which will be beneficial to all consumers, the hon. Gentleman will have a little difficulty in explaining why he is acting in the interests of the general electorate.
In terms of the nature of the system, the purpose of our proposals is essentially competitive, and we shall see the benefits of competition that have resulted from previous privatisation exercises.
The hon. Gentleman asked me a question about the assets of Northern Ireland Electricity. I can confirm that those assets, at the time of the last balance sheet on 31 March last year, stood at about £400 million.
In terms of the flotation, the hon. Gentleman is correct to say that the opportunity to purchase shares will be in transmission, distribution and supply—that part of NIE that remains. However, the implications of the rhetoric that he deployed in terms of the percentage of NIE owned by individuals in Northern Ireland, in the fullest sense, also reflect his observations about the relationship of the generation of power in Northern Ireland to the generation of power in the whole country.
The hon. Gentleman mentioned the advice that the Government have received. We are at one with our advisers about our proposals, and I expect the board of NIE to support them as well. The interconnector and the gas pipeline are currently under negotiation. If it were possible to draw on the resources for future power generation, new owners would be able to consider doing SO.
I shall shortly be announcing the name of the successor to Dr. Schierbeek, to whose chairmanship I pay tribute.
The hon. Gentleman asked about conservation. The new arrangements will, of course, be subject to all the conservation rules to which the present arrangements are subject. He also asked about the overseas department. Such matters will flow from decisions made by the new management as and when transactions have occurred.
I think that, in expressing confidence that all the proposals that I have announced will be set aside by a Labour victory, the hon. Gentleman is counting his chickens a little early.
Mr. Roy Beggs: I think that the Secretary of State is the only person who believes that the proposals will bring competition to Northern Ireland. In

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the absence of members of I he Democratic Unionist Party and the SDLP, I can confidently speak for them and say that all Northern Ireland parties will oppose this charade.
Will the Secretary of State tell the House whether the former chairman of NIE, Dr. Schierbeek, resigned because he too opposed the proposals? When we have had to put up with cartels operated through the banks for years, does he expect us to believe that a half-monopoly—two private-sector companies operating generation in Northern Ireland—will provide a better service than a public monopoly? Northern Ireland industry and Northern Ireland consumers have been crucified. Northern Ireland Electricity has declared both a £90 million profit and a huge hike for next year's prices. We shall be subjected to even worse by profit-motivated private companies in the future. This is a disaster.
I sincerely hope that the consultation period stretches over 12 weeks, because the Government will learn their lesson if they decide to go to the country within the next 12 weeks.
Mr. Brooke: The hon. Gentleman was more convincing in his statement about the possible opposition of Northern Ireland parties to the Government's proposals than in explaining why those proposals will not have the same competitive benefits as they have had elsewhere.
I have paid tribute to Dr. Schierbeek's chairmanship of NIE.
The hon. Gentleman called for the continuation of a public monopoly. He will be aware of the frequency with which he and his hon. Friends have called for what is effectively a degree of public subsidy for Northern Ireland electricity prices. We are determined to secure lower prices through the vehicle of competition. To say that consumers have been crucified reflects on the past pattern of behaviour rather than on our proposals. The hon. Gentleman also referred to profit. His observations show some clairvoyance, as the financial year has not yet come to an end.
Mr. James Kilfedder: The Secretary of State is aware, judging by what he has just said, that electricity prices in Northern Ireland for domestic consumers and for industry are far higher than the average in the rest of the United Kingdom. I would welcome any proposal that would reduce that heavy burden on people in Northern Ireland, especially retired people who live in all-electric homes.
Is the right hon. Gentleman aware that I have grave doubts about whether the measure will reduce prices? Will he assure us that, when electricity is privatised, it will not only bring prices down but keep them down? I fear that, once electricity is privatised, the shareholder will come first and the consumer a poor second.
Finally——
Mr. Speaker: Briefly, please.
Mr. Kilfedder:—in order to provide real competition, will he provide a gas pipeline between the mainland and Northern Ireland?
Mr. Brooke: I acknowledged in my answer to the hon. Member for Antrim, East (Mr. Beggs) the pattern of prices in the past. That is one reason why we are trying to gain the benefits of competition—in order to bring those prices down in the future. The hon. Gentleman said that he has
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grave doubts, but it would be an unusual occurrence, in view of previous privatisations, if competition did not provide the beneficent influence that it has in other cases.
The hon. Gentleman asked about prices being kept down some way down the road. I am confident that that is more likely to happen some way down the road, when there are further opportunities for supplying competition. The hon. Gentleman fears that the profits would be garnered by the industry and not shared with the consumer, but the regulator would exercise just that balance. As I said earlier, we are engaged in investigating the pipeline.
Mr. Simon Hughes: Is the Secretary of State completely committed to what is clearly a matter of ideology rather than rationality, or is he saying that, if the consultative process results in wholesale opposition to his view from all parties and their representatives in Northern Ireland and from those informed about the industry, the Government will think again?
Will the right hon. Gentleman answer the specific question about the reason for the resignation of Dr. Schierbeek as chairman and the real effect on costs? If costs are 30 per cent. higher in Northern Ireland than in the rest of the United Kingdom—as is widely believed—is the Secretary of State saying that costs will come down by that amount? Given that the extra cost of getting rid of emissions is to be charged additionally to consumers over the next decade, presumably they will have to pay for that.
Mr. Brooke: If, in propounding the benefits of competition, I am regarded by the hon. Gentleman and his party as guilty of dogma, on behalf of my party, I happily plead guilty. The hon. Gentleman is correct that there will be a consultative period and there will be an opportunity for those who take a different view from the Government to demonstrate that the competitive results that I have forecast will not have the benign consequences that I mentioned.
Dr. Schierbeek had a contractual relationship with Northern Ireland Electricity which had come to a particular point. It is true that there will be a massive exercise in advance of carrying through the Government's proposals.
The hon. Gentleman referred to prices. I shall correspond with him on that, since he quoted a figure that I do not readily recognise.
Several Hon. Members rose——
Mr. Speaker: Order. May I draw the House's attention to the fact that we have a busy day ahead of us and that many hon. Members wish to participate in the Budget debate? May we have brief questions? During the three-month period, we shall certainly be able to discuss this matter.
Mr. Julian Amery: Does my right hon. Friend agree that, whether the proposals are right or wrong, they will be seen in Northern Ireland as colonialism? If he wants to keep in touch with opinion in Northern Ireland, would not it be better to restore local government and get a better feel of what the community thinks?
Mr. Brooke: My right hon. Friend makes a delicious flank attack on me, and I know of his interests in the

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matter. I do not think that I would accept his premise. Both the private and the industrial consumer in Northern Ireland should receive energy supplies at the lowest possible price, and that is the Government's principal motivation.
Mr. Merlyn Rees: What about possible ownership from outside the United Kingdom? If, for example, the Electricity Supply Board in Dublin sought to purchase the NIE, there would be nothing to prevent it.
Mr. Brooke: I understand the right hon. Gentleman's question. It would be inappropriate to prejudge the outcome of the tender competition to purchase power stations. [Interruption.] I will take this at dictation speed. Each bid will be examined on its merits, but I assure hon. Members that the public interest, in the widest sense, will be taken into account.
Mr. William Ross: The right hon. Gentleman seemed to suggest that he was dissatisfied with the efficiency of Northern Ireland Electricity, because of the cost of the electricity it produces. As the Government have run Northern Ireland Electricity for 10 or 11 years, will the right hon. Gentleman now resign because of the grave inefficiency that he has admitted? If he is so anxious to privatise Northern Ireland Electricity, this would be the supreme chance for him to introduce a Bill. Why does he not do so?
Mr. Brooke: The hon. Gentleman makes the seductive suggestion that I should resign over the provision of electricity. The Government's intention—this is quite deliberate—is to improve on the previous record by introducing competition into the system.
Mr. George Foulkes: Will the Secretary of State confirm that, if his misguided proposal goes ahead, there will be nothing to safeguard the continued use of high-quality Ayrshire coal, which is vital not only to the Ayrshire coalfield but to Ayr harbour?
Mr. Brooke: The hon. Gentleman has been pressing Ministers for some time on the subject of Ayrshire coal. Decisions on the future design of power generation in the Province will be in the hands of the operators, but I should be surprised if Ayrshire coal did not prove competitive in the exercise. I am greatly distressed that the hon. Gentleman thinks that Ayrshire coal needs a crutch or prop to sustain it.
Mr. John D. Taylor: Does the Secretary of State recognise that the Ulster Unionist party created the state industry of Northern Ireland Electricity and is proud of NIE's service to Northern Ireland? Does he accept that all the Northern Ireland parties in the House are against his proposal?
Will the right hon. Gentleman explain why he will not allow the House to debate the proposals in a normal parliamentary manner? Why does he intend to force them through the House by means of an Order in Council, rather than having a proper parliamentary debate on a Bill on a process that vitally affects all sections of Northern
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Ireland? Why does the Secretary of State oppose cross-community relations in Northern Ireland when the whole community is united on this matter?
Why is this not a normal privatisation? Why will shares not be floated to the public? Why is the sale restricted to tenders from the limited firms in a position to tender for such stations? Is it true that one of the firms already created is led by the president of the new Northern Ireland Conservative party?
Will the Secretary of State reconsider the idea of privatising power stations that belong to Northern Ireland by restricting the sale to a few selected companies, and instead—if privatisation is to be forced upon us—give us the same type of privatisation as has happened elsewhere in the United Kingdom?
Mr. Brooke: The right hon. Gentleman is of course quite right to take the credit for the previous actions of the Ulster Unionist party in creating the industry. I find somewhat at variance the periodic criticisms by members of his party of the price charged for electricity in the Province and the suggestion that it would be better if that price was otherwise. That seems to me to be sporadic pride.
The right hon. Member for Strangford (Mr. Taylor) asked about the Order in Council; I must apologise to the hon. Member for Londonderry, East (Mr. Ross) because I did not answer his question about that. All hon. Members will be aware that the privatisation of the industry in Northern Ireland is essentially a transferred matter under the Northern Ireland Constitution Act 1973, and such measures are generally dealt with by an Order in Council.
The right hon. Gentleman also asked why we were not following a normal privatisation process. I must stress that the generators will be sold by tender to not fewer than two independent companies. The balance of NIE will be sold by a flotation to the wider public. The restructuring that gives rise to the different treatment is taking place to introduce the competition to which I have consistently referred in my replies today.
Mr. Dick Douglas: Will the Secretary of State elaborate on the significance of the interconnector? What are the prospects of public finance for the interconnector, in view of its importance for electricity generation in Scotland and the Scottish coal industry? Is it not a trifle absurd to go forward with what amounts to half a prospectus without a proper evaluation of the cost benefit of such a link between Northern Ireland and the rest of Britain?
Mr. Brooke: I have consistently said in answers on this statement that the idea of an interconnector with the Scottish industry is now being pursued energetically, discussed and negotiated. While those negotiations obviously need to be commercially sensible, I sincerely hope that future suppliers of power generation in the Province will have the widest possible variety of options available to them, and that also applies to the gas pipeline.
Mr. Harry Barnes: Why has there just been an 8·5 per cent. increase in electricity prices in Northern Ireland? Were not prices raised, to the detriment of consumers there, to fatten up the electricity companies for the privatisation that has just been announced? Why can we not have normal procedures for

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this legislation so that it can be amended in the House? The recent emergency legislation for Northern Ireland was not made by Order in Council. We do not have to have Orders in Council for this kind of legislation.
Mr. Brooke: The implication of the hon. Gentleman's question related to the level of profits that NIE declared last year. However, in terms of current costs, those profits amounted to £4 million. As it is known that further power generation will be necessary in the Province in the near future, the reconstruction of the industry is difficult to contemplate if the profits are only £4 million per year.
Mr. D. N. Campbell-Savours: Can we get it quite clear? Is it true that the Northern Ireland electricity board, the consultants to the board, the first opinion of the Government's own advisers, Coopers and Lybrand Deloitte, Dr. Desmond Lorimer, the next chairman, and Dr. Schierbeek, the former chairman, all opposed privatisation in the form outlined by the Secretary of State today? Why do the Government believe that those people are wrong and the Government are right? This matter will inevitably come before the Public Accounts Committee. Get it right.
Mr. Brooke: The answer lo the hon. Gentleman's rather long list of questions is no. In terms of the proposition that I have put forward, I said that there was no conflict between the Government and their advisers. As I said, I am confident that the hoard of Northern Ireland Electricity will support what we propose.
Mr. Bob Cryer: Why can we not have legislation when the Minister knows that the powers of delegated legislation are scrutinised wholly inadequately? To undertake such a major policy by anything other than primary legislation is an abuse of the House.
Can the Secretary of State assure us that the chairman of the Northern Ireland Conservative party will not be involved in any financial dealings whatsoever with the privatisation, that no contributor to Conservative party funds will be allowed to tender, and that no contributor to Conservative party funds will be allowed to promote the scheme, be involved in merchant bank funding for the scheme, or be involved in any other way? If the Secretary of State cannot give that assurance, it will appear to people outside to be a clear case of political corruption.
Mr. Brooke: The hon. Gentleman is a respected authority on our legislative procedures. There will be an opportunity for full consultation on the Government's proposals for the privatisation of NIE, which may also be debated in the Northern Ireland Committee, if hon.
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Members request it, before the order is laid before Parliament. I hope that such all opportunity will be available.
On the questions that several hon. Members have asked about the Conservative party in Northern Ireland, it has been my experience that, on a series of issues, the Conservative party in Northern Ireland has regularly been in disagreement with the Secretary of State, and, perhaps with the single exception this afternoon, more frequently than any other politicians in Northern Ireland. I shall certainly pay attention to its views and to its position, but, in the past, its complaint has been that I have been paying insufficient attention to it.
Mr. Dennis Skinner rose——
Mr. John D. Taylor: On a point of order, Mr. Speaker.
Mr. Speaker: No, I will take Mr. Skinner's question first.
Mr. Skinner: Does not the Secretary of State realise that one of the reasons why hon. Members who represent Northern Ireland constituencies are against the measure is that they can see what has happened to the privatisation of electricity in Great Britain? They see prices going through the roof, and they do not want any more of it. As for the Secretary of State's remarks about subsidies not being applicable to Northern Ireland, perhaps hon. Members from Northern Ireland will say that what is good enough for Wandsworth's subsidies is good enough for them.
Mr. Brooke: I think that this is the first time that Wandsworth has been injected into one of our Northern Ireland debates, but they do range widely. The Government's preoccupation is with getting prices down in Northern Ireland and making them competitive not only with Great Britain but with the rest of Europe, because, in the Europe after 1992, it will be peculiarly important that Northern Ireland should be able to compete on a level playing field.
Mr. John D. Taylor: On a point of order, Mr. Speaker. When hon. Members on these Benches asked for a Bill rather than an Order in Council so that we could have a proper debate on the measure and the right to table amendments, the Secretary of State kindly responded by saying that a debate could take place in the Northern Ireland Committee if we so requested it. Is that not somewhat misleading, in that, even if the order went before the Committee, we would not be allowed to table amendments? That would not be in accordance with the normal parliamentary rights that hon. Members should have.
Mr. Speaker: I have no responsibility for Select Committees, but I understand that that is the case.

Lewis Group
4.9 pm
Mr. Kenneth Hind: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 20, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the loss of 1,500 jobs in the Lewis Group of retail stores".
The Lewis group recently went into receivership and Grant Thornton, the accountants, was appointed the receivers. Grant Thornton is set to make a deal of sale of five of the stores with Owen Owen, a retail stores group, which will result in the loss of 1,500 jobs.
The matter is urgent for the simple reason that that deal will be made on Friday and any opportunity for further bids will be prevented. The receivers, Grant Thornton, are giving inadequate consideration to the offer of a management buy-out which is backed by substantial funds from Shire Trust and other venture capital funds to purchase all 10 of the remaining stores in the group and the warehouse and head office, thus preserving the 1,500 jobs. It is likely that, if Owen Owen is allowed to purchase the stores, the result will be job losses in Liverpool among my own constituents, and at the remaining stores in Preston, Blackpool, Leicester, Thurrock and Glasgow, as it is unlikely that they will attract buyers.
The purchaser, Owen Owen, backed by Capital and Counties Plc, wants only five stores, three of which are in Liverpool, Manchester and Leeds. The company already owns a store in Liverpool and, as a consequence, there is a great fear in the north-west that the Lewis's store could be sold, with great job losses. There would be no need for the Liverpool head office and warehouses to be retained, but they would be required by the management buy-out team, which would protect a large proportion of the jobs.
The receiver was appointed by the National Westminster and Lloyds banks, both of which, it is calculated, will recover their indebtedness from the management buy-out deal. Therefore, there is absolutely no reason why all those who are interested should not be given an adequate opportunity to bid for the stores.
We in the north-west have suffered a recession in the past—in the early 80s—when we fought to retain jobs. It is vital that we continue to fight. It is under those circumstances that I seek leave to move the Adjournment of the House.
Mr. Speaker: The hon. Gentleman asks leave to move the Adjournment of the House, under Standing Order No. 20, for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely
"the break-up of the Lewis Group and the loss of 1,500 jobs"
I have listened with concern to what the hon. Gentleman has said. He knows that I have to decide whether to give that matter precedence over the business set down for today or for tomorrow. In this case, I regret that the matter that he has raised does not meet the requirements of the Standing Order and I therefore cannot submit his application to the House.

Reserve Free Travel Scheme (London)
4.12 pm
Mr. Harry Cohen: I beg to move,
That leave be given to bring in a Bill to amend the London Regional Transport Act 1984 and to make other provision in respect of the reserve free travel scheme for certain categories of London residents.
When you announced your retirement the other week, Mr. Speaker, many hon. Members paid tribute to you. The difference between us London Labour Members and a lot of the other Members who have paid tribute to you is that we would like to give you a parting gift, and my parting gift to you is this Bill, which will offer you a free travel pass in London for the rest of what I hope will be your very long life.
The VAT rise in the Budget will hurt a lot of pensioners' pockets—but perhaps not your own, Mr. Speaker. At the very least, Parliament should assure those pensioners that they will continue to have concessionary travel arrangements. The purpose of my Bill is to obtain better travel pass arrangements for pensioners, to improve them and to guarantee for years to come that London pensioners will have a free travel pass.
I should like to give the House a brief history of the scheme. In April 1971, the London Boroughs Association began to co-ordinate a concessionary fares scheme for the elderly to allow them to travel at child rates, but only on buses. Some individual boroughs had local discretion over the criterion for eligibility. Subsequently, in September 1973, the Greater London council took over those arrangements and widened the concessionary fares scheme to blind and disabled people, and offered free travel to all people of pensionable age. Gradually, the scheme was extended further, to include free travel on London Country buses, half fare on Green line buses and half fare on British Rail from 1983. The scheme also operated for longer hours. It was extended to the underground in 1976 at a 20p flat fare, which became free in June 1981.
Unfortunately, the GLC was abolished by the Government. Only after immense lobbying by London pensioners and a threatened rebellion by Conservative Back-Bench Members during the passage of the London Regional Transport Act 1984 was the free fare scheme saved and the statutory reserve scheme introduced.
The problem is that the reserve scheme is not as good as the scheme which is in operation. It would take only one London local authority to back out—several Tory councils have threatened to do that in the past—for the current arrangements to collapse. In addition, local authorities have found that the cost of the scheme, now running at £110 million, has been rising beyond their control, because LRT has set fare rises well above inflation and has charged councils the equivalent for pensioners' travel. That problem is building up for local authorities.
If the current scheme collapses and we go over to the reserve scheme, there will be a worse service for London pensioners. For example, the reserve scheme does not provide any travel concessions on British Rail. It would start at 9.30 am on weekdays instead of 9 am. The period for which free travel is offered under the reserve scheme could be varied by London Transport under section 51(7) of the Act. London Transport might well vary it, for example, by getting rid of the free travel aspect.
Paragraph 51 of "A Bus Strategy for London", brought out by London Transport, says:

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"One option for change from the existing reserve scheme would be to specify the scheme in legislation only for the first year of operation. After that there would still be a reserve scheme, but it could be deemed to be whatever scheme was in force the previous year, rather than automatically reverting to a free scheme, as now."
The implication is clear: the free scheme could go in those circumstances.
In addition, the element of local discretion for boroughs under the National Assistance Act 1948 would go, and that could have repercussions for some, including the mentally ill. The reserve scheme would be more expensive. For example, airbus travel would have to be included and charged to London authorities. London Transport would decide the charges and impose them on the boroughs.
My Bill seeks to ensure that if the scheme operated by the London boroughs fails, the reserve scheme, which is guaranteed in law, will give London pensioners the same concessions as they get now, which include BR travel and the earlier starting time to which I have referred.
I am also trying to improve the existing scheme by offering free travel instead of half fare on British Rail and on Green line buses within London. The whole scheme needs to be examined to counter the threat to pensioners' passes because of the Government's deregulation plans.
To summarise the aims of the Bill, the service to pensioners should be improved, the reserve scheme should be as good as the current scheme which is operated voluntarily by local authorities, the Secretary of State's power should be limited only to being able to improve the scheme for users and to help allay some of the costs, and LRT's responsibility for setting charges to local authorities should be limited to the equivalent of fare rises or the inflation rate, whichever is the lower. On top of that, the contribution which the local authorities have to pay for the pass should riot be counted in any poll tax capping or other capping arrangements introduced in future.
The Bill deals specifically with London, but I am not concerned only about London. I am not parochial about these matters. I want free travel arrangements for
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pensioners to be extended to all local authority areas. There should be a statutory reserve scheme in those areas in case Tory local authorities start taking away the concessions which are already provided in those areas.
My Bill has the support of pensioners and travel organisations. For example, Age Concern said:
"an acceptable minimum level of service would be the currently voluntary scheme."
A representative of the London regional passengers committee is quoted as saying that a main concern was to ensure the continuation of concessions already achieved.
The pensioners' pass is safe for this year, because the general election is looming, but after that it will be at considerable risk. It comes up for review in December this year. As I said at the beginning of my speech, all Londoners want the problems to be sorted out early. That is what my Bill seeks to do. It would guarantee pensioners a free travel pass well into the 21st century, so that London pensioners—including you, Mr. Speaker—can enjoy it well into their dotage.
Question put and agreed to.
Mr. Speaker: Who will prepare and bring in this excellent Bill?
Mr. Cohen rose—
Hon. Members: Mr. Speaker.
Mr. Cohen: Yes, perhaps Mr. Speaker.
Bill ordered to be brought in by Mr. Harry Cohen,
Ms. Diane Abbott, Mr. Tony Banks, Mr. Jeremy Corbyn, Mr. Tom Cox, Mr. John Fraser, Ms. Mildred Gordon, Miss Kate Hoey, Mr. Ron Leighton. Mr. Ken Livingstone, Mr. Peter Shore and Mr. Nigel Spearing.

Reserve Free Travel Scheme (London)
  RESERVE FREE TRAVEL SCHEME (LONDON)
  Mr. Cohen accordingly presented a Bill to amend the London Regional Transport Act 1984 and to make other provision in respect of the reserve free travel scheme for certain categories of London residents: And the same was read the First time; and ordered to be read a Second time upon Friday 19 April and to be printed. [Bill 116.]
Orders of the Day
  WAYS AND MEANS
  Order read for resuming adjourned debate on Question [ 19 March].

  AMENDMENT OF THE LAW
  Motion made, and Question proposed,
  That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance; but this Resolution does not extend to the making of any amendment with respect to value added tax so as to provide—

  (a) for zero-rating or exempting any supply;

  (b) for refunding any amount of tax, otherwise than by virtue of goods or services supplied to one person being treated for the purposes of section 14(3) of the Value Added Tax Act 1983 as supplied to another person;

  (c) for varying the rate of that tax otherwise than in relation to all supplies and importations; or

  (d) for relief other than relief applying to goods of whatever description or services of whatever description.—[ Mr. Norman Lamont.]

  Question again proposed.

  Budget Resolutions and Economic Situation
  [Relevant document: European Community document No. 4433/91 on the Annual Economic Report 1990–91.]
  4.22 pm
  Mr. John Smith: A Budget is not just about revenues and fiscal policy. It provides an opportunity for the Chancellor of the Exchequer to make an important statement about the management of the economy and to assess the prospects for the future. It has been noticeable that this Government have used forecasts about our economy ruthlessly and irresponsibly to conceal the real trends in economic performance by always painting a reassuring picture about future prospects. However depressing is the reality of today, happy days are promised for just round the corner. Hence, in this Budget statement we are told that recovery from deep recession is imminent and, indeed, is assured to happen as soon as next year.
  The Government's technique has become familiar because this is not the first assurance that we have had about prospective economic improvement. After all, we were told not so long ago that, as part of the miraculous economic achievement, the scourge of inflation had been eradicated. In his 1988 Budget statement, the right hon. Member for Blaby (Mr. Lawson), whom the Chancellor apparently regards as his mentor, told us:
  "It is a testimony to the soundness of our policies that the present strong and sustained upswing, unlike almost all its predecessors, has not led to any resurgence of inflation."—[Official Report, 15 March 1988; Vol. 129, c. 994.]
  The right hon. Gentleman was not alone. The then Chief Secretary—the present Prime Minister—told us in the autumn statement debate of that year:
  "Inflation is low and will remain so".—[Official Report, 14 January 1988; Vol. 125, c. 549.]
  We know now, of course, that they were both completely wrong. Inflation doubled, rising to more than 10 per cent.
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  last year. So much for Conservative assurances about the prospects for inflation. Even as it rose relentlessly, it was described as a "temporary blip".
  Similarly, we had expansive assurances that recession would not occur, that any pause in the economy would be—to quote the present Chancellor—"shallow and short-lived". Of course, good news is always predicted. Any disturbing tendency is minimised, or concealed by a fresh declaration of confidence, hard on the heels of the last disappointment. A classic of this genre appeared in last year's Budget statement, when the then Chancellor told us that, whatever had been the problems of 1990, we could be confident about good times in 1991. He said:
  "Growth should return in 1991 towards its sustainable rate of around 2¾ per cent. I am confident that the period of low growth will be short lived."—[Official Report, 20 March 1990, Vol. 169, c. 1011.]
  That statement is characteristic of the present Prime Minister. In the Red Book he published a growth figure of 1·5 per cent., but he could not restrain himself from hinting that it might be 2·75 per cent. It would take a Chicago lawyer to get at the real meaning of this remark:
  "Growth should return in 1991 towards its sustainable rate of 2¾ per cent."
  What on earth does that mean? However, it is typical of the Prime Minister that he should publish one figure in the Red Book and, in his statement to the House of Commons, hint that the situation might be much better. But it does not really matter what he intended to say. He was right about at least one thing: growth was short-lived. There was none at all. Far from growing at anything like 2 per cent., the economy slid into recession.
  But exactly the same rose-tinted forecast was made by the then Chief Secretary, who is now the Chancellor. Concluding his speech in last year's Budget debate, he made this ringing declaration:
  "Pain there may be, but gain there will also be. By this time next year, the prospects will be distinctly brighter. [Official Report, 21 March 1990; Vol. 169, c. 1142.]
  Here we are, one year later—[AN HON. MEMBER: "The prospects have been brighter for him."] They have been a little bit brighter for him. There were some ups and downs on the way, and I gather that there is a continuing argument between the right hon. Gentleman and his predecessor as Prime Minister as to what precisely was his role in these events. However, perhaps I should not inquire too closely into matters of private grief—[Interruption.] The hon. Gentleman may get more attention for that sedentary intervention than he planned. I can tell him that the right hon. Member for Finchley (Mrs. Thatcher) keeps a careful eye on all that is happening. I think that the hon. Gentleman is trying to take some of the heat off the Chancellor of the Exchequer. Come to think of it, he looks a bit like a lightning conductor.
  As one reads earlier debates, one finds that some feelings that have obviously been kept under tight control for a very long time are beginning to peep out. [Interruption.] Someone says that Conservative Members are glad that the right hon. Member for Finchley has gone. Unfortunately, he did not get as good a reward as did the right hon. Member for Kingston upon Thames (Mr. Lamont), who, as Chancellor of the Exchequer, now holds one of the senior positions in the Government. I must not be diverted by the seated interjections of members of the Government Front Bench, however entertaining they may be.

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  We must examine the brighter prospects that we are enjoying this year compared with last year's Budget forecasts. In last year's Red Book, it was predicted that in the first half of 1991 there would be growth of 1·5 per cent. Yesterday, the Chancellor of the Exchequer told us that it would fall by 2 per cent. We were told last year in the Red Book that manufacturing output in 1991 would increase by 0·75 per cent. Yesterday, that estimate was revised to minus 5 per cent. Last year, fixed investment in 1991 was expected to decline slightly, by 0·75 per cent. Yesterday, it was reduced massively to the almost unprecedented level of nearly 10 per cent.—9·75 per cent. to be precise.
  Do the new and grim forecasts for 1991 reveal the distinctly brighter prospects that were promised 12 months ago by the then Chief Secretary, who is now the Chancellor of the Exchequer? Since that Budget, unemployment has increased by almost 400,000. Is that another feature of the brighter prospects that were promised last year for the year that lay ahead?
  We see from the repeated contradictions between promise and performance how thin is the credibility to be attached to any forecast about anything in the economy that comes from Ministers of this Government. Let us keep at the forefront of our minds when considering their blithe asssertions the fact that, after heading sharply downwards, the economy will suddenly recover to growth of 2 per cent. in lime for the last available date for the next general election. What a happy statistical coincidence. What a wonderful world we live in when we can create on the basis of bogus predictions and misdeclarations about the economy.
  It was surely significant that the Chancellor of the Exchequer drew our attention to the severe penalties that were attached last year by the Government to incorrect declarations in the value added tax system. The present Chancellor of the Exchequer reminded us yesterday that especially severe penalties had been introduced for those who persistently made inaccurate financial returns. The right hon. Gentleman referred specifically to the serious misdeclaration penalty which was introduced in April 1990. His experience since then appears to have given him a special sympathy for the miscreants to whom the penalty was directed. He told us that there had been widespread protest that the penalty was too severe. I give the Chancellor of the Exchequer credit for realising that it was wholly inappropriate to impose such a penalty on those whose misdeclarations were minor matters compared with the gross misdeclarations about the economy that Ministers have made year after year.
  Whatever the Government try to do, the facts eventually catch up with them. Yesterday, the Chancellor of the Exchequer was noticeably reticent about some key economic indicators. Not a word did he say to the House about the estimate for fixed investment for 1991. The right hon. Gentleman's predecessor told us last year that fixed investment would decline by slightly less than 1 per cent. The forecast that the present Chancellor of the Exchequer has been obliged to print in the Red Book reveals, as I have already said, that the forecast for 1991 is a precipitate fall of almost 10 per cent. Why, we wonder, was that omitted from the Chancellor's Budget presentation yesterday and, indeed, from his television broadcast last night? Come to that, the right hon. Gentleman made no reference to the projected fall in manufacturing output. It was forecast a year ago that it would increase by almost 1 per cent., yet it is now expected to drop by as much as 5 per cent.
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  These are, for the Government, embarrassing indicators of what is happening in the real economy and of the depth and seriousness of the economic recession that afflicts our nation. At least it seems to be accepted that there is a recession. I have no doubt that that is only because it can no longer plausibly be denied—not that the Government did not try to do that as well. In December 1989, the present Prime Minister scoffed at the notion that there would be a recession at all. He said in a speech to the Association of British Chambers of Commerce:
  "I do not believe myself that a recession is either likely or necessary."
  Not to be outdone, the present Chancellor of the Exchequer, after being cornered by the Select Committee on Treasury and Civil Service, and having to accept that there was indeed a recession, told us that it would be
  "shallow and short-lived".
  Let us ponder for a moment the now admitted fact that investment will fall by 10 per cent.—as far as I can discover, an unprecedentedly bad prediction. Investment is the seed corn of economic progress, yet here in Conservative Britain it is falling through the floor. Ominously for us, that is not happening elsewhere. The latest figures of the Organisation for Economic Co-operation and Development show that all the other members of the Group of Seven are maintaining positive and superior levels of growth in investment.
  Investment is vital for economic recovery, particularly in the context of the single market after 1992. It does not seem to worry the Government that in other European countries 1991 is a year of preparation and investment. In Tory Britain it is a year of cuts and decline. That is why we in the Labour party called for a Budget for investment and for recovery. That is why we proposed lower interest rates and a package of investment incentives for manufacturing industry. The Government felt obliged to make reductions in corporation tax—no doubt because of the parlous condition of so many smaller companies as a result of the recession and the years of high interest rates. We should have preferred the fiscal relaxation to have been targeted on the stimulation of investment in the manufacturing sector which, after all, is the crucial wealth creator and the most internationally tradeable part of the economy.
  We also proposed a major investment in training, another area of policy which, like manufacturing, seems not to concern the Chancellor of the Exchequer very much. We proposed that the foolish cuts in the training budget of £245 million should be reversed. How can the Government justify those cuts when we have skill shortages in the midst of sharply rising unemployment and when we are now in the most absurd of all situations, putting trainers on to the dole?
  We also recognised the human problem as well as the economic waste of rising unemployment, up by 85,000 last month alone or more than 4,000 lost jobs for every working day of the month. We proposed to tackle that by a temporary employment scheme to provide both work opportunity and training for the growing number of our citizens without work. Our proposals in this regard would have cost £340 million, and we would have invested £300 million in a new skills fund to provide much-needed extra resources for the training and enterprise councils and non-statutory training organisations.
  The only acknowledgement of any training need in this Budget was the tax allowance for individual training costs at an estimated cost to the Treasury during 1992–93 of £20

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  million. Such a sum shows how totally inadequate is the Government's appreciation of the scale of the training disaster that our country has suffered in the Conservative years.
  Mr. Nigel Forman: I have been trying to follow closely the argument of the right hon. and learned Member for Monklands, East (Mr. Smith). Is it implicit in what he has just said that the previous undertaking given, I think, by him and the shadow Chief Secretary, the hon. Member for Derby, South (Mrs. Beckett)—that the only areas of public expenditure which would be expanded under a future Labour Government were child benefit and pensions—will be extended to cover increased expenditure on these other worthy purposes to do with training? If so, what items of public expenditure does he intend to reduce to make room for those increases?
  Mr. Smith: The hon. Member for Carshalton and Wallington (Mr. Forman) should have read some of the proposals that we published last week. First, he misrepresents what my hon. Friend the Member for Derby, South (Mrs. Beckett) said. We indicated the priority that we attach to certain items of expenditure, but we did not exclude the possibility that we would enter into proposals for other areas of expenditure.
  That was why I drew the hon. Gentleman's attention—I could not have done so more specifically—to the precise sums in our proposal. I hope that he does not think that I did that just for fun. I did so to show the House that we were entering into a commitment to achieve precisely that end. He should consider why on earth the Government whom he supports do not enter into a similar commitment to tackle our training problems. Surely a man of his perception, knowledge and experience of such matters knows that we have a training disaster in this country. What does he do about it—does he merely wring his hands and say that there is nothing that he can do about it?
  Mr. Forman: The answer to the nation's training needs is to be found in the TECs, which are going ahead very satisfactorily—[Interruption]—and the sensible tax relief proposed for individual training.
  Mr. Smith: I do not wish to be disrespectful to the hon. Gentleman, who tries to make a helpful contribution to our debates, but he should have listened to what I was saying. I drew attention to the Budget proposals for tax relief for people on individual training programmes, but I said that £20 million—not this year, but the year after next—is hardly an adequate response to the scale of Britain's training problems.
  The hon. Gentleman referred to TECs. Does not he know that almost all the TEC chairmen protest loudly that they have been given responsibilities by the Government without being given the resources to carry them out, and have recruited various people from the private sector to contribute to the TECs, who discover on arrival that there is no money for them to carry forward the programme? My constituency is suffering from that very problem. The Government amalgamated the Scottish Development Agency and the Training Agency into a new organisation, Scottish Enterprise, and set up many local enterprise companies. The one that affects my constituency,
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  Lanarkshire Development Agency, has had to cut the training programme that had already been promised. Its first job is to deliver the bad news that the Secretary of State for Employment lost the argument with the Chancellor on the previous autumn statement figures. That is why, unhappily, money is being cut from training. I hope that, when he reflects on it, the hon. Gentleman will see that there is a great deal of wisdom in what we are saying.
  There are some proposals in the Budget——
  The Secretary of State for Social Security (Mr. Tony Newton): I wonder whether, before the right hon. and learned Gentleman hastily moves on from Labour's shadow Budget—[Interruption.] He would have been wise to move hastily because he will know that I have been asking the hon. Member for Oldham, West (Mr. Meacher) to explain the major balancing item in the shadow Budget, an alleged saving of £619 million by withdrawing the personal pensions incentive. That could be done only by taking back money to which people already have a legal entitlement and wrecking 4 million personal pensions. Is that the Opposition's policy?
  Mr. Smith: The right hon. Gentleman knows perfectly well that that was one of the changes that we proposed. Our proposals clearly suggested that the bribe for people to enter personal pension schemes should not be continued. The precise figure—which I understand the right hon. Gentleman also contests—was supplied by his Department in a parliamentary answer. On the whole, we should be entitled to rely on that. That is the answer.
  Mr. Newton rose——
  Mr. Smith: The right hon. Gentleman might ask me whether I am prepared to give way. I have not assented to give way and it is slightly arrogant to wander up to the Dispatch Box without asking the speaker if he will give way.
  Mr. Newton: The £619 million included in the shadow Budget is money to which people already have a legal entitlement and most of which has probably been paid in respect of contributions that they have already made. Is that or is that not to be withdrawn?
  Mr. Smith: The right hon. Gentleman should know perfectly well that, since that proposal was introduced by the present Government, the Labour party has said that it would be one of our ambitions to withdraw it. We are merely proposing once again that that bribe should not be continued.
  The right hon. Gentleman's other shot at this subject was to try to say that we had dropped our commitment to uprate old-age pensions according to prices or earnings, whichever was the higher. We do not have to repeat that commitment on every occasion because it is so clearly understood by the public and the House as one of the Labour party's major commitments.
  The right hon. Gentleman asked why we included proposals for child benefit. That was because they are highly relevant to Budgets in which child tax allowance used to be a feature. It looks as though we did some good by putting it into the shadow Budget because the Chancellor appeared to listen to what we said in our proposals.
  I must move on to the other proposals——
  Mr. Newton: Will the right hon. and learned Gentleman give way?
  Mr. Smith: The right hon. Gentleman cannot complain because I have given way to him twice. He asked two absurd questions to which he has received adequate answers.
  There are other items in the Budget, some of which my right hon. and hon. Friends will be disposed to welcome as the Labour party has, for many years, campaigned for them. I shall draw the right hon. Gentleman's attention to one. It seems at last to be recognised, at least for future conduct—I hope that the right hon. Gentleman will pay attention to this because it affects his Department—that a potential Conservative Government would uprate child benefit according to the inflation rate.
  It is hard to believe that the Government are seeking congratulation on the abandonment of a posture of unfairness and obduracy that no Government should ever have contemplated, let alone pursued. They know full well that they broke an all-party understanding that child benefit—the product of the amalgamation of family allowance and child tax allowance—would be regularly updated in the same way as a normal tax allowance. In addition, they were perfidiously misleading in their shameful manifesto reference to the subject at the last election. Even now, when a sense of penitence on their part should have led them to make good the entire shortfall of the freeze, we have a proposal merely to increase the first child's benefit by £1, while the increase for other children is limited to a miserly 25p—all of which will not be paid, as I understand it, until October of this year. The Labour party proposed that the increase should take child benefit up to £9·55 for all children. Clearly, it will be left to the next Labour Government to put right an injustice which has been only partially, if revealingly, acknowledged in this year's Budget.
  There are other items, such as the changes in mortgage tax relief——
  Mr. Newton rose——
  Mr. Smith: The right hon. Gentleman should ask me whether I am prepared to give way. I think that he is clearly ambitious to join Treasury Ministers. I shall give way to him for one last time, but he must understand that I am being generous in giving way to him so frequently.
  Mr. Newton: I acknowledge that, but the right hon. and learned Gentleman might acknowledge that the biggest single proposed item of expenditure in the shadow Budget was social security expenditure, to which I am about to come, and that the biggest single item of saving was the personal pensions incentive, to which I have referred.
  The right hon. and learned Gentleman made a number of points on child benefit. I should like his comments on a point that I have put to him and his right hon. Friends—[Interruption.] The proposal that the right hon. and learned Gentleman put in his shadow Budget is costed in such a way that I million families on income support, and with more than 2 million children, would have gained no benefit. The proposals that my right hon. Friend announced yesterday give full benefit to all parts of the population, including the poorest. The document that he published——
  Hon. Members: Come on.
  Mr. Frank Haynes: On a point of order, Mr. Deputy Speaker—[Interruption.]
  Mr. Deputy Speaker (Mr. Harold Walker): Order.
  Mr. Haynes: This is disgraceful, Mr. Deputy Speaker. You should have stopped the Secretary of State for Social Security. He is abusing the procedures of the House of Commons. He will have an opportunity to speak in a day or two's time.
  Mr. Newton: My question is simply this: is it or is it not Labour party policy, as costed in the shadow Budget, to spend £750 million on child benefit while giving no help to the poorest families on income support?
  Mr. Smith: I fear that I cannot congratulate the right hon. Gentleman on a capacity for brevity. Having patiently listened for quite a long time to his third intervention, I believe that it is an abuse of the generosity that I have extended to him——
  Mr. Michael Brown: How about answering the question?
  Mr. Smith: I will answer the question in my own way and in my own time. The Opposition are well used to abuse from Conservative Back-Benchers, but I see that it has moved forward.
  I give a straight answer. The difference between the Opposition and the Government is that we would have increased child benefit properly and they did not. That is what it is all about. Had there been a Labour Government, child benefit would be £9·55 per week for each child. That is not the case under the Government. If the right hon. Gentleman wanted to show support for the poorest people in our society, he has had plenty of opportunity to do so during his period in office.
  As I was endeavouring to say, there are other items, such as the change in mortgage tax relief, which the Opposition support and which have long been resisted by the Government. Imitation is, in many ways, the sincerest form of flattery and I suggest that for guidance and enlightenment the Conservative party would be well advised to read the Labour party's policy statements with care and attention. [HON. MEMBERS: "We have "] I am glad to hear it. If they read them with a more open mind than heretofore, they will find some extremely attractive, eminently sensible and much-needed proposals to create the strong economy and the fair society to which an increasing number of our people aspire.
  The Government are no doubt inhibited by a feeling that cheap imitation is no substitute for having policies carried out by those who believe in them and are committed to them for their worth—a view which I think will prevail in the coming decisions of the electorate.
  But what caused many of the headlines following the Budget was the humiliating U-turn executed by the Government on the poll tax which was presaged by the increase in VAT of 2½ percentage points—a percentage increase of more than 16 per cent. in the tax.
  Mr. James Arbuthnot rose——
  Mr. Smith: I have hardly said a word on this, but I will take a risk, as I did on a previous occasion, and give way to the hon. Gentleman.
  Mr. Arbuthnot: Would a Labour Government reverse the transfer of local government taxation to VAT?
  Mr. Smith: On the radio this morning the Chief Secretary said——
  The Chief Secretary to the Treasury (Mr. David Mellor): I was asleep.
  Mr. Smith: Well, the right hon. and learned Gentleman's voice was on the radio. He probably was asleep, but I certainly heard it. He said that it would be wise for us to suspend judgment on the question of local government taxation until the Government's full proposals had been revealed.
  I gather that there is some irritation among members of the Government that one of their colleagues regularly leaks information in Central Lobby. Anyone who took a wander out there a day or two ago could have seen his minions in the act. It is well known that the Secretary of State for the Environment has been leaking like a sieve the proposals that are before the Government. He does not seem to have suffered much, so no doubt he will continue to do so. Since the Government do not tell us very much, we should be grateful for the odd crumb that we get from the right hon. Gentleman.
  We will consider carefully what the Government put forward and when we see the Bill—we do not even know its title—we will be able to give a considered reaction.
  Sir Peter Tapsell: If the Secretary of State for the Environment has been leaking like a sieve, why was everyone so astonished by the announcement about VAT?
  Mr. Smith: The hon. Gentleman who, albeit unsuccessfully, worked assiduously for the Secretary of State for the Environment in the recent contest in the Conservative party——
  Mr. Julian Brazier: Why not answer the question?
  Mr. Smith: I am asked to give advice on something that is happening in the Conservative party, not about Labour party policy. I was asked to give my opinion about what the Secretary of State for the Environment was talking about. Well, he was not actually talking about VAT. He did not get that one. But he sought to capture publicity before the Chancellor's announcement about VAT. The wicked thought crossed my mind that he was trying to bounce some of his Cabinet colleagues into taking a decision at a particular meeting by drumming up support here and there for his proposals. As far as I can see, no one in the Government is denying that that process of leaking went on. But it is for the Government to decide how Ministers behave in their Administration.
  The 16 per cent. increase in that indirect tax will mean that, when we buy the wide range of goods to which the tax applies—household equipment is an obvious example—or pay for services such as in our telephone bills, we will all be paying a poll tax surcharge. It is not clear to me—unless the hon. Member for East Lindsey (Sir P. Tapsell) can give me an opinion—whether the VAT proposal is intended to bury the poll tax or to keep it alive.
  Conservative Members know perfectly well that many among them see in the Chancellor's VAT increase a possible lifeline for the continuation of the poll tax in one form or another. But of course the House of Commons has
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  not been shown the whole prospectus. It does not know whether the poll tax is to go or stay, what is the proposed allocation of services between central and local government or what financial burdens have been allocated and to whom. We get Budget proposals one day, we are told that a Bill will be presented on another, and although the House has not been told what the legislation contains, it is told that the normal processes of legislation will be steamrollered to suit the political convenience of a Government running hither and thither in a desperate attempt to extricate themselves from a poll tax fiasco of their own creation.
  Enormous changes in the relationship between central and local government, of great significance to the balance of our constitution, are revealed in insidious leaks by the Secretary of State for the Environment and are then packaged in a panic form to be bulldozed through Parliament. Was there ever an example of more foolish or ill-considered government?
  The latest burden in VAT increases is just the most recent cost of the poll tax fiasco. Hundreds of millions of pounds—I am generous in that estimate—have been wasted in the constant changes in local government administration and finance which have been imposed by the Government. The tragedy is that all the money could have been used to improve the services which local government exists to provide and which are the real victims of the Government's ludicrous incompetence.
  Let it not be said, as I understand the Chancellor to claim, that the VAT increase that he proposes will not affect the cost of living. The system of retail prices indexing may be such that the effect of VAT increases can be statistically disguised, but, as many newspapers today have pointed out, that is little more than sleight of hand. The price increases will be real. They will be paid by our constituents, who will not be impressed. They are well capable of spotting another inflationary own goal coming in their direction.
  Of course, the retail prices index will fall in the months ahead. That is statistically inevitable as previous price rises fall out of the calculation. One effect of flattening the economy and causing unemployment to rise is that inflation will fall. It would be wise for the House to look with some care at the detailed figures in the Red Book. The gross domestic product deflator, which measures inflation in the economy as a whole, rather than the limited bundle of goods contained in the retail prices index, remains almost unchanged, easing only from 7·75 per cent. in 1990 to 7 per cent. in 1991. That is still well above the equivalent GDP inflation rates of the other major European Community countries. Again, we must be wary of the Government's optimistic forecasts, in the light of the information buried in the statistics which they themselves have presented.
  During the past 12 years the Government have indulged in the economics of the roller-coaster. We are back to the cycle of boom and bust, back to the stop, go and stop again policies which have been the chief characteristic of Conservative economic policy for decades. In the 1960s we saw the Maudling dash for growth, in the 1970s it was the Barber boom and in the 1980s the right hon. Member for Blaby and the present Prime Minister organised their own spend now, pay later credit spree.
  There has been a Conservative boom and bust in each of the past three decades. Why on earth should anyone

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  believe that another Conservative Government in the 1990s would behave any differently from what they have done three times before?
  The Budget confirms how little the Government and the Conservative party have learnt from their experience. I am sad to say that it is yet another missed opportunity. Sooner rather than later I hope that we shall elect a Government who are committed to making the breakthrough to economic success which is so desperately needed for our country in the 1990s. We need it if we are to secure our living standards and to help us build a more decent society. It will fall to that Government to present a Budget for investment and recovery. We in the Labour party look forward to that opportunity.
  5.1 pm
  The Chief Secretary to the Treasury (Mr. David Mellor): Yesterday, my right hon. Friend the Chancellor charted the course of the British economy during the next decade and proposed measures designed to help business through the current recession and to maintain the momentum of a decade of supply-side reform. He introduced proposals to make the tax system fairer and to enhance the quality of life. Finally, my right hon. Friend announced a massive switch between local and central taxation—a switch that lays the foundation for a lasting solution to the problem of local government finance.
  History will show that my right hon. Friend's first Budget was right for its time, right for the economy and right for Britain, and it certainly was not dull either. That is the almost universal view of today's press, the mood of which is well summed up by the Financial Times which, in the opening words of its editorial, said that the Chancellor
  "has played a difficult hand bravely and skilfully."
  What is clearly recognised in that editorial, as in so many others, is that this Budget puts the long-term health of the British economy and British business first.
  Mr. Giles Radice: Will the right hon. and learned Gentleman give way?
  Mr. Mellor: It is very early in my speech, but I shall.
  Mr. Radice: As he was quoting from the Financial Times, the right hon. and learned Gentleman might also have quoted the article by Mr. Samuel Brittan which said that this is not a Budget for business but a Budget to reduce the poll tax. That is the truth, is it not?
  Mr. Mellor: It is not. It is a Budget for business and to reduce the community charge, and it succeeds magnificently in both. I shall come to the chapter and verse. It is to the discomfiture of Opposition Members that it succeeds so well.
  So far in this debate we have heard speeches from he Leader of the Opposition, who, alas, is no longer present, and the shadow Chancellor—a winning combination, the Labour party would have us believe. I do not know whether they are familiar with the old Russian proverb about partnership, of which I am irresistibly reminded when listening to both of them. The Russians say that there are two people in every partnership—the one who chops the wood and the one who does the grunting. I do not know which was which. They were hotly competing for the title of the grunter, but it will be interesting to see how both of them have shaped up in this debate.
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  The Leader of the Opposition's performance was quite astonishing. I have watched him, as have my hon. Friends I am sure, for some years carrying out that task. It is certainly a difficult one. It is a real ordeal to have to respond immediately to a complex Budget. It is a difficult speech to bring off and it is the particular facility of the Leader of the Opposition to make it seem impossible.
  Let me make clear exactly what I mean. First, most of his speech had been typed up well beforehand. [HON. MEMBERS: "So is yours."] If ever there was the wrong speech, by the wrong writer for the wrong occasion, that was it. It is a speech that we have already heard—[ Laughter.] Opposition Members may wish to hide their discomfiture about the performance of the Leader of the Opposition, but—[Interruption.] I thought that Opposition Members were supposed to be behaving well in speeches these days, Mr. Deputy Speaker, and showing us up.
  I shall come to the chapter and verse of why the Leader of the Opposition was unwise not to discard his script. Everything in my script is predictable because of the predictable speech by the Leader of the Opposition, who said nothing new.
  The Leader of the Opposition said that he had been listening to a "tinkering" Budget. Whatever it is, it certainly is not tinkering. I would like to hear the Leader of the Opposition's definition of a radical Budget if this is tinkering. However, it is a fitting tribute to the right hon. Gentleman's forensic skills that because his script said tinkering he continued to call it tinkering, although, as is perfectly obvious to everyone, this Budget is very different.
  When it came to the spontaneous bits, the Leader of the Opposition was unable to keep up with his pre-prepared description of a tinkering Budget from a Government that he said "will not learn" because he went on to say that our child benefit proposals were "another spectacular somersault", and he had to describe the reduction in the community charge as
  "the biggest climb-down in … political history."—[Oficial Report, 19 March 1991; Vol. 188, c. 182]
  He should make up his mind—is it tinkering or a U-turn? After all, he is supposed to be the decisive one. Mind you, Mr. Deputy Speaker, it cannot have been easy for him. All his favourite foxes were shot—the level of the community charge, mortgage relief, offshore trusts, and company cars. Perhaps the right hon. Gentleman should have been congratulated merely for continuing to stand there while all those rugs were pulled out from under his feet.
  I wish to return to the substance of what the Leader of the Opposition said so that I have the attention of the right hon. and learned Member for Monklands, East (Mr. Smith) and to some of the matters mentioned by my right hon. Friend the Secretary of State for Social Security, which appeared in the Labour party's shadow budget. That has exposed, once and for all, Labour's claims to be the party of fiscal responsibility. Despite saying that the child benefit proposals were another spectacular somersault, the Leader of the Opposition went on to say that he wondered that the right hon. Gentleman had "the gall to come" to the House to announce them, but those measures will cost £450 million in a full year. Indeed, when taken together with the increase that is coming into effect next month, the full year cost is more than £700 million. I should have thought that the real gall is to say that one is financially responsible and then sneer at that level of

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  financial commitment. Heaven knows what would happen if the Leader of the Opposition were in charge with that sort of thinking.
  Mr. A. J. Beith: Will the Chief Secretary give way?
  Mr. Mellor: I will in a moment.
  I would like to return to the point made by my right hon. Friend the Secretary of State for Social Security about the measures costed by the right hon. and learned Gentleman in the shadow budget. The right hon. and learned Gentleman will be aware that our proposals alter the income support level so that the poorest families, with a quarter of all children, receive the full benefit of the increase in child benefit. The right hon. and learned Gentleman sought to fudge what was said in the shadow budget. The trouble with publishing documents is that we read them and subject them to scrutiny. What do we find? We find the costing of his child benefit proposal at £775 million.
  The right hon. and learned Gentleman is perfectly at liberty to intervene if I have got that wrong. However, it is clear that he knows only too well that £775 million is the costing if no allowance is made for families on income support. If he was to give the full benefit to the poorest families, the total cost would be over £1 billion. Once again, the figures just do not add up.
  The right hon. and learned Gentleman seems to be studiously engaged in discussions with the hon. Member for Newcastle upon Tyne, East (Mr. Brown) to avoid the argument. If he wants to stand up and make it absolutely clear what he meant, I shall be happy to give way. Were the poorest quarter to be better off or not? Were the poorest quarter to have their income support varied on the right hon. and learned Gentleman's calculations or not? [HON. MEMBERS: "Silence!"] As I have said to the right hon. and learned Gentleman before, we hear plenty of quarter sessions huff and puff from him, but when we look for the beef, it simply is not there.
  The right hon. and learned Gentleman has published a shadow budget riddled with errors and inconsistencies. We have already exposed the hole in the middle of the child benefit proposals, but there are more. There is the repudiation, which he acknowledged this afternoon, of Beckett's law, which stated that Labour had only two priority spending pledges—pensions and child benefit. We know, and he has acknowledged, that a raft of additional measures on training, capital allowances, temporary work programmes and so on was included in the shadow budget.
  When it comes to paying for all that, the whole thing begins to fall apart. The right hon. and learned Gentleman may want to clarify other points in the shadow budget, and that would be helpful to us all. First, £1 billion of the cost of the shadow budget was to come from withdrawing mortgage tax relief from top-rate taxpayers and reducing the subsidy on company cars. We have done that, and money cannot be spent twice. What is next in line? Sooner or later the right hon. and learned Gentleman may have to return to the subject that always embarrasses the Labour party so much—the level of income tax. Labour Members have been anxious not to commit themselves on that topic since the fiasco of their promise at the last election that income tax would have to go up to 29p in the pound.
  Mr. Harry Ewing: Will the Chief Secretary give way?
  Mr. Mellor: No. I want to deal with the right hon. and learned Gentleman's shadow budget; I shall give way after that. There will be plenty of time.
  Mr. Ewing rose——
  Mr. Mellor: I will give way when I have finished dealing with the shadow budget. That is perfectly fair. The hon. Gentleman must be patient.
  Mr. Ewing rose——
  Mr. Deputy Speaker: Order. The Chief Secretary has made it clear that he will not give way.
  Mr. Mellor: According to the shadow budget, £619 million for investment and recovery will come from ending the 2 per cent. personal pension incentive. That figure has a nice ring. It sounds accurate, because it is not a round figure, and some people might be taken in by it. As has been made obvious this afternoon, they should not be.
  The right hon. and learned Gentleman may benefit from what I am saying next time he has a go at the same exercise. The elimination of the 2 per cent. personal pension incentive would yield, not £619 million, but about £10 million a year. Where, then, does this little pot of gold come from? As my right hon. Friend the Secretary of State for Social Security has made clear, it comes from the retrospective removal of the 2 per cent. rebate that has already been given to 4·3 million of our fellow citizens who have opted out of the state earnings-related pension scheme and taken up private pensions.
  I shall make myself available to the right hon. and learned Gentleman if he wants to correct any of what I have said. I shall be happy to give way to him.
  Mr. Ewing: Will the Chief Secretary give way?
  Mr. Mellor: No. These diversionary tactics are useless. I am keeping my eye on the Opposition Front Bench.
  Mr. Ewing rose——
  Mr. Mellor: I will not give way. I am sorry that the hon. Gentleman does not want to hear the rest of my argument. I shall give way to him after I have finished dealing with this passage in the shadow budget.
  The retrospective removal of the 2 per cent. rebate would rob a man on average earnings of a £272 contribution to his pension scheme for this year alone, and would slash his pension contributions by £5 per week. Is that really what the Labour party wishes to do to millions of working people up and down the country?
  Mr. Ewing rose——
  Mr. Mellor: The hon. Gentleman has been in the House long enough to know better.
  The Labour party is in considerable disarray on this point. I do not know to what extent the hon. Member for Oldham, West (Mr. Meacher) is privy to the discussions that result in the shadow budget, but he assured my right hon. Friend the Secretary of State for Social Security that the proposal was only for the future. Is it, or is it not? Does the right hon. and learned Gentleman wish to intervene to tell me the answer? If so, I am anxious to give way to him. Surely the Labour party should know what its policy is.
  Mr. Ewing rose——
  Mr. Mellor: Diversionary tactics are no use. Is the proposal for the future, or is it not?
  Silence speaks volumes; sometimes it speaks louder than words. The right hon. and learned Gentleman will not intervene, even with a lengthy, lawyer-like evasion. Labour will have to sort the matter out. It is clear that if Labour wishes to persist with the idea that £619 million will be saved, it will have to face the wrath of 4·3 million of its fellow citizens whose money will be taken back from them. If the removal of the rebate is not retrospective, however—if it is only for the future—the £619 million figure becomes £10 million, and knocks a hole in the heart of this so-called responsible document, the shadow budget. [HON. MEMBERS: "Give way"] No. I am still dealing with the shadow budget. I shall be happy to give way later, but I have not yet finished discussing the anomalies in the document. For instance, it refers to closing the tax loophole available through offshore trusts. Labour implies that that would be worth £1 billion. As the right hon. and learned Gentleman knows, we have closed that loophole. The Inland Revenue's estimate of the benefit to be gained from closing it is £100 million—
  Mr. John Smith: That is the Government's estimate.
  Mr. Mellor: The right hon. and learned Gentleman, who is recovering his composure and voice, says insouciantly that it is our estimate. It is not our estimate. It is the Inland Revenue's estimate—the same Inland Revenue as would have to advise him if he were Chancellor.
  Our proposal will be more professionally drafted than the right hon. and learned Gentleman's proposal for closing the same loophole last year, and it is more far-reaching than his, yet it yields only one-tenth of the amount that the shadow budget says will be forthcoming. In one of his more memorable phrases, the Leader of the Opposition said yesterday that the Government's plans were a con. The biggest con in this debate is the Labour party's shadow budget. Until we get answers—we certainly have not had any this afternoon—it will not just be Conservative Members who think that it is a con.
  Mr. Ewing rose——
  Mr. Mellor: I shall give way.
  Mr. Ewing: Such generosity bewilders me, but I am grateful to the Minister for giving way. From his briefings, will the right hon. and learned Gentleman tell the House and the country what percentage of an average income is now paid in direct taxation—income tax and national health insurance—as opposed to when the Government took office? Is the Minister aware that many of my constituents would be over the moon to pay a higher rate of income tax if they could get a job to enable them to pay tax? The Prime Minister has done away with many jobs since coming to power.
  Mr. Mellor: Direct taxes are down. If the hon. Gentleman wants to talk about the average family—the man on a national average wage with a non-working wife—he must be aware that after five years of Labour government that man was one pound a week better off. After 12 years of Conservative Government he now has £58 more in his pocket. That is the reality. [Interruption.]
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  I have answered the question. If the right hon. and learned Member for Monklands, East answered questions so candidly, we should have got a bit further this afternoon.
  Mr. Ian Stewart: Will my right hon. and learned Friend monitor the shadow Chancellor's broadcast tonight to make sure that he does not mislead viewers in the same way that he has misled us by using phoney figures in the shadow budget?
  Mr. Mellor: Unless the right hon. and learned Member for Monklands, East has already recorded the broadcast, he will have some time to rethink some of the points that have been made.
  In the time that remains I shall return to the central proposition in the Budget. [Interruption.] I have answered the question of the hon. Member for Falkirk, East (Mr. Ewing) and in a way that discomfited him. I provided a statistic that the hon. Gentleman is unable to disprove. I said that the average working man is £58 a week better off after 12 years of Conservative government. I am prepared to answer that question 10 times every day because it does not embarrass me.
  The right hon. and learned Member for Monklands, East properly spent time discussing the environment for business. The Chancellor predicted that inflation will fall to 4 per cent. by the end of the year and that will provide a great fillip to national self-confidence and morale. It is a clear sign we are on the right track. Obviously there is no painless or quick way to conquer inflation, but this time there will be sustained progress and the low figure will be maintained. The decision to join the ERM last October was a clear signal of our overriding commitment to stay the course and to stick to the task until inflation is decisively defeated. The prospect of sharply falling inflation provides the assurance that business needs that the recession will soon be behind us. The Budget provides more than reassurance for business; it provides action.
  This is a good Budget for business.
  Dr. Lewis Moonie: Will the Minister explain in his preamble on economic success how a contraction of 10 per cent. in fixed investment provides an effective springboard for that?
  Mr. Mellor: The hon. Gentleman realises that there has been an unprecedented expansion in business investment over the past decade—80 per cent. over eight years and nearly 50 per cent. in the three years from 1986 to 1989. Inevitably, from that very high plateau, there has been some falling off. This is a Budget for business, which increases companies' liquidity and will allow investment to rise again. As the hon. Gentleman knows, there is no such thing as a straight line in these matters.
  Mr. Beith: Will the right hon. and learned Gentleman give way?
  Mr. Mellor: I want to push on a little more. I shall give way to the hon. Gentleman later. If I give way, I shall simply spend my whole time giving way and not making the points that will allow some of my hon. Friends and other hon. Members to intervene.
  Our proposals look forward to the next decade. They build on the major reforms carried out by my right hon. Friend the Member for Blaby (Mr. Lawson) who, in a reform of business taxation in 1984, cut corporation tax

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  from 52 per cent. to 35 per cent. and removed accelerated investment allowances and gave tax relief at rates that more closely reflected commercial depreciation.
  As I have already said, we were told that that was the end of capital investment as we knew it. It was, but in a way different from that assumed by the critics. There was an unprecedented increase in company investment not only in terms of money expended, but in terms of quality—investment that was not distorted by the availability of allowances and that made the investment seem good, whether or not it was profitable. Today, the entrepreneur makes his own decision on whether to invest and he reaps his reward—if he gets the decision right—by having a low taxation business economy. Those reforms have stood industry and commerce in good stead. They have been good for the entire nation.
  Over 3 million jobs have been created since 1983 and we have become an attractive place to invest, not only for British entrepreneurs but for entrepreneurs from Japan and the United States. In recent years, the Americans have put two-thirds of their investment in the European Community into Britain and the Japanese have invested over 40 per cent.
  Mr. Robert Sheldon: I understand the right hon. and learned Gentleman's point about investment being related to profitability. However, in the case of capital allowances, only 25 per cent. is allowed in the first year. To think that one can use a piece of equipment for one year and sell it for 75 per cent. of its worth is nonsense in many areas of capital equipment purchase. That 25 per cent. is probably eaten up by the commission for the seller. We are getting not a capital incentive but a disincentive. It is the removal of that which is important.
  Mr. Mellor: It is a better rate than commercial depreciation. The right hon. Gentleman knows that the record of the past 10 years is that there has been an upsurge of investment. It is better to look at the outcome of policies than at academic points. [Interruption.] The facts speak for themselves. The level of business investment in Britain has never been higher. The right hon. Member for Ashton-under-Lyne (Mr. Sheldon) spoke about disincentives. When he held responsibility, the incentive was to invest, whether good or bad. That is not an improvement.
  In the Budget we have seen major changes in corporation tax. The first change is to reduce corporation tax rate in two stages to 33 per cent., which means that once again we have the lowest company taxation rate in the developed world. It also looks after the smaller businesses. Over 4 million businesses do not pay the main rate of corporation tax. We have already done much to help them in times past but now, building further on the enterprise culture that has been created in the past decade, my right hon. Friend the Chancellor has dramatically raised the profit limit for the lower rate of corporation tax. He has also pushed up the VAT registration threshold by no less than 40 per cent. to £35,000. He has cut down bureaucracy and tax forms and helped cash flow by delaying PAYE, national insurance contribution payments and so on.
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  What does all that mean in terms of improved cash flow to business this year? Some £380 million is to come from corporation tax, and that is only the 1990–91 retrospective cut, not the cut that is to come next year; £150 million is already due to come from bad debt relief, now there is a further £190 million on top, and £210 million is to come from later payments of PAYE and national insurance contributions. A further £25 million will come from the lifting of the VAT threshold, and a further £30 million from the reduction of the serious misdeclaration penalty. All that represents a transfer from the Exchequer to business of almost £1 billion, directly benefiting business across the spectrum. That is where companies will find extra resources to invest.
  Mr. Beith: Welcome though the changes are, does the Chief Secretary accept that the "Financial Statement and Budget Report" reveals that £2·2 billion extra will be paid by business next year under the uniform business rate?
  Mr. Mellor: The hon. Gentleman knows very well that the uniform business rate removes the uncertainty that was created by the extraordinary changes in the business rates imposed by a number of local authorities. He also knows that business rate increases cannot be above the rate of inflation, whereas, during the past decade of local authority control of business rates, they increased by 40 per cent. over the rate of inflation. The hon. Gentleman does not make a good point if he suggests that we may have been wrong to change the system.
  Given that this is a Budget for business, what matters is not what the Opposition say—they have an interest in deriding what is said and done—but what is said by the business community. Rarely has the business community greeted a Budget with such a chorus of approval. Sir Brian Corby, the president of the Confederation of British Industry—[HON. MEMBERS: "Scotland?"] He is the president of the CBI nationally, and we are one nation. Sir Brian Corby said:
  "This is almost precisely the Budget that the CBI recommended—a Budget for soundly based recovery, for saving and for investment. The prospect for further reductions in interest rates, a resumption of growth and low inflation are better tonight than they were this morning. The Chancellor has listened to those who create the nation's wealth."
  The Chancellor has taken the action that the Institute of Directors asked for—on corporation tax, VAT, bad debt relief and the carry-back of losses. The relief to business will be a major help to those with cash flow problems. The IOD said of the Budget:
  "It addresses the immediate economic ills of business as part of an imaginative long term fitness campaign and the promotion of the individual in the market economy."
  Mr. Paul Boateng: Jeffrey Archer wrote that one.
  Mr. Mellor: I am sure that the hon. Gentleman would find it helpful if he applied his mind to these matters a little more seriously.
  The National Federation of Self Employed said:
  "This is a Budget to bring a smile to small businesses."
  When did the organisation last say that about a Labour Budget?
  The Association of British Chambers of Commerce said:

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  "He really listened to everything we had to say. Chambers are delighted at the practical measures of support to help businesses during a difficult time. This was a Budget for business we needed."
  My right hon. Friend the Chancellor deserves congratulations for eliciting such praise, which is not often given readily and which is given in genuine appreciation of his achievements.
  Mr. John Garrett: Will the Chief Secretary explain why the Red Book shows such a remarkable increase in labour productivity in the coming 18 months coupled with such a remarkable fall in productive investment?
  Mr. Mellor: We shall see. [HON. MEMBERS: "No, we will not."] The hon. Member for Norwich, South (Mr. Garrett) asked a serious question and I shall give him a serious answer. He knows very well that the expansion in business investment which has already been referred to—it has almost doubled over the past decade—will feed through into increases in productivity. That is the basis for that investment, which will not be distorted by bogus allowances. Such genuine investment will maximise production opportunities. That is the answer to the hon. Gentleman's question, although it may not be to his taste.
  What does the Budget do for the supply side? One of the great strengths of the past decade has been the supply-side reforms to which the Government have paid so much attention. Our record speaks for itself. We took a machete to the jungle of banana-republic controls that existed under the Labour Government. Pay, price and dividend controls all went. Hire purchase controls were swept away and foreign exchange controls were abolished.
  All those reforms liberated British industry and brought benefits that will last well beyond the end of the decade. Yesterday, we took a further major step forward in the supply side. My right hon. Friend gave profit-related pay a further important boost when he announced that, in future, the profit-related element would be entirely free from tax. That is particularly important when profits are under pressure and firms may be tempted to shed labour. Profit-related pay helps companies to contain labour costs without losing jobs, and provides the work force with incentives, which the Chancellor's proposals for share schemes will also do. We are not keeping share schemes in the boardroom. We have given incentives for them to spread to the shop floor. That is an example of the Conservative party's approach to industrial democracy which, in the long run, will prove far more efficacious than anything that the Opposition propose.
  Mrs. Edwina Currie: Is my right hon. and learned Friend aware that in areas such as south Derbyshire and Derby, where major engineering industries continue to do well and are optimistic about the future, employee share ownership schemes play a major part in ensuring that employees not only understand the way in which their businesses work but are committed to them, which enables businesses to do well?
  Mr. Mellor: That is absolutely right. That is why my right hon. Friend the Chancellor introduced those measures.
  We have heard a great deal from the Opposition about training. It is a good thing if there is a commitment to training on both sides of the House, but it is a bit rich for our record to be criticised given that our expenditure on
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  training this year is £2·7 billion—two and a half times in real terms what the Labour Government were spending, even though unemployment more than doubled under Labour. Under the Labour Government, when did the unemployed have the opportunity of job clubs, employment training, the advice that is given at regular intervals and the job guarantee scheme?
  We must also take into account the fact that some people wish to take responsibility for their own training needs. That is why we have recognised that we have a role in supporting employees who wish to help themselves, and the tax system should not stand in their way. That is why my right hon. Friend announced a new tax relief for people enterprising enough to get training for themselves. That was warmly welcomed by the training and enterprise councils and the business community and is a further major contribution to supply side reform.
  Let me say something about the changes to the community charge. In recent weeks, there has been much talk about fair taxes—particularly in relation to the community charge and the level of local taxation. My right hon. Friend the Chancellor tackled both issues head on. The package that he announced yesterday brought the community charge throughout the country down to what the Government regard as a fair and tolerable level. Indeed, in some of the best-run councils in the country there will now be no charge to pay at all.
  Opposition Members have already started to say that the proposal for an across-the-board reduction in the community charge by £140 is not fair. The switch to VAT is fair, sensible and fully in line with the Government's wider tax objectives. VAT is a pay-as-you-buy tax. The more you buy, the more you pay. The essentials of life—food, housing, domestic fuel, power and even public transport—are all zero rated, so these goods bear none of the burden of reducing the community charge. For lower income groups, zero-rated expenditures account for a higher proportion of total spending than they do for the better-off. As a result, VAT accounts for a larger proportion of household expenditure the higher the income of the household.
  Opposition Members are, as usual, facing all ways at once. On the one hand, they want higher investment and higher savings; on the other, they seem to be opposed to switching from a tax on income to a tax on spending. On the one hand, they shout from the steeples that the community charge hits the poor; on the other hand, when we reduce the community charge they tell us that too, hits the poor. [HON. MEMBERS: "Abolish it."] Are the Opposition proposing to abolish local government and local government services? Labour councils have contributed to the overspending that has led to unacceptably high community charges. Perhaps only Scotsmen on the Conservative Benches believe that "You canna spend what you have nae got." If a Labour Government—if there ever is one—wants to sustain Labour councils, they would have to find a way to resource their extravagances. By reducing the community charge, we have proved that there is no free lunch. If the reduction has to be made through local taxes, the only honourable and principled thing to do is to impose them on national taxes while continuing to press local authorities to improve efficiency.
  Mr. Stuart Bell: One of the principles that we understood was very important to the

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  Conservatives was accountability. If the people of Wandsworth are to be subsidised by the people of Teesside and pay no community charge, how can the council be held accountable by the local community? If the charge is £1 in the Orkneys, how can that council be held accountable by the local community?
  Mr. Mellor: The council is reaping the benefit of being efficient. Wandsworth has the second lowest amount of Government assistance of the inner-London boroughs. It receives a much smaller amount of money per head from the Government than Lambeth, but the community charge in Lambeth will be £450 due to the feckless irresponsibility of Lambeth council. Far from accountability being abolished, it is just as sharp. Throughout the country it will be possible to draw differences between sensibly run councils and foolishly run councils, and the communities will be able to make choices.
  Over the past few weeks there has been a great deal of speculation that this would be a small or insipid Budget. No doubt the commentators are feeling a little foolish about those predictions today. My right hon. Friend the Chancellor has introduced a Budget that manages to be both prudent and imaginative. It reinforces the Government's central aim of defeating inflation and it contains a number of important measures to help business through the recession. It also contains particular help for small businesses.
  The Budget helps families. More than that, it helps all community charge payers and it continues the Government's policy of making the tax and national insurance system fairer. Above all, the Budget tackles the big issues. This is not the Budget of an indecisive Government. It is the Budget of a confident Government who are ready, willing and able to go on and on.
  5.42 pm
  Mr. Roy Hughes: We are debating today the Chancellor of the Exchequer's first Budget, the production of which is by common consent an awesome task. We welcome the VAT assistance to small businesses and the concessions on corporation tax. We also welcome the commitment on mortgage relief which is to remain at £30,000, but only on the basic rate. The Chancellor is also trying to organise additional support for sport and the arts through the pools promoters. However, those proposals can be summed up as small beer.
  The Prime Minister also introduced only one Budget, and it is reasonable and fair to say that, since then, the British economy has gone from bad to worse. The country is now in severe recession. When preparing his Budget, the Chancellor saw the imminence of a general election. He knows that that major political event is drawing even closer and he considered the warring factions in the Conservative party, particularly in respect of the nightmare of the poll tax.
  The Daily Telegraph, that organ of Conservative thought and opinion, on 14 March described the poll tax as
  "the biggest self-inflicted political wound of modern times."
  The poll tax was the personal crusade of the right hon. Member for Finchley (Mrs. Thatcher). It was the flagship policy of her Government. However, it is clear that the ship has run aground.
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  I appreciate that any Chancellor of the Exchequer must be concerned about income and expenditure. I understand that the poll tax will cost £500 million to collect in 1991–92. The cost of collecting rates would have been a fleabite in comparison.
  The Chancellor must have used his blinkers in reading the Audit Commission's report that was issued a few days ago. The report reveals that more than 7·5 million summonses will have to be issued. It states that courts will need a significant injection of resources if they are to cut the backlog of cases. Most councils have had to resort to borrowing to bridge the gap between current expenditure and what they hope eventually to collect. The Audit Commission's report tells a story of delays, backlogs, bad debts and underpayments, all coupled with a colossal administrative work load.
  I did not exaggerate when I described the poll tax as a nightmare. The Chancellor seems to have reached the same conclusion. Yesterday, he announced one of the biggest turnarounds in modern political history: the switch of £4·25 billion expenditure from local to central Government, with the leeway made up by a 2·5 per cent. increase in VAT.
  The Labour party has long recognised that there is too much financial pressure on local government, but the Government's move is essentially a panic measure in an attempt to save the Conservative party's skin at the forthcoming general election. The Government have discovered that the poll tax is impossible to collect while VAT amounts to cash on delivery. Apparently there is to be a further chapter in this remarkable episode—or what I describe as a skin-saving exercise—when the Secretary of State for the Environment makes his statement tomorrow. There has been speculation—as well as suggested leaks—about the Government reducing local government to one tier and transferring certain services to direct central Government control.
  I have always had considerable regard for British local government. Before I became a Member of this House, I served on a major local authority. I appreciate that there have been a few rogue elephants in recent years, but over the years local government has served Britain well and is very much a part of our democratic tradition. I have never been convinced that the man in Whitehall necessarily knows best. I warn the Government that restructuring local government and also reorganising its revenue-raising powers is a pretty tall order. Administrative costs could be substantial, and chaos could be caused. Last Thursday, the latest unemployment figures showed that no fewer than 2 million people are out of work. The total is rising by about 80,000 a month. On present trends, the jobless total could top 3 million in a year. This year, no fewer than 20,000 businesses will go to the wall. Business investment will fall by 16 per cent. when the rest of Europe gears up for the 1992 single market. Last year, 44,000 homes were repossessed by building societies and banks—that is easily a record—and mortgage arrears are now at record levels.
  I am particularly concerned about the situation in Wales. Unemployment is again at more than 100,000. For males, the figure is 10·3 per cent. Of course, that is without any allowance for the doctoring of statistics in which the Government have engaged in recent years. Listening to the Secretary of State for Wales during Welsh questions on Monday one would have thought that he was achieving the mother of victories. Perhaps he has been taking lessons from Saddam Hussein. Sadly, one third of unemployed

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  people in Wales have been out of work for more than 12 months. Approximately one third are under 25. What a waste of a priceless asset—our young people. Much of our unemployment is directly due to the rundown of British manufacturing industry.
  I recall the right hon. Member for Blaby (Mr. Lawson), when he was Chancellor, saying that manufacturing industry was no longer important. Earlier this month, the House of Lords Science and Technology Select Committee produced a report entitled "Innovation in Manufacturing Industry", which made the serious accusation that, in the 1980s, there was virtually no net investment in British manufacturing industry. What an indictment or the vintage Thatcher years. The present Chancellor, when he was in the lower echelons of Government, used to talk about the British miracle, and he repeated that theme yesterday. He compares our achievement with those of Germany. Some British miracle; some comparison.
  The House of Lords Select Committee also found that the United Kingdom was the only country in which gross domestic expenditure on research and development declined as a percentage of gross domestic product over 1981–88. That decline was largely the result of the reduction in Government support for research and development. That has happened despite the oil wealth and the privatisation proceeds that were poured into the Treasury coffers. It is no wonder that British economic output per head is now lower than it was two and a half years ago. That decline, that mismanagement, can no longer be accounted for in terms of idle employees or obstructive trade unions. The heart of the problem is the Government's managerial incompetence.
  The weakest. such as pensioners, are losing. If state pensions were uprated in line with earnings, a single pensioner would be £11·75 a week better off, and a married couple would gain £18·95. Of course, there was no mention in the Budget about any increase for pensioners. I am glad that the Government have rediscovered the virtues of child benefit. It is a welcome move, for it gives most help to low-income families, who account for three quarters of those receiving child benefit.
  The Chancellor seems to be relying on a reduction in interest rates to get him out of his difficulties. I agree that interest rates are a major economic indicator, but for two and a half years they have languished at around 15 per cent. As a result, we have suffered a damaging dose of monetary overkill, which was inflicted on the country by a Government who, even after 12 years in office, lack self-confidence and credibility.
  Of course we welcome the recent decreases in interest rates, because lower interest rates are vital to restore industrial confidence, to ease family budgets, and to get the country out of the recession in which the Government have put it. Of course inflation will come down. As my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) said, that is the inevitable consequence of recession.
  However, the real problem is the weakness of our industrial capacity and competitiveness. We need to invest in our manufacturing industry. A Labour Chancellor would help to reverse the decline. We need a new programme of expenditure on training, not cuts of £245 million, as was announced recently. Likewise, we need a temporary employment scheme to assist the unemployed. I have often said that unemployment is like a tap that is left running—sheer waste.
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  I conclude on the point with which I began. This is the Chancellor's first Budget. The nation faces enormous problems, but the Budget will do nothing to solve them. The measures that he has introduced are essentially panic-stricken, in an effort to save the Tory party at the polls. The Chancellor will not succeed, because people will eventually realise that the major problems of the economy remain as vivid as ever. We have a massive trade deficit. How much longer can we finance it? We have 2 million unemployed, and the number is fast increasing. Also, there is a continuous decline in manufacturing industry. A change of Government is urgently needed. A Labour Chancellor will introduce the necessary measures once again to put Britain back on the road to recovery.
  5.57 pm
  Mr. Alan Haselhurst: I begin by declaring my interests, which are all listed in the Register of Members' Interests, as some of them may be thought at least partly to inform some of my remarks, although I dare say that some of my comments are blindingly obvious.
  I congratulate my right hon. Friend the Chancellor on an excellently presented Budget. If it was a beginner's Budget, I hope that he will have opportunities to present many more. He hoped that his Budget would be known as a Budget for business. It probably is a Budget for business, but he will have some difficulty in getting that title to stick, at least in the early days, because of its dramatic impact on local government finance.
  I make no bones about welcoming my right hon. Friend's direct approach to local government finance. I agree that it has become unsatisfactory that the share of the cost of local government services has shifted more towards the local taxpayer, and away from taxpayers at a national level. The correction that he has made is a good one.
  However, it will always be difficult to convince people about the way in which local government services should be financed. There is no doubt in my mind about the unpopularity of the community charge. I have had plenty of letters on that score, but interleaved with them have been many other letters saying that more should be spent on local government services. People constantly ask for improvements. Indeed, both those points have sometimes been made in the same long letter of complaint about the community charge. Some letters have started with a complaint about paying the community charge, but ended with the demand that more money should be spent.
  People must realise that there is no magic cure to this problem., somehow or other, the costs of the services must be financed. We have a choice between tying the payment to property, which does not move, or to people, who do move—and, my word, how people move. Apparently, my own electorate has shrunk by 3,000 in the past year. I do not believe that that is because of any decay in my area. People have disappeared. That highlights one difficulty about taxing people rather than property.
  If one wants to tax people effectively, one must do so either through their income or through their spending. I do not believe that we should be looking for ways of increasing direct taxation—so that leaves only indirect taxation. In the circumstances, the system that my right hon. Friend has chosen, which is to put extra on VAT, is perfectly reasonable, because those who spend more will

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  pay more and those whose incomes are spent largely on the essentials of life will not make a particularly heavy contribution.
  It is difficult for the Opposition to seek to stigmatise VAT as regressive while continuing to embrace the idea of domestic rates, because nothing in domestic rates made that form of taxation essentially progressive. What my right hon. Friend has done is therefore absolutely right, because we shall now have a more sensible balance and distribution of costs between national and local taxpayers.
  My right hon. Friend the Chancellor probably hoped that people would regard his Budget as a green Budget. Conclusions on that point may be somewhat qualified: the Budget has green tinges, but obviously not enough for some people. We need to face the fact that my right hon. Friend's attempt to include environmental considerations in his Budget will undoubtedly hit certain people very hard. The increase in excise duty on petrol and the increase in the taxation on company cars will not be welcomed by a great many people. There will not be any singing and dancing in the streets by the people who will be affected by those taxation changes.
  Even so, what my right hon. Friend has done is evidently not enough for the thoroughly green parties in this country. Writing in today's edition of The Independent, Julie Hill of the Green Alliance states that the 15 per cent. increase on excise duty on petrol
  "is unlikely to have a significant effect."
  I hope that, when people at the pumps are paying an extra 16p, 17p or 18p per gallon, they will remember that the Green Alliance thinks that that is not nearly enough of an increase.
  My right hon. Friend the Chancellor has been sensible to deal with such matters progressively and in not deciding simply to make a gigantic switch that would grab the headlines. If he had done so, he might have received plaudits from the Green Alliance, but he would not have received many from the people outside. People are not ready for such a comprehensive switch in taxation.
  Julie Hill of the Green Alliance also stated: "company cars are still unjustifiably subsidised".
  That may be so, but in taking a further step in taxing that benefit my right hon. Friend has adopted the right approach. Those who would plead for more to be done more quickly on that issue are forgetting that such moves would have a serious effect on the car industry, which is going through a difficult time, and that such a policy would also be difficult for those who earn their living in the manufacture of motor cars.
  My right hon. Friend the Chancellor took another step towards the environmental lobby by increasing the duty on tobacco by more than the rate of inflation. I very much welcome that, but I am afraid that I would go further. Although I speak with the prejudice of a non-smoker, I believe that it is nonsense that we continue to include tobacco in the retail prices index. I hope that the House can reach a general agreement that the Government should re-examine the RPI and remove tobacco from it. Logically, I must add that alcohol should be similarly considered—[HON. MEMBERS: "Why?"] Because tobacco and alcohol are the bolt-on extras to the cost of living. They are by no means essential, and I do not see why the RPI should be bolstered by products that the Government believe harm health—and that are proven to harm health.
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  As we are urging people to curb their consumption of such products, I do not see why they should be allowed to boost the RPI and, as a result, to boost spending.
  My right hon. Friend the Chancellor could have gone a little further with provisions affecting motoring without embracing the vengeful approach of the green parties. If we are to keep vehicle excise duty, I do not see any justification for freezing it at its present level for all motor cars. It would be sensible to adjust it according to the size of the car. If we are not to use VED in that way, we might as well forget about it.
  I know that the former Paymaster General, my right hon. Friend the Member for Mid-Norfolk (Mr. Ryder), has argued that adjusting vehicle excise duty by, say, £10 or £20 would have only a small effect on people's choice of car when they are contemplating expenditure of several thousand pounds. But who is thinking of £10 or £20? I am thinking of something much more dramatic. A 1,000 cc car may well attract vehicle excise duty of £100, but why should not a 2·5 or 2·9 litre car bear a vehicle excise duty of £300 or £400? That would influence people's choice of motor car and drive them towards smaller and more fuel-efficient cars. That idea deserves greater consideration.
  The gap between unleaded and leaded petrol should be widened. I welcome the fact that my right hon. Friend the Chancellor widened that gap somewhat in his statement yesterday, but it already seems to be being interpreted as a differential of only 2p in the price at the pumps, despite what my right hon. Friend said about 3p per litre on unleaded petrol and 4p per litre on leaded. Cannot that gap be widened without cost to the Exchequer?
  I wish to make a similar point about catalytic converters, in which I have a particular interest. By law, they will be necessary on all new cars from 1 January 1993, but a boost could have been given to their early purchase now, either through VED or through the car tax. Again, that would have helped the car industry at a difficult time, and might have persuaded a few more people that it would be worth buying a new car now rather than putting it off for a few more months. On balance, therefore, my right hon. Friend the Chancellor made some sensible decisions on environmental measures.
  However, I come back to the question whether it was a Budget for business. I believe that it was. My right hon. Friend is to be congratulated on putting the emphasis on corporate rather than personal taxation. The real test is whether the Budget will get us out of the recession. That judgment may depend on how quickly and by how much interest rates come down. Understanding the exact characteristics of a recession is not easy. They can sometimes be long and shallow, or short and shallow, or short and deep. This time people have been laid off, but not many factories have closed. There has been a great deal of investment over the last three years, the effects of which have to come through. I believe that the pick-up may be swift.
  Manufacturing industry feels neglected and unwanted. I agree with my hon. Friends the Members for Hertfordshire, South-West (Mr. Page) and for Staffordshire, Moorlands (Mr. Knox) that we must give more emphasis to manufacturing industry. People in manufacturing are a little like teachers: they do not think that the Government compliment them enough. The fact

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  that some good words are said about them does not seem to affect them. They notice only the occasional critical comments.
  Manufacturing is important. The only way that the country will survive is by our success in making and selling things. The sooner the Government make it clear to the industrial sector that they think the same, the better. We must revive confidence. Confidence will depend on low inflation. The Budget is headed determinedly in that direction. Confidence will also come from oil price stability, which fortunately we seem to have. It will come too from exchange rate certainty, which is also implicit in the Budget.
  I believe that the Chancellor's mixture is right to achieve the cure that industry as a whole and manufacturing industry in particular need. We can look forward with confidence to a substantial and sustained economic recovery over the next few months.
  6.10 pm
  Mr. A. J. Beith: The Budget and most public discussion of it has been dominated by the poll tax: £10 billion later, we still have the poll tax, extra VAT, the prospect of a new property tax tomorrow and water rates which are rising to levels above those of the old rates. Of course, water rates still operate on the rating system. One curiosity tomorrow will be to find out what will happen to water rates now that property taxes seem to be back in the Government's favour.
  In order to proceed with the changes, parliamentary procedure will be drastically truncated, with no proper debate on the Bill which will be necessary to implement. the shift in local finance. I remind the House that, when measures are not properly debated and amendments are not properly considered, great mistakes are made and magnified. That happened with the poll tax originally and will be even more evident if there is no proper debate on the details of the new Bill.
  The result will be no adequate tax base for local government, with local government finance divided over several taxes, and a weakened local government system, with more power taken to the centre. That could all have been avoided if the Government had gone for a local tax in the first place.
  In any other walk of life, people rarely have opportunities to make mistakes on the scale of the poll tax mistake. If they make colossal mistakes, they are apt to lose their jobs. I can think of no better case for people losing their jobs than the scale of the errors made on the poll tax. So the first problem that the Government addressed in the Budget was the poll tax mess that they themselves had created. The second was the economic mess——
  Mr. Toby Jessel: Before the hon. Gentleman leaves the subject of the poll tax, will he say whether he is in favour of reducing it by £140 per head? Does he intend to vote accordingly?
  Mr. Beith: I shall certainly not oppose the reliefs which are to be given to poll tax payers. The poll tax is incapable of bearing the levels of charge being put on it. It is an unfair system of tax, and relief should be applied. It would have been much better not to have it at all but to have a fair local income tax, which would not have needed to be baled out.
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  The second problem which the Government had to address in the Budget was the economic mess which they created, with a recession, rising unemployment, high interest rates and high inflation. That meant that the Chancellor had to convince the markets that he would be fiscally responsible and firmly committed to maintaining sterling's position in the exchange rate mechanism.
  That is all well and good, and the Chancellor has made a reasonable attempt in the Budget to demonstrate that fiscal responsibility and that commitment. But they could have been achieved more clearly and over a longer period by announcing the measure that we proposed, of greater independence for the central bank on monetary policy. That would have removed the need for the premium on interest rates which arises from uncertainty about the Government's attitude to monetary policy and the level of sterling. That would have allowed us to loosen fiscal policy slightly to counteract the deepening recession.
  The fiscal responsibility which the Chancellor had to assume was forced upon him by the Government's own mistakes. The creation of the recession has led to the automatic stabilisers and to the return to deficit. That, together with the need to bale out the poll tax, conditioned the Chancellor's whole approach in his Budget.
  There was an interesting phrase about the exchange rate mechanism in the Chancellor's speech:
  "The time has come to apply ourselves wholeheartedly to the task of making our membership a success."
  I take that to mean that, up to that moment, the Government had not applied themselves wholeheartedly to the task of making a success of our membership of the exchange rate mechanism and that what the Chancellor said signifies a new approach. He followed that up by saying that at the moment he had no plans to move to a narrower band. I can only take that to be a signal that that is under more active consideration than before. I hope that that is what is intended.
  Another interesting phrase appears on page 9 of the Red Book:
  "Interest rate convergence will follow inflation convergence. Both are likely to take some time to achieve."
  However, that contrasts with what the Chancellor said yesterday:
  "The prospect, therefore, is that we will narrow the inflation gap with Europe remarkably quickly."—[Official Report, 19 March 1991; Vol. 188, cols. 165, 167.]
  The Chancellor was saying in one breath that it will happen quickly, and in another that it will take some time to achieve. Only one of those statements can be true, unless they apply to totally different measures of inflation. Perhaps that can be clarified.
  What the Chancellor said yesterday on inflation needs most of all to be qualified. He referred constantly to the forecast of 4 per cent. for headline inflation. It is not long since he as Chief Secretary, and his two predecessors as Chancellor, were lecturing us about how misleading the headline inflation figure is, and how vital it is to look at the underlying rate of inflation. I listened to all those lectures and was greatly moved by them. Perhaps I was influenced by their strictures to look more closely at the treatment of inflation.
  I find that the GDP deflators set out in the Red Book show none of the wonderful improvements. They show that we will continue to have a high rate of underlying inflation. Even if we take account of the effect of that on

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  the introduction of the 2·5 per cent. extra VAT, it will still show a failure to converge with lower inflation rates in other parts of the European Community.
  If we take some of the other indices, such as producer output price inflation, which is quite a good index of underlying inflation, we find much wishful thinking in the Red Book. Indeed, we find the statement:
  "This recent pick up in inflation is surprising."
  Surely, after all these years, the Government are no longer surprised by the persistence of British inflation. It is worrying that they seem to grasp at the straw of 4 per cent. headline inflation and do not recognise the 7 per cent. underlying inflation rate which all their forecasts contain.
  Figures that have been put before us in the debate and in the documents tell the story. Output is down by 5 per cent. and fixed investment is falling by 9·75 per cent. Those are alarming figures, particularly when set alongside the unemployment forecasts and the serious unemployment that we face.
  The Government seem to think that, despite all that, productivity will rebound with the recovery in activity and that that will keep down unit labour costs. If the recovery is as slow as the Government forecast, how will productivity rebound? I suppose the Government would argue that it will do so because business will have a better climate as a result of the Budget measures.
  How good is the Budget for business? Many of the tax changes, large and small, are welcome. Indeed, they follow closely the submissions which we made in the Liberal Democrat alternative budget, including the proposals for raising the VAT threshold, changing the VAT bad debt scheme and changing the VAT serious misdeclaration penalty scheme. The measures on corporation tax are welcome in principle but they are less effective in serving the purposes that I favour than the measures that we propose. The Government's measures will not stimulate investment.
  I do not share the Labour party's view that it is possible to distinguish between manufacturing investment and other types of commercial investment. That understates the value of the services sector and the general tradeability of services. However, measures designed to encourage investment in general, such as indexation of depreciation allowances, might have been a better stimulus to industry than the proposed changes in corporation tax.
  As I said to the Chief Secretary, when one adds up all the changes—the Government's estimate is that there are almost £1 billion-worth of tax reductions for industry, which it will take at face value—one must set that against the extra £2·2 billion that business will pay in uniform business rates in the coming year. That is an absolutely massive increase in liability for businesses both large and small. It will be felt particularly keenly by small businesses.
  The fundamental problems for United Kingdom industry remain, against the background of the inadequacies of our education system and transport system. People have practical problems in simply getting to work by public transport, especially in London. There was no new investment in education or transport.
  The tax relief for training does not address any of the serious problems that we face. It does not even begin until next year. It will help only a limited range of qualifications, and it will not add up to a tenth of what the Government have cut from the real training budget during the current
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  year. Investment in training, transport and education would all have been sensible measures to take at this stage, which would have justified some loosening of fiscal policy.
  I welcome some of the measures in the Budget, including the tax easement for people who were hostages and prisoners in the early stages of the Gulf conflict and lost the benefit of the tax relief which they could have expected to receive for the year. I have pressed Ministers on that several times during parliamentary questions, and I am glad that the Chancellor has now conceded the point. It will give deserved relief to people who have gone through a terrible experience.
  I also welcome the removal of top-rate mortgage interest relief. Again, we have pressed that measure on the Government for several years. We also welcome indexation of excise duties, closing the capital gains tax loophole, the Chancellor's increases in petrol duty and his rather incomplete measures on company cars. Those are all measures that we pressed on the Chancellor. However, in the case of company cars, he has been careful to ensure that only the employer's contribution will be affected, and not that of the employee.
  Mr. Harry Ewing: May I take the hon. Gentleman back to his point about tax relief for people who were connected with Kuwait? Has not he misunderstood the Budget proposal? Will it not benefit people who were in Britain at the time of the outbreak of hostilities who could not return to Kuwait? The mere fact that they could not return meant that they were in Britain for more than 12 weeks and therefore did not qualify for exemption from tax. As they were here for more than 12 weeks, they were liable to pay tax. The Chancellor announced yesterday that the Government are waiving that liability to tax. It has nothing to do with those who were held hostage.
  Mr. Beith: I do not know whether the category that the hon. Gentleman describes is included in the relief. I assumed from what the Chancellor said that he intended to benefit the people whose eligibility for tax relief was lost because they returned from the Gulf before the end of the tax year when they were released from being held hostage. The matter is a Finance Bill Committee point. We can consider it in detail in Committee. I hope that the hon. Gentleman will serve on that Committee. He can raise the point then.
  I was listing some tax-raising measures which the Government were right to take. However, the trouble with the Government taking such measures—which we ourselves proposed—is that the compensating benefits have not been provided. The Government have raided tax-raising measures without spending the revenue where it should have been spent. They have increased the tax penalty on the use of a private motor car, but where is the improvement in public transport to enable people not to use their cars for essential journeys and journeys into city centres? Where is the improvement in rural public transport to compensate people in rural areas for the high cost of petrol when they have seen such a staggering decline in rural transport since bus deregulation? Investment in public transport should have been undertaken and paid for out of the gains in revenue. The purpose of taxes which are directed at the environment is not merely to raise revenue but to change the way in which we treat the environment.

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  There are several items missing from the Budget. Several measures that people expected were not taken. There is a large gap when it comes to green measures. I have already referred to measures on the motor car, but where were the measures referred to by the hon. Member for Saffron Walden (Mr. Haselhurst) on catalytic converters? Where were the pollution taxes hinted at in the Government's environment White Paper? When pressed on such taxes, the right hon. Member for Bath (Mr. Patten), who now chairs the Conservative party and was previously Secretary of State for the Environment, said that the Chancellor would be considering them. It seems that he is still considering them, because they were riot in the Budget this year.
  Another trumpeted possibility that we pressed on the Government last year was wider tax relief for child care. That has not appeared in the Budget this year. Things have gone very quiet on that front, at a time when the Government were widely expected to give greater opportunities for women who want to do so to work, even where workplace nurseries are not available. Indeed, that facility is available to very few people.
  The effect on charities of the 2·5 per cent. increase in VAT strengthens the case for more extensive relief for charities. Charities will face serious problems after the Budget.
  This was a Budget to get the Government out of a mess of their own making, not to deal with the present and future problems of the United Kingdom economy. The measures in the Budget were the result of the rejection of the poll tax by the electors of Ribble Valley, of the inflation and the recession—which resulted from the credit boom that the Government stimulated—the failure to control inflation and of the failure to keep child benefit up to date. The Budget was a clean-up operation for the Government's failures. It is not sufficient to guide us safely out of recession.
  6.25 pm
  Sir Ian Gilmour: The hon. Member for Berwick-upon-Tweed (Mr. Beith) made several cogent points to which I shall return later. First, I congratulate my right hon. Friend the Chancellor of the Exchequer on a thoroughly civilised as well as an astute Budget. My right hon. Friend the Member for Aylesbury (Sir T. Raison) and my hon. Friends the Members for Broxtowe (Mr. Lester) and for Hornchurch (Mr. Squire) and I and other hon. Members have vehemently opposed the Government's freezing of child benefit for several years past. So my right hon. Friend the Chancellor's assurance yesterday that those bad old days were over and that in future child benefit would be uprated with inflation was enormously welcome.
  The increase in child benefit is equally welcome, although I am puzzled by the form that it took. When my right hon. Friend the Secretary of State for Social Security announced that he would not uprate in general but only for the eldest child, I pointed out that the only countries which gave more in child benefit or child allowances for the first child were Iran and Malta. I am puzzled as to what close affinities the Government find between Iran and Malta and our social system and customs. Such affinities do not immediately spring to mind. One would have thought that we had closer affinities with countries on the European continent, some of which differentiate between
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  children but give more to the third child. That has slightly more rationale because it is well known that the worst poverty is in families with large numbers of children. However, on the whole it is better to keep the rate uniform. Whether the change is illogical or not, what has been done is enormously welcome and the Chancellor's assurance is greatly valued.
  I also welcome the Government's tolerance of running deficits and their intention to have a public sector borrowing requirement this year and next year. However, it may be rather larger than is predicted in the Red Book. Nevertheless, the firm realisation that Budgets can be balanced at best only over the medium term, leaving open how medium the term is and how long it will go on, seems an excellent idea.
  Like the hon. Member for Berwick-upon-Tweed, I welcome what is being done by way of corporation tax and for small businesses. Having forgotten that there was a heavy extra burden on the uniform business rate, I take the hon. Gentleman's point. I welcome very much the fact that a great deal is being done, even if in a minor way, for businesses. I welcome also the uprating of tax on tobacco, alcohol and petrol. It seems to me that, in a possible—perhaps probable—election year, that is a thoroughly responsible thing to do. I regret very much the fact that the lottery that we had been rather led to expect will not be introduced. Help for the arts, sport and other good causes would have been very welcome.
  Mr. William Ross: Football pools are now getting into the arts and sport on a very large scale and they are nothing but a lottery.
  Sir Ian Gilmour: Football pools are indeed a lottery. I welcome also what is being done by the sports and arts trusts. However, as I understand it, the scale of benefit is very much smaller than would be provided by a national lottery. Although I welcome what is being done, I regret the fact that a national lottery will not be set up. I hope that that will be remedied next year.
  Having been a heavy opponent of the poll tax from the word go, I welcome very much the fact that such a hefty chunk is being taken out of it. Of course, until we see what happens tomorrow, there is not much point in saying anything more about that. I am not wholly sure, however, that the Chancellor is wise to finance the reduction out of VAT. As other hon. Members have said, the headline rate of inflation will be improved, but the core rate will increase, and consumer spending, on which the Government greatly rely to get the country out of recession, may take a knock.
  I come now to my main point. While fully recognising the great merits of the Chancellor's individual proposals, I am concerned about the strategic plan that must be presumed to underlie them. We have to consider where the economy is headed—not just in the short term, but for the next few years. The Chancellor, in his Budget speech, said that he expected output to grow by 2 per cent. during the year up to the end of the first half of next year, and that this should be followed by annual growth of more or less 3 per cent. That does not sound too bad; indeed, it sounds pretty good. However, it is worse than it appears. The forecast growth rate is little better than the long-run trend. Starting where we are now, there is no prospect, on the basis of the Chancellor's own showing, of any decline in

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  unemployment. The very sorry prospect is of unemployment hovering indefinitely around 2 million or 2·5 million. But will things be even as good as that?
  It has now been accepted by the Treasury that a severe recession is under way. The Treasury, with characteristic honesty, has produced, in its Red Book, a table showing how last year's forecast of 1 per cent. growth in GDP in 1990 turned out to be a growth of only 0·5 per cent. The right hon. and learned Member for Monklands, East (Mr. Smith) said that this was a Government and Treasury technique to make things seem much better than they really were. He suggested that it was all rather dishonest. I only wish that it were a technique, but I acquit the Government and the Treasury of any such design. I am sure that they actually believed the forecast—and that is more worrying. I think that the Treasury has been wholly honest, but I wish that it had carried its honesty even further and emphasised the full scale of the revision that it has had to make. That can be done only by taking a slightly longer period than 1989–90.
  In last year's Red Book, the Treasury forecast that, between 1988 and the first half of 1991, GDP would rise by 4·75 per cent., with manufacturing output rising by 5·5 per cent. The comparable figures for that period of two and a half years are now zero growth for GDP and minus 1·25 per cent. in the case of manufacturing output. These downward revisions mean that the level of GDP is now nearly 5 per cent. lower than was expected only a year ago, while in the case of manufacturing output there is a drop of nearly 7 per cent. That is a staggering discrepancy.
  I am not making an abstruse, technical or academic point. When we, as laymen, give our support to the Chancellor for his Budget proposals, we are completely dependent on the accompanying economic forecast being approximately—if only very approximately—correct. The Chancellor himself must agree that his Budget proposals can be justified only if they are followed by events that bear some slight resemblance to what was forecast. There must be some point at which it would have to be conceded that events had taken a turn so different from what had been expected that the entire rationale of existing policies was destroyed.
  We are not all that far from such a situation—certainly not as far as I would wish. Professor Wynne Godley, whose forecasting track record is probably second to none, forecasts in the New Statesman not a rise in output from now on, but a continued decline through 1992. Unfortunately, the Budget papers contain nothing that wholly convinces me that Professor Godley is wrong. Indeed, all that we need is a repeat performance from the Treasury forecasters to make his forecast come true. Another error of the same size as that of last year would mean that, after the drop of 2 per cent. in output in 1991, there would be not the expected rise of 2 per cent. in 1992, but a further fall of 3 per cent.—and unemployment would be rising towards 4 million rather than 3 million.
  I hope that before the end of the debate Treasury Ministers will make good what is at present an unacceptable gap in the material that we have been offered. In other words, I should like to be told why things have turned out to be so much worse than was expected, so that we may have more confidence that, next time round, Treasury forecasts will prove to be right. The
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  weakest part of the Red Book is the short section devoted to recovery. I profoundly hope that the Treasury forecasts are correct at last and that my right hon. Friend the Chancellor can look forward to framing a number of successful and socially aware Budgets.
  6.37 pm
  Mr. John Garrett: The backdrop to the Budget is a recession that is very deep indeed—precisely as the Opposition forecast. Indeed, last October, the Treasury Select Committee found that the economic indicators showed a profile of decline in economic activity in this country much the same as in the year 1980–81. Over the last year or so, Chancellors have said that this recession was not a recession; then that it would be shallow and short; then that it was deeper, but was only a ripple from the world trade cycle—as if it were something from the act of God department. In fact, it is a deep and dangerous, home-grown slump.
  The fall in GDP this year is no less than 2 per cent., whereas the Treasury, in the autumn statement four months ago, forecast a rise of 0·5 per cent. This is a phenomenal level of error over a mere four months. These Treasury sources, whose forecasting record, as the right hon. Member for Chesham and Amersham said, is spectacularly worse than that of other bodies, let alone the Treasury Select Committee, now foresee a most tremendous turnround, taking us to a growth rate of 2 per cent. from this mid-summer to next mid-summer.
  It would be interesting to know what the source of this turnround might be. I suppose that it could be restocking, or the end of destocking, by industry; but restocking is not what it used to be. As industry has become more efficient, it needs less in the inventory and in work in progress for a given level of output. Or there could be a spectacular rise in exports, but that does not seem to be forecast in the Red Book. After 25 years of reading Red Books, I have come to the conclusion that Treasury economic forecasts are a form of institutionalised leg pulling. The results never bear out the optimistic scenarios. As a member of the Select Committee on the Treasury and Civil Service off and on since the mid-1970s, I believe that the Committee needs alternative forecasting machinery of its own so that it can serve the House with more objective calculations. The Committee is well served by its advisers but it needs an analytical staff to provide an alternative view to the nonsense with which we have been presented by the Treasury on the public sector borrowing requirement, trade, employment, inflation and monetary volumes, at least over the past few years.
  It is clear that, in this recession, the economy will decline by the greatest amount in one year since 1980. We are seeing a stream of business failures, the collapse of corporate profits and dividends, and rapidly rising unemployment. As the right hon. Member for Chesham and Amersham said, it is difficult to believe the Government's figures for the PSBR in the coming financial year at a time of such deep recession. It seems that the £8 billion that appears in the Red Book will be £10 billion or £12 billion, and that it will be a greater sum in the following year.
  It is clear that, unless the Government fiddle the unemployment figures for the 30th time in a decade, unemployment will reach, and probably exceed, 2·5 million this year. All that is coupled with a cut in training

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  places. We should spend on training during a recession so that we have a skilled work force ready for the upturn. My constituents are being turned away from training courses because resources for training are being cut. In Norwich, scarcely a week goes by without redundancies in the food, footwear, engineering and construction industries. The retailing and construction industries in East Anglia have come to a full stop. They are important engines of growth and economic development in such a region. The increase in value added tax will hit both industries.
  Consumer spending in 1991 was forecast in the autumn statement—we are back to Treasury forecasts again—to increase by 1·75 per cent. Instead, it will fall by 1·75 per cent. Imagine the impact that that will have on the retail trade. Manufacturing output will fall be 5 per cent. in 1991, which will take it to roughly where it was in 1979. So much for the decade of the enterprise economy.
  It is said that this is a Budget for business, but that does not bear too close an examination. We are told in the Red Book that corporation tax will be reduced by about £1 billion, but company national insurance contributions will rise by over £600 million. As the hon. Member for Berwick-upon-Tweed (Mr. Beith) said, paragraph 1·2 on page 7 of the Red Book tells us that rates—mostly the uniform business rate—will rise by £2·2 billion in one year. When challenged on that, the Financial Secretary to the Treasury said that at least the UBR gave us continuity. I do not know what sort of continuity it is when we read that there will be an increase of £2·2 billion in rates as a result of the impost on businesses.
  Part of the miraculous upturn in mid-1991 derives from an even more miraculous improvement in unit labour costs at the same time. Chart 3·11, which appears on page 30 of the Red Book, shows British labour costs falling from an annual increase of 10 per cent. in early 1990 to 3 per cent. or 4 per cent. in mid-1992. The graph is unbelievable. It seems that our relative labour costs rise, only to fall off a cliff, as it were, in 1991. At that stage they join—surprise, surprise—or converge with the rate of change in unit labour costs in the 16 major industrial countries.
  After we have experienced greater wage inflation than other countries, there is suddenly to be an improvement within a few months. In other words, there will be a huge increase in labour productivity that will be associated with a vast decline in investment. The Financial Secretary's answer to my intervention on that issue seemed to be merely a smokescreen. The effect of past "investment" cannot produce that level of productivity increase, given that companies have been disinvesting on a large scale. The Government's assertions strain belief.
  I welcome the green tinges in the Budget, including the price that will be charged for unleaded petrol and the provisions that bear on company cars, but the effect on energy efficiency will be perverse. The increase in the rate of VAT will lead to an increase in the cost of making home improvements, such as better insulation and double glazing. That will hit the small builder substantially and reduce energy saving, an area in which our national record is extremely poor. Indeed, in the past two years investment in energy-saving measures in buildings has fallen by 28 per cent.
  There was an opportunity to use taxation or, failing that, Government grants as a way of encouraging home insulation, the fitting of double glazing and home improvements generally. If that opportunity had been
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  taken, a boost would have been given to the small builder, while energy bills would have been reduced. It seems that a substantial opportunity has been lost.
  I welcome the increase in child benefit, but the 25p increase for children other than the first is derisory. I suppose that the increase will provide for a pair of shoelaces. One constant problem for poorer families is the tax burden that falls on the low-paid because of the lack of progression in our tax system, which has only two income tax levels. All other European countries have far more sensitively graduated steps for the entry into paying income tax so that the taxation levels are much more progressive and much more sensitive to circumstances. In not changing our system of tax thresholds the Chancellor of the Exchequer missed an opportunity to relieve family poverty.
  The Budget will do little for industry, jobs, the environment or the family. It produced great theatre at the very end of the statement, but it was largely irrelevant to our economy.
  6.45 pm
  Mr. Toby Jessel: My right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour) and the hon. Member for Wallsend (Mr. Garrett) referred to economic forecasters——
  Mr. John Garrett: I represent Norwich, South.
  Mr. Jessel: I apologise to the hon. Gentleman. Both he and my right hon. Friend placed some reliance on the accuracy of various economic forecasters. That is entirely wrong. Economic forecasters are about as reliable as old-fashioned weather forecasters. They never project with any precision what the state of the economy will be. The condition of the economy will depend on many variable factors, such as changes in the confidence of business entrepreneurs. Those changes will have an effect on their investment decisions. Other changes are dependent on international fluctuations in currencies or other economic factors. A modest upturn or downturn in economic activity, when contrasted with the predictions of economic forecasters, will make a relatively considerable difference in the Government's tax yield, and an exaggerated difference in the public sector borrowing requirement. All experience shows that economic forecasters are most unreliable and that we should place no reliance upon them.
  Much the most important thing is to ensure that we get the economy right by reducing inflation, reducing interest rates and introducing steady growth in the economy. Although those objectives cannot be achieved at once, I believe that the policies that are set out in the Budget statement are the right ones to bring them about. They will be achieved safely and reliably without giving another twist to the inflationary spiral by the implementation of the proposals that my right hon. Friend the Chancellor of the Exchequer set out. Only when we reduce inflation can we safely reduce interest rates.
  I warmly congratulate my right hon. Friend the Member for Kingston upon Thames (Mr. Lamont), the Chancellor of the Exchequer, who is my constituency neighbour. I should be grateful to the Financial Secretary to the Treasury if he would be kind enough to convey my feelings to my right hon. Friend.
  I commend the 15p increase——
  Mr. John Garrett: Is the hon. Gentleman sure that he has referred to the right constituency?
  Mr. Jessel: I have a very good constituency, thank you.
  I commend the 15p increase in the tax on cigarettes. A direct relationship has been established between the smoking of cigarettes and the incidence of lung cancer, bronchitis and coronary heart disease. There was a disturbing increase in smoking by young people, especially young girls, in the second half of the 1980s. The increase in tax will make them think twice. It is entirely right and proper to use the Budget, and thereafter the Finance Bill, consistent with economic policy, to promote health. I am glad that the Chancellor has proposed it and I hope that he does it again next year.
  I was delighted by the cut in community charge of £140 per person. In Twickenham, this will mean that the community charge goes down from £419 to £279. It takes some of the sting out of the community charge. I believe that most people will hardly notice the corresponding increase of 2·5 per cent. in value added tax.
  Mr. Ted Leadbitter: I hope to speak later on this subject. When the hon. Member for Twickenham (Mr. Jessel) is dealing with the 2·5 per cent. increase in value added tax, instead of invoking the phrase that the more those who are richer spend, the more they contribute, will he address himself to the facts? It is the proportion of the income that is spent on goods with value added tax which matters. The proportion is greater for low-income workers than for richer people.
  Mr. Jessel: I respect the sincerity of the hon. Member for Hartlepool (Mr. Leadbitter), but I think that he is talking nonsense, because value added tax is not charged on the basic essentials of life—food; housing, whether by way of rent or mortgage; fuel, whether coal, electricity, gas or oil; or fares, whether on buses, trains or planes. There are a few items such as books and newspapers on which it is not currently charged, but those are the main items, and they make up a much larger proportion of the family budget of the poorest families than of the better-off families.
  Mr. Leadbitter: The hon. Member appears to be wanting a fight, but all zero taxes affect the rich as well as the poor. The hon. Member for Hartlepool is not referring to zero taxes; I am referring to those value added taxes that everyone, whatever their income, must invoke. The proportion of that for people on low incomes is bound to be higher than that for people with bigger incomes.
  Mr. Jessel: It is not bound to be so, and I have just explained why. Poorer families spend a larger proportion of their income on those basic essentials and the richer families tend to spend a larger proportion of their income on items on which value added tax is charged. Furthermore, the 2·5 per cent. increase in value added tax is not 2·5 on 100; there is already a 15 per cent. value added tax, so it is 2·5 per cent. on 115, and that is an increase of only just over 2 per cent. Once one has allowed for the fact that something like half the budget of the average family goes on essentials, however, the figure reduces to a little over 1 per cent. on the budget of a family—perhaps between 1 per cent. and 1·5 per cent.—and against that must be offset the reduction of £140 in the community charge.
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  That is why, at a time of falling inflation and soon, I hope, falling interest rates, I believe that I was right to say a couple of minutes ago that the 2·5 per cent. increase in value added tax will hardly be noticed.
  Mr. Matthew Carrington: My hon. Friend the Member for Twickenham is absolutely right. A family on average income whose community charge was reduced by £140 would have to spend more than £5,500 on items on which VAT is payable to spend the equivalent in additional VAT. Does my hon. Friend agree that that represents about half the national average income? In other words, someone on average income will almost certainly be better off by the reduction in community charge than worse off by the increase in value added tax.
  Mr. Jessel: My hon. Friend the Member for Fulham (Mr. Carrington) is absolutely right.
  I return to what my right hon. Friend the Chancellor of the Exchequer said in his Budget speech about inflation:
  "We must get inflation down, and this time we must keep it down. The overriding lesson of the past few years is that the battle against inflation is never won."
  He went on to outline the evils of inflation and how they affect ordinary families.
  I hope, however, that my hon. Friend the Financial Secretary to the Treasury will enlarge on what the Chancellor meant when he said that local authorities should play a part in the battle against inflation and that when community charges were to be reduced in the coming year
  "the money will not be available to increase local authority spending."—[Official Report, 19 March 1991; Vol. 188, c. 166, 180.]
  This is very important because it is vital to get inflation down, and local authority spending is not always helpful in the battle to control inflation. Here, if my hon. Friend the Member for Fulham will allow me, I refer to an advertisement in The Guardian on 27 February for the appointment of a chief executive for the London borough of Hammersmith and Fulham at a salary of £78,000. The advertisement was headed "Facing the Future" and part of its text read:
  "We can offer you a negotiable salary of c. £78,000 plus a car and benefits package. Not to mention the satisfaction that comes from making a personal impact on the future of local government."
  That negotiable salary of £78,000 should be contrasted with the top pay unit's monthly review of salaries and benefits for chief officers of local authorities of England and Wales. For the London boroughs and metropolitan districts with populations of up to 300,000, the maximum recommended amount was £50,600. It also compares with the current salary of a full admiral, a full general or an air chief marshal of £77,000, or the £59,000 salary of a Cabinet Minister with responsibility for running an entire Government Department.
  This is getting out of hand and we must do more to stop it. It is a very serious matter in the battle to restrain inflation. It tends to have a knock-on effect on the salaries of chief officers of other local authorities and on the economy as a whole. I hope that the Public Accounts Committee will look at it. We must get a better grip on this particular part of public spending, and I hope that the Government will have more to say on how it can be done.
  Mr. Kenneth Hind: In the same issue of The Sunday Times——
  Mr. Jessel: It was in The Guardian.
  Mr. Hind: If my hon. Friend had looked at The Sunday Times of the same week, he would have found that Hackney was also advertising for a chief executive at or about the same salary, as were Hammersmith and Fulham and one or two other Labour authorities. It is perhaps an indication of the difficulties of obtaining a chief executive of any ability who is prepared to undertake the running of an authority controlled by Labour, with all the rough and tumble and the likely breaking of the law that often takes place in certain cases. It has to do with market Forces rather than the type of work.
  Mr. Jessel: My hon. Friend the Member for Lancashire, West (Mr. Hind) is entirely right, but this type of extravagance is not confined to Labour local authorities.
  Mr. Boateng rose——
  Mr. Jessel: Liberal authorities such as Richmond upon Thames borough council are also sometimes extravagant. That council has in the past three years constructed a new town hall costing £11 million.
  Mr. Boateng: How many chief executives did Lady Porter get through?
  Mr. Jessel: I have not the slightest idea, but I bet that she did not pay them £78,000 a year.
  Mr. Boateng: How much did she sell the drains for?
  Mr. Jessel: That goes beyond the scope of this debate, and is nothing to do with the Budget and inflation control.
  Mr. Carrington: Will my hon. Friend also reflect that the fact that Hammersmith and Fulham council spends such a lot on its chief executive may be in direct proportion to the £6 billion that it gambled on the money markets?
  Mr. Jessel: That is relevant because, by any standards, £6 billion has an effect on the national economy.
  The arts and heritage bring enormous benefits to the British economy. Theatres, concerts, opera, ballet, museums, art galleries and historic houses have a total turnover of more than £5 billion. More people in Britain go to the theatre than to football matches. The arts not only enhance the quality of life of the British people, but draw to our shores visitors who spend not only on the arts and heritage, but on hotels, restaurants, shopping and internal travel, all of which generate income, employment and foreign exchange. It is true that during the Gulf war traffic across the Atlantic to this country diminished, but it has begun to pick up again. Those overseas visitors, whether from other continents or Europe, come here not for our weather, but to see our arts, countryside and heritage.
  My right hon. Friend the Minister for the Arts is strongly positive in his support and encouragement. The Treasury team that he has to consult has a history which suggests that they are likely to support the arts. The Prime Minister is also First Lord of the Treasury; when he was Chancellor of the Exchequer he sanctioned increases in the Arts Council budget, well above the inflation rate, in the two successive autumn statements of 1989 and 1990. Those decisions were shared by the present Chancellor of the Exchequer when he was Chief Secretary to the Treasury and by the present Prime Minister when he was
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  Chancellor. The present Chancellor of the Exchequer was once a Parliamentary Private Secretary to the former Minister for the Arts, Lord St. John. The present Chief Secretary to the Treasury is a former Minister for the Arts, a job for which his enthusiasm was obvious in the short time in which he held the position.
  I shall make two fiscal points relating to the arts. The first deals with the proposal for a national lottery for arts and sports. I wish that yesterday my right hon. Friend the Chancellor could have gone further than he did when he announced a scheme for a national arts and sports trust, which would raise £60 million a year. That is a substantial sum, but in an Adjournment debate last Thursday introduced by my hon. Friend the Member for Hyndburn (Mr. Hargreaves), my hon. Friend the Member for Basildon (Mr. Amess) said that if the figures for national lotteries in practically every continental country were extrapolated to the United Kingdom, the turnover would be £3 billion a year and the profit available for arts and sports, after expenses, administration and the distribution of prizes, would be about £1 billion a year. That is 15 or 17 times as much as the £60 million which the Chancellor of the Exchequer mentioned in relation to the other scheme. I hope that what was proposed yesterday will be no more than a stepping stone towards a national lottery, which I hope will come because it could do a massive amount of good for the sports and arts.
  I now turn to the tax position of actors and actresses, and declare an interest as my wife is a singer and actress. In the pursuit of their profession, actors and actresses are not allowed to offset against income, for tax purposes, anything other than agents' fees. Actors and actresses often have to bear the cost of lodgings when they appear in performances away from home. They also have an abnormal number of auditions because of their separate appearances in different shows. Those are obviously much more frequent than the job interviews of people in different occupations. All those professional costs should come under schedule D so that they can be offset. I do not believe that it is enough to offset merely agents' fees. I hope that the Government will consult British Equity, the actors' union, and take another look at the matter because I believe that it would help the theatre industry, which is so important for tourism and for bringing visitors from overseas to the United Kingdom.
  7.4 pm
  Mr. William Ross: I shall not venture too far into the arguments of the hon. Member for Twickenham (Mr. Jessel); nor do I wish to get involved in the quarrels about councils in Great Britain—we have enough problems at home. However, I say to the hon. Member that, if one third of the profits of a national lottery went to the arts, the punters would not come out of it well. I should have thought that those who invested their hard-earned cash in such a lottery would want a better return than that scheme would apparently give them.
  Yesterday, I listened to the right hon. Member for Plymouth, Devonport (Dr. Owen), who said that he had just listened to the first social market budget. A friend of mine is reputed to have said that, whenever the term "social" is used before the word "market", it means that the market will be negated by the adjective.
  I was gratified when the Chancellor, in his opening remarks, said that he was committed to at least one of the

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  virtues underlying the Thatcher years, in that his central economic aim was to bring down inflation and keep it down. It is nice to turn the circle every 10 years or so, but I wish that the Government had managed to do so the first time.
  I have been here long enough to know that not everything said by a Chancellor in a Budget speech is necessarily accurate, any more than autumn statements are. Certainly, Chancellors have not got it all that right lately. Some hon. Members have already belaboured the Treasury's forecast team; time will prove the accuracy of its forecasts and let us see, as events unfold, just what has been known and left unsaid.
  I have a number of concerns about the economy and what we heard in the Budget yesterday. In a sense, we heard two Budget speeches yesterday—one was the normal Budget speech and the other related solely to the money that is to be put into local government. I shall begin where the Chancellor finished: with the £4·5 billion, which will have vast consequences for all parties in the House and in the country that fight elections, and for the future of local government—its structure, functions and finance. Anyone who thinks that it will not lives in a dream world.
  Unless the Bill to be presented is carefully designed, we shall get into even deeper difficulties. The Bill will deal only with the first step in a much larger reorganisation of local government. We see here the abandonment of the principle of the direct link between those who pay local government taxation and those who spend it, the councils.
  I am concerned about that, because we are moving too far away from the principle of accountability, which the community charge tried to address, perhaps not successfully. But that issue will remain with us. If we reach the stage when accountability disappears, local government as we have known it in this country for a long period will be utterly swept away—there is no escape from that conclusion.
  We in the Ulster Unionist party believe that everyone should pay something towards the cost of local government. Therefore, the Bill that we shall see tomorrow is of great importance. We had two basic objections to the community charge. One was that Northern Ireland was not treated in exactly the same way as the rest of the United Kingdom—a problem that we have always had. Our other objection was more serious in its application—that we were simply replacing one crude tax with another. Local government taxation needs a wider tax base. The revenue that local government collects in other countries, especially in America, is specific to the functions that local government bodies perform.
  I must disagree with the hon. Member for Twickenham (Mr. Jessel) who said that the 2·5 per cent. increase in VAT would work out at only 2 per cent. I am sorry, but we are moving from a VAT rate of 15 per cent. to one of 17·5 per cent. That is my understanding and I am sure that those on the Treasury Bench will agree with me rather than with the hon. Gentleman. That 2·5 per cent. is important.
  We may have to wait until tomorrow to find out, but I would like to know whether that 2·5 per cent.—that widening of the tax base to which I have no great objection if it is done properly—will be specific to one level of local government or to a specific function of local government. If so, we are going down a sensible road. If not, we are
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  simply throwing money at the problem of local government finance. Doing that in such a panic-stricken atmosphere will eventually put us in an even worse hole than we are in with the community charge which many hon. Members seem to forget was introduced because of the panic-stricken state of the Conservative party in Scotland as a result of the revaluation there.
  In the political arguments between parties in the House, hon. Members seem to forget the root causes of the problems of local government finance, which are very real and which would not go away even if the rates were restored. Because we in Northern Ireland have been able to stand back, we have taken a more jaundiced but perhaps more accurate view of the real difficulties of the Government and the difficulties which any Government would face in trying to put local government on a sound basis, where people see their money spent and know what it is spent on, and so hold their councils responsible for its spending.
  We do not believe that the fire service, the police or education, to name but three of the functions of local government, should be completely under Government control. That would be a wrong step. The more money is put into local government by the Government, the more the Government's hand will control every aspect of it. That is inherently wrong. We must create a system of local government with proper financing which not only works but which commands a consensus across the House.
  Looking at local government in Great Britain from the perspective of Northern Ireland, we see councils fighting a national battle when they should be getting on with administering efficiently their local government functions, which, far too often, does not happen. The hon. Member for Twickenham touched on some cases where money was literally being thrown away in local government. That is the impression that I as an outsider get, and I think that it is an impression shared by many in the community outside. We must seek a consensus which works even if there is a political battle in the House to get it. The sooner we start getting such a consensus, the better.
  It would be false to believe that to do away with one tier of local government would result in a better service. I do not believe that the three services that I have just mentioned can be dealt with at district council level. A wider geographical area with perhaps a rather larger population than is contained in a district is needed if they are to be provided efficiently. If we do away with a tier and have only single-tier local councils, there will be great difficulties in the future. There is a real need to maintain a two-tier structure in future in local government, and I hope that the Government will not lightly abandon that. If they do, they will be straight back into another and possibly even deeper boghole.
  Another question to which I would like an answer tonight concerns the application of the 2·5 per cent. VAT increase in Northern Ireland. Enough has already been said in exchanges across the House this afternoon to show that it will not receive universal acclaim or affection, but I am curious about what will happen to rates bills in Northern Ireland in the coming financial year as a result of that 2·5 per cent. VAT increase. How will the electorate in Northern Ireland who are paying the rates bill—a very different tax from the community charge—receive the average £140 per head rebate? That is a question which

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  everyone in Northern Ireland would like answered and answered soon. But perhaps the Government have not yet worked that out.
  I am sure that before the debate is finished we will hear more about these matters, not least about the effect of VAT on low-income families where it will have a different impact. Both the hon. Members for Twickenham and for Hartlepool (Mr. Leadbitter), who took part in an argument across the Floor of the House a few minutes ago, had a lot going for them. That concerns the nuts and bolts of the tax, which I would like to see explored more deeply.
  There is, as I have said. already far too much central control of council work. Hon. Members from all parties would desire less. But if there is to be less, some of the councils will have to show a sight more responsibiity, and perhaps party leaders will have to impose more responsibility on them right across the board. Some of the behaviour that we have witnessed is not good for Britain, for democracy or for the people on the ground.
  Unfortunately, Thursday's Bill will be rammed through. I hope that when it is being rammed through all hon. Members will have a glimmering of the anger that we in Northern Ireland feel at the Order in Council procedure which is used for changing the law in Northern Ireland. The statement made by the Secretary of State for Northern Ireland today was another vivid illustration of that. The Government do not dare to bring before the House a Bill to privatise Northern Ireland Electricity.
  But the Bill on Thursday will not be the end of the local government argument. It simply means that one method of financing local government is being changed, or perhaps only modified. Far ranging changes will still be needed and any changes to the financing of local government will also affect its structure and functions.
  We have a long way to go. I hope to take some part in future debates to explore the matter more deeply. We in Northern Ireland would like to see a common system of local government throughout the United Kingdom, even if there is some variation from jurisdiction to jurisdiction. We would like to see a system which is recognisable from one end of the kingdom to the other.
  The measures that were announced for business were welcome and they will help. but when the nuts and bolts are examined, business will not be universally content because in one way or another considerable burdens are being placed upon it. I hope that by the end of this debate the Chancellor and his colleagues on the Treasury Bench will have heard a fair number of well founded criticisms of their proposals.
  Unfortunately, we were told nothing about interest rates yesterday. They are the greatest burden that business has to bear at present. The sooner that interest rates come down and stay down the better, but that is tied to inflation, and we do not want negative interest rates again. Across the board, the business community is hoping for an early and a fairly large cut in interest rates but I appreciate—and I hope that all those who cried out for entry into the ERM appreciate—that the Government lost an enormous amount of freedom of action on entry and cannot make the cuts in interest rates that they would have been able to make a year ago.
  Business, especially manufacturing, needs more investment. Investment is falling and I should like to think that it will rise rapidly and soon. I agree with those hon. Members who have said that manufacturing industry is the source of a nation's wealth. Although service industries
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  provide jobs, they do not provide national wealth in the way that manufacturing does. The more encouragement that is given to manufacturing the better, and I regret that more incentives to invest are not given in the Budget.
  I also regret that the inventor seems to be overlooked. We must do more for the fellow in the back shed who is up to something. Even in these days when huge sums are spent on research and development, individual inventors still come up with a nice idea which will provide 40 or 50 jobs when it gets to the market. Getting to the market is not simple, cheap or easy. Often inventors do not want to let go of their investment as it is the only chance that they have to make a few quid. We should be doing something to help them with the cost of patents, which can be a considerable cost to the individual.
  We should also help with development costs. I am always telling the Secretary of State for Northern Ireland that, even if some of the money were lost, it would be far better to spend money on our own people than on some fellow with a big hat and a Texas drawl, who usually collects a few million and heads back to Texas again. I would prefer a few million pounds to be lost every year on promoting our own home-grown inventors than to hand millions to overseas people who only come here to try to defraud the Government and the country.
  I also note that the increase in value added tax may well affect the capacity of some firms to pay money to charities. The VAT increase may not be universally acceptable to charitable organisations.
  I noted with regret that the Chancellor once more praised entry into the exchange rate mechanism as a secure framework against inflation and said that we needed the discipline of the ERM. I always thought that that discipline was inherent in the claim that Anyman made whenever he was asking folk to vote for him. I always thought that people elected Governments to exercise discipline in financial matters. I point out to Ministers that the Germans did not need ERM to succeed after the war: all they needed was financial discipline. It could well be said that such discipline was imposed by the Bundesbank. I wonder why other Governments have not exercised the same discipline since the war. All it takes is the guts to do what is right when the right moment comes and not to bend with every passing wind.
  If Governments accepted and imposed that discipline we would not have needed the ERM and we would have the freedom of action to change interest rates whenever it suited us. That might have been useful to the Conservative party at the present time.
  In election after election the Conservative party has attacked the Labour party for not exercising financial discipline. Now we are told that the Conservative party needs someone else to prop it up in that financial discipline. It is a sad failing and a fall from the high standards which their predecessors employed.
  I hope that the forecast that inflation will be down to 4 per cent. within a year is correct. Those of us who study past forecasts will not be as sure that it will happen as the Government Front Bench is. Considering that we have repaid £26 billion of our national debt during the past few years, which is a vast and welcome change from the rake's progress which characterised financial behaviour for many decades, I cannot but listen with dismay to the prophecy that there will be a minimum £8 billion deficit next year, and possibly a good deal more. We are told that it may be much larger the year after.

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  What really stuck in my gullet was the fact that the excuse given was that it was merely because of our place in the business cycle. If one can make that excuse for debts, will it also be applied to the £26 billion in repayments? How can one say that a deficit is a result of the cycle and in the same breath not have to admit that the repayments are a result of the cycle? I do not think that they are altogether the result of a cycle; they are the result of good management or mismanagement. I do not look with any pleasure upon the return of a deficit to Government finances.
  The Chancellor said that failure in generations past has put a burden upon us and that, if we do not get back to a balanced budget, we will put a burden on future generations. That is a paraphrase but is basically the meaning of his words. However, yesterday he did not say that he was hoping to get back to a state of affairs where he could make repayments. He was merely looking for balanced budgets in the medium term. Therefore, one must accept that there has been a massive departure from the position for a few happy years when public sector debt was repaid.
  I hope that it will dawn upon Ministers that many people in this country would like the public sector debt to be eliminated eventually, or at least reduced to a much lower level than at present. I am talking not about the percentage of gross national product but of a real decrease in cash terms in what we owe to the rest of the world.
  As far as the taxation changes are concerned, I am disappointed that the fuel tax has risen so much because it increases the problems for rural dwellers, raises transport costs and is inherently inflationary in some respects. If the Government had decided to do that, why did they not go the whole hog? Why did they not simply replace the road fund licence while they were at it? That would have meant that everyone paid and there would not be so many tax dodgers floating around.
  The tobacco tax increase, which has been so widely welcomed, will not be so widely welcomed in areas of the country where there is a tobacco industry. Tobacco is dangerous and I do not smoke myself—thank God, I never have. However, that increase will cost quite a lot of jobs in Ulster and will not necessarily stop people smoking. It might mean that we suck in imports of a lower quality and thus do more damage to people than any apparent good that may come about. The increase, which is above the level of inflation, was unwise at this time.
  The mortgage interest relief changes may have only a minor effect upon house prices and may stop them taking off again. I certainly hope that that is the case, but I am curious as to whether it signals a slow shift from the special treatment of mortgages for housing purchase, which has been the case for many years, towards treating them like any other capital investment.
  Other changes to be welcomed are those to capital gains tax and inheritance tax. Given the drop in the price of agricultural land, we are getting to a stage where most working farmers—rather than large estate owners—will not have to worry much about insuring themselves against inheritance tax because their farms will soon be well below the limit.
  Child benefit has been considered time and time again as a means of helping families with children and it is
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  probably still the best way to do so. The Chancellor said yesterday that, while he had considered child tax allowances, he had come down against them. Because of the changes made, I think that child benefit will be with us for the foreseeable future, and we should try to ensure that all mothers get the benefit of that money.
  Yesterday, there was no mention of privatisation income. I have had a quick glance through the Red Book, and I cannot find it there either. I wonder how much money we shall get from Northern Ireland Electricity? Frankly, I hope that the Government's efforts to put that legislation through the House fail, although, sadly, I fear that they will not. There simply cannot be privatisation and competition in the Northern Ireland context. We were in effect told today that one large power station would supply far more electricity than the Province needs, so how on earth can there be privatisation if we are to get into that state? And that is bound to come, because the existing plant is wearing out.
  One of the two Budgets is a thing of bits and pieces, many of which we welcome and some of which will have unforeseen consequences. The other contains a massive change to the system of local government finance. The effects of the first are quantifiable, but experience suggests that those of the second cannot be reduced so easily to common sense and specific figures.
  Once again, battle is joined over the financing, powers and structure of local government, and I think that that battle will continue for a long time. We are entering an unknown minefield, and, if we are not careful, the whole system of local government as we know it will be swept away. That will harm the country, local government and the people who live in the areas concerned, and, ultimately, will cost far more. We should not dare to bring such matters under the control of central Government. We must search assiduously for an acceptable means of financing local government that will keep it in sensible hands within the community.
  7.30 pm
  Sir Alan Glyn: I agree with the hon. Member for Londonderry, East (Mr. Ross) that the Bill which will be presented tomorrow will by no means complete the process that is required for reform of local government—it needs a thorough overhaul. It must also be accountable. As my hon. Friend the Member for Twickenham (Mr. Jesse!) said, offering enormous salaries to chief executives does not promote accountability and has a detrimental effect on other authorities.
  I congratulate the Government on producing such a sane and sensible Budget in the present circumstances. For one thing, the Budget will provide encouragement for small and large businesses. As the hon. Member for Londonderry, East observed, it is important that our industries should be helped to build themselves up to be able to compete with those of our European partners. I think that that is what the hon. Gentleman meant—and I see that he is nodding his agreement.
  This country recognises that savings, too, should be encouraged, and I am glad to see that the Government also accept the importance of that. I am not talking about personal equity plans or the tax-exempt special savings account; I am talking about the accumulation of wealth by all sections of the community—not just the top section—to provide them with reserves to fall back on and a base

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  for their retirement. The encouragement of such savings, like the encouragement of home ownership, is Conservative party policy.
  I hate the way in which managing directors are given enormous freedom to purchase shares in their companies while the workers are denied it. My right hon. Friend the Chancellor is right to want to ensure that the same facilities are offered, in a smaller way, to workers who, having become shareholders, will become more interested and involved in the work of their company. The widening of share ownership serves two purposes: it builds up a capitalist society among all classes, and it gives the workers an interest in the work that they are doing with their own hands.
  I note that special provision has been made for those—married women in particular—who wish to use their initiative and train for an occupation that will be of use to the country in the future. I also welcome the help that has been given to charities.
  I want to say something about local government, because what was said by the right hon. and learned Member for Monklands, East (Mr. Smith) has somehow been incorporated into the Budget. I think that the Government were right to raise VAT by 2·5 per cent., but I am not sure that I like the idea of that becoming permanent. Hon. Members have mentioned a property tax. Having spent 20 years on the rating and valuation tribunal in London, I find it terribly difficult to value houses. It is almost impossible. One house may be given a completely different valuation from the one next to it. Linking valuations with a property tax will mean an enormous undertaking if we are to get the tax right, and it will be as unfair as the present system.
  Of course, successive Governments were wrong not to increase rateable values. That, indeed, gave rise to the poll tax, which was the only alternative to a property tax that the present Government could see. I disagree with the hon. Member for Londonderry, East—I think that the fire, police and education services should be financed directly by the Exchequer. After all, the Exchequer pays a considerable sum to local government—about 48 per cent. It is not all raised through local rates. Financing those services centrally would merely mean that the Exchequer would contribute a little more.
  Although central Government provides local government with money—and is to provide more—local authorities must be made far more accountable. Councils should be run not by officers, but by elected members. The hon. Member for Londonderry, East is right to say that a complete reappraisal of the local government system is needed.
  I was pleased to learn of the help that the Government will give to seamen. It may seem a small point, but such help is important to the Merchant Navy, which is declining. We want British sailors on board those ships, and we welcome the concessions that have been given to them. The same applies to those employed in the Gulf, who, through no fault of their own, were forced to leave because of the war and have been heavily penalised fiscally. No doubt the Ministry of Defence had a word in my right hon. Friend the Chancellor's ear. The tax on alcohol and tobacco strikes me as reasonable. After all, they are luxuries.
  I have always advocated a move from direct to indirect taxation. Tomorrow's Bill is part of that, but I should like
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  more to be done in that regard. Other countries in Europe operate such systems, and run their affairs very successfully.
  I welcome this excellent Budget, and congratulate my right hon. Friend the Chancellor on it.
  7.38 pm
  Mr. Harry Ewing: If the hon. Member for Windsor and Maidenhead (Sir A. Glyn) will forgive me, I shall not take up all the points that he made. I shall deal with one later—the question of local government. First, I want to deal directly with his point about savings.
  I am the first to agree that savings are very important to the country and its citizens. Tragically, however, one of the results of the Government's 12-year tenure is that savings have reached their lowest-ever level as a percentage of net disposable income. Despite the various incentive schemes introduced in last year's Budget, savings still have not taken off. After the introduction of those incentive schemes—building societies would be the first to tell us this—people merely transferred money that they had already invested from one savings account to the greater tax-incentive savings account. The tragic truth is that, as a percentage of net disposable income, savings are at their lowest level ever.
  Over the past 12 months we have seen a traumatic recession and we have still not reached the depths of it. We have seen a dramatic increase in unemployment, which is beginning to accelerate. We have also seen some spectacular business collapses. If anyone had told the people of Glasgow or the west of Scotland that the massive Lewis's department store in Argyll street would go bankrupt in 1991, they would not have believed it, and nor would the people of Manchester and the other cities in which that store was located. It was an institution in those cities. We have seen the recent spectacular collapse of the International Leisure Group and Air Europe. We have seen an increase in inflation, which we have also seen begin to decrease.
  Against that backdrop, the Government have failed at every by-election to hold some of the safest Conservative seats. The Liberal Democrats won Eastbourne and Ribble Valley and that is matched by the fact that the Labour party won Mid-Staffordshire with an equally massive swing. Sometimes I think that the Labour party does not give itself credit for the stupendous victory of my hon. Friend the Member for Mid-Staffordshire (Mrs. Heal).
  There is a feeling—my hon. Friend the Member for Copeland (Dr. Cunningham) spoke on television about Ribble Valley—that those seats will revert to the Conservative party at the next election. I part company with my hon. Friend because the electorate are giving a great deal of thought to the way in which they will cast their vote. Political parties will, at their peril, take for granted the view that those seats will return to what is loosely described as their natural home at the general election. I do not believe that, but it remains to be seen whether my analysis is correct.
  I wondered where the Budget had come from. As I listened to the Chancellor introducing his Budget, I realised that it was not the Government's Budget. In fact, the Chief Secretary told us today where it came from. He said that the Confederation of British Industry announced last night that the Budget contained every proposal that it had made to the Treasury. He also said that the Institute

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  of Directors announced last night that the Budget contained every proposal that it had made to the Chancellor. The Chief Secretary also told us that the Association of British Chambers of Commerce had announced that the Budget contained its proposals. The spokesman for the Liberal Democrats, the hon. Member for Berwick-upon-Tweed (Mr. Beith), said that the Budget contained everything that his party had suggested to the Government. Where was the Government's input? It is fairly obvious that the Budget was a hotch potch, put together against the backdrop of the panic of the past year and the prospect of a general election.
  I welcome some aspects of the Budget. For example, I welcome the increase in the VAT registration threshold for small businesses to £35,000. I welcome also, although it was not a financial incentive, the Chancellor's determination to encourage Customs and Excise to persuade companies of a certain level of turnover to pay value added tax when the account is paid rather than when it is sent out. I welcome also the increase in child benefit.
  It was a pleasure to listen to my right hon. and learned Friend the Member for Monklands, East (Mr. Smith), who displayed a far superior grasp of the economy and its future needs than did the Chancellor and the Chief Secretary put together. My right hon. and learned Friend made it clear that had there been increases in line with inflation and, had the Labour party been in power, we would have been starting child benefit from a base of £9 per child.
  I enter a note of personal sympathy. All my life I have suffered the disadvantgage of being a twin. My brother is 10 minutes older than me and, for the life of me, I do not understand why my mother would have received more money for him than for me. I cannot accept that. Perhaps the Minister will explain what happens in the event of multiple births and how they are separated for the payment of child benefit. I am glad that the Government have moved away from their refusal to increase child benefit because that was inflicting hardship and suffering on families.
  One of the greatest disappointments in the Chief Secretary's speech was that he did not mention unemployment. The Budget will not put a single person back to work. Indeed, yesterday the Chancellor made it clear that unemployment will increase. I heard forecasts today of unemployment reaching 3 million and the right hon. Member for Chesham and Amersham (Sir. I. Gilmour) forecast 4 million. That is unacceptable. A total of 2 million is unacceptable and will severely damage Britain's social fabric. It will introduce trends into the social fabric which will be difficult to deal with by whichever Government are in power if they are not dealt with now.
  If the Government are prepared to sit back and allow unemployment to rise to 3 million or 4 million, the quicker they are out of power, the better. I say that not only for the Labour party, although I declare a vested interest, but for the people of the United Kingdom. We simply could not tolerate that level of unemployment.
  There is no hope in the Budget. I am speaking from the point of view of a Scottish constituency. There is no hope for the work force at Ravenscraig or for the work force at Rosyth naval dockyard. There is no hope for the 1,000
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  textile workers who lost their jobs in my constituency when clothing manufacturers had to close because of the recession.
  I hope that the Minister will pay attention here. The Government wax eloquent about the need for share ownership among employees. I am in favour of that, but I hope that the Government will not give the impression that employees' jobs are protected just because they happen to own shares in the company. I can tell the Government a different story. ICI is world famous for its employee share ownership scheme, but in Grangemouth in my constituency, only two weeks ago, ICI announced that 250 workers—or shareholders—were to lose their jobs. In anyone's language that is a warning on employee share ownership. We should not give the impression, as the Government have done, that owning shares protects employees' jobs. It does not, and we should not mislead working people in that way.
  I shall now refer to the link between VAT and local government finance. As the hon. Member for Londonderry, East (Mr. Ross) said, there has been a debate about whether the increase in VAT was 2·5 per cent. In my view, an increase of 2·5p on 15p in the pound is an increase of 16 per cent. If the Government were reducing VAT by 2·5p they would have claimed that that was a 17 per cent. reduction, but because VAT is going up by 2·5p they say that it is only a 2·5 per cent. increase. That increase is to finance the review of poll tax so that poll tax payers can pay £140 per head less.
  That is one way of financing the poll tax cut, but the Government have chosen another way of raising revenue, too. Contrary to what the hon. Member for Londonderry, East said about there being no mention of the proceeds of privatisation sales, the Chancellor announced yesterday that the Government intend to sell at least part of their 48 per cent. shareholding in British Telecom. Part of the money is being raised by the Government selling public assets. The sale may affect the BT pension fund—I hope that the Minister will consider that question.
  The hon. Member for Twickenham (Mr. Jessel) challenged the hon. Member for Berwick-upon-Tweed (Mr. Beith) to say whether he was in favour of the £140 per head reduction in poll tax that will be effected by the Bill to be introduced tomorrow. The hon. Member for Berwick-upon-Tweed said that he was in favour of it, but I am not in favour of the millionaire in his mansion getting a reduction of £140—he spends more on cigars in a week than that—and the old-age pensioner in her humble home getting a £140 reduction, too. The millionaire in his mansion should get nothing and the old-age pensioner should get three times £140. That would at least begin to approach social justice, or we might begin to be, as the Prime Minister put it, a nation at ease with itself.
  We have not yet seen the Bill to be introduced tomorrow, but we understand that it will contain only one or two clauses. Anyone who thinks that it will be universally accepted has another thought coming. In arranging for a £140 per head rebate the Government have made the same fundamental error as they made in introducing the poll tax. Where everyone pays the same everyone will get the same refund. No one can convince me that the millionaire in his mansion is entitled to £140 back, in the same way as the old-age pensioner in her humble home.
  We are talking about a complete review of local government. We are told that the Budget set the scene for

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  it, so it is relevant to the debate. The hon. Member for Windsor and Maidenhead mentioned local government, too. I shall not be here in the next Parliament so I shall not have a say in what happens. Let me warn the Government, and my hon. Friends who may have responsibility if a review is to be undertaken, that we should not do what was done when local government was reorganised in England and Wales in 1972 and in Scotland in 1973. The democratic element was reduced by 50 per cent. We cut in half the number of elected councillors, and in the process increased the bureaucratic element by more than 50 per cent. Everyone in the House knows that bureaucracy in local government grew because there was no democracy there to stop it.
  Hon. Members on both sides of the House talk about local accountability. They should get off councillors' backs. That applies to all parties—I do not make a political point. Councillors from all parties do an excellent job in difficult circumstances. When the poll tax was introduced we were told that it would get the Government out of local government, that the Government would not interfere, and that local government would be accountable to the electors in each area. Local electors would deal with overspending. That concept was soon shed, first with poll tax capping and now with the Bill that will be brought before us tomorrow. We shall see the Secretary of State for the Environment at the Dispatch Box making the biggest climbdown in political history. But there will be a reduction in interest rates, too, to take some of the spotlight off that climbdown—let there be no ifs and buts about it. I choose my words carefully when I say that the Conservative party is the first party in the political history of the United Kingdom to put a price on a vote. The Government will try to buy the vote of every person over the age of 18 in this country for £140 a time—that is their strategy for the next election. Anyone who thinks that the British electorate will fall for that con trick has another thought coming.
  I saw the Minister of State on "Kilroy" this morning. My better side tempted me to feel sorry for her, but my realistice side said that she deserved all that she was getting. She got a going over from people affected by the Budget.
  We have heard a lot about the CBI, the Institute of Directors and the chambers of commerce. Just as I accept that sometimes trade union leaders do not speak for their members, I know that the CBI, the IOD and the chambers of commerce do not speak for their members. On "Newsnight" last night the managing director of a furniture manufacturing company in Bristol with 270 employees and a turnover of £50 million tore the Budget apart. He was asked if he had ever voted Conservative and he said, "Yes, but I am seriously considering whether I will ever vote Conservative again." That is the sort of comment on the Budget that we are hearing from the business world. Business men can see through the Budget. This is not a universally acceptable Budget and its backdrop is one of disaster after disaster.
  The Budget was introduced with the general election in prospect. My interest in the date of the election differs from my interest in the election's outcome. I am interested in the election's date because I want to know whether I will be going home in June to start to grow chrysanthemums and gladioli and to tend my garden again or whether my departure will be delayed until October, November or even until next year.
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  The Government are taking a massive gamble. The Budget is the last throw of the dice for a desperate Government. If their gamble fails, we will see a political slaughter in this country such as we have never seen before. The Government are gambling with the future of the people of this country and the people know what is happening. That is why by this time next year my right hon. and learned Friend the Member for Monklands, East will be Chancellor of the Exchequer and my right hon. Friend the Member for Islwyn (Mr. Kinnock) will be Prime Minister. There will be a Labour Government, much to the joy and relief of the people of Great Britain.
  8.1 pm
  Mr. James Hill: The city of Troy had only one Cassandra, but on the Opposition Benches today there has been a flock of Cassandras. Opposition Members have been forecasting more and more disasters. They have claimed that the public will take us to task because we are reducing the community charge. How far from reality are the Opposition? I have been chums with the hon. Member for Falkirk, East (Mr. Ewing) for many years. Why go out with such a black outlook? He should have faith in his country and in the work force. He should have faith——
  Mr. Boateng: Get out.
  Mr. Hill: Well, the hon. Gentleman can replace me if he thinks that I am not doing my job very well. Opposition Members should have faith in their country. The stock market is buoyant, the foreign exchange is steady, the ERM is not affecting us and we will be able to reduce interest rates in the very short term. In the face of all that, why all this gloom and despondency?
  It is clear that the Opposition received a terrible shock yesterday. I watched their faces. The Liberal Democrats, like Labour Members, were decimated——
  Mr. Boateng: Where are they now?
  Mr. Hills: Obviously the shock was so great that they are now huddling together somewhere trying to create another policy on something.
  I am almost inclined to apologise for yesterday's shock. I did not know what was going to happen. If I had known, I would have told some of my chums to relieve the shock. Some of them might have had cardiac arrests. I do not like the phrase "shooting foxes" because we might lose the animal lobby, but there is no doubt that several very promising attacks on the Budget had to be completely rewritten as a result of yesterday's shock.
  I sense a great upsurge of relief. At long last we have a Cabinet that is determined to act. I want to recount the history of the community charge in Southampton.
  Mr. Boateng: The hon. Gentleman voted for it.
  Mr. Hill: I know, and I have written many letters saying that I cannot exonerate myself. However, when I first voted for the community charge, the estimated charge for Southampton was £178. I said to myself, "Okay. We're a low-rated area, but on the other hand £178 is quite reasonable". So I supported it. On the second occasion that I voted——
  Mr. Boateng: How many times in all?
  Mr. Hill: We voted on it twice. As a loyal supporter of the Government I voted for something that I believed would be much better than the rates. That evening, there was a minor rebellion on the Conservative Benches and I was appalled because my first loyalty has always been to the party.
  Mr. Boateng: Never mind the country.
  Mr. Hill: I believe that the country is best served by the Conservative party and that fits in with my sense of loyalty.
  On that evening, I was told by members of the Cabinet who are no longer members of the Cabinet, "There's no need to worry, James. It'll be about £278 and we think you can sell that." When the Labour-controlled council announced its community charge of £317, I very nearly fell over. I thought that no one in the low-rated area of Southampton, Test would be able to pay it. A real cloud had appeared.
  I kept hoping that others would view matters as I viewed them. Slowly, but surely, that began to happen. No matter what the Liberals have or have not done, they fought a good election in Ribble Valley. The public came out clearly on the community charge: they said, "Get rid of it." We were then accused of dithering and all the rest of it. When the dagger came out and went straight through the heart of the Leader of the Opposition, we were no longer dithering——
  Mr. Boateng: The Conservtive party stabbed its own leader in the back before that.
  Madam Deputy Speaker (Miss Betty Boothroyd): Order.
  Mr. Hill: Indeed, Madam Deputy Speaker, and that was said by the hon. Gentleman from a sedentary position.
  Madam Deputy Speaker: The hon. Member for Brent, South (Mr. Boateng) will have his chance later.
  Mr. Hill: I am pleased that you, Madam Deputy Speaker, are protecting me from the violent elements on the Opposition Front Bench. I need as much of that protection as I can get. The hon. Member for Brent, South (Mr. Boateng) said that someone was stabbed. It was a perfectly democratically arranged leadership election. It would be counter-productive to consider what happened in those days. Why should we always think of the past? That brings me back to the Cassandras. Opposition Members always think about the terrible things that have happened and do not believe that anything good can happen in future.
  The community charge will be reduced by £140 a head throughout the land, regardless of people's incomes, but we are already beginning to hear objections to that. Council leaders and treasurers claim on television that the notices cannot be issued in time. They claim that they will be working night and day and that it will cost another £60 million. They want more staff and, no doubt, longer tea breaks.
  My right hon. Friend the Secretary of State for the Environment will introduce a Bill on Tuesday that will incorporate everything that we have said about the community charge today. I hope that the Bill will include a provision to the effect that there is no need to issue another lot of invoices or bills simply because those bills must be issued before 1 April. People have enough savvy
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  to strike £140 off their existing bills or, if they normally pay 10 cheques during the year, to strike £14 off their cheques. Let us at least save £60 million and much hard work for local authorities.
  My local authority was dilatory when housing benefits were introduced, and it is just as dilatory now in respect of exemptions. People are getting two or three forms. The council is writing to the dead and to people under 18. That is all part of the system. The computerised society, which many hon. Members do not like, is not as efficient as we are told. I should not mind at all if my right hon. Friend the Secretary of State were to table an amendment to the Bill.
  Mr. William Ross: Will the hon. Gentleman give way?
  Mr. Hill: No. The hon. Gentleman had a good innings. My goodness, I sat here wondering what he had to do with the community charge. Irishmen are always pleasant and enjoyable to talk to, but not to listen to for too long. Today I thought that the hon. Gentleman spoke for a little too long.
  The increase in VAT to 17·5 per cent. will be the source of a little grievance. That is possibly the hardest aspect of the Budget that I will have to sell to my constituents. It is difficult when the hon. Member for Falkirk, East accuses us of wasting more money on the community charge. Before long, everyone will realise that the additional VAT will pay for the extra help with the community charge. The majority of families will readily pay another 2·5p in VAT. I hope that the child benefit policies that have been introduced will make up for that increase.
  Debates on business are not welcome in this House. We are always told that millionaires live in mansions. People ask, "What about the Japanese, Germans and others?" Millionaires who live in mansions can be Japanese, German, Irish or English. The hon. Member for Falkirk, East says that, for some reason, a person who invests in industry must be a millionaire. I have not yet heard of any trade union groups investing in industry, but no doubt I will hear about that later. Private investment mainly comes from people with money. Not all people who invest in the marketplace or the stock market or people who invest privately live in mansions. Some of them are humble—one can hardly tell that they have a penny to spare. Nevertheless, the main way to attract the attention of those people is exactly what has been done with corporation tax. Reductions in corporation tax from 35 per cent. to 34 per cent. in 1990–91 and to 33 per cent. in 1991–92 will do more than a thousand speeches by the hon. Gentleman.
  Mr. Harry Ewing: I shall not be here.
  Mr. Hill: No, the hon. Gentleman may not be here, but that is the way to encourage investment.
  There are many items in the Budget for the small business man. Small business men are people such as tobacconists who supply workers with cigarettes, milk and so on. There is no doubt that the small business man has been under pressure. If we can raise the profit limit of small businesses to £250,000—it used to be called the small business relief, but I am sure that the new Chancellor will call it something else—we will help business enormously. My right hon. Friend the Chancellor recognises small shopkeepers' problems. He has raised the VAT registration threshold by nearly £10,000 to £35,000. A

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  small shopkeeper can now have a trade of £700 a week and not even have to register for VAT. How different that is from what happened in 1979.
  There are problems with personal taxation. I have one little grumble. It is not like me to grumble, but personal allowances and all age-related allowances are raised in line with inflation, whereas the married couples' allowance for the under-65s is unchanged. Why? What is behind that policy? Is it the Conservative party, the party of the settled family? Is it more possible for two people——
  Mr. Graham Riddick: The standstill is offset by the increase in child benefit.
  Mr. Hill: I do not mind the Parliamentary Private Secretary, my hon. Friend the Member for Colne Valley (Mr. Riddick), or anyone else saying that. Two single people living in a house get two personal allowances, but for a married couple the position is unchanged. [Interruption.] Luckily my hon. Friend is not allowed to speak. [Interruption.] Married couples had better get on and have a few children? Is that what I am told by my Government? I hope that that is not so. We have had that problem in respect of council accommodation and so on.
  One extremely good point that has not been mentioned is tax relief. [Interruption.] Would hon. Gentlemen on the Opposition Front Bench kindly listen? Tax relief for businesses would help to provide equipment for schools and other educational establishments. That is to be encouraged by hon. Members on both sides of the House. If a benefactor wants to present a kit of footballs, football jerseys, soccer boots and so on, why should he not be allowed tax relief on it? Exactly the same applies to the arts. My hon. Friend the Member for Twickenham (Mr. Jessel) made a good plea. That side of our social life needs more assistance. A lottery would have been absolutely right. I am sure that we shall get around to that in the not-too-distant future.
  There has been tax avoidance through the use of non-residential trusts. That matter is almost white hot. The Jersey island of Bergerac has been used for many non-residential trusts. People gain. They pay only 20 per cent. on the island of Jersey, yet practically all their investments are held in the United Kingdom. It will be an extremely interesting Finance Bill. I look forward to listening to the reasons why non-residential trusts should be closed.
  Opposition Members are aggrieved that there was a reference in the Budget to British Telecom shares being sold off. I do not see why they should be aggrieved, but I rather like the idea that the shares should be sold from high street shops. I like to think that Marks and Sparks or Boots or almost any other high-street shop will be able to sell shares over the counter. Although we have talked about selling shares over the counter, we have always been strapped into the stock market and it has been the brokers or the banks who have made the money. Now, however, there is a chance that shares will be sold from high-street shops. I hope that we get 100 per cent. support from the Opposition on that.
  I represent a conurbation and have had the problem of having to go along with the community charge. I have never been happy about it. When someone said on "Newsnight" last night that a stake had been driven through the heart of the community charge, I thought that it was good news. I sat there smiling and today I am still
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  smiling. I am afraid that it will mean a desperately poor election for the Opposition. I am sorry that a lot of Opposition faces will disappear. Nothing will be safe. Once we get the policy into place and explain it properly, I am sure that we will be returned overwhelmingly.
  8.20 pm
  Mr. Tom Pendry: It is always a pleasure to follow the hon. Member for Southampton, Test (Mr. Hill). However, having been watching the clock, I must advise him that it was a bit rich of him to chide my hon. Friend the Member for Londonderry, East (Mr. Ross) for going on a bit: I can honestly tell him that he was not far behind. I had the same feeling when the hon. Gentleman was speaking as he obviously had when my hon. Friend was speaking. However, I richly enjoyed his speech and the fact that he found bits of the Budget as laughable as many of us found them. I assure the House that I shall be briefer than both those hon. Gentlemen.
  The Budget has been marked by two facets—one of fear and one of panic. As many hon. Members have shown, chief among the manifestations of the panic and fear have been the Government's desperate attempts to get themselves off the hook on which they have impaled themselves over the poll tax. As we all know, they have been defending the poll tax both inside and outside the House for many months. They did not listen to the advice of the experts or to the interested organisations. Most of all, they failed to listen to the electors.
  Generally, most panic measures fail when they are put under any scrutiny. The electors of this country would be mistaken to think that only the poll tax has attracted ill-thought-out and hasty measures from the Government, but, as many of my right hon. and hon. Friends have already mentioned many of them, I do not intend to go over that ground again.
  I had originally intended to raise the problems experienced by direct labour organisations, which are being penalised for ensuring that a high level of apprenticeship is maintained in the construction industry, and which are being hampered by the compulsory competitive tendering processes. Many of the apprentices who have been trained in the construction industry then go into the private sector. Although in some cases as many as 75 per cent. do so, the private sector is not playing as big a part as the direct labour organisations in continuing that process. However, as I realise that the arguments on that are lengthy, I shall not stress that point tonight.
  It will be no surprise to many hon. Members who know me that I intend to highlight a crucial area of the nation's life that will suffer enormously as a result of yesterday's announcements. I refer to sport. Given the Government's hype about the Budget proposals for funding sport, hon. Members may find it curious that I am raising this. However, like most of the Government's dealings with the sporting industry, the Budget is yet another case of broken promises and smokescreen tactics, coupled with the hasty and last minute cobbling together of a scheme to avoid a national lottery, to which the hon. Member for Test referred. I shall seek to explain how yesterday's announcements can be described as a "conning Budget for sport". I hope that the Minister is listening. The House should consider many aspects of this issue, not just the question of a national lottery.

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  The Budget certainly does not contain any move to abolish corporation tax for sport, at which many people, including the Minister for Sport, hinted. Along with the Prime Minister, the Minister has been happy to bask in the glow of the initial, but now proven sadly misguided, title of "the dream ticket for sport". I hope that the author of that title is eating his words tonight. The Budget has delivered a rude awakening to any who may have shared that view.
  In January, the Minister for Sport promised The Mail on Sunday that he would
  "look very hard at the financial structure of sports so that they can be released from having to pay corporation tax",
  and professed to feeling
  "very strongly about the tax sport has to pay".
  He added:
  "I believe we can change this and get more money into grass-roots sport",
  but those worthy promises have proved to be just words. Perhaps the Minister for Sport should come to the House now to tell us how strongly he feels about the refusal of his partner in the so-called "dream ticket"—the so-called "sporting Prime Minister"—to aid sport in that way. If the Minister of State replies to the debate, I hope that she will answer those points. If one of her colleagues is to reply, I hope that she will pass on those comments.
  Perhaps the Minister for Sport would explain to our rugby players, athletes and tennis players why he has failed to deliver the goods that he intimated that he would deliver, and what has happened to the much-trailed national lottery. That proposal appears to have been shelved or buried. In its place, we have a commitment to take £60 million out of football, where it is desperately needed to fund the requirements of Lord Justice Taylor's report, and to give it to some new body, the members of which we do not know, the structure of which is unclear, and on which we have not heard a single assurance from the Government about accountability or the monitoring of decision making or performance.
  However, what is clear is that that money will not even all go to sport. Some will go to the arts, which already receives eight times the level of Government funding for sport. Government figures that were given to me only last year in a written answer show that total funding of the arts has risen over the past four years by 43·9 per cent., whereas sport has seen only a 16 per cent. rise in grant to the Sports Council, and has suffered a cut of over a quarter in the amount of money that is given to inner-city sport through the urban programme. Like, I am sure, most of my hon. Friends, I do not wish to see the arts knocked. They should receive a proper level of funding from central Government—and rather more than they receive at present.
  What infuriates me, however, and many other sports lovers is that the Government refuse to meet their own responsibilities for supporting the arts but expect an already grossly under-invested industry, which is what football is, to subsidise their own inadequacy and unwillingness. It is like asking Bob Cratchit to pay Scrooge's poll tax, but stranger things have happened under this Government.
  We do not even have any guarantees that the new body will see the light of day. As I understand it, the scheme has been concocted as a result of negotiations between the Government and one pools company—the one that has 77
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  per cent. of the betting turnover. I wonder what has happened to the party that believes in free competition. It has now negotiated a deal that penalises the minority players in this market.
  Will the Minister give a clear undertaking tonight that the other two companies involved will be consulted about the structure that is to be set up to dispense their money? I hope that the House will have an opportunity to discuss that structure, because it will be a baffling prospect to many that any organisation will be able to satisfy the demands that will be placed upon it by the sports and arts lobbies.
  However, even more damning for sport, and possibly the biggest sting of all, is that the proposals will not lead to net investment or to even a single penny for sport. Many hon. Members will be fascinated by the figures. The Budget will result in a massive subsidy from sport to the Chancellor, not the other way round. Even if sport was to get all the money going from the Government to the new foundation, it would still receive only £20 million, not in direct grants but in Government revenue from the football pools betting duty.
  The Royal Commission on Gambling said in 1978 that the rate of 40 per cent. on football pools betting duty was too high and recommended that it be cut to 37 per cent., and that the money should be ploughed back into football. That recommendation came long before Lord Justice Taylor's report was envisaged. How much more desperately does football need the money now, never mind the needs of sport in general?
  When one considers the effect of increased VAT and excise duties, the figure of £20 million is dwarfed by the amount of hard cash that will come to the Government from sport. A Sports Council official confirmed to me that the effect of increased VAT on its own will mean that our sportsmen and women will cough up—through, for example, increased charges for equipment and admission fees—a staggering extra £77·5 million at 1985 prices which translates into £105 million in today's prices. That is a net profit to the Government of over £80 million. We could say that the Government's sporting horse has come in at a starting price of 4 to 1. That does not take account of the effect of VAT, increasing charges for voluntary sports clubs of hiring grounds and equipment, or increases in excise duties.
  So much for the great dream ticket for sport; so much for the sporting Prime Minister; and so much for the concern of the Minister for Sport about the amount of tax that sport has to pay. The reality is that the Budget is the biggest con for sport in recent history. If the Government were a racehorse, there would be cause for a stewards' inquiry.
  Last night, a Conservative Member—I will not name him, for obvious reasons—told me that he was ashamed of being a Tory. It is a bad Budget. It is designed to save the Tories' own neck rather than to build the country's future. The Minister of State, the hon. Member for Norfolk, South-West (Mrs. Shephard), had a rough time this morning, as we have heard. The Gravesend constituency is considered the most representative in the country. She must have got a clear message from the audience that they recognised that it is a bad Budget which will fail them. She is probably still bruised from that exercise.
  The Government began their life by increasing VAT. They will surely finish their life in the same fashion.
  8.32 pm
  Mr. Matthew Carrington: I will not follow the hon. Member for Stalybridge and Hyde (Mr. Pendry) down the sporting route, although he knows that I follow the affairs of the football world with keen interest. Nor will I follow hon. Members who have discussed at length the effect of the Budget on the community charge, because that matter will be addressed tomorrow, probably in a statement. Remarks on that should be seen in their entirety, when we know how the community charge is to be altered.
  There is no doubt that we have had a Budget for business because of the changes to the VAT regulations and rates, and also because of the changes in corporation tax. Business will also welcome the proposals for consultation about high street share shops. If we can persuade people to purchase shares in the high street from retailers, who may or not be banks or financial institutions but who will be much more accessible than the average stockbroker, that is an exciting prospect, if only because it holds out the opportunity of reducing transaction costs for share purchase. Transaction costs are one of the major obstacles to people buying shares. With the delay of the TAURUS system—transfer and automated registration of uncertificated stock—to 1992 in the London stock exchange, every effort should be made to ensure that transaction costs are kept to a minimum.
  Having high street share shops to cover the primary market in shares may not be enough. They should also cover the secondary market, so that people could sell their shares as well as buy them in those shops. If the shops are to work in that context, consideration must be given to the operation of the secondary market in shares in the London stock exchange and the spread between bid and offer prices.
  The principal item in the Budget which will be welcomed by business is the projection of Treasury economists, confirming the projection of other economists in the London market, that the inflation rate should be down to about 4 per cent. by the final quarter of the year. That would be a dramatic reduction and a great improvement on previous inflation projections. I believe that it will presage a tumbling of interest rates which will be extremely advantageous to business, large and small.
  Interest rates have hit business and home owners badly. Businesses have also suffered because of the uniform business rate. In conjunction with the changes to the community charge, I hope that attention will be given to the effect of the uniform business rate on businesses in London and the south-east. It has by no means been beneficial, although there are undoubtedly major advantages to it.
  There are dangers in low interest rates. If interest rates come down rapidly—I believe that they will, in a way which is sustainable within ERM constraints—the risk is that the property market will take off again, and that we will suffer another house price boom. The last property boom contributed to our troubles of high inflation and too much consumer spending because of leakage from the property market to the consumer market. As a result, interest rates had to be raised. We need to be cautious about how rapidly and how far interest rates drop because of the effect on the housing market.
  I welcome the Government's decision to remove mortgage interest relief for higher rate taxpayers. That will
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  be at least a constraint on the property market taking off again, although the benefits that such mortgage holders gained was by no means as great as other tax benefits from investing in their principal home. The major benefit is capital gains tax relief. Investment in principal homes rather than in other parts of the economy has led to a major distortion of the investment market. While it is not necessarily more beneficial to the economy to have investment in other areas rather than in bricks and mortar, it would be nice to get a better balance between property and other sectors of the economy.
  As interest rates come down, and as people start to borrow, there will be calls from the Labour party, especially from the right hon. and learned Member for Monklands, East (Mr. Smith) and from the hon. Member for Brent, South (Mr. Boateng), for the institution of credit controls. Of course, credit controls are nonsense now and would be nonsense in future. There is no possibility of them working without the reintroduction of exchange controls. If the Labour party ever formed a Government and structured a Budget, it would introduce exchange controls to stop leakage, because in no other way could it introduce credit controls.
  Labour Members talk also about compensating balances and reserve asset ratios for banks. But those are merely other means of jacking up interest rates. If one wishes to constrain the way in which banks lend, it is much better to do it through interest rates than by phoney ratios which have no other effect than indirectly to affect interest rates. They certainly have no effect of shaking off borrowing, other than through the indirect pressure on interest rates which they produce.
  The danger we face is incidental to our membership of the exchange rate mechanism. It is important that we consider moving rapidly towards entering the narrow band of the ERM, because that constraint will be important to us. At present, we suffer in the ERM from the fact that the deutschmark is—or has been—extremely strong. There are now clear signs from the German economy that the deutschmark is about to enter a phase of structural weakness, if only because of the high cost of reconstructing eastern Germany and the consequential large budget deficits that the German economy will run. They will be offset partly by higher interest rates and a rise in German domestic taxation, but the result will almost certainly be a weakening of the deutschmark.
  The consequence of a weaker deutschmark may also be that the pound will start to rise to the top end of the band in the ERM, forcing us to reduce interest rates more rapidly—indeed, to a lower level than we would otherwise have wished. In itself, that may have inflationary consequences in Britain, because, if nothing else, property prices would be stoked up.
  The way to get around that within the mechanism of the ERM is to recognise that we must be either in the ERM or out of it. As we have decided to be in it, we ought to be in it entirely. We should ensure that the ERM is altered in such a way that there is a common interest rate and foreign exchange policy across European Community countries and control of the different reactions of currencies within the ERM. That would mean that we would not be forced to adjust for domestic German policy by changing our own interest rate policy. That can be done only if we enter the narrow band of the ERM and move fairly rapidly to

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  some form of Eurofed or central bank in the EC. That is important, because the only alternative is to come out of the ERM altogether.
  The Budget will benefit business. If for no other reason than the fall in interest rates, we shall start to see business take off again, and we shall begin to come out of the recession later this year. That will be welcome and will set us back on the path of growth and economic strength which will be the foundation for great prosperity. As I and all my hon. Friends believe, that will lead us forth to a successful general election campaign when it comes.
  8.42 pm
  Mr. Ted Leadbitter: I have considered most of the comments made by the economic analysts in the press and other areas of information provision and concluded, after the most careful thought, that the Budget was a dog's breakfast. It does not meet, even in the slightest way, the problems of the country.
  I do not have to call on Labour party opinion and policy or, indeed, any platform to underwrite what I have just said. I call in aid the report issued on 14 March of the Select Committee on Science and Technology, in another place. It said that the policies of the present Government include no commitment to industry. It is a Committee on which Conservatives are in the majority. After careful consideration and after examining witness after witness, the Committee's report said that, if the present policies were persisted with, Britain would not have any British-owned manufacturing industries. That is the risk. It also said that the Government had no strategy for industry and no policy that took into account the national interest.
  This piddling little thing called the Budget—we had the usual ritual of the walk in the park before the Chancellor arrived here, and the little red box, which has more said about it than was in it—was a bit of a dog's breakfast. I call in aid another factor. In the House this afternoon, I raised a matter which is current. The calamitous news in Barrow-in-Furness will cripple the economy of that populace. I raised another matter this afternoon which is causing great concern. The Minister's answer was not much. He told me that he intended to talk to the Commissioner, Leon Brittan. I know that they deserve each other. Ministers made so much of the meeting. One might ask the Commissioner, who is a British subject, whose side he is on. I asked a question arising from Lloyd's List of 3 March, which said that there had been a calamitous decline in shipbuilding in the United Kingdom—of 80 per cent. in 10 years. Britain, which had the most magnificent shipbuilding industry in the world has experienced an 80 per cent. reduction of what was left 10 years ago. The newspaper added that Denmark, Germany and Italy have increased their share of world shipbuilding orders while Britain's share has shrunk to 0·77 per cent.
  I feel a little ashamed. When I was a young lad, my father used to tell me about Britain. When I grew up, I began to learn about British-made. It was better than a handshake and a good deal done. Our word was our bond. What do we have now? We have not only a shipbuilding industry which is almost non-existent but a mere 0·77 per
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  cent. share of world orders. There must be a state of madness in Government Departments to allow our great country's major industries to be in a state of decline.
  Another matter which the Budget statement did not touch on was the closed Ravenscraig steelworks. Thousands of people have lost their jobs. One must apply a multiplier to the immediate unemployment created. If 2,000 jobs are lost at a factory, the multiplier, which is never less than two, makes it a loss of 4,000 jobs in the area. What a disgusting, messy nonsense it is that Black Bob—he got his name well enough as chairman of British Steel—says that he does not intend to allow anyone to buy the works to compete with him. As in the case of shipbuilding, the British steel industry, which once accounted for 20 per cent. of steel making in the whole of Europe, has now been reduced to a size that does not reflect the significance that it once enjoyed.
  Did the Budget include any reference to the dilemma faced by people who want to save communities in the coal industry? Not very long ago we were producing 75 million tonnes of coal for the power programme. The figure is now 60 million tonnes. There is now talk of coal being imported from abroad—cheap coal extracted by cheap labour. Indeed, the privatised electricity industry is buying coal mines abroad. Is there something wrong with that? Of course there is. It stinks. When I go abroad I want to speak well of my country; I do not want to be reminded that the major pillars of our industrial economy have been knocked down.
  The best economists and chancellors in the world are the housewives. The Conservative party need not think for one moment that what it is doing about the poll tax will get it anywhere. The housewife will ask, "What is it that is a charge on my domestic budget but is not being taken into account by the House of Commons?" We hear a great deal of impressive economic jargon. Hon. Members enhance their self-importance by referring to such things as the ERM. The ERM is just another name for the fixed rate. We all know the history of fixed rates in this country. The housewife, when she is talking to her husband about the week's budget, will say, "The new financial year is starting. We have been told that the price of electricity is going to rise by more than 17 per cent., and that we shall have to pay more than 12 per cent. more for water. We have been told that fares are about to go up, and that we are going to have to pay more for food and household goods. You will have to pay more for the petrol that you use travelling to work." The list goes on and on. The housewife will say, "How are we going to meet these extra costs? Those daft Members of Parliament tell us not to make wage demands, because they want to get inflation under control." Members of Parliament and other people who are well off do not have to ask how they will manage to meet the extra costs.
  What of the poll tax? I chaired the Standing Committee that dealt with the poll tax legislation. Every member of that Committee expressed concern. What a stupid idea it is to try to tax at local level people who are always on the move. What an awful proposition. But now, having said time and time again over the past two years that the poll tax would work, the Government, in a panic, are doing something about it. The Ribble Valley by-election hit them on the head, and they said, "My god, we can't win an election. We had better get rid of the poll tax." So they put the extra burden on VAT.

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  I have news for the Government. Value added tax—and I am talking not about zero-rated goods—represents a higher proportion of limited incomes than of higher incomes, and is therefore a regressive tax. People on family income support who are under the threshold do not have to pay poll tax, but even they—people with less than £50 a week to play with—will have to pay an extra 2·5 per cent. in VAT. It does not make sense. For those without money in their pocket, life is going to be hard.
  As other hon. Members have waited a long time for the opportunity to speak, I intend to say very little more, but there is one more point that I want to make. Irrespective of whether we like it, Members of Parliament have to make political judgments. There is great concern about how to get the best response from the electorate. Sometimes we make the mistake of making promises—offering carrots. I can tell the House that the electorate will respond favourably if they see consistency of principle, if they see in Members of Parliament examples of public service. They will vote for candidates whose behaviour demonstrates that they are concerned about people. They will not be fooled by carrots—offers of concessions—in the hope that they will deliver their votes in a few weeks' or a few months' time. The public are bigger and better than that. This is Britain. There are higher standards and better examples to be found out there than in here. That had better be understood. Otherwise, something else might be at risk—democracy itself.
  8.57 pm
  Mr. Kenneth Hind: I welcome the opportunity to speak in the debate. The hon. Member for Hartlepool (Mr. Leadbitter) has just made a stirring speech on behalf of the Opposition. I say to the hon. Gentleman, and to the many people who criticise the Budget from an expenditure point of view, that when the economy is not at its strongest money has to be earned. Industry has to prosper before money can be spent. That fact must be taken into account. Many of the industries to which the hon. Gentleman referred have changed in nature. They have become far more productive; with advancing technology, there is a smaller manual element. Thus, there are fewer jobs.
  The most important element of the Budget is the community charge. The public cried out to us for a remedy. Rejection of the tax was widespread. It caused low-income and middle-income families a great deal of difficulty. It eroded the disposable income of many people and the situation had to be rectified. In introducing an extremely bold policy my right hon. Friend the Chancellor of the Exchequer has addressed the problem. The community charge will be reduced by £140 a head for every payer. It is a sensible measure that will be greeted by the majority of the British people as a common sense move. My right hon. Friend has chosen to raise the money to meet the reduction in the community charge by increasing value added tax by 2·5 per cent. I have listened to the complaints about that, but the reduction of the community charge means that the average family will save £280 a year. That family will have to spend at least £11,000 a year on goods and services that attract VAT before it is worse off. That puts the issue in context.
  What are the main essentials for a family? When we answer that question we take into consideration items that are zero-rated, such as children's clothes and shoes, fuel
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  for heating and housing costs. Those are essential items that form the basis of the bills that face every family. As they do not attract VAT, it is clear that the majority of families, including pensioners, single parents and those who are unemployed, will be better off as a consequence of the policy that my right hon. Friend the Chancellor of the Exchequer has produced.
  I say in a jocular sense that I look forward to the other half of the Budget, as I see it, which will be introduced tomorrow afternoon when my right hon. Friend the Secretary of State for the Environment tells us exactly what he plans to do in the long term. Many of us appreciate that that will lead to the abolition of the community charge.
  It is important to understand that we are discussing a Budget for business. Certain factors are not understood by Opposition Members. I listened with interest to the members of the Opposition's team of polytechnic lecturers who speak from the Opposition Front Bench on Department of Trade and Industry matters. They tell us how we should run the economy, but they have never had to worry about where wages come from, about the cash flow of a company or how they will ensure that their workers have training and expertise. These Front-Bench Opposition spokesmen have no experience of those matters. I am a barrister, the chairman of one company and the director of another, and I have relevant experience, as do my colleagues who sit on the Government Front Bench.
  There will be cuts in corporation tax and additional help with bad debts. The cost of those measures will total £570 million. That sum will find its way into long-term investment, including the creation of new jobs that will be available when we see the upturn in the economy, which I am sure will come.
  We cannot ignore the small business element. The Budget will lead to changes in the collection of tax and to national insurance relief. It will raise the limit of VAT registration to £35,000. The submission of small business accounts will be by way of statement when there is a turnover of only £10,000. These are major improvements that will be greeted with enthusiasm by those who run small businesses. They will work their way through in economic activity and job creation throughout the country. The theme that is forgotten is the overall downward thrust on inflation which in the next few months will lead to a reduction in interest rates. The present level of those rates is the major complaint of every business throughout the country and their reduction is the key to our future prosperity.
  We took a bold decision to go into the exchange rate mechanism. It seems clear that the decision made on the value of sterling when we entered the mechanism will be sustained. That in itself will bring a downward pressure on interest rates. Who else will benefit from a reduction in interest rates? The answer is the 65 per cent. of British people who own their own houses and who pay mortgages. A reduction in interest rates will put more money into their pockets. That will lead to their having a greater disposable income and that benefit will work its way back into the economy.
  Another important element is the green policy contained within the Budget. I make no apology to those who complain that the price of cigarettes will be increased. How much money do we spend on the national health service year on year to enable it to deal with

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  smoking-related diseases? The hon. Member for Brent, South (Mr. Boateng) laughs, but we are spending millions of pounds on cancer research and treating people for heart disease within the NHS, much of which is related to the amount of smoking that takes place in society. We all received a letter from Action on Smoking and Health last week. That organisation is concerned about the increasing numbers of young girls at school and of married mothers at home who are smoking. An increase in the duty on cigarettes will be a major deterrent that will lead to an improvement in the health of the nation.
  The same can be said of alcohol. Drinks that contain high levels of alcohol will bear the greatest amount of duty. My right hon. Friend the Chancellor of the Exchequer has rightfully decided that low-alcohol beers should attract a smaller amount of duty.
  We have a major problem with the greenhouse effect, so we are encouraging lean-burn engines. It will cost more for petrol, but the encouragement is for lean-burn, smaller engines for the future. It is not without significance that, overall, Britain has the lead in lean-burn technology. As time goes on we shall probably benefit from that; the cars of the future will have smaller engines and will consume less petrol.
  Although I believe that child allowances in tax terms should be the way to target money at the most needy, I know that the increase in child benefit will be greatly appreciated by the vast majority of families.
  This is a diverse Budget which deals with a good many difficulties. It is imaginative and it attacks the major problems that face us today. I have no doubt that it will be greeted warmly by the vast majority of people.
  9.5 pm
  Mr. George Walden: I congratulate my right hon. Friend the Chancellor of the Exchequer on a highly intelligent and socially sensitive Budget. I also congratulate the Chief Secretary on his typically meaty contribution to the debate, and remark in parentheses that the broadcasting authorities and interests who have good reason to be grateful to him for his sensible and enlightened conduct of the Broadcasting Bill are lucky to have someone in the Treasury who will be sensitive to their concerns when these matters raise their heads again.
  My main point concerns something that other hon. Members—I apologise for my temporary absence earlier this evening—have not addressed: housing. My right hon. Friend the Chancellor, in deciding to reduce the 40 per cent. mortgage tax relief to a flat rate of 25 per cent. for everyone, mentioned his desire to avoid another upsurge in the housing market.
  We are in a curious situation in the House when it comes to housing. Whatever subject one may care to take, hon. Members on one side or the other, Labour, Liberal Democrats or ourselves, will tell the public the truth about the situation. It is all too rare for this to happen with housing, particularly with mortgage tax relief. Nothing should be taboo for discussion in the House, yet somehow we all know that there is something fundamentally, culturally wrong with housing finance. If one were to lock the Conservative, Labour and Liberal Democrat leaders in a room for half an hour and tell them that they must agree on one thing that would benefit the economy of the
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  country in the longer term, however controversial it might be politically, they would all come out with the same answer: the total abolition of mortgage tax relief.
  Let us not forget that this problem has a history. It is not so much a cultural history, it is a cult of house ownership. When the Government talk about encouraging further house ownership, it may be electorally appealing in the immediate future but it is also financially and economically damaging. How far do we want to go? We have nearly 70 per cent. house ownership now. Do we want 100 per cent. house ownership with all the immobility of labour that it implies? Have we spared a glance for the position in some other countriess, the economies of which tend to be in better shape than ours and where there is a healthier mixture of ownership, rental and state provision? It seems that there is something wrong and unhealthy with the state towards which we are heading, with 70 per cent. house ownership and beyond, because so much of that is based on state subsidy. It is no good arguing that the £30,000 tax relief limit is withering away, when the actual cost to the Treasury is going up by leaps and bounds. It has gone up by about 50 per cent. during the past few years and now stands at £8 billion. With my own little interest in education, I note that that is precisely the same sum as the cost of teachers' salaries—an interesting little side point.
  The enormous figure of £8 billion which is coughed up by the Treasury does not help people to gain their houses or help first-time buyers, but, as everyone outside the House knows and says, it inflates the price of houses. The result in my constituency, which is rural, is that people born in villages cannot afford to buy houses in them. It is important for the subject to be debated honestly in the House. I understand perfectly well why the Government find it difficult to be as frank as they might be inclined to be on the subject, and I am tempted to say that I understand why the Opposition are a little reticent. However, it is important for us to confront the public with the realities of the inflated cost of housing.
  One of the many distortions to which this state leads is in the private rented market. The Government have rightly introduced legislation to liberalise the private rented market, but no one in his right mind will rent a house if he can receive Government subsidy, in the shape of mortgage tax relief, to buy one. That is one reason why the private rented market has not taken off and remains at the stultified and completely artificial level of about 9 or 10 per cent., despite the Government's best efforts to improve it.
  We could develop the subject ad nauseam. The Organisation for Economic Co-operation and Development has said that the existence of mortgage tax relief in the British culture of house ownership distorts the relationship between productive and non-productive investment—in bricks and mortar, money under the floorboards—to an enormous degree. It distorts the mentality of people's financial planning. Extraordinary figures show that the average mortgage indebtedness of individuals in this country is about double that of analogous countries. The culture of house ownership distorts our wage-claim philosphy. As soon as interest rates go up after a housing boom, people feel that they are entitled to ask for a wage rise to compensate them because their financial philosophy is based on mortgage tax relief and the extent to which they have got themselves artificially indebted because of their mortgage commitments.

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  This is a fundamental problem in the British economy which, uniquely, cannot be frankly discussed by the Government or the Opposition and so is rarely talked about in this place. However, every responsible economist outside the House and every major, quality newspaper, including The Times this morning—which asked why the Chancellor of the Exchequer had not done away with the whole damned thing while he was about it—agrees that this is a pernicious system that is damaging to the British economy, housing interests in general and home buyers.
  There are paradoxes here. I recognise all the politial problems of doing away with mortgage tax relief. They are common to hon. Members on both sides of the House. We all understand the difficulties of presentation to the public. But if mortgage tax relief were done away with, the first thing that would happen would be that house prices generally would fall. In my personal estimation, they would fall by more than the tax relief in question. It is exactly like going to Harrods or any other shop during the sale—people tend to buy things that they do not need. In just the same way, the very existence of mortgage tax relief encourages people to pay more for their houses than they should.
  The paradox—it is an important economic paradox—is that if mortgage tax relief were done away with or phased out, house prices would be reduced by more than the tax relief is worth. The result of that—this is the important point—would be that people's mortgages would be less than they are at present.
  Since I am making a bit of a virtue of being honest, let us be honest about the repercussions of that. The general level of house prices would stagnate or perhaps even subside. Therefore, people's sense of what they owned in terms of capital might stagnate or subside. But we must be frank and honest about that. Is it a good thing for Britain's future economy that people should have a permanently inflated sense of the value of their property? I rather doubt whether that is so. In this, as in other elements of the Government's policy over the past 10 years, realism and honesty are probably the best policy, particularly in terms of Conservative philosophy. We cannot say that our philosophy in economic matters is based on choice and at the same time say that the be-all and end-all of a person's economic existence is house ownership. There is a fundamental contradiction there.
  Economic choice in the housing market means a choice between buying and renting. It is as simple as that. But the market is skewed by the fact that we spend £8 billion a year—I repeat, the total cost of teachers' salaries—propping up artificial prices in the housing market. Our philosophy is skewed and contradictory and, while that goes on the private rented market in Britain will never take off in the way that the country needs, both to expand that stunted market and to create a level playing field in housing terms.
  We are all grown-up people and no one, other than misguided individuals such as myself, talks about such matters before an election. But this is a fundamental problem which will not go away. That is why I am taking this opportunity to make some remarks that will be highly unpopular among many people in the country and which will marginally embarrass members of the Government Front Bench, except that they know that what I say is true and that the remedies that I advocate are the right ones. I suspect that the Opposition know that perfectly well, too.
  I conclude with the perhaps slightly excessive remark that the continued existence of mortgage tax relief, which
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  inflates prices, distorts the economy and contributes indirectly to the appalling problem of homelessness, is to some extent due to a conspiracy of silence in the House among all political parties. However, I have enough residual political realism to realise that nothing will be said or done about the problem this side of an election.
  9.19 pm
  Mr. Paul Boateng: On the eve of the Chancellor's statement, the country looked to him for a Budget for manufacturing industry, for training and employment, for mother and child, for sustained and sustainable investment, and for growth and recovery within a decent environment.
  Yesterday, the House and the country got a Budget born out of desperation and rooted in failure. The desperation prompted a squalid political bribe of unsurpassed proportions to be delivered, in an unprecedented fashion on the back of an unparalleled transfer from local to central taxation, by a substantial addition to the rate of value added tax. The failure was a failure in the economy.
  In his opening remarks, the Chancellor paid a somewhat surprising, but nevertheless heartfelt, tribute to his predecessor, the right hon. Member for Blaby (Mr. Lawson). In so doing, he invited a comparison between the right hon. Member and himself that I think the Chief Secretary to the Treasury will well understand—a comparison in performance. I shall try to explain it. I said that I believed that the Chief Secretary would understand it because the English National Opera company—of which I am director—has a reason to be thankful to him in another incarnation and I know that he is a great lover of the lyric verse.
  The best way to describe the performance of the right hon. Member for Blaby on these occasions used to be "bravura". The performance of the Chancellor was much more "sotto voce", more of an Italianate tenor—a lightweight Figaro. That is how I would describe him, as a deft but lightweight Figaro whose bits of business—we all know what a great one Figaro was for bits of business—were not designed simply to enhance one's understanding of the piece, although it must be said that they were ingenious bits of business and brought cheer to some of the audience who feared that they might otherwise lose their seats. Nor were his bits of business even designed to take the action forward, which is always a good excuse for a bit of business in opera. No, on this occasion they were designed to keep the set from falling down on the heads of the players.
  That was the point of all of those ingenious little steps, although some were large, histrionic steps—consider the hike in the rate of VAT. We shall remember that performance. However, the failure is a serious matter.
  Mr. Mellor: What about Brunhilde?
  Mr. Boateng: No, Brunhilde is in the past. She has had her day and has been disposed of in the most unpleasant and Wagnerian fashion. The Chief Secretary must not be naughty, although his role in those matters is suspected, if not known. I want us to consider the failure that necessitated the bits of business. One hundred business failures, 4,000 job losses and 150 house repossessions every working day: that is the extent of the failure. The CBI's

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  optimism indicator—an interesting criterion by which to judge a Conservative Government—is at its lowest since 1980, at minus 51 per cent.
  Moreover, we must not forget the figures that the Chancellor left out yesterday. Fixed investment, predicted last year to fall by 1 per cent., is now predicted to fall by 10 per cent. Manufacturing output, predicted last year to fall by 1 per cent., is now predicted to fall by 5 per cent.
  What we encountered was a phenomenon to which Opposition Members have grown accustomed. We encountered it last year with the former Chancellor, the present Prime Minister; even the right hon. Member for Blaby was given to using this simple device from time to time when he had cause to do so. The device to which I refer is best illustrated by a comparison with a certain cynical, indolent servant of the state—a figure whom the Chancellor, whose love of the cinema is well known, is bound to recognise. Hon. Members will remember the part played by Claude Rains in the movie "Casablanca". Whenever things got out of control and he—through his own indolence or unwillingness—was not able to put them right, he would latch on to the device of rounding up the usual suspects. "Round up the usual suspects!", he would say, and a few tattered figures would be drawn from the casbah.
  Hon. Members will remember the scene. Time and time again, throughout the movie, the same thing happened—and that is what has happened in successive Budget speeches over the years. Who, then, are the suspects? It seems that the basic cause of the problem is the same everywhere. We hear of cyclical influences, global phenomena and—I think that this is the best of all—recession, the inescapable feature of the market economy. That is rich, coming from a party that has told us year in, year out, to worship at the feet of this Moloch. "Round up the usual suspects!"
  I was a little worried by the fact that, this year, the usual suspects appeared to be pretty thin on the ground. I see the Chancellor craning his neck to see what is coming next. After a while, of course, all the suspects disappear; they are not so obliging in coming forward. The Secretary of State for Trade and Industry and aficionados of late-night debate will recall his contribution last year, when he was, if memory serves me right, Financial Secretary to the Treasury. It was a startling contribution. This year, however, he was clearly a little concerned that the usual suspects would not be readily to hand. From an article in the Financial Times of Monday 11 March—and a good read it was——
  Mr. Nigel Griffiths: I remember it well.
  Mr. Boateng:—we were to discover a new batch of "usual suspects": highly unusual suspects, in view of the Conservative party's composition and policy. We were told that our problems arose because
  "we have an over-developed finance function, vis-a-vis the production function."
  We could have told him that. Indeed, the last time I saw that phrase used was in the New Left Review. The correspondent with the Financial Times felt obliged to point that out.—[Interruption.] I see that the Minister of State, Treasury read the same letter as I did.
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  Why should we be surprised that those views have been espoused? After all, the Conservative party chairman felt it necessary to refer to the interesting concept of the social market economy in no less a publication than Marxism Today. If that is the vehicle of the chairman of the Conservative party, why should not the New Left Review be something from which the Secretary of State for Trade and Industry culls his new ideas?
  He went on to say—this is where the "usual suspects" appear—that
  "We have 120,000 accountants compared with 7,000 in Germany. The inevitable thing in a company dominated by financial people is an excessive preoccupation with succeeding in making deals rather than the predilection of the production manager and the engineer to proceed by organic growth."
  We now have a new batch of "usual suspects"—accountants. If there is a profession more populous among the new breed of Conservative Members than estate agents, it is accountants. In their desperation, the Government have turned on the accountants. However, I do not want us to become too hung up on the accountants. We should look at what the engineers have said about the Budget.
  Mr. Walden rose——
  Mr. Boateng: I shall give way later.
  The Chief Secretary trotted out a series of favourable reviews. However, he overlooked the review by Ian Thompson of the Engineering Employers Federation—an engineer. That will please the Secretary of State for Trade and Industry because he is not yet among the "usual suspects". That review said that the Budget was
  "not an adequate response to the problems of United Kingdom industry and does not address the problems of companies not having enough cash to invest for the future."
  That was the judgment of the engineers. This afternoon, we heard the judgment of the accountants, and we all know where they stand on the issue. We must look to Mr. Thompson and the Engineering Employers Federation to find the true reflection of the Budget's worth.
  Concern has been expressed by many hon. Members about the belief that the engineering and manufacturing industries were not getting the deal that they deserved from the Budget. The hon. Member for Saffron Walden (Mr. Haselhurst) rightly said that he believed that the Government might have difficulty in making stick the view that this was a Budget for business. At least he was frank. The hon. Member for Fulham (Mr. Carrington) was less frank. He said that there is no doubt that it is a Budget for business. There was an ambivalence on the part of Conservative Members, and with good cause, because the Budget does not meet—as we would have it meet—the deep-seated needs of the British economy.
  In the Budget statement and the Red Book which supports it we find a number of unlikely assumptions and false forecasts that lead us to believe that the Budget is about electoral considerations and short-term political advantage rather than about meeting the immediate needs of our economy.
  The Chancellor said in his Budget statement:
  "If I may confess it, I do not believe in miracles".—[Official Report, 19 March 1991; Vol. 188 c. 166.]
  Remember the economic miracle to which my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) had cause to refer time and again? It is an albatross around the Government's neck. We are told that the Chancellor does not believe in miracles, yet we are asked

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  to believe in a Budget that is constructed around a number of assumptions whose plausibility looks dubious even now and will look increasingly dubious in future. The Budget deficit of £8 billion must be delivered without spending cuts in the next autumn statement. Inflation must fall to 4 per cent. by the fourth quarter of 1991, and interest rates must fall dramatically. All that must be achieved within the ERM and in an uncertain world.
  If we are to achieve 2 per cent. growth between this summer and next, interest rates will have to fall and stay down. The United States economy will have to recover and drive world growth. United Kingdom companies will have to disavow reductions in investment, jobs and stocks. Will that happen? Will the hon. Member for Derbyshire, South (Mrs. Currie) take a vow of silence? Will the hon. Member for Billericay (Mrs. Gorman), who has gone off in a huff, suddenly convert to the command economy? Will it happen? Will it hell.
  Mr. Walden: Will the hon. Gentleman give way?
  Mr. Boateng: I promise that we shall hear the apologia for the accountants in due course.
  We can therefore be forgiven for being somewhat sceptical about the assumptions that lie behind the Budget.
  Mr. Walden: The hon. Gentleman's speech is more entertaining than enlightening. Why does he not recognise that three of his favourite foxes—child benefit, mortgage interest tax relief and the community charge—have been shot, leaving him bugling away to the empty air? Will he now tell us exactly what he would do?
  Mr. Boateng: I do not have a favourite fox, but those among my acquaintances are very fit and will yet outrun Conservative Members.
  In the moments that remain to me, however, let me seize with both hands the opportunity to examine what we believe needs to be done. We have outlined it clearly enough, but I am only too happy to reiterate it. We believe that it is important that the Government should reverse the cuts that they have made in employment training and youth training. We are disappointed that all we had from them was the paltry £20 million-worth of allowances. [HON. MEMBERS: "Paltry?"] Yes, it is paltry when compared with I he £245 million that the Government have cut from the youth training and employment training budgets. That cut should be reversed. We believe that there should be a temporary work programme for the long-term unemployed and we have called for a specific programme to achieve that.
  We believe that, in regard to child care and support for children and mothers, the proposals in the Budget about child benefit are completely inadequate. Child benefit should have been increased to £9·55 a week for all children and we entirely accept the point made most cogently by the right hon. Member for Chesham and Amersham (Sir I. Gilmour). It makes no sense to distinguish between the first child and any subsequent children. This year, a two-child family will lose £154·70 as a result of the Government's failure to upgrade child benefit.
  We believe that more should have been done in relation to the environment. To describe what the Government have done as a green tinge is a misuse of language. The Government had an opportunity, which they failed to take, to begin to create conditions that would have a real
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  impact on the misuse of the car through the use of differential VAT and differential vehicle excise licensing, but they failed to take that opportunity.
  We believe that it is important to emphasis research and development and to use capital allowances imaginatively and progressively to achieve that end. That was the call made by the Confederation of British Industry and by the engineers.
  The Budget is a wasted opportunity. The Government have failed the country and they have failed to meet the challenge of the times. In due course, they will pay the price of that failure.
  9.41 pm
  The Financial Secretary to the Treasury (Mr. Francis Maude): This has been an enjoyable debate. It is some time since I had the pleasure of taking part in a Budget debate and this has been a spirited and delightful day. I very much enjoyed the speech made by the hon. Member for Brent, South (Mr. Boateng). It was strong on style although a bit short on content. It was good on opera and films, but a little light on economics. It may be a pedestrian view, but I believe that a debate on the Budget should at least touch lightly on economics at some point. None the less, the hon. Member for Brent, South made a very good speech and we all enjoyed it.
  My right hon. Friend the Chancellor of the Exchequer has not been with us in the Chamber for much of this debate. However, I suspect that his ears were burning as a result of the large number of compliments that were paid to his Budget. I will spare his blushes by not listing all the plaudits.
  Mr. Nigel Griffiths: Go on, list some.
  Mr. Maude: Very well, I will. My right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour) described the Budget as civilised and intelligent. Many of my right hon. and hon. Friends used other adjectives. Very few of my right hon. and hon. Friends found anything to cavil at in the Budget. It was slightly disappointing that the hon. Member for Hartlepool (Mr. Leadbitter) chose to describe it as a dog's breakfast. If that is right, it is some dog and it must be a very filling and nutritious breakfast.
  To paraphrase my hon. Friend the Member for Saffron Walden (Mr. Haselhurst), he pleaded that we should be nice to manufacturing industry. I believe and hope that we are. Perhaps I can say something nice about one particular part of manufacturing industry which has been the subject of much comment—the car industry. The car industry did astonishingly well during the past year—[Interruption.] Opposition Members may laugh, but it is an important matter. They may like to listen. In the past three months motor vehicle exports from this country rose by 50 per cent. over the equivalent period a year before. Opposition Members may think that that is funny, but we think that it is to be commended.
  Mr. Hind: My hon. Friend makes a very good point. Is it not a credit to the fact that Britain has been prepared to invite inward investment from Nissan, Toyota and so on? People are building cars in this country and exporting them to the European Community, and that plays a major part in closing the trade deficit with which we are currently wrestling.
  Mr. Maude: My hon. Friend is entirely right to draw attention to the large amounts of investment coming into this country. Despite Opposition Members' efforts to talk it down, this country is now a rather good place in which to manufacture goods, as people outside the Labour party increasingly recognise.
  I shall deal briefly with the speech of the hon. Member for Berwick-upon-Tweed (Mr. Beith). The main burden of his song seemed to be that we should hand over control of monetary policy to an independent central bank. That demonstrates in an aspirant Chancellor of the Exchequer a certain lack of confidence in his ability to control monetary policy. If there were ever the prospect of his being Chancellor of the Exchequer, the attractions of having an independent central bank might become rather more apparent.
  Mr. Beith: It was the view of the previous Chancellor, the right hon. Member for Blaby (Mr. Lawson). Was he dissatisfied with his capacity to run monetary policy?
  Mr. Maude: The hon. Gentleman wants to hand over control first to the Bank of England and then to a European central bank. I am bound to say that that view does not command much support on this side of the House.
  The hon. Member for Norwich, South (Mr. Garrett) referred, as did my right hon. Friend the Chancellor, to the erratic nature of some forecasts. The hon. Gentleman expressed a strong preference for private sector rather than public sector forecasts. That represents a damascene conversion to the merits of the private sector which is wholeheartedly to be welcomed.
  My hon. Friend the Member for Twickenham (Mr. Jessel), who also spoke in complimentary terms about my right hon. Friend's Budget, rightly emphasised the importance of getting inflation down. That is the major theme of the Budget and of the debate. Unless we get inflation down we cannot build for growth and prosperity in the future.
  Several hon. Members talked about local government, and properly so because it featured in my right hon. Friend's Budget statement. I must ask them to contain their impatience until tomorrow, in particular the hon. Member for Londonderry, East (Mr. Ross), who asked several specific points. Those points will be dealt with in due course, but I must ask the hon. Gentleman to contain his proper inquisitiveness until then.
  In the Budget there are several tax reform issues which take forward the Government's firm commitment steadily to reform the tax system where necessary. There is a consultation document on foreign exchange gains and losses—not, I accept, a glamorous subject, but it is important—in which we present proposals that we believe will bring rationality to a difficult aspect of the tax code. We have also presented a consultative document on resident trusts. That is the outcome of a review that was announced by my right hon. Friend when he was Financial Secretary to the Treasury. Again, that document would rationalise the law in a way that will simplify it and make it more comprehensive and helpful. We proposed to bring forward a consultative paper on taxation of the self-employed. The present arrangements for taxing companies and the self-employed are complicated and inefficient.
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  We are already introducing a new system, "Pay and File", which will simplify the way in which companies pay tax. It is now time to streamline the arrangements for the self-employed. We propose changing one of the oddest features of the present system which is that in any year the self-employed are taxed on their profits in the preceding year. Under the new proposals, the self-employed would, like employed people or companies, pay tax for one year on the profits earned in that year. We believe that that would help to make the rules much simpler. We also have proposals to cut the regulation of the self-employed by the Inland Revenue, by giving the self-employed greater responsibility for settling their own tax, as happens in other countries. It will not be possible to implement the reforms for some years, but, if we are to take full advantage of the opportunity for radical and imaginative reform, we need to start planning for it now.
  The Budget contained a number of proposals about deregulation of the tax system. Taxes inevitably place a compliance burden on taxpayers and it may frequently be necessary for businesses to play a role in administering the system to ensure that it is as cost-effective as possible. Periodically, we must look at ways of easing that burden where possible, and must always take into account the compliance costs when considering options for change. Of course, the best deregulatory measures are those that take people out of the tax system altogether. That is why my right hon. Friend the Chancellor announced a 40 per cent. increase in the value added tax threshold. It will mean that up to 150,000 firms will no longer have to register for VAT.
  We have also reduced the burden of the tax system on small firms through our proposal to allow up to 700,000 small employers to pay their PAYE and NIC payments quarterly instead of monthly. That will help them by improving their cash flow—although I accept that it will do so only slightly—and by reducing their administrative costs.
  Next year we shall increase the number of taxpayers who may submit simplified three-line accounts to the Revenue from 1 million to 1·5 million. Again, that means a substantial reduction in compliance costs for those in business.
  My hon. Friend the Member for Bedfordshire, South-West (Mr. Madel) asked yesterday about the proposed tax relief on vocational training and whether it would extend beyond examination fees, and tuition and course fees. The relief is intended to be given at source. Repayment systems always cause delay and confusion, so we propose that tax offices will be involved only in reimbursing organisations that provide qualifying relief and individual taxpayers who are entitled to relief at the higher rate. Because it is relief at source, it is not possible to extend it to travel, subsistence or accommodation costs or to the cost of books or equipment——
  Mr. Hill: I observed earlier that it seems unnecessarily harsh that married couples should not have any increase in their tax-free allowance. I was told during the debate that that hinged on child benefit, but I can scarcely believe it. Will my hon. Friend look again at this matter because we are the party of the family, and married couples should receive an increase in that allowance?
  Mr. Maude: I am sorry that I missed my hon. Friend's speech. He is right that we do not propose to increase the married couple's allowance this year. My right hon. Friend

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  the Chancellor decided that the benefit for families should be directed this year at families with children, and especially the first child. I know that that seemed eccentric to my right hon. Friend the Member for Chesham and Amersham, but the main cost on a family comes with the arrival of the first child because that is generally when the mother has to stop work and other costs arise. If it is desirable—as we believe that it is—to target help on families with children, almost by definition it is less sensible to give help by way of the married couple's allowance to families without children.
  This is a Budget for business. That is not just a slogan; it has been recognised as such by everyone from the business world who has commented on it. It will cut the administrative burden of the tax system and will help the cash flow of businesses.
  Mr. Harry Ewing: The Chief Secretary made no reference to expected levels of unemployment. I suspect that the Minister is about to finish his speech without making any reference to them. Within the context of its being a so-called Budget for business, will he comment on the fact that tomorrow morning British Aerospace will announce 3,500 redundancies?
  Mr. Maude: Clearly I cannot comment on that, except to say that if it is the case., I regret it. Obviously we all regret any loss of jobs. We have been frank about unemployment. The economy is going through a recession and a difficult time and unemployment is increasing. My right hon. Friend the Chancellor said clearly that it will continue to increase for a time, but there is no forecast. There is nothing surprising about that. So far as I am aware, no Chancellor has ever made a forecast of unemployment.
  The Budget will release new money for investment—money that would otherwise have been taken by the taxman. There has been a clamour from the Opposition for capital allowancs to be changed. They want a return to the 1970s when there were over-generous tax incentives for business investment. It was not necessarily good investment; indeed, it was often the reverse.
  The present system allows businesses to decide for themselves how much to invest. Decisions are taken on economic and commercial grounds and are not driven by tax. More generous capital allowances would deliver a subsidy through the tax system. They can make a bad investment look like a good one. They can make investing in expensive machinery look more sensible than employing extra staff, even when commercially the opposite is true.
  Changes to capital allowances could distort business decisions in favour of capital against labour. It sounds surprising that the Labour party should want a tax system that favours capital investment rather than employment. It is odd until we look at what happened in the socialist economies of eastern Europe. They, too, thought that investment in capital was an end in itself. We all know
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  what happened there—massive inefficiencies, bloated heavy industries and inflexible economies. Capital investment in Yugoslavia in the late 1980s was running at 38 per cent. of gross national product, double the rate here. Investment is a means to an end, not an end in itself. The end to which it is a means is improving business performance and profitability and underpinning economic growth. That is why our approach encourages companies to take investment decisions on business rather than on tax considerations. That must be right.
  Following the 1984 reforms, business investment grew dramatically. In the three years to 1989 investment grew by 43 per cent. to reach an all-time high. Despite the recession, business investment remains at historically high levels. When profitability starts to recover next year, companies will be well placed to benefit from the upturn in activity as inflation drops. Therefore, the Budget will encourage further investment—not any old investment just for the sake of it, but worthwhile investment justified on commercial grounds. It will leave businesses with more of their own money to invest as they judge right. It is worth repeating that my right hon. Friend has cut corporation tax for next year by a full 2 per cent. to 33 per cent., the lowest rate of corporation tax in the European Community and among the G7 countries. At the same time companies will be able to carry back trading losses against profits in the previous three years.
  All those measures will provide extra money which would have been taken by the taxman and will leave it with the companies for them to invest, if they choose to do so. For all the sneering from the armchair managers in the Opposition, it is clear that those who are running businesses agree with our judgment that the Budget will benefit businesses by removing burdens and by increasing cash flow.
  The right hon. and learned Member for Monklands, East (Mr. Smith) had a good joke about misdeclarations. We all thoroughly enjoyed it. But I suspect that he began to feel uncomfortable with it when his shadow budget came in for some scrutiny. My right hon. Friend the Chief Secretary asked him some searching questions about it, but he did not give any answers. I was rebuked in a previous debate for not giving way to the right hon. and learned Gentleman, but if I had time I would willingly give him an opportunity to set the record straight so that we could know the answers.
  The shadow budget that the right hon. and learned Member for Monklands, East set out is the greatest case of a serious misdeclaration that I have ever come across. Either the figures are simply wrong and he would not raise anything like the money that he claimed from his measures, or he is short-changing people either by robbing those who have already received benefits of those benefits or by keeping the benefits of children——
  Debate adjourned—[Mr. Boswell.]
  Debate to be resumed tomorrow.

  Nuclear Test Veterans
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Boswell.]
  10 pm
  Mr. Jack Ashley: The spectacle of the British Ministry of Defence fighting British ex-service men with the same determination it shows to enemies of the country is disgraceful. Nuclear test veterans have been victims of not only radiation but hostility, miscalculation, dogmatism, meanness and complacency by the Ministry of Defence.
  Tonight, I want the House, and the MOD, to consider new evidence which supports the claims of nuclear test veterans, but first I want to look at the National Radiological Protection Board's report. This scientific report was scandalously distorted by political presentation. The crucial "Conclusions" page began:
  "It is concluded from the study that participation has not had a detectable effect on the participants expectation of life nor their total risk of developing cancer."
  Then, almost as an afterthought, it says:
  "apart from a possible effect on the risks of developing Multiple Myeloma and Leukaemia".
  People died of multiple myeloma and leukaemia.
  The report could, and should, have opened with the sentence, "Participation may have caused death from multiple myeloma and leukaemia although not from other cancers." Instead, it opens with a disclaimer and buries in a long paragraph this revealing comment:
  "There may well have been small hazards of leukaemia and multiple myeloma associated with participation in the tests".
  It is not surprising that, as a result of the detail of the report, the Department of Social Security is now paying pensions for multiple myeloma and leukaemia. Fortunately, it does not have the gall to demand rigid proof of causation, as does the MOD.
  Why is the MOD persisting in its harsh interpretation of the report? The Minister must be aware of the supporting evidence for the test veterans' case. Although the Australian Commission was not a full epidemiological study, it concluded:
  "Their exposure to radiation in the trial programme has increased the risk of cancer among 'nuclear veterans'".
  The Minister must also know that the epidemiological New Zealand study found a fivefold increase in the risk of death from leukaemia among test veterans—a figure comparable with the three-and-a-half times figure found by the NRPB report. The New Zealand study concluded that the relationship was likely to be causal because a similar excess risk was found in the British study. Two distinct studies found additional risk for the veterans. That cannot be dismissed.
  The MOD is burying its head and shutting its eyes and its mind to existing evidence. It prefers to wait for the follow-up report from the NRPB, which is not due until 1992, by which time even more veterans will have died without compensation. That is shifty, evasive and deplorable.
  I sent the Minister a copy of my speech in advance so that he might be able to respond constructively to what I am about to say. The new evidence was revealed in the excellent Scottish Television programme "Dispatches", researched by Eamonn O'Neill. The programme claimed that, on 28 April 1958, in the Grapple Y test—the second off Christmas island—the megaton nuclear explosion was
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  at a much lower height than the 8,000 ft officially reported. This lower height would have substantially increased the radioactive fallout because a low-level explosion sucks up material that becomes heavily radioactive. Where that material lands, when it falls back to earth, is a matter of life and death. The programme claimed that a violent rainstorm occurred, and radioactive rain poured on to Christmas island, drenching the men, soaking the ground, and polluting the lagoons.
  Will the Minister confirm or deny that the explosion was at a low height, that material was sucked up, and that it fell back with the rain on to Christmas island and into the seas around?
  It is also claimed that the explosion took place just one and a half miles away from Christmas island, and not at the official distance of five miles. If this is the case, it is even more likely that the island became contaminated. If the Minister says he has no information, I will bring a deputation to see him to support the television claims. They must be investigated and cannot be ignored.
  On the crucial question of safety, the Government are on record as claiming that adequate precautions were taken to protect the men. Dosimeters were used to measure individual exposure to radiation, and it is said that no one was at risk, but inferior film was used in those days. It was not sensitive to low doses. It reached only to gamma radiation and not the more dangerous beta radiation. Will the Minister confirm this? I do not mind being interrupted at any stage. The most damaging claim, supported by the NRPB report, is that exposure to internal contamination could not be recorded on the dosimeters.
  These are crucial points, because much of the Ministry's safety claim rests on the fact that exposure to gamma radiation was measured, and that it was at a safe level. If there was no measure of beta exposure, or exposure from internal contamination, there can be no valid claim of safety; it has all been a mirage. Nor can there be any confidence in the argument of the NRPB in its report that there was no association between exposure to radiation and excess leukaemia and multiple myeloma. If it knew about only part of the exposure, discussion of the issue is fruitless.
  Far more relevant is the following suggestion in the New Zealand report:
  "The possibility cannot be excluded that there could have been significant external exposure to neutron radiation or internal exposure due to inhalation or ingestion".
  It is also significant that the greatest relative risk of excess leukaemia was suffered by men thought by the MOD not to have been exposed to radiation—by that is meant external gamma radiation. Could those men, who suffered more leukaemias than others, have ingested fatal beta radiation doses unknown to the MOD? Could that have happened because the cloud of radioactive material over Christmas island was washed down by rain and entered the food chain?
  Does the Minister know whether the water on Christmas island, used for drinking and washing by the men, was regularly checked for radioactivity? Was the water on the south side of the island, where the men swam and caught fish, checked for radioactivity? Again, the House is entitled to answers.
  Despite claims by the MOD that radiation levels found in fish were minimal, evidence was put forward in the television programme that one of the scientists found that

  377
  his geiger counter went berserk when checking radioactivity in some of the fish caught off the south-east point of the island.
  Much concern and many unanswered questions have emerged from just one well-researched television programme. Are they the tip of the iceberg? That question can be answered only by a judicial inquiry, and I repeat my request for one. The urgent task is compensation for the veterans while they are alive to benefit from it. The United States Congress was persuaded that there could be no certainty that the tests were safe. Its nuclear test veterans were given the benefit of the doubt. No rigid proof of damaging exposure was demanded. American test veterans now get compensation if they develop any one of 15 cancers.
  In Britain, only the nuclear industry has moved. In January of this year, as part of a compensation agreement, British Nuclear Fuels plc paid out £150,000 to the widow of a former plant worker who died of leukaemia. What has been the response of the MOD? Officially, nothing but statements that proof is required and that the study must be awaited. In military parlance, the MOD is cowering in its bunker. It is afraid of the truth. However, just yesterday, it was confirmed in a parliamentary reply to me that the Ministry is investigating the merits of a compensation scheme for radiation-linked disease—similar to that operated by BNFL. Let me warn the Minister that, if the scheme does not include the nuclear test veterans, there will be uproar. Will the Minister tell us tonight just what is stirring within the timid body of the MOD?
  Our nuclear test veterans deserve compensation to rank with that given elsewhere. They have suffered injustice since the 1950s. Successive Governments have failed to help them. Many of them are dying with great suffering. They, and their widows, feel what I can only describe as a dignified bitterness. It is time for the Government to put an end to this shameful episode in British military history.
  I hope I shall not receive a negative response tonight from the Minister. Perhaps he will recall the words of the Prime Minister, praising the dedication and heroism of our men in the Gulf. He should bear it in mind that praise is not enough. What the men need is justice.
  10.14 pm
  The Minister of State for the Armed Forces (Mr. Archie Hamilton): I congratulate the right hon. Member for Stoke-on-Trent, South (Mr. Ashley) on obtaining this Adjournment debate. He has, over the years, persistently campaigned for compensation for those personnel who participated in the United Kingdom's nuclear test programme. I applaud him for his diligence and dedication and I also thank him for giving me prior notice of the points that he made in his speech. He is well aware" Mr. Speaker, that the nub of the matter is the need to prove causation—that is, a causal link between participation in the programme and any subsequent illness. I emphasise at the outset that there is no such evidence.
  The young men who took part in the test programme are now middle-aged or elderly and, inevitably, will begin to suffer from the sort of illnesses that might befall all of us as we grow older. The fact is that the incidence of cancer in the participants closely matches that in the normal population.
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  The question of the nuclear test veterans is, as I say, not new and has been discussed in the House at length. The House will recall the considerable discussions that took place on the subject in 1990, when attempts were made to introduce an amendment to the Social Security Bill to permit the payment of compensation to those service men who participated in the test programme and who subsequently contracted various cancers which they attribute to their involvement in the tests. The proposal was, after much debate, rejected.
  Considerable concern has been expressed in the House and elsewhere about the nuclear weapons test programme conducted in the south Pacific in the 1950s and the suggestion that those who took part in the tests have now developed illness as a result of their participation. The concern is understandable. The widespread publicity given to the allegations, and the potentially harmful effects to which radiation can give rise, have considerably added to public anxiety and concern. Cancer is a common cause of death in the developed world; indeed some 20 per cent. of deaths can be attributed to the disease. There are, tragically, more than 100,000 cancer-related deaths a year in this country. It has been estimated that some 1,000 of those deaths may be caused by the various natural sources of radiation all round us. Many participants in the test programme, therefore, would by now be suffering from cancer, or would have died, if they had spent their service entirely in this country and never gone to the south Pacific. It is inevitable, however, and in the circumstances understandable, that many who have developed cancer should attribute their illness to the after-effects of the bomb tests.
  The nuclear safety standards implemented during the tests bear favourable comparison with the standards in force today. Individuals who were liable to be exposed to radiation were issued with dosimeters to record the radiation experienced. The safety regulations in force were consistent with recommendations of the International Commission on Radiological Protection and advice from the Medical Research Council. The Government have confirmed that safety precautions were properly monitored and stringently implemented.
  While the Government have remained confident over the years that the safety precautions were adequate and that participants were not subjected to any significant health hazards, they have been anxious to alleviate their fears. Bearing in mind the difficulties in determining causation, it was decided that there should be a study to provide up-to-date and reliable information to show whether a problem existed and, if so, its extent. In October 1983, the National Radiological Protection Board was commissioned to undertake a study of the participants and investigate any correlation with radiation exposure. The study compared the mortality and cancer incidence of more than 22,000 men who took part in the tests with a similar group of service men and civilians who were not involved in the tests.
  The study, the results of which were published in the British Medical Journal, concluded, as the right hon. Member acknowledges, that participation in the tests had no detectable effect on the participants' life expectancy. Nor did the study establish a causal relationship between the incidence of cancer and participation in the nuclear test programme; and, in particular, there was no evidence of

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  increased incidence of any cancer with increased radiation dose, contrary to what might have been expected if those cancers were radiation-induced.
  Mr. Ashley: I am absolutely incredulous at the Minister's speech. Does he deny that the report to which he referred said:
  "There may well have been small hazards of leukaemia and multiple myeloma associated with participation in the tests"?
  Will he deal with the new evidence which I have raised and which was brought forward in a television programme, bearing in mind that the Americans are paying their veterans and have given them the benefit of the doubt? Why cannot the Minister give the benefit of the doubt to our veterans?
  Mr. Hamilton: As to the specific parts of the study, the right hon. Gentleman anticipates me; I am about to come to leukaemia and multiple myeloma and will also refer to the American compensation scheme.
  As the right hon. Member said, the study showed a small but statistically significant increase in the incidence of certain leukaemias and multiple myeloma in test participants, compared with the control group. However—I think he would also acknowledge this—the control group exhibited an extraordinary low incidence of those two cancers compared with the average for England and Wales and the NRPB concluded that those differences were likely to be largely due to chance.
  The right hon. Gentleman criticises the NRPB's presentation of its conclusions. I can say only that the NRPB is an independent and internationally respected scientific institution. Its report was well received by the medical community and has not been criticised by any of the leaders in epidemiology. Internationally accepted estimates of risk from radiation predict that not one person would be expected to die as a result of exposure to radiation from the United Kingdom test programme.
  The Government regard the result of the NRPB study as vindicating their view that the safety precautions adopted during the test programme were effective. The report went on to recommend that observations on the groups of participants and controls should be maintained for a further 10 years and the Government were pleased to accept that suggestion. The NRPB will, therefore, continue to monitor the cancer and mortality incidence of the participants over a 10-year period and will publish an updated study next year.
  I now turn to the specific points made by the right hon. Gentleman. I must say at the outset that the irresponsible and sometimes misleading allegations made by the "Dispatches" television programme, from which the right hon. Gentleman drew many of his points, were based on a series of factual inaccuracies. The unfounded allegations made by the programme can only add unnecessarily to the concern and anxiety of those who participated in the nuclear test programme and their relatives.
  An example is that the programme showed some people wearing special clothing but not radiation badges, the implication being that the participants were being improperly protected and monitored. The clothing was used, in fact, as protection against the intense heat flash from the detonations. As they were located at a mustering
  380
  point at least 34 km from ground zero at the time of detonation, the dose from the flash radiation would have been zero.
  The right hon. Gentleman mentioned the United States compensation scheme. What he knows, but has failed to tell the House, is that the scheme works where people are present at a detonation and within 20 miles of it. As he will know, the vast majority of people on Christmas island were 34 kms away and so would not have been eligible for compensation under the American scheme if it had been operating. Similarly, it would be absurd to contend that participants who were upwind of the tests could have been exposed to radioactive fallout. As a result, there would have been no necessity to issue them with film badges.
  The programme also alleges that the Grapple Y test went wrong. If that is the case, it follows that those responsible for the conduct of the tests either deliberately connived in a massive deception or that they unknowingly did not correctly interpret the manifestations at the time and were thus guilty of negligence or professional incompetence. The records show that the Grapple Y test was detonated at a height of 8,000 ft at the intended diagonal distance of 2·5 km from the point of bomb release to the detonation point, corresponding to a distance of 1·7 km from the south-east point of Christmas island.
  I am mystified by the allegations in the "Dispatches" programme that the official detonation distance from Christmas island was meant to be 5 miles or 8 km. There are no official records to support this. In terms of exposure of participants, of course, it would have made no difference if the weapon had been detonated at 8 km or zero km from the south-east point of the island. Doses at the nearest mustering point would still have been zero.
  The main evidence in the television programme to support the allegation that the bomb detonated at 800 ft is the statement made by Captain Stewart, who was a co-pilot of a Shackelton flying on a shipping patrol some 60 miles away, as he said himself, at the time of detonation. At such a distance much of the evidence on which to base an eyeball estimation is below the horizon and he could not have seen the point of detonation. If the detonation had occurred at 800 ft, large amounts of water would have been sucked into the cloud giving rise to massive fallout over parts of the island. If test veterans had been exposed to that fallout, as the programme implied, severe symptoms such as nausea, vomiting and beta burns would have been manifested within hours of the detonation among all participants, with deaths from radiation sickness some weeks later. No such symptoms were observed. Furthermore, the radiation from that fallout would have been impossible to hide since it would have been apparent in the fallout pattern over the entire world.
  The "Dispatches" programme alleges that there was heavy rain off Christmas island on 28 April 1958 which substantially increased the amount of radioactive fallout. All that I can say to the right hon. Gentleman is that, shortly after the test, extensive environmental monitoring did not measure any deposition of radioactive materials from the detonation. On the basis of that evidence, therefore, there could have been no exposure to internal contamination as a result of inhalation, as suggested by the right hon. Gentleman. I confirm that sea water from swimming areas, drinking water, fish and locally gathered foods, such as coconuts, were continuously sampled and no traces of radioactive contamination were found.

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  The programme further alleges that the instruments used to measure radiation during the Grapple megaton nuclear bomb tests were not capable of measuring beta radiation. Of course, that allegation is totally without foundation since the instruments used on the nuclear weapon tests were of the beta/gamma type, capable of measuring both types of radiation.
  The right hon. Gentleman asked what criteria were used to designate areas of Christmas island safe or not safe. Any area or task in which it was expected that there might be radiation doses that were not trivial, or where pessimistically there might, however unlikely, be a possibility of exposure to radiation that was not trivial, was identified and entry to it stringently controlled. All persons entering such areas, or who might have to undertake tasks with radiation or radioactive substances, were issued with personal film badges. Additionally, the levels of radiation throughout the island were known and, in places occupied by the participants, the levels did not differ from the ever-present background and were considerably less than would have been experienced in the course of living in the United Kingdom.
  There are many factual errors in the New Zealand study entitled "Mortality and Cancer Incidence in New Zealand Participants in United Kingdom Nuclear Weapons Tests in the Pacific". Those errors were pointed out to the New Zealand authorities before publication, but were not amended in the final report. As an example, the authors assumed that the average dose to which Royal New Zealand navy personnel were exposed to be identical to that received by Royal Navy personnel—taken to be 5·2 mSv. In fact, the duties of the respective navies were quite different. The closest that the New Zealand ships ever
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  approached ground zero at the time of any of the detonations was 40 km upwind and their dose was, therefore, not significantly different from zero.
  A further factual error is the statement in the New Zealand report that
  "there could have been significant external exposure to neutron doses".
  It is irrefutable that neutron doses at a distance of 40 km from ground zero at the time of detonation were zero. Indeed, the total dose from all sources of radiation, neutron and gamma, was trivial at a distance 7·5 km from ground zero, and the neutron dose would have been a small fraction of this. But if any nuclear test participant had been close enough to receive a measurable neutron dose he would have been killed instantly by accompanying blast and thermal effects.
  It is a salutary lesson on the vagaries of statistics that, despite exposure levels to radiation from the tests being zero, an increased incidence of leukaemia compared with the average of New Zealand is still documented in the report. I should also point out to the right hon. Gentleman that the New Zealand report found no increased incidence of multiple myeloma.
  The right hon. Gentleman asks if I will place in the Library a copy of an unpublished paper by Dr. Headley Marston on the fallout of strontium 90 from nuclear explosions. I regret that, despite searches initiated by the Department of Primary Industries and Energy in Australia, for which I am grateful, the document has not yet been traced.
  The motion having been made at Ten o'clock, and the debate having continued for half an hour, MR. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at half-past Ten o'clock.

ATTORNEY-GENERAL

  Birmingham Pub Bombings
  Mr. Mullin
  To ask the Attorney-General if he will place in the Library a transcript of the Birmingham pub bombings appeal hearing.

  The Attorney-General
  Arrangements are being made to have copies of the transcript placed in the Libraries of both Houses.

NATIONAL FINANCE

  Retail Prices
  Mr. Ralph Howell
  To ask the Chancellor of the Exchequer what were the prices of one pint of milk, 11b of beef sirloin, one loaf of bread, 20 cigarettes, the average price of a three-bedroomed house and a medium-sized car, in 1970, 1980, 1985 and 1990 taking current prices as 100; and if he will show the percentage changes in each case.

  Mr. Maples
  Following is the available information.

  Index (January 1991 = 100)

  Percentage change in prices to January 1991

  Fresh milk

  January 1970

  13·1

  660·5

  January 1980

  46·5

  115·0

  January 1985

  68·2

  46·6

  January 1990

  92·5

  8·1

  January 1991

  100·0

  —

  Beef, sirloin

  January 1970

  10·6

  842·2

  January 1980

  54·3

  84·2

  January 1985

  75·5

  32·5

  January 1990

  98·9

  1·1

  January 1991

  100·0

  —

  Large white sliced loaf

  January 1970

  15·1

  561·1

  January 1980

  56·0

  78·4

  January 1985

  69·6

  43·6

  January 1990

  91·9

  8·8

  January 1991

  100·0

  —

  Cigarettes

  January 1970

  13·3

  653·6

  January 1980

  37·5

  166·8

  January 1985

  70·8

  41·3

  January 1990

  91·6

  9·2

  January 1991

  100·0

  —

  House prices1

  January 1970

  7·2

  1,288·9

  January 1980

  34·8

  187·4

  110

  Index (January 1991 = 100)

  Percentage change in prices to January 1991

  January 1985

  48·8

  104·9

  January 1990

  104·8

  -4·6

  January 1991

  100·0

  —

  Medium sized car2

  1 Based on national average price for all house types. Specific figures for a three-bedroomed house are not available.

  2 Information on new car prices is not available.

  Mr. Ralph Howell
  To ask the Chancellor of the Exchequer if he will publish estimates for the length of time a married man with two children on average male earnings had to work in 1960, 1970, 1980, 1990, and for the latest date available, after taking into account income tax liability and national insurance contribution, to pay for each of one pint of fresh milk, one pint of beer, 20 cigarettes, the weekly rent of a three-bedroomed council house and the running costs of a medium-sized car.

  Mr. Maples
  The lengths of time necessary to work to pay for one pint of milk, one pint of beer, and 20 cigarettes are shown in the table. Data for 1960 and data for the weekly rent of a three-bedroomed council house and the running costs of a medium-sized car are not available.

  The lengths of time necessary to work to pay for selected commodities and services are published annually in "Social Trends". Copies are available in the Library.

  Length of time necessary to work to pay for selected commodities

  Great Britain

  Minutes

  Married couple with husband only working1

  19702 Minutes

  19802 Minutes

  19902 Minutes

  Pint of fresh milk

  5

  4

  3

  Pint of beer (draught bitter)

  16

  13

  11

  20 cigarettes (filter tipped)

  29

  15

  17

  1 Length of time necessary for a married man on average hourly male adult earnings for all industries and services, with a non-earning wife and two children under 11, to work so that his net income pays for the various goods.

  2 At April.

  EEC
  Mr. Ralph Howell
  To ask the Chancellor of the Exchequer for each year since 1973 what were(a) the overall payments by the Treasury to the European Economic Community, (b) the overall payment made by the European Economic Community to Britain in refunds and all other payments, (c) the total payments and refunds made to the Treasury and (d) the net cost to the Treasury.

  Mr. Maude
  The information requested concerning public sector contributions and receipts to and from the Community budget for 1973–1989 is set out in the following table. The Commission does not provide member states with details of payments made directly to the private sector. The overall payment made by the EC to the UK is therefore not available.
  111

  £ million

  Year

  Gross payments to the EC

  Public sector receipts other than refunds and abatements

  Negotiated refunds

  VAT abatements

  Net contribution after refunds and abatements1

  1973

  181

  79

  —

  —

  102

  1974

  179

  150

  —

  —

  29

  1975

  342

  398

  —

  —

  -56

  1976

  463

  296

  —

  —

  167

  1977

  737

  368

  —

  —

  369

  1978

  1,348

  526

  —

  —

  822

  1979

  1,606

  659

  —

  —

  947

  1980

  1,767

  963

  98

  —

  706

  1981

  2,174

  1,084

  693

  —

  397

  1982

  2,863

  1,238

  1,019

  —

  606

  1983

  2,976

  1,522

  807

  —

  647

  1984

  3,204

  2,020

  528

  —

  656

  1985

  3,940

  1,905

  61

  166

  1,808

  1986

  4,493

  2,220

  —

  1,701

  572

  1987

  5,202

  2,328

  —

  1,153

  1,721

  1988

  5,138

  2,182

  —

  1,594

  1,362

  1989

  5,585

  2,116

  —

  1,154

  2,315

  1 Because of rounding the total with not necessarily equal the sum of the individual items.

  The information for 1990 is due to be published in April in the Statement on the 1991 Community Budget.

EDUCATION AND SCIENCE

  Polytechnics
  Mr. Madel
  To ask the Secretary of State for Education and Science what plans he has to make further polytechnic designations between now and 30 June 1992; and if he will make a statement.

  Mr. Alan Howarth
  We have made clear that we see the designation of new polytechnics as a continuing process, and would be happy to receive advice from the Polytechnics and Colleges Funding Council at any time that an institution has met the criteria for designation as a polytechnic together with the supporting evidence.

  Universities and Polytechnics
  Mr. Madel
  To ask the Secretary of State for Education and Science (1) what plans he has to create a joint funding council for universities and polytechnics; and if he will make a statement;

  (2) what plans he has to dissolve the binary line between universities and polytechnics; and if he will make a statment.

  Mr. Alan Howarth
  I refer my hon. Friend to the reply that I gave to the hon. Member for Oxford, East (Mr. Smith) on 25 February 1991,(Official Report, columns 332–33)

  Kirklees Metropolitan Council
  Mrs. Peacock
  To ask the Secretary of State for Education and Science how many persons were employed in the Education department of Kirklees metropolitan council in each year since 1979.

  Mr. Fallon
  The figures in the table are taken from a table of joint staffing watch data, analysed by local education authority, which has previously been placed in the library.

  The total employees of Kirklees metropolitan council education department in March 1990 were as follows:
  112

  Number

  Full-time teachers and lecturers

  4,040

  Part-time teachers and lecturers

  1,520

  Full-time other employees

  1,350

  Part-time other employees

  4,750

  These figures include the nursery, primary and secondary schools sector, special and further education and central administration.

  Comparable figures for other years are not available.

  Education and Training Costs
  Mr. Anthony Coombs
  To ask the Secretary of State for Education and Science how much in total, at constant prices, has been spent on the education and training of the average United Kingdom citizen by the time he or she reaches(a) 16 years, (b) 18 years, (c) 20 years, (d) 22 years and (e) 24 years; and if he will give equivalent figures for the main OECD countries.

  Mr. Alan Howarth
  On the basis of 1988–89 unit costs for maintained schools in England, expenditure per pupil up to age 16 amounts to some £16,000. Information for the other ages requested, and for OECD countries, is not available in this form.

  Ministerial Visits
  Mr. Devlin
  To ask the Secretary of State for Education and Science when the Parliamentary Under-Secretary of State, the hon. Member for Darlington (Mr. Fallon), last paid an official visit to a school in Stockton, South; and which county councillors he met.

  Mr. Fallon
  I visited Grangefield school in Stockton-on-Tees-on 25 February 1991 and met County Councillor D. C. McReddie, chairman of the education committee.

FOREIGN AND COMMONWEALTH AFFAIRS

  Mr. Crispin Rushworth-Lund
  Mr. Harris
  To ask the Secretary of State for Foreign and Commonwealth Affairs what steps have been taken by Her Majesty's Government to persuade the Dutch authorities to investigate the murder of Mr. Crispin Rushworth-Lund in St. Maarten.

  Mr. Lennox-Boyd
  On 7 December 1990 the British consul-general in Amsterdam put to the Netherlands authorities the suggestion made by my hon. Friend that detectives from the Netherlands should investigate the murder in St. Maarten of Mr. Rushworth-Lund. He wrote again about the case on 18 December. We are still waiting for a reply. The consulate-general sent a reminder on 15 March.

  Virgin Islands
  Mr. Foulkes
  To ask the Secretary of State for Foreign and Commonwealth Affairs what meetings he has arranged during his visit to the British Virgin Islands; whom he will meet; and what is the purpose of his visit.

  Mr. Lennox-Boyd
  I hope to visit the British Virgin Islands—BVI—from 20 to 22 April: I hope to meet the governor, the chief minister and executive council and leading members of the community. In particular I hope to look at BVI's capabilities to combat drug trafficking and see and discuss developments in the offshore finance sector.

  Mr. Foulkes
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions he has had with Ministers from the British Virgin Islands about combating drugs trafficking; what action he is now taking as a result; and if he will make a statement.

  Mr. Lennox-Boyd
  When I met the chief minister of the British Virgin Islands, the Hon. Lavity Stoutt, on 11 March we discussed the campaign to combat drugs trafficking through BVI. I informed the chief minister that the FCO had just purchased a drugs surveillance aircraft to be based in BVI and would fund a two man RAF team to operate it. I hope to be able to inspect anti-narcotics operations in the BVI during a visit from 20 to 22 April.

  Plastic Explosives
  Mr. Ian Taylor
  To ask the Secretary of State for Foreign and Commonwealth Affairs what progress has been made in international initiatives to make plastic explosives detectable.

  Changes in rate bills by property type, England and Wales

  Reduction (-)/Increase (+) in rate bill, per cent.

  England

  Wales

  Property type

  Overall change

  Net change on UBR

  Net change on revaluation

  Overall change

  Net change on UBR

  Net change on revaluation

  Factories

  -31

  -9

  -22

  -26

  -1

  -26

  Warehouses

  -22

  -6

  -15

  -17

  +1

  -17

  Shops

  +18

  -1

  +19

  +21

  —

  +21

  Offices

  +12

  +20

  -8

  —

  +7

  -8

  Other properties

  +12

  -5

  +16

  +12

  —

  +12

  114
  Mr. Douglas Hogg
  A new convention on the marking of plastic explosives for detection was opened for signature at the International Civil Aviation Organisation on 1 March. The United Kingdom, with 40 other countries, signed the convention. Among other things, the convention will require all plastic explosives manufactured by states parties to be "marked" through a chemical additive; prohibit the import and export of unmarked plastic explosives; and, subject to certain exceptions, require the destruction of commercial stocks of unmarked plastic explosives within three years, and certain military stocks within 15 years, after entry into force. The convention is the result of an Anglo-Czechoslovak initiative, launched after the Lockerbie bombing. We warmly welcome the rapid completion of the convention, in which British officials played a leading part. We hope to ratify the convention at an early date.

PRIME MINISTER

  Uniform Business Rate
  Mr. Gwilym Jones
  To ask the Prime Minister if he will make a statement on the impact of the operation of the uniform business rate on(a) offices, (b) factories, (c) warehouses and (d) shops in Wales relative to England.

  The Prime Minister
  The uniform business rate poundage for 1990–91 has been set at 36·8p in the pound in Wales in order to raise broadly the same amount in real terms from private business and nationalised industries as in 1989–90. The same principle has been adopted in England.

  The combined impact of the revaluation of non-domestic property and the introduction of the uniform business rate on the specified categories of property is shown in the tables:

  Changes in aggregate rate bills1 between 1989–90 and 1990–91

  Percentage change

  Property type

  Wales

  England

  Offices

  0

  12

  Factories

  -26

  -31

  Warehouses

  -17

  -22

  Shops

  21

  18

  1 After allowing for inflation as measured by the retail prices index and for appeals against valuation.

TRANSPORT

  Oil Spill Recovery Equipment
  Mr. Barry Field
  To ask the Secretary of State for Transport how much dispersant the marine pollution control unit keeps in stock expressed in(a) value in £ sterling, (b) weight and (c) volume; what were the stocks in each of the last five years; and what was the capital expenditure of the unit for each of the last five years.

  Mr. McLoughlin
  The marine pollution control unit—MPCU—current dispersant stock expressed in(a) value (b) weight and (c) volume is as follows:

  (a) value

  £1·68 million

  (b) weight

  1,680 tonnes

  (c) volume

  1,680 cubic metres

  Further stocks are in the course of supply to maintain the level of about 1,800 tonnes which has been held for the last five years.

  Total capital expenditure by the MPCU, including the purchase of dispersant, for each of the last five years is as follows:

  Year

  £,000

  1986–87

  282

  1987–88

  130

  1988–89

  215

  1989–90

  333

  1990–91

  397

  Mr. Barry Field
  To ask the Secretary of State for Transport what is the contingency fund(a) held and (b) expended for oil spill recovery for the last five years.

  Mr. McLoughlin
  The Department has Treasury approval to spend whatever it deems reasonable to deal with a major pollution threat and there are arrangements for calling on the contingencies reserve as necessary. This is represented by a token provision of £1,000 in the Department's annual estimates.

  Expenditure on dealing with oil spills in each of the last five years is as follows:

  £ thousands

  1986–87

  0

  1987–88

  10

  1988–89

  62

  1989–90

  168

  1990–91

  715

  The figures for 1989–90 and 1990–91 include £29,000 and £200,000 respectively for the deployment of MPCU oil recovery equipment and hire and deployment of supplementary oil spill recovery resources. Reimbursement of all of this expenditure has been obtained, or is being sought, from the polluters.

  Marine Pollution Control Unit
  Mr. Barry Field
  To ask the Secretary of State for Transport what was the total budget of the marine pollution control unit for the last five years.

  Mr. McLoughlin
  The total budget of the marine pollution control unit for each of the last five years, excluding the cost of dealing with major oil spills, was as follows:116

  Year

  £,000

  1986–87

  3,076

  1987–88

  2,781

  1988–89

  2,805

  1989–90

  3,308

  1990–91

  5,974

  Buses
  Mr. Spearing
  To ask the Secretary of State for Transport if, pursuant to the statement of Monday 11 March,Official Report, column 722, he will indicate any information available to him on the maximum percentage reduction in scheduled bus mileage on any bus route in east London.

  Mr. Freeman
  London Transport expects scheduled bus mileage in 1990–91 to rise to 182 million miles—an increase of 4 per cent over last year. I have no information on the performance of individual London bus routes. That is a matter for London Transport.

  British Railways Board
  Mr. Gregory
  To ask the Secretary of State for Transport how many British Railways Board members receive pay related to train punctuality; what percentage of the board's total remuneration such payments represent; and if he will make a statement.

  Mr. Freeman
  Under the terms of the British Railways Board members' bonus scheme, the six full-time executive members are eligible for bonus payments based on, among other things, train punctuality. Board members can earn payments of up to 4 per cent. of annual salary if British Rail meets the agreed train punctuality targets, and up to 7 per cent if the targets are exceeded. In 1989–90 board members earned a bonus of 1·5 per cent. for exceeding the punctuality target for the provincial sector.

  Coastguard Service
  Mr. Matthew Taylor
  To ask the Secretary of State for Transport when he intends to announce his decision on the future of the auxiliary coastguard service, arising from the recent review.

  Mr. McLoughlin
  After there has been time to consider the advice of regional controllers and the Chief Coastguard, following consultation that is now in progress. It is expected that this process will be concluded during the summer.

  Vehicle Inspectorate
  Mr. Roger King
  To ask the Secretary of State for Transport when the vehicle inspectorate business plan for 1991–92 will be published.

  Mr. Chope
  The business plan has been published today. Copies are available in the House Libraries.

  Trains
  Mr. Snape
  To ask the Secretary of State for Transport when he received an investment submission from British Rail to place an order for 200 new Networker electric trains for Kent link services; when he will be in a position to reply to the application; and if he will make a statement.
  117
  Mr. Freeman
  My right hon. and learned Friend received an investment submission for British Rail, requesting approval for 274 class 465 vehicles, in a letter dated 29 January. British Rail provided additional information on 26 February and 13 March. My right hon. and learned Friend will respond as soon as possible.

  Mr. Snape
  To ask the Secretary of State for Transport when he received an investment submission from British Rail to place an order for 60 vehicles to be used on London Paddington/Oxford services; when he will be in a position to reply to the application; and if he will make a statement.

  Mr. Freeman
  My right hon. and learned Friend received an investment submission from British Rail, requesting approval for 59 class 165 vehicles, in a letter dated 29 January. British Rail provided additional information on 19 February. My right hon. and learned Friend will respond as soon as possible.

AGRICULTURE, FISHERIES AND FOOD

  Badgers
  Mr. Ron Davies
  To ask the Minister for Agriculture, Fisheries and Food (1) what advice he has given to private forestry companies to ensure against disturbance or destruction of active badger setts during forestry operations;

  (2) what steps he has taken to protect active badger setts from disturbance or destruction by planting, timber harvesting or other operations on Forestry Commission land.

  Mr. Curry
  Badger setts are not on the whole vulnerable to damage from forestry operations, since they are characteristically large, subterranean and in well-drained soils. The Forestry Commission nevertheless endeavours to locate all the badger setts on its land so that they can be protected from any possible damage. It has also published forest nature conservation guidelines, for use by its own forest managers and those in the private sector, which emphasise the importance of good management in protecting animal populations.

  Cereal Farmers
  Mr. Ralph Howell
  To ask the Minister of Agriculture, Fisheries and Food what was the average income of a cereal farmer in each of the last five years.

  Mr. Curry
  The information is not available in the form requested. About one third of the total area of cereals in England is on specialist cereal farms and over a half is on general cropping farms. The following table provides estimates of the net farm income from a sample of these types of farm in England as recorded by the farm business survey.

  Average net farm income of specialist cereal and general cropping farms in England

  £ per farm

  Specialist cereal farms

  General cropping farms

  1985–86

  3,800

  6,100

  1986–87

  9,700

  17,700

  1987–88

  1,600

  8,400

  1988–89

  2,100

  8,500

  1989–90

  8,700

  21,800

  118
  Note: The figures shown relate to samples of farms which change somewhat each year. The movement in incomes from year to year is more accurately measured by a comparison of the results from an identical sample for each year which are published annually in "Farm Incomes in the United Kingdom".

  Infant Formulae
  Mr. Mans
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on the recent adoption of the European Commission directive on infant formulae and follow-on formulae.

  Mr. Gummer
  The Government voted in favour of the adoption of this important directive. My right hon. Friend, the Secretary of State for Health, and I warmly welcome the essential compositional and nutritional standards which this directive will provide for the first time to safeguard the health and safety of bottle-fed babies. During the negotiations in Brussels the United Kingdom succeeded in obtaining important changes that align the directive more closely with the principles and aims of the World Health Organisation international code on the marketing of breastmilk substitutes. In particular, improvements have been obtained in relation to the advertising controls on infant formulae and to the provisions covering the supply of these products to hospitals.

OVERSEAS DEVELOPMENT

  Virgin Islands
  Mr. Foulkes
  To ask the Secretary of State for Foreign and Commonwealth Affairs what studies have been undertaken into the feasibility of extending the runway on the British Virgin Islands; what cost is involved; and what action he plans to take.

  Mrs. Chalker
  We have not undertaken or commissioned any studies into the feasibility of extending the airport runway on the British Virgin Islands; nor have we been asked or have any plans to do so. We understand that consultants from Israel have undertaken preliminary feasibility studies at the request of and funded by the British Virgin Islands Government and that estimated costs of around US$30 million—£15 million to £20 million—have been mentioned.

  Mr. Foulkes
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recommendations were made in the report he commissioned on education in the British Virgin Islands; what plans he has to implement them; and what funds will be made available for this.

  Mrs. Chalker
  The 1988 education sector review recommended improved access to primary and secondary education through the reorganisation of existing infrastructure and management, with the quality of primary and secondary schooling to be assured through strengthening monitoring systems and increased budget allocations for instructional materials and in-service training. The Overseas Development Administration has assisted with quality improvement through the provision of additional school buildings and equipment linked with staff development for primary and secondary training in-country, in the region and in the United Kingdom.

  We have also assisted the British Virgin Islands Government in the formulation of its first five-year

  119
  development plan for education. Initial Government reaction to the plan has been favourable and we have indicated our willingness to continue to provide further technical assistance in its implementation when the Government have determined their priorities.

  India (Property Projects)
  Mrs. Clwyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs over what period £175 million for property projects in India, referred to in the letter of 15 February from the Minister of Overseas Development, was committed; and on what basis the decision was made not to include reference to the period involved in the letter.

  Mrs. Chalker
  My letter gave the total value of the British bilateral contribution to poverty alleviation projects in India against which our aid funds are currently being disbursed. Of that total, £130 million was committed to specific projects in the calendar years 1988 to 1990.

  Aid Loans
  Mrs. Clwyd
  To ask the Secretary of State for Foreign and ommonwealth Affairs, pursuant to the answer of 28 February,Official Report, column 564, what criteria were used to determine the eligibility of developing countries for old aid loans to be converted into grants; and whether these criteria remain the same in considering future conversions of aid loans to grants.

  Mrs. Chalker
  Britain decided to convert a numberr of outstanding aid loans into grants following a 1978 UNCTAD resolution. Eligibility was based on poverty

  Year

  Net Aid programme in cash terms

  Percentage change on 1978–79

  Net Aid programme in 1990–91 prices

  Percentage change on 1978–79

  £ million

  £ million

  1978–79

  715

  —

  1,807

  —

  Year

  Expenditure Plans

  Percentage change on 1978–79

  Expenditure Plans

  Percentage change on 1978–79

  £ million

  £ million

  1990–911

  1,587

  +121·9

  1,587

  -12·2

  1993–94

  1,860

  +160·1

  1,618

  -10·5

  1 Original planning figures. During 1990–91 the planned aid programme was increased to allow for additional expenditure on Zambia and the Commonwealth Development Corporation.

  Turkey (Natural Gas Project)
  Mrs. Clwyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is the developmental purpose of the aid and trade provision-supported natural gas conversion project in Turkey; what is the total value of the contract; over what period the ATP grant is expected to be paid; and if he will make a statement.

  Mrs. Chalker
  The purpose of this project is to provide a cheaper alternative to other fuels for meeting Ankara's energy demands and to reduce the atmospheric pollution caused by the use of oil, coal and lignite as domestic fuels.

  The cost is $200·7 million of which $108·5 million is being financed by a long-term concessional loan to meet the costs of 85 per cent. of the British goods and services. Aid and trade provision grant funds, calculated on exchange rates applying at the date of implementation of
  120
  and a satisfactory human rights record. In addition we now also seek evidence of a commitment to economic reform so that the resources provided through debt relief can be used effectively.

  Low-income Countries
  Mrs. Clwyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs what percentage of bilateral aid went to low-income countries, as defined by the World bank, in 1990; and what percentage went to least-developed countries, as defined by the United Nations in 1990.

  Mrs. Chalker
  The percentage of United Kingdom gross bilateral aid to low-income countries, as defined by the World bank, was 71·2 per cent. in 1989, the latest year for which figures are available. The proportion going to the least-developed countries, as defined by the UN, was 31·7 per cent. in 1989.

  Net Aid Programme
  Mrs. Clwyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will publish a table showing the size of the net aid programme, in cash and constant 1990–91 financial year terms, for the financial years 1978–79, 1990–91 and planned figures for 1993–94, showing the percentage change in real terms for each period.

  Mrs. Chalker
  Following is the Information; figures for the net aid programme in 1990–91 will not be available until the autumn.

  the loan and estimated not to exceed £58·7 million, are being provided to support interest payments due on this loan. Repayments of principal will be made over a 20-year repayment period. Allowing for a five-year grace period the final payment will be made in 2013. Payments from the ATP grant to meet interest "make-up" and Export Credits Guarantee Department premium costs have amounted to £6·35 million to date.

  The hon. Member will be aware that the figure of £58·7 million differs from that given in my reply to the hon. Member for Hackney, North and Stoke Newington (Ms. Abbott) on 28 February at column 565. I have written separately to the hon. Member correcting this latter figure.

WALES

  Energy Efficiency
  Mr. Colvin
  To ask the Secretary of State for Wales which of his Ministers has been given responsibility for energy use by his Department; and what is his brief regarding energy efficiency.

  Mr. Nicholas Bennett
  As Parliamentary Under-Secretary of State for Wales, I have responsibilities which include the use of energy. The publication of the Welsh Office energy efficiency plan was announced on 8 May 1989 by the then Secretary of State for Wales, my right hon. Friend the Member for Worcester (Mr. Walker), and copies were placed in the Library of the House. The plan is currently being updated to reflect the increasing concern for energy efficiency exemplified by the recently instigated ministerial group on energy efficiency.

  Water Rates
  Dr. Kim Howells
  To ask the Secretary of State for Wales if he will list by district authority in Wales the numbers of council tenants evicted, or currently under threat of eviction, by district councils because they are in arrears with respect to payments of water rates, where those rates are charged inclusive of rent by the councils in 1990, and in the first two months of 1991.

  Mr. Nicholas Bennett
  This information is not available centrally.

  Cadw
  Mr. Gwilym Jones
  To ask the Secretary of State for Wales if he will make a statement about the future management arrangements for Cadw.

  Mr. David Hunt
  I have concluded that Cadw should become an executive agency on 1 April 1991. I shall be announcing the objectives and targets that I have set for the agency shortly.

NORTHERN IRELAND

  Moyle Hospital, Larne
  Mr. Alton
  To ask the Secretary of State for Northern Ireland what is his assessment of the efficiency and effectiveness of Moyle hospital, Larne, in the delivery of acute hospital services.

  Mr. Hanley
  The Department of Health and Social Services has not yet assessed the efficiency and effectiveness of actue services in the Moyle hospital. This is primarily a matter for the Northern health and social services board.

  Fire Advisory Panel
  Mr. Ken Hargreaves
  To ask the Secretary of State for Northern Ireland how many members serve on the Fire advisory panel for Northern Ireland; and how many of those members are also members of the Society of Fire Safety Engineers.

  Mr. Needham
  There are 30 members who serve on the fire advisory panel which in Northern Ireland is known as 122
  the Northern Ireland fire liaison panel. Of these, only one member is also a member of the Society of Fire Safety Engineers.

  Job Clubs
  Mr. Beggs
  To ask the Secretary of State for Northern Ireland which council districts in Northern Ireland currently have a job club.

  Mr. Needham
  The Training and Employment Agency provides support for job clubs in the following council districts:Antrim, Ards, Belfast, Larne, Newtownabbey, North Down, Coleraine, Craigavon, Dungannon, Derry, Newry and Mourne, Omagh.

  Fair Employment
  Mr. John D. Taylor
  To ask the Secretary of State for Northern Ireland when was the last examination of the employment records of the Bank of Ireland under the provisions of fair employment legislation; and if there has been any progress towards eliminating the underemployment of Protestants in the Bank of Ireland since the first fair employment report on this bank.

  Mr. Needham
  A report by the Fair Employment Agency in March 1986 dealt with the employment patterns and practices of the five main banks in Northern Ireland, including the Bank of Ireland; a copy of that report is held in the Library. The Fair Employment Commission has decided to make available, upon request, monitoring information from individual concerns following receipt of their monitoring returns for 1991. The Bank of Ireland is required to make its monitoring return by 6 June 1991. This return will indicate the religious composition of its work force and applicants for jobs and will, therefore, enable a comparison to be made with the position as shown in the 1986 report.

  Nephrops
  Mr. John D. Taylor
  To ask the Secretary of State for Northern Ireland what was the catch of nephrops in 1988, 1989 and 1990; and what is the projected catch in 1991 based upon the experiences of the first two months of the year.

  Mr. Hanley
  Landings of nephrops into Northern Ireland totalled 5,344 tonnes, 5,595 tonnes and 5,606 tonnes for the years 1988, 1989 and 1990 respectively. Landings in the first two months of 1988, 1989 and 1990 totalled 423 tonnes, 370 tonnes and 222 tonnes respectively compared with 397 tonnes for the same period in 1991. This does not give a statistically sound basis from which to project the total 1991 landings.

  Fish Marketing and Processing
  Mr. John D. Taylor
  To ask the Secretary of State for Northern Ireland how much of the £15 million in EC grants for the United Kingdom's fish marketing and processing industry for the period 1991 to 1993 will be allocated to Northern Ireland; and if he will make a statement on the implementation of this scheme in Northern Ireland.

  Mr. Hanley
  Of the £15 million in EC grants, some 1·5 million has been separately allocated to Northern Ireland
  123
  The scheme is open for applicants, but is competitive and not all applicants can be guaranteed support. I hope that the Northern Ireland industry will make full use of the moneys available.

  Belfast Action Teams
  Rev. Ian Paisley
  To ask the Secretary of State for Northern Ireland if he will list the expenditure in each of the Belfast action teams which were created and the projects on which the money was spent.

  Mr. Needham
  In view of the considerable number of projects involved, it will take some time to collate the information. I will write to the hon. Gentleman as soon as the information is available and place a copy of my letter in the Library.

  Disability
  Rev. Ian Paisley
  To ask the Secretary of State for Northern Ireland (1) how many applications were made by employers for capital grants in each of the financial years since 1985 to enable them to adapt(a) premises, and (b) equipment, to employ disabled people in Northern Ireland;

  (2) what was the total amount of grant aid paid in each financial year since 1985 to employers to enable them to employ disabled people in Northern Ireland.

  Mr. Needham
  Information in the form requested is not readily available and could be obtained only at disproportionate cost. The number of applications approved and amount of grant aid paid to employers to adapt premises and equipment to enable them to employ disabled people is as follows:

  Number of approved applications

  Grant aid £

  1985–86

  3

  5,750

  1986–87

  4

  7,860

  1987–88

  3

  2,872

  1988–89

  7

  5,124

  1989–90

  6

  23,000

  11990–91

  3

  8,000

  1 To February 1991.

HEALTH

  Hospital Incinerators
  Mr. Ward
  To ask the Secretary of State for Health by what date all hospital incinerators in the United Kingdom will be operating in accordance with the guidelines laid down by the Department of the Environment.

  Mr. Dorrell
  [holding answer 27 February 1991]: With the removal of Crown immunity, new incinerators will have to meet the requirements of environmental protection legislation from 1 April 1991. Health authorities and NHS trusts that currently operate incinerators which do not comply with the new standards will be required by 30 September 1991 to agree with the local authority pollution inspectorate a programme for ensuring that all incinerators meet the new standards in full. These agreed programmes will set interim standards which will have to be met.
  124
  Although there is a maximum transitional period of five years we have made clear that NHS incinerators must meet as quickly as possible the new standards laid down in environmental protection legislation. We are about to issue guidance on the different options which are available to health authorities and NHS trusts. They include the sharing of facilities across district and regional boundaries and the use of private sector waste management companies.

SOCIAL SECURITY

  Disability Living Allowance
  Mr. Alfred Morris
  To ask the Secretary of State for Social Security what is his estimate of the number of people who will be eligible for the new lower rate of care component of the disability living allowance by virtue of(a) the requirement of attention for a significant portion of the day and (b) inability to prepare a cooked meal; what is his estimate of the take-up rate for each group; and if he will make a statement.

  Mr. Scott
  We expect 140,000 people to receive the lower rate care component of disability living allowance in 1993–94. It is not possible to give any reliable estimates of how many of the anticipated caseload will qualify by each of the alternative routes to entitlement.

  Mr. Alfred Morris
  To ask the Secretary of State for Social Security, pursuant to the answer to the right hon. Member for Manchester, Wythenshawe of 28 February, column 610, what is his estimate of the number and proportion of people who need special diets who will qualify for the new lower rate of care component of the disability living allowance; and if he will make a statement.

  Mr. Scott
  Something under 500,000 people below the age of 65 said that they needed a special diet in response to an Office of Population Censuses and Surveys question. Many of this group would be at the lower levels of the Office of Population Censuses and Surveys severity scales. The comment in the Office of Population Censuses and Surveys fourth report that"not all the problems included under this heading (eating, drinking, and digesting difficulties) were strictly speaking disabilities",
  applies even more strongly to this group. Nevertheless, even after allowing for overlaps between the different rates and components of disability living allowance, we estimate that nearly 200,000 of the people in this group would be in receipt of at least one of the rates of the new benefit.

  Mr. Alfred Morris
  To ask the Secretary of State for Social Security, pursuant to the answer to the right hon. Member for Manchester, Wythenshawe on 28 February,Official Report, column 610, if he will explain the basis for the increase in his estimate of the number of recipients of the new lower care component of the disability living allowance from paragraph 4.12 of "The Way Ahead"—Cm. 917—to the figure given in his answer; and if he will make a statement.

  Mr. Scott
  The figure of 240,000 given to the right hon. Member on 28 February 1991 represented the number of people whom we anticipate will be eligible for the new lower rate care component of the disability living allowance. The figure of 140,000 quoted in paragraph 4.12
  125
  of "The Way Ahead"—Cm. 917—represents our best estimate of the numbers who will be receiving the new lower rate care component in 1993–94.

  Alzheimer's Disease
  Sir Charles Morrison
  To ask the Secretary of State for Social Security how many people suffering from Alzheimer's disease are in receipt of terminal grant(a) in nursing homes and (b) in residential homes.

  Miss Widdecombe
  Details of conditions suffered by claimants in receipt of the terminal illness limit of income support are not collected by the Department.

  Mobility Allowance
  Dr. Twinn
  To ask the Secretary of State for Social Security what progress has been made on introducing regulations to guarantee the mobility allowance entitlement of double leg amputees.

  Mr. Scott
  I am extremely pleased to announce that regulations have been laid today which come into force on 10 April 1991. These will ensure the eligibility to mobility allowance of people who are without both legs for any reason, including amputation. I am also glad to state that the regulations will allow these claims to be fast tracked. That is, they could be decided without a medical examination if suitable evidence about the person's medical condition, such as a general practitioner's letter or previous medical report, is available.

  Claimants

  Dependants

  Children

  Total

  Income support1

  3,429,000

  599,000

  1,688,000

  5,716,000

  Family credit2

  264,000

  164,000

  569,000

  997,000

  1 Data derived from 1989 annual statistical inquiry.

  2 Data derived from 5 per cent, sample of family credit caseload at 31 July 1990.

  Housing Benefit
  Information for Leeds, West is unavailable and could be obtained only at disproportionate cost. The information in respect of the metropolitan borough of Leeds, West Yorkshire and England is as follows:

  1Claimants

  1Dependants

  Children

  1Total

  Metropolitan Borough of Leeds

  63,700

  218,000

  Not available

  81,700

  West Yorkshire

  159,100

  244,800

  Not available

  163,900

  England

  3,153,000

  2902,000

  Not available

  4,055,000

  1 Data relate to August 1990 and is in respect of those receiving either rent rebate or rent allowance only.

  2 Partially estimated.

ENVIRONMENT

  Seals and Dolphins
  Mr. Simon Hughes
  To ask the Secretary of State for the Environment what steps he is taking to prevent the disappearance of seals and dolphins from United Kingdom coastal waters.

  Mr. Trippier
  Preliminary indications are that our coastal waters continue to support a wide range of marine mammal species and regular surveys carried out for Government by the Natural Environment Research

  Unemployment Benefit
  Mr. Meacher
  To ask the Secretary of State for Social Security if he will indicate the savings to the Exchequer arising from the failure to increase unemployment benefit in line with average earnings since 1979; and if he will specify the saving in 1990 and the anticipated saving in 1991.

  Mr. Jack
  [holding answer 13 March 1991]: Unemployment benefit is increased annually in line with the retail prices index. If the benefit had been uprated in line with average earnings from 1979 onwards the estimated net additional cost in the financial year 1990–91 would be £125 million and in 1991–92 £150 million. Estimates for earlier years could be provided only at disproportionate cost.

  Family Credit
  Mr. Battle
  To ask the Secretary of State for Social Security how many people are dependent on(a) income support, (b) family credit and (c) housing benefit broken down into claimants, dependants and children for (i) Leeds, West, (ii) Leeds metropolitan district council area, (iii) West Yorkshire and (iv) England.

  Miss Widdecombe
  [pursuant to her reply, 6 March 1991, c. 72.]: I regret that information was omitted from my reply. The correct information is as follows:

  Income Support and Family Credit
  Information for Leeds, West, Leeds metropolitan district council area and West Yorkshire is unavailable and could be obtained only at disproportionate cost. The information in respect of England is as follows:
  Council's sea mammal research unit show that grey seal populations continue to increase. Common seal numbers are now stable following the 1988 viral epidemic, and we hope to see signs of recovery soon. As far as dolphins are concerned no reliable estimates of population are available.
  My Department has already commissioned a number of new research projects on marine mammals including the appointment of a co-ordinator to oversee the recording and sampling of marine mammal strandings in England and Wales, the carrying out of post mortem and

  127
  contaminant analysis for selected cetaceans, including dolphins, washed ashore and support for improved sighting schemes and population studies.
  More generally the initiatives we have taken to implement measures agreed at the third North sea conference, held in the Hague in March 1990, which apply to all our coastal waters, will do much to improve the quality of our seas. Marine mammals may be particularly at risk from PCBs which can accumulate in their fatty tissues and notable amongst the third conference measures is the agreement to phase out and destroy all remaining identifiable uses of PCBs by 1999.

  River Pollution
  Mr. Simon Hughes
  To ask the Secretary of State for the Environment if he has any plans to amend the criteria used to determine river quality so as to reflect pollutant levels in river life.

  Mr. Trippier
  We are currently reviewing with the National Rivers Authority the existing schemes for classifying river quality in conjunction with the work of developing the system of statutory quality objectives provided for in the Water Act 1989. The outcome of the review will be published for consultation in due course.

  Local Government Finance
  Mr. Hayward
  To ask the Secretary of State for the Environment if he will ask the district auditor to review the action of councils and councillors when a substantial proportion of the community charge has not been collected.

  Mr. Key
  All community chargepayers have a right to expect their local authority to collect the charge in a diligent and economic manner. The Audit Commission has published useful guidance to local authorities on improving collection performance. In general local authorities are seeking to collect the charge efficiently. I would expect that there are no cases where action by councillors is impeding effective collection, but if there were the auditor already has a duty to under section 20 of the Local Government Finance Act 1982 to certify, where a loss has been incurred or deficiency caused by wilful misconduct of any person, that the amount of that loss or deficiency is due from that person. The auditor may recover the amount for the benefit of the authority from that person concerned. Councillors may therefore be liable for uncollected community charges where the failure to collect results from their misconduct.

  Mr. Fearn
  To ask the Secretary of State for the Environment if he will list the various guidance circulars he has issued to local authorities concerning collection of the poll tax.

  Mr. Key
  My Department issued a practice note to local authorities covering all aspects of the collection of the community charge. A copy is in the Library. The note is currently being revised and updated by the Institute of Revenues Rating and Valuation.

  Mr. Beith
  To ask the Secretary of State for the Environment how many households he expects to benefit from the new community charge reduction scheme in Berwick borough, Castle Morpeth borough and Alnwick district.
  128
  Mr. Key
  Information on the number of people expected to benefit from the community charge reduction scheme broken down by local authority areas will be available once authorities have returned their initial grant claim forms.

  Mr. Lewis
  To ask the Secretary of State for the Environment what has been the year on year increase in standard spending assessment for 1991–92 in respect of(a) Westminster, (b) Salford, (c) Wigan and (d) Bolton.

  Mr. Key
  The percentage increases in SSA between 1990–91 and 1991–92 are as follows:(a) 22·1, (b) 16·3, (c) 18·6 and (d) 17·9.

  Pollution Inspectorate
  Mr. Simon Hughes
  To ask the Secretary of State for the Environment if he will list, in tabular form,(a) the establishment of Her Majesty's inspectorate of pollution and (b) the number of staff employed for each year since 1987.

  Mr. Baldry
  The complement and number of staff in post in Her Majesty's inspectorate of pollution from its formation in 1987 are set out in the table.

  Her Majesty's inspectorate of pollution staffing1

  Year (1 April)

  Complement

  Number of staff in post

  1987

  199

  133

  1988

  183

  158

  1989

  194

  165

  1990

  212

  172

  1991

  248

  2232

  Notes:1 All figures exclude the former radioactive waste policy and administrative division, (25 administrative, 2 professional staff) which transferred from Her Majesty's inspectorate of pollution to the DOE directorate of pollution control and waste in November 1990.

  2 1 March.

  Her Majesty's inspectorate of pollution's complement has been authorised to expand to over 300 by 1 April 1992 and may require a further increase to around 400 when integrated pollution control is in full operation.

  A recruitment competition for pollution inspectors has recently been completed, and has produced 38 successful candidates to fill the remaining vacancies and authorised new posts.

  Beaches
  Mr. Fearn
  To ask the Secretary of State for the Environment whether he will detail the criteria used to assess the level of pollution on British beaches.

  Mr. Baldry
  Bathing water quality is assessed according to standards set out in directive 76/160/EEC.

  Environmental Action Guide
  Mr. Simon Hughes
  To ask the Secretary of State for the Environment when the "Environmental Action Guide" was issued to Government Departments; and if he will place a copy in the Library.

  Mr. Baldry
  An initial working version of the "Environmental Action Guide" was circulated to all Government Departments immediately following publication of the environment White Paper last year. The guide
  129
  itself, together with the first of a continuing series of advisory notes on specific environmental topics such as CFCs and timber in buildings, will be published by HMSO shortly. Copies will be placed in the Library.

  Leeds Development Corporation
  Mr. Fatchett
  To ask the Secretary of State for the Environment if he will set out for 1988–89, 1989–90 and 1990 to 28 February 1991, how many planning applications have been determined by Leeds development corporation(a) within one month of receipt, (b) between one and two months of receipt and (c) after more than two months of receipt.

  Mr. Key
  Information is not collected in the format requested. The available information shows that, for the year ending September 1989, 131 planning applications were decided by the Development Corporation of which 57 per cent. were determined within eight weeks of receipt. For the year ending September 1990, 179 applications were decided of which 58 per cent. were determined within eight weeks.

  Rural Development Commission
  Mr. Amos
  To ask the Secretary of State for the Environment if he will make it his policy to allow the Rural Development Commission to retain receipts from the sale of its portfolio; and if he will make a statement.

  Mr. Trippier
  It is our policy that the Rural Development Commission should retain receipts from the sale of their workspace portfolio: up to the targets agreed for each year. The receipts are used to finance the commission's agreed expenditure.

  Environment Council
  Mr. Ian Taylor
  To ask the Secretary of State for the Environment if he will make a statement on the outcome of the Environment Council on 18 March.

  Mr. Heseltine
  My hon. Friend the Minister for Environment and Countryside and I represented the United Kingdom at this meeting.

  The Council agreed a common position on a directive to tighten up controls on emissions from lorries and buses. The United Kingdom took a lead in pressing for this measure, which will introduce strict new pollution standards for large diesel engined vehicles to match those set last year for cars. The controls, which will come into effect in 1995 and 1996, represent the toughest achievable standards. The motor industry will have a clear target and a manageable timetable for the substantial work which now needs to be done.

  Agreement was reached on a directive setting minimum standards for the collection and treatment of sewage. The so-called municipal waste water directive requires that all communities above a certain size should be provided with sewerage systems, and that sewage should in general receive full secondary treatment before it can be discharged. Additional treatment to remove nutrient substances is required where this is necessary to protect the water environment. The directive also allows for primary treatment only for certain coastal discharges where this can be demonstrated to he sufficient to protect the environment. Other provisions require treatment of
  130
  analagous industrial discharges, and an end to the disposal of sewage sludge at sea. This measure represents a major step forward in the protection of the water environment throughout the community. The Government's decision last year to introduce treatment for all remaining major coastal discharges, and the huge investment programme put in place at the time of water privatisation, means that the United Kingdom is well placed to comply with the directive.

  The Council agreed a common position on a directive amending for the seventh time directive 67/548/EEC on the classification, packaging and labelling of dangerous substances. The amending directive updates requirements for manufacturers or importers of a new chemical substance to provide data on its hazardous properties. It introduces harmonised notification requirements for substances produced in small quantities, with exceptions in certain circumstances to encourage research and development.

  A directive on the content and disposal of batteries and a new framework directive on waste management, the substance of which had been agreed at previous meetings, were formally adopted by the Council.

  The Council had a useful discussion on aspects of a proposed regulation controlling the movement of waste within, into and out of the European Community. The United Kingdom, supported by other member states, stressed the importance of incorporating the principle of self-sufficiency in waste disposal, both within countries and for the Community as a whole.

  Proposals for a directive to protect fauna, flora and habitats, and for a Community ecological labelling scheme were briefly discussed. In both cases the United Kingdom called for the measures to be agreed as soon as possible, and the presidency said it would seek agreement at the next Environment Council.

  The Council had preliminary discussions on two new proposals on the evaluation and control of environmental risks from existing chemicals, and on a Community environment fund—LIFE.

  The Council also discussed action taken by member states and the Commission in response to environmental problems in the Gulf. Ministers were briefed by Mr. Al Arrayed, Health Minister of Bahrain, on the environmental situation in the Gulf states. Member states welcomed the efforts co-ordinated by the European Commission to complement initiatives by the International Maritime Organisation and the United Nations Environmental Programme. The Council agreed on the need to provide further assistance to the Gulf clean-up operations, and to develop proposals for responding to similar disasters in the future in collaboration with member states and other international organisations.

  Sea Bathing
  Mr. Ian Taylor
  To ask the Secretary of State for the Environment when his Department expects to announce the results of the 1990 study into the health risks of sea bathing; and whether those studies are to continue.

  Mr. Trippier
  The Department is awarding a further contract to the Water Research Centre to manage large-scale studies into the health risks of sea bathing using the methodologies developed over the last two years. The
  131
  WRC will invite tenders from suitably qualified professional institutions and organisations to undertake these studies.

  The research will be jointly funded by my Department, the Department of Health, Welsh Office and the National Rivers Authority. It will be undertaken at selected bathing beaches where the waters are of different microbiological quality to allow a further investigation of the relationship between the levels of contamination and the incidence of illness.

  The results of the 1990 studies at Moreton (Wirral) and Ramsgate will be placed in the Library in early April.

  Community Charge
  Mr. Ken Hargreaves
  To ask the Secretary of State for the Environment if he will publish his latest estimate for each local authority in England of(a) the community charge for 1990–91, (b) the charge set for 1991–92 before the new grant announced on 19 March, (c) the charge for 1991–92 after the new grant, (d) the bill in 1991–92 after the community charge reduction scheme for a couple who had 75 per cent. of the average rateable value for their area and (e) the bill in 1991–92 for a couple who had 50 per cent. of the average rateable value for their area.

  Mr. Portillo
  The new grant announced yesterday will reduce charges set in England in 1991–92 by £140, or to zero where the local charge was below that figure. The details are as follows:

  Notes to table

  column 1: shows the headline community charge set on average in each authority for 1990–91;

  1991–92 Community Charges

  Bill for couple after charge reduction scheme

  1990–91 charge

  1991–92 charge set

  New 1991–92 charge

  at 75 per cent, average RV

  at 50 per cent, average RV

  (£ adult)

  (£ adult)

  (£ adult)

  (£ couple)

  (£ couple)

  1

  2

  3

  4

  5

  Total England

  357

  392

  252

  456

  356

  Total inner London boroughs including City

  352

  359

  219

  376

  307

  Total outer London boroughs

  356

  394

  254

  495

  405

  Total shire areas

  357

  390

  250

  449

  352

  Total Metropolitan areas

  360

  403

  263

  476

  358

  Greater London

  City of London

  288

  315

  175

  350

  350

  Camden

  500

  440

  300

  600

  461

  Greenwich

  350

  398

  258

  506

  372

  Hackney

  499

  462

  322

  514

  377

  Hammersmith and Fulham

  321

  387

  247

  494

  400

  Islington

  481

  516

  376

  613

  444

  Kensington and Chelsea

  379

  329

  189

  379

  379

  Lambeth

  522

  590

  450

  491

  362

  Lewisham

  297

  308

  168

  336

  336

  Southwark

  329

  328

  188

  377

  330

  Tower Hamlets

  297

  287

  147

  294

  294

  Wandsworth

  150

  137

  0

  0

  0

  Westminster

  199

  176

  36

  72

  72

  Barking and Dagenham

  280

  310

  170

  340

  328

  Barnet

  338

  387

  247

  494

  460

  Bexley

  280

  342

  202

  404

  333

  Brent

  470

  470

  330

  660

  588

  Bromley

  283

  330

  190

  380

  339

  Croydon

  287

  320

  180

  360

  354

  Ealing

  435

  395

  255

  510

  421

  Enfield

  329

  388

  248

  496

  399

  Haringey

  508

  560

  420

  782

  556

  Harrow

  322

  393

  253

  506

  411

  132
  Column 2: shows the latest information available to the Department of the Environment on community charges actually set in each authority for 1991–92. For most authorities the information is taken from returns to the Department; but in some cases the figures are taken from press reports or other sources;

  Column 3: shows what the 1991–92 charge in column 2 will be after the £140 reduction announced on 19 March;

  Column 4: shows the combined charge bill which will be paid by a couple living in a property with 75 per cent. of the average rateable value for their area, after any help they receive from the community charge reduction scheme;

  Column 5: is the same as column 4 but for a couple living in a property with 50 per cent. of the average rateable value for their area.

  The community charge paid by many people will be less than shown in column 3 of the table. Some will be helped by the community charge reduction scheme and people on low incomes may be entitled to a reduction of up to 80 per cent. through community charge benefit.

  The community charge reduction scheme helps those who have not moved since 1 April 1990 and who face an increase of more than £2 a week over their last rate bill, counting a maximum of two charges for their property. When first introduced, the Government published a "scheme charge" for each authority which was to be used to calculate the reduction to be given, unless the actual charge set were lower. This new grant means that actual charges set for 1991–92 will in every case be lower than the scheme charge and will thus form the basis for the reduction scheme. Therefore, one and two-adult households who have not moved should nowhere pay more than about £2 a week above what they paid in rates in 1989–90.
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  Bill for couple after charge reduction scheme

  1990–91 charge

  1991–92 charge set

  New 1991–92 charge

  at 75 per cent, average RV

  at 50 per cent, average RV

  (£ adult) 1

  (£ adult) 2

  (£ adult) 3

  (£ couple) 4

  (£ couple) 5

  Havering

  350

  369

  229

  458

  355

  Hillingdon

  290

  355

  215

  430

  405

  Hounslow

  396

  425

  285

  570

  431

  Kingston upon Thames

  345

  379

  239

  478

  395

  Merton

  280

  409

  269

  480

  354

  Newham

  449

  444

  304

  575

  418

  Redbridge

  290

  395

  255

  440

  328

  Richmond upon Thames

  395

  419

  279

  558

  417

  Sutton

  381

  400

  260

  519

  390

  Waltham Forest

  438

  437

  297

  541

  395

  Greater Manchester

  Bolton

  345

  406

  266

  439

  327

  Bury

  373

  436

  296

  527

  386

  Manchester

  425

  432

  292

  549

  401

  Oldham

  366

  409

  269

  433

  323

  Rochdale

  335

  389

  249

  459

  341

  Salford

  396

  440

  300

  499

  367

  Stockport

  399

  450

  310

  536

  392

  Tameside

  349

  410

  270

  456

  338

  Trafford

  298

  345

  205

  410

  381

  Wigan

  348

  408

  268

  485

  358

  Merseyside

  Knowsley

  370

  425

  285

  552

  402

  Liverpool

  449

  474

  334

  525

  385

  Sefton

  375

  423

  283

  534

  391

  St. Helens

  380

  401

  261

  504

  371

  Wirral

  341

  476

  336

  635

  458

  South Yorkshire

  Barnsley

  271

  325

  185

  369

  309

  Doncaster

  303

  343

  203

  406

  346

  Rotherham

  298

  372

  232

  450

  335

  Sheffield

  356

  360

  220

  441

  367

  Tyne and Wear

  Gateshead

  321

  367

  227

  419

  314

  Newcastle upon Tyne

  391

  456

  316

  490

  361

  North Tyneside

  354

  425

  285

  524

  384

  South Tyneside

  309

  360

  220

  430

  321

  Sunderland

  310

  355

  215

  413

  310

  West Midlands

  Birmingham

  406

  406

  266

  498

  367

  Coventry

  394

  434

  294

  534

  391

  Dudley

  387

  415

  275

  529

  387

  Sandwell

  423

  459

  319

  495

  365

  Solihull

  393

  396

  256

  512

  402

  Walsall

  425

  425

  285

  563

  410

  Wolverhampton

  418

  415

  275

  544

  398

  West Yorkshire

  Bradford

  276

  363

  223

  409

  307

  Calderdale

  248

  318

  178

  355

  320

  Kirklees

  290

  380

  240

  396

  299

  Leeds

  351

  409

  269

  411

  308

  Wakefield

  313

  353

  213

  426

  325

  Avon

  Bath

  348

  385

  245

  457

  339

  Bristol

  425

  524

  384

  515

  378

  Kingswood

  357

  399

  259

  485

  358

  Northavon

  385

  407

  267

  530

  388

  Wansdyke

  361

  424

  284

  509

  374

  Woodspring

  394

  444

  304

  551

  402

  Bedfordshire

  Luton

  403

  390

  250

  500

  435

  Mid Bedfordshire

  397

  406

  266

  532

  421

  North Bedfordshire

  398

  404

  264

  527

  396

  South Bedfordshire

  414

  418

  278

  556

  456

  134 135

  Bill for couple after charge reduction scheme

  1990–91 charge

  1991–92 charge set

  New 1991–92 charge

  at 75 per cent, average RV

  at 50 per cent, average RV

  (£ adult) 1

  (£ adult) 2

  (£ adult) 3

  (£ couple) 4

  (£ couple) 5

  Berkshire

  Bracknell Forest

  393

  369

  229

  458

  375

  Newbury

  401

  386

  246

  491

  376

  Reading

  447

  474

  334

  491

  362

  Slough

  360

  331

  191

  382

  351

  Windsor and Maidenhead

  449

  428

  288

  575

  421

  Wokingham

  434

  404

  264

  527

  445

  Buckinghamshire

  Aylesbury Vale

  352

  351

  211

  422

  384

  Chiltern

  402

  391

  251

  502

  502

  Milton Keynes

  398

  455

  315

  513

  377

  South Buckinghamshire

  393

  361

  221

  442

  442

  Wycombe

  409

  408

  268

  536

  464

  Cambridgeshire

  Cambridge

  428

  469

  329

  569

  414

  East Cambridgeshire

  312

  355

  215

  414

  311

  Fenland

  293

  372

  232

  396

  299

  Huntingdonshire

  298

  336

  196

  393

  337

  Peterborough

  360

  407

  267

  460

  341

  South Cambridgeshire

  332

  345

  205

  409

  392

  Cheshire

  Chester

  401

  449

  309

  524

  384

  Congleton

  400

  433

  293

  516

  379

  Crewe and Nantwich

  417

  452

  312

  493

  363

  Ellesmere Port and Neston

  406

  449

  309

  523

  383

  Halton

  395

  465

  325

  456

  339

  Macclesfield

  430

  423

  283

  565

  427

  Vale Royal

  391

  432

  292

  485

  358

  Warrington

  394

  440

  300

  481

  355

  Cleveland

  Hartlepool

  385

  437

  297

  454

  337

  Langbaurgh-on-Tees

  421

  478

  338

  529

  387

  Middlesbrough

  429

  457

  317

  494

  364

  Stockton-on-Tees

  428

  440

  300

  533

  390

  Cornwall

  Caradon

  321

  376

  236

  389

  294

  Carrick

  318

  391

  251

  395

  298

  Kerrier

  329

  387

  247

  371

  282

  North Cornwall

  311

  354

  214

  394

  297

  Pen with

  317

  365

  225

  362

  276

  Restormel

  321

  365

  225

  389

  294

  Cumbria

  Allerdale

  289

  352

  212

  383

  290

  Barrow-in-Furness

  328

  416

  276

  368

  280

  Carlisle

  367

  439

  299

  410

  308

  Copeland

  328

  368

  228

  371

  282

  Eden

  297

  357

  217

  384

  291

  South Lakeland

  349

  414

  274

  442

  329

  Derbyshire

  Amber Valley

  342

  397

  257

  451

  335

  Bolsover

  296

  352

  212

  423

  317

  Chesterfield

  358

  405

  265

  451

  336

  Derby

  399

  410

  270

  509

  374

  Derbyshire Dales

  376

  417

  277

  494

  364

  Erewash

  363

  414

  274

  468

  347

  High Peak

  337

  401

  261

  457

  340

  North East Derbyshire

  364

  419

  279

  496

  365

  South Derbyshire

  384

  437

  297

  499

  367

  Devon

  East Devon

  345

  383

  243

  430

  321

  Exeter

  344

  377

  237

  404

  304

  Mid Devon

  338

  394

  254

  380

  288

  North Devon

  319

  384

  244

  363

  277

  136 137

  Bill for couple after charge reduction scheme

  1990–91 charge

  1991–92 charge set

  New 1991–92 charge

  at 75 per cent, average RV

  at 50 per cent, average RV

  (£ adult) 1

  (£ adult) 2

  (£ adult) 3

  (£ couple) 4

  (£ couple) 5

  Plymouth

  350

  380

  240

  432

  323

  South Hams

  334

  380

  240

  422

  316

  Teignbridge

  365

  405

  265

  422

  316

  Torbay

  395

  380

  240

  470

  348

  Torridge

  285

  346

  206

  333

  257

  West Devon

  340

  370

  230

  393

  296

  Dorset

  Bournemouth

  320

  348

  208

  416

  344

  Christchurch

  339

  356

  216

  432

  357

  East Dorset

  358

  386

  246

  492

  396

  North Dorset

  295

  340

  200

  399

  307

  Poole

  325

  340

  200

  400

  362

  Purbeck

  291

  318

  178

  355

  325

  West Dorset

  313

  355

  215

  388

  294

  Weymouth and Portland

  336

  380

  240

  407

  306

  Durham

  Chester-Le-Street

  343

  409

  269

  440

  328

  Darlington

  356

  416

  276

  462

  343

  Derwentside

  332

  416

  276

  405

  305

  Durham

  355

  419

  279

  449

  334

  Easington

  278

  350

  210

  377

  286

  Sedgefield

  303

  370

  230

  416

  312

  Teesdale

  245

  313

  173

  341

  262

  Wear Valley

  308

  337

  197

  383

  290

  East Sussex

  Brighton

  373

  396

  256

  507

  372

  Eastbourne

  385

  414

  274

  544

  398

  Hastings

  380

  414

  274

  453

  337

  Hove

  330

  337

  197

  394

  358

  Lewes

  351

  384

  244

  489

  393

  Rother

  359

  372

  232

  464

  390

  Wealden

  349

  387

  247

  493

  376

  Essex

  Basildon

  443

  495

  355

  689

  494

  Braintree

  348

  357

  217

  434

  376

  Brentwood

  375

  369

  229

  458

  458

  Castle Point

  377

  355

  215

  430

  423

  Chelmsford

  397

  368

  228

  456

  438

  Colchester

  335

  348

  208

  416

  381

  Epping Forest

  381

  388

  248

  497

  477

  Harlow

  425

  459

  319

  638

  478

  Maldon

  347

  343

  203

  406

  406

  Rochford

  388

  357

  217

  434

  434

  Southend-on-Sea

  378

  348

  208

  416

  416

  Tendring

  346

  346

  206

  411

  376

  Thurrock

  417

  408

  268

  536

  434

  Uttlesford

  357

  348

  208

  416

  416

  Gloucestershire

  Cheltenham

  364

  416

  276

  472

  349

  Cotswold

  389

  394

  254

  503

  370

  Forest of Dean

  342

  412

  272

  388

  293

  Gloucester

  354

  401

  261

  408

  307

  Stroud

  380

  445

  305

  452

  336

  Tewkesbury

  362

  385

  245

  477

  353

  Hampshire

  Basingstoke and Deane

  323

  327

  187

  374

  336

  East Hampshire

  368

  363

  223

  447

  381

  Eastleigh

  368

  385

  245

  474

  351

  Fareham

  360

  365

  225

  450

  374

  Gosport

  340

  386

  246

  431

  322

  Hart

  395

  365

  225

  451

  421

  Havant

  339

  369

  229

  459

  356

  New Forest

  328

  339

  199

  398

  341

  Portsmouth

  309

  319

  179

  358

  308

  Rushmoor

  325

  358

  218

  436

  357

  Southampton

  317

  395

  255

  405

  305

  138 139

  Bill for couple after charge reduction scheme

  1990–91 charge

  1991–92 charge set

  New 1991–92 charge

  at 75 per cent. average RV

  at 50 per cent. average RV

  (£ adult) 1

  (£ adult) 2

  (£ adult) 3

  (£ couple) 4

  (£ couple) 5

  Test Valley

  329

  320

  180

  361

  359

  Winchester

  359

  352

  212

  424

  379

  Hereford and Worcester

  Bromsgrove

  339

  362

  222

  444

  357

  Hereford

  289

  351

  211

  341

  262

  Leominster

  281

  341

  201

  357

  273

  Malvern Hills

  343

  379

  239

  463

  343

  Redditch

  345

  402

  262

  463

  343

  South Herefordshire

  279

  327

  187

  369

  281

  Worcester

  340

  397

  257

  452

  336

  Wychavon

  324

  358

  218

  435

  362

  Wyre Forest

  343

  393

  253

  440

  328

  Hertfordshire

  Broxbourne

  361

  361

  221

  441

  412

  Dacorum

  400

  367

  227

  454

  439

  East Hertfordshire

  379

  369

  229

  458

  428

  Hertsmere

  416

  369

  229

  457

  457

  North Hertfordshire

  399

  369

  229

  458

  440

  St. Albans

  396

  383

  243

  487

  471

  Stevenage

  435

  433

  293

  586

  452

  Three Rivers

  423

  415

  275

  551

  512

  Watford

  404

  434

  294

  574

  417

  Welwyn Hatfield

  445

  459

  319

  638

  478

  Humberside

  Beverley

  373

  426

  286

  564

  411

  Boothferry

  291

  360

  220

  416

  312

  Cleethorpes

  367

  434

  294

  476

  352

  East Yorkshire

  326

  387

  247

  437

  326

  Glanford

  361

  424

  284

  459

  341

  Great Grimsby

  384

  431

  291

  443

  330

  Holderness

  364

  427

  288

  467

  346

  Kingston upon Hull

  307

  370

  230

  402

  303

  Scunthorpe

  356

  409

  269

  480

  355

  Isle of Wight

  Medina

  342

  335

  195

  390

  328

  South Wight

  374

  378

  238

  476

  354

  Kent

  Ashford

  299

  316

  176

  352

  328

  Canterbury

  300

  334

  194

  388

  314

  Dartford

  330

  345

  205

  405

  305

  Dover

  298

  333

  193

  383

  290

  Gillingham

  285

  313

  173

  345

  299

  Gravesham

  294

  294

  154

  308

  308

  Maidstone

  330

  358

  218

  429

  320

  Rochester upon Medway

  249

  191

  51

  102

  102

  Sevenoaks

  308

  331

  191

  382

  341

  Shepway

  347

  343

  203

  407

  342

  Swale

  301

  334

  194

  359

  274

  Thanet

  300

  315

  175

  349

  316

  Tonbridge and Mailing

  320

  348

  208

  417

  323

  Tunbridge Wells

  315

  348

  208

  417

  321

  Lancashire

  Blackburn

  365

  427

  287

  354

  271

  Blackpool

  384

  434

  294

  451

  335

  Burnley

  299

  349

  209

  328

  253

  Chorley

  363

  434

  294

  424

  317

  Fylde

  388

  408

  268

  494

  364

  Hyndburn

  315

  383

  243

  338

  260

  Lancaster

  385

  419

  279

  408

  307

  Pendle

  299

  358

  218

  329

  254

  Preston

  384

  454

  314

  418

  313

  Ribble Valley

  358

  413

  273

  439

  327

  Rossendale

  338

  401

  261

  368

  280

  South Ribble

  367

  427

  287

  423

  317

  West Lancashire

  378

  400

  260

  497

  366

  Wyre

  376

  399

  259

  446

  332

  140 141

  Bill for couple after charge reduction scheme

  1990–91 charge

  1991–92 charge set

  New 1991–92 charge

  at 75 per cent, average RV

  at 50 per cent, average RV

  (£ adult) 1

  (£ adult) 2

  (£ adult) 3

  (£ couple) 4

  (£ couple) 5

  Leicestershire

  Blaby

  343

  368

  228

  456

  361

  Charnwood

  372

  397

  257

  481

  355

  Harborough

  367

  405

  265

  529

  387

  Hinckley and Bosworth

  347

  378

  238

  469

  347

  Leicester

  405

  459

  319

  427

  320

  Melton

  339

  390

  250

  457

  339

  North West Leicestershire

  366

  407

  267

  457

  339

  Oadby and Wigston

  370

  427

  287

  509

  374

  Rutland

  370

  394

  254

  508

  373

  Lincolnshire

  Boston

  280

  355

  215

  379

  288

  East Lindsey

  277

  358

  218

  371

  282

  Lincoln

  284

  364

  224

  359

  274

  North Kesteven

  282

  345

  205

  401

  302

  South Holland

  284

  357

  217

  392

  296

  South Kesteven

  279

  340

  200

  399

  301

  West Lindsey

  286

  350

  210

  387

  293

  Norfolk

  Breckland

  310

  375

  235

  404

  304

  Broadland

  320

  368

  228

  453

  337

  Great Yarmouth

  326

  400

  260

  386

  292

  King's Lynn and West Norfolk

  285

  344

  204

  381

  289

  North Norfolk

  291

  325

  185

  369

  296

  Norwich

  365

  433

  293

  424

  317

  South Norfolk

  313

  370

  230

  446

  332

  Northamptonshire

  Corby

  350

  390

  250

  445

  331

  Daventry

  354

  389

  249

  498

  386

  East Northamptonshire

  306

  360

  220

  425

  318

  Kettering

  323

  370

  230

  436

  325

  Northampton

  349

  366

  226

  453

  369

  South Northamptonshire

  358

  366

  226

  453

  372

  Wellingborough

  288

  269

  129

  258

  258

  Northumberland

  Alnwick

  347

  397

  257

  432

  323

  Berwick-upon-Tweed

  323

  360

  220

  396

  299

  Blyth Valley

  415

  440

  300

  474

  351

  Castle Morpeth

  437

  444

  304

  555

  404

  Tynedale

  389

  443

  303

  448

  333

  Wansbeck

  348

  395

  255

  426

  318

  North Yorkshire

  Craven

  256

  311

  171

  343

  280

  Hambleton

  312

  330

  190

  381

  330

  Harrogate

  362

  394

  254

  470

  348

  Richmondshire

  276

  329

  189

  379

  325

  Ryedale

  289

  347

  207

  396

  299

  Scarborough

  276

  324

  184

  368

  287

  Selby

  283

  345

  205

  401

  302

  York

  264

  324

  184

  345

  265

  Nottinghamshire

  Ashfield

  320

  385

  245

  394

  297

  Bassetlaw

  371

  436

  296

  431

  322

  Broxtowe

  380

  405

  265

  465

  345

  Gedling

  371

  407

  267

  481

  356

  Mansfield

  378

  435

  295

  421

  315

  Newark and Sherwood

  377

  413

  273

  437

  326

  Nottingham

  390

  435

  295

  432

  323

  Rushcliffe

  394

  405

  265

  525

  385

  Oxfordshire

  Cherwell

  385

  389

  249

  498

  370

  Oxford

  489

  484

  344

  590

  428

  South Oxfordshire

  456

  449

  309

  555

  405

  142 143

  Bill for couple after charge reduction scheme

  1990–91 charge

  1991–92 charge set

  New 1991–92 charge

  at 75 per cent, average RV

  at 50 per cent, average RV

  (£ adult) 1

  (£ adult) 2

  (£ adult) 3

  (£ couple) 4

  (£ couple) 5

  Vale of White Horse

  412

  405

  265

  531

  394

  West Oxfordshire

  412

  380

  240

  481

  370

  Shropshire

  Bridgnorth

  315

  351

  211

  421

  336

  North Shropshire

  317

  366

  226

  417

  313

  Oswestry

  329

  403

  263

  387

  293

  Shrewsbury and Atcham

  333

  403

  263

  442

  329

  South Shropshire

  310

  372

  232

  376

  286

  The Wrekin

  383

  428

  288

  458

  340

  Somerset

  Mendip

  361

  415

  275

  449

  334

  Sedgemoor

  353

  388

  248

  458

  340

  South Somerset

  363

  411

  271

  452

  336

  Taunton Deane

  351

  386

  246

  444

  331

  West Somerset

  335

  396

  256

  448

  333

  Staffordshire

  Cannock Chase

  356

  409

  269

  460

  342

  East Staffordshire

  338

  384

  244

  431

  322

  Lichfield

  349

  376

  236

  472

  401

  Newcastle-under-Lyme

  349

  409

  269

  440

  328

  South Staffordshire

  325

  349

  209

  418

  395

  Stafford

  339

  376

  236

  473

  354

  Staffordshire Moorlands

  323

  377

  237

  444

  331

  Stoke-on-Trent

  313

  412

  272

  391

  295

  Tamworth

  329

  386

  246

  467

  346

  Suffolk

  Babergh

  330

  375

  235

  453

  337

  Forest Heath

  372

  357

  217

  410

  308

  Ipswich

  440

  464

  324

  471

  349

  Mid Suffolk

  332

  370

  230

  440

  328

  St. Edmundsbury

  319

  379

  239

  429

  321

  Suffolk Coastal

  390

  370

  230

  461

  363

  Waveney

  350

  392

  252

  406

  305

  Surrey

  Elmbridge

  449

  479

  339

  677

  502

  Epsom and Ewell

  452

  467

  327

  654

  491

  Guildford

  400

  391

  251

  501

  406

  Mole Valley

  388

  395

  255

  510

  404

  Reigate and Banstead

  445

  411

  271

  542

  432

  Runnymede

  295

  338

  198

  396

  380

  Spelthorne

  368

  387

  247

  488

  360

  Surrey Heath

  401

  393

  253

  505

  448

  Tandridge

  373

  413

  273

  540

  395

  Waverley

  410

  396

  256

  512

  432

  Woking

  359

  400

  260

  519

  425

  Warwickshire

  North Warwickshire

  391

  459

  319

  544

  397

  Nuneaton and Bedworth

  386

  476

  336

  536

  392

  Rugby

  347

  428

  288

  536

  392

  Stratford-on-Avon

  381

  414

  274

  549

  447

  Warwick

  387

  409

  269

  538

  439

  West Sussex

  Adur

  351

  406

  266

  470

  348

  Arun

  314

  360

  220

  440

  336

  Chichester

  303

  310

  170

  341

  341

  Crawley

  345

  375

  235

  449

  334

  Horsham

  304

  329

  189

  378

  337

  Mid Sussex

  317

  345

  205

  410

  373

  Worthing

  296

  335

  195

  390

  326

  Wiltshire

  Kennet

  307

  353

  213

  425

  340

  North Wiltshire

  323

  379

  239

  438

  327

  Salisbury

  313

  348

  208

  417

  352

  Thamesdown

  337

  399

  259

  436

  325

  144 145

  Bill for couple after charge reduction scheme

  1990–91 charge

  1991–92 charge set

  New 1991–92 charge

  at 75 per cent, average RV

  at 50 per cent, average RV

  (£ adult) 1

  (£ adult) 2

  (£ adult) 3

  (£ couple) 4

  (£ couple) 5

  West Wiltshire

  333

  378

  238

  434

  324

  All Purpose Authority

  Isles of Scilly

  280

  245

  105

  210

  210

EMPLOYMENT

  Employment Training
  Ms. Short
  To ask the Secretary of State for Employment if he will give the latest information he has, for each region and for Great Britain as a whole, on the number of employment training participants who fall either within(a) the Guarantee group and (b) the Aim group; if he will give comparable data for one year ago;

  Employment training

  Aim and guarantee group entrants1

  April to September 1989

  April to September 1990

  Region

  Guarantee (per cent.)

  Aim (per cent.)

  Guarantee (per cent.)

  Aim (per cent.)

  South East

  8

  26

  9

  16

  London

  11

  32

  12

  21

  South West

  13

  25

  13

  16

  West Midlands

  13

  30

  13

  26

  East Midlands and Eastern

  15

  31

  15

  20

  Yorkshire and Humberside

  16

  27

  15

  21

  North West

  14

  31

  13

  23

  Northern

  18

  28

  16

  24

  Wales

  16

  26

  14

  21

  Scotland

  17

  33

  15

  28

  Great Britain

  15

  30

  14

  23

  1 Estimated.

  Note: Great Britain total includes a small number of trainees covered by national contracts and residential training colleges not included in regional totals. The table shows the latest information for this financial year and comparable data for the previous year.

  Source: ET management information system and ET starts database.

  Cathedral Employment Enterprises
  Mr. Cox
  To ask the Secretary of State for Employment what has been the grant to Cathedral Employment Enterprises for projects in Wandsworth for each of the last three years.

  Mr. Jackson
  Details of the grants to Cathedral Employment Enterprises for projects in Wandsworth are available only for the last two years. The amounts are:

  £

  1989–90

  564,355

  1990–91

  1478,822

  1 This figure includes an estimate for March 1991.

  Mr. Cox
  To ask the Secretary of State for Employment what discussion he has had with Cathedral Employment Enterprises on future funding of (i) the Earlsfield job club, (ii) English for Asian girls project, Earlsfield, (iii) general office skills training, Earlsfield, and (iv) Milan Asian Centre, Tooting; and if he will make a statement.
  146
  and if he will make a statement about how he intends to monitor participation by both groups when ET is delivered by training and enterprise councils.

  Mr. Jackson
  The Government's guarantee and aim covers a range of options to help unemployed people back to work: from employment training provided through TECs to others offered by the Employment Service. My Department monitors the provision offered by TECs in the light of the overall position.

  The information requested is provided in the following table.

  Mr. Jackson
  (i) The current contract with Earlsfield job club expires on 28 June 1991. The award of a contract beyond that date will be subject to competitive tendering during April/May.

  (ii)-(iv) These projects are currently subject to negotiation by AZTEC.

  Youth Training Scheme
  Mr. Fatchett
  To ask the Secretary of State for Employment if he has any plans to review the guarantee that all 16-year-olds with special needs will be offered a place, if they so wish, on a youth training scheme; and if he will make a statement.

  Mr. Jackson
  The Government remain fully committed to the guarantee of the offer of a suitable YT place to all young people who are under 18, not in full-time education or in a job and who are seeking entry to YT.

  This applies to young people with special needs as well as to all other young people. Trainees with special training needs are identified by a process of endorsement, and

  147
  training and enterprise councils—and, where relevant, area offices of the Employment Department—are obliged to provide suitable high-quality training for them.

HOME DEPARTMENT

  Female Circumcision
  Dr. Kim Howells
  To ask the Secretary of State for the Home Department what measures the Government are taking to curtail the activities of persons entering the country to perform circumcision operations on female children.

  Mr. Peter Lloyd
  Female circumcision is a criminal offence. On convicting a person who does not have the right of abode of such an offence it would be open to a court to recommend deportation.

  Life Sentences
  Mrs. Peacock
  To ask the Secretary of State for the Home Department how many convicted murderers are at present in prison serving life sentences; and what is the cost of keeping one such prisoner in prison for(a) 15, (b) 20 or (c) 25 years.

  Mrs. Rumbold
  On 31 December 1990, the latest date for which figures are readily available, it is estimated that 2,300 prisoners were serving life sentences for murder in prison establishments in England and Wales. Detainees during Her Majesty's pleasure and persons sentenced to custody for life are included. It is not possible to distinguish the costs of holding a particular class of prisoner; the average cost of holding a prisoner was £321 per week in the year ending 31 March 1990.

  Escapees
  Mr. Alan Williams
  To ask the Secretary of State for the Home Department how many prisoners escaped from Spring Hall open prison in 1988, 1989 and 1990; how many were recaptured in each year; and how many of those not recaptured were drug offenders.

  Mrs. Rumbold
  The number of prisoners who absconded from Spring Hill open prison in 1988, 1989 and 1990 was as follows:

  Number

  1988

  46

  1989

  49

  1990

  73

  In each of those years the number of prisoners unlawfully at large from Spring Hill open prison who were recaptured was as follows:

  Number

  1988

  45

  1989

  48

  1990

  57

  Of those who remain unlawfully at large, the number sentenced for drug-related offences is as follows for each of the three years.
  148

  Number

  1988

  1

  1989

  Nil

  1990

  7

  Mr. Alan Williams
  To ask the Secretary of State for the Home Department how many prisoners escaped from North Sea Camp open prison in 1988, 1989 and 1990; how many were recaptured in each year; and how many of those not recaptured were drug offenders.

  Mrs. Rumbold
  The number of prisoners who absconded from North Sea Camp open prison in 1988, 1989 and 1990 was as follows:

  Number

  1988

  5

  1989

  32

  1990

  22

  In each of those years the number of prisoners unlawfully at large from North Sea Camp open prison who were recaptured was as follows:

  Number

  1988

  5

  1989

  31

  1990

  20

  Of those who remain unlawfully at large, none was sentenced for drug-related offences.

  Mr. Alan Williams
  To ask the Secretary of State for the Home Department how many prisoners escaped from Morton Hall open prison in 1988, 1989 and 1990; how many were recaptured in each year; and how many of those not recaptured were drug offenders.

  Mrs. Rumbold
  The number of prisoners who absconded from Morton Hall open prison in 1988, 1989 and 1990 was as follows:

  Number

  1988

  36

  1989

  34

  1990

  37

  In each of those years the number of prisoners unlawfully at large from Morton Hall open prison who were recaptured was as follows:

  Number

  1988

  35

  1989

  34

  1990

  36

  Of those who remain unlawfully at large, none was sentenced for drug-related offences.

  Mr. Alan Williams
  To ask the Secretary of State for the Home Department how many prisoners escaped from Standford Hill open prison in 1988, 1989 and 1990; how many were recaptured in each year; and how many of those not recaptured were drug offenders.

  Mrs. Rumbold
  The number of prisoners who absconded from Standford Hill open prison in 1988, 1989 and 1990 was as follows:
  149

  Number

  1988

  79

  1989

  110

  1990

  122

  In each of those years the number of prisoners unlawfully at large from Standford Hill open prison who were recaptured was as follows:

  Number

  1988

  69

  1989

  105

  1990

  97

  Of those who remain unlawfully at large, the number sentenced for drug-related offences is as follows for each of the three years.

  Number

  1988

  2

  1989

  2

  1990

  2

  Mr. Alan Williams
  To ask the Secretary of State for the Home Department how many prisoners escaped from Rudgate open prison in 1988, 1989 and 1990; how many were recaptured in each year; and how many of those not recaptured were drug offenders.

  Mrs. Rumbold
  The number of prisoners who absconded from Rudgate open prison in 1988, 1989 and 1990 was as follows:

  Number

  1988

  98

  1989

  120

  1990

  107

  In each of those years the number of prisoners unlawfully at large from Rudgate open prison who were recaptured was as follows:

  Number

  1988

  96

  1989

  119

  1990

  102

  Of those who remain unlawfully at large, none was sentenced for drug-related offences.

  Mr. Alan Williams
  To ask the Secretary of State for the Home Department how many prisoners escaped from East Sutton Park open prison in 1988, 1989 and 1990; how many were recaptured in each year; and how many of those not recaptured were drug offenders.

  Mrs. Rumbold
  The number of prisoners who absconded from East Sutton Park open prison in 1988, 1989 and 1990 was as follows:

  Number

  1988

  20

  1989

  19

  1990

  51

  In each of those years the number of prisoners unlawfully at large from East Sutton Park open prison who were recaptured was as follows:
  150

  Number

  1988

  15

  1989

  7

  1990

  23

  Of those who remain unlawfully at large, none was sentenced for drug-related offences is as follows for each of the three years.

  Number

  1988

  nil

  1989

  8

  1990

  25

  Mr. Alan Williams
  To ask the Secretary of State for the Home Department how many prisoners escaped from Askham Grange open prison in 1988, 1989 and 1990; how many were recaptured in each year; and how many of those not recaptured were drug offenders.

  Mrs. Rumbold
  The number of prisoners who absconded from Askham Grange open prison in 1988, 1989 and 1990 was as follows:

  Number

  1988

  13

  1989

  12

  1990

  7

  In each of those years the number of prisoners unlawfully at large from Askham Grange open prison who were recaptured was as follows:

  Number

  1988

  6

  1989

  11

  1990

  5

  Of those who remain unlawfully at large, the number sentenced for drug-related offences is as follows for each of the three years:

  Number

  1988

  1

  1989

  1

  1990

  Nil

  Mr. Alan Williams
  To ask the Secretary of State for the Home Department how many prisoners escaped from Leyhill open prison in 1988, 1989 and 1990; how many were recaptured in each year; and how many of those not recaptured were drug offenders.

  Mrs. Rumbold
  The number of prisoners who absconded from Leyhill open prison in 1988, 1989 and 1990 was as follows:

  Number

  1988

  32

  1989

  28

  1990

  16

  In each of those years the number of prisoners unlawfully at large from Leyhill open prison who were recaptured was as follows:

  151

  Number

  1988

  31

  1989

  28

  1990

  12

  Of those who remain unlawfully at large, none was sentenced for drug-related offences.

  Mr. Alan Williams
  To ask the Secretary of State for the Home Department how many prisoners escaped from Kirkham open prison in 1988, 1989 and 1990; how many were recaptured in each year; and how many of those not recaptured were drug offenders.

  Mrs. Rumbold
  The number of prisoners who absconded from Kirkham open prison in 1988, 1989 and 1990 was as follows:

  Number

  1988

  167

  1989

  147

  1990

  145

  In each of those years the number of prisoners unlawfully at large from Kirkham open prison who were recaptured was as follows:

  Number

  1988

  162

  1989

  145

  1990

  133

  Of those who remain unlawfully at large, the number sentenced for drug-related offences is as follows for each of the three years.

  Number

  1988

  Nil

  1989

  Nil

  1990

  1

  Mr. Alan Williams
  To ask the Secretary of State for the Home Department how many prisoners escaped from Highpoint open prison in 1988,1989 and 1990; how many were recaptured in each year; and how many of those not recaptured were drug offenders.

  Mrs. Rumbold
  I regret that this prison's records for 1988 are not available. The number of prisoners who absconded from Highpoint open prison in 1989 and 1990 was as follows:

  Number

  1989

  1

  1990

  10

  In each of those years the number of prisoners unlawfully at large from Highpoint open prison who were recaptured was as follows:

  Number

  1989

  1

  1990

  5

  Of those who remain unlawfully at large, the number sentenced for drug-related offences is as follows for each year.
  152

  Number

  1989

  Nil

  1990

  1

  Mr. Alan Williams
  To ask the Secretary of State for the Home Department how many prisoners escaped from Ford open prison in 1988, 1989 and 1990; how many were recaptured in each year; and how many of those not recaptured were drug offenders.

  Mrs. Rumbold
  The number of prisoners who absconded from Ford open prison in 1988, 1989 and 1990 was as follows:

  Number

  1988

  79

  1989

  74

  1990

  71

  In each of those years the number of prisoners unlawfully at large from Ford open Prision who were recaptured was as follows:

  Number

  1988

  71

  1989

  64

  1990

  61

  Of those who remain unlawfully at large, the number sentenced for drug-related offences is as follows for each of the three year.

  Number

  1988

  1

  1989

  Nil

  1990

  1

  Mr. Alan Williams
  To ask the Secretary of State for the Home Department how many prisoners escaped from Sudbury open prison in 1988, 1989 and 1990; how many were recaptured in each year; and how many of those not recaptured were drug offenders.

  Mrs. Rumbold
  The number of prisoners who absconded from Sudbury open prison in 1988, 1989 and 1990 was as follows:

  Number

  1988

  111

  1989

  92

  1990

  90

  In each of those years the number of prisoners unlawfully at large from Sudbury open prison who were recaptured was as follows:

  Number

  1988

  106

  1989

  82

  1990

  75

  Of those who remain unlawfully at large none was sentenced for drug-related offences.

  Electoral Registration
  Ms. Richardson
  To ask the Secretary of State for the Home Department (1) if he will consider bringing in legislation to enable women escaping domestic violence to register as electors without revealing their new addresses;

  (2) how many representations he has received asking for women fleeing domestic violence to be able to register as electors without revealing their new addresses.

  Mrs. Rumbold
  Since September 1989 we have received four letters from hon. Members, five from local authorities and six from members of the public on this issue. I recognise that the hon. Member has raised a matter of genuine concern, but there are important democratic reasons for publishing the names and addresses of registered electors which make an amendment of the existing electoral law in the way proposed unacceptable.

  Hunting
  Mr. Fearn
  To ask the Secretary of State for the Home Department whether he will list Government funds made available to fox hunts in England and Wales since 1979.

  Mrs. Rumbold
  The Home Office has made no such funds available to fox hunts.

  Drug Offences
  Mr. Alan Williams
  To ask the Secretary of State for the Home Department how many convictions with prison sentences there have been in each of the last three years for drug-related offences.

  Mr. John Patten
  The information requested is contained in table 3.4 of the Home Office statistical bulletin "Statistics of the misuse of drugs: seizures and offenders dealt with, United Kingdom, 1989", a copy of which is in the Library.

SCOTLAND

  Eskbank Bypass
  Sir David Steel
  To ask the Secretary of State for Scotland on what date he expects the A7 Edinburgh to Galashiels trunk route bypass of Eskbank to be opened to traffic.

  Mr. Lang
  Construction work on the A7 Dalkeith western bypass is expected to be completed and the road opened to traffic this summer several months ahead of schedule.

  Historic Buildings Council
  Mr. Wilson
  To ask the Secretary of State for Scotland if he will list those persons who have, directly or indirectly, been in receipt of grants from the Historic Buildings Council in each of the past 10 years, while serving as members of the council.

  Lord James Douglas-Hamilton
  Historic building repair grants are awarded by my right hon. Friend, having first taken advice from the Historic Buildings Council for Scotland. In the past 10 years, one member of the council, Mr. Marc Ellington, has received historic building repair grant on one listed building while serving as a member of the council.
  154
  Mr. Wilson
  To ask the Secretary of State for Scotland how many grants have been authorised by the Historic Buildings Council in respect of Towie Barclay castle; what has been the value in each case; and in which years they were made.

  Lord James Douglas-Hamilton
  The following historic building repair grants were approved for Towie Barclay castle and steadings:

  Amount of grant £

  Paid

  Towie Barclay castle

  Phase I

  8,800

  1972–74

  Phase II

  2,000

  1976–77

  Towie Barclay castle steadings

  36,684

  1987–89

  Tourism
  Mrs. Margaret Ewing
  To ask the Secretary of State for Scotland what level of financial support his Department has given to tourism in Scotland in each of the past five years.

  Mr. Allan Stewart
  [holding answer 14 March 1991]: The information is as follows:

  Financial year

  Expenditure £ million (cash)

  1985–86

  18·0

  1986–87

  21·5

  1987–88

  17·3

  1988–89

  18·7

  1989–90

  22·0

  Notes:

  1. The figures for 1985–89 are in respect of expenditure on the promotion of tourism by the Scottish Tourist Board, the Highlands and Islands Development Board and the Scottish Development Agency. The figure for 1989–90 is in respect of the Scottish Tourist Board and the Highlands and Islands Development Board only.

  2. Information in respect of the Scottish Development Agency for that year could only be obtained at disproportionate cost. The Scottish Development Agency is involved in many projects with a tourism element, including training initiatives relevant to tourism, support for conferences held in Scotland, strategic studies, physical works, small business advice and environmental renewal.

  3. Provision by the Highlands and Islands Development Board is through its marketing and projects programmes and under its section 8 assistance scheme; the figures do not include salary and administration costs incurred by the Board.

  4. Total expenditure by the Scottish Tourist Board is provided. including salary and administration costs, in performing its statutory functions of promoting Scotland as a tourist destination, both within the United Kingdom and overseas, and encouraging investment in tourism infrastructure.

  Shackleton Crash (South Harris)
  Miss Lestor
  To ask the Secretary of State for Defence for what reasons it was decided not to hold a fatal accident inquiry into the RAF Shackleton crash on South Harris in 1990.

  Lord James Douglas-Hamilton
  [holding answer 15 March 1991]: I have been asked to reply.

  On behalf of my noble and learned Friend the Lord Advocate, who has responsibility for fatal accident inquiries, I advise the hon. Member that the question

  155
  whether such an inquiry should be held received careful consideration. It is not the practice of the Lord Advocate, however, to divulge his reasons for deciding not to hold an inquiry.

TRADE AND INDUSTRY

  Telephone Use
  Mr. Hayes
  To ask the Secretary of State for Trade and Industry if he will make a further statement on proposals relating to low telephone users.

  Mr. Lilley
  British Telecom has agreed to introduce an improved and better targeted low user scheme this year. Low users will be able to opt to pay only half the standard rental, and get 30 free call units per quarter. The new scheme will be focused to benefit people who rely on the telephone as a lifeline. BT expects that more than 2 million people will be eligible for the new scheme.

  Telecommunications
  Mr. John Marshall
  To ask the Secretary of State for Trade and Industry if he will make a statement about the growth in telecommunications since 1984.

  Mr. Lilley
  The United Kingdom has one of the fastest growing telecommunications markets in the world. The number of connections on the fixed network has grown by over 25 per cent. since 1984, and the volume of calls has increased by more than 60 per cent. in the same period. The growth in mobile services is even more spectacular, and there are now more than 1·1 million cellular radio subscribers. The United Kingdom equipment market has grown by over 60 per cent. since 1984, and the range of choice has increased substantially, and the United Kingdom has by far the largest value added services market in Europe.

  Mr. Watts
  To ask the Secretary of State for Trade and Industry if he will make a further statement on the Government's telecommunications policies.

  Mr. Lilley
  I set out the Government's proposals for liberalising the United Kingdom telecommunications market in my statement to the House on 5 March. My aim is to build on the policies of competition, choice and private enterprise that have been so successful, and to create the most open and dynamic telecommunications market in the world. The White Paper, "Competition and Choice: Telecommunications Policy for the 1990s", is available in the Library for Members who may wish to study the proposals in more depth.

  Mr. Charles Wardle
  To ask the Secretary of State for Trade and Industry what assessment he has made of the effect on consumer choice of the introduction of equal access, outlined in his Department's White Paper on telecommunications policy.

  Mr. Lilley
  The introduction of equal access will widen consumer choice substantially. It will make it simpler for consumers to select which operator carries their long-distance calls. They will be able to choose the operator providing the best or cheapest service.

  Trade Statistics
  Mr. Lofthouse
  To ask the Secretary of State for Trade and Industry what was the balance of trade between the United Kingdom and(a) Poland, (b) Australia and (c) South Africa last year; and what were the principal elements for each.

  Mr. Sainsbury
  In 1990, the United Kingdom had a positive visible trade balance of £606·5 million with Australia and £34·9 million with South Africa accounted for mainly by machinery and transport equipment. The balance of trade deficit with Poland was £135·7 million, the main elements of which were iron and steel.

  Domestic Products (Labelling)
  Mr. Andrew F. Bennett
  To ask the Secretary of State for Trade and Industry what discussions he has had with trading standards officers about misleading labelling of domestic products.

  Mr. Leigh
  While I have not met trading standards officers specifically to discuss the subject of misleading labelling the question of environmental claims in respect of goods was raised as part of a general discussion I had with representatives of the Institute of Trading Standards Administration, when I met them on 20 February.

  North Devon Manufacturers Association
  Mr. Speller
  To ask the Secretary of State for Trade and Industry if he has received any adverse comments about the work of the North Devon Manufacturers Association.

  Mr. Lilley
  On the contrary. I have heard nothing but good of its efforts to represent and support industry in the north Devon area throughout its 20 years of existence, and I wish it well in the future.

  Exporters
  Mr. Pawsey
  To ask the Secretary of State for Trade and Industry what information he has on the categories of companies that have performed best in export markets over the last four years; and what assessments he has made of the reason for their success.

  Mr. Sainsbury
  The greatest success is achieved by companies that make a long-term commitment to export markets. We believe that the level and quality of management involvement is an important factor in success. Manufacturing exports increased by 70 per cent. in volume over the past 10 years.

  Bulgaria
  Mr. Amos
  To ask the Secretary of State for Trade and Industry if he will meet the Bulgarian Ministers of Trade and Industry to discuss ways of increasing British assistance to Bulgaria; and if he will make a statement.

  Mr. Sainsbury
  Within the past few weeks I have met Mrs. Todorova and Mr. Daskalov, two of the three Bulgarian deputy Ministers of Foreign Economic Relations. The Government are providing assistance to Bulgaria through the IMF and the European Community and bilaterally via the know-how fund administered by my
  157
  right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs. My Department will continue its efforts to stimulate trade and investment, supplemented by the support of the East European Trade Council whose chairman is visiting Bulgaria this week.

  Consumer Affairs
  Mr. Cohen
  To ask the Secretary of State for Trade and Industry when he last met representatives of the local authorities trading standards officers to discuss consumer affairs.

  Mr. Leigh
  Although my right hon. Friend has not had any such meetings, I met representatives of the Institute of Trading Standards Administration last month to discuss consumer affairs.

  Advice Agencies
  Mr. Robert Hughes
  To ask the Secretary of State for Trade and Industry what further assessment his Department has made of the implications of the poll tax on the workload of citizens advice bureaux and other advice-giving agencies.

  Mr. Leigh
  Citizens advice bureaux have had to deal with a number of inquiries arising from the introduction of the community charge, just as they used to on rates. The number of inquiries on the community charge rose in 1989–90 compared to 1988–89, but there was no significant change in the total number of inquiries dealt with by bureaux in 1989–90 compared to 1988–89. Figures relating to the current financial year are not yet available.

  The Department of Environment has agreed to give the National Association of Citizens Advice Bureaux £36,000 this year to help with the costs of training bureaux workers to deal with these inquiries. The Scottish Office has also given Citizens Advice Scotland £36,000 over the last two years for the same purpose.

  Inward Investment (USA)
  Mr. Knapman
  To ask the Secretary of State for Trade and Industry if he will make a statement on inward investment from the United States of America.

  Mr. Leigh
  The United Kingdom continues to be the preferred location for United States investment in Europe. United States Department of Commerce figures show that at end 1989 Britain's share of United States direct investment into the European Community stood at 41 per cent., representing a stock figure of over £30 billion.

  Kuwait
  Mr. David Nicholson
  To ask the Secretary of State for Trade and Industry if he will make a statement on his Department's role in helping British firms to play a part in the reconstruction of Kuwait.

  Mr. Lilley
  The Kuwait reconstruction co-ordination team in my Department is working closely with industry to help develop links with the Kuwaiti authorities responsible for planning and implementing reconstruction and to disseminate information about opportunities. A number of DTI/industry sectoral groups have been set up for this purpose to cover the areas most relevant to Kuwait's likely requirements. A prospectus setting out the experience and 158
  capabilities of United Kingdom industry and listing more than 160 companies was presented to the Government of Kuwait by my right hon. Friend the Foreign Secretary on 9 February. The DTI has also helped set up a small team of business representatives in Kuwait to promote British industry's interests, and one of my officials accompanied a group of senior business men on a visit to Kuwait on 10 and 11 March. A list is being compiled of companies which have expressed an interest in reconstruction work.

  Mr. Dalyell
  To ask the Secretary of State for Trade and Industry if he will make a statement on the investment of United Kingdom firms in the reconstruction of Kuwait.

  Mr. Lilley
  Many British companies wish to take part in the reconstruction of Kuwait and have invested considerable time and resources in developing proposals and in responding to invitations to tender. The DTI is helping British firms to establish working relations with the Kuwaiti authorities which warmly welcome British interest in participating in the reconstruction process.

  Mr. Janman
  To ask the Secretary of State for Trade and Industry by when his Department hopes to have created a database of British companies interested in competing for contracts with the Government of Kuwait after the initial emergency programme; and if he will list the companies included, by category.

  Mr. Sainsbury
  [holding answer 14 March 1991]: About 2,500 companies are now registered on the data base. My Department is still receiving many inquries from companies wishing to register their interests. For reasons of commercial confidentiality, I cannot reveal their names.

  Information Technology
  Mr. Bill Michie
  To ask the Secretary of State for Trade and Industry what is his most recent estimate of the balance of trade in information technology with Japan.

  Mr. Sainsbury
  There is no statistically recognised definition of information technology. However, divisions 75 and 76 of the standard international trade classification include information technology products and the estimated crude deficit in these divisions in 1990 was £1·8 billion. Our exports to Japan in these categories in 1990 increased in value by 17 per cent. over 1989.

  Industrial Development (North of England)
  Mr. Campbell-Savours
  To ask the Secretary of State for Trade and Industry whether he will visit the north of England to meet representatives of industry to discuss matters relating to his Department's activities in industrial development.

  Mr. Leigh
  During recent visits to the north of England, my colleagues and I have met a broad spectrum of local business leaders and discussed matters relating to industrial development. In the near future the Secretary of State will be meeting representatives of the Manchester financial and professional forum and the Tyne and Wear chamber of commerce. I have two planned visits to the north-east, where I have a particular interest in view of my position as godparent Minister for the region.

  Eastern Europe
  Mr. Simon Coombs
  To ask the Secretary of State for Trade and Industry if he will make a statement on the prospects for trade with the countries of eastern Europe.

  Mr. Sainsbury
  The short-term prospects for trade with most of the countries of eastern Europe have worsened this year. However, the prospects of investment in and longer term trade with Poland, Hungary and Czechoslovakia, are continuing to improve as their governments press ahead with reform and establish a proper legal and fiscal framework for business.

  Steel Industry
  Mr. McAvoy
  To ask the Secretary of State for Trade and Industry if he has any plans to meet the chairman of British Steel to discuss the future of the steel industry.

  Mr. Leigh
  My right hon. Friend meets the chairman of British Steel whenever appropriate. Their last meeting was on 7 September, and there are no plans for a further meeting at this stage.

  International Trade
  Mr. Viggers
  To ask the Secretary of State for Trade and Industry if he will make a statement on the development of simpler international trade procedures.

  Mr. Sainsbury
  The development of simpler international trade procedures is largely the responsibility of the

  United Kingdom visible crude trade balances

  £ million2

  Division of SITC1

  1979

  1984

  1989

  04 Cereals and cereal preparations

  -404·0

  363·7

  229·4

  77 Electrical machinery etc.

  46·9

  -1,041·4

  -1,630·4

  78 Road vehicles

  -795·1

  -2,638·8

  -6,932·2

  1 Standard International Trade Classification (SITC), 1979 and 1984 = Revision 2; 1989 = Revision 3.

  2 At current prices.

  Source: Overseas Trade Statistics of the United Kingdom.

  Mr. Ralph Howell
  To ask the Secretary of State for Trade and Industry what was the value of(a) imports and (b) exports in 1980, 1985 and 1990 at current prices of (i) cereals, (ii) all agricultural products, (iii) motor vehicles,

  Table 1—United Kingdom visible imports

  £ million1

  Section/Division of SITC2

  1980

  1985

  1990

  1990 less 1980

  Net change since 1980 (per cent.)

  0 Agricultural products3 of which

  5,478

  8,107

  10,409

  4,931

  90

  04 Cereals4

  603

  713

  785

  182

  30

  32 Coal, coke and briquettes

  239

  740

  655

  416

  174

  67 Iron and steel

  1,448

  1,716

  2,677

  1,229

  85

  77 Electrical machinery etc.

  1,519

  4,277

  6,924

  5,406

  356

  78 Road vehicles

  3,352

  6,801

  12,587

  9,235

  276

  160
  Simpler Trade Procedures Board—SITPRO—a non-departmental public body supported by the Department. SITPRO's central aims are the development of international standards for electronic data interchange where it has made a particularly significant contribution to what has become known as UN/EDIFACT—United Nations electronic data interchange for administration, commerce and transport. Secondly, they work for elimination of procedural barriers to trade with particular reference to measures associated with the creation of the single European market.

  Production Statistics
  Mr. Austin Mitchell
  To ask the Secretary of State for Trade and Industry what was the increase/decrease in the production of the principal import competing and exporting industries between 1973 and 1990.

  Mr. Sainsbury
  There is no officially recognised definition of"principal import competing and exporting industries".

  Imports and Exports
  Mr. Ralph Howell
  To ask the Secretary of State for Trade and Industry if he will show the crude balance of imports and exports of(a) cereals and cereal preparations, (b) motor vehicles and (c) electrical goods in 1979, 1984 and 1989; and if he will make a statement.

  Mr. Sainsbury
  The information requested is in the table.

  (iv) coal, (v) steel and (vi) electrical goods; and if he will show the net increase or decrease since 1980 in money and percentage terms.

  Mr. Sainsbury
  The information available is shown in the tables.
  161

  Table 2—United Kingdom visible exports

  £ million1

  Section/Division of SITC2

  1980

  1985

  1990

  1990 less 1980

  Net change since 1980 (per cent.)

  0 Agricultural products3 of which

  2,051

  3,252

  4,325

  2,274

  111

  04 Cereals4

  456

  833

  1,046

  590

  129

  32 Coal, coke and briquettes

  180

  179

  122

  -58

  -32

  67 Iron and steel

  983

  1,856

  3,036

  2,053

  209

  77 Electrical machinery etc.

  1,799

  3,380

  5,649

  3,850

  214

  78 Road vehicles

  3,l58

  3,911

  7,301

  4,143

  131

  1 At current prices.

  2 Standard International Trade Classification (SITC), 1980 and 1985 = Revision 2; 1990 = Revision 3.

  3 Section 0 of the SITC is defined as Food and Live Animals. A definition of Agricultural Products does not exist in the SITC.

  3 Cereals and cereal preparations.

  Source: Overseas Trade Statistics of the United Kingdom.

  Mr. Ralph Howell
  To ask the Secretary of State for Trade and Industry if he will give comparative figures in money and percentage terms in exports of(a) cereals and

  Table—United Kingdom Visible Exports 1980 and 1990

  Section/Division of SITC (1)

  1980 £ million

  Per cent, of total trade

  1990 £ million

  Per cent, of total trade

  1980–90 per cent.

  0 Agricultural products (2)

  of which:

  2,051

  4·3

  4,325

  4·2

  110·9

  04 Cereals (3)

  456

  1·0

  1,046

  1·0

  129·4

  1 Beverages and tobacco

  1,206

  2·5

  2,770

  2·7

  129·7

  2 Inedible crude materials, except fuels

  1,379

  2·9

  2,163

  2·1

  56·9

  3 Mineral fuels, lubricants

  6,429

  13·6

  7,801

  7·5

  21·4

  4 Animal and vegetable oils etc.

  71

  0·1

  88

  0·1

  23·5

  5 Chemicals and related

  5,286

  11·2

  13,183

  12·7

  149·4

  6 Manufactured goods classified chiefly by material

  8,754

  18·5

  15,821

  15·2

  80·7

  7 Machinery and transport equipment

  16,267

  34·3

  42,155

  40·6

  159·1

  8 Miscellaneous manufactured articles

  4,504

  9·5

  13,347

  12·8

  196·4

  9 Other visible trade

  1,411

  3·0

  2,559

  2·5

  81·3

  Total United Kingdom visible exports

  47,364

  100·0

  103,911

  100·0

  119·4

  Total less agricultural products (2)

  45,313

  95·7

  99,586

  95·8

  119·8

  Source: Overseas Trade Statistics of the United Kingdom

  (1) Standard International Trade Classification (SITC), 1980 = Revision 2; 1990 = Revision 3.

  (2) Section 0 of the SITC is defined as Food & Live Animals. A definition of agricultural products does not exist in the SITC.

  (3) Cereals and cereal preparations.

  Shipbuilding
  Ms. Quin
  To ask the Secretary of State for Trade and Industry if he will make a statement on the work of the shipbuilding task force within his Department.

  Mr. Leigh
  The objective of the shipbuilding task force is to reduce state involvement in the shipbuilding industry, working for the elimination of production and development aids internationally while encouraging United Kingdom shipbuilders and marine equipment manufacturers to operate competitively in international markets and in the defence sector.

  To that end, the task force is resolving any remaining problems arising from the disposal of British Shipbuilders; managing expenditure on the home shipbuilders credit guarantee scheme and the shipbuilding intervention fund; ensuring that the European Community seventh directive on aid to shipbuilding is operated in line with Ministers' objectives; attempting to ensure further progress in the European Community and the OECD in negotiating an agreement to end state aids for shipbuilding worldwide;
  162
  (b) all agricultural products and the percentage change in the remainder of British exports, broken down also into its principal sections between 1980 and 1990.

  Mr. Sainsbury
  The information available is shown in the table.

  and maintaining appropriate liaison with the Ministry of Defence on the future naval shipbuilding programme and on projects likely to affect shipyard capacity utilisation.

  Inward Investment
  Mr. Maxton
  To ask the Secretary of State for Trade and Industry what is his estimate of the percentage of United Kingdom inward investment projects going to(a) Wales, (b) Scotland and (c) the north-east, both as a percentage of total projects and in terms of numbers of jobs promised in the periods (i) June 1987 to the most recently available date and (ii) January 1989 to the most recently available date.

  Mr. Leigh
  The table sets out the number of investment decisions known to the Invest in Britain Bureau from 1 July 1987 to 31 December 1990 and from 1 January 1989 to 31 December 1990 for Scotland, Wales and the north-east. The numbers of jobs expected to be created from such projects and the percentage share of both projects and jobs as part of the total for the United Kingdom as a whole is also given.
  163
  The decisions recorded include the establishment of new business, expansion or acquisition of an existing business and involvement in joint venture. The figures are

  Table showing numbers of inward investment projects and associated created jobs for certain regions over specified time periods, and their respective percentage share of the overall inward investment figures for the United Kingdom

  Region

  Number of projects

  Percentage of all United Kingdom projects

  Number of jobs created3

  Percentage of jobs created

  Scotland

  1987–901

  151

  12·9

  22,484

  22·9

  1989–902

  73

  10·8

  14,298

  24 ·8

  Wales

  1987–901

  192

  16·4

  14,114

  14·4

  1989–902

  114

  16·9

  6,330

  11·0

  North East

  1987–901

  120

  10·2

  11,320

  11·5

  1989–902

  88

  13·0

  7,049

  12·2

  11 July 1987 to 31 December 1990.

  21 January 1989 to 31 December 1990.

  3Created jobs are those jobs that the inward investor anticipates will be created by the project over the next three years.

  Bloodstock Sales
  Mr. Wiggin
  To ask the Secretary of State for Trade and Industry what is his estimate of the total worth of overseas earnings from the sale of bloodstock in the United Kingdom.

  Mr. Sainsbury
  [holding answer 18 March 1991]: Statistics in this area are not separately identified in "Overseas Trade Statistics"—standard international trade classification division 00.

  RECHAR
  Mr. Hinchliffe
  To ask the Secretary of State for Trade and Industry what representations he has received from organisations seeking full additionality within the regions for the RECHAR programme.

  Mr. Leigh
  [holding answer 18 March 1991]: My right hon. Friends and I have received a number of representations from Members of Parliament, local authorities and the Coalfield Communities Campaign on various aspects of the proposed RECHAR programmes.

  Mr. Hinchliffe
  To ask the Secretary of State for Trade and Industry what allocations of RECHAR funds to the United Kingdom have been withheld by the Community on grounds of lack of additionality.

  Mr. Leigh
  [holding answer 18 March 1991]: European Commission decisions are awaited on applications made in July 1990 for RECHAR grants of £109 million from European Community funds to United Kingdom coalfield areas. As is usual with applications for grants from the European Community structural funds, discussions with the Commission are proceeding on various aspects of them.

  Structural Fund
  Mr. Hinchliffe
  To ask the Secretary of State for Trade and Industry if he will provide a breakdown of the claims made, by year from 1987, for each EC structural fund operational programme area, compared with the allocation awarded to each programme within the United Kingdom.
  164
  based on information provided by the companies themselves at the time of the investment and take no account of subsequent developments.

  Mr. Leigh
  [holding answer 18 March 1991]: Fifty current operational programmes have to date been approved by the Commission for the United Kingdom. Details of the claims made for each of these could be provided only at disproportionate cost.

  Mr. Hinchliffe
  To ask the Secretary of State for Trade and Industry (1) what steps he has taken to ensure that EC structural fund support for the regions of the EC has an additional economic impact in those regions;

  (2) what steps he intends to take to ensure that local authority spending of EC structural funds is exempt from current United Kingdom capital and revenue controls to ensure that there is a net benefit to regions with severe economic structural problems in receiving EC support.

  Mr. Leigh
  [holding answer 18 March 1991]: Expected levels of receipts from the European Community structural funds, as of other receipts from the Community, are taken into account when the Government decide the size of United Kingdom public expenditure programmes. Structural fund grants to local authorities are paid in full to the authorities concerned.

  Mr. Hinchliffe
  To ask the Secretary of State for Trade and Industry if he will provide a detailed breakdown of how much of the EC structural fund support designated for programmes to take place in the eligible United Kingdom regions has been spent on United Kingdom Government Department schemes of assistance.

  Mr. Leigh
  [holding answer 18 March 1991]: The Community support frameworks agreed between the Government and the European Commission do not in general specify in detail the Departments and other authorities whose measures the European Community structural funds will support. Until each operational programme has been concluded it is not possible to say how the expenditure from it has been allocated.

  Regional Policy
  Mr. Hinchliffe
  To ask the Secretary of State for Trade and Industry what steps he has taken to review the effectiveness of United Kingdom regional policy.
  165
  Mr. Leigh
  [holding answer 18 March 1991]: My Department has an on-going programme for reviewing all schemes of support to industry, including regional policy instruments. A second-stage evaluation of regional enterprise grants was published earlier this month by HMSO, and a report on the evaluation of regional selective assistance covering the period 1980 to 1984 was published last year.

DEFENCE

  The Gulf
  Mr. Blunkett
  To ask the Secretary of State for Defence if he will list the companies employed on behalf of his Department to give advice. or to undertake other work on public relations and similar matters, during the Gulf crisis; if he will indicate the amount of money spent on remuneration for the companies involved; and if he will make a statement.

  Mr. Archie Hamilton
  The only companies employed by the Ministry of Defence on work on public relations and similar matters during the Gulf crisis have been employed to provide administrative support services, such as transcription services and provision of press cuttings. Principal among these companies have been the Broadcast Monitoring Company and Lincoln Hannah Ltd.

  Details of payments to individual companies are generally a matter of commercial confidentiality.

  Mr. O'Neill
  To ask the Secretary of State for Defence whether any employees of British defence companies were sent to the Gulf region to provide assistance to the armed forces as part of Operation Granby.

  Mr. Alan Clark
  Yes.

  Mr. O'Neill
  To ask the Secretary of State for Defence what is the approximate number of(a) combat and (b) non-combat sorties carried out by the Royal Air Force as a part of Operation Granby.

  Mr. Archie Hamilton
  The RAF flew over 4,000 combat and 2,500 non-combat sorties from the commencement of the air campaign until the cessation of hostilities. Some 9,000 sorties were also flown in support of Operation Granby prior to 17 January 1991, 8,000 by combat aircraft and 1,000 by non-combat aircraft.

  Mr. O'Neill
  To ask the Secretary of State for Defence what is his assessment of the role of British industry in supporting Operation Granby.

  Mr. Alan Clark
  The United Kingdom defence industry responded admirably to our requirements during all stages of Operation Granby.

  Mr. O'Neill
  To ask the Secretary of State for Defence what was the number of(a) British and (b) coalition casualities involved in Operation Granby; and if he will make a statement detailing the numbers killed or wounded and whether these casualties resulted from combat or non-combat operations.

  Mr. Archie Hamilton
  Twenty-five service men are confirmed to have been killed and 43 injured in action. A further 19 have been killed in non-combat accidents in the Gulf since 2 August 1990. Her Majesty's Government are not in a position to provide information on casualties sustained by coalition partners.
  166
  Mr. O'Neill
  To ask the Secretary of State for Defence what is the approximate amount and type of ordnance delivered by the Royal Air Force as part of Operation Granby.

  Mr. Archie Hamilton
  The RAF delivered over 3,000 tonnes of ordnance during the air campaign in support of operations in the Gulf. This total comprised over 100 JP233 airfield denial weapons, some 6,000 bombs, of which over 1,000 were laser-guided, over 100 anti-radar missiles and nearly 700 air-to-ground rockets.

  Mr. McFall
  To ask the Secretary of State for Defence (1) what is his Department's assessment of the number of Kuwaiti civilians seized and taken to Iraq between 2 August 1990 and the cessation of hostilities;

  (2) what is his Department's assessment of the number of Kuwaitis seized by the Iraqi forces between 2 August 1990 and the cessation of hostilities that are still unaccounted for.

  Mr. Douglas Hogg
  I have been asked to reply.

  We understand that the total number of missing Kuwaitis is estimated at 33,000. This is made up of 6,000 prisoners of war, 5,000 Kuwaitis who are known to have been taken to Iraq, and 22,000 whose fate is still unknown. The Kuwaiti authorities have established registration centres to enable Kuwaiti families to give details of missing persons.

  Site Security
  Mr. O'Neill
  To ask the Secretary of State for Defence (1) what assessment he has made of the adequacy of the level of security at the sites of his Department's main contractors; and if he will make a statement;

  (2) what level of security at the sites of his Department's main contractors, relative to that of his Department's sites, his Department requires; and if he will make a statement.

  Mr. Archie Hamilton
  At defence contractors' sites the level of security required by the Ministry of Defence depends on the nature and classification of the contracts. Where appropriate, the MOD satisfied itself that its security requirements are met before work begins on the contract. Thereafter such contractors' sites are inspected regularly, the continuing adequacy of security arrangements is assessed and, where necessary, improvements are made.

  The MOD is directly responsible for all aspects of security at all its own establishments. These establishments are inspected regularly, security arrangements are assessed and, where necessary, improvements are made.

  Europe
  Mr. O'Neill
  To ask the Secretary of State for Defence what recent discussions his Department has been involved with regarding military confidence-building measures in Europe.

  Mr. Archie Hamilton
  The continuing negotiations on confidence and security-building measures in Europe resumed in Vienna on 4 February. The Ministry of Defence is fully involved in these negotiations, although the Foreign and Commonwealth Office is the lead Department on these and other arms control matters.

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

Gulf War Costs: Japanese Contribution
Lord Annan Lord Annan asked Her Majesty's Government:
What financial contribution Japan has made to defray the cost of the allied forces in the Gulf, and in particular that of the British forces.
The Minister of State, Foreign and Commonwealth Office (The Earl of Caithness): My Lords, Japan has made two contributions. The first was of approximately 2 billion dollars, of which the United Kingdom received 50 million dollars. The second was of 9 billion dollars.
Lord Annan: My Lords, does the noble Earl consider that to be an adequate contribution from that country when compared with the contribution made by Germany, having regard to the fact that Germany has faced great financial difficulties over unification and also given very considerable amounts to governments in Eastern Europe? Surely the Foreign Secretary should make representations to the Japanese Government suggesting that they could possibly now do more.
The Earl of Caithness: No, my Lords, I disagree with the noble Lord. I think that it is a very generous contribution.
Lord Cledwyn of Penrhos: My Lords, does the noble Earl agree that it would be more equitable if contributions from Japan and other non-participating countries were made to the coalition under the auspices of the United Nations as a whole and were then divided between the participating countries pro rata according to their individual costs?
The Earl of Caithness: My Lords, we believe that it is for the countries concerned to announce their contributions to whichever country or group of countries they wish. The Japanese contributions have been made to the Gulf peace fund.
Lord Cledwyn of Penrhos: My Lords, can the Minister say how that will work in practice? Will it be beneficial to the United Kingdom and what is allotted to us? The United Kingdom has made a very substantial contribution to the Gulf conflict and we must defend our interests in this matter.
The Earl of Caithness: My Lords, we certainly seek to defend our interests in this matter. So far the Japanese have made two contributions. We know how the apportionment of the first one was made and out of that 2 billion US dollars we received 50 million dollars. We do not know the apportionment for the second tranche.
Lord Harmar-Nicholls: My Lords, in the context of the situation covered by these contributions, does my noble friend agree that it is more valuable to be able to form a judgment on the nature of a relationship by a spontaneous and voluntary contribution? Is that not better than to give the impression of wanting to dig something out of somebody with a kind of force?
The Earl of Caithness: My Lords, we are grateful for any and all contributions that have been made to the coalition forces and in particular to the United Kingdom. We are particularly grateful for what the Japanese have done.
Lord Tordoff: My Lords, despite the rebuff that I received from the noble Earl last week, can I draw his attention to the possibility that if the Japanese are reluctant to pay into our coffers they may be prepared to pay some money into the coffers of the United Nations High Commissioner for Refugees?
The Earl of Caithness: My Lords, the Japanese have done an enormous amount for the refugees, as the noble Lord will know. It was with Japanese money that a number of the planes were chartered in the first place.
Lord Mellish: My Lords, may I assume that the Minister has in front of him a list of contributions made by various countries including Japan? If so, can he say something about the contributions that have been made by some of our European colleagues, notably Belgium and Holland, especially as they have a lot of old chat in telling us what to do now?
The Earl of Caithness: My Lords, the noble Lord is absolutely right. I have a list of contributions from other countries. I covered that in an Answer last week. The Question on the Order Paper is about Japan.
Lord Annan: My Lords, does the noble Earl agree that we are somewhat lily-livered in our approach to this matter? It seems to me that the spectacle of the Foreign Secretary sitting with cap in hand waiting for pennies to be dropped into it, after which he touches his forelock, is not the way in which the Foreign Office should regard this matter. Do we not owe it to our country to make representations about the costs that we have incurred and the comparatively small amounts being paid by countries which have made no contribution at all to the fighting?
The Earl of Caithness: My Lords, I would agree with the noble Lord if it were true that the Foreign Secretary was standing with his cap in his hand ready to touch his forelock. That is not the true situation.

Scottish Fishing Fleet
2.42 p.m.
Lady Saltoun of Abernethy Lady Saltoun of Abernethy asked Her Majesty's Government:
Whether they will introduce a decommissioning scheme for Scottish fishing boats.
The Parliamentary Under-Secretary of State, Scottish Office (Lord Strathclyde): My Lords, we have

621
no plans to introduce a decommissioning scheme. The Government remain to be convinced that such a scheme would represent good value for taxpayers' money and would achieve the objective of reducing pressure on fish stocks.
Lady Saltoun of Abernethy: My Lords, I thank the Minister for that very unsatisfactory reply. May I ask him in the first place, why not? Does he accept that the Government are hated and reviled around the north-east coast of Scotland for the eight day tie-up scheme and the inflexible way in which it has been implemented? Will he put pressure on his right honourable friend to allow him to enter into discussions with the leaders of the fishermen's organisations with a view to devising an effective decommissioning scheme?
Lord Strathclyde: My Lords, I do not accept that a decommissioning scheme would either work to conserve the livelihoods of fishermen in the long term, or help to reduce the amount of effort of fishing on the stocks that are most under threat, in particular in the North Sea.
The noble Lady asked about flexibility on the eight day rule. I hope that she will recognise that we have introduced flexibility by offering fishermen an alternative to the eight day tie-up; namely, that they can fish with a 110 millimetre diamond mesh, rather than tying up for eight days or using the 90 millimetre diamond mesh which is the current minimum.
Lord Kirkhill: My Lords, does the Minister agree that the Scottish fishing fleet is more greatly affected by the EC mandatory tie-up scheme—about 380 vessels are involved—than any other fishing fleet in the Community? If that is so, will he tell the House why the Government are so implacably opposed to the EC-funded decommissioning scheme?
Lord Strathclyde: My Lords, the noble Lord is quite right in saying that it is the Scottish fleet that is most affected by the eight day tie-up regulation. That is because the stocks that are most under pressure, cod and haddock, are caught mostly by Scottish fishermen. We catch about 45 per cent. of the Community cod quota and 87 per cent. of the haddock quota in the North Sea.
On the question of European money for a decommissioning scheme, the European Community has no money; it comes directly from the taxpayer of individual nation states. As a net contributor to the Commission that money is rebated to us under the Fontainebleau accord. It therefore would cost the British taxpayer about £60 million to put in hand an effective decommissioning scheme. As I have already suggested, that is not good value for money.
Lord Stodart of Leaston: My Lords, I believe that I heard my noble friend mention the eight day fishing restriction as an alternative. If a fisherman's boat by any chance breaks down, and he dares to put his nose out of the harbour to ensure that the engine is
622
working, is that venture outside the walls of the harbour counted against the time that is left to him to go fishing? Is the whole day deducted?
Lord Strathclyde: My Lords, my noble friend is correct. The point of the eight day consecutive tie-up is that it is exactly an eight day tie-up at the harbour. What one used to be able to do in 30 days one must fit into the remaining 22 days in the month.
Lord Carmichael of Kelvingrove: My Lords, is that not distrusting a fisherman? If he has his engine repaired is he not allowed to take it out on trial to ensure that the engine is working? If he needs a specialised repair which is better undertaken in Peterhead than in his own port, does that count too? Is that not being too rigid with the scheme? Despite the statement made by the Minister in another place in the debate on 5th March, we have had no evidence from the fishermen that there has been any tolerance towards the fishermen with regard to bad weather or boat testing. Will the Minister expand on that?
Lord Strathclyde: My Lords, there is no question of distrusting fishermen. The aim of the regulation is to cut down on the amount of fishing effort. It is, for instance, to avoid fishermen testing their boats, or doing anything else with their fishing boats that they can do outwith the eight days that they are tying up.
Flexibility is important. One area on which we are keen to be as flexible as possible —and we have instructed the Fishery Protection Service to be so—is that of safety, so that fishermen do not feel obliged to go out (as I am sure none of them ever would) in a severe storm on the basis that they might get caught by the eight day regulation.
Baroness Seear: My Lords, is it not another argument for Scottish devolution?
Lord Strathclyde: My Lords, it is a European Community regulation. It has nothing to do with devolution.
Lord Kirkhill: My Lords, in the light of the Minister's disingenuous remarks about the Fontainebleau agreement, will he indicate briefly to the House when he believes that such an agreement may be operative?
Lord Strathclyde: My Lords, in the present conditions I cannot foresee a government-backed decommissioning scheme coming into force.
Baroness Strange: My Lords, will the Minister consider some form of payment to the fishermen of two boats which are currently banned from fishing for sand eels in the Shetland so that the ban continues in perpetuity and the sand eels survive?
Lord Strathclyde: My Lords, no, because those fishermen are quite capable of fishing for other species.
Lady Saltoun of Abernethy: My Lords, is the noble Lord aware that the alternative to the eight day tie-up scheme—that is using nets with a minimum mesh size

623
of 110 millimetres—is totally unrealistic for catches of whiting and haddock? With that mesh size one would catch no whiting and hardly any haddock.
Lord Strathclyde: My Lords, I am aware that many Scottish fishermen have difficulties in using a net with larger mesh sizes. I am sure that the House will be pleased to know that many fishermen in the United Kingdom have greatly welcomed the flexibility that we have introduced by the alternative 110 millimetre mesh and are in fact using that mesh.

TECs: Advertising Costs
2.50 p.m.
Lord Dormand of Easington Lord Dormand of Easington asked Her Majesty's Government:
What has been the total cost to date of advertising related to the training and enterprise councils.
The Parliamentary Under-Secretary of State, Department of Employment (Viscount Ullswater): My Lords, the total cost so far of advertising relating to training and enterprise councils is £11.1 million. This consists of £1.1 million spent in 1988–89 and 1989–90 for the initial launch of TECs; £5 million committed in 1990–91 for the current advertising campaign; and a further £5 million committed in 1991–92 to this campaign.
Lord Dormand of Easington: My Lords, why is there such a huge increase in TEC advertising at the present time? Is it not the case that many of the councils are not achieving their objectives and that the massive advertising campaign now being undertaken is little more than a cover-up of the Government's failure to deal adequately with training?
Viscount Ullswater: My Lords, I do not agree with the last part of the noble Lord's supplementary question. The timing is particularly appropriate in relation to the development of the training and enterprise councils. Approximately 51 TECs have become operational since April 1990 and a further 20 or so will become operational from Tuesday, 2nd April 1991. Therefore the timing of the campaign to advertise the TECs' existence and to promote training and enterprise could not have been better.
Baroness Turner of Camden: My Lords, is it not a fact that employment training is expected to lose 60,000 places this year as a result of cuts in funding? Despite the Minister's Answer, will that not result in redundancies among training staff, which will be disastrous for the future training programme?
Viscount Ullswater: My Lords, that is another question. The Question on the Order Paper relates to the cost of advertising TECs.
Lord Carr of Hadley: My Lords, does my noble friend agree that, since the TEC scheme has been perhaps the most important and valuable development in training in this country during my adult
624
lifetime, this is the right moment to market it with the greatest possible force and with the maximum resources?
Viscount Ullswater: My Lords, I am happy to agree with my noble friend. The TECs have been most keen to be brought to public attention at a national level so that there is an awareness of their existence and their role, in particular among employers. There is no point in having such help available if people do not know about it.
Baroness Phillips: My Lords, is the Minister aware that many teachers believe not only that the advertising is colossally expensive, but that one advertisement is sexist because the woman is portrayed as being stupid whereas the man appears to be full of information?
Viscount Ullswater: My Lords, the noble Baroness has her own way of reading things into what the advertisement states. I am grateful to her and to her noble friend Lord Dormand for bringing the TECs to your Lordships' attention. I am delighted to think that, whereas the advertising campaign has made its mark with the noble Baroness and the noble Lord, other noble Lords may now become aware of it.
Baroness David: My Lords, is the Minister aware that we have known of its existence for some time. Is he further aware that we are surprised that so much money is being spent on advertising the TECs when they are complaining of being kept short of money? Would not some of the money be better spent on the training?
Viscount Ullswater: My Lords, research carried out following the launch of the TEC movement revealed a low rate of awareness. It showed that when asked a direct question 5 per cent. of employers knew about TECs. However, with prompting and after a description had been read out 34 per cent. said that they knew about the TECs. After the current campaign we expect awareness to be between 60 and 70 per cent.
Baroness Carnegy of Lour: My Lords, does my noble friend agree that the TECs will welcome the announcement made yesterday by the Chancellor of the Exchequer in his Budget, that it will be possible for people undertaking training for vocational qualifications to set the cost of that training against tax? Does my noble friend agree that that will be of great help to TECs in developing their training base?
Viscount Ullswater: My Lords, I agree with my noble friend. The important point about the advertising campaign is that the Government, and from next year the TECs, are spending £2.7 billion on a training programme. It is important that knowledge about TECs should be improved.
Lord Hutchinson of Lullington: My Lords, the Minister referred to the knowledge of Members of this House. Is he aware that those Members who have been involved with the resettlement of offenders have heard, for instance, that NACRO has had to lay off 1,000 trained personnel since the establishment of the

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TECs and as a result of their failure to fund such organisations? Is the Minister aware that many noble Lords have learnt about TECs as a result of that information and not through advertising?
Viscount Ullswater: My Lords, that is an interesting question. 1f the noble Lord wishes to table such a Question on the Order Paper I shall answer it.
Lord Donaldson of Kingsbridge: My Lords, does the Minister remember that we have corresponded about the subject for months and therefore it is not a matter of an extra Question?
Viscount Ullswater: My Lords, I return to the central theme about the cost of advertising TECs. It is important that the available help that they are giving nationally and locally should be well known not only among employers but among employees.
Lord Dormand of Easington: My Lords, is it merely a coincidence that a similar increase in the advertising of training—one might almost call it an explosion — took place before the 1987 General Election? Have not the Government now, as then, simply failed to convince the country, the unemployed and the employers about the importance of training?
Viscount Ullswater: My Lords, the department's expenditure on advertising and publicity material has fallen since 1987-88 from £42 million to £27 million, with a budget for £17 million in the next year.

Voluntary Services: Funding
2.57 p.m.
Baroness Ewart-Biggs asked Baroness Ewart-Biggs asked Her Majesty's Government:
What is their response to the NCVO recommendation of an immediate rescue package of £30 million to reduce cutbacks in the voluntary service as a result of cuts in local government funding.
Viscount Astor: My Lords, there have been no cuts in the funding of local government from central taxpayer sources. The Government increased aggregate external finance for next year by 12.8 per cent. It is for local authorities to determine their priorities for spending.
Baroness Ewart-Biggs: My Lords, I am grateful to the Minister for that Answer. It will bring little comfort to the increasing number of voluntary organisations which are facing substantial or total reductions in funding. They are carrying out invaluable work in giving advice and providing housing and community care. Indeed, they are carrying out the increased role that the Government have wished of them. Will the change announced in the Budget yesterday enable local authorities to reinstate some of the funding previously given to voluntary organisations?
Viscount Astor: My Lords, the Government value highly the great contribution made by the voluntary sector and already support it on a large scale. In
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1988–89 government grants exceeded £2 billion. The Government will continue to provide funds for effectively-managed organisations that are providing worthwhile services which meet the Government's objectives. It is up to local authorities to decide which local voluntary organisations to support and they are best placed to determine local priorities.
Baroness Ewart-Biggs: My Lords, will the Minister please answer my question? Will the change announced in yesterday's Budget mean that local authorities will be able to reinstate some of the funds that they previously gave to voluntary organisations?
Viscount Astor: My Lords, I am not sure to which change in the Budget the noble Baroness is referring.
Lord Moyne: My Lords, is my noble friend aware that the allocation to the community volunteer scheme in Northern Ireland is being cut by more than 25 per cent? Does he appreciate the importance to the long-term unemployed of the practical skills acquired in working as volunteers and of the confidence given by the training in eventually finding work in that area where it is so tragically scarce?
Viscount Astor: My Lords, I am grateful to my noble friend. We appreciate the work carried out by all the voluntary organisations. However, as I said, it is for local authorities to decide how they wish to spend their money. They are best placed to choose how to do that.
Viscount Tonypandy: My Lords, will the noble Viscount bear in mind that the community voluntary service represents almost everything that is good in our national life; namely, the young unemployed who do not wish to waste their time and who are giving their services to help the old, the frail, the sick and the needy? There is a crisis in the community voluntary service. Will the Minister's department look at this matter and consider either the possibility of increased help for local authorities or advising on the matter?
Viscount Astor: My Lords, to put the matter in perspective, each year the Government announce the aggregate needed to spend in the following year to provide a standard level of service by local authorities. The total standard spending for 1991–92 is £39 billion —an increase of 19 per cent. over 1990–91. The aggregate external finance for 1991–92 is about £26.05 billion of that—an increase of 12.8 per cent. I shall certainly look into the point raised by the noble Viscount, Lord Tonypandy, and write to him.
Lord Jenkins of Putney: My Lords, is the noble Viscount aware that while it is true that local authorities determine their expenditure in an endeavour to remain within the limits laid down by the Government they have had to impose cuts? Is he aware further that those cuts have fallen heavily on the voluntary sector? In particular, some local theatres are in grave difficulties, which adds colour to the Question asked by my noble friend. Will the changes made yesterday enable local authorities to remove the imposition of such cuts?
Viscount Astor: My Lords, it is up to local authorities to balance their books and choose how they wish to spend their money. The voluntary organisations have a turnover of about £15 billion per year of which the Government finance centrally over £2 billion. The rest is raised from tax concessions of some £800 million and local government spending of over £600 million.
Lord Stallard: My Lords, is the noble Viscount aware that the crisis mentioned by a number of your Lordships as regards local government finance is a direct consequence of cuts to local government finance? A direct result of that is that the local authorities now face serious difficulties. Is the noble Viscount aware that voluntary organisations rely on local government for what is called their core funding?. That then allows them to request and receive matching funding from business, commerce and private sources. That core funding is now being cut and in some cases abolished altogether. My noble friend who asked the original Question is asking whether, following yesterday's announcement of relief for local authorities of some poll tax expenditure, the Government will permit local authorities to reinstate funds originally made available to voluntary organisations.
Viscount Astor: My Lords, the purpose of the new community charge grant announced yesterday is to provide for a reduction in the level of the community charge and not to boost local authority spending. The 1991–92 settlement provides already for resources which are adequate for realistic levels of spending. I said earlier, and I will say again, that it is for local authorities to ensure that their services are run efficiently. They must decide how to provide funds for the many voluntary sector organisations in their areas.
Lord Elton: My Lords, in order to clarify the present discussion and possibly to remove a misapprehension which is constantly repeated in this House, can my noble friend confirm that central government's subvention to local government has not been reduced and that the cuts do not consist of an intentional reduction by central government to a particular form of local authority expenditure because the local authorities remain free to make their own decisions?
Viscount Astor: My Lords, I confirm the point made by my noble friend Lord Elton. As he pointed out, the Government are giving more money to local authorities.
Lord McIntosh of Haringey: My Lords, perhaps the Minister will join with me in expressing pleasure at seeing my noble friend Lady Ewart-Biggs again on these Benches after her illness. Is he not at risk of misunderstanding the questions put to him about central government contributions to local authority expenditure? He has answered as to last year's changes but is it not a fact that over a number of years central government's contribution, as a proportion of local government expenditure, has declined considerably? Therefore, the anxiety expressed by the National
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Council for Voluntary Organisations is not answered in the way in which the noble Viscount has answered it.
Viscount Astor: My Lords, standing spending assessments include provision for a range of services which include the voluntary sector. We believe that the amount of money paid by central government to local government is sufficient for their needs.
Lord Skelmersdale: My Lords, is not the real problem not so much the amount of money going from central government to local government—or, indeed, from local government to the voluntary organizations—but the timing of the money going from local government to voluntary organisations, as was established by my noble friend Lady Blatch in response to a recent question? Have we not become perilously close to the equivalent of fixing a date for a rate when we should legislate for local authorities to give a date for the amount of money which they will give to charities in the following year?
Viscount Astor: My Lords, I am not sure that I understand fully all the points made by my noble friend. He may be referring to an area in London where local councils have not been able to agree a budget. We hope that they will be able to do so later this month.

Business
3.7 pm
The Lord Privy Seal (Lord Waddington): My Lords, as your Lordships know, yesterday my right honourable friend the Chancellor of the Exchequer announced in his Budget Statement in another place that legislation would be introduced to authorise payments of extra grants to local authorities and to ensure that community charge payers would reap the benefit. Subsequently, my right honourable friend the Lord President announced that it is proposed to take all stages of that Bill in another place on Tuesday of next week.
In view of the urgent nature of the legislation, it is proposed that the Bill should be taken through all its stages in this House on the next day; that is, Wednesday, 27th March. That will allow the Bill to be given Royal Assent before Easter. I appreciate fully that the procedure which I propose is unusual. However, I hope that your Lordships will accept that it is necessary that the decision announced should be implemented as soon as possible.
Lord Cledwyn of Penrhos: My Lords, the noble Lord the Leader of the House has made a significant business statement. Perhaps he will he rather more specific. He will be aware that on this side of the House —and I believe this is true of the whole House—we are always ready to respond to appeals for co-operation whenever possible. However, we are bound to be concerned when we are asked to process a Bill of this importance without detailed examination of it

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beforehand. As I understand it, we are dealing with £4 billion to £5 billion of taxpayers' money. We do not yet know precisely what the Bill is about.
For example, can the noble Lord tell the House, against the background of his right honourable friend's Budget and the points he has made in the statement, whether the Government regard this as a Bill which the Speaker will certify as a money Bill? We recognise that it is an attempt to reverse the immense damage done by the poll tax. Without being party political perhaps I may say that it is a Bill to seek public support in time for the election.
Having said that, my noble friend Lord McIntosh and others will be dealing with the Bill in detail on Wednesday. We shall reserve our position until we have read the Bill and studied all its implications.
Baroness Seear: My Lords, we on these Benches also recognise that it is an important change and needs to be handled quickly; on the other hand, it is a matter of the greatest importance. Once again important matters are being hurried through both Houses with totally inadequate preparation and time for discussion. It is not the way to deal with what is an important development in local government. Is it not possible for us to have more time to enable this matter to be dealt with in a proper parliamentary and democratic manner?
Lord Waddington: My Lords, I can assure the noble Baroness that there is no question of inadequate preparation. That will become obvious when the Bill is published tomorrow. I realise that this procedure is unusual. I hope that it will not happen very often. However, it would be unusual indeed if an important proposal of this kind were made in a Chancellor's speech, which involved the mitigation of the burden of the community charge on the charge payer, and Parliament did not respond rapidly in order to put into legislative force that which was announced by the Chancellor.
In answer to the noble Lord, Lord Cledwyn, I understand that it will not technically be a money Bill. However, it concerns financial matters which are principally the concern of the House of Commons. That does not mean that after the Bill has been published there will not be ample opportunity for noble Lords to peruse the same. There will be opportunity for noble Lords who so wish to move amendments in Committee.
Lord Stoddart of Swindon: My Lords, I am puzzled by the whole procedure. It seems to me that the Bill will be amendable. Although it seems to be a simple Bill at the present time, to many of us it could become a very complicated Bill. For example, as I understand it, the situation may be that nobody in Wandsworth will be paying poll tax, yet I, in Berkshire, will be paying £347. That is an arguable proposition which may need amending. Therefore we need a lot of time to consider these matters in Committee.
A further point arises in regard to Report stage. Having completed the Committee stage, how on earth are we then to have a properly constituted Report
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stage? I am an amateur in these matters in the House of Lords and I need some guidance. But I and other noble Lords will need to be pretty fleet-footed if in one day we are to table amendments between the Committee and Report stages. We shall then need to go to Third Reading, where, in this House, we are also able to table amendments.
The proposed procedure is an imposition on your Lordships' House and ought not to be accepted. I hope that the noble Lord the Leader of the House will reconsider the position and give us sufficient time to discuss the Bill in a proper manner. It may be all right for the Commons to follow that procedure. I hope that this House will not be treated in that way.
Lord Waddington: My Lords, the noble Lord says that it is an imposition on this House. However, the mitigation of community charge to the tune of £140 per charge payer will not be looked upon as an imposition by community charge payers throughout the country. These matters can be discussed through the usual channels. I am no expert on procedures in this House but I see no reason why amendments should not be tabled at Report stage and ample opportunity afforded through our procedures to allow that to happen.
I repeat what I said earlier. It would be very unusual if this House were not to see implemented in legislative form that which had been announced by the Chancellor in his speech, which clearly is of benefit to the community charge payer.
Lord Boyd-Carpenter: My Lords, perhaps my noble friend can clear up one point. If the Bill is only being considered in another place on Tuesday and in this House on Wednesday, when will it be possible to table amendments?
Lord Waddington: My Lords, the Bill will be published tomorrow; noble Lords will have an opportunity to see the shape of the Bill then. There will be no difficulty in noble Lords considering what improvements might be made to the Bill. After the Bill arrives in this place and Second Reading has been obtained, it will be possible to table any amendments which noble Lords wish to discuss.
3.15 p.m.
Lord Tordoff: My Lords, the matter is not as simple as the Leader of the House suggests. It is normal to take Bills through all their stages when they are matters of consensus. Noble Lords have no objection to doing that. This is a very different matter. It is not simply a question of shifting money from one pocket to another. It is a question of shifting the whole balance between local and central government. In that sense it borders on being a constitutional matter.
I understand that the Bill will be guillotined in another place; in other words, it will reach your Lordships' House without proper consideration in another place. It is our duty and our role to give due consideration to Bills as they pass through this House. We are proud that we can consider the detail of Bills

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late into the night if necessary, and that we send Bills back to another place in better condition than that in which they arrived in this House.
By going through this procedure we are being inhibited from carrying out our true role on a matter which changes the whole balance of democracy between local and central government.
Lord Waddington: My Lords, I cannot say whether there will be any Motion curtailing debate in the other place. However, it is well precedented for a Bill to be taken through all its stages on one day, both where such a Bill confers a financial benefit and, equally, where it concerns financial matters which are principally the concern of the House of Commons. It would be unusual if, as a result of the reluctance of your Lordships to allow this unusual procedure to be followed, additional burdens were placed on local authorities and ultimately on those who finance the local authorities. Local authorities would not be able to adjust their bills and pass on to the local charge payers the benefits they will receive as a result of the Chancellor's proposals.
Lord McIntosh of Haringey: My Lords, I do not wish to intervene on constitutional matters; my noble friend Lord Cledwyn has already covered that aspect. However, I wonder whether the House is fully aware of the range of political matters which must arise as a consequence of the Bill.
Whatever the Bill, as finally drafted, contains, major political and contentious issues arise which must be covered. I do not suggest that the noble Lord the Lord Privy Seal can answer today, but I ask the House to consider these matters. For example, will the Bill provide for the abolition of the minimum 20 per cent. poll tax which is now payable and which has proved to be financially, as well as morally, indefensible? Will the Bill contain a commitment to abolish the poll tax as a whole? Will the £140 additional revenue per head be on a flat rate basis to all poll tax payers with the absurd result that we see in Wandsworth and Westminster or will it be on some more equitable basis? Will the Bill be a Bill at all, or will it simply he a paving Bill providing for regulations to be made by the Secretary of State?
Those are the matters which the House will have to consider next Wednesday. Even though we understand from the Lord President of the Council that there is going to be a guillotine applied in another place, I remind the Leader of the House that there is no provision for a guillotine here. Even if we take all stages of the Bill consecutively, there is nothing to stop us tabling a large number of amendments at all stages to cover those important matters.
Lord Waddington: My Lords, I fully appreciate what the noble Lord has said. It is the obvious right of noble Lords on any side of the House to put down whatever amendments they wish. I repeat what I said before; namely, that it would be very unusual if this House were not to facilitate the passage of legislation which will confer a very considerable benefit on poll tax payers on whose behalf many noble Lords opposite have spoken eloquently over the years.
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I can answer very simply all the questions which have been posed by the noble Lord. The Bill will not deal with the 20 per cent. payment and it will not deal with the abolition of the poll tax. All poll tax payers will benefit from the reduction in the poll tax in the sense that the amount set by the local authority will in all cases he reduced by £140. There will be no regulation-making powers.
The Earl of Halsbury: My Lords, are we not making mountains out of molehills? What does it matter whether these matters are resolved before or after the Easter Recess?
Lord Waddington: My Lords, it does matter. Some local authorities have already sent out their poll tax bills; many have not yet done so. It would be an absurd situation if, as a result of the reluctance of your Lordships to pass this measure, the local authorities which had already sent out their poll tax bills were unable to correct them, and those which had not sent them out were to distribute entirely inaccurate bills, and in the knowledge that in due course the bills would be very much smaller.
Lord Dean of Beswick: My Lords, in defence of the action that the Government are proposing to take, the noble Lord said that Members of your Lordships' House, in considering their amendments, will be able to see the Bill tomorrow. The Bill, as printed tomorrow, may be amended by government-sponsored amendments in another place. The Bill that is produced will not be the one that comes to your Lordships' House, and it will have to be reprinted. We must bear in mind the various stages set out by my noble friend Lord Stoddart; namely, that there will be a Second Reading after which we can put down amendments in Committee; then there will be Report, at which stage we can put down amendments. There will then be Third Reading and we shall he able to make further amendments.
If there is any justification for your Lordships' House, it is as a revising Chamber. Will the noble Lord the Leader of the House tell us whether we shall then be adjourning for three specific periods in order to table amendments so that they can be listed, grouped and serialised in the normal manner? If we are not going to do that, how does the noble Lord expect us to cope with the situation? Is it not completely farcical that we are being denied our normal role?
Lord Waddington: My Lords, I do not see why arrangements cannot be made through the usual channels so that amendments can be put down. I have a great deal more respect for the ingenuity of the noble Lord, Lord Dean, than he seems to have himself. As a result of his experiences in another place, I know perfectly well that he will look at the shape of the Bill as presented in another place, and at all its permutations and computations. No doubt he will come up with some very ingenious amendments.
Lord Dean of Beswick: My Lords, the noble Lord has not answered my point. Will there be ample time to place amendments during adjournments if we so

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desire? I do not know whether I shall table any amendments despite what the noble Lord the Leader of the House said. What will be the situation? Will we adjourn? Amendments have to be studied to see whether they are in order when they are on the Marshalled List. To believe that we can simply come here and have a First and Second Reading, and then ride a cycle right through the Bill until it becomes law, is nonsense. If the Leader of the House does not know that, then he does not know his job.
Viscount Davidson: Order!
Lord Waddington: My Lords, I can tell the noble Lord, Lord Dean, that I may not know very much about this job, but I have worked out this problem. I see no reason at all why your Lordships should not adjourn for a period of time between the conclusion of the Committee stage and the Report stage to enable your Lordships to table any amendments.
Viscount Mountgarret: My Lords, I do not want to make my noble friend's task harder in this matter. I appreciate his problem very much indeed. But we have a responsibility to facilitate the passage of legislation, and urgent legislation at times. I am honestly and personally very concerned about this matter. There is a debate later today in your Lordships' House which gives another suggestion as to how the community charge might be levied. Some noble Lords may agree with the suggestion and others may not. The point is that I do not believe it is possible for any government, however good and however brilliant their members, to get an enormous measure like this through both Houses of Parliament and for it to be carefully thought through so that it will work.
This country cannot afford to make another mistake. An enormous mistake has been made in the way in which the community charge was set up. I am sorry to have to say that. I have always believed in the principle of the community charge but unfortunately the method has not seemed to be right. We cannot afford to make the same mistake again. I ask my noble friend whether he will go back to his colleagues in another place and perhaps convey to them that there may be considerable anxiety, certainly on the other side of the House, but I suspect also on this side of the Chamber. We should think whether what is proposed is the right thing to do. We may have to suffer the community charge for another 12 months; but if that is so, so be it. However, let us give time, and let us try to get the matter right.
Lord Waddington: My Lords, my noble friend is under a misapprehension if he believes that the Bill which we are now discussing has anything to do with the future of the community charge. There will be ample opportunities to discuss any proposals which may eventually be forthcoming for the future financing of local government. All we are talking about today is the proposal made by my right honourable friend the Chancellor of the Exchequer in his Budget speech that the scale of the community charge for the year 1991–92 should be mitigated as a result of a small Bill which will give local authorities
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sufficient extra funding to enable them to reduce the community charge by £140 per person. It has nothing whatever to do with the debates which will no doubt take place later concerning the ultimate funding of local authorities.
Lord Tordoff: My Lords, we have been speaking about tabling amendments in the course of Wednesday's discussions. Am I right in supposing that it will not be possible to table amendments at Third Reading?
Lord Waddington: My Lords, I think that is correct. I do not think that your Lordships will find that inhibiting in any way. There will be ample opportunities for putting down amendments at Committee and Report stages.
Lord Callaghan of Cardiff: My Lords, would it not be in the interests of the Government to discuss this matter through the usual channels? Otherwise, in the light of some of the issues which have been raised, there will be a procedural shambles. On the substance of the matter, does the noble Lord agree that although this matter has nothing to do with the local elections, the response of the electorate is likely to be, in the famous words of "Lord" Bacon, "I accept every bribe and am influenced by none"?
Lord Waddington: My Lords, I shall not comment on the last point made by the noble Lord. I can assure him that there have been discussions through the usual channels, although I fully recognise that this procedure is not one that we should like to become usual in your Lordships' House. I have discussed the matter with the usual channels, and there is general acceptance that this procedure has to be followed on this occasion.
Lord Sefton of Garston: My Lords, will the noble Lord the Leader of the House agree that a simple way out of the dilemma which the Government have forced themselves into would be to propose a small Bill which defers payments levied by local authorities this year in order to give both Houses of Parliament time to consider the proposals properly?
Lord Waddington: My Lords, with great respect to the noble Lord, I should have thought that if such a Bill were introduced, exactly the same constitutional arguments would be advanced as those that have been advanced concerning this Bill.

Business
3.30 p.m.
Viscount Davidson: My Lords, I should like to say a word about this afternoon's debates standing in the names of the noble Lords, Lord Donaldson of Kingsbridge and Lord Hooson. As the mover is allowed 15 minutes and the Minister should rise to reply not less than 20 minutes before the scheduled end of the debate, in the case of the debate in the name of the noble Lord, Lord Donaldson of Kingsbridge, this means that all other speeches should be limited to a maximum of 10 minutes, not nine minutes as stated

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on the list of speakers. In the case of the debate in the name of the noble Lord, Lord Hooson, the number of speakers is such that it is not necessary to propose a formal time limit, but I am sure that noble Lords will agree that it would conform with the spirit of these short debates if they would keep their speeches within the 15 minutes which applies to the mover of the Motion.

Disability Living Allowance and Disability Working Allowance Bill
Viscount Astor: My Lords, on behalf of my noble friend Lord Henley, I beg to move the Motion standing in his name on the Order Paper.
Moved, That the amendments for the Report stage be marshalled and considered in the following order—
Clauses 1 to 4,
Schedule 1,
Schedule 2,
Clauses 5 to 7,
Schedule 3,
Clauses 8 to 10,
Schedule 4,
Clauses 11 to 15.—(Viscount Astor.)
On Question, Motion agreed to.

Problems of Developing Countries
3.31 p.m.
Lord Donaldson of Kingsbridge Lord Donaldson of Kingsbridge rose to call attention to the problems of food shortage, the environment and over-population in developing countries, with particular reference to the present famine in parts of Africa; and to move for Papers.
The noble Lord said: My Lords, I should like to turn the attention of the House from the undoubted pleasures of political controversy to the horrors of real life. In particular, I want to draw the attention of the House to what I believe to be an impending famine of very large proportions.
The very idea of a whole community of all ages wandering from place to place in search of food and slowly starving to death seems to me almost unbearable. Yet there is a growing realisation that that is about to happen. There is a real threat of widespread famine for some 15 million people, half of whom are children. In this case, I am speaking in particular of the Sudan and Ethiopia, as they seem the nearest to total disaster, though not the only places very seriously at risk. All the main non-government organisations, who are the people doing the work on the ground, have made it starkly clear that existing measures will not be enough to meet the crisis by something not far short of a million tonnes of food. Nineteen Members of Parliament in the other place signed an Early Day Motion to this effect about a month ago. I thought it was time to ask the Government to tell us how they thought the crisis could be averted.
The first objective of this debate is therefore to find out where the necessary urgent action is to come from.
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The second is to discuss what can be done in a longer term way to prevent such disasters coming upon us once or twice every decade, not only in the Sudan and Ethiopia but in all the many developing countries which are at risk. I shall devote most of my speech to the first problem, appealing for immediate action, and I shall leave my colleagues and other noble Lords to pursue the second, the long-term and slow-moving effort to help people to help themselves.
I want to know how it can be that, with our technology so brilliantly demonstrated in Iraq, with our great wealth and with our ruinous agricultural surpluses, the West can allow the approach of famine to grow so dangerously near to these 15 million human beings. The Gulf War has taken our eyes off it. There seems now to be a lack of political will.
Let me try to give a picture of the two crucially affected areas. I have been briefed here by the Save the Children Fund, and as it is actually operating there, I think we can rely on its information. The area affected by food shortages in the Sudan is huge—some 400,000 square miles; in Ethiopia it is about 150,000 square miles. Both populations are what we used to call peasants—small men, in other words—earning, in good weather, a bare living from their few cattle and small patches of land, and in bad weather, half starving. When things get bad, they begin to move, wandering elsewhere in fruitless quest for food, ending up as displaced persons in temporary camps in Khartoum and other centres. The wandering is terrible for the children and pregnant women. In both areas infant mortality is high and rising, and deaths from starvation have already been recorded in the Sudan.
A second year of drought has followed poor harvests in 1989 in both countries. The harvest may fail totally through lack of rain in the Sudan, where the price of sorghum, the staple food—I think a kind of grass—is already up by 600 per cent. There are some 2 million people in make-shift camps in Khartoum; 1 million in the Red Sea hills; 2 million in the province of Darfur, where things are especially bad due to lack of drinking water as well as food; another 3 million further south and in Kordofan, with nearly 1 million wandering in from Ethiopia.
Ethiopia itself is no better, with 2.5 million in Tigre, a province controlled by rebels; 2.25 million in Eritrea, also largely controlled by rebels and also short of drinking water; and 1 million elsewhere, all on the edge of disaster. The latest news is that another million has just come in from Somalia—all in all this constitutes some 15 to 16 million souls in this same huge area.
On top of all that, there is steady fighting, which has been going on for years, in both areas. In the Sudan the civil war is concentrated in the south, where the non-moslem Sudan People's Liberation Army has been fighting the moslem government for the past eight years. In Ethiopia the government are fighting on four fronts—a 29-year old war against the Eritrean People's Liberation Front, which now controls most of Eritrea; a 15 year war against the Tigre People's

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Liberation Front in the drought stricken provinces of Tigre and Gondar; and two other continuing struggles further south.
The constant fighting makes local distribution far more difficult, expensive. irregular and dangerous. Meanwhile, cattle are raided and the workers are hindered in their growing, sowing and harvesting. But even so. the local distribution seems to go on pretty well. Both governments are glad to have food brought in and to co-operate. The basic organisation is done by the non-government organisations, known locally as NGOs, such as Oxfam, Save the Children Fund, CARE, CAF0D—which is the Catholic body—the International Red Cross and the Sudan Council of Churches, to mention only some of them.
These bodies co-operate seemingly without a hitch or a breath of competition, taking, if I may be tiresome for a moment, a liberal rather than a Tory view of the advantages of co-operation over competition. It is a wonder that anything gets delivered at all, and we must take off our hats to the NGO employees who are out there trying to organise transport in such appalling circumstances. But all parties assert that, if the stuff arrives, they will get it to its destination. Fuel is desperately short, particularly since the Gulf War. Much used to come from the Saudis, but the Sudan Government's strong support for Saddam Hussein makes any renewal uncertain. Perhaps the Minister can let us know whether this source is likely soon to be reopened.
Everything comes in through three ports, Port Sudan in the north; Assab in the south; Massawa in the middle. The latter was bombed last year but has been in operation since January. Their intake is limited. If supplies do not bunch and are properly spread they can be handled. So neither ports nor local distribution seem to be breaking down. The vital factor will always be the supply of food and its cost.
The main sources of supply are the United States surpluses and the EC surpluses. In 1989 the United States supplied 700,000 metric tonnes. It was expected to supply 300,000 tonnes this year; but it is feared that Sudan's support for Saddam may have halted this—at any rate there is no news of such a delivery. Once again, perhaps the Minister has some information. This year the EC supplied 110,000 tonnes, including 60,000 tonnes direct to Darfur via the Save the Children Fund. I understand that the food is available, and I am assured that all that is needed could be not only supplied but also delivered if the necessary cash was forthcoming.
The question seems to come down squarely to cash. Sudan is some 600,000 tonnes short of its requirements at the moment and Ethiopia is 400,000 tonnes short of its needs, making a deficit of 1 million tonnes between them. At a rough reckoning, it costs about £200 a tonne to buy, ship and move the food to its eventual destination. The cost before us is of the order of £200 million. If there are gaps and delays in its arrival. deaths will begin. I emphasise that the food can be made available, shipped, unloaded and distributed in trucks; and, despite the fighting and many other troubles, it will get there. But this will not
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happen without this huge sum. From where is it to come? The British Government have spent more than £9 million in emergency aid to the Sudan in 1989 and pledged £3 million in 1990. For Ethiopia the Government have committed nearly £13 million since the beginning of 1990, with a further commitment of £5 million. But these figures, though far from ungenerous, are chicken food in relation to the real needs. From where is the rest to come? I believe that, had it not been for the Gulf war, the powers-that-be would somehow or other have come up to scratch to save these lives. I hope the Minister will he able to say something encouraging.
Let me turn now for a minute to the longer term problem, illustrated, oddly enough, by a letter yesterday in The Times. Many people, some in your Lordships' House, have devoted their lives to helping one or other of the developing countries to solve their own problems. But judging from the particular crisis that I am considering today, little progress has been made. In 1984–85, 150,000 died of starvation in the Sudan. In 1988, 250,000 people died of starvation in Ethiopia. Now it is all beginning again. Fighting has paved the way for famine all through history, and today mankind seems as determined as ever to quarrel and kill. It is like the Hundred Years' War, with larger populations and greater killing power, but famines just the same. Efforts to improve general conditions are constantly set back by fighting. Improvements like terracing or water conservation are particularly vulnerable. Nothing is easier to destroy than a large water tank.
Nevertheless, we must keep on trying, and I hope noble Lords will talk about population and its very difficult problems; education; agricultural training; water conservation; and all the other measures which might in due course make these ghastly food migrations ending in death from famine at least less regular in their occurrence.
Above all, I want to hear from the Minister that he agrees that the relief of famine is an imperative international obligation that cannot be shirked, and that the Government will not rest until the full £200 million has been found, wherever it may come from; the food bought, moved and distributed; and the lives of so many saved. My Lords, I beg to move for Papers.
3.44 p.m.
Lord Cledwyn of Penrhos: My Lords, we are all grateful to the noble Lord, Lord Donaldson, for tabling this important and timely Motion and for his compassionate speech which has set the scene for our debate. There are many aspects to this vast problem and the noble Lord has touched on many of them. I should like to draw attention to a number of issues which I believe are central to any debate on the current famines haunting many African countries. These are: the massive scale of the problem and the inadequacy of the international community's response; the causes of famine; and, finally, I shall make some comments on the issues raised in the noble Lord's Motion and in his speech.
Exact figures are difficult to come by but all the agencies involved estimate that between 20 million

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and 30 million people are affected. Our own Government have estimated that 29 million people are affected. That is the equivalent of more than half the population of the United Kingdom. These people are spread over many countries in Africa, as the noble Lord, Lord Donaldson, indicated. In Ethiopia more than 6 million people need aid, in Sudan more than 7 million, in Mozambique 2 million, in Angola 2 million and in Liberia more than 1 million. Those are the principal countries affected. Yet others too need help. Somalia is in turmoil with refugees fleeing from Ethiopia. Poor harvests have also caused problems in many countries of the Sahel from West Africa to the Horn. We must be prepared to assist them all and we must be in the lead to ensure that the international effort matches the crisis.
Let us consider how the international community has in fact responded. After a decade of famines and uncertain harvests in the Horn, it could be expected that the international community would have been ready and waiting with a smooth emergency response mechanism. The fact is that agencies such as the World Food Programme report that pledges of food aid from donor communities have been inadequate and that the actual delivery of the food in some cases has been "woefully short". That is a depressing picture. Out of an estimated total of 4 million tonnes of food aid needed, only 1.7 million tonnes have so far been pledged.
We know that it takes months between food being pledged and food being delivered. United Nations agencies and non-government organisations emphasise that the crisis in Africa is taking place now, that food must be delivered urgently because time is running out for countless people, and yet major donors such as the European Community and the United States have still to make major commitments. While the ODA has pledged food early—we appreciate that—we could still do more, particularly in the EC where we have a major influence.
I am greatly concerned that the ODA is paying for this year's food pledges from next year's budget. I am even more concerned that the European Community may he prevented from responding by lack of funds. What is needed is a firm commitment from the Government and from other governments to provide new additional money to both the EC and the ODA. I urge Her Majesty's Government to take the opportunity of today's debate to announce new funds to meet these demands. The Chancellor made some concessions in his Budget but he did not seem to be aware yesterday of the magnitude of the problem we are discussing here today.
Let us turn to another aspect. Why have these famines occurred? Why does harvest failure lead to such distressing levels of suffering? The answer, of course, lies in the context in which the failures occur. An obvious underlying theme in all the principal countries affected is conflict. A less obvious theme is poverty. If communities and governments had greater access to wealth they would be less dependent on food aid. If conflicts could be resolved, then refugees could be resettled and harvests would not be disrupted. I shall give one example. In Mozambique and Angola
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the conflicts originating in the fight for independence, and subsequently fuelled by South Africa as part of its policy of destabilisation at the time, may be nearing their end as peace talks take place and, as we hope, apartheid is abolished.
The cost of those conflicts has been enormous. Mozambique is now among the poorest countries in the world. Ninety per cent. of the population live in poverty and 60 per cent. in absolute poverty. Two million people in Mozambique have been forced to leave their homes as a result of this conflict to become displaced people within their own country. Over 2 million people have become refugees in neighbouring countries. It is a tragic scene.
Perhaps I may now turn to another facet of the problem; namely, the Horn of Africa, which my noble friend dealt with. As noble Lords are aware, conflict in that area is much more difficult to unravel, although even here there may be some cause for hope, especially in Ethiopia. We know that the people of that country have suffered from a wickedly incompetent government over several years. However, changes in the Soviet Union could mean that the Ethiopian Government will receive less military aid. The establishment of relief roads, particularly through the port of Massawa, which was referred to by the noble Lord, has brought the combatants together and may lead to further talks taking place. If' there is any possibility of that occurring, I hope that the Government will do all they can to encourage such talks. Perhaps I may add that we warmly welcome the announcement by Mrs. Lynda Chalker on Monday as regards the additional food aid for Ethiopia to be channelled by Her Majesty's Government through Oxfam.
Conflict is both caused and exacerbated by poverty. Throughout Africa massive external debts, lack of appropriate aid, both in absolute terms and in quality, and over-rigorous implementation of structural adjustment packages have all prevented economic growth and development designed to alleviate poverty.
Obviously, Africa's development problems cannot be laid at the door of the industrialised world, but even allowing for the deficiencies of many African countries, it is appalling to note that the 1980s—the decade presented by the Government as one of growth and prosperity in the United Kingdom—should have become a lost decade for development in Africa. Throughout the 1980s the average income per person in Africa fell by 1.7 per cent. each year. Investment, exports and commodity prices fell thus weakening many African economies. That weakness was turned into economic disaster by huge external debts caused by massive lending by the industrialised world in the 1970s and high interest rates in the 1980s.
Noble Lords will be aware that debt repayments often equal or exceed export earnings. Throughout much of the last decade the net transfer of capital was from the South to the North. For example, in 1988 Africa paid the industrialised countries more than 21.7 billion dollars—that is more than the continent received in aid or in loans.

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The situation is slowly changing but crippling damage has been done. We have supported the Government's actions on official debt, in particular the "Trinidad terms" recently proposed by the Chancellor of the Exchequer. We also urge the Government to look at debts owed to commercial banks and multilateral agencies. It is extraordinary that United Kingdom banks receive tax relief in debt exposure, and yet do nothing about the debt itself. Last year—I shall be grateful if the noble Earl can confirm this fact—the Government lost more in tax revenue through these procedures than they gave in financial aid to the developing world. It would be farcical were it not so tragic.
I should now like to address the wording of the noble Lord's Motion which indicates that food shortages are linked to environmental degradation and over-population in developing countries. The issues of population growth to which he referred and the environment are principal themes of much policy analysis about third world development.
Time prevents me from going into great detail, but in conclusion I urge the Government to take the following action. They should provide new sources of funding for urgently needed food aid from the United Kingdom and the European Community and should urge other major donors to do likewise, especially our friends in the United States of America. Speed of delivery is vital if mass starvation is to be avoided. Almost as important is long-term support for poverty alleviating development. The Trinidad terms for official debt must be implemented. Commercial and other debt relief must also be introduced. Greater financial aid must also be provided. The economic and political reforms currently being undertaken by many African countries are expensive. I believe that we in the United Kingdom must take a lead in ensuring that fragile democracies in Africa must not be undermined through economic difficulties. As I said during our recent debate on South Africa, most important of all is the need for peace. The peace process needs all the support it can get.
In 1984 we all watched with horror as thousands of people were dying. On our television screens we watched the reports of what was happening. We said that it must never happen again. However, it will happen very soon unless we move very fast and on a massive scale. The Gulf war has just shown what can be done logistically. The battle for life and humanity is as challenging as the Gulf crisis. Voluntary organisations like Oxfam and Christian Aid do their very best and often put us to shame. Let governments and the international community respond with at least equal vigour and commitment.
3.55 p.m.
The Earl of Selborne: My Lords, I too should like to begin by thanking the noble Lord, Lord Donaldson, for giving us the chance to debate this issue today. I should like to confine my remarks to longer-term food security for Africa and specifically to
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the issues which we in this country should be addressing if we are to make a contribution to what clearly in the long run is an essential strategic policy.
What is so worrying about the developments over the past 20 years in Africa is that they have not just occurred in the countries which have been at war; even in the countries which have not been so directly affected the ability to secure basic food supplies seems to have deteriorated. We have already heard about many countries which are either at war or which, like Somalia, have suffered because of a war in a neighbouring country. Of course, the population projections suggest that even if there is no further disruption by war, the likelihood of many countries in Africa being able to provide even their basic food needs becomes ever less likely.
It must be evident that there is a need for a major international and co-ordinated research programme, probably stretching well into the next century. All of us in the developed and the developing countries must sit down together and work out just what resources can be brought to bear to deal with the matter and how specifically we may contribute.
I have a background as a farmer and I have been involved until recently with agricultural research in this country. I should like specifically to look at how our own agricultural research can contribute to the third world, and especially to Africa. However, I am not so naive as to imagine that agricultural research by itself can do anything very much. We have already heard that if a country lacks any degree of political stability or of economic management, then the best endeavours of any scientist will be disrupted. Therefore, we are looking at an important and perhaps key contribution, always assuming that a number of other parameters will be put in place. One has only to look quite close to home in Eastern Europe to recognise the fact that where science and technology have been present, there have nevertheless been food shortages simply because of the lack of incentive for producers or economic stability. Therefore, it is not surprising that this is such a difficult problem to solve in other parts of the world.
Again, I do not think that we in this country, or those anywhere else in the developed world, should assume that we can automatically set out the agenda. It will be for others who understand much better the resources in the countries concerned and those who understand the constraints of climate, of soil, of labour and of power. Those people will have a major role to play in setting out the strategic agenda.
However, all funding organisations—that clearly includes our own Government—having established the strategic objectives, will then have to determine together how they can best co-ordinate their resources. Again, it is most important to prevent ourselves being accused of what may be described as "scientific imperialism"; that is, the feeling that we in our more sophisticated research establishments have the ability to resolve problems which cannot be solved locally. That may or may not be right. However, it is certainly not an assumption which should be made. I

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repeat, it will be a partnership between the developed and the developing worlds. They will put together the strategic agenda.
I should now like to look specifically at the United Kingdom's contribution. It was salutary to note the evidence from the ODA which was given to Sub-Committee 1 of your Lordships' Select Committee on Science and Technology when it reported in January 1990 on overseas aid. That evidence drew attention to the reduction in resources in this country for overseas agricultural research which arose from the very considerable cuts in agricultural research for this country.
Sadly, when those cuts—I shall not seek to justify or criticise them for domestic purposes today—were made, no one stopped to ask whether there were implications for the ODA and overseas aid. That was a serious planning fault. We lost for all time many scientists with experience of overseas aid. With a little extra expenditure, or no expenditure at all, and a great deal more planning, that resource could clearly have been saved. I therefore hope that when we look at our overall resources for agriculture in this country we shall always remember that the ODA should be one of the sponsoring departments.
Within the ODA there is a natural resources division which has a 10-year research strategy which is reviewed every three years or so. It does some fine tuning or increases priorities at each review. It is good to see that the problems in Africa, for example, are to be given a higher priority. I feel that the ODA is handicapped by being very much a bystander. There arc the universities and the research councils in the shape of the ARC, and within agriculture we have the Priorities Board for Agricultural Research and Development. The ODA is never at the table when the major issues are discussed, and so the natural resources division for which I have a great respect nevertheless tries to put together an ad hoc policy for which it does not have command over the available resources.
Again I make the plea that the ODA be given a central role in planning the use of civic research resources within this country where they might have a relevance overseas. We need strong scientific leadership within the ODA. It must be proactive rather than reactive. I hope that the philosophy of bringing together the resources we have in this country be duplicated internationally. Those of us who are players in the agricultural research league throughout the world will all be pooling resources, determining for ourselves how we can help countries with special needs and consulting, with a degree of humility I hope, those countries to which we are offering help; and then, having determined the policy, we should be prepared to be extremely proactive and not wait just for things to go wrong.
4.2 p.m.
The Lord Bishop of Sheffield: My Lords, I am grateful to the noble Lord, Lord Donaldson, for his remarks about the contributions the voluntary organisations make in Africa. It is of their contribution in this country that I wish to speak a
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little. Over the years my commitment and interest has been in Christian Aid, which the noble Lord omitted from his role of honour. What he said applies to CAFOD, the Save the Children Fund, Oxfam, and, I am pleased to say, many many others.
The more we look at the situation in Africa and elsewhere, the more we see that the basic problem is poverty. It is poverty that causes famine to be a disaster. We consider the underlying causes of that poverty as apparently insoluble. Not least, there is the apparently insoluble continuation of civil wars which are a special worry. Faced with those apparently insoluble problems and the recurring cries of disaster and crisis, we are tempted to respond with the time-honoured skills of the ostrich: we do not want to know and we do not want to be told. Those of us who have been involved in making door-to-door collections for Christian Aid and similar organisations, realise that there is a growing apathy. We have, in the Biblical phrase, grown weary of welldoing; we feel that we cannot do anything, that it is not worth trying, and so we do not want to know.
The organisations about which I and others have spoken are important if only because they stop us giving up. They act like a goad—sometimes an unwelcome goad—to prevent us giving up the struggle to do good. It is easy, and often done, to scoff cynically at the readiness of the British people to worry about the peoples of Africa and the problems of distant nations and distant places overseas. Given a choice between a nation that cares for others and a nation that cares only for itself, I know which I prefer. Those organisations ensure that famine remains on the agendas of ordinary people, and especially the ordinary churchgoing people of this country. I am glad of that.
It is important not to underestimate the readiness of people to do good and to give up doing good. Debates like this, and every other opportunity which comes our way, must be seized to encourage us to continue making the effort to show our concern as human beings for our fellow human beings in acute distress. One of the reasons that tempts us to give up is the legend, so assiduously broadcast, that there is nothing that we can do.
The second of the important contributions that those organisations make is that they show us that there are things that can be done. It is astonishing —the noble Lord, Lord Donaldson, told us this—that at a time of civil war it is possible for the agencies, working as channels for food and longer-term aid, to help bodies such as the Eritrean Relief Association and the Relief Society of Tigre, in Eritrea and elsewhere, to get things done. There are the practical needs of ensuring that the starving are fed and providing the long-term skills which enable small farmers to grow nutritious local staple crops without overloading the land. They can give training, cheap loans, and support programmes designed to prevent the further erosion of the land.
In Eritrea, Christian Aid funds a terracing programme for four villages. What are four villages among thousands'? That programme enables hundreds of families to return to the homes they left

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during the 1984 famine. Similar work would enable thousands of other families to do the same if resources were available. We should not despair. On a small rather than megascale those programmes enable conditions to be created in which people do not starve. We should rejoice and continue to give our support.
It is perhaps in a third area that those organisations can make a major contribution in this country: in creating a public opinion that wants our Government to be in the forefront of taking steps to improve matters in the short term and the long term. A good deal has already been said about short-term needs. There is a need for food. The food exists in our Western world. It must surely be a government priority to ensure that the food reaches where it is needed and to see that the organisations of which I have spoken ensure that it is not wasted. They must ensure that all the legends about the food being dropped into the sea, and all the rest of it, have no foundation.
In the longer term, I cannot see why steps are not taken by the international community, working through the United Nations, to bring peace to that troubled area. Basically, it is not an area of starvation. Through the centuries it has been self-supporting in food and can be again, given peace. Arising out of the Gulf conflict we talk of a massive conference to bring peace to the Middle East. The problems of Africa are minimal compared with those of the Palestinians; that is, the political problems standing in the way of peace.
I should like to see high on the agenda of Her Majesty's Government some demand, some planning, some programme for a peace conference for Africa. In that way, somehow or other, political decisions can be taken, agreed to by the nations and peoples involved. Thus, there may be a beginning of the end of the problems of poverty and so an end to the problems of famine.
4.10 p.m.
Lord Cocks of Hartcliffe: My Lords, I was interested to listen to the right reverend Prelate. I followed him entirely until he deprecated the problems of the Horn of Africa as opposed to those of the Palestinians. The latter have received a great deal of attention over the past 20 or 30 years. Purely in numerical terms, it is a comparatively small problem compared with the tens of millions of people who at the moment face starvation in the Horn of Africa.
The Lord Bishop of Sheffield: My Lords, I apologise. What I meant by that reference to the Palestinians was that in this context I, as a layman, look at the problem of finding a settlement to the difficulties of Palestine which look almost insuperable politically. To find a settlement to the political problems in the Sudan and Ethiopia does not appear to me, speaking in this context as a layman, as of the same order of magnitude of insolubility. It was only in that connection that I made the reference on the spur of the moment to the Palestinians.
Lord Cocks of Hartcliffe: My Lords, I am obliged to the right reverend Prelate. For somebody from that
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Bench to speak as a layman is an entirely fresh experience in this House. I shall not proceed with the point, but I should like to communicate privately with the right reverend Prelate about it.
I feel privileged to speak in the debate because since the age of 25—and as your Lordships appreciate, that is fairly historic—I have taken an interest in what were then the backward countries, trying to draw the attention of the civilised communities to the problems of people who were in a desperate situation. I am glad that the vocabulary has improved from "backward countries" to "developing countries" then to "newly developing countries".
In the Horn of Africa we are faced with a quite desperate situation. The whole area is riven with internal disputes. In Somalia there is a dispute between the Liberation people and the government of President Barre. Similarly, in Eritrea and in the Sudan there is the persecution of the Christians by the ruling Al-Bashir regime. Sometimes I despair about the situation because when faced with the recurrent problems of drought in the Sahel and the shortage of food which people face, one is almost thrown back to Thomas Malthus and his bizarre idea that the population of the world would be controlled by disease and death through shortage of food.
In this civilised and advanced state of humanity, we cannot accept this. I return to the idea of the Tennessee Valley Authority in the United States during the inter-war depression. President Roosevelt looked at the problems which the country faced: the dust bowl where the soil had been eroded by over-cultivation. He put up the Tennessee Valley Authority as a pilot scheme for socialism in the United States if the project did not succeed. It succeeded and that means that the western world has the expertise to grasp the situation by the scruff of the neck and to resolve it.
I decided to speak in the debate when I heard the Whip announced last Thursday, but I was comforted by the article in today's Telegraph. I apologise to my colleagues on the Front Bench for quoting that newspaper, which mentions the Prince of Wales saying that:
"Fifteen million people in Africa face death because of an apparently unbreakable cycle of drought and environmental degradation".
I happen to support the actions of the Government in dealing with the recent situation when Iraq invaded Kuwait. The success of that military enterprise must be built on, but not in a military sense. I was brought up during the war and, to my great disappointment, soon after the war I found that the Russians, who had been our great allies all through it, suddenly became our enemies. I believe that Lady Churchill was the prime mover in the fund for aid to Russia.
Now, at last, the Russians have dropped out of the equation in the sense that they were always blocking proposals. We only made progress in the Korean war because they happened to be absent from the Security Council when the UN decided to support South Korea against North Korea. We now have a chance through the United Nations to tackle these problems on an international scale. I believe that in East Africa, with the problems of Somalia, Eritrea and the Sudan

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where there is a persecuted Christian minority, we should seek to intervene on an international scale. I believe that if we did that, it would be accepted because it would not be regarded as some belated colonial enterprise, but would be in the interests of the people concerned.
It is a coincidence but I do not feel it is inappropriate to draw attention to the Unstarred Question of the noble Earl, Lord Shannon, today about global warming. As we know, global warming involves anxiety about the changes in the climate because of the release of gases into the atmosphere through industrial and domestic burning. We now have a major superstructure of international agencies concerned about the problem and examining it. Why can we not translate it into an international superstructure, through the United Nations, to examine the whole subject of poverty in East Africa. It is not a coincidence. If we are concerned about global warming, it is because of the climatic changes which we have generated through our own efforts.
Also in the Sahel there is the spread of the desert. I am sure that problems there could he examined by scientists so that we could come up with an international solution to get out of the persistent cycle of drought, poverty and death for large numbers of people who are themselves virtually victims in the situation. I urge your Lordships to think seriously about the proposal. Those of us who are lucky enough to live in an environment which is comfortable and civilised have a great responsibility to those in other parts of the world who are not so fortunate.
4.20 p.m.
Lord Northbourne: My Lords, I, too, wish to thank the noble Lord, Lord Donaldson, for introducing this desperately important subject. Like the noble Earl, Lord Selborne, I wish to concentrate on some of the long-term agricultural aspects of the problem in the context of one small country in Africa, Malawi, which I know reasonably well. Although the climate in Malawi is not the same as that in the Horn of Africa, the problems of Africa south of the Sahara are comparable in many respects.
When I first went to Malawi about 35 years ago the country was covered with secondary forest and bush. In the bush there were patches of cultivation, and in certain areas there were tea plantations. However, the country was mainly covered by bush. It was occupied by Malawians who practised a shifting agriculture; that is to say, they had a rotation of crops which consisted of about three years of maize followed by about 25 years of bush. That rotation maintained the fertility of the soil and prevented it from being washed away.
The last time I flew over the highlands of Thyolo district in Malawi, it was possible to see small patches of emerald green denoting the tea plantations, but the rest of the countryside was entirely covered with food plots. The plots were poor, the soil was eroded and the crops were poor because the natural rotation was no longer possible. The peasant farmers are still trying to farm on the old system where nature renewed the
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fertility of the soil. However, as there is no more land to move to, they are stuck in one place and therefore the fertility of the soil degenerates rapidly.
When one looks down from the aeroplane, one sees around the tea estates a little spot of green here and there. The reason for that is that if one is an intelligent tea worker, one fills one's pockets with fertiliser before going home and one puts that fertiliser on one's own maize crop. Therein lies the clue to what we should be doing about that situation—by "we" I mean the Malawians, the West and the aid agencies—in supporting and trying to develop the agriculture of Africa south of the Sahara.
Over the years since the war we in this country have developed an agricultural system which, in terms of cereal crops, produces something like four times the yield per hectare that was possible in 1939. That has been achieved through the development of sustainable, high input, high output agriculture. Now the farming community is heavily criticised because it is alleged that that community produces too much. That is a matter for another debate, but I do not believe we are excessively overproducing. We are producing a little too much, but in Africa they are producing a great deal too little. What they need is a little of our medicine, and perhaps we need a little of theirs.
The problem is one of soil exhaustion, soil erosion and poorer and poorer crops. That situation leads to hunger and to the drift to the towns. I am not one of those who criticise our colonial regime, but I believe we made one terrible mistake in that we stopped the babies dying without thinking of the consequences. It is a simple matter of mathematics. If one moves from a situation where one baby in three was dying to a situation where three per thousand are dying, in the first 16 years there will he a rapid increase in population. After that period an exponential rise in population will occur as the additional babies start to become parents.
What is needed is, first, to develop a sustainable high input, high output agriculture which will produce, as far as possible, the food that is needed by the larger population. Secondly, and almost equally important, is the need for education and what the Americans call extension work; that is the need to pass on the information and to ensure that the peasant farmer not only understands how to do the job but is also motivated to do it. In this context—this is perhaps just an aside—we should not ignore the great importance of educating women as trainers. In many traditional African societies today it is still women who are responsible for farms. Therefore women are needed to train others how to manage the farms.
There is one other point on which I wish to touch this afternoon and that is the impact of AIDS. Officially there is no AIDS in Malawi. However, informed sources believe that approximately 30 per cent. of the population is HIV positive. That is a terrifying figure, and it is made even worse if we consider that the percentage is not evenly spread across the population. The worst affected are the middle classes and the educated people who are the natural leaders of the community. We must look ahead to a time when many of the natural leaders of

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the community will be tragically removed by this scourge, at the same time as the population explosion continues unabated among those who are least able to cope with the problems. There will be a desperate need for help from the rest of the world over the coming decade.
4.27 p.m.
Lord Hatch of Lusby: My Lords, one of the great tragedies of the Gulf crisis and war was that the attention of too much of the world was turned away from the crisis in Africa. As has already been said, many more millions are in danger of dying in Africa than the number of people who died during the Gulf war. I am grateful to the noble Lord, Lord Donaldson, who introduced this debate, for giving us the opportunity to discuss this matter. I entirely support those who have called for emergency food aid to be provided quickly and efficiently to those Africans who face death over the next few months.
However, I do not wish to address the House this afternoon on the emergency issue. Such emergencies have occurred before. Only four or five years ago the famine in Ethiopia was headline news. Those natural and human disasters are increasing during our lifetime. It is surely time that we looked at the root causes and attempted to find methods by which such disasters do not attack the peoples of our world. I wish to concentrate on that point this afternoon.
What are the causes of famine? As my noble friend Lord Cledwyn has pointed out, one cause of famine is war, and particularly civil war. Such civil wars are often fuelled by outside powers. My noble friend mentioned South Africa, but in addition to South Africa, the United States is still supplying arms to UNITA in the civil war in Angola. In the past the Soviet Union has supplied arms although that supply seems largely to have dried up now. Famine is caused by war and the environmental decline of many areas. Again, this is often accelerated by the depredations of outside logging companies.
Above all, there is the declining production of food by Africans themselves. I have been privileged over many decades to work with third world governments, particularly in Africa, along with people like late and greatly lamented noble friends of mine such as Lord Balogh and Lord Kaldor, and also with that remarkable French agronomist, René Dumont.
We have been trying for a matter of 40 years to get the African governments to concentrate on the development of their own agriculture and we have very largely failed. But that is not entirely their fault. I agree that there has not been sufficient conviction put into agricultural policies in African countries, but when they have tried to put them into effect they have met very grave economic hurdles, and it is the whole structure of the world economy which is responsible for these periodic outbursts of famine across the continent.
It has often been said, and was said, in particular by your Lordships' Select Committee on Overseas Trade five years ago, the Aldington Committee, that trade with the developing countries is even more important
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than economic aid for them, but also for us; that this is a joint venture, and should be seen as a joint venture; that we can profit by recognising that Africa is a part of the world economy and that Africans are our partners in the march forward towards a better world.
But this is not happening. In the last decade, exports from the United Kingdom to the developing countries fell from 27 per cent. in 1979 to 19.4 per cent. in 1989, and imports from the developing countries fell from 20.8 per cent. in 1979 to 14.2 per cent. in 1989. I suggest that, along with what my noble friend the Leader of the Opposition said in his opening speech, along with the transfer of resources, this is raising an immense barrier to the development of African economies and, in particular, to the development of their agricultural base, because they are forced by their position within the world economy to export primary goods whose price has declined severely during the last decade. They are forced to concentrate on exports to the neglect of their own economies and, in particular, of their own agricultural economies.
Moreover, right at the moment we are in the middle of discussions on the next GATT round, the Uruguay round. What is this doing for developing countries, particularly in Africa? Surely it can be seen that the whole debate on subsidies is leading to the dumping of agricultural products from Western Europe and North America into the developing countries. Yes, my Lords, that is essential as an emergency measure; but in the long term that is undermining the agricultural development of those countries, and they are being penalised and prevented in some cases from subsidising their own agricultural development.
I have spoken often in this House about the interaction between this country and developing countries, and I bring to your Lordships' attention one small matter which seems to me to illustrate in current form the possibilities that exist. The question is not just one of producing food. Also needed are houses. Those noble Lords who have been to the recent Ideal Home Exhibition may have noticed in one small corner a special project for the building of a £100 house made from tiles and building blocks. That is the kind of housing which could form the basis of industrial activity in this country, providing for the immediate needs of millions of people in the African Continent. It could provide employment here. It could provide shelter and the opportunity for economic development in African countries.
Finally, I should like to ask the noble Earl who is to reply two questions, of which I have given him prior notice. The first deals with the immediate emergency. To what extent have the British Government contributed resources above the ordinary ODA budget, which we know has been cut drastically over the past 10 years, to meet the immediate famine challenge in the African Continent, and when will those resources be available? Are they available now? Have they been provided? Or is it the case, as has been suggested, that they will not be available until after the end of the financial year next month?

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Secondly—and here, again, I come back to something that I have often mentioned before in this House—what is the British Government's contribution this year to the International Fund for Agricultural Development? That is the most efficient and most constructive agency of the United Nations, providing the basis, the investment and the infrastructure for the development of agriculture in the developing countries. It has always had a tiny budget which is a scandal, but I should like to know what is Her Majesty's Government's contribution to the budget this year. What is that budget, and how do the Government see it as the base for building the future collaboration between this country, and the African countries, which is essential for our future and for the future of the Africans?
4.38 p.m.
Baroness Robson of Kiddington: My Lords, I too thank my noble friend Lord Donaldson for introducing this subject for us to debate. I particularly thank him for his analysis and request to us in this country and the world to help combat the famine in Sudan and Ethiopia. I do not know how many noble Lords saw the programme on breakfast television this morning of grain arriving in Port Sudan. My noble friend seemed reasonably relaxed about the distribution problem in Sudan. I am afraid that I do not feel quite as optimistic as he does.
The distance that this grain has to be transported is, on the average, 2,400 kilometres away from Port Sudan. That is about 10 days' drive with a lorry. We are approaching the time when it will soon, we hope, start raining in that part of the world, but then the lorries are often no longer able to get through. If I were one of the starving people in Sudan and Ethiopia I would ask myself: how is it that the United Nations coalition was able to move equipment and hundreds of thousands of men into the Gulf in no time at all? I ask the Minister: is there not a possibility that in order to help these people we could use heavy load-carrying helicopters and all the other equipment that could reach the starvation area in time to combat the famine that is going to take place? I know that it might be difficult to negotiate such an arrangement but it must be considered .because if the aid is taken by road, I believe that it will not reach the people in time.
In a few words I want to concentrate on the over-population problem. I had a very salutary experience some years ago when I was in India and had the privilege of taking tea with Mrs. Indira Gandhi. That was a couple of months before she was assassinated. She was tremendously concerned about the over-population of India. She said, "Do you realise that when India was independent we had 375 million people?" At the time I was visiting her, which of course is now some years ago, the population of India was approaching 790 million. Mrs. Gandhi said, "If we had been able to stabilise our population we would have been the economic miracle of the world." That is true. India has an industrial economy and would have been able to produce an economic miracle; but over-population destroyed that.
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I believe that the place of women in society is really at the heart of development and of population control in Africa as well as in the rest of the underdeveloped world. On the whole, the women of these countries are responsible for subsistence agriculture, for bearing and raising the children and for doing all the domestic labour. For that they get virtually no support and, as a result, most of the time their own health and that of their children suffers. It also results in population growth, high child mortality, poor agriculture and a deteriorating environment. While the only way that a woman can assert herself in these societies consists of having more children than the woman next door the problem will not go away.
What is needed is a complete re-think to make investment in women a development priority. First, there must be adequate availability of family planning. It has been estimated that during the next decade 350 million couples will wish to use contraceptives. Can we supply and distribute what is needed? A much greater involvement by men in the problem of family planning in these societies has to be encouraged. Not enough attention is given to this by the aid societies. Persuasion must be increased and it must be proved to the men that the health of mother and child can be improved if they themselves take an interest.
Secondly, the improvement in the provision of education for girls, with a consequent increase in employment opportunities, would among other things help to postpone the age of marriage and so reduce the pressure on population. I think all of us are aware of the tremendous benefits that would follow from improved education possibilities for women. But that would not be of immediate help for certain types of women in the underdeveloped world. Something must also be done for the enormous number of women who live in remote villages far from any improvement in educational opportunities in the normal sense. For many of them it will come much too late and will not improve the situation. They need help now. We need to make certain that integrated into the provision of family planning and mother and child health care is provision for craft education. That would enable the women in the villages for the first time to become at least partially economically independent.
I saw a wonderful example when I was in the Gambia, where a new unit for the provision of child care and family planning was integrated with the opportunity for women, when they came into the clinic, to be taught certain crafts that they could perform in their own villages. That was wonderful and it was very helpful, but that kind of provision is no good unless at the same time you help them to market the produce they make. The women often live a very long way away from a centre where they can market their produce. Therefore, a marketing exercise is also needed in order to help them.
A change of attitude is required not only on the part of the developing countries but also on the part of the financing countries and the lending institutions. As the noble Lord, Lord Cledwyn, pointed out, partly because of the enormous burden of servicing their debts to the developed world 37 of the poorest countries have, sadly, cut their health spending by 50

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per cent. and their education spending by 25 per cent. in the past four years. That is a long way from improving the standard of health and education for all; but particularly for women.
Improving the services for women will obviously not solve all the problems of the underdeveloped world but I believe it would be one of the most effective ways of promoting a reduction in the growth of population and that it would help in the development of sustainable growth in these economies.
4.48 p.m.
Lord Thurlow: My Lords, first, I strongly endorse the appeals that have been made by the noble Lord, Lord Donaldson, and others, to Her Majesty's Government to do everything they can to support the international initiatives to seek emergency urgent action to relieve the immediate famine prospects that are on the horizon, and which are indeed already facing East Africa. I do not propose to develop that particular aspect but to concern myself with the long-term problem of the causes of shortages in Africa and the possibilities for solution.
May I say at the outset that I do not endorse the view of the right reverend Prelate that the problems of poverty in Africa are insoluble. I believe that we can see our way to helping the Africans to solve their own problems if we can only pursue the right strategy and supply the relatively modest resources that may be required to prime the pump. I am sure that there is enormous unexploited potential in Africa, south of the Sahara, to grow vastly greater quantities of food. As has been said, production of food has been declining for a variety of reasons which can be identified, but the physical potential of soil and climate make it possible to visualise, with the right co-ordination of action, enormous increases in the capability.
The various factors to which noble Lords referred —food production, health, family planning and debt relief—all interact. At this stage, as the noble Lord, Lord Northbourne, emphasised, the basic problem is food production. There can be no advance in Africa south of the Sahara without an enormous increase in food production. But how can that he achieved? It certainly cannot be achieved by relying on massive increases in international aid. I warmly support the various appeals that have come from this House in the past year and more for greater resources to be given to the Overseas Development Administration. But overseas aid is only a means to prime the pump. The problem of production in Africa has to be solved, can be solved and I hope will be solved by the Africans themselves.
If international aid cannot do more than prime the pump, how is the rate of increased production to be achieved in a time-scale that is relevant to the danger? The population surge is such that Africa south of the Sahara is rushing toward a stupendous disaster. One of the greatest authorities on population, who for a time served as head of the population division of the United Nations, has predicted that with present trends the population of Africa will reach between 2 billion
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and 4 billion in the 100 years between 1950 and 2050. Already the first 40 years have gone and the trend certainly justifies the prediction. That gloomy forecast may even be too conservative. Judging from the rates of increase of population with which I have been acquainted in countries in Africa in which I have served, and which I have visited in recent years, I believe it possible that the rate of increase could be even faster. Africa may be moving toward a population of 5 billion by the year 2050.
Is it conceivable that such a population could be fed? If so, how? What is the means by which the present states of inertia can be overcome? The problem of food production is basically one of getting through to the peasant farmer how to utilise and apply the results of research which has already been done. The means have already been achieved to grow five blades of corn where at present one grows. So the problem is one of a kind of adult education.
In the past the vehicle for bridging the gap between research and the peasant farmer was the Agricultural Extension Advisory Services, which is an expensive piece of bureaucracy, though that is rather a pejorative term. The organisation does magnificent work but it is a salaried service and the resources are not there to multiply services of that kind on a scale which can meet the needs of the time-scale.
Is there any other way? I venture to believe that there is. There has been a significant breakthrough —an important innovation—in the field of accelerated education. It is the achievement of this country. It is still pretty well under wraps. The research is being conducted at various universities. At the London Business School important work is being done to examine how new methods of crash, accelerated education can be applied in various fields; for instance, in relation to the problems of producing new skills in Eastern Europe to cope with the transition from a command economy to freedom. There is research into management training and also—this is very important—in relation to the possibility of finding a vehicle for crash education in Africa which may bridge the gap between the results of research and the practices of the peasant farmer.
Is that just a utopian visionary dream? No. Serious work is being done. I mentioned the London Business School but there is also a new unit in the University of Glasgow and specialised work being undertaken at the University of St. Andrews. The research is going ahead and the intention is to apply it to pilot projects in Africa at a comparatively early date. If the pilot projects are validated I believe that this will be a form of new adult education which can spread very rapidly throughout Africa.
I shall not try to describe to noble Lords how the new system works. This House is not a school or university. However, in a nutshell, one can look forward to a time when in communities and villages in Africa, with the full support of the whole community, there will be units for relatively short courses covering mainly two separate aspects of this education: first, the agricultural and pastoral methods of the peasant farmer and, secondly, the education of women in hygiene, appropriate technology and family planning.

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I believe that that is the way ahead. When the research has reached the point of asking for support in its application I hope that the necessary support from Her Majesty's Government will he forthcoming.
5 p.m.
Lord John-Mackie: My Lords, from what we have heard in the debate it is obvious that we are indebted to the noble Lord, Lord Donaldson, for raising the subject. In my opinion it is one of the most important that faces the world.
I wish to go back to 1930. With my father, I took over a farm on which the previous occupant could not sell his potatoes. He left me to get rid of them. I used a few tons to feed some cattle and the remainder I drove into an empty quarry hole. At the same time my elder brother started farming a dairy farm. He could not sell all his milk; he was pouring it down the drain. I visited Glasgow to buy cattle. From the station to Merklands Wharf, where the cattle were sold, the bus stopped twice, each time at a long queue at an employment exchange. Badly-dressed and obviously badly-fed men were waiting to collect, I think, 16 shillings a week to feed their families. I wondered, "Could they not use my potatoes and my brother's milk?" It made me feel that something was very wrong. It was the first time that I took an interest in public affairs.
Like the noble Baroness, Lady Robson, I watched the Nine O'Clock News on television this morning. A portion of it was devoted to Jonathan Dimbleby's visit to the Sudan. It was pathetic to see what was going on there. He showed photographs of a woman who walked three miles to fetch a bucket of water to steep poison cherries in for a week to feed her children. Imagine that on the scale on which it exists, my Lords. Not many weeks ago I watched a programme about another area which showed children with arms not much thicker than my thumb. The situation must be looked into.
This morning, I received a letter from the Scottish NFU enclosing a document which stated:
"Dilemma. So we have a real dilemma: too much food is being produced".
I was watching the programme yet reading that too much food is being produced. I thought then, as I did 61 years ago: something is wrong. An hour later I picked up the telephone and put my name down to speak in this debate.
Not long after I came to the House in about 1981, the noble Lord, Lord Renton, spoke in a debate on this subject. I tried to look it up in Hansard. He spoke about teaching the thousands of people then starving to grow their own food. That is essential; it has been much referred to. He also made the point that we should be getting the food to those starving thousands. However, what impressed me—the point was made 10 years ago—was his emphasis that both are long-term problems. How right he was. The noble Earl, Lord Selborne, and the noble Lord, Lord Thurlow, made that point, too: it takes a long time to educate under-developed countries in how to increase their food production.
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Ten years later we are still not growing enough food and millions instead of thousands are starving. The noble Lord, Lord Thurlow, may have been a little optimistic, but there is no doubt that with education of the people, with modern techniques and so on—he stated that it takes a long time to educate on such matters—food production in such countries as Africa, with a reasonable climate, good land and so on, could be increased. Those countries could do as we have done: since 1930 we have more than tripled food production in this country. We should not be too pessimistic, although it is a long-term programme.
I realise that a huge population explosion has upset plans for food production in some countries. The noble Baroness, Lady Robson, mentioned India in particular. Other noble Lords have given figures. The world undoubtedly failed to stop that enormous population explosion. Some figures recently given by experts have suggested that by the end of the century world population will be 8,000 million and that by 2020 the figure will be 10,000 million. I am not an expert. I do not know how one educates in birth control. However, we should assist in that effort in every possible way.
Whether or not we can help in that area, we can produce more food and get it to the pathetic starving men, women and children whom we have seen on television. It seems to be the women and children who suffer more than the men. The noble Baroness, Lady Robson, was right to emphasise the importance of attending to the rights of women.
How do we get the food to them? Reference has been made to Oxfam, War on Want, Christian Aid and other bodies, including the specific organisation mentioned by the right reverend Prelate. I refer to it not so much because the right reverend Prelate mentioned it but because if my wife knew that I had missed it out I should be in dire trouble. I agree with the noble Baroness, Lady Robson, about getting the food to the starving people. There are numbers of ships lying rusting in ports which could be used to get the food to them. An enormous problem is distance. Jonathan Dimbleby emphasised it this morning. The food has to be transported distances of 1,200 miles on lorries. As the noble Baroness mentioned, there are plenty of transport planes to carry bombs and death-dealing equipment weighing hundreds of tonnes. Could those planes not be used on a life-saving mission for a change? I do not know about the airfields situation but there are transport helicopters nowadays. When one considers what money is spent on, something along those lines could be undertaken.
It has been asked, "Who will pay us for this?" Quite frankly, I suggest that if we undertake a major effort to help the starving people immediately—there is no sense in fiddling about—we should not worry about who will pay us. I suggest that salving our consciences would be ample payment.
5.8 p.m.
Lord Walston: My Lords, like all other noble Lords who have listened to the debate, I am most grateful to the noble Lord, Lord Donaldson, for giving us the opportunity to take part. As he and the noble Lord,

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Lord John-Mackie, pointed out in a most moving way, the situation in the Sudan, and more particularly in Ethiopia, is horrifying and terrifying. The fact that I shall not deal with that aspect does not in any way mean that I do not share their very deep concern. However, I believe that sufficient has been said on that subject to bring home to all of us the situation in those and other countries.
The noble Lord, Lord Cledwyn, pointed out that a similar situation exists in many other countries; for example, Mozambique, Angola and Liberia. The exacerbated reason for that is the absence of peace. In all those countries there is a war of one kind or another which has made the production and distribution of food virtually impossible in many areas. I was particularly struck by the analogy made by the noble Lord, Lord Donaldson, with the Hundred Years' War, when the whole of Europe was in turmoil. It was almost impossible for farmers and peasants to produce food and when it was produced it was almost impossible for the town dwellers to use it. That is happening today in many parts of Africa but on a much larger scale. As the right reverend Prelate rightly pointed out, peace is an essential factor in bringing these appalling crises to an end.
I turn to the long-term aspects of the problem. Even in peaceful countries in Africa hunger will continue to exist unless there are drastic reappraisals and alterations to their situations. First, it is essential that we should do what we can to instigate the redistribution of wealth. Far too much wealth is concentrated in the developed countries and there is far too little in the developing countries. They do not have the money to buy food even if it is produced. Nor do they have the money to provide incentives, including raw materials, to the farmers to grow the foods of which they are capable. The developing countries have an appalling burden of debt. They borrowed money from rich countries at high interest rates. They must now repay that money and therefore cannot spend it on their own countries.
We in this country place an emphasis on the market economy. If one wants more food produced one must offer more money to its producers. That will cost money and although it is difficult to achieve it can be done. However, the answer is not so simple when one is dealing with people who are accustomed to a subsistence economy rather than to a market economy. I give your Lordships an anecdote from Malaysia. A new variety of rubber tree had been developed and the authorities wanted its growth to be spread among the peasant rubber planters. A meeting was held in a remote area and a distinguished scientist spoke to the people. He was warned that the whole village would follow one old man who would be sitting in the front row. If the speaker could get the old man on his side he would win his case. Therefore, he directed his remarks to the old man who smiled and nodded his approval. At the end of the speech the old man rose and said that he was sure he could speak for the whole village which he said was grateful to the distinguished gentleman for travelling such a long way to explain how to produce more rubber. The old man
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said that he would follow the advice because he would need to grow only half the number of trees to have the same amount of income. He would do that and have a more leisurely life rather than a richer life.
Until we change such mentality we shall have an uphill struggle to get more crops grown. We have plenty of knowhow; for instance, we know about terracing, water conservation, new varieties and so forth. However, not many experts know about the people who will implement such knowhow. We must understand the people.
I give another anecdote to illustrate the importance of my argument. The Commonwealth Development Corporation decided to set up a new oil palm plantation in certain parts of Papua New Guinea. There were two sources of extra labour—the coastal people and the mountain folk. Both groups were in need of more work. The people were happily installed and they began work. The corporation decided to give them an incentive to work harder. They approached one or two of the bright young people among the mountain folk and suggested that if they made use of new techniques and used new varieties of plants they could make more profit and would go up in the world. That incentive was avidly accepted by them and worked extremely well. The corporation put the same proposal to the coastal folk but it was met with a complete refusal. The reason was that the coastal folk lived as a community and no one wished to be a leader or to be richer and more prosperous than the other members. They all wished to share and share alike.
Until one knows the people, what makes them tick and what incentives to offer, a great deal of effort will be wasted. I urge upon all those concerned with overseas development to appoint to the extension services not only people with diplomas in agriculture and a knowledge of terracing, fertilisers, disease control and so forth but also people with experience of local customs and local habits. It is not easy to find such people. In the old days the district officers were admirable at such tasks but now, unfortunately, they no longer exist. However, if we can appoint such people it will be possible to institute and promulgate a whole variety of basic reforms and provide incentives to grow more. Basic reforms such as the privatisation of the land and enclosures led to a great upsurge in agricultural production in this country. We must endeavour to get people to realise that cultivating their crops well instead of wasting the land and eroding it will increase the productivity of the land and its long-term potential.
I urge a long-term policy that concentrates on the technical aspects of agriculture and does not forget the enormous importance of knowing what is an incentive to the grower to produce more food and to follow eagerly and happily the advice of the scientists.
5.20 p.m.
Lord Rea: My Lords, listening to the noble Lord, Lord Walston, tell the story of the elder in the village in Malaysia who felt that he would rather have twice as much leisure than twice as much rubber, I am not

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sure that he does not have the right idea. Perhaps we should learn from him rather than take up the position that we can teach him a lesson.
From the wording of the Motion, it may be held that population pressure is the main reason for the hunger in the developing world. It is easy to blame food shortage on overpopulation, especially in the Sahel and Horn of Africa where there is a precarious ecological balance. In those circumstances the felling of trees and the increased cultivation of marginal lands is associated with the degradation of the environment and "desertification"—I prefer the word "desertisation". To blame all that on overpopulation would be to oversimplify the problem.
As the noble Lord, Lord Northbourne, pointed out, at the time of colonisation of most of the tropical world, populations maintained their numbers at a stable rate with almost maximal birth rates which compensated for very high death rates in infancy and childhood due to endemic tropical diseases, particularly malaria, on top of the normal range of universal diseases such a diarrhoea, measles, pneumonia and so on. Many societies lost half their children before they reached the age of five. For a variety of reasons, northern technology has cut that death rate by 50 per cent. or more even without easily accessible health services. That still leaves many areas —mostly in Africa—with child mortality rates of 15 to 20 per cent. For that reason, there is still a strong desire among women to have large families to ensure the survival of at least some of their children. There are other social, economic and religious pressures tending in the same direction.
For millenia in Africa those with large numbers of children were considered fortunate and favoured by the gods. The work of those promoting family planning in the teeth of such deeply held beliefs is unlikely to succeed. Many noble Lords may have received a briefing about family planning in Ethiopia from Population Concern which describes the reasons for local resistance to family planning.
However, looking at countries or states with very low per capita income, some have succeeded in dramatically reducing fertility rates in the space of one generation or less. I point to China, Cuba, Sri Lanka and Kerala, a state in the south of India. There are four main similarities in these otherwise very diverse cultures: first, a universally available free primary medical care service which has led to greatly reduced infant and child mortality; secondly, major efforts to eliminate illiteracy, especially that of women; thirdly, a recognition of the status of women and the realisation that that needs to be upgraded so that women can play a greater role in the life of the community; and fourthly, a more equitable land tenure system than in most of the developing world. Family planning facilities are available as an integral part of the primary health care service.
Rapid population increases are not the only—or indeed the main—reason for overcultivation and environmental degradation in the third world. Other factors also create the poverty and land hunger which perpetuates malnutrition, high child mortality and
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high birth rates. That makes for a vicious circle. As I said, high child mortality makes women want to have more children, hence large families.
As my noble friend Lord Hatch pointed out, development policies to date have concentrated on major projects which have helped to increase cash crops for export. They have not been of much help to small farmers growing food crops for local consumption; quite the reverse. The farmers and their families have often been displaced from the best land, low prices have been fixed for their produce and cheap food has been imported from the north. Africa, once a food exporter, has become a net food importer.
World Bank and IMF loans to countries with economic difficulties—possibly because of gross mismanagement—have until now insisted upon adjustment programmes. These have made serious inroads into already meagre social programmes which have been supporting food subsidies and health and educational facilities. It is true that recently the World Bank has realised that the measures may have gone too far. However, I have not read—I should be interested to know if other noble Lords have—of any loan where a condition has been the maintenance or augmentation of provision for the social sector. To do that would ensure a wholly logical investment. It would provide the basis, through education, for diversifying the economy and, through better nutrition and health, lay the basis for health and family limitation.
As several noble Lords have pointed out, African countries must run in order to stay still and most are moving backwards. Some 286 billion dollars net has been transferred from the developing countries of the south to those in the north in the past decade in debt repayment and increasing interest rates. There seems to be little hope that most non-oil African countries will ever work themselves out of the debt trap. That is a disastrous prospect for Africa and not much better for us since those countries have no foreign exchange with which to buy our goods and services, a point brought out clearly by my noble friend. There is now a growing awareness that the debt trap must be ended. But how is that to be done?
The problem is explored most constructively by Susan George in her book A Fate Worse Than Debt. To put her suggestion in a nutshell, the debts of the poorest countries—mainly those in Africa—should be transferred to development agencies within each country and the debt should be paid off to those agencies in local currencies within a 10 to 20-year period.
The development agencies should be internationally overseen using such bodies as the International Fund for Agricultural Development and also local and international non-government agencies. Susan George calls that the 3D solution—debt, development and democracy. In that way, funds could be channelled to help local farmers through loan schemes to improve land, to buy fertilisers and to build small

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dams and water development projects. Non-government organisations and international organisations could be involved. There are enough examples of good local development schemes in Africa to show that that is by no means a pipe dream.
A crucial aspect of the problem is the impact of military spending on civil war in Africa. That has been made more devastating by the export of arms by both the East and the West over the past two decades. Not only in the Middle East, but universally, arms sales must now be controlled and restricted.
The overseas debts of sub-Saharan Africa stand at about £100 billion. When the total cost of the eight-month Gulf war—taking into consideration the loss of oil, the rebuilding of Kuwait and the cost of putting out the oil fires—has been calculated, it will probably amount to twice as much as that. I do not believe that anyone has yet done the sum.
It should surely be possible over a period of several years—not months—for the wealthier nations of the world to invest the same amount of money in rescuing a whole continent from increasing poverty. At the same time it would give our industry a shot in the arm. To provide the £100 million necessary to avert the current famine crisis should be possible when we and the United States were able to go round cap in hand and obtain £100 billion in contributions to the Kuwait war. UNICEF feels that £100 million is required for the famine of East Africa; that is only 0.1 per cent. of £100 billion.
5.30 p.m.
Lord St. John of Bletso: My Lords, I join in thanking the noble Lord, Lord Donaldson, for introducing this important and critical debate. Whereas, as noble Lords mentioned, world attention has focused on the Gulf war, the very scale of the problems in developing countries, particularly in Africa, call for ongoing and urgent action.
A brief analysis of the numbing statistics can hardly mirror the extent of agony and misery for those involved. I say that as a South African, although I am of British descent. As a South African I have not experienced the famine and poverty of the Ethiopian and Sudan situation. However, I have certainly spent much time in Malawi and Zimbabwe. I intend before too long to take the trip from Cape Town to Cairo.
It has been estimated by various aid agencies—as mentioned by the noble Lord, Lord Cledwyn of Penrhos—that between 20 million and 30 million people in Africa are facing starvation and famine. That equates to almost half the population of the United Kingdom. It is feared that the scale of the disaster will be worse than that experienced in the 1984-85 famine in Ethiopia and the Sudan.
Today's debate calls attention specifically to the problems of food shortage, the environment and over-population. By inference it relates those topics to the present famine in Africa. However, central to what I have to say today is the premise that famines are not just caused by changes in environmental conditions
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and a decline in food supply, but to a large degree by the absence of effective political accountability in the worst affected countries.
Oxfam released this week a brief headed, Famine in Africa, in which it highlighted Ethiopia, Sudan, Mozambique, Angola, Malawi and Liberia, where a combination of drought and conflict has left over 20 million people facing hunger and starvation. The only country amongst those which is not in a state of civil war is Malawi. In direct contrast to Malawi is the case of Liberia, which bears brief mention. Liberia has never in the past—I speak of 10 years ago—required food aid. It now has a devastated economy as the direct result of civil war. Internal production and distribution of food are totally hampered. Ships are unwilling to use the harbour at Monrovia for fear of their safety.
In my view there can be no resolution to those problems until political stability exists in the country. In the 1960s Africa produced more food than it could eat. As has been made clear by the speeches today, that is no longer the case. Over the past decade farm output in Africa grew by 1.5 per cent. a year while the population swelled at least twice as fast. The Save the Children Fund organisation estimates that up to 12 million children in Africa face food shortages caused by drought, war and economic problems.
In the debate on population growth initiated by the noble Lord, Lord Rea, in May last year, it appeared that the general consensus of those who spoke was that population growth rates in developing countries will not go down without improvements in standards of living. Those improvements can be achieved with relative ease, particularly in the fields of basic health care and primary education. However, there is a lag period between the basic improvements which lower mortality rates and their positive influence in reducing birth rates.
In Africa today 45 per cent. of the population are children. It is noteworthy that immunisation rates of children in the developing world improved dramatically during the 1980s from 10 per cent. in 1980 to the present 75 per cent. It has been estimated that well over 1 million children who are now living active lives would possibly be crippled by polio were it not for the efforts of UNICEF, the World Health Organisation and other agencies.
The 1990 United Nations population statistics showed that there has been a slower drop in birth rates in Africa than was previously forecast. That indicates that the lag period, after improving standards of living in developing countries, will be longer than expected. As a consequence upward revisions have been made to world population forecasts.
That brings me to the subject of the effect on the environment. Increased population pressures have exacerbated soil erosion problems resulting in massive environmental degradation in the third world. That is compounded in Africa by the physical geography of the continent. It lacks an abundance of valley sites suitable for storing water. As a result only 3 per cent. of farms are adequately irrigated. By contrast, the geography of India, for example, provides many suitable sites. It is said that up to 30 per cent. of farms

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in India are properly irrigated. One of the consequences of inadequate water supplies in Africa has been massive malnutrition problems, which obviously affect mostly the children and the elderly people. At the same time half of the continent of Africa's forests have been chopped down this century to provide fuel and shelter or new land for the plough. It is said that the Sahara is spreading southwards sometimes as quickly as 90 miles a year.
In assessing the scale of the problems of food shortages, the environment and overpopulation in developing countries, I have been stimulated by the arguments in the excellent recent book by Jean Dréze and Professor Sen on Hunger and Public Action, where they address practical action to be taken for the avoidance of famine and hunger. They claim that famine is nearly always avoidable, even after gigantic natural disasters. Sensible public action, including appropriate legislation, can eradicate large scale starvation. To this end they draw parallels between India and certain famine stricken countries in Africa.
India relies extensively on cash for work programmes to help those without food. Their prognosis is that if the government of developing countries were to be accountable to the public through elections, free news reporting and uncensored public criticism, then the government also would do its best to eradicate famine. It is not surprising that in the terrible history of famines there is hardly any case in which a famine has occurred in a country that is independent and democratic, with an uncensored press.
In short, their desire is that the governments of even the poorest countries should and can protect and promote the entitlements of the very poor. In their view the solution does not lie in giving more food to developing countries or encouraging them to grow more of their own. Instead they believe that it depends on governments protecting the rights and incomes of their most vulnerable people. One of my concerns which has been well illustrated by the noble Baroness, Lady Robson of Kiddington, is that all too often we hear of reports of food aid not reaching those to whom it has been targeted. For example, in Ethiopia time and again it has been proved that once the authorities get their hands on the international charity, it stands little chance of reaching its proper destination but is diverted to the army and the open markets.
I wish to ask the Minister a number of questions. First, what are Her Majesty's Government doing to encourage the effective distribution of food aid through, for example, food corridors such as those which have been established in the Sudan and Ethiopia? To what degree are Her Majesty's Government working in tandem with the independent aid agencies such as Oxfam and the Save the Children Fund which, as other noble Lords have mentioned, are achieving brilliant work in delivering food to war-torn countries in Africa?
In conclusion, there is a lesson of obvious importance for sub-Saharan Africa where the lack of overall economic growth and political instabilities have been major causes for the deprivations
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experienced. Attention needs to be paid to the creation of stable political environments promoting peace, economic growth, jobs and an overall better environmental planning policy. The aid agencies with which I have had some contact also recognise these long-term requirements and apportion their funds in an attempt to accommodate not just emergency requirements but also these long-term challenges. In his concluding speech, will the Minister indicate what assistance and pressure Her Majesty's Government are bringing to bear on strife-riven governments in Africa to resolve their internal problems and to face up to these long-term solutions?
5.42 p.m.
Baroness Seear: My Lords, when we in the Liberal Democrat Party were discussing how we should use the afternoon when we had the opportunity of deciding the subject for debate, we reckoned that, quite properly, over the past months the minds of most Members of your Lordships' House and of the people outside have been focused on the immensely important, threatening and then encouraging events in the Gulf. That has understandably distracted our attention from many other issues which in the longer-run are certainly as important, if not more important. It is for that reason that we chose this subject for this afternoon's debate. We are very grateful to my noble friend Lord Donaldson for being prepared to lead on it.
As noble Lords have emphasised, there are two parts to this debate. They are the immediate emergency of famine and the longer-term issues which are referred to in the title of the debate regarding the environment and over-population. The first point is that both these issues are of the greatest possible urgency. It is easier to focus on the urgency and the tragedy of famine in Northern Africa. Many noble Lords have spoken about what needs to be done. There is the absurd fact that if it were a rational world—which only the most foolish person believes that it is—there should be too much food in one part of the globe and so devastatingly little in others. There are also the problems of conveying the food which is in surplus to the places where it is grossly in need.
Those are issues which everybody can understand. It has been emphasised by speaker after speaker that one solution is to find the money which is required. In comparison with money spent on other causes, particularly that spent in the Gulf of which I make no complaint, it should not be impossible to find the sums required to transport the surplus food in Europe and America to those needing it in Africa. Perhaps noble Lords will deny that it is simple and straightforward because I am sure that the problem is shot through with difficulties. However, the food is available. I am the last person to suggest that money can always be found when a suitable case is recognised; but the sum involved is not vast in comparison with the amount of need with which we are confronted. If the sense of urgency were there the money would be found.
I do not wish to carp, but it is sad that the Chamber has been so empty during most of this debate and that there has only been one speaker, excellent though he

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was, from the Government side. That does not suggest that there is the sense of urgency about this issue that we should all like to see. I see the noble Lord shakes his head. That is no answer to the fact that there has been nearly an empty Chamber this afternoon.
I am not going to say any more about famine because so many other speakers have spoken so very effectively on the subject. They have pointed out both the urgency and the ways in which the matter can be dealt with while recognising the reality of the difficulties.
I wish to concentrate more on the longer-term issue and to make the point that this is as much an emergency and a matter of urgency as the famine. I remind noble Lords very briefly what the population figures are. The world population now is in the region of 5 billion. It is "guestimated" that in the 2020s it will be 10 billion or even more unless action is taken. These figures are so astronomical and terrifying that people will just bring down the blinds because they do not want to consider the figures. It is at least a doubling of the world population by that date. Thank heavens I shall not be here when it gets to that figure! and neither will most people here. The noble Earl who has to reply may well be here. We have to get the significance of those figures appreciated because they are terrific. Ninety-four per cent. of the increase is in the developing countries.
As the noble Lord, Lord St. John of Bletso, said, in African countries and in Kenya, for example, over half the population is under 15 years of age. When I was there less than a year ago I was told quite openly that they had no doubt in their minds that in 10 years' time there will be no work for them, and it will be impossible to feed them. The measure of the seriousness of the problem simply cannot be exaggerated. It is a problem connected with those of the environment. I am not for one moment saying that all the problems of the environment can be linked directly to the issues of over-population and the developing countries. There are tremendous environmental difficulties coming from the developed world. It would be very easy for people in the developing world to say "It is easy to blame the problems on us; but look at what you in the industrial societies have contributed".
The fact that that is true does not make it any less true that doubling the population, or 94 per cent. of it in the developing countries, must be an environmental threat. What can we do about that? The rapid growth in population is linked with poverty. It has both an effect on poverty and in turn poverty is a cause. In countries where there is no old-age pension, unemployment pay or national health service, there is no one to come to your aid during life's inevitable catastrophes. You have to have children. That is undoubtedly the view taken by people who are too poor to provide for life's emergencies in any other way. As long as that is so, they will go on having children. So it is in our interest as well as theirs that we should tackle the problem of poverty. The noble Lord, Lord Hatch, is right in saying that this will be done only if the developing countries are seen as part of the
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world economy in which we trade and from whom we buy. That means that we cannot allow catastrophes like the breakdown of the Uruguay Round. I know there are difficulties—of course there are—but what those countries need is for us to buy goods from them. Aid is fine—I shall come to that in a moment —but what they need is trade. They have to get the money. As Job said, money does not make for happiness. It does, however, ease the pain. More money in the developing countries would ease the pain quite a lot.
Trade and an attack on poverty is of the first importance. There is also the whole question of family planning. I know it can be said that this is a controversial issue and that it is neo-colonialism to try to encourage family planning in developing countries. But unless there is family planning, there is not the faintest chance that the figures I have given can be curtailed. All the consequences that they imply will then follow. There is the element of education. Other noble Lords have spoken about this. I want to underline once again—I shall not go into it in detail because other noble Lords have done so—the importance of the education of women. The increased literacy of women correlates with the voluntary restriction of family size. It is a matter of the greatest importance. There is a time lag. There is a tremendous time lag between educating women and having the required results in family planning.
In addition, we have to put more resources into family planning. I shall use a word which has not been used in the debate this afternoon in connection with aid and family planning. We have to face the issue of conditionality, of saying that we will give aid—indeed, increased aid—provided some of it is devoted to family planning and some of it is devoted to women's education. I am well aware of all the arguments that can be made against conditionality, but it is a choice between two evils. If one does not do anything, the evil resulting from not doing it seems far greater than the evil resulting from doing it. Therefore I urge that it should be so.
We need family planning in connection with attempting—this is where it links with women's education—to delay the age at which a woman has her first child, and to encourage longer spaces between the births of children. The large number of children born in the very early years of a woman's child-bearing life can then be reduced. The effects of excessive child births in the early years of a woman's life—on population, on the woman and on the standards of family life—are quite horrifying.
We have today in the ODA an outstanding Minister who fully understands these matters. She fully recognises the needs. She recognises it as much or even more than anybody in your Lordships' House. She also recognises that a great deal of the work has to be done through the NGOs for a whole variety of reasons. I have gone on too long and I must not elaborate them. I beg the noble Earl to accept that this problem will not just go away, that the action we are taking at the moment is not enough and that we need combined action between the Government and government agencies working through the NGOs to tackle the multiple problems that we face in this area.
5.56 p.m.
Lord Gallacher: My Lords, we are grateful to the noble Lord, Lord Donaldson, for giving us the opportunity to debate this subject. The response from all parts of the House indicates its importance.
Problems of world food shortages, over-population and the present famine in parts of Africa are by any standard daunting. We are entitled to ask ourselves whether current "food surpluses" in North America, Western Europe and the Cairns group of countries are real or not. They are real enough in the context of the needs of the populations for whom food was grown in the first place. They are not so when measured against world population growth, both actual and projected.
These surpluses can play a vital role in relief work. Yet when sold on world markets they destabilise prices and paradoxically make it harder for poorer countries to earn a living from exports. In developed countries, farm support policies, whatever their form, bedevil the situation. Improved growing methods, aided by new technologies, further aggravate the position.
The resumption of GATT talks on agricultural support distortions is welcomed. The discussions should also take account of the need to let developing countries earn a living on world markets. GATT talks are not just about the European Community versus the United States and the Cairns group of countries. For example, in the Australia News for week ending 8th March 1991, there is a record of a multi-party delegation to the United States, led by the Australian Minister for Trade and Overseas Development, to put Australia's case against the United States export enhancement programme which threatens to damage Australian grain exports to the Middle East, including Egypt. Such cases can be repeated worldwide: the problem is considerable. It is not helped in any way by high interest rate policies.
Restraining population growth in developing countries is a major aspect of solving problems related to present levels of subsistence living in so many areas of the world. Encouraging viable forms of food production by under-developed nations is the other great challenge facing the world, especially our supranational institutions such as the Food and Agricultural Organisation and the European Community. Most observers agree that, if living standards could be raised, population growth would slowly reduce, although improved mortality rates would then probably discount benefits, at least for some time. That point has been well developed by several speakers in the debate.
It is something of a chicken and egg situation, but there is no present alternative to encouragement of population control. As to the form of that encouragement, we can all learn from the instances which have been discussed by several speakers.
Helping local food production depends on many variables. Climate, especially rainfall, presents a major impediment and challenge. Irrigation schemes are expensive but unavoidable in many regions, even allowing for the beneficent effects of biotechnology. Advice on good farm methods is essential. Food aid programmes are still in need of greater co-ordination
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while attempts to channel aid through particular sources are not always successful. For example, the European Court of Auditors in its latest report, is critical of the Community's administration of recent projects, especially in West Africa and Bangladesh. Such deficiencies are partly due to local conditions—not always conducive to honest dealing—and partly to the lack of a permanent framework to distribute fairly. Civil strife can also undermine aid programmes as can poor communications.
Food shortages are regrettably a permanent feature of the world scene. Can the noble Earl who is to reply say whether relief structures are generally of such a nature as to best undertake current and possible future tasks? Are voluntary organisations given the right place within such structures? Are they well supported in the work they undertake? Do they report to the Minister for Overseas Development on their experiences?
Civil war is a wretched factor in causing starvation, a point rightly brought out by several speakers today. How active is the United Nations in attempting to end such civil wars? What standing does it seek in such disputes when innocent people are put at risk by small groups of merciless protagonists? Has the United Nations the peace-keeping resources for such tasks, and does it intend at any future time to deploy those resources accordingly?
In promoting best assistance for agriculture in developing countries, co-operatives have an on-going part to play. Viable farmers' co-operatives can also help to achieve stability in rural areas. As farmers may follow extensive growing systems, the co-operatives may also help arrest the drift of population to the towns where social and housing problems may be great, a problem not unknown even in developed countries.
At one time, the Minister for Overseas Development was assisted by both an adviser on co-operatives and a small consultative committee. The granting of independence to former colonies resulted in a scaling down and eventual abolition of such work. Self-government for former colonies was thought to have eliminated the need for advice on co-operatives. Yet rural problems in developing countries abound; so the opportunities for agricultural co-operatives arc still there. These may be of growers, marketeers, requisite suppliers and even credit societies. Multipurpose types usually come later. How can this need for co-operatives be addressed?
The current change of emphasis in United Kingdom farming is likely to lead to less intensive methods here. The ADAS organisation, which functions at the moment under the auspices of the Ministry of Agriculture, is now promoting extensive methods both on their merits and on environmental grounds. Also under the wing of the Ministry of Agriculture is the recently restructured Agricultural Training Board. A year or two ago, at the Government's request, I took a Bill through the House to permit the Agricultural Training Board to engage in paid overseas work. The board has a good

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record in basic training skills and ADAS has considerable expertise in almost every agricultural department.
ADAS is scheduled to become an executive agency in a couple of years or so and is obviously looking for clients in the field. Could not the Minister for Overseas Development find a joint overseas role for both these bodies as advisers and in practical promotional schemes abroad? Forming and supervising local co-operatives plus training would he a natural field for joint action. Perhaps I may suggest that there should be discussions on this matter between the Minister for Overseas Development, the Ministry of Agriculture and the two bodies I have mentioned.
No one addresses these problems without a total and devastating sense of inadequacy. Yet the challenge does not diminish. One consolation is that there is basic support for action to alleviate and, it is to be hoped, in time to eradicate the worst features of hunger in the third world. This debate has been useful to that end. I hope that the Government will capitalise both at home and abroad on the many views that have been expressed and will bear them strongly in mind at discussions within the European Community, the Commonwealth and the United Nations and the specialist organs of that body.
6.2 p.m.
The Earl of Caithness: My Lords, I have listened with great interest to the wide range of contributions which this debate has provoked. The concerns expressed by noble Lords who have taken part reflect the concerns of Her Majesty's Government. That is why I, too, am grateful to the noble Lord, Lord Donaldson, for initiating the debate and to all noble Lords who have contributed to it.
The Motion refers in particular to the present famine in parts of Africa. I shall deal with that complex problem, but before doing so I shall make one or two points about the Government's long-term development programmes in sub-Saharan Africa.
The UK delivers a high quality, growing aid programme. In this financial year, we are spending £1.62 billion—the sixth largest Western aid donor. Within the aid programme we aim to support effective policies in developing countries, built around open, accountable government and sound economic management with respect for the needs of the poor. We do so through well designed and well managed projects, with a commitment to environmental sustainability, combined with a realistic approach to population issues.
These are the priorities in our long-term development assistance programmes in Africa. Without sound macro-economic and sectoral policies, there is a high risk that development resources and efforts may be wasted. Structural adjustment programmes seek to help countries to improve their fiscal and monetary policies. More than 40 per cent. of total British aid goes to the region. Our bilateral programme to sub-Saharan Africa rose from £267 million in 1986 to £496 million in 1989. In 1989, more than half of all our bilateral aid went to Africa. But we
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must recognise that in countries where famine and civil war o rage, long-term development has to take second place to humanitarian assistance, designed to meet immediate needs. It is this type of assistance which we are providing to help alleviate famine in sub-Saharan Africa.
The food crisis in sub-Saharan Africa is extremely serious. The noble Lord, Lord Donaldson, was absolutely right to say that there is a growing risk of tragedy in Ethiopia and Sudan, and possibly also in Somalia, on a scale even greater than that of 1984-85. In these countries, environmental factors, particularly climatic change—one of the factors mentioned by the noble Lord, Lord Cocks of Hartcliffe—and high population growth rates have served to aggravate and deepen a perennial crisis. But they are not the sole reasons for famine. The disaster of 1984–85 had its roots in high rates of population growth, poor farming techniques; misguided, wrong and unsuitable agricultural policies; and environmental degradation. Unfortunately. little has changed since 1984.
Two successive years of poor rains and crop failures in 1989 and 1990 have deepened the region's problems. In addition, continuing civil wars have frustrated relief efforts and development aims alike. Economic mismanagement, political repression and abuse of human rights have also driven some, notably Sudan and Somalia, further from the international development community, the very community whose help they need to break the recurrent cycle of drought and famine. Because of these factors, about 29 million people in 25 countries in Africa are facing the threat of starvation. Upwards of 15 million of them are in the Horn of Africa—7.5 million in Ethiopia and 7.7 million in Sudan.
In Ethiopia the threat of famine is greatest in the north and Eritrea is most at risk. Crops have failed for the second successive year and farmers have no reserves to fall back on. There are similar problems in Tigre and North Wollo as well as in other regions, which are not traditionally famine areas. The situation is as grave in Sudan. There are food shortages in all regions except the East, but the situation is most severe in Darfur, Kordofan and the Red Sea hills.
Undoubtedly, the scale of the problem in the Horn is greater than in 1984-85, but I am pleased to tell the noble Lord, Lord Cledwyn, that we are better prepared now than we were then to cope with it. Information from British relief organisations and satellite imagery gave us earlier warning of serious crop failures in 1990 and impending food shortages in 1991. The donor community has used this time to preposition food stocks and organise transportation. Thus we have already saved lives. We must now keep the food pipelines evenly stocked through to October, when the next harvest is due, and ensure that the food provided is distributed to those who need it and for whom it was intended.
The World Food Programme estimates that almost 4 million tonnes of food aid will be needed in Africa this year; 2.2 million tonnes for Ethiopia and Sudan. About a third has been pledged so far but its distribution poses major problems.

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In Ethiopia, the regions hardest hit by drought are the areas where civil conflict is most intense. This makes food delivery difficult. But we have achieved major improvements in the channels for transporting food to the needy. Early last year, under pressure from the international community —the House will be pleased to hear that it was the British Government who played an important role in this—the southern line was opened. It is working remarkably well. It has moved well over 125,000 tonnes of food from the port of Assab to Tigre's northern border.
Lord Donaldson of Kingsbridge: My Lords, perhaps I may intervene on that point. I heard today that it has been discontinued because of political reasons and fighting. It is very sad.
The Earl of Caithness: My Lords, I was coming on to that precise point. The noble Baroness, Lady Robson, and the noble Lord, Lord John-Mackie, wondered whether airlifts could be used to help in this process. Indeed, we have already done so. Throughout 1990 an expensive airlift was mounted to reach the vulnerable groups in the Asmara area. It has reached up to 700,000 people. The House will be pleased to know that we have just provided a further £200,000 for the Juba airlift.
Perhaps the most important recent breakthrough in the relief effort has been the reopening of the port of Massawa. Relief operations were greatly hampered when the EPLF took the port in February last year. In December, both sides agreed to accept a UN vessel shuttling between Djibouti and Massawa with food shipments. There have been five sailings. So far, 32,200 tonnes of food have arrived at Massawa and have been distributed equally between the EPLF and government relief agencies.
If the use of Massawa can be expanded it will provide a cost-effective way to reach more people. We shall be pressing for improvements but they will need careful negotiation. The new northern line has begun well but there are still problems. Asmara has been shelled by the rebels. There are worries that the land route between Massawa and Asmara may come under fire. Renewed military activity could also affect the prospects for the southern line.
I turn now to deal with the point just made by the noble Lord, Lord Donaldson. I can confirm that we have today heard that the southern line has been closed. However, I can assure noble Lords that we shall be making strong representations to the Ethiopian Government to reopen it as soon as possible. The situation is delicate, but, in Ethiopia, there is relief machinery in place.
The prospects for Sudan are less optimistic. There is continuing civil war in the South, the government continue to mismanage the economy, and they have been slow to acknowledge the scale of the impending food crisis or to seek help from the international community. The UN Assistant Secretary General, James Jonah, visited Sudan last month. The communiqué which he agreed with the Sudanese was promising. However, there have been setbacks. I am
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sure that all noble Lords will agree that we still need assurances on distribution mechanisms; without these, relief supplies simply cannot be delivered.
Our role in this new crisis in the Horn of Africa has been a major one. We have taken prompt and effective action on two fronts. We have provided food and relief assistance. We have also acted through diplomatic channels, together with our European partners and others, to try to ensure that an adequate flow of supplies reaches those at risk, unhindered by continuing civil wars. The speed of our response owes much to the expertise and experience of the British and international NGOs through which we work. They are a vital asset.
The noble Lord, Lord Donaldson, spoke about the good work of NGOs, as did the right reverend Prelate the Bishop of Sheffield who mentioned a few of them. In fact, there are rather more than a few of them. In 1989-90 we supported 510 projects with 70 NGOs in Sub-Saharan Africa. Moreover, I can tell the noble Lord, Lord Gallacher, that we are in regular and daily contact with the voluntary agencies. My right honourable friend the Minister for Overseas Development—in respect of whom the tribute from the noble Baroness, Lady Seear, was most welcome; it will of course be passed on to her—holds regular meetings with the main British agencies working in the Horn of Africa. I can tell the House that she last met with them on 21st February and that she plans to do so again in due course.
As soon as the first warning signs of food shortages appeared last autumn, the Government reacted very quickly and committed 24,000 tonnes of food and other relief assistance worth £1.1 million to Ethiopia and 10,400 tonnes of food to Sudan. In December, we announced a package of £7.2 million of emergency relief for the five worst affected countries in Sub-Saharan Africa. That was three weeks before the Disasters Emergency Committee launched its "Crisis in Africa" appeal, which so far has raised a magnificent total of £6 million.
Since the beginning of this year my right honourable friend the Minister for Overseas Development has visited Ethiopia and announced further emergency relief. In January, a package worth £8.75 million was agreed for Ethiopia and 20,000 tonnes of food aid announced for Sudan, worth at least £4 million. Last month, a further 1,300 tonnes of food was agreed for the Ogaden; £200,000 for the Juba airlift in Sudan; and £180,000 to help with the new influx of Somali refugees into Kenya. Last week, we made a further allocation of 6,500 tonnes of food, worth £1 million, for the northern line through Massawa. This week, £430,000 has been provided through UNHCR for Somali refugees in Ethiopia. This brings to £860,000 the total amount the Government have allocated for Somali refugees in Ethiopia and Kenya since the beginning of this year.
In summary, since the beginning of 1989, we have provided £145 million of humanitarian assistance to Africa, of which over £123 million has gone to the five worst affected countries and £80 million to the Horn. We expect to provide more in the course of 1991.

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The noble Lords, Lord Donaldson and Lord Hatch, and the noble Baroness, Lady Seear, suggested that the Gulf War had diverted the Government's attention and their resources away from the needs of Africa. Clearly, that is not the case. Not only did my right honourable friend the Minister for Overseas Development visit Ethiopia and a number of other African countries during the course of the war, but we also pledged considerable extra assistance to famine relief.
Since the autumn of 1990, when the first signs of famine emerged, we have pledged more than £25 million in humanitarian and emergency assistance to Ethiopia and Sudan. Some of that assistance has already been provided, but the rest will follow during the course of the 1991-92 financial year. I should point out that £16 million of the sum which I mentioned will have been spent by the end of the 1990-91 financial year and £9 million —that is 20,000 tonnes of food aid for Sudan and 25,000 tonnes of food aid for Ethiopia—will be available in 1991-92. Our aim is to deliver that food aid in the second quarter of 1991.
Those who know about food provision will know that food aid has to be planned well in advance. Food will be needed in Ethiopia and Sudan until October. Its purchase and delivery must be phased to reflect both needs and storage capacity in the countries concerned. Our food aid is channelled through British and international relief agencies. In order to help them plan their efforts, we have given as much notice as possible of our intentions.
I am sure your Lordships will welcome Britain's leading role in mobilising this new relief effort. But a long-term solution to the problems in the Horn depends on ending the civil wars. They have not caused drought and crop failure, but they cripple efforts to help. We have urged all parties to seek peaceful solutions to their differences and we shall do more where we can.
Apart from the crisis in the Horn of Africa, there are crises in countries such as Angola and Mozambique. Here years of internal conflict have brought misery to millions of people and made refugees of thousands more. Again the British Government have responded generously. Since the beginning of 1990, we have pledged food and other emergency assistance totalling about £7.5 million for Mozambique and more than £1.5 million for Angola, with around a further £5 million going to support Mozambican refugees in neighbouring countries.
Another major emergency where we have helped is in Liberia. Since February last year, Britain has provided over £4 million. We are probably the second largest contributor to this emergency after the United States. However, as noble Lords will recognise, the British Government cannot do everything. We have tried to mobilise the international community to follow our lead and respond swiftly and generously to the crisis facing Sub-Saharan Africa. My right honourable friend the Minister for Overseas Development has discussed the issue of famine in the Horn many times with fellow European Community development Ministers. She has also written to them,
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to the Commission itself and to her colleagues in Washington and Ottawa stressing the need for urgent action to ensure food supplies are in place in time to feed those in need. I am glad to say that there are signs that those actions are bearing fruit. The Community has pledged 320,000 tonnes of food for Ethiopia and Sudan since November 1990.
As I have pointed out, the food crisis in Sub-Saharan Africa has some, but not all of its roots in problems of environmental degradation and high population growth rates. The linkages are complex and bear some explanation. The world's population has doubled since 1950. The noble Baroness, Lady Seear, reminded the House that it would double again to 10 billion or probably more by about the year 2050. The greatest percentage increase will occur in Africa where the population growth rate is about 3 per cent., compared to a global rate of 1.7 per cent. and 2.1 per cent. for developing countries as a whole. I am sure the whole House noted what the noble Lord, Lord St John of Bletso, said. He reminded us that children represent 45 per cent. of the population of Africa.
The rapid growth of the world's population raises questions about the capacity of the environment to support it. I believe that there are two important considerations in this respect. First, there is the growth of per capita incomes; and. secondly. there is the Government's policy towards the environment. The first is important because environmental degradation is closely linked to poverty. Among the reasons for which people clear forests, for example, is to provide land for agriculture and wood to burn as fuel.
The second consideration is also important—a government's policy may be critical. Policy changes. such as removing financial incentives for deforestation, or charging economic prices for energy, fertilizer or water, can help promote sustainable economic growth and protect the environment. Societies are beginning to make decisions on how they allocate resources among investment, consumption and the maintenance of the environment. Those choices affect the delicate balance of population growth, economic growth and the environment. We must influence them.
The noble Lord, Lord Thurlow, said that the main problem to be solved was that of agricultural production. We do not necessarily disagree with him. About 30 per cent. of UK bilateral aid to Africa goes to agriculture and related activities. On that point, my noble friend Lord Selborne was worried about the research needed. The ODA is seeking fully to involve the overall science base in the universities and research institutions in its long-term research strategy for renewable natural resources. However, we must not overlook the difficulties of implementing any remedies or aid that we may propose.
The noble Lord, Lord Walston, was one of many of your Lordships who reminded us that many of the countries most seriously threatened by famine have chosen to give priority to military aims. Internal wars cripple the economy, disrupt vital transport routes, and drain the countries' material and human resources. We are encouraging all sides to settle their differences by peaceful means. In the meantime, we are

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looking ahead to times when more rational priorities for public expenditure may prevail. That is not easy. It is especially difficult in countries such as Sudan where economic mismanagement and human rights issues have convinced us and others that we can no longer provide effective long-term development aid.
The noble Lord, Lord Northbourne, asked about women becoming trainees. The noble Baronesses, Lady Robson of Kiddington and Lady Seear, mentioned the position of women. We agree that literacy is an important aspect in enhancing women's role in development. They often grow crops, as the noble Lord reminded us. If productivity is to increase women must become literate to enable them to understand basic information about fertilisers, equipment and the techniques necessary to gain access to credit facilities. The ODA is increasing access to training for women. The female percentage of the Technical Co-operation Training Programme arrivals in 1988 was 19.7 per cent. In 1989, it was 21.5 per cent. In some countries, women account for 50 per cent. of in-country trainees. Let us think about literacy. It is a vital ingredient in democracy. To keep women illiterate is to disfranchise half the world's population.
The noble Baroness, Lady Robson, referred to the need to help women with facilities to market the produce that they are encouraged to grow. She mentioned a project in the Gambia. I happen to be well briefed on that project. It was supported through the Heads of Mission small projects schemes and it funded a marketplace of which the noble Baroness told the House. I believe that it was at Sankandi. The person who handed over the cheque is now my private secretary.
The noble Lord, Lord St. John of Bletso, reminded the House of the importance of child health care. I am pleased to be able to tell him that the ODA's priority on health assistance is to strengthen the provision of primary health care and to help developing countries establish sustainable and effective health services for their poorest people. We focus our assistance upon women's and children's health services and the development of services that prevent disease and disability, including family planning and child immunisation programmes. The noble Lord, Lord Northbourne, reminded the House of the terrible AIDS. Important though that is—it is something of which we must not lose sight —we must also not lose sight of the more mundane (if that is the right word to describe them) less high-profile diseases which affect the people of Africa and elsewhere. The noble Lord, Lord Rea, brought that matter to our attention.
I have one last answer for the noble Lord, Lord Hatch. I have answered all his other questions. He asked about the funding for the International Fund for Agricultural Development. Its budget in 1990 was 40 million dollars and the UK payment during 1990 was 4 million dollars. We are tackling the underlying causes of famine, including high population growth and environmental degradation. I hope that I have convinced the right reverend Prelate that we care and are acting, but that we are by no means complacent. We know that we need to do more and that no one donor can do all that is necessary. We shall continue
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to encourage other donors to follow our lead. We shall urge governments to persevere with peace negotiations and adopt sensible and economic social policies. We know that those tasks are not easy but they will help achieve, on a sustainable basis, better living standards for their people. They are their only hope.
6.25 p.m.
Lord Donaldson of Kingsbridge: My Lords, I have the right of reply, but I do not want to do more than thank the Minister for a full reply and to thank everyone who has spoken. We shall all read the debate with great interest. I hope that it will lead to four or five different subjects being pursued in greater detail here or elsewhere. The only question that remains is whether the Minister—I shall write to him about this —is satisfied that enough food will be available to help in Eritrea, Ethiopia and Sudan. Having said that, I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

Local Income Tax 6.26 p.m.
Lord Hoosonrose to call attention to the case for strengthening the financial base and autonomy of local government by replacing the community charge with a local income tax; and to move for Papers.
The noble Lord said: My Lords, when, together with my noble friend Lord Holme of Cheltenham, I put down this Motion last Thursday for debate, there was no inspired leak from the Department of the Environment. There was no hint that we were about to have what I believe to be the second highest rate of VAT in Western Europe. I have reflected upon the disclosures that have been made in the past two or three days, and I believe that it is even more important that we have the debate today. The Government seem to have a speciality of making policy on the hoof, so to speak, by inventing new policies as a reaction to a difficult situation. They do not foresee the consequences of the policy.
I have no doubt that the Ribble Valley by-election concentrated certain minds and shattered certain illusions. Over the past three days, we have reached an absurd situation with regard to the future of local authority finance: how it is to be raised; the functions, structure and responsibilities of our local government system; and what is an acceptable level of VAT.
The Government give the impression of being in a state of panic and of running scared, and to be about to try another bout of lightning reform to try to mitigate the damage caused by a policy which was itself implemented on the hoof. I shall come to the genesis of the poll tax presently. When I opposed the introduction of the poll tax in Scotland in your Lordships' House on 17th March 1987, I said:
"Perhaps I may say on behalf of the Alliance that it is important that we appreciate that the question of local government and its functions and what role we require local government to play in the future cannot be separated from the way in which we raise finance for it .… this Bill provides a remedy which is worse than the evil that it is trying to reform".—[Official Report, 17/3/87, col. 1353.]

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The Government were arrogant and stupid about the poll tax. They were not in a mood to listen or heed and now they have resorted to another panic measure.
There have been only two thorough investigations into local government finance during this century. The first was under the Liberal Government in 1914; then a departmental committee on local taxation was set up under the Labour Government in 1974, and its report was published in 1976. This committee of inquiry was chaired by Sir Frank Layfield who is probably the greatest authority on the subject in the country. He headed a committee of 16, which covered all parties and people who were not in any parties. Between them, the committee members had a great deal of knowledge and experience and were a fine cross-section of the community.
Evidence was given to them by a large number of organisations and individuals. The list of witnesses takes up no fewer than 19 pages as an annex to the report. Among the organisations which gave a great deal of evidence to the committee were the Conservative and Unionist Party and the Scottish Conservative and Unionist Party. Not a single individual or organisation which gave evidence to that committee even suggested that there should be a community charge or poll charge.
A study of the proposal did not even warrant one sentence in the report. That is not surprising because it is an entirely regressive tax. Its introduction by the Thatcher Government, in the absence of any proposal of the kind to the Layfield Committee, shows how ill-considered, ill-thought out, unwise and ill-judged it was. On 18th April 1988, Mr. Norman Tebbit said:
"I am an unrepentant supporter of the community charge and have been ever since I invented it in the early 1970s".
I believe that it was invented centuries ago. Wat Tyler's rebellion was a rebellion against it. Nevertheless, let us accept Mr. Norman Tebbit's legitimate claim to paternity. Of course the attitude of the Government, until the composure of their minds by recent events, can be summed up in the words of Mr. David Hunt, the present Secretary of State for Wales, when Minister for Local Government. On 3rd March 1990, only a year ago, he said:
"I believe the community charge will come to be accepted for what it is: simple, straightforward and above all fair. But it will also do local government a power of good".
As the main element for strengthening the financial base and autonomy of local government, it has proved to be entirely unacceptable. It has not done local government any good at all.
This afternoon I shall invite your Lordships' attention to the case for local income tax which was thoroughly investigated and approved of by the Layfield Committee in its recommendations, after hearing and considering detailed evidence and hearing other alternatives. The committee considered it as an addition to the rates. It is quite clear that, local government finance now having fallen into such an incredible mess, and the present Government being in such a complete panic, the Government are now trying at short notice to find an alternative to the poll tax. Any such proposals by them will inevitably have to be regarded as interim and short term, particularly
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if they go back to a hastily considered property tax and/or retain any form of the poll tax which has proved so expensive and difficult to administer.
Therefore, particularly if the result of the hasty unscrambling is to undermine local government itself even further, it behoves everyone to look at the merits of local income tax as considered and recommended by the Layfield Committee. I quote from page 208 of the committee's report, Command Paper 6453 on its conclusions on local income tax, contained in paragraph 104:
"A locally variable tax on all personal incomes could:

(i) raise substantial sums;

(ii) enhance the accountability of local authorities by bearing on the inhabitants of the area concerned;

(iii) bear on individuals according to their incomes; and

(iv) be a feasible proposition if operated by the Inland Revenue, making use of the PAYE system for Schedule E incomes and provided the present national scheme was simplified".

The Layfield Committee concluded, after consultations with the Inland Revenue, that a local income tax scheme could be integrated into the national tax system. At annex 25, page 450 of the report, it sets out an outline scheme for integrating local income tax into the national tax system. I am content to accept that scheme as a possible structure for a local income tax. It was thoroughly looked into and researched by the Layfield Committee, which concluded that a local income tax should be integrated within the administrative framework of the national system for personal taxation.
The committee had before it three research papers which it had commissioned on the way that local income tax was raised in states in the United States, in Canada and in Sweden. As your Lordships know, other countries in western Europe have reverted to the personal income tax and local income tax.
Therefore, I wish this afternoon to concentrate not on the technical details which were investigated by Layfield and considered at length, but on the reasons for the advocacy by the Liberal Democrats and many other interested bodies of the advantages of a local income tax as a main component in putting local government finance on a sound and long-term basis.
At this stage I should make clear that we accept the Layfield view that the local tax on personal incomes should be based on place of residence, for the greater part of local authority expenditure relates to the provision of such things as education and social and environmental services and they relate to where people live. We think also that it is important, as we set out in our Motion, that the autonomy of local government should be safeguarded. It should not become simply a tool of central government.
Of course, adjustments may be necessary in relation to certain properties such as second homes and so on. I do not exclude the consideration which I know my noble friend Lord Holme will touch upon: site value rating, as an addition. The Liberal Democrats base their view that local income tax is preferred to any other form of revenue raising as the main source of revenue from individuals for local government on the basis that it meets four crucial requirements: first, that it is based on an ability to pay. VAT is certainly not based on an ability to pay. Secondly, it must meet the

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crucial test of accountability. Thirdly, it must be capable of producing a substantial and regular yield. Fourthly, it should be easy to collect with the national income tax.
I return to the Layfield Committee report and its conclusion, page 190, where paragraph 37 states:
"The foregoing description has indicated that a local income tax … on personal incomes, levied according to where people live, is the only serious candidate for a new source of local revenue that could give a substantial yield and at the same time maintain or enhance accountability".
VAT will give a substantial yield, but it is unfair. It will not maintain or begin to enhance local accountability.
I wish to turn to the crucial question of ability to pay. Every person in this country old enough to purchase anything in a shop pays national taxes. He or she does so by means of VAT and it is payable, however poor that person is. The average earner or below average earner pays a higher proportion of income in VAT than do the higher earners. It is a regressive tax.
Last night the BBC demonstrated on its computer the benefits and the disadvantages of the announcements made in the Budget in regard to this matter. We have long accepted that the obligation to pay income tax to support our national expenditure should be based on ability to pay. It is fair, reasonable and just that this should be so. Exactly the same principle should surely apply to expenditure at a local level on services provided locally. There is no distinction to be drawn in principle between services provided nationally and services provided locally. Mr. Michael Portillo, the Minister responsible for local government, said on 19th October 1990 that taxes on people's homes are unfair and property values bear little relation to people's ability to pay. He also stated in the same speech:
"Accountability is beginning to work. Local democracy is being reborn".
I am bound to say that was a stillborn hope.
Whether a person lives on his or her own in a rambling run-down house with many rooms but cannot afford to run a car, or whether there are four able young people all on high salaries sharing a flat or a house, each with an expensive car in a garage, does not alter the fact that they should all pay towards local expenditure in accordance with their ability to pay. Quite apart from the inherent impracticability of the poll tax, it was an utterly unfair tax and one which was totally unacceptable to right thinking people in our community.
I turn to the matter of accountability. We on these Benches believe in local democracy. We are opposed to the centralising tendency of this Government. It is our belief that that tendency has been enhanced by the developments of the past two or three days. It is of fundamental importance to bear in mind the fact that the essential quality of local income tax is that the tax rate borne by any individual on his income should be set by his local authority. Rates of tax will vary from place to place, and will be subject to upper limits set in the national interest. Layfield deals extensively with this matter. There should be considerable discretion in
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the setting of the tax. My party proposes that there should be a uniform tax throughout the country with rebates at the end of each year.
This limitation on discretion would have to be made in the interests of national demand management. There are precedents for that in Canada, Sweden and other countries. However, on one's annual income tax demand there would be a clear indication of the amount of tax that was required to meet the local demand in the area in which one has one's principal home. Therefore there would be a clear link between the services provided by local authorities and the local income tax levied. What we have in mind is that national government and Parliament can insist —and do insist—on certain minimum standards to be achieved through local authority services such as education, police services, roads and other services. But there would have to be a much clearer and better defined relationship between central and local government with regard to how these national standards and their financial obligations should be met. That relationship should not be decided in a panic situation as a result of emergency measures to rid the populace of the unfair burden of a mistaken and unacceptable tax. The relationship should be carefully thought out.
Thereafter the main responsibility for the level and pattern of expenditure on local services should be firmly placed on the shoulders of the local authority. As I have said, we deplore the undermining of local government that has taken place over the past few years. We accept that all governments should have at their disposal instruments which enable them to exert influence and control to a degree on local expenditure. However, many of the decisions in which central government now interfere at a local level could best be made without that interference by people who are elected to consider specifically the needs and circumstances of their own areas and to respond to the views and preferences of the people living there.
We take the view that we would be a much happier society in this country if more responsibility was given to local government. We believe that many of the decisions which affect everyday life should be taken by elected people who are responsible to the electors of their areas. It seems to me that the events of the past few days which have been the result of a panic reaction foreshadow the most drastic undermining of local democracy this century. The consequences of the actions that have been taken in the past few days have not been thought out.
I turn to a further great benefit of personal income tax which concerns the amount and certainty of it. Our national income tax yields annually huge sums for national expenditure. The rate of taxation has decreased considerably in the past few years, thanks largely to the income brought in from indirect taxation, particularly VAT and North Sea oil revenues. We tend to forget about North Sea oil revenues. If a considerable chunk of local expenditure is to be met by a local income tax, the national rate levied by way of taxation would probably fall a little. However, one thing is certain. Raising money through a local income tax thoroughly integrated into the

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present system of collecting income tax nationally would be a far more certain way of raising money and making sure that those who are liable to pay do so. The huge unproductive superstructure which local authorities have been forced to set up to administer and police the unacceptable poll tax could be dismantled. I hope the Minister will be able to tell me what the overall cost of setting up the poll tax has been to date in Scotland, England and Wales. That must be an immense sum. We would no longer have a situation in which many of the people Parliament had decreed should pay towards local government expenditure escaped from that obligation. I shall repeat a statement that I made in your Lordships' House on 17th March 1987 when I said:
"The poll tax is the most primitive of all taxes, and it is the most unsatisfactory".—[Official Report, 17/3/87; col. 1351.]
Now, at last, I believe the Government appreciate that fact.
It has always appeared to me somewhat ridiculous to consider the question of raising funds for local government expenditure separately from the question of the functions of local government and the set-up of local government. In another place in 1971 or 1972 I opposed the local government reform legislation on the basis that we should have unitary all-purpose authorities in my native Wales and an elected council, that is a council for Wales, above them. I also proposed regional councils for England. I expressed a view then which I repeat today. I do not believe we should decide such matters as the set-up of local government without considering at the same time local government finance, its boundaries and what functions one wishes local government to perform.
There is a great deal of debate now on the matter of whether our unitary authorities should be county councils or district councils. I believe that in certain areas district councils would be more appropriate as they are much closer to the people. In other areas I can think of, county councils might be more appropriate, but not where large geographical areas are involved. I live in a large county and most local government officials spend a great deal of their time in motor cars as they have to travel a great deal. The whole matter depends on what is acceptable, reasonable and sensible to the people in the area concerned. One must consider where their loyalties lie and which council encapsulates the sense of community which is so necessary in local government. I believe that in my own part of mid-Wales the unitary authority should be the district council because of long historical allegiance and the physical set-up of the area.
I intend to cut my speech a little short, even though we have quite a lot of time available. I have referred to the fact that there would have to be clear lines of demarcation drawn on those parts of local government expenditure which should be met not from national taxation but from local taxation. Let me take education as an example. We have universal education demanded nationally; we have set up a national curriculum and we require national standards to be achieved. That is the minimum requirement. It seems to me that that minimum requirement should be met
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clearly from national taxation and should be reflected by way of direct grant to the local authority. It should be assessed in relation to each unit of local authority at least a year in advance.
However, in certain areas—and I am sure that mine is one of them—there would be a tremendous demand for further expenditure on education to provide additional facilities to study music, for adult education, for additional nursery provision and so on, and that should be met from local income tax.
It is quite clear that, in the process of deciding what is paid nationally and what is paid locally, regard should be had to the difficulties of any given area. For example, an inner city community might require a larger national grant; a remote rural area may require a larger proportionate national grant because of the difficulties and additional expense of meeting national requirements. But the administration of education, the carrying out of the requirements of national government, as well as the provision of additional facilities, should be under the firm control of the local authority. It does not matter what autonomy one gives to schools. Who is to provide supply teachers? Who is to co-ordinate the activities of schools, unless the matter is firmly delegated to the local authority?
I wish to conclude by saying this. I put down this Motion last Thursday, in order to try to get the Government to give a little more considered and mature thought to what should replace the community charge, because it was quite obvious to me by then that it would have to be replaced, and to influence them to produce a measure which they had carefully considered and which had been analysed and its consequences foreseen.
We have now lurched from attacks on all adults to pay for local government, to attacks on all individuals who buy goods in our shops, including children, to pay for the deficiencies in the financing of local government. The Government ought, for their own sake, to hesitate before going any further down this path. Relief might be necessary from the community charge—and I entirely agree with that —for we do not want another crisis in local government finance as a result of what the Government are going to do in a panic. My Lords, I beg to move for Papers.
6.53 p.m.
Lord Monson: My Lords, I am stunned to find myself with no direct experience of local government, the sole participant from the Back-Benches in this evening's debate particularly as the subject matter is so very topical. The beautifully chosen timing of this debate, upon which the noble Lord, Lord Hooson, must be congratulated, permits a non-expert like myself to fantasise about what the right honourable Member for Henley, in his unenviable hot seat, might have in store for us; an opportunity which one gathers will be no longer available 24 hours from now.
The rates, for all their many imperfections, were something which we had grown used to, and not all of us found them as inherently objectionable as, let us say, the noble Lord, Lord Jenkin of Roding, who I am sorry is not here tonight. However, this broad acceptance of—perhaps it would he better to say

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resignation about—rates would certainly not have survived revaluation. That would have proved almost as controversial as what we have at the present time. So it makes good sense to start again from first principles, provided that these are tempered by political realism.
One of these first principles surely is that, just as there should be no taxation without representation so the reverse should apply; there should he no representation without at least a certain minimum of taxation, and the poll tax certainly fulfils those requirements for those who actually register and pay.
Incidentally, it is a great fallacy to claim, as some do, that this principle of no representation without taxation does not apply at general elections. It most certainly does. True, not everybody pays income tax, but even non-smoking teetotallers who do not run a car pay VAT, as the noble Lord, Lord Hooson, has pointed out. They also indirectly pay tax on petrol and derv, both as bus passengers and, more indirectly, as customers of shops to whom goods are delivered by road. So it is in the interest of every single voter to vote for prudent and efficient central government.
There is another fallacy which goes like this: there are vast numbers of people who cannot afford to contribute anything towards local government. That is nonsense. An interesting survey by the London Business School, published at the end of November, revealed that an astonishing 80 per cent. of the adult population would pay up to £200 for the privilege of watching BBC television. If 80 per cent. of the population are prepared to pay an extra £129 for the luxury of improved television they are certainly capable of paying at least £129 for necessities and luxuries provided by their local authority.
The requirement of any new tax is that it should not leave any group vastly worse off, or vastly better off, than under the old regime and certainly not suddenly; nor should it be perceived as grossly unfair. Here, of course, the poll tax in its present form failed dismally and I frequently criticised it for that. But it need not have happened in that way. The poll tax could have been phased in over five years. It could have been banded roughly according to income or the value of property. Or national taxation, including income tax, higher rate tax, national insurance contributions, allowances for mortgage interest relief, pension contributions, and so on, could have been adjusted so that people in general would, broadly speaking, be in the same net position as they were under the old rates assuming —and this is crucial—that they lived in a reasonably efficiently run local authority area.
I can only imagine that the reason why the last did not happen—that is, the adjustment of national tax rates to make them more progressive—is that a large section of the public would have been intellectually incapable of grasping a trade-off between lower central taxation and higher local taxation; and the old maxim that there is no gratitude in politics would have been proved right once again.
Any new tax should also, ideally, be cheap to collect. Here, again, the poll tax fails badly, though it is not unique in that. Witness the curious way in which successive governments foolishly started to dispense
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with stamp duty, which is an extremely cheap tax to collect, very difficult to evade and, provided that it applies to the disposal of property rather than to its acquisition, can act as a rough and ready form of capital gains tax. Instead, the Government go in for more and more complex schemes—BES, extremely complicated capital gains calculations, and so on —all of which are extremely costly both to the public and to the Government.
A new tax should also be difficult to evade and here, again, the poll tax does not score well. The Government could, of course, get around this by calling the public's bluff—given that they are constantly annoyed that the community charge is termed the"poll tax" by the public and the press —and make it a true poll tax. In other words, they could say, "If you don't pay, you don't vote in local elections". Of course, the public could, in turn, call the Government's bluff by saying, "That's fine by me. I would rather keep the money" and they probably would, given that only 30 per cent. of the population vote in local elections in any case. That would leave local authorities even more short of funds than they already are as a result of the high incidence of non-payment at present.
How would the proposals set out by the noble Lord, Lord Hooson, measure up? I confess I have not studied the Layfield Report and, for that reason, I have only tenuously grasped his proposals. Provided that there were no personal allowances so that tax was levied on the first pound of income upwards, they would certainly meet the criterion of "no representation without taxation". They would also largely meet the requirement that nobody should be vastly better off or worse off than under the old rating system; the exception being those of the mega-rich who are wholly domiciled in this country. There would be an amazing collapse of house prices in certain London boroughs. I think that I heard the noble Lord, Lord Hooson, say there would be some upper limit to his tax but I do not know whether that applies to the percentage rates or to the individual.
In saying that a local income tax would be easy to collect I have to say that there would be certain snags, and I will come to those in a moment. In theory, it would also be difficult to evade but the reality is somewhat different. For example, there are a very substantial number of expensive house and flats, particularly in London, owned by wealthy people from overseas who spend only a few months a year in this country and who pay little, if any, United Kingdom income tax. Many of these people probably avoided registration for the poll tax, but all of them would have been liable, directly or indirectly, for rates —and quite rightly, because of course empty houses are much more likely to catch fire or to be burgled than occupied houses, notwithstanding that there is less refuse to be collected.
However, that is not the only snag. Unless the link between local income tax and the local authority is tenuous—and rather to my surprise the noble Lord said it would be, which would make a nonsense of the whole idea of local accountability—what about the fact that so many people, particularly those who work

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in London, live in quite a different local authority area from the one in which they are actually employed? What about people in the black economy who pay little or no tax? What about the self-employed, whose incomes are not known until well after the year end? Quite often in the case of farmers, artists, actors or salesmen working mainly on a commission basis, their assumed income for the year is based on the previous year's income but it could be very much lower for one year than anticipated because of a change in their fortunes, thus totally upsetting a local authority's revenue calculations. What would also upset local authority calculations would be the sudden financial collapse of the largest employer in the area, throwing thousands onto the dole. Again, that would lead to a massive shortfall.
No, following the Chancellor's ingenious shifting of much of the burden of local authority funding on to VATI find it hard to believe that poor people pay more VAT than those who are better off, given that so many items like food and children's clothing are exempt, but I suppose I have to take the noble Lord's word for it; however, I should be very interested to see his figures—one is driven to the conclusion that in the absence of any will to make the poll tax more progressive some form of property tax has to be the only answer. However, there are a number of essential provisos and safeguards of which I will list only three.
First, it should certainly not follow Mr. Nigel Lawson's scheme, which would involve no revaluation until a house or flat changed hands, apart from annual indexation in line with the RPI. This would most definitely suit me down to the ground. I bought my London house 31 years ago, when real house prices were at rock bottom. My neighbour, who bought an almost identical house two years ago at the height of the boom, would not be so pleased because his rates would be rather more than seven times mine. Secondly, the powers to cap—so unsuitable when every voter pays, or is meant to pay, the poll tax—must be retained and strengthened if there is to be a reversion to any form of property tax which is paid only by a minority of those on the electoral roll.
Finally, I have one other novel suggestion—I hope that the noble Lord, Lord McIntosh, is holding on to his seat—should a property tax be introduced. I do not propose that we go back to 1946, when only those who paid rates were able to vote in local elections, but suggest a rather fairer half-way house. Everybody on the electoral roll would be able to vote once in local elections, in their capacity as citizens. That minority which would actually pay rates would have an additional vote and so would be able to vote twice in recognition of the fact that they pay the piper. This is not so much the principle of "no representation without taxation" but rather the principle of slightly enhanced representation as a quid pro quo for being singled out for taxation.
7.6 p.m
Lord Holme of Cheltenham: My Lords, I join my noble friend Lord Hooson and the noble Lord, Lord Monson, in referring to the timeliness of this debate.
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It is an extraordinary piece of parliamentary serendipity that between the Scylla of the Chancellor's Budget yesterday and the Charybdis of the Statement tomorrow by the Secretary of State for the Environment this small river of common sense can flow through your Lordships' House. Many millions of words have been said and written about the poll tax and I propose to add a few more of my own in your Lordships' House this evening.
I believe that the poll tax is more than a failed policy: it is a very major failure of the whole system of government in this country. In fact, I think the poll tax is probably the biggest single administrative governmental blunder in peacetime in this century. Before framing that assertion I found myself studying the history of great mistakes in this century and I came up with the groundnuts scheme. Of course, the noble Baroness, Lady Blatch, will not remember that any more than I do directly, but I have read about it and seem to remember that it resulted in the resignation of a Minister, the then Colonial Secretary. All I can say is that the poll tax makes the groundnuts scheme look like peanuts.
I think that in any rational, accountable and open system of government there would be some sort of investigation of how this great blunder occurred, and those who were guilty of sins of omission or commission would be identified and would in some way or other be held responsible for what has happened. We have not even had that little word "sorry" from the Government. Perhaps the noble Baroness will remedy that omission this evening, or perhaps being in government means never having to say you are sorry! At all events, I hope that we can get some acknowledgement of the fact that a very great blunder has been made because that would be healthy for our whole system of government. I suspect that that will not happen; but if it does not I trust that at the coming election, when the Government face their final reckoning at the ballot box, they will find the words "poll tax" engraved on their hearts.
The worst aspect about this tragic blunder is that it still is not over: it goes on and on and on. Like the tar baby of the Uncle Remus stories the Government find themselves stickily attached to their own misdeeds; and yesterday's gimmicky Budget illustrates just how serious the situation is and shows that it is still unravelling.
I think we should be quite clear as to what the effect of Mr. Lamont's sleight of hand will be. Not only will local councils have to face yet another series of administrative dislocations and extra interest costs to cover the new borrowing that will now be needed to bridge the Government's credibility gap, and not only will the tax system have been abused for what seems to be a transparent electoral purpose, but the whole relationship between central and local government will have been changed for ever and, in our view on these Benches, changed for the worse.
Of course there is a long-standing case for the reform of the structure and functions of local government; and that review should have come first. There would then have been a case for reform of the system of financing local government; and that should

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have come second. Finally, as a result of these reforms there might well have been a case for tax changes; and that should have come last. A democracy that has succeeded in reversing that process, starting yesterday with a gimmick, which it then attempts to turn at very high speed into a principle, does not seem to me to be fully worthy of the name of a democracy. Are we not behaving exactly like the elective dictatorship to which the noble and learned Lord, Lord Hailsham, drew our attention 15 years ago. We have reached a situation of constitutional nonsense on stilts.
A great question of principle underlies this whole debate. It was very well put last week in a leading article in the Independent, which said:
"We have a choice between some form of local solution and some form of central solution".
If we genuinely want local government in Britain we should aim to raise and spend money locally using government subventions to equalise somewhat between prosperous and poor areas but otherwise respecting local autonomy, as my noble friend Lord Hooson said. In practice, despite the history of the post-war Conservative Party, the Government have decided that the gentleman in Whitehall knows best. We are witnessing an unprecedented centralisation of power in the hands of government in London.
Given the experience of the noble Baroness in local government, I wonder how it can be thought right to bring increasingly into Whitehall the functions of local government and the decisions that affect local people, and that we centralise what many of us hoped and believed would be a local democratic system. The solution to be put forward tomorrow to these problems, which has been foreshadowed by the Chancellor of the Exchequer, is that effectively local government will become a puppet play put on by Whitehall and Westminster. There will be shadow puppet plays in the localities but all the real decisions will be made in London.
As my noble friend said, a local income tax is not only fair, and by definition easy to collect, but it is genuinely local. I see that the noble Baroness disagrees. No doubt she will tell us why she does so when she replies. I am sure she will concede that income tax is rather easier to collect than the poll tax. There is a very much lower incidence of people not paying income tax than of people not paying the poll tax; particularly in Scotland, as we have painfully discovered in the past two or three years.
I want to try to respond to the point which, to put it positively, must have been in the Government's mind when they launched themselves on the slippery path of the poll tax. No doubt they were looking for local accountability. They were trying to strengthen the connection between locally elected councillors and their constituents. They were trying to achieve greater responsibility and accountability in the system. I believe that a local income tax, particularly if combined with proportional representation (which would eliminate some of the extremist minorities which have given local government such a bad name) would have provided precisely the accountability that is now so lacking.
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My noble friend said that I would refer briefly to site value rating. Historically, that was the main policy of the former Liberal Party. We see some application for the site value principle in place of the uniform business rate. Businesses would be taxed locally according to the value of the site which they occupy. That is not perfect but I ask the noble Baroness to tell us what proposals the Government have for the reform of the uniform business rate which seems almost as unpopular in the business community as is the poll tax with the general public at large.
I make one or two final observations. We have all seen the process of the poll tax produced by a strong Prime Minister acting on an acquiescent Cabinet acting on a docile Conservative Party acting on an enfeebled House of Commons. It is a sequence that does no credit to our constitutional arrangements. If ever there was a time for careful deliberation to consider first the structure and functions of local government, then its financial needs and then how the money should be raised, that was it. If the Government were not to accept Layfield, as I think they should have done, the situation cried out for a Royal Commission.
It is a very exciting part of the new dispensation in Downing Street that Royal Commissions will now be allowed. Surely it is not too late for this country to use its institutional genius, which strangely seems to have atrophied in recent years, to appoint a Royal Commission to consider these matters in the right order and come up with the right conclusions. We should fear the possibility of another spatchcock solution produced at short notice for electoral reasons. The constitutional nature of what we are doing, which was referred to this afternoon in the debate on Government business, is such that measures are being pushed through that will together fundamentally affect the quality of local democracy and our democratic life in this country in a way which does not reflect deliberation or care and which does not bother to obtain a wide basis of support.
Unless constitutional change of the kind that we are undertaking has some wider basis of democratic support than the will of the leadership of one party, I do not believe that it will command public confidence.
7.16 p.m.
Lord McIntosh of Haringey: My Lords, I hope that noble Lords will forgive me if I view the debate with somewhat modified rapture. I do not agree that the timing is particularly good. We had an excellent debate instigated by the noble Lord, Lord Rippon of Hexham. If I am to hear attacks on the poll tax, I much prefer to hear them from the Conservative Benches. They are the more genuine for being the more profoundly concealed in recent years.
I do not believe that a serious political party ought to table a Motion for a debate of this kind and not put forward any speakers other than the proposer of the Motion and a Front Bench spokesman to reply. We ought to be jealous of the opportunity given by these limited Opposition debates and make sure that we bring forward matters for discussion which arouse rather more interest at least from the party which

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tables them than has here been the case. That is not to say that I have not enjoyed some of the speeches. I enjoyed the first 20 minutes of the speech of the noble Lord, Lord Hooson. However, this is not the way to deal with the serious matters which are before Parliament and the House this week. That is not to say that I believe for a moment that the way adopted by the Government is the right way to proceed.
We are experiencing an extraordinary week. On Monday a little Bill seeking to enshrine the principle that Marsham Street knows best about the details of local government expenditure was pushed through and completed its passage through this House. Within hours comes a leak—we are told from Marsham Street itself—indicating that despite all the talk earlier in the afternoon about capping the measure is for one year only and that there will be major changes in the whole basis on which local government finance, structure and everything are to be put before Parliament. It was the quick fix.
On Tuesday we had the quick quick fix. In other words, not only do the Government propose—we gather that it will take place tomorrow—after inadequate consideration and inadequate consultation, to make radical changes to the whole structure of local government, but they now propose, within a period of only a few days, to go back on what had been said about local authority expenditure in the coming financial year 1991-92 and, as was well said by the noble Lord, Lord Hooson, to transfer from a completely unjust tax to the next most unjust alternative available, the very unprogressive value added tax. We shall see what that means in legislative terms tomorrow.
If the leak means anything, we shall also have a clearer indication of what will happen in the following years if this country has the misfortune to continue to be governed by the Conservative Party. In the circumstances, the House will forgive me if I do not talk further about the wider issues raised by local government finance. It is not that I am unwilling to kick the poll tax when it is down. I do not think we should be in politics if we are not willing to kick our opponents when they are down. It is that I believe there will be better opportunities to do so. I am sure that parliamentary time will be afforded to enable us to do that.
Before I turn to local income tax in detail, I wish to say a word to the noble Lord, Lord Monson, about the proposal he made which he thought would shock me. If I understand him aright, he is proposing that in addition to the first vote given to all adults, a vote should be given to those who actually pay over the cash for the property tax which he recommends as an alternative to the poll tax. That would not reflect the way in which people have thought about property taxes. I speak now as an opinion pollster. We asked the very simple question immediately after the 1987 election, "Do you pay rates?" Seventy-five per cent. of the adult population answered yes. That means that other adults in the household who may not be handing over the cash themselves see themselves as contributing to the rates. It means in particular that council
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tenants who pay their rates as part of their rent, and not directly as rates, see themselves as paying rates. Those are the people who would be semi-disenfranchised by the proposal made by the noble Lord. They would have one vote, but it would be a lesser vote than that of others.
Lord Monson: My Lords, if one third of the people pay rates, then only that third would have the extra vote. I believe it is fair to say that the noble Lord was once the victim of the loony Left. Does he agree that students, for example, do not pay rates and do not consider themselves as paying rates? Students at universities and polytechnics have nothing whatever to lose, and possibly a great deal to gain, if they vote for loony Left candidates. That is the type of thing that I am trying to minimise.
Lord McIntosh of Haringey: My Lords, that was a very strange intervention. First, I rather resent continuous harping back to the loony Left. Secondly, the noble Lord is just plain wrong. When there were rates, students paid rates. They paid them because the halls of residence in which they lived were accountable for rates and therefore it affected the fees that they paid. If they lived in digs their landlords or landladies were paying rates and the rent that they paid to the landlords and landladies reflected the rates paid. Students paid rates the same as everyone else. Virtually all adults except those who were exempt because of rebates paid rates. To include only those who hand over the cheque or cash for this extra vote is irrational and in contravention of the facts about property taxes as we know them.
I turn to the Motion put down by the noble Lord, Lord Hooson. I note that he talks about "replacing the community charge with a local income tax". As I understand it, the Motion suggests local income tax as the only locally raised source of revenue. That is what "replacing" means. All other revenue would be raised centrally. I shall refer to other points that he raised later. They were very strange.
It would be futile to conceal that I have been a supporter of local income tax for many years. My view has been published on a number of occasions. I can hardly change my spots simply because my party took a different view afterwards. I am on record publicly as supporting it.
I have read the Layfield Report rather more carefully than the noble Lord, Lord Hooson, including the other parts of the argument in paragraph 142 which led the Layfield Committee to come down against local income tax rather than in favour of it, as the noble Lord implied. I was not impressed by the arguments against local income tax. I thought that the Inland Revenue was being reactionary. When it talked about the difficulties of collection I considered that it had not thought them through properly. When I compare the difficulties of collection of the poll tax with the estimate which Layfield made of a collection cost for local income tax of £ 100 million, I am even more convinced that Layfield was wrong to listen to the Inland Revenue's arguments.
I was particularly unimpressed by the argument which the Inland Revenue put, which the committee

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accepted, that one could not possibly have local income tax at district level because of the complexities of people moving from one area to another. Again those difficulties have been dwarfed by the difficulties that we have seen relating to the poll tax. I do not believe that the committee was right to be impressed by those arguments.
Reading again the Layfield Report, I am confirmed in the view I then took which was reflected in the note of reservation by Professor Alan Day. He argued, quite sensibly, that one ought to consider different categories of local authority expenditure, applying a sensible economic political and social judgment to them, and then decide what source of revenue was appropriate to each. He divided local authority expenditure into those areas which were the local administration of central services in which it is entirely appropriate that central government should apply minimum standards and give local authorities the power to top up the expenditure. He then considered as a separate category those services which depend largely on charges to users. He believed that we should consider those in a different way. Finally, he considered those categories which reflect a local view of the services which are necessary for a decent society in the neighbourhood. I paraphrase his words.
He set two criteria for the consideration of local income tax. First, what proportion of local services were the local administration of central services? The higher the proportion which falls into that category the poorer the argument for local income tax. Secondly, how much of grants or taxation power could be delegated to local authorities? The more power that can be delegated to them the greater the argument for local income tax.
On balance Professor Day came down in favour of local income tax because he believed that local autonomy required a greater delegation of powers of decision about the level of local services. However appropriate it might be for local authorities to administer locally central government policies, the degree of autonomy necessary for services required for a decent society was the consideration for determining the balance of local authority services and therefore for determining the financial system to back it up.
I believe that Alan Day was in that note the only person who fully anticipated yesterday's Budget. He said that there was a case for a smaller property tax and "additional VAT or corporation tax". If the bookies had read that passage more carefully, they would not have been quite so taken aback by the Chancellor's suggestion yesterday.
Having been a supporter of local income tax, I came to listen to the arguments put for it by the noble Lord, Lord Hooson. I was really taken aback because, unless I misunderstood, he talked of a uniform national level of local income tax with rebates as appropriate in different areas. That is a recipe for centralisation more extreme than any that I had ever thought possible from the Liberal Party. He then compounded the argument by saying that he agreed with central funding for the basic services of education, with the possibility of top-ups to meet local needs. That may be what the Secretary of State
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proposes tomorrow, although I sincerely hope not. It is certainly not local democracy as we in the Labour Party understand it. It hands straight to central government the most significant and necessarily local of local authority services.
Finally, the noble Lord spoke as though an upper limit should naturally be laid on local income tax by the Treasury. One of my fears about local income tax has always been that it would be much too easy for the Treasury to cap it. The Treasury could always argue to Cabinet that economic management required that there should be some almost theological limit on the proportion of gross domestic product which should be levied through the direct tax system. I have disagreed with that argument since it was expressed 15 years ago by the noble Lord, Lord Jenkins of Hillhead, then a member of the Labour Government, and I disagree with it now. The version of local income tax proposed by the noble Lord, Lord Hooson, invites such Treasury interference. Under the circumstances I have no hesitation in rejecting the version of local income tax proposed by the Liberal Democratic Party as being neither liberal nor democratic. It is certainly not in support nor in favour of local autonomy.
7.31 p.m.
The Parliamentary Under-Secretary of State, Department of the Environment (Baroness Blatch): My Lords, while thanking the noble Lord, Lord Hooson, for providing the House with yet another opportunity to address the subject of local government I wish to share the comments of disappointment expressed by the noble Lord, Lord McIntosh. I am disappointed because the debate, short as it has been, could well have been subsumed by the debate initiated by my noble friend Lord Rippon of Hexham.
My disappointment was compounded by the contribution of the noble Lord, Lord Holme of Cheltenham. He did not speak to the Motion but spent his time criticising the Government in respect of the Budget yesterday and his own views on the community charge. That was a great disappointment.
However, our review is the most wide-ranging in scope that has ever taken place. Previous reviews have concentrated on either structure or finance but not the two together. The Motion before us today is concerned with only one aspect of the review. But the questions of what local authorities should do, how they should be organised and how they should be financed are interrelated in a number of different ways. The review is looking at all these issues together. An interim statement will be made shortly.
Although there have already been announcements about the community charge for 1991–92 it is important not to see the current review simply as a review of the community charge. Before yesterday's Budget we had already announced a number of changes for next year which were designed to provide help to a great many charge payers. The Government had already announced extra support of more than £4 billion for local government and for charge payers. The Chancellor of the Exchequer announced in his Budget speech yesterday that the Government are

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providing a further £4.3 billion of extra grant to local authorities in Great Britain in 1991–92 to permit a major reduction in community charges.
Accordingly, the Government will shortly be introducing a Bill which on enactment will mean that the community charges which authorities have set for 1991–92 will he replaced by new lower charges. Each new charge will be £140 lower than the one it replaced, or zero in those cases where the original charge was less than £140. The average charge in England will be £252 compared with £392 which local authorities have set. Charge payers in all authorities will pay less than this year.
The community charge reduction scheme will continue to help those who will still face large increases over their last rates bill. Although the total help that will need to be given through this scheme will he much reduced by the lower charges announced today I expect that, together with the effect of community charge and other benefits, it will mean that the average charge actually paid in England will be less than £170.
The Bill will also require grants to be paid to charging authorities in England and Wales and to local authorities in Scotland. It is our intention that the grants paid under these provisions should provide full compensation for the community charge income foregone and should also fully reimburse authorities for their reasonable additional administrative costs as a result of the reduction in charges. In England we intend to advance the distribution of the non-domestic rates pool to off-set the inevitable cash flow losses which authorities will incur as a result of this measure. Broadly similar funding arrangements are intended for Scotland and for Wales.
Our review of local government is based on a strong desire on the part of the Government to re-establish a more stable relationship between central and local government. That was spelt out in detail in the debate initiated by my noble friend Lord Rippon. We have been anxious to ensure that local government itself is closely involved in the process. We have held discussions with the leaders of the local authority associations and we have asked for their views on the wide range of issues relevant to the review. We have recently received their responses to our detailed set of questions and are considering them.
We have invited all political parties to contribute to our review to ensure the widest possible participation. This offer has been accepted by the Liberal Democratic Party, the Scottish National Party, Plaid Cymru and the Ulster Unionist Party. I believe that they each recognise that we have genuinely listened to and considered what they have to say. It is therefore a matter of real regret to the Government that the official Opposition has not responded positively to our invitation. Instead it has set a narrow precondition that we should have committed ourselves from the outset to the abolition of the community charge—
Lord McIntosh of Haringey: My Lords, on that basis it may be possible for us to agree to take part in the review after tomorrow.
Baroness Blatch: My Lords, I do not stand in the way of the noble Lord if he wishes to contribute to that debate. But, as I have said, the review is much wider than that. It is a great pity that the Opposition has denied itself the opportunity to participate in a debate which is of immense importance to all our citizens and which will shape the kind of local government that we have for the foreseeable future.
This intransigence shown by the Opposition has been repeated again and again. We hoped that it might reconsider its position or at least spell out for public scrutiny its proposals. Local representatives of the Labour Party have not been as reluctant to participate as has the parliamentary party. Labour leaders of councils have taken part in discussions with my ministerial colleagues and me. We have also had many constructive letters from the leaders and chief executives of Labour-controlled authorities. They have decided not to let slip a great opportunity to contribute to the debate. Why cannot their national counterparts do likewise?
No such doubt could enter your Lordships' mind as far as the advocates of a local income tax are concerned. The noble Lord, Lord Hooson, has put their case eloquently this afternoon. The Liberal Democrats have published detailed figures for the effect of their proposals in every local authority in the land. They have met the Secretary of State for the Environment to put to him and to discuss their objectives for local government.
Notwithstanding some differences of interpretation of the Liberal Democrats' figures the Government are grateful to them for setting out their case. It has helped the review considerably in its consideration of local government finance.
A number of previous inquiries and Green Papers have set out the considerations against which any local government tax should be measured. These include accountability, fairness, ease of collection and the relationship between local and national taxation.
The noble Lord, Lord Hooson, has put the arguments for a local income tax. He and his colleagues believe most passionately in the rightness of their proposals and, as I have said, I am grateful to him for spelling out those proposals clearly. Noble Lords will understand that it is difficult for me to take up these arguments without appearing to prejudge the outcome of this aspect of the Government's review. But I believe that there are some difficulties with a local income tax which your Lordships' House will want to weigh in the balance when considering this particular Motion.
I have to say that the picture which the noble Lord, Lord Hooson, presents is all too simple and attractive. But it ignores some very real difficulties of philosophy and practice which would attend a local income tax. I shall try to draw these to your Lordships' attention in as dispassionate a way as possible and without prejudice to the outcome of the review. The money raised by the community charge in 1991–92 would mean an average increase in income tax rates of 3 or 5 pence in the pound, depending upon whether it was decided to choose to maintain yesterday's budget changes, which was not made clear by the noble Lord,

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Lord Hooson, in the course of the debate. In some areas the income tax rates would be substantially higher than that and the Liberal Democrats would allow local authorities to spend what they liked without any fear of capping. Alternatively, as a result of what has been said today, would they support limits on local government spending? I believe from what has been said that a form of limitation is to be contemplated. If not, that would surely be a recipe for substantially higher tax rates in many areas. Your Lordships will wish to consider whether that reversal of direction may not place too large a burden of taxation directly on incomes. Rather interestingly, we have now heard about a shift of £17 billion—which is the cost of education—on to the national exchequer. That is an interesting new dimension to the application of local income tax.
A local income tax could well lead to problems of fiscal migration. This is the process by which people with the highest incomes would move to the area with the lowest tax rate. Those who paid no local income tax would have an incentive to move to the high tax, high spending areas and demand services at no cost to themselves. This would create a vicious spiral by which tax rates in some areas would go higher and higher as less people were left to pay the local income tax. It is a recipe for instability.
The Liberal Democrat proposals have within them a suggestion that part of the burden of high spending —and by that I assume high spending over the assumed spending of any Liberal Government—should fall on business ratepayers in an area. We have just ended the system by which local business could be taxed excessively by the local authorities in which they were situated. Business would not welcome a return to that position.
A local income tax would be a buoyant tax. The revenue raised by the tax would increase from year to year as incomes rose, without any need to change tax rates. We have to ask whether this situation would encourage accountability or whether it would simply reduce the restraints on local authority spending.
We also have to ask whether it is a suitable tax for local government. I have in mind that for administrative simplicity, income tax rates are only increased or reduced in half a penny or one penny steps. This would make it very difficult for local authorities to determine their spending plans. With a 5p tax rate, the smallest increases or decreases in tax revenue which could be considered would be 10 per cent. or 20 per cent. of their total revenue. That does not commend the tax as a local source of revenue nor seem to enhance accountability.
Another difficulty is one of predictability of yield. This could be a particularly difficult problem with fiscal migration, which I have already mentioned, but the tax yield, especially for small local authorities, could vary considerably with economic circumstances. Local government needs a steady and predictable source of income.
Your Lordships will also wish to consider whether a local income tax would in fact give a fair distribution of the bills for local authority services. Would it be right that a person with a taxable income of £50,000
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would pay 10 times as much for local authority services as someone with a taxable income of £5,000? Should there be an unlimited degree of redistribution of the tax burden within a local authority area? Is a highly redistributive tax of this kind right for financing local government services or is it appropriate only for national taxation?
Several noble Lords have this afternoon criticised the community charge as being expensive and difficult to collect. I recognise that the advocates of local income tax have striven hard to design a collection system which is cheap and workable. But, your Lordships will want to consider whether the Liberal Democrats have not made unsustainable assumptions about the way in which the national income tax works or have suggested a solution which would remove the main virtues of the PAYE system which are that it greatly simplifies the tax affairs of most people and means that they have little or no direct contact with the Inland Revenue.
With the present national income tax system, the Inland Revenue does not need to maintain a detailed record of where every individual lives at every point in time. It needs a contact address but this need not necessarily be the taxpayer's main residence, the place at which he would presumably be liable to a local income tax. So the introduction of a local income tax collected by the Inland Revenue would mean that the Inland Revenue would in effect have to establish a national register of everyone's address.
Lord Holme of Cheltenham: My Lords, in their review have the Government studied the experience of other countries—notably, the United States—where, as the Minister will know, state income tax is collected without any of the apparent problems to which she refers? Has that been included in the review?
Baroness Blatch: My Lords, indeed the Government are studying the taxation systems of many other countries. However, we must start from where we are. We have a system of national taxation where the national taxation office does not have detailed information about every single taxpayer in the country. The PAYE system which operates here has little detailed information about individuals, particularly places of residence.
Lord McIntosh of Haringey: My Lords, there is nothing difficult about it. Every taxpayer has an address and postcode. All one needs to do is to punch in the postcode as well as the tax reference and map that information to local authority boundaries. There is no difficulty at all.
Baroness Blatch: My Lords, my understanding is that it is the national taxation office which will be interested in the amount of money taken from the individual. Global sums of money will then be given back to local authorities. I am talking about the Liberal Democrat system of local income tax and not that of the noble Lord, Lord McIntosh. However, if the noble Lord has a simpler system which will work, we shall he pleased to hear about it.
Most people who pay income tax do so through the PAYE system which ensures that on every pay-day the

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employer has deducted precisely the amount of income tax due. At the end of the year the taxpayer has paid precisely the right amount. This makes the tax affairs of most people simple. The Liberal Democrats suggest that this approach could be continued if the PAYE system charged in addition to national income tax, a local tax rate which was higher than the rate to which people were in fact liable.
In other words, most people would be expected to put up front, as the noble Lord, Lord McIntosh, pointed out, a sum of money which is not related to what is needed by a local authority but a global sum which is greater than that required by a local authority. At the end of the year taxpayers would claim a rebate from the Inland Revenue. That would prove to be a very complex system.
The local income tax rate would be set at a fixed rate nationally at the beginning of the tax year; for example, 7p in the pound. Employers would operate the PAYE system as normal deducting both national income tax and this notional single rate across the country for local income tax. The Inland Revenue would assign the proceeds of the local income tax to local government and pass that back to the areas in which the taxpayers live. Hence, the addresses would be needed.
At the end of each year taxpayers would be responsible for calculating their own local income tax liability and for making a tax return to the Inland Revenue which would issue refunds or demands, depending upon the situation, to individuals based on those returns. To encourage people to make returns the initial local income tax rate would be set at a level where perhaps 80 per cent. of people would receive a refund. Therefore, the initial levy would be higher than that required by local authorities.
It is also not clear how the Liberal Democrats propose to treat individuals with more than one home. We assume that people owning two homes must nominate one local authority as the place of residence and pay the tax rate for that authority. The authority containing the second home would receive no income. Perhaps I may take my own circumstances as an example. Who would compensate Southwark council for what is the equivalent of the standard charge if I chose to pay my local income tax to Cambridgeshire? Or are the Liberal Democrats suggesting that I pay a local income tax of approximately 5p, 6p or 7p in the pound to Cambridgeshire and also pay an additional 5p, 6p or 7p in the pound to Southwark? That particular issue has not yet been addressed.
The noble Lord, Lord Monson, asked an interesting question. He said that unless we had proper representation without taxation, that begged the question whether we were to stop income tax from every pound of earned income; in other words, disregarding personal allowances. That would require registration of all income earners irrespective of whether they fall inside the national taxation system; that is, anyone below the national income tax threshold. Again, that begs an enormous bureaucratic problem.
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I promise the noble Lord, Lord Hooson, that I shall pass on his suggestions, including his very radical one.
The noble Lord, Lord McIntosh, suggested that what happened yesterday interfered with the local authority budget. What happened in the Budget yesterday makes no difference whatever to local authority budgets. I do not know whether that was a slip of the tongue. What it will seriously impact on is the cost of local authority services to charge payers.
Finally, noble Lords will want to consider the extent to which a tax deducted directly from the pay packet at the same rate wherever a person lived would aid accountability. The noble Lord, Lord McIntosh, has already queried that link of accountability, and I join with him in that. Apart from taking more tax than was necessary initially, I understand that the idea of an end year rebate is intended to help here. But would it present a clear relationship between spending levels and the amount of tax paid? Would the actual tax payment be sufficiently visible to taxpayers?
There has been considerable interest as to what stage the review has reached and what the outcome will be. Several noble Lords have referred to recent press speculation. I have already said that the review is considering the structure of local government, the functions that local authorities provide and the way in which local authorities should be financed. I am unable to say more in that regard at this time. However, the review is making good progress.
We have had an interesting but short debate about the Liberal Democrats' proposals for local government finance. I hope noble Lords will share my doubts that a local income tax is not the straightforward and simple solution to local government taxation which the Liberal Democrats seek to present. There are considerable objections to a local income tax of both a philosophical and practical nature.
7.52 p.m.
Lord Hooson: My Lords, I am grateful to the noble Baroness for the courtesy and detail of her reply, which I shall read with the same great interest with which I listened to it. She will not be surprised to learn that I disagree with many of her arguments. It is right to say that in the evidence given before the Layfield Committee, many of the objections raised by the noble Baroness were dealt with and carefully considered. Foreign experience did not bear out many of the matters to which she referred.
I defend the timing of this debate for this reason. It is obvious that when the Government are announcing matters that will have a real effect on the future raising of local government revenue, it is important for the public of the country as well as the Government to know that a local income tax is not only put forward in detail by the Liberal Democrats, but also has been considered in depth by the Layfield Committee.
Perhaps I may say to the noble Lord, Lord McIntosh, that he does not seem to have read the Layfield Report properly. The last paragraph of the proposals at page 300, paragraph 67, just before the reservation paper by Professor Alan Day, says,
"There is a strongly held view amongst us that the only way to sustain a vital local democracy is to enlarge the share of local taxation in total local revenue and thereby make

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councillors more directly accountable to local electorates for their expenditure and taxation decisions. On balance, we consider that the administrative cost involved in introducing a local income tax for this purpose would be justified. After many decades of uncertainty in the realm of local government finance the time has come for a choice on the issue of responsibility".
That concluded the report and it certainly came down in favour of a local income tax.
I totally accept the argument of the Layfield Committee that there should be a limit to the amount of the rate of local income tax. That is obvious. Otherwise, a local authority can set up in competition with the national government on such matters as redistribution of income. If there is not a limit the local authority can usurp the position of the national government. Though we are firm believers in local autonomy and local authority independence, we do not believe that the local authority—for example, Lambeth—should be under a local income tax and able to challenge national authority.
It has been an interesting debate. I was interested to know that there were various differences between what we may call the "McIntosh version" of local income tax and that of the Liberal Democrat. Not having investigated the matter in detail, I have followed what is sensible to follow; that is, a two-year investigation by Layfield.
Baroness Blatch: My Lords, I am grateful to the noble Lord for giving way. It was remiss of me not to refer to the specific question asked by the noble Lord, Lord Hooson, regarding the cost of collecting the community charge. The cost of collecting the community charge is approximately twice that of collecting the rates. It is our assumption that it will cost about the same to collect local income tax.
Lord Hooson: My Lords, I am grateful for that information. Can the noble Baroness put her finger on the details?
Baroness Blatch Baroness Blatch: My Lords, not at this moment.
Lord Hooson: My Lords, I am obliged. I am grateful to all those who took part in the debate, which has been a helpful contribution to the wider debate on raising revenue for local government. I beg leave to withdraw the Motion standing in my name on the Order Paper.
Motion for papers, by leave, withdrawn.

Global Warming
7.57 p.m.
The Earl of Shannonrose to ask Her Majesty's Government what steps they have taken to ensure that the various implications of global warming have been presented to the public for general debate.
The noble Earl said: My Lords, I seek this evening to ask Her Majesty's Government what steps they have taken to ensure that the various implications of global warming have been presented to the public for general debate. I have done that because I am concerned that outside inter-governmental fora, universities, environmental research centres and the boardrooms of responsible business corporations, the
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public at large finds itself confused and at a loss. Adding to that situation, I fear that government and far too many environmentalists alike have to face claims of a greenhouse conspiracy when urging further action. It is the divided views of environmental scientists and economists as reported by the media —often in an irresponsible way—which may make the public reticent to respond positively and with commitment.
During the debate initiated by the noble Lord, Lord Ezra, on, "The Environment: A Comprehensive Strategy", I referred to the then forthcoming international global warming debate, which took place at the premises of the Royal Society in London on 7th and 8th March. Speaking at the debate, which I had the privilege to chair, was a Mr. Peter Thompson, the chairman of Strategy Europe Limited, whose idea it was to hold the debate. The Minister of State for the Environment, Mr. David Trippier, paid tribute to him for his initiative.
In his address on the media and global warming Mr. Thompson said,
"I would hope that readers, listeners and viewers will be as critically alert about editorial environmental reporting by the media, as they are now about party political propaganda and rhetoric".
Without detracting in principle from Mr. Thompson's views, I would mention the positive and responsible role of the regional and local media both he and I found in its reporting of the global warming debate. The BBC, independent and community local radio stations in many parts of the country in their mainline news and current affairs programmes, demonstrated much interest in the debate. This interest applied to the regional press, notably the Yorkshire Post. I am also glad to say that representatives of a number of scientific, technical and academic journals attended the debate and are writing papers and reports on it. However, the national media was another story. The debate would have passed totally unnoticed were it not for the BBC TV "Breakfast News", the Daily Telegraph, Independent Radio News and Sky Television.
In the main, the national media's view can best be illustrated by the comment of the environment correspondent of the Financial Times when he was offered a copy of the statement made by the Prime Minister of Norway, Mrs. Bruntland, to which I shall refer later. He said at that time:
"I don't want to see what she [Mrs. Bruntland] says. She is always talking about global warming".
I am happy to say that there was no such jaundiced view when I had the privilege to relay Mrs. Bruntland's statement to those who attended the global warming debate. Eminent speakers and distinguished delegates, as one, warmly welcomed the Norwegian Prime Minister's deep and moving anxiety for the crisis which we are all facing related to the greenhouse effect and its global warming.
Returning to Mr. Thompson's address on global warming and the media, Professor Patrick Michaels, a speaker at the debate, responded by referring to an article published in a North American journal which discussed the dilemma of debate on scientific thought. He reported the journal as saying:

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"On the one hand, as scientists, we are ethically bound to the scientific method, in effect promising to tell the truth, the whole truth and nothing but … which means that we must include all the doubts, caveats, ifs and buts. On the other hand, we are not just scientists but human beings as well".
It goes on to argue that, in order to capture the public's imagination, media support is essential, along with some frightening scenario and statistics. It is then up to the scientist to strike the right balance between being effective and being honest. Professor Michaels' illustration has more than a ring of truth in it. It was this type of dilemma which has fuelled media debate and confused the public. That was the background to the conception and setting up of the global warming debate and, I might add, was also the background to this question which I am putting to Her Majesty's Government.
The debate, in association with the Environment Council and supported by the United Nations Industrial Development organisation and the United Nations Environment Programme, covered two days and, within its framework, there were seven mini-debates. The themes of these were: the scientific approach. the economic implications, Eastern Europe, the role of the rainforests (in which we were addressed by Dr. Jane Goodall who flew from Tanzania to be with us and make an address); the media and global warming; transport; energy; the framework policy legislation for the environment; and the business response to global warming.
The structure of the debate was to have opposing positions on all the subjects discussed. Speakers came from five countries and delegates from seven and most of them were environmental specialists and corporate advisers playing a full participating role. I was pleased to see that the Department of Trade and Industry, the Department of the Environment and the Department of Energy had senior representatives at the debate. Although the debate was a-political, it strove to close the gap between conflicting opinion and thereby stimulate a collective response either to advise action to check the rapidity of global environmental damage or to deliberate more effectively and speedily to produce answers before time runs out.
As I have mentioned, the Prime Minister of Norway, Mrs. Bruntland, sent a message for me to read out to those gathered at the debate. Perhaps I may be allowed to read some extracts:
"The threats to our global environment have become even more alarming since the World Commission on Environment and Development presented its report, Our Common Future, in 1987.
In our efforts to save the global environment, a special responsibility lies with the industrialised countries. We have drawn upon the natural capital left to us by our forefathers, we paid little or none of the true environmental costs of our growth, and we have passed on most of the bill to the generations coming after us".
Opening the economic debate, Mr. Nicholas Hartley, senior economic adviser to the Department of the Environment, suggested that there are three ways to lessen global climate risks. First, to intensify the amount of scientific research in order to reduce climate and impact uncertainties; secondly, to foster the development of new supply and conservation technologies; and, thirdly, to make immediate
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reductions in emissions. On the subject of Eastern Europe, professor Zdzislaw Kaczmarek, of the International Institute for Applied Systems Analysis, mentioned in his speech that the world's most developed countries had demonstrated that market mechanisms alone could not sufficiently protect the environment.
The non-CO2 elements of the greenhouse problem, which include population growth, deforestation and others, was addressed by Mr. Malcolm Edwards, commercial director of British Coal Corporation. A new jurisprudence was called for by Mr. Malcolm Forester, director of the centre for environmental law at the University of Southampton. He said it would promote the common interest in the biosphere above absolute sovereignty over natural resources—
"a new De Jure Gentium of the environment".
On voluntary codes of practice, Dr. Horst Wiesebach, deputy director general of UNIDO, stated his organisation's experience shows that voluntary guidelines are broad in their scope and cannot cover every situation which may arise. The principle of their use lacks a mechanism which could motivate the industry to apply them. The subject of carbon dioxide emissions by industry in the united Kingdom was addressed by Mr. Christopher Hampson, chairman of the CBI environment committee and an executive director of ICI. He stated that UK industry is currently a major contributor to the nation's carbon dioxide emissions although these have halved since 1960. He added that if industry was properly motivated, it could effectively deliver desirable change.
Another initiative, which I mentioned during the debate of the noble Lord, Lord Ezra, was that a national survey on the corporate policy on environmental safeguards was to be launched. The survey was conceived and conducted by Strategy Europe Limited, with which I have some association. To-date, 4 per cent. of the major companies which received the questionnaire have responded, against the background that the questionnaire asked for no details of the respondent or of his organisation. What this says about public affairs directors, to whom the survey was addressed by name, and about their corporate attitude to environmental responsibilities, I am not quite sure. The responses received, however, have significant importance and merit, in that they proved to be a litmus test of a good cross-section of the industrial sectors.
Three questions in the survey, dealing with the levelling of tax and levies on companies to contribute to global warming and the environmental damage caused by the Gulf war, produced a majority view against. A report on the responses to the survey is to be published, and there is also to be published a comprehensive report on the global warming debate, which will include speakers' addresses in edited form. There will also be audio recordings of the whole of the two-day debate, in edited form. For those who are interested, these can be obtained from the organisers of the survey and debate.
Arising from these frank responses to the survey and from the key thoughts at the global warming

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debate are a number of recommendations to which I hope this Government will give ear. They are as follows. First, that industry should be properly motivated in order to respond positively to effect business practices on environmental issues. Secondly, that the Government should review their dependence on voluntary codes of practice in industrial sectors to see whether their application should be strengthened by further legal frameworks. Thirdly, that legislation should be introduced to protect non-executive directors from their boards, which effect merely cosmetic environmental stances.
Fourthly, that those Secretaries of State appointed to monitor their department's environmental activities should encourage the appropriate media to act responsibly and concentrate on fact rather than fiction. Fifthly, that, in terms of this country, academics and scientists associated with environmental problems should be encouraged by the Department of Education and Science to work together in the interest of public wellbeing. Sixthly, that the Secretary of State for the Environment should ensure that the broadest factors are considered by the IPCC in the development of a framework policy.
Seventhly, that in Eastern Europe, Western environmental expectations should be allowed to be interpreted by countries which are more able to evaluate the resources which they can put to environmental concerns. Eighthly, that the Department of the Environment should establish public debates, in regional areas throughout the United Kingdom, to assess and evaluate public anxieties on the greenhouse effect and global warming and that the cost of mounting these debates should come out of the public purse.
Finally, I should like to put right a statement which I made, in the debate of the noble Lord, Lord Ezra, about European Commission reported legal challenges to the Government for infringement. At that time I was quoting a news item from the Daily Telegraph dated 25th September 1990. After considering a kind note from the noble Baroness, Lady Blatch, and one from Mr. Kenneth Collins, a Member of the European Parliament and chairman of its environmental committee, whose statement it was that was the subject of the report, it would seem that the report in the Daily Telegraph was inaccurate.
8.15 p.m.
Lord Hatch of Lusby: My Lords, I am grateful to the noble Earl, Lord Shannon, for putting down this Unstarred Question at what is very much an appropriate moment, as I shall show later. I particularly congratulate him on his chairmanship of the conference to which he referred. It would be of benefit to all of us concerned with the environment if we could be supplied with the papers when they are ready.
I say that this is a particularly appropriate moment to discuss the Government's attitude to the question of global warming so far as concerns the public of this country because the best opportunity that the Government had for initiating a debate among the public was just 24 hours ago. The Chancellor had the
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opportunity in the Budget of showing the Government's hand towards global warming and educating the public at the same time. The House will recall that on many occasions since the publication of the environmental White Paper last year—we have questioned the Government on items in it—we have always been referred to the fact that this was the business of the Chancellor and that we should wait for the Budget. Well, we waited. And we have seen what is contained in the Budget.
I am making the assumption that by now, particularly since the report of the IPCC, it is accepted that there is at least a very strong prima facie case for accepting that global warming is a reality. I refer to the report of the noble and gallant Lord, Lord Carver, on this subject in which he and his committee stated clearly that the case was such that we should at least accept what is called the preventive policy, assuming that these changes are likely to take place and that it will be too late if we do not accept the very strong probability that they will take place.
I have been closely associated with the School of Environmental Studies at the University of East Anglia. From my knowledge of the work done there and elsewhere in academic circles, I have no doubt that this is the only sensible—indeed, the only responsible policy—that any government can take towards the prospects of the next 50 years. What do we find in the Government's attitude, as shown yesterday, towards this issue and towards the public, which largely depends on the Government for its lead? We were told in the White Paper that the Government's policy is that the polluter should pay. Let us look at that and let us look at the Government's attitude in the Chancellor's speech yesterday.
First, on the question of carbon dioxide emissions, the use of vehicles is a very important element. We live in the privileged part of the world. We live in the developed half of the world. We in the developed part are responsible for 85 per cent. of carbon dioxide emissions. Those emissions are a consequence of the consumer society. It is the responsibility of all those in public life, and especially of the Government, to bring to the attention of the public the stark realities of the dangers if we continue along the consumer lines to which we have become accustomed over many generations.
We looked yesterday to see what courage the Government had in telling the public that the polluter should pay; that it, the public, would have to pay more for its petrol; that the Government were not prepared to continue to subsidise company cars to the extent of £3.4 billion a year, a grant which is four times as great as the subsidy given to British Rail; and that we should look at road taxing in relation to different sizes of engine. We wanted to see what the Government intended to tell people to encourage them to use catalytic converters.
The Chancellor's speech was timid: it tinkered with all these major problems. Perhaps the right honourable gentleman was frightened, like President Bush, of public opinion. If economic policy is to be governed simply by vote catching, one can see the dangers he foresaw. However, we are talking about

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life on this planet over the next 25 to 50 years. I was glad to hear the noble Earl say in his opening speech that it is now clear that market forces alone will not control the polluting of our planet and the fuelling of global warming.
In this respect one has only to study the United States. President Bush is not prepared to reduce the fuel guzzling of the United States because, as he says, public opinion polls show that the public is against it. That is hardly leadership. Market forces will not reduce the dangers. In this country we have seen the lobbying that goes on. Only today I received a package from a major company which sought to persuade me that what I had been saying about the use of CFCs could not be justified. We have seen the operation of the oil companies in killing the imaginative plan in California for a green policy. It is up to the Government to control those market forces in the way that their own scientific advisers and international scientific advisers have shown is essential if the planet is to be saved from disaster.
We are pleased to see the increase in petrol prices although the differential between the price of unleaded petrol and leaded petrol is not likely to persuade many people to change to unleaded. The tinkering with the taxation of company cars is hardly likely to meet the challenge of the £3.4 billion a year. Road tax is not to differentiate between the size of car engines. Catalytic converters are apparently to receive no encouragement.
More than that, on the other side of the coin of how energy can be saved, the market for energy conservation equipment has declined by 28 per cent. over the past two years. It is 28 per cent. smaller in 1990 than in 1988. Our GDP for the fourth quarter of 1990 was 1.1 per cent. lower than in 1989. In other words, we are becoming poorer. Yet for that same 12-month period, energy use increased by 1.8 per cent. with the consequence that carbon dioxide emissions increased by 1.6 per cent. That hardly promises a stabilisation of carbon dioxide emissions by the year 2005, still less a reduction of such emissions by at least 20 per cent., which environmental scientists believe is essential if global warming is even to be retarded. Yet, on energy saving equipment, this very constructive element in the equation, VAT is still to be charged. If the Government were serious in trying to educate the public into using energy conserving equipment, if the Government were concerned about increasing investment in energy saving equipment, they would remove VAT from it altogether.
When one is looking for a reduction in the waste of energy and for a reduction in carbon dioxide emissions and the emissions of other greenhouse gases, where do the Government stand on those other forms of energy which do not pollute the planet? I refer to solar energy and wind power. We see nothing encouraging in the Government's relations with the public on these matters. I have elicited from the Government Front Bench figures for the amount they are investing in research on renewable energy sources. It is a mere fraction of the amount they are spending on research into nuclear energy. Surely that flies in the
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face of all experience and advice concerning the greenhouse effect. Where does one find in the Chancellor's Budget yesterday any consideration of the carbon tax on fossil fuels, which cause 50 per cent. of carbon dioxide emissions, proposed by the previous environmental adviser to the previous Secretary of State for the Environment, now chairman of the Conservative Party?
I hope that the noble Lord who is to reply will not give us the old and now tired answer that the whole problem will be met by the use of nuclear energy. We have had that canard before. We have pointed out that nuclear energy is wildly expensive, inefficient and builds up a legacy of highly dangerous toxic materials with which neither the Government nor anyone else have any idea how to deal. A programme has been laid down of clear scientific advice to the Government. It includes energy efficiency, renewables and taxation of the polluter at such a level that pollution is reduced. These are the methods which all scientific advisers have suggested to the Government and to the public.
However, we are still awaiting a lead. Will the Government have the courage to tell the people of this country the real, harsh and stark alternatives? The public must be educated into recognising the fact that we have to change our form of living in this country and that in the developed world internationally if we are to play our part in saving the planet from disaster.
8.30 p.m.
Lord Hampton: My Lords, I am sure that we are all grateful to the noble Earl, with all his experience on the subject, for bringing the problems which could arise from global warming once more to our attention. As he said, the public are at present confused and at a loss in regard to the matter. The Select Committee, under the chairmanship of the noble and gallant Lord, Lord Carver, produced an impressive report on the greenhouse effect to which the noble Lord, Lord Hatch, referred. We can only briefly mention the subject in this debate. The Committee's first conclusion was an acceptance that,
"greenhouse gases have increased and that global mean temperature is higher now than in 1850".
The Committee went on to say that,
"they consider it likely, though not proven"—
I emphasise the words "not proven"—
"that the observed increase in greenhouse gases has contributed to the warming".
Surely that is enough to show us that we must take seriously the problem that global warming could bring about considerably worse weather conditions and, in some places, devastating flooding. Steps certainly need to be taken to avert a possible crisis. To do so, the public needs to be fully informed on what it can do. While Ministers happily say, "We are all green now", our submission is that not enough is being done.
The 1980s saw the rise in the United Kingdom of the new force of green consumerism. As the public became more aware of environmental issues they started to demand environmentally friendly goods from manufacturers. The speed with which the public moved to CFC-free aerosols and lead-free petrol was a case in point. Such cases have proved time and again

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that, given accurate and comprehensible information, individual consumers are willing to play their part in preserving and protecting the environment.
Survey work carried out for the Consumers' Association has shown that consumers' purchasing decisions are based partly on the environmental effects of the products. In a separate survey of CA members, 81 per cent. of those questioned said that they were prepared to pay extra for goods which were less damaging to the environment. However, in the most crucial area of the relative efficiency of domestic electric appliances, where the most efficient appliances are not necessarily the most expensive, accurate and comprehensible information is not available to the consumer at point of sale.
The Consumers' Association has given me a most helpful brief on this subject. The association says it is convinced that big energy savings are possible in this area and that energy efficiency labelling would provide an excellent way of simultaneously protecting both consumer interest and the environment. For example, as the March edition of Which? reveals, if a member of the public was setting out to equip a kitchen with a new fridge, dishwasher, washing machine and tumble dryer and had sufficient information in all cases to distinguish the most energy efficient appliance in the range, the extra cost of purchasing the most efficient appliances would be £30. However, given average usage, that increment in cost would be saved in running costs in the first year alone. Further, looking to the environment, over half a tonne less carbon dioxide would be contributed to the atmosphere each year; that is, working on the basis that every unit of electricity generated at a coal-fired power station will be adding about one kilogram of carbon dioxide to the atmosphere. Let us take another example. Some fridges cost half as much again to run as others. That is due to poor insulation, badly fitting doors and so on.
However, such comparative information is presently hard to come by. Although for many years the Consumers' Association has measured the relative efficiency of major appliances as an important part of its product evaluation for Which? and has, in consequence, built up a unique database of energy consumption by brand and by model, such information is not available to the consumer at point of sale; that is, with the exception of those fridge purchases made at any branch of the John Lewis Partnership.
The Energy Efficiency Office has put forward proposals for a voluntary energy labelling scheme for domestic appliances. However, its proposed starred rating scheme, whereby appliances more efficient than a set minimum will get a star rating from one to five, will fail to identify to the consumer appliances which are less efficient than the standard minimum.
Although we hope that consumer pressure will prompt all manufacturers to take part in the scheme, manufacturers' current belief that running costs are not a priority with their customers, combined with their initial reluctance to make the first move lest it should place them at a commercial disadvantage, suggests the need for a mandatory scheme. The
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European Community has proposed such a scheme which will initially be applied to refrigeration equipment where the greatest scope for efficiency is to be found. However, we remain concerned that, given the current progress of the framework directive, this is unlikely to be implemented in the United Kingdom before 1993. In our view the Government should take the initiative in the matter and implement a mandatory labelling scheme.
Before I conclude, I should like to ask the noble Lord, Lord Cavendish, a few questions of which I have given him notice. First, what incentive is there for the newly privatised electricity industry to encourage the use of more efficient appliances by labelling them in the electricity shops? Is it because they will sell less electricity if they do so? In addition, will the Government accept the fact that market forces often working only in the short term—both the noble Lord, Lord Hatch, and the noble Earl touched upon this point—are not sufficient when consumers do not have the information, and retailers the incentive, to buy and sell efficient appliances? Experience in the United States and in Canada has shown this to be the case. Finally, what are the Government doing about the need for better education on environmental awareness in our schools?
I end with a short passage from the Liberal Democratic policy paper on the environment entitled What Price our Planet? It reads:
"Liberal Democrats believe that each and every person can make a contribution to meeting the environmental challenge. Changes in lifestyle can have a positive effect. But those changes in lifestyle must come voluntarily out of a recognition that we are all responsible to future generations for the state of the environment that they inherit".
The passage goes on to state:
"To ensure that people can make informed choices we believe that far more effort is needed from Government and industry, at all levels, to provide reliable information about the issues, and actions, individuals and communities can take".
Will the Government accept that statement?
8.38 p.m.
Lord Peston: My Lords, while thanking the noble Earl, Lord Shannon, for introducing this short debate, perhaps I may point out that my own contribution is rather inexpert and will, therefore, have to be brief. On the subject of global warming, although I know that there is controversy in this respect, it seems to me that the balance of argument must surely be that global warming has taken place. Further, although I understand that there is some controversy among scientists as to whether there is a greenhouse effect, I believe that the balance of opinion lies with those who say, "Yes, there is".
It is difficult to believe that, as is acknowledged, the fact that the five warmest years of this century all occurred in the 1980s can be a coincidence. This is a subject we must take seriously. Equally, without panicking the public, we must recognise the effects that global warming will have. Action is required because those effects are adverse. There are its well-known adverse effects on trees. If we have global warming all sorts of species will begin to disappear. We have read about the melting of the Polar ice-cap

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and the rising sea level. In addition, there are statements which I do not believe are apocalyptic; namely, that we shall experience more extreme weather as a result of global warming—heatwaves, droughts and hurricanes.
It is a serious matter, and it is right that the noble Earl on this occasion, and other noble Lords on other occasions, have emphasised the importance of dealing with it, and looking for policies. I understand the noble Earl to be saying that education is part of what we should do. We should inform and persuade the public, first, of the seriousness of the problem; and, secondly, that some things can be done and, it follows, some things must be done. I shall make a few remarks on that topic.
I recognise—curiously the Government contradict themselves in their White Paper—that we have made considerable progress. I had not looked at the figures for the past year to which my noble friend Lord Hatch of Lusby referred. Clearly, the economy is in a cyclical downturn. He said that our energy use in the past year has increased. I did not check that figure and I apologise to him for not being aware of it. However, that is a one-year phenomenon. As I understand it, having studied the problem in some depth, if we take the longer view, the energy intensity of our economy has decreased considerably. Whatever else we say about our country and the whole of the advanced industrial world, we are producing more with relatively less energy. In that sense, we are doing something to solve the problem. That is one of the points that puzzles me about the remarks in the White Paper. It says, and I do not disagree with it, that we must approach the problem internationally; that a country cannot act on its own; that the whole matter is of international concern and requires some kind of international framework for progress to be made.
The Government seem then to go too far. Having emphasised the international framework with which I agree, they imply, and in one or two places say, that no country acting on its own can do very much. That seems to me to be wrong. I agree that we need to act internationally, but countries acting on their own can do a great deal. The evidence I have cited, which shows that we are all using less energy and are doing a number of other sensible things, is indicative of the fact that we can do things on our own even though co-operation will play an important part if progress is to be made. I hope that when the Government consider those matters they will realise that they cannot duck out of taking action in our country merely by saying that matters would be a good deal better if we were operating in an international framework. Of course they would, but we have important things to do ourselves.
The important point, as my noble friend and other noble Lords have emphasised, is that the action to be taken is tough and is, unfortunately, unpopular. I do not join my noble friend in attacking the Government for that, because any government will have to face up to that unpopularity. I hope that those of us on this side of the House who look forward to being in power will be willing to be as unpopular as my noble friend
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wants the Government to be. The things we need to do are the things that people do not like. They involve raising taxes on environmentally unfriendly activities. People do not like paying taxes. It may mean some regulation of industry, which industry does not like; but, nonetheless, it is difficult to see that we can achieve much without standards and methods of intervention. If we move to alternative technologies, as we need to, they may involve higher costs. So to obtain the environmental benefits the consumer may have to pay more. That is unavoidable. It is a matter of tough policies, persuasion and education.
Like other noble Lords, I am not persuaded that the public fully understands how serious the problem is. We are faced with the usual position, that people on the whole tend to be shortsighted with respect to their own standard of living. They do not see that their descendants will have a major price to pay if we do not act appropriately. In that connection, I assume that the rubric of the noble Earl's Question enables me to say that one area in which we need a great deal more activity is research. We need more research into global warming and alternative technologies.
Perhaps I may mention a point that is dear to my noble friend's heart: that the technologies that should concern us most are those likely to be used by the developing world. Although the advanced industrialised world has to a large extent been the cause of the problem until now, we are rich enough and determined enough to rein back what we do. The danger is that the emerging world—I do not for one minute blame it for this—is likely to adopt as its way forward the obsolete technologies, because they are cheap. It is our duty to invest in production methods suitable for the emerging nations which will enable them to raise their standards of living and at the same time not pollute the atmosphere.
We must move away from fossil fuels. We have been moving away from them and we must do so a great deal more. Solar energy and wind energy have a key role to play. It is a disappointment to many of us that we have not made the technological advances that we had hoped to make, and in particular we have not made the economic advances that we should have liked. When dealing with wind power we have the standard contradiction which is most irritating. People, notably farmers, try to move into wind power. They do so partly to diversify, because we have been told that as part of the CAP we must diversify. Then, as I understand it, the Department of the Environment announces that windmills are environmentally unattractive, and it tries to prevent progress with the windmills. We lose both ways. We are told that we must not pollute the atmosphere by using conventional fuels. We then go for windmills, people say that they are ugly and that permission will not be given for them to be installed. The Department of the Environment occupies easily the ugliest building in the United Kingdom, and I wonder whether it has had its whole environmental judgment distorted by that building and therefore does not realise that it is supposed to be a department of the environment. I live in Marsham Street and so I have the problem of having to look at that building most days of the week.

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I must speak about nuclear power. As my noble friend is aware, on this I disagree with him slightly. The priority is not to increase global warming. The important point about nuclear power—whatever else is said about it—is that it does not add to global warming. It does not emit any of the gases involved. It may have other environmental disadvantages, but on the whole nuclear power does not increase global warming. If one were to take the view, first, that we do not want global warming; secondly, that we do not want fossil fuel; and, thirdly, that we do not want nuclear power, we shall end up cold in the winter. We have to make up our minds.
My last point—wearing my education hat, and following the noble Lord, Lord Hampton—relates to the national curriculum. Educating young people who will be the future decision makers is just as important as educating ourselves. I am very concerned as to whether there is a place in the national curriculum for this subject. As noble Lords know, the problem is that the compulsory part of the national curriculum does not include any subject like this. The education on it is supposed to happen through what are called cross-curricular themes. Most of us who have taught know that cross-curricular themes tend to he topics that are neglected. It would he a great pity if such subjects were regarded as optional when other disciplines, important though they be, are compulsory. It would be a tragedy if, between the interstices of the individual subjects in the national curriculum, a topic such as global warming which is more generally of the environment, disappears because exam questions must be written more specifically in history, geography, economics and so on.
I have ranged across a number of issues because the subject is so interesting. I end as I began, by thanking the noble Earl. It has been helpful to us to raise the topic. I know full well that he will not let it go away, and even if he did my other noble friends will keep at it. I look forward very much to hearing the Minister's comments on these matters.
8.51 p.m.
Lord Cavendish of Furness: My Lords, I have listened with interest to this debate and especially to the contribution of the noble Earl, Lord Shannon. I am grateful to him for summarising the proceedings of the seminar he chaired recently on the subject of global warming at the Royal Society. Perhaps I may also say how grateful I am to him for graciously withdrawing his earlier criticisms of the Government in respect of compliance with Community environmental law.
Perhaps no environmental subject has so captured public imagination in recent years as global warming. Every spell of unusual weather brings more speculation about the possible impacts of global warming on climate and sea levels. It is important that the public are properly informed about the causes of global warming, the likely effects, and what can be done about them. The debate chaired by the noble Earl made a very useful contribution to this process.
We have consistently argued the need for policy to be based firmly on sound science and have sought to
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keep the public informed of the developing scientific consensus. We have backed up our conviction through our support for the Inter-governmental Panel on Climate Change (IPCC).
The IPCC working group on the science of climate change was chaired by the UK. It brought together over 300 of the world's leading scientists in this field who concluded that, allowing for the many uncertainties involved, increases in greenhouse gas concentrations caused by man's activities will result in additional global warming. This has—in the words of the former Prime Minister—given us an "early warning". To that extent, there has been a general consensus in which I find myself agreeing with the noble Lord, Lord Hatch.
The Government recognise the seriousness of the threat. Work must continue on the underlying science of climate change and on predicting and quantifying the effects of such change. The UK's involvement in the IPCC continues to be significant. The establishment of the Hadley Centre for Climate Prediction and Research last year gives us a strong base from which to contribute to the international debate.
We are clear that there is sufficient evidence to justify action now given the length of time greenhouse gases emitted by our generation will remain in the atmosphere and the potentially severe effects of climate change. We are pursuing action internationally and at home.
Action must be taken globally. The UK accounts for only a small proportion of greenhouse gas emissions—for example, only 3 per cent. of world carbon dioxide emissions. So there is little point in unilateral action. Indeed, there would be a danger that we would simply export the problem by encouraging greenhouse gas emitting processes to move to countries without a target. I hope that that answers in part the comment of the noble Lord, Lord Peston, that the action needs to be international. Can anything be done here in the UK? Yes, it can. And we shall do it. However, it needs an international effort to get the global emissions down since we produce only 3 per cent. of total CO2 emissions. We are participating to the full in negotiations for a climate change convention. Those negotiations began in Washington last month and should be completed in time for the United Nations conference on environment and development in Brazil in 1992.
At home we have taken steps to inform the public about the greenhouse effect and the implications of global warming. This is at the heart of the noble Earl's Question. In 1989 we published a booklet, Global Climate Change, explaining the greenhouse effect and the threat of climate change. Copies were sent to all schools to capitalise on the strong interest among schoolchildren in global environmental issues and to ensure that the next generation will be alert to the threat and the need for action.
This was followed by the environment White Paper, This Common Inheritance, which again explained the greenhouse effect and the action the Government were taking to tackle the threat of climate change. We produced a short version of that, which was given wide circulation, including all schools. In saying this I

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hope I answer one of the points raised by the noble Lord, Lord Hampton, and that he derives encouragement from my answer.
Perhaps I may add something about the environment in the context of the national curriculum, particularly as it was raised by the noble Lord, Lord Peston. There is a long tradition of environmental education in our schools. Pupils have investigated aspects of their environment through a variety of subjects. Teachers have used the environment as a stimulus for pupils' learning. We are now introducing the national curriculum and environmental education has been identified as one of the five cross-curricular themes of the curriculum. There are explicit references to the environment and environmental issues in various national curriculum subjects, particularly in science and geography. History, art, English and other subjects also have a part to play. These measures will provide children with a sound knowledge and understanding of the environment and how it affects our lives, both in the small scale and on a global scale.
Greenhouse gases occur naturally in the atmosphere. Indeed, water vapour is the most important natural greenhouse gas. The problem is that human activity is increasing the concentrations of the natural greenhouse gases, principally carbon dioxide, which is responsible for over half the greenhouse effect, methane, nitrous oxide, and ozone. In addition, the chlorofluorocarbons or CFCs, powerful greenhouse gases, are entirely man-made.
The UK has announced that, as our contribution to the global action required, we are prepared, if other countries take similar action, to adopt a target of bringing UK emissions of carbon dioxide, the main greenhouse gas, back to 1990 levels by the year 2005. We are also pursuing measures to reduce our emissions of methane, and we are committed, together with other EC countries, to phasing out the production and consumption of CFCs by 1997.
Taking action on all greenhouse gases together, the global warming potential of Britain's emissions should fall significantly, by approximately 20 per cent. by 2005 compared with levels in 1990.
The White Paper set out a first tranche of measures to achieve our carbon dioxide target. We are already taking many practical steps in the fields of energy efficiency, renewable energy, transport and forestry which make sense in their own right as well as controlling greenhouse gas emissions. We have said that we would like to maintain the nuclear option for electricity generation but only if it becomes more economic and the industry demonstrates that it can maintain high standards of safety and environmental protection. The Government will carry out a full review of the prospects for nuclear power into the 21st century in 1994.
Energy efficiency is clearly one of the most cost effective and environmentally sensible measures for us all to take. Energy efficiency helps to reduce emissions of CO2 through using less fuel while also making economic sense. OECD figures show that between 1983 and 1988 the UK's energy intensity—the ratio of energy use to GDP—fell at a faster rate than that of
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most of our competitors, including Japan, which is widely regarded as the most energy efficient nation. Further improvements in energy efficiency could make the greatest single contribution to reducing energy consumption in the short term.
The Government are putting in hand important moves to achieve further improvements in energy efficiency. The Energy Efficiency Office will continue to participate in this, drawing on its experience since the office was established in 1983. Such has been the success of its work that savings of over £500 million a year are estimated to have been made. The EEO's budget has been increased substantially to £42 million in 1991–92.
The Government are acting to make buildings, which account for nearly half of Britain's energy use, more energy efficient. Amendments to the building regulations will improve the energy efficiency of new homes by 20 per cent. The effect of these changes will be monitored to see how they might be further strengthened. A significant part of the EEO's best practice programme relates to buildings and provides independent advice to owners, occupiers and building professionals. For private sector housing the new system of renovation grants enables local authorities to help less well-off people in housing which falls short in terms of energy efficiency. For local authority housing, £60 million has been allocated to the green house demonstration programme to support innovative and exemplary projects. Furthermore, the EEO's new home energy efficiency scheme will complement these initiatives by providing advice and grants for less well-off households in both private and public sector housing.
We are setting an example through our campaign to promote energy efficiency on the Government estate. We aim to achieve savings rising to 15 per cent. over five years. Work on the campaign is being taken forward under the direction of the new ministerial group on energy efficiency, chaired by the Secretary of State for Energy. Each department is represented by a Minister who has been given special responsibility for his department's own use of energy. Each department has appointed an energy manager and has produced a strategy to achieve the 15 per cent. savings target. Many ideas and initiatives to improve the energy efficiency of government buildings have been forthcoming.
The Government are also taking action on appliances and lighting. That point was touched on by the noble Lord, Lord Hampton. We are encouraging energy labelling of appliances and pressing for an EC scheme. The EEO is continuing its work with industry, which is responsible for over a third of CO2 emissions, to provide advice and guidance on improving energy efficiency through the best practice programme.
I was interested to hear the results of the survey of industry referred to by the noble Earl, Lord Shannon. I note the rather poor response to the survey, but I do not think that necessarily implies a commensurately low level of interest in environmental issues within industry. Industry is increasingly acknowledging that it is in its own interest to be in the forefront of environmental improvements, under the combined

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pressure of consumers and shareholders, and with an eye to the commercial advantages of developing new environmentally friendly technologies. The progress made by ICI in cutting its energy consumption is but one example of that.
This Government will continue to work with industry but will not hesitate to introduce regulations where necessary to control pollution. My right honourable friend the Secretary of State for the Environment will be establishing a forum to allow a regular dialogue between Ministers and business on matters of environmental concern. The Department of Trade and Industry and the Department of the Environment are undertaking a series of seminars for business to encourage environmental management and set out the assistance that the Government can offer. On global warming, the message will be that improving energy efficiency in industry not only helps the environment but also saves industry money, as the experience of the best practice programme shows.
Transport is also a significant source of greenhouse gas emissions. About 20 per cent. of the UK's total CO2, emissions come from transport. Transport is, of course, essential for economic and social reasons. Nevertheless, the Government are firmly committed to reducing its impact on the environment. In particular, in yesterday's Budget, my right honourable friend the Chancellor of the Exchequer announced substantial increases in the duties on petrol and Derv, giving the motorist a strong incentive to choose more efficient vehicles and ensuring that those who pollute most, pay most. He also announced heavier taxes on company car benefits. These will encourage both employers and employees to think more rationally about the choice of vehicles and when and where they should be used. I believe that answers the point made by the noble Lord, Lord Hatch. In his Budget speech my right honourable friend encouraged preventive measures. The noble Lord scathingly mentioned tinkering provisions. However, it is difficult to know what he would recommend in this area. Various other measures are in hand, or planned, to reduce greenhouse gas emissions from transport. I shall mention just a few.
From November 1991 an emissions check will be included in the MOT test and it is planned to introduce speed limiters for heavy goods vehicles from August 1992. The Government are currently supporting massive investment in rail—£7 billion in British Rail and London Transport over the next three financial years. Looking to the longer term, the Department of the Environment and the Department of Transport have jointly commissioned a study of the role that land use planning could play in reducing the need to travel.
At least one noble Lord has argued that all these measures will be insufficient to achieve our carbon dioxide target. I said earlier that these measures were only the first tranche. The White Paper made clear that it will be necessary to take a number of further measures over a period of years. In the long term these will have to include increases in the relative price of energy, perhaps by changes in taxation. But long term measures affecting the relative price of energy can only
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sensibly be taken when competitor countries are prepared to take similar action. Unilateral action could damage the economy and would make little contribution to global warming. We have made clear that tax or other measures directly raising the price of energy outside the transport sector will not be introduced in the next few years.
We must recognise that progress in controlling carbon dioxide emissions will require the involvement of all sectors of society, companies and individuals. The Energy Efficiency Office is conducting a gruelling programme of seminars on different aspects of energy efficiency. I have myself spoken recently at seminars on energy efficiency in modern buildings and on energy efficient lighting.
Steps are being taken, following on from the environment White Paper, to inform individuals of the contribution they can make to reducing emissions of greenhouse gases. This is an important part of the ministerial group's remit. We wish to raise the public consciousness of the link between energy and the environment and are seeking media support. We hope that energy efficiency will be featured in soaps, documentaries and local and national radio.
Earlier this month my right honourable friend the Secretary of State for the Environment launched a new booklet, Wake Up —To What You Can Do For The Environment designed to help the general public to adopt an environmentally friendly lifestyle. Some 5 million copies have been printed and it is widely available through the main supermarkets. The Wake Up leaflet will be followed by a major publicity campaign later this year on energy efficiency in the home. Our aim will be to help the public make the link between their own consumption of energy and the threat of climate change. As has been mentioned tonight, that link remains poorly understood. There are many ways in which individuals can help to reduce carbon dioxide emissions as householders and transport users. The Government know that they require the co-operation of all these individuals to achieve results.
We are also working with local authorities to help them to exploit the many ways of improving their own energy efficiency, following on from the work of the Audit Commission which identified a potential for savings of £100 million. We are also encouraging local authorities to provide a lead in their local community. During May environment Ministers, with EEO support, will be hosting a series of seminars for local authorities on energy efficiency.
Turning to the questions that I have not yet dealt with, the noble Lord, Lord Hatch, asked about the disparity between the R&D spent on renewables, as opposed to nuclear. He has asked that question before and I give him the same answer. There is no reason why expenditure on renewables R&D should bear any proportional relationship to nuclear expenditure. Each energy technology requires a different level of investment to carry out the necessary R&D in its development for commercial use. Both nuclear and renewables provide valuable benefits in terms of diversity and protection against the damage which

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burning fossil fuels does to the environment. I believe it would be wrong and artificial to suggest that one is better value than the other.
In answer to the question of the noble Lord, Lord Hampton, regarding the incentives as applied to the newly privatised generating supply industry—and I believe that this should, in a way, interest the noble Earl who also touched on market forces—the new market orientated structure of the industry does not ignore the needs of the environment.
The new regime provides a stable basis in its price controls for the companies concerned, while facilitating the proper economic pricing of electricity. It introduces considerable competitive incentives on generators and suppliers to be fuel efficient and cost efficient, as well as responsive to their customers' wants. The arrangements explicitly recognise the need to take account of the effects of generation, transmission and supply on the environment, and the need to provide economy and efficiency in the use of electricity. There is no reason why energy efficiency cannot go hand in hand with the competitive privatised industries that we have created.
The new structure is capable of evolution in the light of experience, and the director-general has said
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that he will consider the effectiveness of the energy efficiency incentives when he comes to review the price control in 1994. Each regional electricity company has to have a code of practice for the provision of information on the efficient use of electricity, and this is overseen by the Director-General of Electricity supply.
I have spoken for rather longer than I intended. I think it is clear that the Government take the issue of global climate change very seriously indeed. To sum up, we are actively involved in discussions to agree an international approach to controlling greenhouse gas emissions; and we are working to control the UK's own emissions. The White Paper set out the first phase of measures to help achieve our carbon dioxide target. These include action to improve energy efficiency across the whole economy, action to increase the contribution of renewable sources of energy and action to control carbon dioxide emissions from transport. We recognise that the success of our initiatives will depend largely on decisions made by individuals. We are taking steps to ensure that the public understands both why global warming may occur and what they can do about it.
House adjourned at eleven minutes past nine o'clock.

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