Sitting of 16 October 1991

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

  NEW WRITS
  For Kincardine and Deeside, in the room of the right hon. Alick Laidlaw Buchanan-Smith, deceased.—[Mr. Ryder].
  For Langbaurgh, in the room of James Richard Holt Esquire, deceased.—[Mr. Ryder.]
  For Hemsworth, in the room of George James Buckley Esquire, deceased. [Mr. Foster.]

PRIVATE BUSINESS

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

  KING'S CROSS RAILWAYS BILL (By Order)
  Order for consideration, as amended, read.
  To be considered tomorrow.

  EAST COAST MAIN LINE (SAFETY) BILL (By Order)
  Order read for resuming adjourned debate on Question [13 May],
  That the Bill be now read a Second time.
  Debate further adjourned till tomorrow.

Oral Answers to Questions
  TRADE AND INDUSTRY

    Science Parks
    Sir Trevor Skeet: To ask the Secretary of State for Trade and Industry if he will make a statement on the number of science parks that have been established since 1979.
    The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Edward Leigh): Only two science parks existed in 1979; now there are 41.
    Sir Trevor Skeet: Does my hon. Friend agree that those figures speak for themselves, and that this is a great achievement for the Conservative Government? Universities and industry are being utilised and scientific ideas are being converted into new products and processes. Will my hon. Friend give us his ideas about the course of development ahead? Is it likely to be by way of the Link scheme and other audits, so that the science parks which have been so successful in past years can be developed?
    Mr. Leigh: I am grateful to my hon. Friend. In fact, 20 more science parks are already planned. I believe that it is a major achievement to have increased the number from just two to 41 in the past 12 years.
    The Department of Trade and Industry spent some £100 million on technology transfer last year. My right hon. Friend the Secretary of State takes a particularly close interest in all innovation matters and has announced a number of new schemes—most recently the technology audit —to try to encourage universities to take an active interest in the commercial exploitation of their undoubted academic achievements.
    Dr. Bray: We welcome the development of science parks, but will the Minister talk to the occupants and potential occupants of the science parks and ask them whether they would like the business expansion scheme to be replaced by a scheme to encourage investment in high-tech manufacturing industry and high technology development to be set in the context of policies, with access given to finance, tax credits for research and development and regional support? In short, will he ask them whether they would prefer the Opposition's science and technology development policies to those of the Government?
    Mr. Leigh: That is extremely unlikely. The success of science parks is that they have been market led. It is true that in the assisted areas the Department of Trade and Industry's English Estates has taken an interest in and has helped with the establishment of science parks. What is important, though, is that the DTI uses its innovation budget—some £100 million —to encourage technology transfer and that it does not seek to pick winners. We tried that policy before and it failed lamentably.

    Minimum Wage
    Mr. Riddick: To ask the Secretary of State for Trade and Industry whether he has received any representations from business men about the impact on industry of minimum wage levels.
    The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Peter Lilley): I am aware of the very widespread concern among business men that a national minimum wage would destroy jobs and competitiveness.
    Mr. Riddick: Is my right hon. Friend aware that the chief executive of Sears the retailers has said that if a minimum wage policy were introduced it would be bound to lead to unemployment going over 3 million? Has not the Organisation for Economic Co-operation and Development said that the French minimum wage has reduced employment opportunities, particularly for young people with few skills? Does my right hon. Friend agree that it is the height of hypocrisy for Labour to say that it cares about the most disadvantaged people in society when its own policies would deny job prospects to those very same people?
    Mr. Lilley: My hon. Friend is absolutely right. A number of estimates have been published by business of the damage that would be done by a minimum wage and of the number of jobs that would be destroyed. All of them are very large. Only the Labour party, in the shape of the Opposition spokesman on employment, maintains that there will be no impact on jobs from a minimum wage. Asked by Jonathan Dimbleby:
    "is it your view that there is no negative impact on jobs from a minimum wage of any kind?"
    he said:
    "Yes, that is my view."
    Mr. James Lamond: Is the Secretary of State telling us that he has so little confidence in the ending of the recession that he does not believe that there will be sufficient wealth in the economy to cascade down to those on the very lowest wages, who are asking for just £3·40 per hour, which is barely enough to maintain a reasonable standard of living?
    Mr. Lilley: I do not think that one can ever afford to be reckless with jobs in the way that the Opposition plan to be. It is particularly unwise to destroy the jobs of those on the bottom rung of the employment ladder. If they can never get on to the first rung of the employment ladder, they can never rise up it. If the Labour party says that a minimum wage of £3·40 would have no impact at all on jobs, why stick at £3·40? Why not set it at £5? Would that have any effect? Or is the Labour party saying that there is some magical higher figure which will influence them but that £3·40 has no impact at all?
    Mr. Budgen: Does my right hon. Friend agree that minimum wage legislation will encourage illegal immigration and overstaying? Would it not encourage some employers to employ people in the unrecorded and perhaps ironically called black economy?
    Mr. Lilley: My hon. Friend is almost certainly right. It creates a new form of law breaking—namely, giving jobs to people who need them.
    Mr. Beggs: Does the Secretary of State accept that Northern Ireland already has a low wage economy and that we still have the highest unemployment? Does he agree that we have a responsibility to ensure that people receive a fair reward for the services that they provide and
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    that they are not exploited? Will he tell the House how many other members of the European Community have a minimum wage strategy?
    Mr. Lilley: The one thing that is absolutely certain is that a minimum wage would do great damage in Northern Ireland, as elsewhere in the United Kingdom. It is also equally certain that in France, where the OECD carried out a study, it has been recognised that the minimum wage has destroyed jobs, particularly among the low paid, the young and the less skilled. I cannot believe that it would be to the benefit of the Province of Ulster that its unemployment problem should be aggravated further by this imposition.

    World Trade
    Mr. Roger King: To ask the Secretary of State for Trade and Industry if he will make a statement on the United Kingdom's share of world trade (a) from 1974 to 1979 and (b) since 1979.
    The Minister for Trade(Mr. Tim Sainsbury): Britain's share of world exports of manufactures by volume declined between 1974 and 1979. The decline continued into the 1980s. Since 1981 our export volume has increased faster than that of any of our major competitors.
    Mr. King: I thank my hon. Friend for that reply. Can he confirm that in the first eight months of this year manufactured exports have risen by more than 60 per cent. of the 1979 average? Does not that show, in particular, the dramatic resurgence of the British car industry, which exports an ever-growing number of its products throughout the world? Will my hon. Friend further confirm that, instead of knocking Britain's achievements, as the Labour party does, British industry is out abroad knocking on doors to get business?
    Mr. Sainsbury: I am happy to confirm that my hon. Friend is absolutely right. I join him in paying tribute to the achievements of the British car industry. The achievements of British exporters are a tribute not only to the quality and competitiveness of their products, but to the quality of the Government's policies, which invite inward investment and, through low taxation, encourage productivity and entrepreneurial skills.
    Mr. John Evans: Is the Minister aware that since 1979 more than 23,000 jobs have been lost in St. Helens? More than two thirds of those jobs were in the glass industry. A further 750 redundancies have been announced by Pilkington this week. Will the Minister acknowledge that the United Kingdom's share of the glass industry has fallen dramatically since 1979? When will the Department stimulate the economy to assist firms such as Pilkington to start employing people and to stop sacking them?
    Mr. Sainsbury: The hon. Gentleman will be aware that to be competitive in export markets—as, indeed, in home markets—it is necessary to use the latest techniques and technology. Sadly, that sometimes means that more glass can be produced by fewer people. Any lay-off is a matter for regret, but I hope that the hon. Member will applaud companies such as Pilkington, which has improved productivity, as has British industry as a whole.

    Buy British Campaign
    Mr. Amess: To ask the Secretary of State for Trade and Industry what recent representations he has received calling for a Buy British campaign.
    The Minister for Corporate Affairs (Mr. John Redwood): My hon. Friend the Minister for Trade has recently announced a partnership sourcing initiative which encourages companies to look carefully at how they buy goods. They should take into account currency fluctuations and distance of travel when considering purchasing. We get several representations on this subject. I know that my hon. Friend the Member for Basildon (Mr. Amess) is especially keen to promote the purchase of goods from Basildon, and I welcome that.
    Mr. Amess: In the light of the opportunities likely to be provided by the advent of the single market next year, is my hon. Friend aware that on Friday our local European Member of Parliament, Miss Patricia Rawlings, and I will re-launch the "Buy British Goods From Basildon" campaign? Does my hon. Friend agree that Opposition parties would do well to follow our lead and talk up British goods and services rather than talking them down, as they so often do?
    Mr. Redwood: I am delighted by my hon. Friend's energy and delighted that he supports his local industry so strongly. When he has finished with Basildon, perhaps he could come and support goods from Wokingham, which I am keen to see bought in the markets of the world.
    Mr. Tony Banks: If we are to have a Buy British campaign, may I suggest that Members of Parliament could set an example to begin with? If the Minister goes down to the car park, he will see that most of the cars there are not British but foreign. How many Conservative Members can put their hands up and say that they are dressed in British clothes and buy British cars?
    Mr. Redwood: The hon. Gentleman has chosen the wrong Minister. I have a British car and I am proud to own one. It provides extremely good value for money and is a high-quality motor vehicle. Many of my hon. Friends do the same, especially those who represent midlands constituencies, where they strongly support the British motor industry. I hope that the same is true of Opposition Members.
    Mr. Charles Wardle: I have a British car in the car park and have never had a non-British car there. Is not the most effective Buy British campaign one that does not play on consumer loyalty but urges manufacturers to outdo imports with the best-designed and best-quality products at the keenest prices?
    Mr. Redwood: That is exactly right. We do not say, "Buy British" because goods are British but because—and if—they are extremely good products. I buy many British products and I am usually delighted with the quality and value for money. That is the way to encourage British manufacturing industry.
    Mr. Alton: How does the Minister counter the charge made by some of the workers recently made redundant at the GPT plant at Edge Vale in Liverpool, where 600 redundancies have occurred in the System X production unit, who say that the Government are not encouraging
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    people to buy British technology in the same aggressive way as the French Government encourage people to buy the same sort of product, particularly in the developing world?
    Mr. Redwood: My hon. Friend the Minister for Trade, my right hon. Friend the Secretary of State and all other Ministers in the Department of Trade and Industry give full support to all British businesses trying to sell abroad. On purchasing within the United Kingdom and the European Community, we have to live within the rules of article 30 and the public purchasing directives. If the hon. Gentleman thinks that other countries are not playing fair, he should let us have the evidence and we will take the matter up with the Commission, because we believe that all countries should play by the same rules.

    UK-Japanese Trade Balance
    Mr. Amos: To ask the Secretary of State for Trade and Industry if he will make a statement on the United Kingdom-Japanese trade balance.
    Mr. Sainsbury: Between 1986 and 1990 the value of United Kingdom exports to Japan more than doubled, while imports rose by only a third.
    Mr. Amos: Does my hon. Friend accept that the Government have done more than any other to increase free trade at home and abroad, but that it also has to be fair trade? British exports to Japan have fallen this year and the British visible trade gap with Japan is still running at well over £4 billion per year. Will he ensure that Japan opens its markets to British goods on the same basis as the British market is open to Japanese goods? Will my hon. Friend warn the Japanese that if they fail to do so, they will be subject to retaliation from the EEC?
    Mr. Sainsbury: The figures that I have just given show that British exporters are succeeding extremely well in the Japanese market, which is not so difficult a market as some people think. In the current year, British exporters are holding their share of the market while all our EEC competitors have been losing their market share. There are a few barriers still in the Japanese market, such as high tariffs on finished leather products, but I can assure my hon. Friend that I, my right hon. Friend the Secretary of State and other Ministers will continue to work to remove those obstacles so as to open the Japanese market fully in the same way as we have successfully opened many other markets.
    Mr. Cousins: Will the Minister confirm that the loss of an order for Rolls-Royce Trent engines to Japan Airlines followed directly from the refusal by British Airways to buy a similar engine for its British fleet? Will the Minister also confirm that he has done nothing about that, proposes to do nothing about it, and that the laissez-fairies are in full control in his Department?
    Mr. Sainsbury: I wonder whether the hon. Gentleman is aware that one of the largest ever single export orders to Japan was won recently by British Aerospace. The order was worth £445 million and was to provide search and rescue aircraft to the Japanese self-defence force.
    Mr. Colvin: Further to that supplementary, is my hon. Friend aware that Japan is the world's second biggest domestic market for civil aircraft? Is he also aware that the

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    Japanese aerospace industry is only 20 per cent. civil and that in the short term there are tremendous opportunities for British exporters of civil aircraft to Japan, particularly the regional jet? Also, in the long term Japan would like to enter into collaborative ventures with British aerospace companies in order to develop its own aerospace industry.
    Mr. Sainsbury: I agree with my hon. Friend that there are considerable opportunities for the aerospace industry in the Japanese market. The successful contract to which I referred is evidence that British Aerospace and its suppliers are beginning to get into that market, which has hitherto traditionally been supplied by the United States.

    East Midlands
    Mr. Janner: To ask the Secretary of State for Trade and Industry whether he will make a statement on support for the traditional industries of the east midlands.
    Mr. Leigh: The traditional industries of the east midlands are well placed to take advantage of recovery.
    Mr. Janner: Has the Minister no conception of the disastrous decline in traditional industries in the east midlands and Leicester? Does he not realise that the Chancellor's claim that manufacturing industry is improving and the recession is over is total rubbish? Do the Government intend to offer any practical help to those industries—employers, employees and all who depend on them for their livelihood?
    Mr. Leigh: The hon. and learned Gentleman and I share this —we both represent the east midlands, but he enjoys talking down the east midlands whereas I shall do some talking up. He did not tell us, for instance, that retail sales of footwear and clothing are doing better than almost any other retail sales, that exports of clothing are up 14 per cent. in value compared with last year or that the east midlands has a record second to none in inward investment. He did not mention Toyota, Phoenix Electrical, Toray or Nippon Seiko in his constituency.
    The hon. and learned Gentleman does not want to tell the good news about Leicester, so I shall do it. I want to encourage importers to come to Leicester and businesses to set up in Leicester. The hon. and learned Gentleman does not because he is too intent on making petty party political points. He could talk about George Duxbury and Sons setting up two new factories in Leicester near his constituency and about Rank Taylor Hudson making a £140,000 investment in his constituency. He could talk about Tyson Scientific putting investment into his constituency. The Opposition do not like it, but that is going on in the hon. and learned Gentleman's constituency.
    Mr. Latham: Is my hon. Friend aware that the traditional industries of the east midlands, including Leicestershire, as well as the non-traditional ones, have greatly welcomed the reduction in interest rates that has taken place in recent months and are looking forward to another one pretty soon?
    Mr. Leigh: I am grateful to my hon. Friend. While we are on the subject of Labour allegations, I happened to look at the Labour party political broadcast. The Sunday
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    Times did a truth test on it. Labour claims that British industry could not compete abroad and that exports have shrunk. As The Sunday Times told us,
    "Fact: Manufactured exports have increased by nearly 60 per cent. in real terms since 1979."
    Verdict on Labour's political broadcast: "False." We now have lies, damned lies and Labour party political broadcasts.
    Mr. Vaz: Does the Minister agree that one way in which we could help the traditional industries in the east midlands is to provide local education establishments with resources for education and training? Will he therefore support an application by Southfields further education college in Leicester for a £50,000 footwear fashion design computer which will greatly help the local footwear industry in Leicester and the east midlands?
    Mr. Leigh: I am grateful for that constructive question. We shall certainly look into that, and I will take it up with my right hon. and learned Friend the Secretary of State for Education and Science.
    Mrs. Currie: May I beseech my hon. Friend not to support traditional industries in the east midlands such as lace making, pork pie manufacture and arrowhead production and instead to recognise the increasing contribution of modern industries not only to the British but to the European economy? I refer in particular to Toyota in my constituency, which will soon be making the finest cars in the world.
    Mr. Leigh: I am grateful to my hon. Friend. That investment by Toyota is worth no less than £700 million and will create 3,000 jobs. Investment by another modern industry in the region is that of Phoenix Electrical in Coalville. That is a £14 million investment. Toray industries is investing £50 million. Nippon Seiko is setting up a brand new research centre worth £10 million. My hon. Friend is right. The east midlands is attracting the industries of tomorrow.
    Mr. Wigley: Given the long list of successes in the east midlands to which the Minister referred, why was it necessary for the Prime Minister to intervene to take the Toyota plant away from Wales, which had worked hard to get it and had higher unemployment than the east midlands? Was the Department part of that conspiracy which was described in the book written by the right hon. Member for Worcester (Mr. Walker)?
    Mr. Leigh: Not a penny of Government assistance went to Toyota. Derbyshire won that contract on its merits because of the skills of the local work force and the hard work put in by the local Member of Parliament.

    Science Parks
    Mr. Brandon-Bravo: To ask the Secretary of State for Trade and Industry if he will make a statement on the number of science parks that have been established since 1979.
    Mr. Leigh: Only two university science parks existed in 1979; there are now 41 and a further 20 are planned.
    Mr. Brandon-Bravo: Is my hon. Friend aware that possibly the largest science park is the one attached to Nottingham university, which provides 48 units of advanced accommodation? What bothers me most—I

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    wonder whether my hon. Friend will address this point —is how the possible taxation policies of the Opposition may affect the staff who are employed in those parks, which are the seed-corn of our country's future. Although the employees may not be the highest paid, is it not the case that the kind of salaries necessary to keep science parks running would be precisely the kind of salaries that would be almost taxed out of existence by a Labour Government? Once again we would see the brain drain that we thought we had brought to an end 12 years ago.
    Mr. Leigh: My hon. Friend is right to refer to the successful science park of Highfields in his constituency. It is an example of the type of high technology and investment that we in the Department of Trade and Industry encourage. We have more and better science parks than any other country in Europe. You may not be surprised to hear, Mr. Speaker, that I did some research into my hon. Friend's point. I found that a senior research scientist earning more than £30,000 a year would be required under Labour's taxation plans to pay £5,000 a year extra tax and £2,600 a year national insurance. In other words, the Labour party would impose £150 a week on our senior research scientists. These men and women have highly developed skills and they are extremely marketable internationally. If Labour was ever to get close to Downing street, there would be a queue to flee to America. The only science parks to be set up would be, not in Cambridge, but in Cambridge, USA.
    Rev. Martin Smyth: I welcome the Minister's announcement and the development of the science parks. In particular, I pay tribute to the one in Antrim in Northern Ireland. Will the Minister have conversations with his colleagues in the Northern Ireland Office to encourage the speedy provision of the proposed science park in south Belfast, which could utilise the provisions of the excellent university there?
    Mr. Leigh: Of course, I shall.

    CBI, North East
    Mr. Clelland: To ask the Secretary of State for Trade and Industry when he will next meet representatives of the north-east regional Confederation of British Industry to discuss industrial policy.
    Mr. Lilley: I visited the north-east in August and again in September 1991 when I met a wide cross-section of business people. I expect to meet CBI representatives from all regions when I attend their national conference.
    Mr. Clelland: Is the Secretary of State aware that in this first year of office of his right hon. Friend the Prime Minister business failures in the north have risen by 50 per cent. and mortgage repossessions by 60 per cent., and that unemployment is now running at 200,000? When the only major political initiative—pardon the pun—in the region has been taken within the region by the trade unions, local authorities and the CBI in setting up the Northern Development company, how can the Secretary of State convince the CBI that business as usual at No. 10 is good for business in the north?
    Mr. Lilley: The north-east is doing much better than it has done previously at this stage of the economic cycle, although Members like the hon. Gentleman talk it down
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    and ignore the progress made even in their own constituencies. He did not mention the Newcastle business park, which by the end of this year is creating 5,000 jobs in his constituency, or the Vickers order, which will go to the Vickers Defence Systems tank factory in his constituency, or British Airways taking 700 jobs by 1994 to his constituency, or the Gateshead Metrocentre, which is the largest in Europe and has created 6,500 jobs in his constituency.
    Mr. Amos: Does my right hon. Friend accept that what he has just said proves why the north-east is doing so well and has been able to weather the recession better than most regions? If a Labour Government ever took office, they would impose a devolved assembly with higher taxes and more bureaucracy, which would drive industry from the region. It is about time Labour Members spoke up for the north-east instead of running it down.
    Mr. Lilley: My hon. Friend is absolutely right. During my visits to the north-east, not a single business man has expressed the least desire for the sort of regional assembly to which he refers. A reason why the region is doing particularly well is that it has been outstandingly successful in attracting inward investment, notably from Japan. The threat to that posed by the TUC motion condemning Japanese investment as alien would be even more damaging to the north-east than to the rest of the British economy. People there are well aware of that and are appalled that no Labour Front-Bench spokesman has been prepared to disown it.
    Mr. Gordon Brown: When the Secretary of State visited the north-east was not he condemned by the very business men he visited in Gateshead? Does he now accept that, despite the complacency that he exhibits, those in the north-east and elsewhere expect that another 90,000 jobs will go in engineering, another 40,000 jobs will go in the car industry and that another 100,000 jobs are still to go in the construction industry? What does the Secretary of State say to the 40,000 businesses that are going under in the north-east this year? What does he say to manufacturers who, having faced an 18 per cent. fall in manufacturing investment this year, will, according to the CBI, face another 9 per cent. fall in 1992? If the Secretary of State is so proud of his record, as he told the Conservative conference, why does he not put his record and that of the Government to the electorate?
    Mr. Lilley: On the first part of the hon. Gentleman's question, the answer is no, they do not, he should not believe everything that he reads in the newspapers. On the second part of his question, I note that the hon. Gentleman failed to take the opportunity to dissociate the Labour party from the TUC motion that condemned Japanese investment. That investment has been one of the most important sources of jobs, new investment and higher incomes in the north-east. The hon. Gentleman discredits the Labour party.

    Merger Policy
    Sir Michael Neubert: To ask the Secretary of State for Trade and Industry when he next expects to meet the chairman of the Monopolies and Mergers Commission to discuss merger policy.
    Mr. Redwood: My right hon. Friend the Secretary of State last met the chairman of the Monopolies and Mergers Commission on 16 July. The next meeting has not yet been arranged.
    Sir Michael Neubert: Will my hon. Friend ask the chairman of the MMC to lend his support to his beleaguered counterpart in Brussels, Sir Leon Brittan, whose powers are under threat a week today because he has had the temerity to reject the takeover of the Canadian company De Havilland by the French company Aerospatiale and its Italian partners, Alenia? Does not the reaction of senior French politicians demonstrate that however much our continental neighbours may profess themselves consenting federasts in public, in private they put their own national interest numero uno every time?
    Mr. Redwood: I am afraid that my hon. Friend is right in his assessment of French actions on this particular transaction. The British Government are determined that the Commission should exercise its jurisdiction independently without fear of political interference. To do so we believe that the Competition Commissioner himself should have a particularly important role because he and his staff are the people who have seen all the evidence and listened to all those making their submissions. Therefore, the Commissioner should be the one who brings it all together. There should not then be a political shenanigan to settle the issue; it should be settled on the facts of the case in accordance with European law.
    Mr. Hardy: Will the Minister ask the chairman of the MMC to look urgently at the issue posed by the present operations in the electricity supply industry? I suggest that that issue should be addressed urgently because high-energy-using industries now face the devastating effects of the pricing and patterns of pricing for electricity to the point that a hitherto extremely successful company, Rotherham Engineering Steels, is now facing serious cuts in production simply as a result of the operation of the electricity supply industry. That should be investigated immediately.
    Mr. Redwood: A competitive structure has been introduced into the industry for the first time. If the hon. Gentleman has a reasonable complaint he should send it to my Department or to the Director General of Fair Trading and, of course, it will be examined closely to see whether any further action is needed. I would need more information about the specifics than the hon. Gentleman's general allegation gives me.
    Mr. Batiste: Further to the De Havilland issue, will my hon. Friend take the opportunity to discuss the matter with his French opposite number? Will he tell her in unambiguous terms that this extraordinary fuss belies French claims to be good Europeans and undermines the confidence of their partners in French intentions to support competition which is at the heart of the movement towards a single market?
    Mr. Redwood: I intend to raise the general issue of Community competence and the exercise of its jurisdiction in the Single Market Council meeting when I next go to Brussels for that meeting. I may well get the chance to discuss various matters with my colleague, the French Minister. I hope that she will be interested in what I have
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    to say, although it might not be in exactly the terms of my hon. Friend's remarks. This matter raises general issues that the Community as a whole must face.
    Mr. Alex Carlile: Does the Minister agree, and will he tell the chairman of the MMC when he next sees him, that a credible mergers and monopolies policy must involve a reference to the Commission of British Gas in the light of its threat to renege on its recent price schedule agreed with Ofgas? Will he include in such a reference the recommendation that the pipeline network should be demerged from British Gas into other hands?
    Mr. Redwood: We are not sure what British Gas will do. The matter is being watched closely by the gas regulator and the Director General of Fair Trading. I shall ensure that the hon. and learned Gentleman's comments are forwarded to both those bodies, because they are important. I cannot give him all the guarantees that he wishes. In a recent speech my right hon. Friend the Secretary of State set out some strong measures which will promote more competition in the gas industry. The Government intend to see those through and they will do the job that the hon. and learned Gentleman seeks.

    Kuwait
    Mr. Colvin: To ask the Secretary of State for Trade and Industry whether he will make a statement on the number of new contracts that have been won in Kuwait by British companies since the end of the Gulf war.
    Mr. Lilley: I know of more than 80 companies that have obtained contracts worth £470 million in connection with Kuwait reconstruction.
    Mr. Colvin: Does my right hon. Friend agree that British companies are leading the reconstruction of Kuwait because the Government give the best organised support? Has he any plans to extend the success of Kuwait elsewhere in the world where disaster strikes and reconstruction is required? Is he entirely happy with the Export Credits Guarantee Department cover provided for such work?
    Mr. Lilley: I am grateful to my hon. Friend for those remarks. It is a successful effort, with industry and Government working together, to ensure that British industry plays as leading a role in the reconstruction of Kuwait as we did in its liberation. We can learn and have learnt lessons from that and we have put them into practice elsewhere. I have just led a joint operation—business and Government again working together—in Venezuela. In Caracas we set up a task force of nine business men supported by two Government officials. The task force will stay there for several months and we believe that it will make a major impact on the Venezuelan market, which will benefit a wide range of companies in this country.
    Mr. Flynn: Is the Minister aware that since the Gulf war the United States has sold $18 billion worth of arms to Kuwait and other middle east countries, and that a new high-tech, smart bombs arms race is roaring ahead in spite of what the President of the United States and the British Prime Minister have said? As it is now clear, from what the United. Nations Commission has said, that the British arms embargo on Iraq was as full of holes as a string vest,

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    what will the Minister do to stop the sale of arms to unstable countries that are threatening world peace? How quickly will those British companies that have broken the law be prosecuted?
    Mr. Lilley: On the question of sales to Kuwait, our record is second to none in promoting British industry. As for the embargo on arms, in the course of the summer I published details of every licence given for the sale of sensitive items to Iraq. If the UN team has any further information, we shall look into it thoroughly. Moreover, the Customs and Excise, which is responsible for enforcement and prosecution, will look into any evidence of law breaking. As the hon. Gentleman probably knows, there have already been some prosecutions and charges.
    Mr. Rowe: My right hon. Friend will know that one of the groups of companies experiencing difficulty in getting into Kuwait consists of companies that have been blacklisted by the Americans because of allegations that they have wrongly traded with Iraq. In the case of companies about which the Americans now say that they have no firm evidence but would like to ask more questions, although, when invited to do so, they do not send them, will my right hon. Friend assure the House that he will keep up the pressure on the Americans to come clean about the allegations or take the companies off the list?
    Mr. Lilley: I assure my hon. Friend that I shall pursue any such issues. Indeed, I have already pursued those concerning a firm in his constituency. In respect of an earlier question by my hon. Friend the Member for Romsey and Waterside (Mr. Colvin), there is ECGD cover for Kuwait and I believe that that will be adequate.
    Ms. Mowlam: Does the Minister accept that the activities of the Government and his Department in Kuwait exhibit a lack of judgment and, in some cases, a lack of competence? He has told us how many contracts have been awarded; will he now say how many have been lost because of the criteria used by his Department? If the Minister is so interested in the future of oil as one of the major commodities, when will his Department take action on the possible prosecution of those involved in dummy trading in the Fox market, where oil is an important aspect?
    Mr. Lilley: I do not think that the last part of the hon. Lady's question has a great deal to do with Kuwait. It is typical of those on the Labour Front Bench that when British industry is doing outstandingly well and our share of the market has risen several fold compared with what it was before the war, the hon. Lady should want a list of the contracts that we have not won. We have not won 100 per cent. of the contracts, but we have done a great deal better than any Opposition Member would have expected or would have achieved had they been in office.
    Mr. Dalyell: To ask the Secretary of State for Trade and Industry if he will make a statement on Her Majesty's Government's support for industrial reconstruction of Kuwait.
    Mr. Lilley: As I said, I am aware of 80 companies which have obtained contracts, worth in total, more than £470 million in connection with Kuwait reconstruction.
    Mr. Dalyell: Without wishing to make a yah-boo point, with 1 million barrels of oil a day every day for nine months spewing up carcinogenic polycyclic aromatic hydrocarbons and creating graver pollution than any other anti-pollution activities in the rest of the world—that is the view of the Financial Times—how, in all seriousness, can a Secretary of State come to the House and say that we are making as great an effort to put out oil fires and reconstruct Kuwait as we did to liberate Kuwait? We are not making anything like the effort that we put into Operation Desert Storm.
    Mr. Lilley: We helped in the establishment of a Kuwaiti-British group, which I am happy to say has a contract for extinguishing fires and, more importantly, ensuring that the infrastructure in the Sabriyah field is operational again. There are now only 30 fires left to extinguish in that field, and there are several hundred staff working on that operation who began work as soon as they were given the contract by the Kuwaiti Government. It may have escaped the notice of the hon. Gentleman that Kuwait is a sovereign country which gives contracts to us. We do not have the right to take over its oil fields and extinguish fires off our own bat.
    Mr. Frank Cook: The Secretary of State presents a rosy picture of British industrial activity in Kuwait, especially in relation to the Kuwaiti oil field fires. How many contracts have been sold to American operators because British companies cannot cope with the work load? If the Secretary of State cannot give that information, will he undertake to contact the gentleman, whose card I have in my hand and will pass to him, in order to obtain the information that the right hon. Gentleman should have close to hand anyway?
    Mr. Lilley: I shall, of course, follow up any questions that the hon. Gentleman poses on the part of his constituents or others. It is deplorable that Opposition Members should knock the successful effort made by British companies. One of the distinguishing features of the operation in Kuwait was that British companies joined the task force not just to represent themselves but to work on behalf of their whole sector including companies here. Those companies co-operated and worked together for Britain, and did not expect to be knocked by the Labour party as soon as they achieved success.
    Mr. Dalyell: On a point of order, Mr. Speaker. In view of the unsatisfactory nature —
    Mr. Speaker: Order. Mr. Haynes.

    Timeshare
    Mr. Haynes: To ask the Secretary of State for Trade and Industry what further action he expects to take to eliminate malpractice in the timeshare business.
    Mr. Leigh: I have asked the Commission of the European Communities to prepare a directive to regulate the selling of timeshare properties. The Commission has indicated that it hopes to bring forward a proposal shortly. In addition, we propose to amend the Trade Descriptions Act 1968 to tighten controls on statements about services and to bring timeshare award schemes within the Act's powers.
    Mr. Haynes: The Minister is bone idle. He sits in the ivory tower down at the Department of Trade and Industry while people in our constituencies suffer because of timeshare crooks. What is the Minister going to do about it? While he is at it, he should look to see how many timeshare crooks have contributed to Conservative party funds.
    Mr. Leigh: The hon. Gentleman's manner is so reassuring that he would not get me into a timeshare award scheme in a million years. It is not true to say that the Government have been slow to act. Only yesterday I spoke to Commissioner Van Miert in Brussels about this issue. As soon as I could I approached him to get the Commission to act, and progress is being made. We hope that before Christmas the Commission will issue a draft directive. Moreover, we spent the last year in a review of the Trade Descriptions Act and we hope to bring in legislation, when time permits, to bring award schemes within the remit of the Act. We could not be doing more.
    Sir Robert McCrindle: While I endorse the call to eliminate malpractices to which the hon. Member for Ashfield (Mr. Haynes) has just referred, does my hon. Friend agree that it would be appropriate to draw to the attention of the House and the country the fact that there is nothing wrong with the principles of timeshare and that what we seek to eliminate are the malpractices and excesses through which timeshare is sold? Will he further agree that over the past 20 or 30 years many thousands of our constituents have enjoyed considerable happiness as a result of purchasing a timeshare?
    Mr. Leigh: My hon. Friend is quite right. All the evidence shows that the problem is not with timeshare: it is with its marketing. That is why we believe it essential that we insist that those considering taking up timeshare offers be given a written prospectus, that they have a cooling off period and that deposit moneys be protected.
    There is no point in acting unilaterally in this case, as most timeshare properties are situated abroad. This is a good example of European action being needed. We are pressing the European Commission to act; it has promised to consider our request as favourably as it can.
    Mr. Nigel Griffiths: The Minister knows that many people—including many Conservative Members—are being duped by bogus timeshare advertisements. He also knows that he made the same statement that he has just made to the House in a press release dated 18 February in which he also promised action. Nothing has been done since then. The Advertising Standards Authority, the Office of Fair Trading and the Consumers Association have begged the Minister to take action for the past 16 months, so why is he prepared to sit back and leave the matter to Europe, knowing full well that no protection will come into force before 1 January 1993 at the earliest?
    Mr. Leigh: As 80 per cent. of timeshare properties are situated abroad, it makes sense for Europe to act in this matter. The hon. Gentleman has failed to tell the House that we have just finished an exhaustive review of the Trade Descriptions Act. He is so intent on making petty party-political points that he ignores the fact that we have had to consult hundreds of trade associations. The Trade Descriptions Act affects every buying and selling operation in this country. We have finished the review and we shall bring in legislation. What more could we do?
    Mr. Butler: Will my hon. Friend's actions cover misleading advertising sent from abroad? Will they also cover the cooling-off periods, which are so short that they are over by the time people return from their overseas holidays?
    Mr. Leigh: The whole point of asking for a Commission directive is that it would cover a cooling-off period. Insisting on amending the Trade Descriptions Act is necessary to bring award schemes into the ambit of that Act and to ensure that they are properly enacted. I am afraid that we cannot act on letters sent from abroad, but I urge people to consider such letters carefully. We have issued 750,000 leaflets entitled "Your place in the sun" advising people not to go to these award schemes and to beware of timeshare operators.

    Textile and Clothing Industry
    Mr. Gareth Wardell: To ask the Secretary of State for Trade and Industry what representations he has recently received from the textile and clothing industry.
    Mr. Sainsbury: My right hon. Friend has received representations on a number of issues from representatives of the textile industries.
    Mr. Wardell: The recent survey of the clothing and textiles industry by the Apparel, Knitting and Textiles Alliance shows that more than 500 jobs a week are being lost in the industry and that output is more than 10 per cent. lower this year than last. In the light of that, what hope can the Minister offer for the future of British manufacturing industry in general, when skills are being destroyed on this sort of scale?
    Mr. Sainsbury: I am sure that the whole House shares the hon. Gentleman's regret at lay-offs, but he will be aware from his knowledge of the industry of the great strides that it has made in improving its productivity. He will also be aware that the improvement in productivity often means that one operative can do the work that used to be done by a large number of operatives. I hope that he will also be aware of the industry's success in exporting no less than £4·6 billion worth of textiles and clothing last year. That is a tribute to the industry's success in improving its productivity and international competitive-ness.
    Mr. Nicholas Winterton: I am actively involved in promoting the textile and clothing industry and have benefited from some of the quality and expertise of that industry. Does my hon. Friend accept that the industry faces very unfair competition? In the last few months alone 4,000 jobs have been lost in the north-west and 25 mills and factories have closed. Does he accept that the present anti-dumping procedures in the European Community are inadequate and that by the time that Brussels decides that action can be taken the damage is done? Will he do something about that?
    Mr. Sainsbury: I hope that, like my hon. Friend, we all support the British textile and clothing industry in our purchases. I agree with my hon. Friend about the slowness on occasions of the anti-dumping procedure. That is one of the matters that we are addressing in the current Uruguay round of GATT. I am optimistic that the current

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    negotiations will achieve a much more effective disputes procedure and a more transparent and quicker anti-dumping procedure.
    Mr. Henderson: When the Secretary of State addresses the Department of Trade and Industry textile conference in Manchester next week will he be urged by the Minister to apologise to the thousands of companies that have gone out of business in the industry in the past year and to the 35,000 workers who have lost their jobs in the industry in the same period because of the failure of Government economic policy and the bad news that that means for many of the textile communities in Lancashire, Yorkshire and the east midlands? Does the Minister agree that his failure undermines the sterling work to promote and talk up British products during the London fashion week which is now taking place?
    Mr. Sainsbury: I am delighted to hear at least one Opposition Front-Bench spokesman refer to praise and talking up of British industry. It would be a relief to us all if the achievements and successes of British industry, including the textile industry, were occasionally acknowledged and if we could hear from Opposition Front-Bench spokesmen some praise instead of some denigration of the achievements of British Industry.
    Mr. Waller: Does my hon. Friend agree that, as Britain generally plays by the rules, it would be in our interests for European Community competition rules in relation to textiles and clothing to be more rigorously enforced? Is it not quite unacceptable that the Spanish and Italian Governments continue to subsidise their textile and clothing industries while some Belgian companies have not yet repaid the illegal state aid that they received from the Belgian Government, despite the fact that they are required to do so by the European Commission?
    Mr. Sainsbury: My hon. Friend will know that we are making progress on the important matters to which he refers. However, some issues, including continuing improper subsidies and the Belgian case to which he refers, are a matter of concern to the Government. We hope to make progress on those in the near future. We have made much progress on reducing subsidies and on creating a more open, level playing field for the textile industry and for other industries.

    Recession
    Mr. Livingstone: To ask the Secretary of State for Trade and Industry if he will make a statement on his assessment of the long-term effects of the recession in industry.
    Mr. Redwood: British industry is becoming more competitive and more productive. Manufactured exports are 60 per cent. up in volume terms compared with 1979. The balance of payments deficit in manufactures has been
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    closed. Total investment in the economy is above the levels of the 1970s and private consumption per head is above that in France and Germany. It is about time that Opposition Members started looking at some of the pluses in the situation.
    Mr. Livingstone: Given that since the Prime Minister took office we have lost 250,000 manufacturing jobs out of a total of 750,000 jobs that have been lost and that 30,000 firms have gone bankrupt, can the Minister say upon what basis British industry can expand and tackle the balance of payments crisis? Can the Minister tell us about any point in a post-war recession at which at the depth of that recession we did not have a balance of payments surplus? What is the difference this time?
    Mr. Redwood: The difference is that the hon. Gentleman does not know the facts. The manufacturing deficit has disappeared in recent months because of the great export success of British manufacturing industry, especially in the motor car industry, which has been mentioned already by my right hon. and hon. Friends.
    In a recent radio programme, the hon. Gentleman said that he thought that there would be a Labour Government. That was a rather strange prediction, but the rest of his predictions seemed to be extremely accurate. He said that such a Labour Government would soon enter an economic crisis and would then lurch to the left. That is exactly what happened to the previous Labour Government when they entered an economic crisis, and it would happen again. Perhaps the hon. Gentleman believes that the Labour party's £10 billion takeover plans for British industry by renationalising public utilities are what is needed to revitalise the economy. I have news for the Opposition: that is not what is needed. It is the Government's policies which are needed to produce progress and prosperity.
    Mr. Grylls: Does my hon. Friend accept that wise and experienced industrialists know well that recessions are part of the economic price of every industrialised country? Britain went into recession in an incomparably stronger position than it did 10 years previously because of tax changes, deregulation and a huge improvement in productivity. That is very much a plus and when the present recession ends, we shall be ready to win more markets.
    Mr. Redwood: I agree with my hon. Friend. We were much stronger and we delayed a recession for 10 years, a much longer period than the Labour Government were able to delay recessions in their time. There have, of course, been slowdowns around the world and it is difficult to resist all of those all the time. The important thing is that the economy will recover. All private sector forecasters are looking to growth next year. That is why Opposition Members are so glum. There will be more good news, and they do not like good news.

NHS Trusts
3.30 pm
The Secretary of State for Health (Mr. William Waldegrave): I will, with permission, make a statement about national health service trusts.
On 4 December 1990, I reported to the House that I had received 66 applications from hospitals and other units wishing to operate as NHS trusts from 1 April 1991, and that I was able to establish 57 of these as the first-wave trusts.
The decision to pursue trust status was one which the managers and the clinical staff in those units took for themselves. Hon. Members will recall that, in the great majority of the 57 first-wave trusts, most of the consultants expressly supported the applications.
The experience of the first-wave trusts confirms the confidence which was shown by the managers and professional staff, who recognised the benefits to be gained from putting management responsibility back where it ought to be, in the hospitals themselves. Many of my hon. Friends have constituencies, as I have, which are within the catchment areas of trusts. They will know, as I do, that it is easy to find examples of the new, devolved arrangements improving care for patients.
I will give just four kinds of examples out of the many which are available. On waiting lists, the Royal Liverpool university hospital trust now sees 90 per cent. of all its patients within 10 months—one of the best performances in the country. On activity levels, the Freeman hospital trust in Newcastle has treated 4,700 more patients in the first five months of this year compared with last. On front-line recruitment, the East Gloucestershire trust is to recruit an additional seven consultants to meet growing demand for its services, and the South Devon trust is recruiting an extra 55 nurses and midwives. On improved quality, the Norfolk ambulance trust has speeded up its training programme for paramedics and aims for a target of 24 paramedic teams for its ambulances each year.
Independent surveys—for example, by the consultants Newchurch—quoted warmly last year by the Opposition spokesman, the hon. Member for Livingston (Mr. Cook) and by The Sunday Times—point to the same conclusion, that the trusts are improving their performance, treating more patients and cutting waiting times. A British Medical Association survey published this week has also shown increasing consultant support for trusts. This has strengthened our commitment to the trust programme, through which more and more NHS patients can benefit from the clearer and simpler management structure which trust status gives to hospitals and other services. I was glad therefore to receive applications from 113 hospitals and other units—double the number of first-wave trusts—wanting to become trusts in the second wave from 1 April 1992.
I have considered all these applications very carefully and assessed them against the same criteria that I used last year. Each one has been the subject of a full public consultation. As a result, I have decided today to establish 99 hospitals and other units to operate as trusts from April 1992. The details are available in the Vote Office and have been placed in the Library.
In addition, I have agreed to approve applications from the four London teaching hospitals in the second wave. As the House will know, I have recently Commissioned Sir
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Bernard Tomlinson to act as my adviser on health services in London, supported by a high-powered team. It is obvious that he may have recommendations to make which would affect the shape of the London teaching hospitals. In order to allow the four new London teaching hospital trusts to develop their plans with the benefit of Sir Bernard's advice, I have therefore decided to delay the date on which they become operational until April 1993. However, I have asked the NHS Management Executive to establish devolved management in these hospitals at the same time as the other trust boards are established. In this way, these four great hospitals will get as early as possible the benefits of devolved management.
Seven other units have the potential to become successful NHS trusts, but I have not felt able to establish them in the second wave. I am sure that they will benefit from having longer to develop their applications and I hope that they will reapply next year. A further three units have withdrawn their applications from 1992. However, I can tell the House that I have today agreed that 153 expressions of interest from hospitals and other units may be pursued for the third wave, starting in 1993. I have also made this list available in the Vote Office and placed a copy in the Library.
All trusts are accountable to me through the NHS Management Executive. I have now asked the Management Executive to strengthen and expand its monitoring arm in order to ensure that the growing number of trusts remains fully accountable to the centre. This will be done without increasing overall NHS administrative numbers.
The campaign against trusts and against devolved management fostered by the Opposition has failed. Throughout the NHS, as the British Medical Association has confirmed, there is increasing recognition of the benefits which trust status brings. My statement today is good news for the national health service and good news for its patients. After next April, when the new trusts which I have announced today will begin operating, more that one third of all NHS hospital and community health services will be in the capable hands of trusts.
Despite a truly scurrilous campaign by the Opposition parties, no informed observer can now doubt that trusts represent a necessary modernisation and simplification of NHS management, which is already proving itself good for patients, good for staff, and good for the country. It is a tribute to their commitment to the NHS that so many doctors, nurses and managers have put so much work into preparing the applications that I have been able to approve today.
Mr. Robin Cook: The Secretary of State will be aware that today's announcement follows three months of consultation. Does he recognise that his statement today makes a farce of that consultation? If not, why has he approved the application from Burnley after a local opinion poll found that local people opposed it by 4:1, and why has he approved the application from East Birmingham after the staff who work there voted against it by 9:1? Does he even know that, out of 21 ballots of all staff in hospitals on his list, not one was in favour of the trust status?
Why does the right hon. Gentleman think that he knows better than local people what is good for their hospitals? Is it not just possible that local people are right when they oppose their local health service being broken

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up; that local health staff are right to worry about what happens when their hospitals have to compete against each other in a market, not co-operate in a public service?
The Secretary of State claims—[Interruption.] Conservative Members may be able to shout down the voice of opposition, but they will find that they will not be able to shout down the voice of the electors when they come to vote. The Secretary of State claims success for existing trusts. Is he aware that trust hospitals are already in deficit in London, Leeds, Liverpool, Southend, Sheffield, Crewe and Manchester? The right hon. Gentleman quoted the Newchurch survey. Is he not aware that that very survey concluded that, without extra money, trusts will have to cut patient care?
Mr. Roger Gale: The public do not believe you.
Mr. Cook: On the contrary. The hon. Gentleman's problem is that the public do not believe him.
The Secretary of State quoted the Freeman hospital in Newcastle as a success story. He cannot be aware that yesterday that hospital's top heart surgeon said that there should be an end to trusts, the market is essentially inefficient, and the NHS is being systematically privatised. That, from the very hospital that the right hon. Gentleman quotes as a success story.
In the face of all the evidence from the first wave, how can the Secretary of State justify taking the risk of putting 99 other hospitals into the same unproven market? Would it not be much more responsible to halt the second wave until the right hon. Gentleman has worked out answers to some of the problems that arose in the first wave?
Is the Secretary of State aware that he himself has ensured that most comment will focus not on the hospitals that he has included but on the four London hospitals that he has put in the deep freeze? Does he concede that his inquiry into London health services is an admission that the market in health care has not made any London hospital more efficient but has made them all more insecure? Will he explain to the House, and particularly to those right hon. and hon. Members who represent constituencies outside London, why it is wrong to go ahead with trusts inside London this year, but right to press ahead everywhere but London—except perhaps in Kincardine and Deeside?
As the Secretary of State for Scotland will not be coming to the Dispatch Box today, can the Secretary of State for Health say when the Government will make up their minds on the application from Aberdeen—an application so unpopular that not even the Conservatives' own by-election candidate dares to support it? Or do the Government hope to get the election over first, before coming clean with the people of Kincardine?
Before the Secretary of State proceeds to ignore all my questions and reads out his prepared text of party abuse —[HON. MEMBERS: "Oh."] Conservative Members do not like the truth —will the Secretary of State at least address his mind to a constitutional question? How can the right hon. Gentleman, in the fag end of this Parliament, invite hospital managers and health staff to go through the upheaval in the next six months of preparing for trust status when the Government know that every other party will oppose it in the election that must follow?
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The Secretary of State has just repeated the discredited health policies of a Government living on borrowed time. They will be the first policies to be reversed by the Labour Government that will replace them.
Mr. Waldegrave: That was not one of the hon. Gentleman's greatest performances. As to his final question, on what he called a constitutional point, I can only take it that the tens of thousands of people who have put all that work into trust applications have a very low opinion of Labour's chances at the polls. I suspect that they are right.
I will answer the two other questions that I extracted from the hon. Gentleman's rhetoric. First, as regards London's teaching hospital trusts, I am sure that the hon. Member for Livingston (Mr. Cook) will have noticed that we have appointed new trusts in London. However, it is merely common sense, as everyone knows, that the Greater London teaching hospitals may well have to change their patterns of provision; there is no secret about that. It is obvious to them that the new teaching hospital trusts which I have approved—they do not have to seek renewed applications—should get advice from Sir Bernard Tomlinson, and that is sensible.
On consultations, it is true that local Labour parties, usually by talking in misleading terms about hospitals opting out of the national health service, in some places managed to get rather small letter-writing and pre-paid postcard campaigns going. However, having surveyed those, I do not think that they can even have got all their local members to fill in their postcards because we got so few.
I notice that this year the hon. Member for Livingston did not stand on the opposition of doctors, and he was wise not to do so. Last year he argued that doctors were against. This year he knows that that is not so. The British Medical Association survey has shown growing support from doctors. The hon. Gentleman may have managed to persuade the Confederation of Health Service Employees to oppose the trusts, but what else is new?
Several Hon. Members rose—
Mr. Speaker: Order. I remind the House that we have a busy day ahead of us. I shall have to impose a 10-minute limit on speeches in the subsequent debate tonight. I shall allow questions to continue until half-past four and then we shall move on. I ask for brief questions from all hon. Members please.
Dame Jill Knight: Is it not true that the overwhelming majority of genuine experts in health service matters, who are quite apart from party politics, unlike the National Union of Public Employees and COHSE—whose members will follow anything that the Labour party says —have already said that trusts within the health service are an excellent thing? Is it not the case that those people who oppose hospital trusts are really saying that hospitals are quite incapable of managing their own affairs and must always take guidance from above?
Mr. Waldegrave: That is so. I have every confidence that, in a few years, if anyone should try to change these reforms, we shall see the Opposition defending them with the same energy with which they defended the reforms made by my right hon. Friend Lord Joseph in 1973, which they opposed at the time. The truth is that they are simply

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scaring people up and down the country and opposing necessary reform. My hon. Friend is right that devolved management in hospitals must be right and is overwhelmingly getting support from senior clinicians and senior management in those hospitals.
Mr. Charles Kennedy: Is not by far the most significant part of the Secretary of State's announcement his decision concerning the four London teaching hospitals? By conceding that they can benefit from devolved management without trust status is he not completely contradicting the entire argument that underpinned trust status, when he said that the future of hospitals would no longer be decided by Ministers but by market forces? Is he not admitting that that is a ludicrous and politically unsustainable way to run the health service, and if it is good enough for London, why not for the rest of Britain—and especially for Aberdeen?
Mr. Waldegrave: It is not a question of it being good enough for London. There are a large number of trusts in London now. Those four teaching hospitals argued hard that they should be given the additional freedoms inherent in trust status, and they will get them. However, it is right that they should have advice from Sir Bernard Tomlinson before they write management plans which are put before the Select Committee on Health and analysed in the House. The Liberal party is always in favour—it alleges —of devolution until someone proposes it. Then it lines up with the Labour party in favour of the status quo every time.
Mr. Nicholas Winterton: Will my right hon. Friend assure me and the House that each and every application by a hospital or unit to which trust status is to be given after 1 April next year has been fully analysed, evaluated and vetted in accordance with the criteria that his Department have laid down, and that those evaluations have been carried out by individuals with the experience and accountancy qualifications to enable them to reach a correct decision? Will we thereby not have any further Guy's and Lewisham, Central Manchester and Bradford hospital trusts, which occurred since the first wave became effective on 1 April this year?
Mr. Waldegrave: The answer to the first part of that question is yes. As for the second part, I believe that the management in the two hospitals that my hon. Friend has named—both of which are dealing with long-standing problems—are doing a very good job in bringing those problems under control.
Mr. Stan Crowther: Is the Secretary of State aware that the South Yorkshire metropolitan ambulance service is highly efficient and highly regarded? Will he explain how the service will be improved by being separated from the health authorities with which it has to work, and by management's being top-loaded with half a dozen salaried non-executive directors? How will that improve the service for patients?
Mr. Waldegrave: I advise the hon. Gentleman to go and look at some of the ambulance services that are already operating as trusts. A number of those services have actually increased the pay of their ambulance men through more flexible working. They have bought more vehicles,
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and have increased the supply of paramedics by devolving management downwards, closer to where the real work is done. That system works just as well for ambulance services as it does for hospitals.
Mr. Cranley Onslow: Is my right hon. Friend aware that sensible people who actually care about the national health service will reject the union-driven reactions that we have heard from Opposition Members? Such people will welcome the greater involvement of local input in efficient management of the NHS, which will benefit an acute unit in my part of Surrey, and community and ambulance services all over the country. They will accept, as I do, that the best contribution that the Opposition could make would be to stop spreading smears and scares.
Mr. Waldegrave: My right hon. Friend is entirely right. As was pointed out very eloquently in The Independent on Sunday, the Opposition parties have no policy of their own. Independent commentators—many of them not sympathetic to my party—left the plans of the hon. Member for Livingston riddled, describing them as having no substance whatever.
The Opposition's only policy has been a policy of scares. Most of those scares have now been rebutted, above all the great scare about privatisation. If I were the hon. Member for Livingston, I would give the House and the country the period of silence on these matters that I think that they deserve.
Mr. Terry Davis: Is the Secretary of State aware that, when the hon. Member for Birmingham, Edgbaston (Dame J. Knight) refers to the views of experts, she—like the right hon. Gentleman—is ignoring the expressed opposition of the overwhelming majority of the consultants at East Birmingham hospital, an even larger majority of the junior doctors, the individual nurses, the rest of the hospital staff and the local general practitioners who voted 9:1 against the hospital's opt-out?
Mr. Waldegrave: I hope that the hon. Gentleman received good service from the NHS, which he has obviously had to use; I am sure that the House will offer him its sympathy.
East Birmingham hospital will be a fine trust. Having assessed the management and clinical support given to the trust application, I am certain that it will be very successful, and will further improve its service to the community.
Mr. Tim Rathbone: People in my constituency who are covered by Eastbourne and Brighton district health authorities welcome this step, which they see as a further marriage between better health services and better administration. Does my right hon. Friend accept that many long-time Labour supporters in the area are thoroughly embarrassed by the stand that the party has taken in this regard, and by the bogus referendum measurements that have been made in some parts of the country?
Mr. Waldegrave: I must say that the Labour party's record on these matters in recent years has not been good. When he was lined up with the drug companies, the hon. Member for Livingston said that the limited list would fail; he was wrong. He predicted that the GP contract would

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fail; he was wrong. He predicted that no GP fund holders would come forward; he was wrong. He predicted that there would be no applications for trust status; again, he was wrong. Labour will be wrong in this instance as well.
Ms. Dawn Primarolo rose—
Hon. Members: Order.
Ms. Primarolo: The House is very fractious on this important statement.
The Secretary of State referred to waiting lists. I am sure that he must be aware that, in the city that both he and I represent, the waiting lists are being fixed. One of my constituents was told that he could not go on a waiting list because it was 60 weeks long and that he would be contacted again when the waiting list was lower. Does the Secretary of State condone the fiddling of the waiting list figures by trusts in order to create a false impression?
Mr. Waldegrave: What the hon. Lady says is nonsense. There is no change in the waiting list policy. If the hon. Lady is anxious to look at fiddles, she should look at the poster that her party is paying for —or that the unions are paying for —to be put up around the country. It contains a considerable untruth. It compares waiting lists now with those in 1979, but it leaves out the day patient waiting lists in 1979 in order to produce the bogus appearance that waiting lists have increased. Waiting lists have come down since 1979. Under every Labour Government that there has ever been, waiting lists have risen.
Mr. Toby Jessel: I warmly support my right hon. Friend's statement. Will he take note of Teddington memorial hospital —an excellent small hospital within the national health service that has an astonishing league of friends which has raised £1 million for capital projects, including a GP unit for which my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) laid the foundation stone? Is my right hon. Friend prepared to take into account the need for GP beds, as demanded by GPs, when deciding on trust status for the third wave?
Mr. Waldegrave: I think that my hon. Friend will welcome the fact that I have approved the application from Teddington to be considered for third wave trust status. I know about the hospital in detail. It is an extremely good hospital. One of the benefits of the GP fund-holding scheme, I believe, is that we shall see an increase in GP-controlled beds.
Mr. Bob Cryer: Would the Minister care to remember that, in Bradford, the first trust was greeted by the sacking of 300 workers, the closing of a baby unit and bitter opposition from the vast majority of the people of Bradford? Does he accept that the second trust will almost certainly result in the selling off of assets, including Westwood hospital for mentally handicapped people, who will be decanted into any sort of community care that can be found for them so that the trust managers can line their pockets with their enhanced salaries?
Mr. Waldegrave: As usual, the hon. Gentleman is cheap and inaccurate. The mental health trusts throughout the country are strongly supported by their clinicians. 'They have made it absolutely certain that any money released
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from the closure of old mental health institutions will have to be ploughed back into mental illness and mental health. That is a very good thing.
Sir Marcus Fox: Following from what the hon. Member for Bradford, South (Mr. Cryer) has just said, I am sure that my right hon. Friend heard last week, as I did, with dismay and disbelief reports of the resignation of Dr. Mark Baker, the chief executive of the Bradford trust. The hon. Member is not present who made that allegation so I shall not mention him, but character assassination is now in play on the Opposition Benches. There was no truth in that allegation. I hope that my right hon. Friend will warn the new trusts, which I welcome, that they will be judged by the Labour party, not on performance but by political dogma.
Mr. Waldegrave: One of the things that encourages me is that so many trust applications have come forward for this year and next year, despite the totally unfair campaign that has been waged against them by the Labour party. The Labour party has wanted the trusts to fail in order to advance its own political campaign. The story about Dr. Baker was only the latest of the bogus scares that have been put about. We made the hon. Member for Coventry, South-East (Mr. Nellist) back down on his threat to staff. He did that in this House. I hope that there will be no more similar tactics.
Mr. Robert N. Wareing: Is the Secretary of State proud of the fact that the Liverpool children's hospital trust has cut 112 beds during the last two years and that recently a child of two died in a corridor in her father's arms because she had had to wait for two and a half hours before a doctor was available?
Is the right hon. Gentleman proud of the fact that his apparatchik manager of Alder Hey hospital is on an £11,000 bonus to do his dirty work and cut expenditure in the national health service?
Mr. Waldegrave: That is exactly the kind of story that damages the NHS and usually turns out to be false. Will the hon. Gentleman not welcome the fact that a new paediatric intensive care unit has just opened in the hospital that he named? Would he like to put alongside each other, for comparison by any independent authority that he could name, the performance of the health service on Merseyside and that of Liverpool city council, which the hon. Gentleman's friends control?
Mr. David Evans: Will my right hon. Friend accept my congratulations on his speech at the party conference last week, when he nailed the lies of the other side?
Hon. Members: Withdraw!
Mr. Speaker: Order. That may be a legitimate comment to make at party conferences, but not here, please.
Mr. Evans: My right hon. Friend nailed the untruths of the other side. [HON. MEMBERS: "Withdraw."] Does my right hon. Friend remember that in 1978, when the Labour party was in charge of the NHS, dying cancer patients were refused entry to hospital, supplies were not allowed in, and nurses' pay was cut in real terms? Shall we contrast that with the 30,000 extra patients treated every week in the NHS, with the 60,000 more nurses, and the £30,000 million NHS budget—four times more than was spent by

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the Labour party? East Hertfordshire health authority cannot wait to get out of the clutches of NUPE and COHSE. That is who they want —
Several Hon. Members rose—
Dr. John Cunningham: On a point of order, Mr. Speaker.
Mr. Speaker: Order. I asked the hon. Member for Welwyn Hatfield (Mr. Evans) to withdraw. I said that a charge of lying might be legitimate at a party conference but would not be legitimate in the House of Commons. I thought that the hon. Gentleman had withdrawn his remark. Will he make that clear, please?
Mr. Evans: I withdraw the remark.
Mr. Waldegrave: Whatever they are, they will be nailed. I am happy to say that I have had considerable assistance from Labour Members weaselling and wriggling on the "Walden" programme and elsewhere during the last few days. My hon. Friend the Member for Welwyn Hatfield (Mr. Evans) is right to remind us who is paying for the posters that the Labour party is now putting up. They are the same people who closed cancer and emergency wards in 1978–79. Those are the people who run the Labour party and dominate its policies.
Mr. John Bowis: Is my right hon. Friend aware that there will be a special welcome in London for his statement from the four hospitals that have been given the go-ahead so that they can prepare for trust status in 1993 at the same time as welcoming the Tomlinson inquiry which will look into overall health provision in London? Does he agree that many of London's financial problems were caused by a decision of the Labour Government when, through the Resource Allocation Working Party —the RAWP system —they took money away from London without rationalising the provision of teaching hospital services there? We can now get that right. Will my right hon. Friend go on speaking up for patients, as he has done today, in sharp contrast to the voice of Bickerstaffe opposite?
Mr. Waldegrave: It is true that, when the Labour Government started the RAWP system, they postponed decisions which should have been taken then and which will now be taken. Nobody who knows anything about health services in London doubts that reforms are needed —such as more primary care in some places and a different pattern of hospitals in a number of ways. Now, because of the new system and the referrals made by GPs and district health authorities, we are getting the clear signals that we need to give us the information on which to base sensible reforms. I welcome what my hon. Friend said and thank him for it.
Ms. Kate Hoey: Is the Secretary of State aware of the current confusion and uncertainty in the London teaching hospitals? The right hon. Gentleman seems to have already decided what the review of London will say. Can he clarify whether the teaching hospitals are opting out or not? Can he provide a little certainty for the people living in the areas covered by the teaching hospitals —they may be teaching hospitals, but they are their local
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hospitals? Can he give us an assurance that, for example, St. Thomas's hospital will not be considered for closure at any stage?
Mr. Waldegrave: I am by no means prejudging what Sir Bernard will advise. There are at least a dozen rival plans within the NHS family in London, and every hospital has its own view about what should happen. The position of the four is clear: their present status remains and they will become trusts a year later than the others. We are giving them the benefit of devolved management by asking the districts, which remain their accountable authorities, to establish that devolved management within the hospitals.
Mr. Quentin Davies: Is my right hon. Friend aware that there has been a great welcome in Lincolnshire for the achievement of trust status by Lincolnshire ambulance service? Under the new status, Lincolnshire ambulance service has been able to make much better use of its budget by hiring more people for the same money and putting 10 more ambulances on the road, and is well on the way to achieving a target of one paramedic per ambulance by 1994, which is way ahead of the national guidelines.
Mr. Waldegrave: I can confirm what my hon. Friend has said. Some of the most innovative trusts are ambulance services, and I am delighted to see further ambulance services coming forward in the third wave. They will bring great benefits to their patients. Incidentally, in Devon, members of the local union—NUPE—voted unanimously to support the trust.
Mr. Simon Hughes: A year ago, the Secretary of State's hopes proved to be false, in that Guy's and Lewisham did not have the money to survive its first year, and nor did some other trusts. Before proceeding to approve a second wave, would it not have been better to find out what the users of the already opted-out services thought, because they are not yet persuaded? Also, would it not have been better to wait until the already opted-out trusts had shown that they were solvent, which Guy's and Lewisham still has not done, and to wait until the process that he started last year was seen to provide not just a better service but more choice for patients? People for whom the teaching hospitals are also their local general hospitals now have less choice and are still not persuaded that these changes bring anything but a worsening of the health service as it affects them.
Mr. Waldegrave: I should like to lay to rest the implication —I do not think that the hon. Gentleman meant it—that Guy's will not survive. It is in good shape, and is being better managed now than in the past. The element of balance between district hospital and teaching hospital of the great hospitals will have to be addressed by Sir Bernard. I believe that Londoners do not often receive a good enough local district health service. Let us face it, that is partly because the pull of teaching over the years has perhaps distorted services to the locality. That must now be sorted out. I have worked with the hon. Gentleman in the past for the interests of his constituents, and I hope that he will give evidence to the review because there are long-standing issues that should now be properly sorted out.
Mr. Peter Thurnham: Will my right hon. Friend utterly refute the bogus scare stories about the cancellation of 300,000 operations? Were not more than 1 million more operations performed last year than in 1979 and will not the reforms produce even better services?
Mr. Waldegrave: That was yet another of the Labour party's scare stories. It was instantly refuted by health authorities up and down the country as completely meaningless. Incidentally, when the Labour party told a similar meaningless story last year, more operations were carried out. I do not know what that proves. I can confirm what my hon. Friend has said. The health service has improved the range of treatments and the number of people treated since we were elected, and it will go on doing so.
Mrs. Sylvia Heal (Mid-Staffordshire): Can the Secretary of State tell the people of mid-Staffordshire how their ambulance service will be improved when, in the application for which he has just given approval, the accident and emergency service will be reduced from 72 ambulances to 60, and when a courier service is to be introduced for industry?
Mr. Waldegrave: The hon. Lady might well have listened to my hon. Friend the Member for Stamford and Spalding (Mr. Davies). There are good ways of making better use of the expensive equipment that they have. I do not mind if services seek to earn money from outside to be ploughed back into the NHS: that is for the benefit of patients. I beg the hon. Lady to look at the ambulance service trusts which are up and running and, in many cases, producing spectacularly better services for their locality.
Dame Elaine Kellett-Bowman: May I thank my right hon. Friend for granting trust status to both the applications from Lancaster? They were granted solely on the criterion of improved patient care. May I point out to other people that, as my right hon. Friend already knows, we are not opting out of the health service: we are simply opting out of bureaucracy from Manchester.
Mr. Waldegrave: The more one sees of trust hospitals in action, the more clear it is that devolved management and management in the hospitals, with nurses on the governing bodies of hospitals again as in the old days, must be right. Trusts are simpler and quicker for decision-taking and are gathering strength every day. There is no question about that in my mind.
Mr. Thomas Graham: The Secretary of State is probably aware that the Tory party in Scotland is facing in all different directions on trusts. Is that the reason why today we have not seen any trust status granted in Scotland? Is it because there is to be a by-election? The local people in Scotland will reject the trusts. Face up and tell the truth now.
Mr. Waldegrave: I will tell the truth by saying that I am not responsible for the health service in Scotland. However, I am sure that the trust movement will bring its benefits to Scotland. I very much hope that it will. I am sure that the hon. Gentleman would not want his constituents to have less good services than they would get in England.
Mr. Harry Greenway: Will my right hon. Friend confirm the extent of increased funding to Ealing hospital since 1979 and the increased numbers of staff of every type—doctors, nurses, and the rest? Will he assure my constituents that Ealing hospital will continue to be well funded under trust status, as it has been during the past 12 years?
Mr. Waldegrave: Ealing hospital is an excellent hospital, along with all our other hospitals. It has a strong record and it will be a strong trust. I was delighted to approve Ealing hospital as a national health service trust in response to its request.
Rev. Martin Smyth: While welcoming the improvements that have been announced, may I have an assurance that we shall not have a repetition of previous years in which hospitals which took in more patients discovered before the end of the financial year that they had to undertake redecoration schemes or find other ways of not treating other patients, because they did not have the money? In the knowledge that there are people here for Northern Ireland lobbying about low pay in the health service, will there be a statement in the House about hospital trusts for Northern Ireland, or will the House again be ignored by the Northern Ireland Office?
Mr. Waldegrave: I shall have to ask my right hon. Friend the Secretary of State for Northern Ireland about that. I know that there will be at least one applicant for trust status. It is a great hospital in Northern Ireland and I know people who work in that hospital.
The hon. Gentleman referred to the age-old problem of running up against budgetary controls three quarters of the way through the year. Our reforms aim to make the money follow the patients in order to do away with that problem. After six months, I cannot say that we have yet rid ourselves fully of that problem—we have not—but the whole purpose of our reforms is to move away from that problem so that, when the patients come to the hospitals, the money is automatically there to make their treatment available.
Mr. Speaker: Mr. Hayes.
Mr. Jerry Hayes rose
Hon. Members: Oh!
Mr. Hayes: It appears that the Labour party has had a hectic week on health. May I ask my right hon. Friend to give some guidance to the House about why the Labour party opposes national health service trusts?
Mr. Dennis Skinner: It is an autocue.
Mr. Speaker: Order. I do not know what the excitement is about. Come on, please.
Mr. Hayes: Why does my right hon. Friend think that the Opposition oppose NHS trusts when trusts treat more patients, waiting lists are falling and the overwhelming majority of NHS consultants support trusts? Is it because the real opposition comes from the Confederation of Health Service Employees and the National Union of Public Employees, which put pay before patients? Is not it good to see the unions here today keeping an eye on their investments?
Mr. Waldegrave: It is genuinely surprising that the Labour party is so adamantly opposed to what is a sensible

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devolution of management to the hospitals. It is also foolish of the union leaderships concerned to oppose these developments. We are already seeing in some trust hospitals a recognition that we have too many low-paid people in the NHS, which we have, and a search for greater and more flexible ways of dealing with pay, which is to the benefit of those very people. I suspect that we shall see that opposition crumbling too, at least from the grass roots, as the doctors' opposition has crumbled so far.
Mr. Dave Nellist: May I give the apology of my hon. Friend the Member for Coventry, North-East (Mr. Hughes), whose brother-in-law died earlier this morning, in whose constituency Walsgrave hospital is located and on whose behalf as well as my own I ask the following question? What guarantee can the Secretary of State give us that, after opt-out, Walsgrave hospital will remain a hospital? Is he aware of what happened to the last hospital to move from NHS control four years ago—Whitley geriatric hospital in my constituency—which we were told at the time would always remain a facility for the frail elderly in Coventry?
Two weeks ago the managers of that hospital submitted a planning application to knock it down and build a supermarket. Is the Secretary of State aware that nobody in Coventry wants Walsgrave hospital to leave NHS control and that none of the doctors and none of the people of Coventry voted for it? The sooner we get a general election to stop him and his like playing politics with our health service, the better.
Mr. Waldegrave: The hon. Member was one of those who wrote disgraceful, intimidatory letters to the management of the local hospital, which were disowned by the leader of his party and, more slowly, by his Front-Bench representative on health, the hon. Member for Livingston. The hon. Gentleman should be careful about talking about playing politics with these matters. His story shows one rather obvious point—that, since 1948, some hospitals have indeed closed, and that sometimes it is right to sell their land and to reinvest in hospitals elsewhere. That has nothing to do with trust status or anything else. If the hon. Gentleman is now trying to scare his constituents into the belief that the Walsgrave hospital will close, he is going even further than the Opposition Front-Bench spokesman, which is perhaps not unusual.
Mr. Tony Marlow: Is it not the case that, by putting responsibility for decision-making and management close to the patient, hospital management trusts will become more flexible and efficient, so we shall get more care for the cash? I understand that the Labour party cannot provide any more cash for the health service until it gets growth. As it is likely to achieve less growth than we would, is it not the case that, under a Labour Government, there would be no improvement in the health service? The hon. Gentleman, the Dr. Goebbels of Livingston, has not a leg to stand on.
Mr. Waldegrave: It is true that our party has given the NHS a bigger share of a bigger national product than did the Labour party when it was in power. The hon. Member for Livingston has at no time been able to respond to the challenges from me, the British Medical Association or
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anybody else, about what his figure is. We know that that is because his financial colleagues have not given him permission to say anything whatever, as they know that they have no such pledge to make.
Mr. Peter L. Pike: Will the Secretary of State say just whom he takes notice of in his consultation exercise? Obviously, he wholly ignores the public of Burnley, Pendle and Rossendale, where 80 per cent. of the consultants and 90 per cent. of general practitioners voted against the proposal and only one member of the community health council voted in favour of trust status. Who on earth does he take notice of?
Mr. Waldegrave: First, of the leadership who submitted the application for trust status and whether they can demonstrate overall that they have support in the hospital. I am sure that the hon. Gentleman will join me in wishing that NHS trust well. It is a good hospital now, and it will become even better.
Mr. Michael Morris: Will my right hon. Friend clarify whether the criteria for the third phase will be the same as for the first and second phases or whether we shall learn from the experiences of those two phases and, if necessary, modify the basis of the third phase? May I congratulate my right hon. Friend on his philosophy of devolved management? Nevertheless, will he recognise that some institutions and hospitals may not wish to go as far as trust status, but may want devolved management? Will he address that problem?
Mr. Waldegrave: It is indeed true that the applications are voluntary and that remains the case. I am sure that the hon. Member for Livingston will be glad to see that his right hon. and learned Friend the Member for Monklands, East (Mr. Smith) and his hon. Friend the Member for Derby, South (Mrs. Beckett) are now in the Chamber to hear what he has to say about expenditure. Perhaps we will now learn a little bit more about it.
Mr. Stuart Bell: Will the Secretary of State note that the people of Cleveland have heard the Prime Minister and the Secretary of State say that there will be no privatisation of the hospital service? However, they will note that, in the second wave of trusts announced today, there will be an NHS trust for North Tees, South Tees and the Cleveland ambulance service. The right hon. Gentleman will be aware that our trust port, the Tees and Hartlepool, which has served our community since 1966, is about to be privatised through Government legislation. Is it any wonder that the people of Cleveland do not believe the statements of the Government on the trusts when they see what is happening to their trust port?
Mr. Waldegrave: It is exactly that kind of bogus analogy that has confused and scared people. A large number of ports have always been in the private sector. We have made it perfectly clear that social care, hospital care and health care will remain provided by the NHS and always will be. I am surprised at the hon. Member for Middlesbrough (Mr. Bell) for making such an analogy, which comes close to the type of misleading statement that we have had from the hon. Member for Livingston. I should have thought that, after the hammering that the Opposition have had in the past few days, they would back off from making such analogies.
Mr. Kenneth Hind: I should like to congratulate my right hon. Friend on selecting the Wrightington hospital to become an NHS trust. No doubt my right hon. Friend will be aware that one of the first actions to be taken will be the appointment of a new upper-limb orthopaedic surgeon and medical team. They will assist in reducing our waiting lists in the north-west, although my right hon. Friend will be aware that they have already been greatly reduced. The waiting list now stands at 10 weeks operating time only for the entire region.
Mr. Waldegrave: My hon. Friend is entirely right. Every example of improved health service care in an NHS trust will give the lie to the campaign that the Opposition have waged. They should look with some nervousness to the next few months as we see steadily improving health care in those trusts, because every time that happens, their scares will be disproved.
Mrs. Alice Mahon: May I tell the Secretary of State how sorry I am that he has not learnt anything from the fiasco of the first wave of trusts? However, I am sorry not for him but for the elderly and the sick who will suffer as he continues to damage the health service.
The Secretary of State has told the House that all trusts are accountable to him. If so, will he tell us why an important circular on the decontamination of equipment used for HIV patients and hepatitis B patients is marked "for action" by health authorities only and "for information" only for the trusts? Today I received a letter from the right hon. Gentleman's Department in which it was admitted that
"operationally independent bodies … are not bound''
by such circulars.
If the right hon. Gentleman is in control of trusts and they are accountable to him, why is that important circular not a must for the trust hospitals? Is it because the right hon. Gentleman is not really in control and those trusts intend to opt out of the NHS? As far as this circular is concerned, they already have done.
Mr. Waldegrave: I have tried to explain these matters to the hon. Lady in the Select Committee over some considerable time, but clearly I have not made much headway. The hospitals will remain within the NHS, as she knows very well; they are subject to NHS policy, as she also knows very well.
Mr. Paul Marland: Is my right hon. Friend aware that his announcement today that the Gloucestershire ambulance trust will be given permission to go ahead will put a spring in the steps of all those involved in the service? For my right hon. Friend's edification and that of the Opposition, may I say that I was involved with the preparation of that trust application. The Gloucestershire ambulance service is convinced that, as a trust, it will be able to provide a better service at less cost to the NHS. That will mean more money for the care of patients.
Mr. Waldegrave: What my hon. Friend says is absolutely right. As I have said before to other hon. Members, in the ambulance service we will see some of the most interesting and innovative developments in all the trusts. The trust applications from that service have been pursued with particular enthusiasm by the people working in it.
Mr. Henry Bellingham: In welcoming today's announcement to include King's Lynn and Wisbech NHS hospital trust, may I ask the Secretary of State whether he is aware that that application had broad support from the overwhelming majority of consultants, doctors and management, as well as an overwhelming majority of NUPE members?
Mr. Waldegrave: What my hon. Friend says about his constituency's trust is true, and it is true in the case of many other trusts, too. That is not the only matter at which I looked. I considered the overall balance of benefit for the hospital, and it was by judging those matters in a wider round that I could approve so many trusts. The support in the case of my hon. Friend's trust was indeed widespread.
Mr. Eddie Loyden: May I ask the Secretary of State to answer a question that he has not yet answered? Approaches were made to him about St. Paul's hospital in Liverpool by two Chairmen of Select Committees, the CHC, myself as a patient, and another patient at St. Paul's. Bearing in mind the fact that the CHCs have a constitutional right to represent patients' interests at those meetings, who does the Secretary of State regard when he takes the final decision if he ignores such approaches to him? What criteria did he consider before accepting the decision of the area health authority against the background of the patients' approaches?
Mr. Waldegrave: I know that the hon. Gentleman was unhappy with the decision. However, he knows that my hon. Friend the Under-Secretary of State and I met the CHC and him and his colleagues. Those decisions are often difficult but we believe that we took the best advice with strong clinical backing before making our decision. But I recognise that it was unwelcome to the hon. Gentleman.
Mr. Alan Meale: May I remind the Minister of all the derogatory remarks that he made earlier about the trade union movement, which represents hundreds of thousands of people within the health service? It represents far more people than any Member of Parliament, including the right hon. Gentleman. When he says that it is a disgrace that so many people are on low pay in the health service, may I remind him that the Government have been in office for 13 years? Why have they done nothing about that problem instead of privatising the health service?
Mr. Waldegrave: The hon. Gentleman is very unwise to use that phrase, which he knows to be false. The fact that there are so many low-paid people in the health service should make them consider whether the structure of trade unionism which has represented them for all those years has delivered much to them.
Mr. Roger Gale: Would my right hon. Friend find time to add his good wishes to those already expressed by the Minister of State on the retirement of the unit general manager at Thanet district hospital? My right hon. Friend will know that Dr. Voysey ended 30 years of dedicated service to the health service, both as a doctor and a consultant, by preparing the hospital for full district hospital status and trust status. Will he ensure that her aspirations can be realised by her successor as quickly as possible?
Mr. Waldegrave: I give my hon. Friend the assurance that, although I did not judge that application to be ready yet, I hope that it will be very shortly.
Several Hon. Members rose
Mr. Speaker: The choice is very difficult. The hon. Member from Scotland.
Mr. Tom Clarke: Thank you, Mr. Speaker. I am sure that Scotland will have noticed your choice.
The Secretary of State referred to his evidence to the Select Committee on Health, but has he given some thought to other people's evidence? For example, has he considered the Chairman's draft report before the 20 pages were torn out? If so, what did he feel about the quality of evidence from Bradford, Leeds and Lewisham, which showed that the business plans bore little resemblance to what happened thereafter? There was no mention of bailing out. In view of the shambles that was made known to the Select Committee, should not the Secretary of State at least have hesitated before making a statement today containing the same mistaken policies?
Mr. Waldegrave: I know that the hon. Gentleman hopes for a shambles because he hopes to make political capital out of it, but there is no such shambles. As for the first part of his question, I cannot comment on the internal discussions of a Select Committee.
Mr. Roger Sims: My right hon. Friend will understand that there will be a deep sense of disappointment among those who worked so hard to prepare the proposals for the Bromley acute unit, only to find that they have been refused. That sense of disappointment will be felt particularly deeply by our new chairman and manager, who are committed to the proposals because they feel that they would be in the patients' best interests. Can my right hon. Friend assure me that officials of the executive will be available to give
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advice and assistance to the authority to enable it to ensure that the proposals are of a standard to enable the Secretary of State to approve them in the third wave?
Mr. Waldegrave: That application was greatly strengthened during the past year; it was very nearly there, and I am certain that it will be ready for approval by next year. I understand that it must be disheartening for the team, but I hope very much that it will continue to work to bring the benefits of NHS trust status to its hospital and the patients who will use it. I am sure that the proposals will be approved in due course.
Mr. Huw Edwards: Does the Secretary of State appreciate that those at Nevill Hall hospital in my constituency last month decided that they would not apply for it to be granted trust status because they believe that, within the NHS, they provide a high quality of service that cannot be enhanced by trust status? They also consulted hospital staff, who were overwhelmingly opposed to trust status. I invite the Secretary of State to come to my constituency and share a public platform with me to debate the health changes.
Mr. Waldegrave: I should of course be delighted to do so, and if the hon. Gentleman writes to me, I shall see if I can find a date. The hon. Gentleman has, unfortunately, torpedoed a main part of the argument advanced by the Labour party's Front-Bench spokesmen, to which he cannot have been paying very close attention. Their argument was that hospitals were being forced to apply; the hon. Gentleman has just shown that that is not so.
Several Hon. Members rose—
Mr. Speaker: Order. I am sorry, but we must move on. I shall keep a careful list of those Members who were not called. I hope that the debate to which the hon. Member for Monmouth (Mr. Edwards) has just referred will take place in the House rather than in his constituency.

Standing Order No. 20 Applications
4.32 pm
Mr. Speaker: I wish to make a short statement about applications for debates under Standing Order No. 20.
It is well known that I take the view that this valued right to address me on an urgent topical matter for three minutes at an extremely busy time of day is too precious to be put at risk by abuse.
I am fully aware that the House some years ago declined to accept a Procedure Committee recommendation that the Speaker should be given a formal power to decline to hear applications that have no relation to the purpose of the Standing Order. Nevertheless, I do consider it my duty to protect this opportunity in the interests of Back Benchers. I have stated already this year on several occasions that it cannot be right that I should be obliged to listen to applications that do not —in the words that I used—even get to first base.
Applications must relate to specific, important and urgent matters that involve ministerial responsibility. If I receive applications that totally fail to meet those criteria, I shall continue to advise Members to seek other ways of raising such matters. I make this statement today because, since the House returned, I have received a spate of irrelevant applications, and I wish it to be known that I shall continue to apply this policy to Members in all quarters of the House, in the interests of the House.

Points of Order
4.33 pm
Mr. Donald Dewar: On a point of order, Mr. Speaker. We have just had a lengthy statement about hospitals seeking so-called trust status in England. The Secretary of State for Scotland has not come to the Dispatch Box. I contacted his office yesterday and again this morning, in vain—he remains mute and incommunicado. He should end the damaging uncertainty that is sapping the morale of the health service in Scotland. He should be here to explain what is to happen to the Royal Scottish National hospital at Larbert, the South Ayrshire general hospital and Foresterhill hospital.
That is particularly urgent because this morning the chairman of Grampian health board confirmed that Foresterhill's application to opt out will go ahead. The argument that he put was poverty stricken; he admitted that Foresterhill will be a monopoly supplier and that the internal market was therefore irrelevant. He relied on a series of unsubstantiated claims and pious hopes, and he conceded that the staff, patients and local community were united in opposition to a policy which they believe will undermine the hospital.
Mr. Speaker: Order. The point of order must be addressed to me. This is not a matter for me. I have no idea whether a statement about Scotland will be made, but no doubt it may be.
Mr. Dewar: Further to that point of order, Mr. Speaker. I do not want to delay the House; I was merely drawing attention to the fact that a specific event has occurred in Scotland today—the decision to go ahead with the Foresterhill opt-out. That is why it is important to hear the Government's position. On behalf of my colleagues in
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Scotland, I believe that I am entitled to ask you, Mr. Speaker, to use your good offices to see whether we can get some explanation of the Government's position.
This policy is opposed by everyone—even by many Conservatives in the north-east of Scotland and in other parts of the country—yet the Secretary of State seems determined to hide away from responsibilities that are fairly and squarely his. He cannot do that. He cannot skulk even until polling day in the Kincardine and Deeside by-election —
Mr. Speaker: Order. I think I have the point. I notice the Government Deputy Chief Whip just coming back into the Chamber; I know that he was present when the matter was raised, and I am sure that he will have heard it.
Mr. Barry Jones: On a point of order, Mr. Speaker. The Pembrokeshire health authority has applied to become an opt-out national health service trust. A number of other hospitals and health service units in Wales have expressed a similar interest. Given the massive and understandable concern throughout Wales, where is the Secretary of State for Wales? We want some light to be shed on his plans for a much loved and highly valued service. It is wrong, Sir, that he has not come to the House to face questioning by my hon. Friends, and we demand that you help us to bring him here to answer for his policies.
Mr. Speaker: I am sure that that will have been heard. There may be some statements about this tomorrow.
Several Hon. Members: On a point of order, Mr. Speaker.
Mr. Speaker: Order. This is an Opposition day, and these points will take up time. I will take Mrs. Ewing first.
Mrs. Margaret Ewing: Thank you, Mr. Speaker. I seek your advice and help in the matter of the accountability of the Scottish Office to Members elected from Scottish constituencies.
As you are well aware, hospitals in Scotland are seeking trust status. Reports say that there is a division of opinion between the Minister responsible for health in Scotland and the Secretary of State for Scotland. Surely the House can find some method by which that Minister and the Secretary of State can be asked to report to Members on their opinions and to offer their guidance on these critical matters to do with the health service in Scotland.
Mr. Speaker: Again, that is not a matter of order for me, but the hon. Lady has made her point.
Several Hon. Members rose—
Mr. Speaker: Order. I think that I had better take Mr. Jones first.
Mr. Ieuan Wyn Jones (Ynys Mô n): On a point of order, Mr. Speaker. We have had an opportunity this afternoon to hear from the Secretary of State for Health about a number of expressions of interest in England. Unfortunately, all that we in Wales can do to discover which hospitals might want to express interest is to read our newspapers. Should not the Secretary of State come to the House to tell us so that we do not have to read our papers?
Mr. Speaker: The hon. Member and the House know my strongly held views about that. The answer is yes.
Mr. George Foulkes: I am grateful to you, Mr. Speaker; I appreciate your views, and you are always helpful to us.
On behalf of Labour Members from Ayrshire, I wrote to the Secretary of State for Scotland asking whether we could go to see him to express our deep concern, on behalf of almost all the people of Ayrshire, about the proposals for Ayr hospital, Biggart hospital and Ballochmyle hospital to opt out. But the Minister of State, not the Secretary of State, wrote back refusing to allow us to see the Secretary of State. Is there any way in which you, Sir, can help to ensure that we have access to the Secretary of State? If he is not prepared to come to the House, we are prepared to go and see him.
Mr. Speaker: That is, as I think they say in Scotland, outwith my responsibilities.
Mr. Robert Hughes: I am grateful to you, Sir, as this is a matter of some importance.
Exactly a week ago—minus 20 minutes—the 90-day consultation period in relation to the Foresterhill hospital application for opt-out status ended. Only this morning, Grampian health board recommended that the application be granted.
In the intervening seven days, before the Secretary of State has even seen the responses to the consultations, and even in advance of Grampian health board arriving at a decision, Scottish Office officials have been widely quoted in the Scottish press as saying that the Minister of State will approve the application. That must be in breach of the rules of this House and of the statute.
Mr. Speaker: I do not think that it is in breach of the rules of the House. I do not know whether there will be a Scottish statement or a statement by the Secretary of State for Wales, but the point has been made. It may well be, because this is an Opposition day, that there was concern that time would be taken by such statements.
Mr. Peter L. Pike: I wish to raise a point of order arising from the statement by the Secretary of State for Health. The Secretary of State requested permission to make that statement to the House, and you, Mr. Speaker, granted permission. Judging by the number of hon. Members who sought to ask questions on the statement, it dealt with an issue of great importance. If you had been in Lancashire this morning, Mr. Speaker, you would have got the news about Burnley health care unit because a fax was issued by the chairman-designate of the health care unit, Mr. Rawson —
Mr. Speaker: Order. What has this to do with me?
Mr. Pike: My point of order is that—
Mr. Speaker: Order. If the hon. Gentleman alleges that information is given to people outside the House before it is given to us, he knows my strongly held views on the matter. However, it is not my responsibility and it is not a matter of order in the Chamber.
Mr. Pike: You are therefore saying, Sir, that it is your practice to deprecate such a practice by a Secretary of State. Should not the Secretary of State and the chairman-designate do the honourable thing and resign because of this insult to the House?
Several Hon. Members rose——
Mr. Speaker: Order. I think that I had better take one point of order from the Government side.
Mr. Donald Thompson: Would it not have been easier for you, Mr. Speaker, to take a series of three-minute applications under Standing Order No. 20? That would have saved the House from listening to so much rubbish.
Mr. Speaker: That might have been easier. Such proceedings bring the House into disrepute and take up time on a busy day.
Mr. Dave Nellist rose——
Mr. Speaker: I think that the hon. Gentleman intends to oppose the ten-minute Bill.
Mr. Nellist: This is on a point of order of which I have given you notice, Mr. Speaker. Have you received from the Secretary of State for Energy a request to make a statement on the disgraceful announcement at lunchtime on the closure of Coventry colliery at Keresley with the loss in my city of 1,300 jobs? If such a statement were made, do you agree that it would be totally in order to point out that the problem is due not to the failure of Coventry miners to dig coal but to the tightening ratchet of the Government's economic targets? If they get their way, it will mean that the 200 pits that existed in 1979 could be down to Rothschilds' 14. If the miners want to oppose this closure they know that they have my whole-hearted support.
Mr. Speaker: That is not a matter for me.

Disqualification of Elected Persons
4.43 pm
Mr. Roger King: I beg to move,
That leave be given to bring in a Bill to disqualify from membership of the House of Commons or local authorities any person who is sentenced to a term of imprisonment.
That is the short title of the Bill, but its basic aims are to permit the immediate disqualification from office of a Member of Parliament or local government councillor who has been imprisoned for knowingly, deliberately and publicly defying the laws of the land and, thus, the will of Parliament.
It is necessary to make two distinctions. The Bill is not directed at any individual hon. Member. It is a modest measure and I seek no retrospective legislation. Of course, in part it is motivated by the recent celebrated case of the hon. Member for Liverpool, Broadgreen (Mr. Fields), who is in his place. He has paid his dues as the law stands and my prime intention is to avoid a repetition of that case. Secondly, the Bill does not seek to disqualify any councillor or hon. Member found guilty of an offence and subsequently sentenced to a period in custody where it is clear that that person has not actively campaigned to break the law. A remedy for that already exists under the Representation of the People Act 1991 under which an hon. Member can be disqualified when imprisoned for a period exceeding 12 months. However, the law is much less clear for local councillors.
Hon. Members know only too well that events can overtake some of us in a way that was never premeditated or foreseen and certainly never publicly campaigned about. One is reminded of an hon. Member being apprehended for driving while intoxicated and perhaps as a result being liable to imprisonment. The Bill does not cover such a situation, because the hon. Member would not have campaigned and asked other hon. Members and everyone in the land to join him in his drinking and driving. The Bill distinguishes between that type of offence and one in which an elected representative positively campaigns on a platform of deliberate and provocative disobedience of the law of the land.
All hon. Members have a right to disagree; that is our heritage. But we also have a duty to set an example and uphold the law. We express our feelings in the House and do not do so outside, goading our fellow citizens to disobey the law. 'The same is true of councillors. They are entitled to free expression but never to the right to break the law and remain in a position of continuing influence.
Few of us can have remained unaffected by the hon. Member for Broadgreen. True to his word and to his pledge to his constituents, he has resolutely fought against the introduction of the poll tax. Failure to pay and to obey the law laid down by the House resulted in his imprisonment. Then we read that it was business as usual from the depths of the prison. I admire the hon. Gentleman for his nerve and effrontery, but it makes me angry to know that defiance of the law that was knowingly and deliberately undertaken has had little impact on his job prospects, although, of course, his party affiliation is under some examination. Could a police officer who openly challenges the law and is imprisoned remain a serving officer? Of course not. Would not a solicitor be
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struck off if he refused to carry out his legal duties and advocated that everyone else should do the same? Of course he would.
Five Birmingham councillors still refuse to pay their poll tax and, by their example, they are encouraging thousands of others. That is as clear a case of wilful disobedience of the law as one can get. It is premeditated, calculated and deliberate. If those councillors were brought before the courts it is unlikely that they would receive any more than a month or two in prison, but they would remain councillors, which is the essence of my argument. They have taken on responsible positions and a duty to uphold the laws of the land, but they have openly defied those laws and have campaigned for their defiance.
The Bill would make it impossible to avoid the ultimate sanction of disqualification, because from the moment that councillors were found guilty and sentenced to imprisonment they would cease to be councillors. It would make it absolutely clear that the responsibility of all who are elected to serve as councillors or hon. Members of this mother of Parliaments is to express themselves, to argue fiercely and with conviction, but always to obey the wish of the majority. If they acted in open defiance of that they would face disqualification.
The Bill has been promulgated because of the controversy surrounding the poll tax. Once the Rubicon of transgression has been crossed, as it has, any sort of controversial legislation is an invitation to embark upon wilful disobedience. Rabble rousers and troublemakers will doubtless beat their breasts and proclaim that somehow democracy is all about breaking the law to achieve change. A long time ago that might have been true. At that time debate was about basic freedoms and rights and people had to fight for them. Now such dissent is all about thuggery and militancy and has nothing to do with democracy.
Can we tolerate such loutish behaviour? Is not the House and are not council chambers throughout the land big enough to absorb these political absurdities? The Labour party has tried, in its pathetic way, to introduce some control, but I do not doubt that my arguments will be countered by stuttering rhetoric in defence of the principle that hon. Members should say what they like and do what they like when they like to do so.
The finger that is pointed at those of us who are seeking to achieve what the Bill would introduce is a crooked one. It points back to those Opposition Members who have wilfully disobeyed the law in the recent past. There are others who are still seeking to carry out what they believe is their democratic duty in upholding their beliefs and disregarding the will of Parliament, and at the same time urging others to follow their example.
Without the House clearly and unequivocally spelling out the duties of its Members and those of our council brethren, direct and open militancy, the flouting of what nearly all of us believe in and contempt for democratically arrived-at decisions can only gather pace.
My Bill is a modest measure which is designed to contain excess.
4.52 pm
Mr. Dave Nellist: Were the Bill to be passed this afternoon, the House would be seeking to take powers to decide for the electorate who could and could not stand or sit as a Member of this place. Those powers would go wide of the existing powers.
You and I have crossed on a couple of occasions, Mr. Speaker, and I know that you have powers, subject to the resolution of the House, temporarily to suspend an hon. Member from sitting in the Chamber because of what is deemed at the time to be disruption. That can be done provided that the result of a Division supports you, Mr. Speaker, but that is different from the slippery slope that we have been invited to travel down. We are being asked to substitute ourselves for the electorate and to decide in the Chamber who can and who cannot be voted for outside it. If that were to come to pass, I would argue that democracy would be weakened and reduced. Surely even Conservative Members have cause carefully to consider the measures that are proposed by the hon. Member for Birmingham, Northfield (Mr. King). His message is, during a pre-election period—it extends even to Tory supporters—that Tory Members do not believe that the electorate is to be trusted to decide which candidates should be elected.
The hon. Member for Northfield has said that rules already exist. There is, for example, a rule that people cannot sit in this place if they are under 21 years of age. I disagree with that. I think that it would have been much better if the hon. Gentleman had introduced a Bill that sought to being to an end the legislation that provides that people can vote at 18 and die for their country at 18 but cannot sit in this place to decide whether there should be an Act of war, which would lead to the death of young men and women. It may be that my right hon. Friend the Member for Chesterfield (Mr. Benn) disagrees that that is how the constitutional position is arrived at.
There are other rules that affect those suffering from mental illness and peers. My right hon. Friend the Member for Chesterfield has done sterling work in changing aspects of the law that bear on peers. There are other rules that bear on various offices of profit, bankruptcy and treason. The rule that relates to treason has been used only once this century.
The Representation of the People Act 1981 con-solidated earlier measures and included the rule that if anyone has been imprisoned for one or more acts here in Britain or in Ireland for more than 12 months, he or she cannot sit as a Member of this place. There have been only five occasions over the past 100 years when that rule has been brought into operation. It will come as no surprise to hon. Members when I say that two cases involved Liberals and the other three involved Tories. The Opposition have a clean sheet.
As you know, Mr. Speaker, the case of the hon. Member for Ealing, North (Mr. Greenway) is sub judice and, therefore, cannot be mentioned in the Chamber. I am sure that that hon. Gentleman will welcome the support that he has had from the hon. Member for Northfield in introducing the Bill that is before us! The Bill seeks to extend disqualification to civil matters such as the poll tax, to which I shall turn later in my remarks. If the Bill became an Act, it would catch most Ulster Unionist Members. Nearly all of them have been in prison over the past five years because of their opposition to the Anglo-Irish
336
Agreement. There was no fuss when that happened. Against that background, why has the hon. Gentleman introduced the Bill?
The Bill would catch those who would go to prison on a point of principle as well as those who are imprisoned for corruption, and crooks generally. Clearly, my hon. Friend the Member for Liverpool, Broadgreen (Mr. Fields) went to prison on a point of principle. I have never known a Tory Member do so, but I know that the Conservative party believes in rehabilitation. Keith Best was the first person to shake the Prime Minister's hand on Friday afternoon as he left the stage during the Tory party conference.
We are not ashamed of those who went to prison when they fought in the past to establish rights for the country and for the Labour movement. We have giants in our movement such as Tom Mann, who was born in Coventry, and Manny Shinwell. I have in mind the women who worked in the north-west cotton mills and many other women. I think of those who wished to establish trade unions and who introduced the right for men and women to join unions. I think of those who secured the right for women to vote after the first world war.
Perhaps the most apposite example is George Lansbury, the leader of Poplar council. With his fellow councillors, he went into prison 70 years ago under a banner proclaiming that it was
"better to break the law than to break the poor".
He established, for the first time in Britain, a genuine dole system. Some years later George Lansbury was elected the leader of the Labour party.
If my hon. Friend the Member for Broadgreen had been imprisoned in Russia, "Panorama" would have made a programme on that event. If the provisions of the Bill had been included in the legislation enacted by other countries in the past, many notable people in Russia and elsewhere would never have risen to high office. I have in mind Vaclav Havel, Alexander Dubcek, Lech Walesa and Mahatma Gandhi. Many people have gone to prison on a point of principle. They have been recognised in later life and as a result of that they have risen in society.
Desmond Tutu is the archbishop who said that sometimes there is a moral imperative that causes people to break the law. By implication the hon. Member for Northfield is attacking the president of Georgia, Gamsukhurdia, who was in prison during the 1970s for monitoring human rights in the Soviet Union. There is the lady in Burma who two days ago was awarded the Nobel peace prize for 1991. The Burmese Government ordered that she should spend two years in detention. My hon. Friend the Member for Broadgreen may not have aspirations to win the Nobel peace prize, to become an archbishop or even to lead the Labour party, but I am proud that he went to prison on a point of principle.
The House knows that the principles of my hon. Friend the Member for Broadgreen cost him two months' imprisonment in Walton gaol. He was imprisoned because of his opposition to the poll tax. He expressed his solidarity with those who cannot pay poll tax debts. This week will probably see the 100th person to be imprisoned in England and Wales for poll tax debts. Many of those people are on low, fixed incomes and there are others who have no income. A dozen of them are pensioners.
I said earlier that I did not know of any Tory Members who had gone to prison on a matter of principle. However, I know one Tory voter who has gone to prison on a matter

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of principle. His name is Bill Jones of St. Helens. He went to the same prison in Liverpool—Walton—as my hon. Friend the Member for Broadgreen. He was 72 years old and a diabetic. He has only one leg. When he entered Walton prison his wheelchair was dismantled. He was carried up the stairs and put into a cell. Bill was imprisoned because he was unable to pay the poll tax. I send him my best wishes—I hope that many others will do so—following his recent heart attack.
It is a scandal that pensioners and others should be put in prison in 1991 as a result of a barbaric mediaeval law. It does not happen in Scotland. Even this Government introduced what is now the Debtors (Scotland) Act 1987 to stop people being imprisoned because of debt. I want to see a similar Act apply to England and Wales.
Another example is Norman Cassidy——
Mr. Speaker: Order. The hon. Gentleman should relate his remarks to the Bill. At present they are wide of it. The Bill relates to Members of this House.
Mr. Nellist: My hon. Friend the Member for Broadgreen went to prison to stop people such as Bill Jones and others being sent to prison.
Two weeks ago, in Northumberland, a 69-year-old pensioner, Norman Cassidy, was put in prison for 90 days for owing £62. That is one day for every 69p that he owed. When Ronson went in prison, the sum was £30,000 for every day served. My hon. Friend the Member for Broadgreen went to prison——
Mr. Speaker: Order. The hon. Gentleman is going miles wide of the Bill as outlined by the hon. Member for Birmingham, Northfield (Mr. King).
Mr. Nellist: I take your point, Mr. Speaker.
I contend that we are faced with mediaeval barbarity. My hon. Friend the Member for Broadgreen went to prison to try to put a stop to it. If any of us have to follow him, I think that it will be a price worth paying, to quote someone else's words. The hon. Member for Northfield seeks to introduce a Bill which would disqualify my hon. Friend from taking his seat in Parliament because he was imprisoned as a result of his stand against the poll tax, which was a point of principle.
The imprisonments to which I have referred and the other hundred or so are an attempt to frighten the British people. Millions of them cannot afford to pay the poll tax. The stand on principle of my hon. Friend the Member for Broadgreen was designed to prevent fear entering the minds of the people.
The Bill is at best a shabby item. If it is a serious measure, the anti-democratic implications of it should worry many hon. Members, including Conservative Members. Even if it is merely a political jibe by the hon. Member for Northfield and the Secretary of State for the Environment, who spoke about these matters at the Tory party conference last week, we should question its enforceability. Millions of those who cannot pay the poll tax will stand shoulder to shoulder with councillors and Members of this place.
A Tory Member seeks to ban from the House of Commons those who stood in solidarity against the poll tax. I say to you. Mr. Speaker, and, through this House, to the hon. Gentleman, that he should realise that this sort of bureaucratic and Stalinist measure shows the weakness of his argument. If he thinks that his case is such a good
338
one, he should have confidence in the ballot box in Broadgreen and Coventry, or anywhere else where the poll tax has been fought, and put those ideas before the British electorate, not use bureaucratic measures to try to exclude from the House those who have taken a stand and gone to prison on a matter of principle. I urge my hon. Friends to throw out the Bill.
Question put, pursuant to Standing Order No. 19 (Motions for leave to bring in Bills and nomination for Select Committees at commencement of public business):—
The House divided: Ayes 91, Noes 104.

Division No. 229]

[5 pm

AYES

Adley, Robert

Janman, Tim

Alexander, Richard

Jessel, Toby

Alton, David

Jones, Gwilym (Cardiff N)

Arbuthnot, James

Jones, Robert B (Herts W)

Ashby, David

Jopling, Rt Hon Michael

Aspinwall, Jack

Kellett-Bowman, Dame Elaine

Beaumont-Dark, Anthony

Kilfedder, James

Bellotti, David

King, Roger (B'ham N'thfield)

Bonsor, Sir Nicholas

Knox, David

Bowden, Gerald (Dulwich)

Lawrence, Ivan

Bowis, John

Lloyd, Sir Ian (Havant)

Braine, Rt Hon Sir Bernard

MacKay, Andrew (E Berkshire)

Brandon-Bravo, Martin

Mans, Keith

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

Marshall, John (Hendon S)

Bruce, Ian (Dorset South)

Meyer, Sir Anthony

Buck, Sir Antony

Mills, Iain

Burt, Alistair

Mitchell, Andrew (Gedling)

Butler, Chris

Moate, Roger

Carrington, Matthew

Monro, Sir Hector

Clark, Rt Hon Sir William

Montgomery, Sir Fergus

Coombs, Simon (Swindon)

Morris, M (N'hampton S)

Cope, Rt Hon Sir John

Mudd, David

Currie, Mrs Edwina

Nelson, Anthony

Day, Stephen

Neubert, Sir Michael

Dickens, Geoffrey

Oppenheim, Phillip

Dover, Den

Powell, William (Corby)

Durant, Sir Anthony

Shaw, Sir Michael (Scarb')

Dykes, Hugh

Shepherd, Colin (Hereford)

Evennett, David

Shepherd, Richard (Aldridge)

Fairbairn, Sir Nicholas

Shersby, Michael

Favell, Tony

Smith, Sir Dudley (Warwick)

Fenner, Dame Peggy

Speller, Tony

Fox, Sir Marcus

Squire, Robin

Franks, Cecil

Stewart, Rt Hon Sir Ian

Gale, Roger

Taylor, Ian (Esher)

Gill, Christopher

Thompson, Patrick (Norwich N)

Gorman, Mrs Teresa

Thornton, Malcolm

Greenway, Harry (Ealing N)

Townend, John (Bridlington)

Grylls, Michael

Vaughan, Sir Gerard

Hargreaves, Ken (Hyndburn)

Viggers, Peter

Harris, David

Walker, Bill (T'side North)

Hind, Kenneth

Waller, Gary

Hordern, Sir Peter

Watts, John

Howarth, G. (Cannock & B'wd)

Howell, Ralph (North Norfolk)

Tellers for the Ayes:

Hughes, Robert G. (Harrow W)

Mrs. Maureen Hicks and

Hunter, Andrew

Mr. Jacques Arnold.

Irvine, Michael

NOES

Adams, Mrs Irene (Paisley, N.)

Caborn, Richard

Anderson, Donald

Callaghan, Jim

Ashdown, Rt Hon Paddy

Campbell, Ron (Blyth Valley)

Ashley, Rt Hon Jack

Canavan, Dennis

Ashton, Joe

Carlile, Alex (Mont'g)

Banks, Tony (Newham NW)

Cohen, Harry

Barron, Kevin

Cook, Frank (Stockton N)

Battle, John

Corbett, Robin

Beith, A. J.

Corbyn, Jeremy

Bell, Stuart

Cunliffe, Lawrence

Benn, Rt Hon Tony

Davies, Ron (Caerphilly)

Bottomley, Peter

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

Boyes, Roland

Dixon, Don

Bradley, Keith

Douglas, Dick

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Dunnachie, Jimmy

Madden, Max

Eadie, Alexander

Mahon, Mrs Alice

Eastham, Ken

Marek, Dr John

Ewing, Harry (Falkirk E)

Martin, Michael J. (Springburn)

Ewing, Mrs Margaret (Moray)

Martlew, Eric

Fearn, Ronald

Maxwell-Hyslop, Robin

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

Meacher, Michael

Flannery, Martin

Meale, Alan

Foster, Derek

Michael, Alun

Fyfe, Maria

Michie, Bill (Sheffield Heeley)

Galloway, George

Michie, Mrs Ray (Arg'l & Bute)

Garrett, Ted (Wallsend)

Mullin, Chris

Godman, Dr Norman A.

Nellist, Dave

Golding, Mrs Llin

Patchett, Terry

Gordon, Mildred

Pendry, Tom

Graham, Thomas

Pike, Peter L.

Griffiths, Nigel (Edinburgh S)

Primarolo, Dawn

Hain, Peter

Redmond, Martin

Hattersley, Rt Hon Roy

Rogers, Allan

Haynes, Frank

Rooker, Jeff

Hinchliffe, David

Ross, Ernie (Dundee W)

Hood, Jimmy

Rowlands, Ted

Howarth, George (Knowsley N)

Skinner, Dennis

Hoyle, Doug

Steinberg, Gerry

Hughes, Roy (Newport E)

Stott, Roger

Hughes, Simon (Southwark)

Strang, Gavin

Jones, Barry (Alyn & Deeside)

Thompson, Jack (Wansbeck)

Jones, Martyn (Clwyd S W)

Trimble, David

Lamond, James

Wareing, Robert N.

Leadbitter, Ted

Welsh, Andrew (Angus E)

Litherland, Robert

Welsh, Michael (Doncaster N)

Livingstone, Ken

Wigley, Dafydd

Lloyd, Tony (Stretford)

Winnick, David

Loyden, Eddie

Wise, Mrs Audrey

McAllion, John

Wray, Jimmy

McAvoy, Thomas

Young, David (Bolton SE)

McKay, Allen (Barnsley West)

McKelvey, William

Tellers for the Noes:

McLeish, Henry

Mr. Harry Barnes and

McMaster, Gordon

Mr. Bob Cryer.

Question accordingly negatived.
Mr. Roger King: On a point of order, Mr. Speaker. Will right hon. and hon. Members have an opportunity tomorrow to study carefully the voting in that Division to ascertain how many members of the Opposition Front Bench supported or opposed my very modest measure?
Mr. Speaker: That is not a point of order for the Chair to consider.

Opposition Day
[20TH ALLOTTED DAY]

Manufacturing Industry
Mr. Speaker: I have selected the amendment in the name of the Prime Minister. Because of the late start, I regret that I shall have to impose a limit of 10 minutes on speeches made between 7 and 9 o'clock.
5.12 pm
Mr. Gordon Brown: I beg to move,
That this House strongly condemns the economic incompetence of the Government which has caused a decline in manufacturing output, investment and jobs, has brought very high levels of bankruptcies and closures, and caused fast rising unemployment in every sector of industry and every region of the United Kingdom; and demands that the Government now take seriously the needs of manufacturing industry with policies, both nationally and for the regions, to halt the huge decline in manufacturing investment, to bring unemployment down, and to improve the skills base of the economy.
The motion demands urgent action on jobs and training to end the disgrace of the fastest-rising unemployment this year in western Europe. It seeks immediate action on improving investment in industry, which is the real test of economic competence, with a new manufacturing investment programme. The aim is to bring to an end a collapse of investment which in the last year has been the worst since 1932.
Yesterday, the most recent figures showed that manufacturing production was not rising but falling by 1·1 per cent. Industrial output is not rising but falling by 1·6 per cent. No one denies that unemployment, which officially has already reached 2·4 million—and is an absolute disgrace at that level —will rise yet again. It will rise in the north and in the south; it will rise among skilled, unskilled, and professional workers; and it will rise in high-tech as well as traditional industries. On the Chancellor's own admission, when he was interviewed on the "Today" programme last week, unemployment will rise next month and the month after that unless the Government take the action that our motion proposes.
According to the British Textile Confederation, redundancies in the textile industry will rise by 10,000 in the next few months, and the Engineering Employers Federation states that job losses in engineering will increase by 90,000. The Motor Agents Association says that there are 40,000 more redundancies to come in the vehicle industry, and another 100,000 job losses are expected in the construction industry. Those affected will be men in their 50s who will never work again, girls and boys in their teens who will be denied their first job, and family men and women who face the loss not just of their jobs but of their homes as well. Many of them are among the three-quarters of a million people who have mortgage arrears of two months or more. Business men and women who invested their life savings now feel abandoned by banks and by the Government.
This is not the failure of some other Government, some other Cabinet, or some other Prime Minister—today's failures are the failures of this Government, this Cabinet, and this Prime Minister. If Ministers had the courage to defend themselves, today's debate would be taking place

341
not just in this Chamber but throughout the country, in a general election—in a nationwide debate in which the Government could no longer continue to cower behind their temporary parliamentary majority. Instead, the Government would be subjected, as they should be, to the full and direct scrutiny of the electorate. Such a debate would encompass not only the Government's failures in manufacturing but the importance of electing a Labour Government to rectify those failures.
The reason why a general election is not being fought at this time is abundantly obvious from everything that we heard at the Conservative party conference. It is not that the Chancellor has a new economic programme for Britain to implement, or that there is a new policy for the 1990s for which the Government want to legislate in the next Queen's Speech—the Conservative party has run away from an election that it knew it would lose.
The country knows that the Government are going down. The tragedy is that they are taking much of British industry with them. Let us examine the scale of the manufacturing crisis which confronts this country. Manufacturing employment is now below 5 million for the first time this century, after huge job losses of 250,000 in only 18 months. Industrial output is 3·3 per cent. lower than this time last year, and manufacturing output is down 5·7 per cent. It is not just one trade or sector that is affected, but almost every trade and sector. Engineering output is down 6 per cent., and output in investment goods by 6·6 per cent. Consumer goods are down by nearly 4 per cent. That is not an industry-led recovery or investment-led growth. Ministers argue that Britain is undergoing a weak recession that will give way to a strong recovery, on the road to the permanent elimination of inflation. The neglect of industry, however, means that Britain is moving from a deep recession towards only a shallow recovery, on the road to a permanent reduction of the country's industrial capacity.
Britain's manufacturing economy is already smaller than that of France and Italy, and half that of Germany. If the Government do not act on the supply side measures that we recommend, Britain will fall further behind in the more competitive Europe of 1992. I am sure that most right hon. and hon. Members agree that if we are to succeed in the new Europe, and if we are to be leaders in European industry, the real test of Britain's prospects—and of the jobs of tomorrow, not just of today —is the quality and quantity of investment. However, not only has overall investment fallen this year, but according to all estimates it will call again next year by 2 per cent., in contrast with a general rise throughout the rest of western Europe.
Mr. John Bowis: The hon. Gentleman says that he wants to see more investment, and presumably he also wants to encourage savings. How will savings be encouraged by Labour's pledge to impose a 9 per cent. surcharge on them?
Mr. Brown: The measures that we have outlined will encourage people to invest in manufacturing industry. Our small business scheme includes provisions whereby individuals can invest, and therefore save with tax relief, to put small business in this country on its feet. It is no use Conservative Members posing as the friends of small
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business men and women, and of savers, when they have been responsible for 40,000 businesses going down this year alone.
Business investment in Germany is rising by 7 per cent. this year, in Spain by nearly 5 per cent., and in Japan by just under 7 per cent. According to the Confederation of British Industry, business investment in Britain is falling by 11 per cent. this year—19 per cent. in total in manufacturing. I can think of no other European competitor country experiencing such a big collapse in its basic manufacturing investment this year. Worse than that, I can think of no other western European country where the Government's response to falling investment has been to withdraw the little help that they have rather than to offer the best that they can do. We are not merely the only major country in Europe in which business investment has fallen this year by significant amounts—we are also the country in which investment will fall in 1992.
Let us be absolutely clear about what is happening to manufacturing in this country. According to the Confederation of British Industry, investment in manufacturing was £12·4 billion in 1989 and £12·1 billion in 1990; it is only £9·4 billion for this year and in real terms it will be only £8·5 billion in 1992. In other words, in three years investment in manufacturing will have fallen by 30 per cent.
Whom do business blame for what has gone wrong? Do they blame the Organisation of Petroleum Exporting Countries, the European Community, world conditions, or the trade unions? Do they blame the BBC, as Ministers now seem to? Does not business in fact believe that the Government have no one to blame but themselves?
Mr. Peter Gill, director of the Builders Merchants Federation, said:
"As a result of a combination of ineptness and sheer arrogance, the Treasury and Government were responsible both for the depth of the slump and its seemingly endless course."
Mr. John Harris, chairman of the policy unit of the National Federation of Self Employed and Small Businesses, said:
"A little more sympathy and humility would not come amiss".
The managing director of Marlborough Ceramic Tiles said:
"This time round we have no such benign feelings towards the Government. We regard the recession as being the result of unforgivable incompetence by the Government."
The Secretary of State, who is before us today, knows all that. He has been on a regional tour, as he told us earlier this afternoon, meeting business people. Perhaps he should tell us what business has been telling him. Clearly he was impressed by what he heard in the north-east at a meeting on 17 September, almost exactly a month ago. He met Mr. Carl Watkin, the managing director of Crabtree in Gateshead which was a winner of the Queen's award for export achievement, and exporter of the year. The Secretary of State described it as a tremendous firm. What did the director of that tremendous firm say? Did he thank the Secretary of State for all his work? Did he express confidence that the Government had revived manufacturing industry? Did he say that there was any sign of uplift? Did he blame the BBC for all the bad news and start to jam the BBC switchboards, as Mr. Patten has suggested? No, I have here the cutting entitled:
"Award Winner in Fierce Attack on Government".

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Just to be sure, we checked this afternoon that he was correctly reported. He said:
"The economy has been in trouble since the present Prime Minister was made Chancellor. We forecast the problems in September 1989 but the Government did not accept recession until the beginning of 1991. Confidence is totally destroyed in manufacturing …there is no sign of an uplift."
Is that not the view of many manufacturers throughout the country?
Faced with all the evidence, with rising unemployment, ever-rising bankruptcies and direct condemnation by industry itself, what are the Government still trying to tell us? The Secretary of State for Trade and Industry was interviewed on the "Today" programme last week by Mr. Brian Redhead—the man whom he accused a few months ago of voting the wrong way at the last general election, until Mr. Redhead pointed out that he had indeed voted the wrong way as he had voted Conservative. What did the Secretary of State say in that interview? Did he say that he appreciated all the problems of industry, that he shares the doubts about confidence coming back, or even that things may gradually improve? No. He said:
"The mood that I detect in businessmen"—
obviously based on his experience in the north-east—is that
"confidence is flooding back".
Is it flooding back when investment is falling, redundancies are rising, and unemployment is increasing? Perhaps the Secretary of State will explain exactly what he means by confidence flooding back when he speaks later this afternoon.
The Chancellor, not to be outdone by the Trade Secretary, told us that there was a miracle when there was not, and that there was no recession when there was. He told us in the spring that he could hear faint stirrings that no one else, he admitted, could hear. In the autumn, he alone can see "green shoots of spring" that no one else can currently see. What does the Chancellor say when pressed? I have the cutting here. He says that the United Kingdom economy is "making dramatic progress".
Why should we believe the statements of Ministers who told us in 1988 and 1989 that they had created a miracle, who told us in 1989 that there would be no recession, who told us late in 1990 that the recession would be over by the beginning of 1991 and who told us this year that the recession would be over towards the middle of the year and then by the middle of the year? That never happened, as everyone knows. Now, even in the face of the Government's own evidence—published in the Budget statement—we know that next year the balance of payments will worsen, imports will rise and investment will continue its decline. In the face of that, what do they tell us? The same vicious circle is about to be repeated—a circle that can only be broken by a proper policy for industry.
Nowhere is the gap between what Ministers say will happen and what happens wider than in the statements of the Prime Minister. Let us be clear about what the Prime Minister told us almost a year ago when he was Chancellor, giving the autumn statement in the House. Last November he told us that growth would be 0·5 per cent.—it is now declining by 3·7 per cent., so he was wrong by just over 4 per cent. He told us that manufacturing output would fall by 0·5 per cent.—it fell by 6 per cent., so he was wrong by more than 5 per cent. He told us last
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November that investment would fall by only 0·75 per cent., but it has fallen by nearly 12 per cent. according to estimates, so he was wrong by more than 11 per cent.
What is the Government's answer? As we saw in the Financial Times on Monday, it is not to admit to mistakes but to suggest privatising the Treasury forecasters. It is not the civil servants who work for the Government who should be moving out of Government and into the private sector—it is the Cabinet Ministers who made the policies that undermined the forecasts.
To be fair to the Prime Minister in his record on manufacturing, however, let us consider his record since he first arrived at the Treasury in 1987. He told us then that he had licked inflation—but then it doubled, and doubled again. In 1988, he told us that he would continue as a Treasury Minister with a policy of a balanced budget and said:
"Living today and paying tomorrow is not an attractive philosophy for Government, nor is it a Conservative philosophy. We are determined we will not do that. We will maintain a balanced budget."
Is a £10 billion and rising public sector borrowing requirement a balanced budget? To crown it all, in April 1989 the Prime Minister made a speech to the country which I have here. What is its title? It is "The Manufacturing Renaissance"—under the Tories of course. He told us:
"The British economy is now resilient and dynamic and growing and so it will remain, and manufacturing will lead the way".
Since that day in April 1989 when the Prime Minister, then Chief Secretary, made that speech manufacturing investment has fallen 21 per cent., manufacturing output by 8 per cent., and manufacturing unemployment by 361,000. Is that a renaissance? We should be grateful that he is not promising a renaissance in the health service, in schools and in our public services.
The failures cannot be dismissed as one-off misjudgments, as aberrations or as the misfortunes of a single recession. We argue that the failures in manufacturing are the enduring and cumulative consequences of 12 years of short-termism when what Britain needed was a long-term strategy for investment in our future.
After twelve and a half years of this Government, manufacturing output has grown by 63 per cent. in our competitor country Japan, by 26 per cent. in Germany and by 32 per cent. in America, but in Britain it has grown by only 6 per cent.—10 times slower than in Japan.
The debate is not about whether we are fourth, fifth, sixth or seventh in the league for manufacturing growth. The fact is that we are 20th out of 21, with only Greece behind us. This is the Government who tell us that they think that manufacturing is important. Not only that—no other industrial country has seen such a lamentable performance in manufacturing investment, and in no other country has Government-funded research and development for the future expanded so poorly. Let us consider the figures for a minute.
Mr. Tony Marlow: I am intervening by popular demand: I have been asked to do so by some of the hon. Gentleman's colleagues on the Opposition Benches, who are bored stiff with what he has been saying so far. I am very grateful to the hon. Gentleman for giving way.
Whenever the hon. Gentleman speaks to one of his colleagues, there is a promise to spend more money on

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this, that or the other. Thus everyone in the country knows that if they suffered the misfortune of a Labour Government, it would lead to massive increases in taxation. How does the hon. Gentleman feel that that would increase investment in manufacturing industry?
Mr. Brown: That question is asked in every debate on this subject, whether it is asked by the hon. Gentleman or by someone else. We have set out our programme very clearly, and we have listed our priorities. We shall not spend what we cannot afford to spend, but we shall invest where we believe investment is essential for the future. We will take no lectures about prudence in public spending from a party that wasted £10 billion on the poll tax.
In 12 years, manufacturing investment—the key to our industrial prospects—has risen by 52 per cent. in France, 48 per cent. in Germany and 54 per cent. in Europe as a whole. Since 1979, it has fallen in real terms in Britain —the only one of the main industrial countries in which it has done so.
Mr. Keith Mans: The hon. Gentleman has referred to budget deficits. Is he saying that he now believes that we should balance the budget?
Mr. Brown: What I am pointing out is that it was the Conservative party which said that it would balance the budget. [Interruption.] Conservative Members are unduly sensitive today about some of the points that Labour is making about their management of the economy. That is the party which said not only that it would achieve a balanced budget—which must be the aim of Governments over a period of years—but that it would try to balance the budget every year. Now, of course, we have a budget deficit of £10 billion or more.
How do we improve our prospects so that we can achieve the wealth creation through which public services can be financed? We must do so by means of a strategy for investment in our future, and particularly in manufacturing industry. Let us, however, examine the current position. Germany now exports three times as many manufactured goods as Britain; under the present Government, production of electric motors, transformers, tractors, buses, lorries and vacuum cleaners has halved in this country. We now produce less steel than Brazil and even less than Taiwan. We import 3 million computers and 2 billion microchips a year, and 36 per cent. of all our manufactured goods are imported.
The truth is that our production is falling away, not only in the traditional industries, but in the high-technology industries on which our future depends. The tragedy is that, without a policy for industry, the current recession is merely an interval between the making of mistakes in one short-term consumer-led economic upturn and their repetition in another.
If another investment crisis exists in this country, along with the crisis that I have already described—the crisis relating to the Conservative Government's investment in industry—it is the crisis relating to industry's investment in the Conservatives. If Conservative Members are not worried about their party's investment in industry, should they not be worried about industry's lack of investment in their party? What has happened as a result of the policies for manufactuing industry that Conservative Members have pursued? Until 1985, GEC gave the Tories £50,000. What is the latest figure? Nil. Viyella gave £25,000, and now gives nothing. Vickers gave £30,000, and now gives
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nothing. Plessey gave £32,000, and now gives nothing. Pilkington gave £30,000, and it, too, now gives nothing. I could continue with the list: fewer and fewer British manufacturers are now prepared to support the finances of the Conservative party.
The only enthusiastic supporter of whom the Tory party can still boast—in Britain, at least—and the only one who can boast about the Tory party is Mr. Gerald Ratner, and we all know what he thinks of the products that he supports. The reason is clear. Quoted in The Spectator, one company director said:
"This is the age of shareholder power. We just can't hope to get big contributions past them … especially since our shareholders seem to blame the Tories exclusively for the recession."
The problem has affected not only donations to the Conservative party but, I understand, its winter ball. Refusing to support the last one, Mr. Peter Edmondson, of Anglia Secure Homes, said:
"After a decade of hard work and commitment to free market ideology I find in financial terms that I am back where I started."
Perhaps, however, tickets for this year's winter ball are selling better, at least in Hong Kong, Athens and other such hotbeds of activity. Indeed, one Greek shipping magnate is contributing more than the whole of British manufacturing industry.
Mr. Robert G. Hughes: What the hon. Gentleman is saying is very interesting. Will he confirm, however, that the Transport and General Workers Union will be giving, and has always given, more to his party than has been given to ours by all the companies that he listed put together? Moreover, unlike those companies, the union controls the party to which it is contributing, and dictates its policies.
Mr. Brown: I can confirm that the Transport and General Workers Union gives money to the Labour party, but I cannot confirm whether it gives Labour more or less than what is given to the Tory party because the Tory party does not publish its accounts. To know how much it is receiving, we have to rely on The Sunday Times.
The Transport and General Workers Union may give money to the Labour party; what we want to know is who gives money to the Conservative party. Furthermore, when that or any other union sponsors individual Members of Parliament, it is not giving money to those Members of Parliament directly. That cannot be said in relation to the 800 directorships and consultancies held by Conservative Members.
The fact is that the Government have nothing to say to the management of a midlands light engineering company which is struggling in the export market and battling with high interest rates. They have nothing to tell a small business man faced with the twin problems of interest rates and bank charges. They will, however, be extremely interested in what a Greek ship owner with a special affinity with the right wing of politics has to say. As for the Hong Kong business man who offers to contribute, the Prime Minister will not, it appears, merely meet him halfway—he will meet him in Hong Kong.
I ask Conservative Members whether there could be any stronger indication of Conservative priorities than this. I understand that the Prime Minister was in Hong Kong a few weeks ago, and that he left a drinks reception organised on behalf of United Kingdom trade and industry to go and see Mr. Li Ka-Shing, a plastic flowers

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millionaire and contributor to Tory party funds. According to The Sunday Times, the Prime Minister left with an important carry-out: the promise of £100,000 in Hong Kong dollars. That must have been one of the most lavish Chinese takeaways in history. A Happy Eater indeed, and yet another invisible item in the nation's trading balance—and, I suspect, yet another disgracefully invisible item in the Tory party's traditionally mysterious accounting system.
If we were to ask the Prime Minister to list his engagements for 3 November, we should learn that he is to be in Oxfordshire. Will he be meeting small business men and manufacturers? Will he be talking to the unemployed, or to some of the youth trainees who cannot even obtain a place, and certainly cannot obtain any benefits? No—he will be at Blenheim, entertaining 40 of the Tory party's biggest contributors. Some of them may even be from this country. We can take it for granted that all these millionaires share the Prime Minister's vision of a classless society for Britain. The Conservative and Unionist party is no longer what it was. If its fund-raising is anything to go by, it has become the City and offshore party of this country —yet it is the party that tells us that it thinks and acts as though British manufacturing industry is important.
What has changed since the time, early in the 1980s, when the Conservative party discounted manufacturing industry and complained of Labour's obsession with it? What has changed since it talked about the importance of the service economy and even of a low-tech, no-tech economy? All that has changed are the statements— nothing else. The Conservative party tells us that manufacturing industry is important, but is there a new manufacturing investment programme, as Labour proposes and as industry supports, to kick-start investment in our economy? No. Is there a new regional investment incentive—a reform of regional aid to benefit manufacturing industry in all the regions of this country? No. The Conservative party has abolished many of the existing forms of aid that were available. Are there new incentives for research and development through the tax system, as we propose, and supported by industry? No. Are there tougher takeover rules to encourage long-term investment and to free business from stop-go short-termism, as Labour proposes? No.
The Conservative party wants weaker, not tougher, rules. Has it adopted our proposal for regional development agencies, which would be welcomed in every part of England? Would it create them in Scotland and Wales? No. Has the Conservative party even considered our proposal for a one-stop business service that would help many of the small businesses that are currently in difficulty, a policy that has been welcomed by business? No. Has it considered our new approach to training that would help manufacturing industry to expand? No, not at all. All that has changed is that, under pressure, the Conservative party now tells us that manufacturing is important. However, it pursues exactly the same policies that damaged manufacturing, even though we were told that those policies were not doing it damage.
If the Conservative party supported a policy for manufacturing industry, would it not have responded in 1984 and 1985 to the House of Lords report on
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manufacturing instead of disparaging it and wasting another six years, and would it not have supported its own official committees' recommendations—to take action on information technology in 1987, to take action on optel-electronics in 1988 and to take action on biotechnology in 1989? Would it not have responded when the Bank of England identified an investment gap for small business in 1990? No last gasp initiatives from this Government, no cheap scheme, simply for its public relations value, can disguise the fact that for twelve and a half years the Department of Trade and Industry, charged with responsibilities to industry, has been a do-nothing, care-nothing and listen-to-no-one Department.
Mr. Graham Riddick: The hon. Gentleman believes that the Government should have a far larger role in the way that manufacturing industry is run. Will he please tell me what experience either he or any of his colleagues in the shadow trade and industry team have of working within manufacturing industry?
Mr. Brown: The Labour party has been listening to industry and talking to industry. We have entered into a proper dialogue with industry. If the hon. Gentleman does not believe it, industry does.
Mr. Riddick: But has the hon. Gentleman ever worked in industry?
Mr. Brown: There is now a consensus about the measures that need to be taken. The people outside that consensus are the members of this Government.
Mr. Quentin Davies: During the dialogue that the hon. Gentleman conducted with industry, did he ask industrialists or small business men what they thought of his industrial relations policies, or his minimum wage policies, or his tax policies? If he asked that question, does he have the courage to tell the House what replies he received?
Mr. Brown: The hon. Gentleman may be interested to know that the Institute of Personnel Management has just reported on a survey that it has conducted of its members. More than 50 per cent. of them want a minimum wage and believe that it is absolutely right. The Conservative party has remained absolutely silent as the chairmen and directors of privatised companies have awarded themselves 50, 60, 70 and more than 100 per cent. pay rises and then complained about workers, struggling on £2, £2·20, £2·40 or £3 an hour, wanting a minimum wage—something that happens elsewhere in Europe and America without job losses.
Apart from neglecting manufacturing industry, the Conservative party has neglected the whole of industry over the past 12 years. We have a new Conservative party document entitled "The Government's Industrial Strategy." For 12 years they told us that there was no need for an industrial strategy and that a regional policy was a phoney Government activity. Rapturous applause was given to the former Secretary of State for Trade and Industry when he asked what the DTI was actually for. Now the Conservative party tries to tell us that an industrial strategy is what it is pursuing in Government.
Let us explore just what the Secretary of State means by an industrial policy. Does he mean that the market, unaided, cannot solve the training problems and that legislation will be essential? Does he believe in a market

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forces approach to training, or is he prepared to legislate? Does he mean a new commitment to regional policy, which he has cut, and cut again? Or does he still agree with his ministerial colleagues who believe that a regional policy has no real place in industrial policy as a whole? Does the Conservative party's industrial policy amount only to extolling the market's virtues or recognising the market's limitations? Is the partnership that it talks about a partnership between Government and industry to achieve specific training and technology objectives, long-term objectives and a policy for the regions, as we propose? Or is the truth not this: that, as the document makes clear, the partnership and the industry policy that the Conservative party talks about amounts to simply more privatisation —not to a recognition that markets can fail. It is a statement of conviction, in the teeth of all the evidence, that markets will always be right.
If the Conservative party really supported a policy for industry, this year alone it would be acting on the recommendations of the Government's committees regarding the action required on advance manufacturing for the 1990s, on the quality of technology transfer and on the lack of support for small business. It would have listened to and taken action on the House of Lords report that promoted the idea of capital allowances for manufacturing, tax credits for research and development, regional development agencies and proper policies for technology. Is the Confederation of British Industry not right to complain that these technology policies are public relations exercises rather than anything of substance? Is the House of Lords not right when it says that schemes come forward, when they do, simply for the sake of gaining political kudos?
The truth is that as we face the problems and challenges of the 1990s—when we need a policy for training, a policy for technology, a new approach to regional policy similar to that pursued by our competitors and an emphasis on long-term investment—a once great Department of State, whose job it is to support industry, has been hijacked by a faction that does not believe that industry needs the Department.
The Government say that they are the party of small business; yet they stand by and do nothing as enterprising people are let down by an unenterprising Government. They say that they support home owners; yet they have forced record numbers into mortgage arrears. It is the Government of a Prime Minister who tells us that his motto for the 1990s is the power to choose and the right to own. Let him tell that to the 70,000 victims of repossession in his first year of office because of mortgage arrears. Let him tell that to the 750,000 people who have been made redundant because of the Government's mistakes in the 10 months he has been Prime Minister. Let him tell it, too, to the 50,000 businesses likely to go bankrupt in the 15-month period he will have been in office.
If the Prime Minister believed in a classless society and in opportunity for all, would he stand by and do absolutely nothing as firm after firm, industry after industry, goes to the wall in a series of preventable disasters for British industry? If he really believed in opportunity for all, would he not repudiate the top rate tax cuts which have caused many of the problems that we now have? Would he not repudiate private medical care tax relief, the training cuts and the cuts in support for the regions and industry? If the Prime Minister believed in opportunity for all and a classless society, would he not have introduced a better
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deal for the unemployed, with an emergency work programme, legislation to improve training, action to bring the regions into play in our economy and, most of all, action to get people back to work?
British industry is no longer safe in the Government's hands. They have no new policies and no new vision. They have no new programme for six months, let alone for five years. Even six more months is too long for British industry and for the British people to wait—they need a new Government with a new mandate, and they need it now.
5.50 pm
The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Peter Lilley): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
"congratulates Her Majesty's Government on its success in bringing down inflation to German levels and in creating almost three million jobs since 1983; recognises that the defeat of inflation is essential in maintaining international competitiveness, and in further job creation; welcomes the dramatic transformation which has taken place in training in this country and the continuing succeses in export markets and in attracting inward investment; recognises that sustained growth depends upon quality and innovation and welcomes the Government's policies to stimulate these; and notes the revival in business confidence, which would be put at risk by the inflationary, job destroying and anti-industry policies of the Opposition, in particular their commitment to nationalisation, state intervention, punitive taxation, renewed union power and a national minimum wage.".
The House is familiar with the speech of the hon. Member for Dunfermline, East (Mr. Brown). Every time he plays us the same recorded message of denigration and despair. He gloats over gloom. He crows over closures. He revels in redundancies. But what makes him genuinely gloomy is any sign of good news. He is the sort of chap who is banned from his local wine bar during happy hour.
There is good news coming through. We did not hear a word of it from the hon. Gentleman, because what is good news for Britain is bad news for the Labour party. Contrast the picture that Labour paints of the British economy with the description given by the director general of the CBI:
"manufacturing output in Britain is running at levels which caused local economists to worry about overheating not three years ago; British manufactured exports have been increasing faster than world trade—we export more per head than Japan; in Britain import penetration remains below that in West Germany; British investment in skills and innovation is at record levels and still rising; our private sector inflation is under 4 per cent. and falling; our manufacturers are rapidly closing the gap between productivity growth and pay rises … and our industrial disputes are at their lowest level for half a century."
Mr. Gordon Brown rose——
Mr. Lilley: I shall give way later. The hon. Gentleman spoke for 36 minutes without telling us any Labour policies.
The Opposition have given the debate the title "Manufacturing Decline". Of course, that is a subject which they know a lot about. Manufacturing output fell under the last Labour Government. It has risen under this Government. Manufacturing output is now 25 per cent. higher than it was 10 years ago—the same point in the business cycle.
Moreover, the wounds of which British industry still bears the scars were inflicted by socialism. It was

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manufacturers who suffered most from the excesses of trade union power, from inflation, nationalisation, high taxation, protection and state intervention. Those Labour policies are all behind us now. We rejected them and sowed the seeds of a manufacturing revival in his country.
I would not even mention the past if the Labour party did not intend to take us back to it. But it does. It is committed to policies that wrought havoc in the past and would undermine what everyone outside the Labour party recognises as the great achievements of the last decade.
Above all, poor industrial relations used to be the cancer of British manufacuring industry. We tend to forget just how appalling they were. In 1979 we lost 29·5 million working days through industrial disputes. Over the past 12 months we have lost only 0·7 million days—the lowest level for more than 50 years.
Yet the Labour party opposed each and every one of the trades union reforms which have brought about this improvement. Now it threatens to restore trades union powers and privileges. Of course, it sends the hon. Member for Sedgefield (Mr. Blair) to reassure us that Labour will not undo all our reforms. He is a nice chap; went to a good public school; speaks posh. But even he cannot conceal the fact that the trades unions are Labour's paymasters. They expect a return on their investment. And they have the votes to ensure they will get it. Labour claim some support among business men. I have yet to meet a business man who wants to unpick our laws on secondary action; who wants to change our laws on picketing; who wants compulsory union recognition.
Another undoubted Government success which a Labour Government would put at risk is the flow of inward investment. This Government have made Britain the most attractive country in Europe in which to invest in manufacturing. Last year we attracted more than half of all the Japanese and American investment coming into the European Community. Yet, by an overwhelming majority, the Trades Union Congress condemned Japanese investment as alien.
It would be a tragedy for this country, especially for our manufacturing sector, if inward investment were frightened off. Yet not one Opposition Front-Bench spokesman has dared to disown the TUC. I challenge them to do so now.
Mr. D. N. Campbell-Savours rose——
Mr. Lilley: I shall give way to the hon. Members opposite who are so indifferent to inward investment that they talk through what I am saying about it. Will either of the Labour Front-Bench spokesmen—the hon. Member for Dunfermline, East, the spokesman on trade and industry, or the hon. Member for Sedgefield, the spokesman on employment—disown that overwhelming majority vote of the TUC condemning inward investment? What about their colleagues from the regions that have benefited so strongly from inward investment?
Mr. Nigel Griffiths: On a point of order, Mr. Deputy Speaker. Is it in order for the hon. Member for Harrow, West (Mr. Hughes) to sign letters to his constituents and stuff envelopes, failing to listen to the drivel being spoken by the Secretary of State?
Mr. Lilley: That was a defensive measure to try to help the Front-Bench spokesmen out of their embarrassment. They have to call in the Whips. How pathetic. The puppetmasters pull the strings. And there are more union strings on the Labour party than in the entire cast of "Thunderbirds"—but there is nobody, it seems, called Brains. The result is that a Labour Government and their trades union paymasters would frighten off foreign investment overnight. All that investment, all those factories and all those jobs would go to France, Germany or Spain, and they would export to us instead of our exporting to them.
Mr. Campbell-Savours rose——
Mr. Lilley: I happily give way to the hon. Gentleman.
Mr. Campbell-Savours: The Secretary of State says that investment is taking place. Will he respond to the proposition put by the shadow Secretary of State, my hon. Friend the Member for Dunfermline, East (Mr. Brown) —that investment has fallen? Has investment fallen?
Mr. Lilley: Investment this year is 30 per cent. higher than it was a decade ago—the same point in the economic cycle. As for inward investment ——
Mr. Campbell-Savours: On a point of order, Mr. Deputy Speaker. You will have heard me ask the Secretary of State a specific question. Will he answer it? Has investment fallen—yes or no?
Mr. Deputy Speaker (Mr. Harold Walker): As I suspected, that is not a point of order.
Mr. Lilley: Only this week a report from Nomura spelt out just how dramatic will be the full benefits of the current inward investments. It says:
"our new estimates suggest that by 1995 Japanese investment could add £4 billion to the trade balance, 2 per cent. to output, and over 400,000 new jobs".
That is what Labour Members put at risk by their shameful silence. I do not believe that British voters will share that willingness to put at risk the successful flow of inward investment by putting it in the hands of a xenophobic Labour movement.
Nothing was more destructive of industry than rampant inflation. It reached 27 per cent. under Labour. That almost wiped out profits. It made planning for investment impossible and it provoked the biggest industrial unrest Britain has seen.
By contrast, we have brought inflation down to 4·1 per cent. That is barely half the lowest level ever achieved under the Labour Government. It means that we are getting inflation down to German levels for the first time in a generation and it has enabled the Chancellor to reduce interest rates by nearly a third. That is why all the surveys show a strong recovery in business confidence.
Business men recognise that we have now created the conditions for sustained and non-inflationary growth. Manufacturing output should again outstrip the rest of the economy, as it did in the second half of the 1980s.
Another unqualified success story which the Labour party's policies would put at risk is privatisation. Virtually every company that we have privatised has improved its output, turnover, profits, investment and industrial relations.
British Steel is a case in point. It was one of the commanding heights of the economy which was

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nationalised by the so-called moderate Labour Government in the 1960s. Nationalisation brought the steel industry to its knees. There was a genuine danger that we would end up with no viable steel industry in this country. Attempts to sustain it were costing the taxpayer ever more unbearable sums—totalling £14 billion between 1975 and 1985. In 1979–80 British Steel was costing the taxpayer £5 million a day.
Privatisation has transformed all that. British Steel has become one of the most successful steel industries in the world. Its efficiency increasingly rivals and, in many areas, surpasses even that of Japan.
I recently visited British Steel's works at Redcar, which has the largest blast furnace in Europe. It is more efficient than its Japanese counterparts. I saw the massive new beam mill being installed. It is a huge investment and the best in the world and is operating to twice as fine a tolerance as its best rival anywhere in the world.
We never hear a word of praise from the Opposition Benches for the achievements of our privatised companies. They threaten our utilities with renationalisation. At last year's party conference the hon. Member for Dunfermline, East won a cheap cheer from his socialist supporters by reaffirming Labour's commitments to renationalise water, the national grid, and British Telecom. Before this year's party conference I challenged him to withdraw those pledges. It would have been the first time he had ever given us some cheerful news, but he passed up the chance.
The Labour party remains committed to its priority programme of nationalisation which represents a £10 billion threat to the taxpayer, a threat to 6 million private shareholders and a threat to 50 million customers. Labour is the only party east or west of the old iron curtain which remains wedded to nationalisation. The Labour party has replaced Oxford as the home of lost causes.
Mrs. Gwyneth Dunwoody: Will the Secretary of State tell us whether he considers the privatisation of British Rail Engineering Limited to be a success, when the railway industry is falling apart, when it has totally empty order books and when my constituency has the largest and fastest growing unemployment level in the north-west? Will he tell us whether he regards the privatisation of BREL as an example of the brilliance of privatisation?
Mr. Lilley: If the hon. Lady thinks that nationalised industries with empty order books can survive, she has a strange idea of economics.
Nationalisation of the utilities, which is what the Labour party proposes, would damage those utilities and undermine British manufacturing industry. When British Telecom was state owned 250,000 people, many of them with small businesses, had to wait two months or more to obtain a telephone line. Delays such as that damaged, destroyed or aborted countless small firms. Today nobody has to wait that long for a new line and if British Telecom is even a day late in repairing a telephone, it offers compensation. There would be small hope of that if it was still nationalised.
When the water industry was nationalised, investmeni was held back. Now that the industry is privatised it has embarked on a massive £28 billion investment programme. That creates immense opportunities for British suppliers.
We have seen how well our manufacturers can do in winning orders in such massive engineering projects. For
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example, on the channel tunnel, British firms have won 78 per cent. of the orders at this end of the tunnel, and 45 per cent. overall. French industry has picked up only 30 per cent. of the total orders.
Dame Elaine Kellett-Bowman: My right hon. Friend will be pleased to know that not only large companies are thriving. An engineering firm in my constituency—R. E. Leach—which is small but growing steadily, secured an order in Cologne, the backyard of the German engineering industry, for work on a wind tunnel. Having got the order, it then trebled it. Would my right hon. Friend care to add his congratulations to that company?
Mr. Lilley: I add my congratulations. I recently had the pleasure of visiting the constituency of my hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman) and I was struck by the enterprise and initiative of the business men I met there and by their positive attitude. That contrasted massively with the attitude of Labour Members.
One key to our success in reviving British industry has been reducing tax rates, simplifying many taxes and abolishing others. We now have the lowest rate of corporation tax of any major industrial country. We have abolished six major taxes, including the surcharge on employers' national insurance contributions, investment income surcharge, capital duty, development land tax, composite rate tax and stamp duty.
Paradoxically, fewer, simpler, lower taxes generate more revenue as they restore incentives, boost profits and leave companies free to invest their own money. As a result, we have kept the total tax burden on business below that of our major continental competitors. The total of corporation and payroll taxes on business in this country amounts to 8·9 per cent. of national income. In Germany it is 10·5 per cent. and in France it is no less than 17 per cent.
The Opposition are reluctant to talk about their tax policies in any detail. However, we do have some sources of information.
Mr. David Winnick rose——
Mr. Lilley: Perhaps this is one of them.
Mr. Winnick: If it is all such a great success story, can the right hon. Gentleman tell us—I hope that he will refer to it in his speech—why there is such devastation in the west midlands, why 37 unemployed people are chasing every available job and why the west midlands is suffering devastation arising from the recession in the same way as it did 10 years ago, under the same Government? Is the Secretary of State at all concerned about what is happening in what should be Britain's industrial centrepiece? If the west midlands suffers as it did in the early 1980s, British industry suffers.
Mr. Lilley: If the hon. Gentleman seriously believes that that would be improved by a return to nationalisation, increased trade union power and higher taxation, he will believe anything.
As I have said, we have some sources of information about the Labour party's tax policy. The first is its voting record. It has opposed virtually every tax reduction that we have introduced. Secondly, we have the frank acknowledgement by the shadow Chancellor that he

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would never cut taxes. His counterparts in former left-wing parties in Spain, Australia and New Zealand have set lower taxes as their objectives. The right hon. and learned Member for Monklands, East (Mr. Smith), happily for us, intends to go into the next election with the slogan, "Watch my lips—no more tax cuts." That is about the only Labour slogan that the electorate will believe. Those who read not just the right hon. and learned Gentleman's lips but his party's spending pledges know that he really means much higher taxes. The Labour party's £35 billion spending pledges, about which the hon. Member for Dunfermline, East refused to comment, as he refused to answer any questions, are equivalent to 15p on the basic rate of income tax. When my hon. Friend the Member for Battersea (Mr. Bowis) asked how a 9 per cent. tax on savings would help investment, he scored a bullseye. The hon. Member for Dunfermline, East wriggled and squirmed and said that there would be some offsetting incentives. It is fiscal madness to raise taxes and reduce them at the same time on the same thing.
The Labour party often condemns short-termism, but, like the hon. Member for Dunfermline, East did again today, it invariably focuses on the short term. I am fully aware from my daily contacts with business men how painful the economy still is in many sectors. However, the return of confidence, in all the surveys, shows that business men increasingly take a positive long-term view. We should do likewise. It is clear from our record over the past decade and the outlook for this decade that the picture for manufacturing is very positive indeed.
After falling rapidly behind during the 1960s and 1970s Britain's manufacturing productivity grew faster in the 1980s than in any other major country, including Japan. With improved productivity came increased competitiveness. Our total exports have risen by over 60 per cent. since 1979. In the past two years alone, manufactured exports have increased by nearly a fifth. Since 1983 our share of world trade in manufactures has done better than that of France, Germany, Japan, the USA and Italy.
Make no mistake. Britain is succeeding in world markets. Whole industries that once seemed in terminal decline are undergoing a rebirth. Output of motor cars halved during the 1970s. Yet since the early 1980s output has been rising. The planned increase in capacity to produce motor cars exceeds that of all our European partners put together. Car imports this year have been up 82 per cent. on last year. Output of television sets has doubled since 1979, and we now export more television sets than we import.
Our policies have brought about this transformation. But we do not sit back complacently. We are developing the policies for the future, to build on success, to reinforce growth. By contrast, the Labour party looks back to the past, to policies which failed, to a recipe for decline. It is a party in decline, wedded to policies of decline, which it declines to change.
We have been developing new approaches to encouraging exports. Early in February we co-ordinated a comprehensive British presence at India's massive trade fair. I am proud to say that British firms outnumbered the rest of the world put together. The orders that we won exceeded all expectations.
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In April I led a team to Kuwait to ensure that Britain played as important a part in reconstructing that country as we did in liberating it. We have already won £0·5 billion worth of orders. And much more will follow.
Business men were so pleased with the success of these efforts that they suggested that we develop them further. As a result, last month I led a high-powered British team to Venezuela to establish a task force of nine business men supported by officials which will stay in Caracas until December. We announced a series of ministerial follow-up visits over the months to come and seminars back in Britain to disseminate the information that is gained. The response of the Venezuelan Government and industry was enthusiastic, the commitment of British industry wholehearted, and we all believe that the success of the project is assured.
I also recently announced new schemes to encourage technology transfer from our universities to industry; help for our universities to carry out technology audits to assess their strengths and scope for commercial exploitation; and support for industrial units to manage and market their technology to meet commercial deadlines and industry's needs. Today I am announcing further support for the Centre for Exploitation of Science and Technology.
Labour pretends that it has changed. I wish that I could believe that it really has abandoned socialism.
Mr. Peter Hain: Will the Secretary of State give way?
Mr. Lilley: I will give way to the hon. Gentleman to see whether he has.
Mr. Hain: Are these entrepreneurial activities abroad the reason why Air India has just cancelled its £87 million deal with Rolls-Royce to build its engines?
Mr. Lilley: No. But I believe that my visit to Japan played a part in British Aerospace winning the biggest aircraft order that we have ever won in that market and one which I believe will presage further sales for our aerospace industry.
Labour pretends that it has changed, but I wish I could believe that it has abandoned socialism. If it had, that would be the most dramatic conversion since St. Paul on the road to Damascus. But it would be a whole lot less convincing. St. Paul saw the light. The Opposition saw the opinion polls. So they decided that Labour's unpopular policies must be hidden from sight.
Mr. Winnick: On a point of order, Mr. Deputy Speaker. I have referred to the plight of industry in the west midlands, where there are 37 people going for every job. My point of order to you, Sir, is this. In view of what is happening in my region and the number of jobs which have been lost already, does not the Secretary of State for Trade and Industry have some responsibility at least to refer to the matter and tell us what the Government intend to do? This is just empty political propaganda.
Mr. Deputy Speaker (Sir Paul Dean): The hon. Gentleman knows that that is not a point of order for the Chair.
Mr. Lilley: The hon. Gentleman was probably upset by the contemptuous way in which the shadow spokesman treated manufacturing industry. He devoted most of his speech to knockabout and none of it to policy to remedy the defects that he saw.
Mr. Gerald Howarth: Is my right hon. Friend aware that the real reason why the hon. Member for Walsall, North (Mr. Winnick) is so desperately upset is that there is a substantial private building programme in his constituency? Is my right hon. Friend also aware that he will soon open an extension to a factory in the area bordering on the hon. Gentleman's constituency? The Reward group has said that the most damaging thing that could happen to British industry would he a national minimum wage and that the region which would be worst hit would be the midlands, with its manufacturing base.
Mr. Lilley: My hon. Friend is right. The damage that would be done to the west midlands by that policy would be greater even than that which would be done to other regions. I saw the development to which my hon. Friend refers. It is doing much to contribute to the regeneration of that area.
The Labour party decided that its unpopular policies must be hidden from sight. So just for the sake of appearances it steals some of our clothes. But do not be deceived by appearances. The truth is that Labour has become a party of political transvestites. It wears Conservative outer garments but still clings to its socialist clothing underneath. It remains attached to nationalisation, high spending, high taxes, state intervention and trades union power.
One topic to which the Labour Front Bench spokesmen devote much rhetoric, though little detail, is training. Training is very important they tell us; qualifications are essential. So they are. How strange then that the Labour Front-Bench spokesmen arc so singularly lacking in qualifications for the roles to which they aspire. It ill behoves those with neither experience nor qualifications in industry to lecture industry on training and qualifications, still less to tell business men infinitely more competent than themselves how to run their businesses.
I shall be asking my right hon. and learned Friend the Secretary of State for Employment to set up special training courses for the shadow industry team, to convert this assortment of lecturers, trades union officials, charity workers and psychiatrists into a decent set of industry spokesmen. The hon. Member for Dunfermline, East believes that his experience as a lecturer and broadcaster perfectly equips him to run British industry. In his conference speech he revealed his patent solution for all our industrial ills. It is the university lecturer turned broadcaster's approach to industrial regeneration. He wants to set up a new satellite television station
"to bring together universities, industry and broadcasters using satellite telecommunications to disseminate the newest ideas to industry as rapidly as the ideas themselves come forward."
I cannot help feeling that this was a zany idea which came forward and got disseminated a bit too rapidly. It conjures up visions of a television station beaming the thoughts of Chairman Mao—sorry, Chairman Kinnock—to every factory, laced with exhortations from Commissar Brown. What reams that tells us about the hon. Member's understanding of British industry.
Recently the Labour Front-Bench team has been out on its cocktail offensive. Offensive, certainly. One unfortunate business man who had the misfortune to hear them certainly found it offensive. Asked how Labour would run industry he replied,
"Run industry? That shower couldn't run a bath."
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We cannot have a successful British economy without a vigorous manufacturing sector. But we cannot have a vigorous manufacturing sector if we return to Labour's trade union laws, to Labour's penal tax rates, to Labour's rampant inflation and to Labour's nationalisation.
The way to success is to set managers free to manage, to return unions to their members, to slash red tape, to cut taxes, to restore incentives, and to release the enterprise of the British people. That is our strategy. It has succeeded in reversing decades of decline. It will reinforce success. It will regenerate Britain.
6.20 pm
Mr. Joseph Ashton: My constituents will look in vain to the Secretary of State's reply to the opening speech of the debate for a single new concept which would lead to new jobs. I am sorry to say that his speech contained nothing but personal abuse of my hon. Friend the Member for Dunfermline, East (Mr. Brown).
During the past 12 years of Conservative power, my constituency has seen unemployment at least double and almost treble. I shall speak about the electricity industry and coal mining, because they create so many jobs in our part of the world.
In 1979, under the Labour Government, we had a system of grey areas, and an area such as mine got help towards machinery and buildings. The Tories took that away. Since then, there has been no regional aid, despite the massive pit closures in areas such as Nottinghamshire and despite the privatisation of the electricity industry, which will make matters even worse by increasing coal imports.
Three months before the last election, the then Secretary of State for Energy, the right hon. Member for Worcester (Mr. Walker), promised from the Dispatch Box to build a new power station, West Burton B. It was to create about 800 permanent jobs and 2,500 temporary building jobs, would cost £1 billion and would be a godsend to the area. There were some marginal seats in Nottinghamshire, which is why he made that announcement. Lo and behold, what happened after the election? Nothing. The promise was quickly forgotten. The industry was sold off, privatised, and there is no sign whatever of that new power station being built. It was just an election promise.
Instead, the power stations were sold off at about a third of their worth. Now, the intention is to import massive quantities of coal from South Africa, Poland, Columbia—where it is dug by children—and any other part of the world where labour is cheap. That will be done to close down the pits in Nottinghamshire and South Yorkshire. Last week, we heard that the Rothschild report would recommend cutting the number of pits there to four. Again an election is coming up, so the Tories will say that they will not make any decisions or announcements, but they know very well that they will privatise the industry.
The two industries go together. The nationalised coal mining and energy industries were planned. We heard the Secretary of State scoff at nationalisation. Three power stations were built on the Trent in my constituency and were connected to the coal mines by a railway. The railway ran 365 days a year, picking up coal at the mines and dropping it off at the power stations, which ran 365 days a year. That was nationalised planning, and it worked.

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That planning is to be destroyed. Coal is to be imported on the Humber through Killingholme and such places and then taken to the power stations, probably by road. Heavy lorries will thunder through the environment, destroying the countryside, on roads which were not built to carry their weight and which have no proper street lighting or verges. Importing coal will destroy not only jobs, but the countryside. What will it achieve? It will make massive profits for the newly sold electricity industry. The consequences will be massive pit closures, because British mines will not be able to get their price down to that of imported coal, and further massive job losses, because the coal that was transported on the railways will no longer be taken from those pits.
Every job lost in manufacturing industry loses four further jobs connected with it. The suppliers to the coal mines will suffer. Even the farmers who supply potatoes to the canteen will lose their contracts. There is no planning for that. There is no regional policy. The pits will be shut, coal will be imported, and nothing will be put in their place. Everything will be entirely down to naked market forces, about which the Government talk so much. Prices and profits alone will matter—if jobs are destroyed, so be it. They could not give a damn. That is the level of their concern.
About four years ago, the Common Market protested about our power stations causing acid rain which was landing on the forests of north Germany and elsewhere. Naturally, people were concerned about the environment. The then Prime Minister went across to Germany and said that we would do something about it. At the time she implied that the power stations would be modernised and improved, which can be done, to stop acid rain pouring on to Europe. That would have created many jobs.
If the power stations had been nationalised, that would have been done and the cash would have been spent—but not under private enterprise. There is no way that the new order, PowerGen and National Power, will spend their money on improving those power stations. It is much simpler and cheaper to import low-sulphur coal than to spend cash on creating local British jobs and modernising our industry. That will destroy our pits and save private enterprise from spending a penny on the power stations.
The regions of the country affected are Yorkshire and Nottinghamshire, as we saw from last week's leaked Rothschild report. Two of the 14 pits, Harworth and Welbeck, are in my constituency. In case the miners there think that they will be okay as their pits will stay open, I warn them now that, if those pits stay open, they will work seven days a week for their new private owners. They will work three shifts around the clock. The environment of the privatised coal mining industry will destroy whatever is left. It is not that good in a pit village anyway, with the slag heaps, the cracks in the walls, the nightshifts and the lorries working through, but at least there is a bit of peace on Saturdays and Sundays. There will be none of that under privatisation. Safety standards will go, because privatisation will do away with the Mines and Quarries Act 1954. The new owners will not spend as much on safety as the nationalised industry does.
Hundreds of thousands of miners will be made redundant and lose their right to concessionary coal. As my colleagues can verify, many pensioners who worked in
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the industry enjoy concessionary coal under an agreement with the miners' union. There is no guarantee whatever that, once the pits are privatised, that concessionary coal will continue to be given to pensioners and ex-employees. There is nothing in writing, no contract. It is not part of the pension. A new owner of a privatised industry could stop it straight away. Privatised industries do not guarantee to continue with the same pension schemes. I am not saying that the privatised industry would get rid of the pension scheme, but there is nothing to stop it, for example, dropping a 6 per cent. contribution to 2 per cent. There is no agreement. There is nothing in law. There is no protection of pensions or concessions in the mining industry, or any other, if they are sold.
One of the most serious and diabolical situations that we have seen for a long time arises with additionality, under which the Common Market makes moneys available for regional policies. The Secretary of State is not even bothering to listen. He is talking to his colleagues, because he knows that we have raised the matter many times in the House, and he does not have an answer.
The European Economic Community made available millions of pounds for areas such as mine, which have suffered from massive pit closures, or those where the fishing industry has been run down. All over Europe, other countries have gratefully said, "Thank you for the RECHAR system, the additional cash, the regional money from the Common Market"—except Britain. But what have the Government said? Apparently, if the coalfields receive any cash from the Common Market, the Government will stop other grants. We have led deputations to the Government on this issue and made protests, and the Coalfield Communities Campaign has asked the Government many times to take up the issue and to press the additionality case for RECHAR.
If money is available from the Common Market through RECHAR—money that could be pumped into the regions—why do the Government say to local authorities that, if they take that cash, they will stop an equivalent amount in Government grant? Therefore, the local authorities would not be a penny extra better off. Every other European country gets that extra cash—it is going begging—but the Government adamantly refuse to allow our regions to receive it.
Mr. Lilley: May I reassure the hon. Gentleman that he is labouring under a delusion? If the Common Market will release the money, we will let it be spent on the RECHAR programmes. The fact that that money cannot be spent, because we have not got it, is proof that those programmes are additional. That should be enough proof for Commissioner Millan. We have endeavoured to persuade him that he should let us have the money. We want it and we are exactly on the same side as the hon. Gentleman and the people in the coalfields. We regret the stance that Commissioner Millan has adopted so far.
Mr. Ashton: That is extremely interesting, but I have a letter from the Coalfield Communities Campaign that refers to a resolution
"tabled in the European Parliament urging the UK government to adhere to the rules of the European Community and implement additionality for RECHAR".
That was passed by a 3:1 majority.
The British Chambers of Commerce has added its voice to the controversy. Its president, Miles Middleton, has written to the Secretary of State in support of the

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additionality principle for RECHAR funds. Commissioner Bruce Millan has also made strong protests. The coalfields of Germany, Belgium, France and Spain have got the cash but we have not. Is the Secretary of State saying that the Government, not his Department, will ensure that RECHAR funds will be made available without an equivalent amount being deducted from the Department of the Environment or anywhere else?
Mr. Lilley: We have made that clear in public and in private to Commissioner Millan. He has dug in his heels on certain technical issues, but we hope that he will show some flexibility. In his most recent letter, he said that he thought that he was close to agreement and that the sooner he can overcome his difficulties the sooner the money can be spent. We believe that half the RECHAR funds should come to this country. Those funds are earmarked for expenditure, and that expenditure can take place as soon as the money is released.
Mr. Ashton: I am grateful for that information. In that case, perhaps the right hon. Gentleman would not mind meeting a deputation from the Coalfield Communities Campaign to straighten things out. In July, the Parliamentary Under-Secretary of State for the Environment wrote to the Coalfield Communities Campaign:
"little purpose would be served by a meeting."
I take it that the right hon.. Gentleman and his Ministers will now be prepared to meet representatives of the campaign so that we can clear up this important matter.
During Trade and Industry questions, mention was made of the reason that Toyota has decided to go to Derby. That company has chosen to go to Derby without any Government cash when so many coalfield areas with far higher unemployment are absolutely desperate for that type of work. Nissan went to the north-east and the coalfield areas of south and north Yorkshire would have given anything for the Toyota plant. The Minister claimed that the Toyota decision showed that the free market was working. However, if Japanese entrepreneurs and firms are allowed to choose where they want to establish in this country without being steered or bribed into the important areas, surely that does nothing to solve existing problems.
Toyota has gone to Derbyshire for one reason—to steal the skilled workers from British Rail Engineering Ltd., Rolls-Royce and the other car manufacturers in the area. Toyota has not established in any other area because mining skills are not transferable—they are not engineering skills. Despite massive unemployment, we face a massive skills shortage. Foreign industries therefore invest in the areas with a skilled work force.
Toyota will simply offer more money to Rolls-Royce engineers. It will recruit those engineers and those employed by BREL and that will cause skill shortages in those companies. Those engineers will be used to train Toyota's own people, as it will not import Japanese personnel to train the new employees. Toyota must get its skilled workers from somewhere, and that is why it has gone to Derby, an area with a skilled work force. It will poach the skilled workers who are desperately needed in other industries.
The Secretary of State for Employment (Mr. Michael Howard): I invite the hon. Gentleman to disabuse himself of the misapprehensions under which he is, evidently sincerely, labouring. If he visits the Nissan plant in the
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north-east, he will find out how it has trained its workers to reach levels of skill of an extremely high order. This morning, Nissan was one of the 28 companies to qualify as "investors in people" —the highest accolade that we have in our training policies and programmes. I invite the hon. Gentleman to visit Nissan to see the steps it has taken to train British workers. I am sure that Toyota will do exactly the same in Derbyshire.
Mr. Ashton: Initially Nissan took skilled workers—admittedly, they were unemployed—from the shipyards. One reason why Nissan chose the north-east was that surplus of skilled workers. It is easy to train workers after five years when a plant is running, but initially a company needs skilled people.
The Secretary of State for Employment is a lawyer, but I am an engineer. I served my apprenticeship; I went into a drawing office and I am a design engineer. I am not seeking to be derogatory about the right hon. and learned Gentleman, but I know what I am talking about. It is impossible to think that one can acquire skills just like that.
People have argued that, when the defence contracts are dropped, the engineers in the defence industry will be able to do something else, but that is like saying that, because I speak English and I have a voice, I can immediately start speaking French. One has to be trained, and it takes years to acquire the necessary skills. One cannot suddenly switch skills, and any company developing a new high-technology plant knows that.
The next thing that the Japanese will go for are our defence plants. The House can rest assured that, 25 years from now, all British industry will be owned and run by the Japanese. They are smart enough and have the cash and the nous to put money into investment, but we are not training people to acquire the right skills.
People in my area may have been employed as jobbing welders at the pits. They come to me to ask whether they can train as ASVIII welders or insurance welders, who weld boiler drums—high-quality welding. Those people cannot get the training, because the factories that used to provide such high-skilled training have gone. When I take up such cases with the north Nottinghamshire training and enterprise council, I am told that it will send such people to train as waiters or something else. However, the guy with the basic skill who wants to improve it in my coal-mining area cannot do so, because there is nowhere for him to improve it. I could give chapter and verse on that, but I do not want to take up the time of the House.
I know that the Secretary of State for Employment is absolutely against the minimum wage. I made my maiden speech 23 years ago next week. Between 1972 and 1973, we spoke about a Labour Government bringing in equal pay for women. The then Tory Government cried out that that would throw thousands out of work at Woolworth, Marks and Spencer and the like. The Tories claimed that hundreds of thousands of women would be thrown on the dole if we brought in equal pay. But it did not cost one job.
When women got the extra money, they went out and spent it, and that created other jobs. When the Government give tax cuts to the well off, they spend that cash on a bigger mortgage, a BMW, a Mercedes or a microwave. They will spend it on anything that has not been made in Britain. If the minimum wage is awarded to those who work in C&A, McDonald's or Woolworth, those men and women, but especially the women, will go

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out to buy a new carpet, furniture or clothes. They will buy stuff that is made in Britain, which will get British industry back to work. Those who object to paying women shop assistants another 50p an hour will find that they soon need more shop assistants because the volume of customers with money to spend will start to grow, as it did when we introduced equal pay.
6.40 pm
Sir Julian Ridsdale: I was interested in the little argument about the Toyota plant and Nissan plants because I have visited them both. I assure the hon. Member for Bassetlaw (Mr. Ashton) that the RB211 plant is as recognised and as advanced in technology as any plant that I have visited in Japan.
I remember going to Japan with the hon. Member for Bassetlaw and Joe Harper, who is no longer with us. He was an excellent Member of Parliament and, like the hon. Gentleman, an excellent Yorkshireman. Like the hon. Gentleman, Joe Harper objected angrily when the Japanese said that they were going to close down a coal mine. But were the Japanese wrong to close down an unproductive coal mine? In the 1970s they closed down inefficient industries because they knew that they were getting into the motor car industry. They moved from the motor car industry to the electronics industry and from the electronics industry to the technology industries. That pattern is happening in this country today, mainly with Japanese help. We must follow that pattern because we can no longer think in terms of United Kingdom industry alone. We must have bigger companies like the Japanese companies, which can compete on world terms.
That is the experience that I have gained from being chairman of the all-party group on engineering development, which has 120 members from both sides of the House and from the House of Lords. The group has visited factories around the country. Because of my experience in Japan, I knew that we had to copy Japan's industrial pattern if our manufacturing industry was to have a chance to compete in world markets, as it must and will do.
I am glad that we may now have reached the stage of getting away from the hustings and trying to reach a consensus by discussing some of the problems that face us. As the election may be in six months' time, the Government still have another Budget in front of them, and my all-party group will try to advise them on how to help our manufacturing industry.
I congratulate the Government on bringing down inflation to German levels and on the direction in which interest rates are moving. They are a key to investment, which is so badly needed in this time of world recession. We think that the recession is happening only in this country, but, alas, world trade has not expanded for the past two years. Anyone who goes to the continent—I speak of the continent and not of Europe, because we are part of Europe—or to Japan, or sees the problems in the developing world, will know what a terrific task faces any Government of this country. We must face up to that problem, which is why I hope that we shall get away from the hurly burly of electioneering and get down to discussing some of the problems facing this country.
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As chairman of the all-party group on engineering development, I have found it valuable that our group believes in specific action to ensure that engineering makes its full contribution to the balance of payments. One of the biggest concerns in the past few years in that regard has been transportation equipment, particularly our imports from Germany. I only wish that the Germans had invested in this country like the Japanese have when their exports to this country in 1987 reached a £10 billion surplus in one year, and a £10 billion surplus again in 1988. If that had happened, the world recession in trade may not have been nearly so bad because we could have kept the economy going. We must learn a lesson from that.
Mr. Doug Hoyle: As the hon. Gentleman knows, like him I was one of the first to go to Japan and urge the Japanese to invest overseas. I said that they could not export their unemployment. Would not it be better if that advanced economy now took away all the restrictions on imports into Japan and really opened up a free market so that we and others could have a fair chance?
Sir Julian Ridsdale: The hon. Gentleman's comments are misguided. My experience of the Japanese market is that our exports to Japan have almost doubled in the past three years. With the priority campaign that now exists, it is up to us to test the market. I think that the hon. Gentleman's remarks are out of date, but I do not want to be too emphatic because I am trying to keep the argument on a low key and not to raise the temperature in this debate.
Thanks largely to Japanese investment in transportation equipment, particularly by Nissan, Toyota and Honda, when we pull out of the recession in the first half of next year—I am optimistic that we shall do so—we shall have the capacity not to suck in, as we did in the late 1980s, huge amounts of transportation equipment, especially from the continent.
I declare an interest in the Nissan plant, because I am an adviser to Sir Robert McAlpine. In 1983–84 I met Nissan with McAlpines, which then won the contract to build the Nissan plant in the north-east of England. How exciting it is to visit that plant today. As my right hon. and learned Friend the Secretary of State for Employment said, people must go and see the Nissan plant. I understand why the Opposition do not talk about that plant: it is an example of what should be done in British industry. Unfortunately —or fortunately—it has Japanese management, but, in answer to the point raised by the hon. Member for Bassetlaw on training, may I say how exciting it is to meet the 3,000 23-year-olds who work there and earn £15,000 a year. Perhaps the Archbishop of Canterbury will go there if he wishes to comment, as he did the other day, on crime in the north-east.
It is an inspiration to see what is happening at that plant, which is exporting all the new Primeras to Germany. There is a waiting list for those cars and, although we are worried about the current rate of unemployment, 1,000 more people will be employed within the next month because of the demand for the Primera. A new model of another car is coming out which will help us to correct our imbalance with Germany. I am sure that nobody will welcome that more than the Germans, who do not want to be embarrassed by huge surpluses, because huge trading surpluses and huge deficits create unemployment.

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The same may be said of the Toyota plant in Derby, where skilled jobs will not be taken. The RB 211 plant is so mechanised that not so many people work there. As the Secretary of State for Employment said, I am sure that Toyota will, like Nissan, train staff. The hon. Member for Bassetlaw, as an engineer, knows the importance of training engineers. We must train more skilled people and take advantage of engineers and other skilled people, but they must not be poached. I am sure that my Japanese friends would not wish to do that because they do not want to get a bad name through their investment in this country. They want to help this country because in doing so they will encourage world trade and raise the standard of living throughout the world.
It is exciting not merely to see the Japanese plants, but to see the British plants. At the IBM plant in Havant one can see computer-integrated manufacturing and computer-aided design and manufacture—we should ensure that the same processes apply throughout industry. We did not hear a word about that from the hon. Member for Dunfermline, East (Mr. Brown) who made a hustings speech ——
Mr. Hoyle: We did not hear it from the Secretary of State.
Sir Julian Ridsdale: I am trying to lower the temperature of the debate because I want to help by introducing constructive ideas on manufacturing industry, not just to make a political argument.
Gavin Laird, the general secretary of the Amalgamated Engineering Union, was right to say that the success of Japanese plants in this country was a result of company unions. Anyone who has been to Japan knows the importance of the company union. I know that some of our engineering industries wish that we could have the company union in some of our engineering plants because we would achieve better productivity which would allow us to sell more throughout the world. The skilled bloke on the shop floor must produce for £1 that which his competitor is producing for £2 ——
Mrs. Llin Golding: And women.
Sir Julian Ridsdale: Yes, certainly the ladies. I should hate to leave out the ladies because as one goes around industry one appreciates the value of ladies, particularly in relation to computers and machines in industry.
It is encouraging that achievements are being made, even now, in some of the British companies that I have visited, including EIS, Ricardos and the IBM factory in Havant to which I referred. However, some companies have been badly hit, particularly those in the machine tool industry. That is why we must press the Chancellor to encourage more extensive and effective investment in the most up-to-date processes in our manufacturing industry —I have already referred to computer-aided design and computer-integrated manufacturing.
The Italian machine tool industry has suffered a similar fall in the level of its orders—about 40 to 50 per cent.—as a result of an alarming fall in investment. The Italian senate has recently passed the "Righi Battalia" law which, if formally approved, will provide for about £700 million of investment in new technology over the next three years. Our machine tool industry is not asking for aid in excess of that received by our competitors; all that it is asking for
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is the opportunity to compete on a level footing. Surely we must provide help through capital allowances in the next Budget. I am delighted that I can talk about the next Budget although I shall not be standing in the next election, which is one of the reasons why I am not making an electioneering speech tonight.
In the next Budget we must also assist those sectors of the engineering industry that will have to bear substantial engineering costs in order to meet stricter environmental standards. Perhaps most important, we must encourage research and development. In Germany and Japan, that is being done from the profits of the big and successful engineering companies, but we lag behind, mainly because of the world recession. I congratulate the Government on what they are doing to encourage science parks around our universities. We must not be complacent about investment in research and development, but must take note of the huge amounts that Germany and Japan are investing in research and development.
There are other sectors in which help is needed, especially in the new markets in eastern Europe, Russia and China. We must give continual and expanding support to United Kingdom engineering companies to obtain overseas contracts and help to provide export guarantees for such work.
I hope that the Secretary of State and the Chancellor will bear these points in mind. In the marketplace, as in skiing, there is no security, only opportunity. In normal times, industry can get on well on its own, but in a recession it needs a helping hand.
Several Hon. Members rose——
Mr. Deputy Speaker: Order. I remind the House that the ten-minute limit on speeches operates from 7 o'clock, so the next hon. Member I call can speak until 7.10 pm if he needs to.
6.57 pm
Mr. Alex Carlile: I am extremely grateful to you, Mr. Deputy Speaker, for calling me at this opportune moment in the debate—6.57 pm.
The debate stands as an indictment of the Government's wilful neglect and failure to sustain this country's manufacturing base. The case against the Government is based simply on an exposure of three aspects of their policies: first, their understanding, such as it is, of the recession; secondly, their commitment, in so far as they have one, to training; and thirdly, their attitude, if that is not too polite a word, to unemployment.
This recession—for we are still well in it—is one that has been made worse for manufacturers and the service industries alike by the Government's lengthy, desperate and, until recently, mostly unsuccessful attempt to get to grips with inflation. Surely the Government cannot be satisfied with the results. While inflation is down, which is welcome, it remains so under a threat of high interest rates. Industry knows that, the moment that inflation rises, interest rates will rise with it, yet those rates remain at historically high levels.
As a result of what has happened to manufacturing industry, particularly in the past two to three years, when the recession eventually ends it will be at the expense of a significant slice of our manufacturing base. The inevitable consequence is that, at the end of the recession, there will

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be greater import penetration, for we shall have lost even the facilities to manufacture many of the goods that we consume.
Mr. Howard: As I understand the policy of the hon. and learned Gentleman's party, it is to hand over responsibility for these matters to another quarter altogether—to an independent European central bank. What recourse would the House have in respect of high interest rates if such an authority decided that high interest rates were necessary?
Mr. Carlile: If the right hon. and learned Gentleman, who asks a fair question, will bear with me, I shall come to the answer to that in due course.
I would ask the House to examine some of the evidence for the depth of this recession. The gross domestic product at the end of the third quarter of this year is one relevant item. GDP fell by 0·6 per cent. between the first two quarters of 1991 and was 3·7 per cent. lower in the second quarter than in the same period last year. Manufacturing output, however, was as much as 6·6 per cent. lower than a year earlier. Construction output was worse still—9·4 per cent. below the same period last year. Output in the energy and water sectors, flagships of the Government's privatisation policies, was 4·1 per cent. lower than a year earlier.
There are some dramatic examples of what has happened to certain sectors of manufacturing industry. One such is the textile industry. Since the last general election in 1987, there has been a 16 per cent. fall in output in the textile, clothing, footwear and leather industries. That is affecting my constituency, where there are a number of Laura Ashley factories.
Laura Ashley is just one example of a company whose share price rises as people are made redundant in the United Kingdom. The more people Laura Ashley employs outside the European Community, the higher its share price, because that is thought by the City to be a sign of efficiency. It should not be so. I think that it shows that the Government have failed to sustain, in an important domestic industry, the manufacturing base that is necessary in the long term. For the share price to be in inverse proportion to the amount of manufacturing done in the United Kingdom cannot be right.
In the venture capital sector, fund managers in the regions—the Secretary of State emphasises their importance —say that they have plenty of money to invest but that there are practically no takers. They feel that usual mechanisms for funding investment and growth appear to be at a standstill because the banks do not know whither Government economic policy is leading them.
Mr. Abbott, who runs the Liverpool office of Capital for Companies, part of a well-known group in the north-west, has said that he knows of one company that needs to borrow about £120,000, and of others needing less, and adds:
"The banks which would have normally financed these sorts of sums are nervous as kittens. Until they do, the economy will not turn."
Yet the Government are not creating the climate in which this can take place.
The evidence provided by members of the British Venture Capital Association—I assume that the Government applaud their activities—shows that the recession is still very deep, especially in manufacturing
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industry. Over the years, the Government have been enthusiastic about management buy-outs and management buy-ins. The British Venture Capital Association's statistics show that the sums invested in 1990 in management buy-outs were one third below the sums invested in 1989. The total amount invested by British venture capitalists in industry and commerce as a whole in 1990 was £1·394 billion, £253 million less than the amount invested by the same group of investors the year before. Indeed, in 1990 the amount regressed to equal the 1988 figures.
Another striking example is the leisure industry. In 1990, venture capitalists invested about one third of what they invested in 1989. In retailing, they invested one tenth of what they invested in 1989; and in construction they invested £21 million less than in 1989. To be fair, the figure for financial services was significantly higher than the 1989 figure, but it was less than 50 per cent. of the investment in 1988.
In the manufacturing sector, investment declined by 40 per cent. in 1990 as compared with 1988. That is the evidence of the Government's failure to provide a manufacturing base in which venture capitalists would feel keen to invest.
Evidence of the depth of the recession emerges from another source, too. Bankruptcies and liquidations are at record levels. Every time a small company goes into liquidation and its directors go bankrupt, people are affected. We know about their misery from meeting the many constituents who face bankruptcy and liquidation.
The Government have done nothing except to create a climate in which those of us who meet young people looking for good careers in the professions would be well advised to tell them to go into the liquidation business: at least that is a growth industry. Dun and Bradstreet report 33,532 business failures in the period between January and September of 1991.
What is most worrying is that the Government seem as confused about the state of the economy as industry and commerce. To be sure, some entrepreneurs have tried to work their way out of the recession and have adopted with a vengeance the Government's vaunted belief in free enterprise; but the evidence for that belief is fairly unimpressive—the dismal procession of the denizens of Thatcherite policy wending their grim trail through the Old Bailey and Southwark Crown court. One thinks too of the Rover fraud which the Government perpetrated against the European Community—the evidence for that is manifest. One thinks too of the disreputable episodes that led to the House of Fraser takeover. That was clearly tainted with malpractice, if not with fraud.
So it is not surprising that the Government themselves are confused about the state of the economy. When they talk to home audiences or British journalists, they give the impression that the recession is at an end and recovery under way. At the Tory party conference, the Chancellor talked about the
"green shoots of economic spring".
After figures this week showing manufacturing output falling, the Chancellor said that the recession in manufacturing was over and that the fall in output was consistent with the recession bottoming out and with recovery in the second half, adding:
"I have always said that the recovery will be gradual."
When the Chancellor is out of the country, however, talking privately to other Finance Ministers, he comes up

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with a much less upbeat story about the economy. According to the evidence of Herr Kohler, the German deputy Finance Minister, when the Chancellor talked to the Germans he was much more cautious. The weekend communique from the G7 said that Britain was
"moving towards recovery, while recovery is under way in the United States and Canada."
Those of us who remember the former Chancellor's repeated promises that there would be no recession, and the current Chancellor's comments that the recession would be shallow and short-lived, cannot help but greet recent remarks by the Chancellor, such as the one that next year growth will take place at a moderate pace, with a huge scepticism. Predictions from the Government's Chancellors are about as reliable as the weather; when the Government say that it will he sunny tomorrow it might be a good idea to invest in an umbrella.
I should like the Secretary of State to give a clear answer to a question about the training and employment sector. Do the Government still adhere to the target set by the Secretary of State's predecessor, the right hon. Member for Sutton Coldfield (Sir N. Fowler), who as recently as 1989 said that half the work force would achieve the equivalent of National Council for Vocational Qualifications level 3 by 2000? Is that still the target? If it is, how will the Government achieve it, given the situation in which the training and enterprise councils currently find themselves, in which all their money is being spent not on retraining people in work, but on providing some kind of training for people who are out of work?
Mr. Deputy Speaker: Order. The hon. and learned Gentleman has run out of time and must now come to his last sentence.
Mr. Carlile: I understood you to say that I was not tied to the 10-minute rule.
Mr. Deputy Speaker: Order. I told the hon. and learned Gentleman that the 10-minute limit started to operate at 7 o'clock. That meant that he had until ten past 7 and, as he started to speak before 7 o'clock, he had a time bonus. He must now come to his last sentence.
Mr. Carlile: I do not want to finish my speech without giving a direct answer to the Secretary of State. The whole range of our policies answers his question. An independent central bank is part of it. Bringing sterling into the narrow bands of the exchange rate mechanism is another part. The Government have promised to do that, but they are not doing it at the moment. A proper training and investment policy in manufacturing is the key.
7.11 pm
Sir Giles Shaw: I shall not deal immediately with the speech by the hon. and learned Member for Montgomery (Mr. Carlile), although I shall deal later with a part of it. The debate turns on the scale of manufacturing investment, and I firmly suggest to the hon. Member for Dunfermline, East (Mr. Brown), who is not in his place, that he was in grave danger of overplaying his rather feeble hand. The point about manufacturing investment is not its actuality, its level or its rigidity or flexibility, but the determination that it demonstrates to provide goods and services for people to buy and use.
It is ludicrous to talk about manufacturing investment in isolation, without regard to the market at which the industry or service is pitched. For that reason, in looking
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at the way in which the recession will he beaten— as beaten it will surely be—it is not enough merely to look at manufacturing. We must also look at consumption and access.
I concede that the recession has been far deeper and longer and has had far more features that were unknown in any previous recession. Whether it was started peculiarly by Saddam Hussein and the Gulf war or the energy crisis which followed it, or whether it was started by the extraordinary decision of corporate America and, I say to my hon. Friend the Member for Harwich (Sir J. Ridsdale), by corporate Japan virtually to stop flying and therefore to stop taking any real interest in corporate decisions other than in their domestic markets, we cannot tell. However, we know that the complexity of the recession has made it much more difficult to manage than those which occurred hitherto.
There are some obvious matters. The scale of inflation that Britain once endured and the interest rates that followed made the effect on the United Kingdom peculiarly vicious. None of us can do other than recognise that those two factors had a depressing effect on British manufacturing. The consequences of manufacturing investment in terms of funding the investment and on cash flow cannot be ignored. The confidence factor is such that the consumer purchasing power of the United Kingdom is heavily depressed. That is the real problem in the high street and in service industry, and for the moment it stunts the growth of manufacturing investment. The hon. and learned Member for Montgomery rightly said that there is plenty of money available for investment if there were a corporate willingness to undertake it, but no company, whether a plc, a private institution or a small business, would willingly take that decision unless it was confident that it could manage the cost of debt on the basis of the revenue from what is assumed it could sell in the market place.
Two factors require to be added to our mighty success in bringing down inflation so that we can reduce the rate of interest which all trade has to bear. First, we need to make sure that our policy places a high priority on access to markets. The Government's resumption of continuity in the GATT negotiations will do far more for the confidence of British industry than anything that has happened in the past six months. I congratulate my hon. Friend the Minister for Trade on the remarkable way in which he has dealt with that difficult matter. I hope that he will be able to bring the GATT talks to a solution because that would have two immense advantages. First, we shall know whether we can get access to new markets on more beneficial terms than in the past. Secondly, we shall know the international commitment to running markets in a fair and sensible manner. That will do more to restore our export potential and long-term investment than most of the matters mentioned by the Opposition.
British industry does not need great panoplies of Government grant-aided Systems, committees, form-filling or bureaucratic management. Everyone in British industry takes risks every day, and the management of risk is personal, complete and direct and cannot be devolved in a welter of Government agency help.
In addition to opening markets, we must look at some of the problems associated with the European Community. We are committed to the biggest single extension of the domestic market that Britain has ever seen. We are delighted to know that the stability of the

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European exchange rate mechanism will provide some stability in the value of our currency. There is great panic by the Government to ensure that our European credentials are met and therefore they implement every directive instantly and in full. That has huge consequences for the confidence and competence of British industry.
I took a small delegation to see my hon. Friend the Minister for Roads and Traffic about the European regulation on drivers' cabs on lorries and the ultimate configuration and length of articulated vehicles. That is not a matter that the burghers of Pudsey are thinking about, but a matter in which I got involved. It was a surprise to the Minister, as it was to me, to find that the Government are the only one who have implemented this tortuous process right away without a long deferral or derogation. I understand that the Dutch and the Germans are trying to delay implementation because of its consequences on the efficiency of transporting goods.
British industry could do without such haste. We should take more time because no one is hustling us. I doubt very much whether the Greeks have even heard of the directive. It is high time that our view was a bit more like that of the Gallics and Latins, whose implementation of the water directive has barely started. Let us take a slightly more relaxed view on the regulatory mechanisMs of the Commission. I am sure that that will find some favour with the Minister.
Another problem alongside that is the one faced by small businesses in particular in dealing with the mechanisms of the national insurance charge on benefits in kind. I found in my constituency a business which has three or four vans which it uses to sell its products. It does not operate cars for the benefit of its employees. It seems that operating the vans has to be regarded as a benefit in kind, and that is subject to the national insurance charge.
It is not just a matter of value added tax or the Inland Revenue. The Department of Social Security is entering the range of assisted services with which small businesses have to cope. These businesses have managed to cope with the Inland Revenue and its inspectors. They have managed also to deal with Customs and Excise and its inspectors, but they now have to deal with the DSS and its inspectors. The Revenue and Customs and Excise have become used to the way in which VAT is handled. They have, broadly speaking, reached an agreement on how small businesses can cope and have learnt to live together. The DSS. with its new inspectorate—I understand that it is funded largely by sale or return on a Commission basis, or something like that—has decided that all telephone calls, domestic or business, must be separated one by one, and that unless that is done it will regard all calls as having a private purpose. That would mean that the entire bill would carry a national insurance charge, because the facility will be regarded as a benefit.
For cars the Inland Revenue found it acceptable to apply a scale of 2,500 to 15,000 miles unless a taxpayer's claim showed the mileage to be otherwise. That is not acceptable to the DSS, which has introduced a band of under 2,500 business miles. That scale will he applied unless detailed mileage records are maintained. I will not have that, and I do not think that my right hon. and learned Friend the Minister will have it either. We want a conformity of Systems that small businesses can manage.
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Those businesses should be given a little lift at a time when, unfortunately, they are going broke. As Opposition Members have said, that is happening all too frequently.
I am aware of the problems in the textile industry mentioned by the hon. and learned Member for Montgomery, but there has been rather better news from west Yorkshire. The wool scouring business is doing much better. I understand that at Haworth Scouring orders worth £300,000 have been placed in the past six months. There has been an important development in Dewsbury. Standard Wool has invested £1·5 million, and in other industries Spring Ram has invested £85 million in Birstall, Bradford, Barnsley, Scunthorpe and Huddersfield. It is not all gloom. Britain can make it and we shall make it. But we should like a little less interference from Government.
7.21 pm
Mr. Ken Eastham: I am glad that the House has an opportunity to examine the true position of Britain's manufacturing base. Unfortunately, it is nothing like what was projected last week at the Tory party conference. I watched the proceedings at Blackpool, during which Minister after Minister sought to soothe the Government's supporters. In effect, they said that everything was running well and that there were no problems. The conference ended with the waving of flags and the playing of an organ, after which everyone went home. We are now in the real world.
During the debate my hon. Friends have presented the true picture when describing the standing of our industrial base. Regardless of what the Secretary of State said, we must recognise that we have the fastest growing rate of unemployment in the industrialised world. That is the real world to which I was referring when I made a comparison between the picture that was presented at the Tory party conference and the standing of our industrial base.
When I returned from my holiday during the summer recess I received a long letter from the Machine Tool Technologies Association. It probably wrote to me because I act as the secretary of the engineering parliamentary group. The letter set out a dreadful catalogue of disaster in the machine tool industry. We must remember that the industry is the seed corn of any manufacturing base. Without a good machine tool industry we shall have no future that embraces inventiveness, innovation and competitiveness. Having received the letter from the association, I wrote to the Secretary of State. Unfortunately—I hope that the civil servants in the Box are taking notice—it seems that my letter has disappeared somewhere in the Department. Four or five weeks have passed and I have received no reply. I asked him to consider the problems facing the machine tool industry and to comment on them.
At the same time I received a further communication from the Machine Tool Technologies Association. The association stated that demand for machine tools in the three months to July 1991 was down by 28·5 per cent. when compared with demand during the same period in 1990. Some companies are experiencing reductions in demand of between 40 and 50 per cent. The association states that industry is not investing and that there is little hope in the machine tool industry of any upturn until well

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into next year. It claims that this will have major implications for its competitiveness, which will bear on the productivity and the quality of British industry in future.
The association referred in its letter to the Italian machine tool industry. It seems that that industry has been suffering a little because orders are not being placed for its machine tools. The association tells me that the Italian Government are in the process of granting the industry the equivalent of £700 million over the next three years. It fails to understand why we in Britain cannot learn some of the lessons that have been learnt by the more successful countries in Europe. It cannot be denied that Italy has been successful, along with France and Germany. If Italy and other countries can learn the relevant lessons, why cannot Britain? We must make some adjustments if we want to have a successful machine tool industry.
When my hon. Friend the Member for Dunfermline, East (Mr. Brown) was speaking from the Opposition Front Bench some young Conservative Members were making jibes to the effect that Labour Members have no experience of industry. I shall place my credentials before the House. I worked in the machine tool industry, I have been involved with heavy turbines and I have worked in the diesel engineering industry. I have worked in manufacturing industry from the shop floor to the office, where I worked on the technical side. It can be claimed that at least my colleagues and I know something about the manufacturing base. That should be remembered when we say that we are facing a devastating situation.
I contacted the Amalgamated Engineering Union, which provided some good information and feedback. It told me that the recession is following a different pattern from that which emerged during the recession in the early 1980s. During 1980–81, no Conservative Member seemed to care about the impact of the then recession in the north. So many jobs were being lost in the region and the Government said, "This is some of the pain that you must endure. It will all come right. Make the sacrifice and everything will turn out well." We made sacrifices in 1980–81, and lo and behold we are back to square one in 1990–91. This time, however, the recession is in the south-east. Its stranglehold is being experienced in unexpected areas.
The greatest downturn has taken place in the south-east. Even Northern Ireland is doing better than the south-east. In August this year the turndown in Northern Ireland was 3·9 per cent. compared with the previous year. In the south-east it was 84·7 per cent. Such factual comparisons show that there is no success story.
The feedback that I have received from various engineering offices in the southern region leads me to ask what Conservative Members have been doing for industry in the south-east. They predominate in those areas but they do not seem to be doing anything. They do not even seem to care.
Let me give some examples to show what has really gone on in the south-east during the past few months. Ford Motors will lose 300 to 350 jobs at Dagenharn. Ferguson is closing its plant at Gosport in Hampshire. Sealink has lost 1,500 jobs. Ford New Holland is reducing its work force in Basildon by 650. British Aerospace is to close its plant at Kingston. In west London, Trico-Folberth is to close its Great West road plant at Brentford and Clearplas is to close its car components factory at Heathrow. Courage Brewing is to lose 506 jobs in Middlesex. Riverside Press has lost 210 jobs in Whitstable.
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GEC Marconi has lost 130 jobs in Chelmsford. Crittal Windows has lost 152 jobs in Colchester. Allen West has lost 71 jobs in Brighton. Rolls-Royce is to lose 6,000 jobs and its Leavesden helicopter facility is threatened. British Aerospace has lost 300 jobs in Stevenage and the London Brick Company is to lose 250 jobs in Milton Keynes.
Madam Deputy Speaker (Miss Betty Boothroyd): Order. I regret that the hon. Gentleman has had his 10 minutes.
7.31 pm
Mr. Donald Thompson: Much has been said tonight by my hon. Friend the Member for Harwich (Sir J. Ridsdale) and by Opposition Members about the Japanese and Japanese industry. A long time ago, in 1904, Lord Masham, who founded the great silk spinning company of Listers, was invited to the opening of the Cartwright museum in Bradford. In his reply to the vote of thanks by the mayor he said that what he was about to say might be considered to be in the realms of fiction.
Lord Masham pictured the Cartwright hall as a place where the Asiatics of the future might come in search of the inventor of the power loom—the power loom being the means by which the east would overcome the west. At that time, that power enabled the west to overcome the east, but he said that the thoughtful mind must realise that, if ever the power loom were taken up by such nations as the Japanese—a wonderful nation with a facility for copying western ideas—who could say what would happen in a few years' time. He said that some might think that he was in the realms of fiction, but that sometimes reality was even stranger than fiction. "Hear, hear," said historians.
His Lordship continued:
"I have a very strong itnpresson that the east will overcome the west in the coming years and instead of our clothing the east, the east will clothe us."
There was loud laughter. However accurate he was in 1904, he did not predict that the Japanese would now be investing in the north-east.
My constituency is in the heart of what used to be, and can still be called, the manufacturing areas. The manufacturing industries employ 50 per cent. of my constituents. I am not as keen as many Opposition Members on what has in the past been known as regional aid. Regional aid—the hon. Member for Bassetlaw (Mr. Ashton) hinted as much when he spoke about job skills —has taken jobs from high skill areas and planted them in areas without such inherent skills, and those jobs and skills have then withered at the slightest economic winter. The jobs have to stay with the skills and, difficult as it is, people must be brought to the jobs. I was interested to hear what the hon. Member had to say about that specific objective.
I get a lot of help in my constituency from the development Commission. People seeking help from the Commission have a range of experiences from their own and their friends' jobs. It is not the same in the coal-mining areas. Coal miners who live in a big community and are then thrown out of work do not have such multiple experiences. They do not have friends who have been in 50 different industries; that makes a huge difference.
There is investment throughout the valleys in my constituency. The local bus company has spent £4·5 million on 61 new buses and 13 minibuses, all of which were built in the United Kingdom, and there is investment in heavy engineering, furniture, textiles and non-woven

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textiles, kitchen equipment, ceramics, motor car components and white goods. Those companes have told me that, since the beginning of August, they have invested considerable sums of up to £5 million in jobs.
However, manufacturing needs, and is short of, a climate for success. To people from my part of the world, there seems to be no enthusiasm for manufacturing, not just on the part of the Government or the Opposition, but on the part of the banks, universities and schools and the City. They seem to think that manufacturing is the bottom line. I think that it is the bricks on which a good and sensible country is built.
We have heard much from the Opposition today, but in the country we hear a story different from the balanced one which it tried to convey today. In the country, the Labour party still turns up its nose at profit, risk and success, and that almost completely negates the words that we hear in this place. The cry is for high tech. In practice, that often means a soldering iron instead of a sewing machine. The ladies and gentlemen still sit in serried rows.
There is even less understanding when we hear the Labour party in the country crying out against service industries, forgetting that the financial side of those industries is the greatest purchaser of high-tech equipment and that most of the service industries are expanding to provide jobs for my constituents in the manufacture of beds, carpets, baths, and so on.
The climate created by the Labour party is not the climate that manufacturing industry needs. It is no good the Opposition complaining about bankruptcies and then not allowing successful industries to continue making profits and retaining them and the men who work in those industries to earn higher and higher wages.
Before we reduced taxation to 40 per cent., people used to say that we were taxing their overtime. They do not say that any more. Ordinary working men and women in our successful industries do not want the Government's hand in their pockets. They want a reasonable tax regime.
The Government's commitment to the north is exemplified in my constituency by an £8 million grant for industrial development. That follows millions of pounds of investment in other parts of the north, year after year, when jobs have been lost. For example, millions of pounds were invested yearly in Todmorden in my constituency.
My part of the world has benefited from self-help, by supporting business in the community—and the development Commission also helps. Business is still not properly understood by much of the rest of the community. I once employed 26 people, but others cannot understand the joys and hassle of employing five, 10, 15, or 20 people. The Administration also misunderstand the difficulties, and the burdens placed on small industry are still too great. Over the next 10 years, a Conservative Government must get those burdens off its back. Labour will not do so because, basically, it does not like small businesses. That is because small businesses do not like unions as they represent an even greater burden than anything else.
Eastern Europe is now seeking our help, and the Government can provide it through their diplomatic service. It seems strange to some of my constituents who export white goods to Poland that the British embassy there has a staff of 50, but that only two of them are commercial attaches. They think that it should be the
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other way round. The whole of eastern Europe wants to be a consumer society and its working men and women want to buy all the goods that we take for granted—all the trappings of a reasonable life. Our manufacturers have a chance of supplying those goods, and the Government must help them in whatever way they can. We can do so without contravening EC rules, from within the diplomatic service, which can help our business men to find their way through the decaying labyrinths of eastern European bureaucracy to the entrepreneurs. In that way, we can take a few leaves out of many other books. Industry wants the Government—any Government—off its back.
7.42 pm
Mr. Doug Hoyle: I am sorry that the Secretary of State for Trade and Industry is no longer in his place. If the House had been sitting in August, the Secretary of State would not have been with us today because of the terrible mess into which he got himself in respect of the export of military, chemical and nuclear materials to Iraq. What kind of Secretary of State is he to say, "It is a lot of fuss about nothing—it is a silly season story"? I do not imagine that those British troops who served in the Gulf, or their parents, would regard it as a lot of fuss about nothing for Britain to have exported equipment which might have cost the lives of British service men and women.
The Secretary of State got himself into an even worse mess in connection with the strange story of the 8·6 tonnes of depleted uranium. He said it was all a question of the packaging—of the lead and dry ice. The Secretary of State cannot tell his ice from his elbow. His Department, which issued the instructions, directed that exports must be listed in terms of net weight, not gross weight.
The Secretary of State had not one word to say today about the businesses that are being destroyed. Had he been in Rome, he would not have been fiddling but using the torch to start even more fires. The Secretary of State and his Ministers do not understand industry. The Under-Secretary of State for Industry and Consumer Affairs, the hon. Member for Gainsborough and Horncastle (Mr. Leigh), was a second-rate barrister, and the Secretary of State and at least one of his other Ministers were City slickers. The Minister for Trade is the lad whose father would not let him out of the back room to run the grocery store. Is it any wonder that unemployment is rising, interest rates are higher than in most of our major competitor countries, business failures are at a record level, and manufacturing output has fallen below the 1988 level?
Perhaps the Under-Secretary of State will say whether the Government have made any representations to British Airways or to Lord King about its decision to buy the Boeing 777 with a General Electric engine. Why did British Airways reject a good commercial bid that offered a stretched A330 with a Trent engine, which would have been not just a European aircraft but virtually a British aircraft, using British parts and British engines? The problem is that the Government are not interested.
Not only did British Airways fail to buy the European airbus, which is a fine aircraft; it decided to buy a paper aircraft with a paper engine—one which has never flown. Rolls-Royce has already shed 6,000 jobs, and now it is to lose out because GE bought a factory in south Wales for

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£270 million, and GE will repair the engine. British Airways' decision could mark the beginning of the end for Rolls-Royce. I should have thought that that was a matter of concern to the Government. Have they asked for any explanation?
The Minister may smile, but all our competitors—be they in Germany, Japan or the United States—operate in protected domestic markets while our leading aircraft engine manufacturer, which makes 20 per cent. of the world's aircraft engines, is put at risk.
I remind Conservative Members that large businesses are important to small businesses. Thanks to privatisation, BMW now has 1 per cent. of Rolls-Royce, and there is talk in the City of a hostile takeover bid. That could not have happened if Rolls-Royce had remained in the public sector. More nails have been driven in by the Government, who do nothing to help. The same applies to British Aerospace. The Secretary of State said nothing about the denigration of British Aerospace and the way it has been talked down by the City. That company has 195,000 workers, and annual sales of £9·3 billion. What is happening does not seem to bother the Government in the slightest. They are standing idly by.
Let us contrast that with what is happening in Germany. Daimler-Benz owns Deutsche Aerospace and 28 per cent. of the holdings in Daimler-Benz are held by the Deutsche Bank. Compare Deutsche Bank with one of our banks—50 per cent. of its lending is to companies for four years or more. Can one imagine a bank in this country doing that? It is no wonder that Deutsche Aerospace has 200 experts studying the conversion of military items and spending in Deutsche Aerospace to civilian products.
Mr. Eastham: That is the peace dividend.
Mr. Hoyle: My hon. Friend is right.
Why are we not setting up such an agency here? British Aerospace has appealed to the Government to do so, but the plea has fallen on deaf ears. Yet the aerospace industry accounts for 10 per cent. of our manufacturing exports. Despite that fact, not a word is being said about it.
On the subject of mergers, can one imagine any other country where the Secretary of State would have had nothing to say about Hanson's bid for ICI, which is our largest manufacturing company? It is our second largest exporter, exporting 50 per cent. of its output, and spends £591 million on research and development or 4·5 per cent. of its annual sales as compared to Hanson, which spent £34 million on R and D—0·5 per cent. of its annual sales. Yet the Government are prepared to stand idly by while the bids are made. Hanson could take over ICI, split it up and sell it off—asset stripping—but the Government are not bothered.
The Government are standing idly by while a bid is made by Williams for Racal, one of our leading electronics manufacturers. Williams is involved with distribution. Hawker Siddeley, the largest manufacturer of electric motors, is going to be taken over by a predator, BTR, which would split it up. The Government know that Pilkington is shedding 750 jobs. Nothing is being done. The best thing that could happen is for the Government to be defeated. Nowhere would the wind of change be more welcome than if it blew away the current trade and industry team, who are all Dr. Dolittles.
7.52 pm
Mr. Anthony Coombs: Although I support the Government's strategy for manufacturing industry, I would not like to underestimate the difficulties that some industry in some parts of the country has been facing. I come from Kidderminster, where there is a carpet industry which is related to the housing market, and there is no doubt that during the past 18 months it has been going through a difficult period. That has been exacerbated by the closure of the Coloroll factory, which lost 1,400 jobs, primarily because it was badly managed and massively in debt as a result of an over-expansionist policy.
Nevertheless, having talked with businesses throughout my constituency, I can report that confidence is gradually returning. The same policies that resulted in unemployment in my constituency being reduced from 18 per cent. to only 4 per cent. will again lead to such a regeneration of industry.
When one considers the decline in investment and output this year, it is important to see it in context. In 1989 and 1990, gross domestic capital formation for manufacturing industry was at a record high, which meant that a whole range of industries in my constituency and elsewhere were able to re-equip. In the 1980s, investment grew twice as fast as consumption and faster than anywhere outside Japan. As a result, about 40 per cent. of the Organisation for Economic Co-operation and Development's investment comes into Britain.
With that record of investment, it is scarcely surprising that the average productivity of manufacturing workers in this country has increased by 50 per cent. in the past 10 years. Interestingly, The Independent said recently that, despite the fact that output had been declining recently, productivity per man has continued to improve and as a result our competitiveness in world markets remains relatively unimpaired.
The "CBI News" recently said:
"Not only do the key indicators of output, productivity and UK share of world trade all show an improving trend relative to our main competitors, but there has also been a considerable restructuring of industry, with the help of inward investment, increasing the UK presence in high technology sectors. Employee communications and industrial relations have been transformed. In addition, some long standing weaknesses, in terms of quality, customer service, innovation and skills are being addressed."
It would be wrong to leave the impression —as the Opposition tend to do—that all manufacturing industry is not doing well. In my constituency, a number of companies in several sectors are doing well. A spring makers, which supplies the automotive industry, is working at capacity and 68 per cent. of its output goes to the automotive market. It estimates that, by 1996, Britain will be the fulcrum of the engine market in Europe.
There is a con rod maker in my constituency which supplies the automotive industry and is working at full stretch. Other newly started carpet companies which I visited last week have increased turnover, with minimal stock turn, by 50 per cent. in the past year. There is an improvement in confidence.
As far as manufacturing industry is concerned, the fundamentals are right. That has been exemplified in the export sector and has been carried through into the first half of this year. The figures for the three months to August this year—about the latest available—show that manufacturing industry exports have increased 60 per

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cent. in volume terms since 1979, and that exports of electrical machinery have increased by 11 per cent. over last year, scientific instruments by 16 per cent. and clothing and footwear by 28 per cent. and car exports by 47 per cent.
It is significant that people in the machine tool industry say that they have a trade surplus with Europe for the first time since 1971.
More important than all those figures is the fact that that will continue. Consider the CBI pay database. The CBI says that, because wage settlements are less here than in Germany, our unit labour costs are coming back into line with those of our European competitors. As a result of that, and of the improvements in productivity that I referred to, our competitiveness relative to the outside world and to our European competitors is improving all the time; hence our export performance.
Although times are difficult, there is a background of low inflation, low taxation and a better industrial relations climate. Those are many of the fundamentals that industry needs and that made it so successful in the 1980s, and they are in evidence now.
What industry does not need are the sort of policies that have been advanced —sadly too consistently—by the Opposition. Ask any business in my constituency, and I suspect in virtually every other constituency, and one will find that they do not want a party in government whose record when it was last in power was a significant decline in manufacturing output and a reduction in road infrastructure spending, which is so important to industry, of 60 per cent. in real terms, and which never reduced inflation to less than 7·4 per cent.
Businesses do not want their costs increased by a payroll tax; nor do they want their ability to reward more skilled workers with proper earnings undermined by minimum wage legislation, which would inevitably push up their costs. They do not want a top rate of tax that would be increased by no less than 50 per cent. to batter incentives. Nor do they want a surcharge on savings to finance investment; the hon. Member for Dunfermline, East (Mr. Brown) never responded to that point.
As for industrial relations, the last thing that companies want is to be compelled to recognise trade unions of which only 40 per cent. of their employees may be members; they do not want an increase in the number of sympathetic strikes and secondary action; they do not want more workplace enterprise councils; and they do not want their legitimate ability to employ part-time workers to be eroded by the lack of flexibility that is inherent in the European social charter—which Labour seems prepared to swallow hook, line and sinker.
Companies tell me that they do not want to encounter the kind of bureaucratic nonsense that the Labour party seems intent on foisting on manufacturing industry. They are not interested in regional equality tribunals. They do not see how social audits will improve their competitiveness and their ability to sell goods abroad. They do not want a national investment bank; and, by God, they do not want "British Technology Enterprise", a re-run of the National Enterprise Board which was so unsuccessful when they were last in office.
Manufacturing industry informs me that putting Labour in government would be like putting the fox in
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charge of the hen house. The result would be akin to the effect of the Western Samoa team on Welsh rugby. I do not believe that it will ever happen, thank heaven. None the less, we must emphasise the damage that Labour policies would do to manufacturing industry, and maintain the policies that caused such an enormous improvement in productivity, investment and manufacturing growth during the 1980s.
8.1 pm
Mrs. Gwyneth Dunwoody: Let me illustrate the reality of manufacturing in Conservative Britain. On Monday morning, in my constituency, Rolls-Royce Motor Cars closed down. The employees had been working a three-day week, but no warning was given of the closure, although it had been announced that the firm would close for a fortnight in December; it managed to tell the local radio station before telling the work force.
Rolls-Royce has already announced 1,192 redundan-cies—858 in the car division and 334 in Vickers Precision Instruments. Moreover, my constituency contains one of the great privatisation successes about which we have heard today, although the Secretary of State did not seem to know what it was. I asked him whether he was proud of British Rail Engineering Ltd., which had been sold off at considerable cost to the taxpayer and had made a great deal of money for those who were made directors—so much money, indeed, that an incoming director became a millionaire by buying shares for a tenth of what they were worth. Not only was the right hon. Gentleman singularly silent on the subject of that great success; he gave no answers to our claims that there were serious redundancy problems.
The Secretary of State should, I think, take a certain amount of credit. The local mayor asked him whether he would like to come and see some of the great successes of Conservative planning. It took the right hon. Gentleman some weeks to reply, but eventually he wrote what was plainly an offensive letter saying, in effect, that he had had no difficulty in deciding that we were actually doing quite well. He knew that, of course, because he had been through the constituency on his way to visit a neighbouring area a couple of weeks earlier; stopping in Crewe, however, was beyond him.
I then wrote to the Prime Minister. Would he like to visit my constituency, and tell the people who had lost their jobs at BREL and the people who could no longer hang on to their homes —families who, because of repossessions, were losing those homes at a rate of seven or eight a week—about the great success of Conservative policies? The Prime Minister wrote back to both the mayor and me, saying that the Secretary of State's assessment of the position had been entirely correct. He would, he said, be passing through at some point in the future, but he certainly did not intend to come and see what was actually happening.
When I first came to the constituency, BREL was not only making superb rolling stock; it was known throughout the world for the quality of its manufactured goods. What happened when it was sold off was very simple. Increasing numbers of redundancies were announced year in, year out; at the same time working conditions declined, as did the redundancy payments made to those who left and the so-called privileges of cheap tickets and access to cheap facilities. Some of the staff had

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been working in the manufacturing industry for 25 years, but, when it came to the point, their employers were not even prepared to maintain their existing pension rights in regard to the payment of subsidiary amounts.
We have lost 405 jobs in that recent closure. Department of Employment statistics reveal that my area has experienced the fourth largest increase in unemployment in the north-west. The figure is 72 per cent. and the three larger increases are all in rural areas. During the period concerned, Crewe has experienced a higher rate of growth in unemployment than any other industrial town: the figure has risen from 4·7 per cent. to 8·1 per cent. above the Cheshire average. The statistics show that we have lost 1,725 jobs, but 2,146 jobs have gone at Rolls-Royce, Vickers and BREL alone: 1,360 of those losses have occurred since the beginning of the year. More significantly, Crewe has the fastest growing rate of unemployment in the north-west.
We now have no apprentices. Even a short time ago, apprenticeships were available for school leavers wishing to go into one or other of the manufacturing units. Two years ago, between 30 and 90 apprenticeships were available in my constituency; this year there are none, and last year some of those units had the magnificent total of 12.
What does that mean for young people in my area? Last year, Crewe had 381 unemployed 16 to 18-year-olds; this year, it has 578. In Crewe, 108 were on a youth training programme and 112 were in jobs, but 358 had no experience in employment or training. That is what the Conservative Government have done to my constituency. They took a solid, happy working unit and managed to destroy the basis of many lives.
The Government did not simply take from those people their jobs and dignity and their future employment. They took their homes, their children's training and their incomes, which, although already low in comparison with incomes in other parts of the United Kingdom, had at least allowed them to maintain family units that had some cohesion and some hope for the future.
The Government have destroyed some of the best-known and most reliable firms in the world. Rolls-Royce and BREL have made it clear that, even if they can claw their way out of the current deep recession with no assistance from the Government, they will never return to their previous employment rates. They will never be able to offer my constituents the same kind of future. On their behalf, I am deeply angered by the superficial clowning at the Dispatch Box of a Secretary of State who could not even be bothered to come and talk to people who, every minute of the day, risk losing their employment and their future.
The Government have a great deal to answer for. They are uncaring and superficial, and their intensely selfish attitude to those who need to work for a living is a price that we are no longer prepared to pay. The closure of Rolls-Royce, with no warning, said more about the reality of Conservative policies than any other gesture could possibly have said. When it comes to maintaining jobs and quality, and actually manufacturing goods, the Government are not only uninterested; they actively wish that the problem would go away.
Almost without exception, the service jobs available in my constituency pay below the national minimum wage. In fact, 60 per cent. of the jobs in my constituency are advertised at below the national minimum wage. That is
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the future which the Conservative Government hold out for my constituents. I am deeply angered by their lack of care for these most important people. The sooner the Government go, the better it will be for this country.
8.9 pm
Mr. Phillip Oppenheim: A theme that ran throughout the speech of the hon. Member for Dunfermline, East (Mr. Brown) and many Opposition speakers today was the need for an industrial strategy and a hands-on approach to industry. It is worth examining that concept closely. The argument against a hands-on industrial policy is not that the market is perfect and can sort everything out on its own. The market is imperfect. However, it is less imperfect than the choices made by politicians and civil servants who know very little about industry and commerce. Their decisions are often influenced by other than commercial factors.
The market is the aggregate of choices and decisions made by the thousands or even millions of people who are most concerned with industry—the people who run industry and those who buy its products. Almost invariably, history has shown us that their aggregate decisions lead to more efficient industry than the choices imposed on industry by politicians and civil servants.
There are a number of reasons for that. Decisions on which industries to subsidise are often distorted by wishful thinking and misplaced national pride. The most obvious examples can be found in the developing countries. For example, India tried to sponsor an Indian rocket programme and Brazil tried to build up a computer industry. Billions of pounds worth of investment went into those industries, with virtually no results. It represented a drain on the capital and the skilled labour and best minds in those countries. It was a colossal waste of money and resources. India and Brazil did not succeed in building up successful high-tech industries. The only result was that the rest of their industries were drained of some of their best people.
Even advanced European countries have made the same mistake. For decades massive state aid was provided in Britain for the computer, semi-conductor and consumer electronics industries. However, we have failed to produce world-class products. Even where appropriate research and development facilities exist, efficient production and effective marketing have, far too often, been lacking. Intervention in industry tends to be driven by political and social rather than by commercial objectives. During the 1960s regional development policies led the British Government to encourage the siting of new vehicle plants in the north-west of England and Scotland, well away from the traditional centre of car manufacturing in the midlands. The theory might have been admirable, but in practice components and engines had to be transported expensively across the country. Eventually, three of the four plants that had been set up under this initiative proved to be totally uneconomic and had to close.
The British steel industry also suffered greatly from such well-meaning but ultimately disastrous political meddling. When, in the late 1950s, Colvilles, the steel works, wanted to build a large strip mill in north Wales close to deep water ports to facilitate the import of ore and the export of finished products, the Government—it was a Tory Government at the time—insisted, for regional policy reasons, that the plant should be split between two

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sites, one in Wales and the other in Scotland. As we know, the Scottish plant is far away from the main steel markets. It is also well inland, which causes problems over the import of ore and other raw materials.
Subsequently, wishful thinking by politicians led to unattainable targets and overinvestment in the British steel industry. In 1973, the Government decided on a major expansion, aimed at raising output in the, by then, nationalised steel industry from 23 million to 28 million tonnes. Even that was not enough for the trade unions, so the target was increased to 36 million tonnes, which proved to be hopelessly over-optimistic. The market was not there. The net result of two decades of meddling and interference by politicians and civil servants was that Britain was saddled with a massive and expensive over-capacity in steel. British Steel became the world's largest loss maker.
Government interference and intervention in industry have also led to the encouragement of completely unsuitable mergers. The aim of merging companies is the creation of world-class industries. The problem, however, is that such policies pay too little attention to the importance of competition. To forge world-class companies, with good economies of scale, through the selective and toughening process of competition is one thing, but to attempt artificially to create national champions through the choices of bureaucrats and politicians rarely works in practice, especially when, as so often happens, competition is further decreased by trade barriers to protect the national champions.
Another problem is that state grants and subsidies almost invariably do not go to those companies that most need them or that could use them best. They go to industries with the greatest lobbying power. To direct resources to one company or industry invariably takes place at the expense of others. The hon. Member for Warrington, North (Mr. Hoyle), who is no longer here, bemoaned the Government's hands-off approach to Rolls-Royce. He thinks that the Government ought to have ordered British Airways to make sure that it bought airbus aeroplanes and Rolls-Royce engines. That used to happen in the British aerospace industry. The Government told British Airways that it must specify Rolls-Royce engines, and told it to buy a range of planes like the Comet. The result of this interference, of cosseting companies and making them buy British, thereby ensuring that British companies had a guaranteed domestic market, was that they became over-reliant on Government protection and aid. I have many Rolls-Royce workers in my constituency. Whatever the problems that they face, they are in far better shape than they were in the 1960s and 1970s. Since privatisation, I have never met anyone in Rolls-Royce who wanted the company to go back to the bad old days of state ownership.
The hon. Member for Crewe and Nantwich (Mrs. Dunwoody) mentioned British Rail Engineering Ltd. She implied that before BREL was privatised there was a golden age when the sun shone and the birds sang in Britain's industrial heartlands and that BREL was the world's most efficient manufacturing company. For years and years, however, BREL knew that every train that it produced could be sold to British Rail. It knew that British Rail was a guaranteed customer and could go to no one
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else for its trains. The result was that BREL became steadily less and less competitive. As a result, by the end of the 1970s, BREL was exporting virtually nothing.
Mrs. Dunwoody: The hon. Gentleman knows nothing about it.
Mr. Oppenheim: It is the truth.
One of the justifications for Government aid is that industrial research and development should be boosted. One lesson, however, that we should have learnt from the Japanese is that it is not always necessary or desirable to carry out one's own research and development, especially if the economy of the country in question is not at such a stage of development that it can best exploit the fruits of research. To pour Government funds into advanced projects that are out of line with the fundamental production capabilities of the country in question is likely to distort the economy as a whole and to take the best trained scientists and engineers away from other industries.
The result of Government-directed research grants was that Britain manufactured the first jet airliner, the Comet. In the 1950s we also led the world in high-speed computers. We were the first country to commercialise computers. Ferranti built the world's fastest computer in the 1960s. It went on to pioneer the market for customised semi-conductors. Despite Government aid, none of those industries proved to be sustainable. British companies did not have the production and marketing skills to capitalise on their research. The head of the British Patents Office said recently that European industry wastes £20 billion a year on reinventing the wheel because it insists on carrying out huge amounts of in-house research instead of doing what the Japanese have been so successful at doing for the last 30 or 40 years—scouring the world for patents in existing technology, buying that technology and spending their money on improving it.
If we want to become successful again, industrial strategies, Government grants, research grants, state-sponsored research are irrelevancies. If we want a sustainable manufacturing growth and a successful manufacturing industry, we need, above all, a well-educated population. The Government are implementing their education reforms in order to ensure that we have a rigorous, vocationally oriented education policy. That is something which the Labour party opposes.
The other thing that we need is a pool of capital for industry. Labour policies of penalising savers by imposing an investment income surcharge will reduce the pool of capital available for industry and will repeat the problems that we had in the '60s and '70s. All Labour's policies would damage, not help, manufacturing industry, as happened in the 1970s, when manufacturing output ——
Madam Deputy Speaker: Order. The hon. Gentleman must finish now.
Mr. Oppenheim: May I finish my sentence, Madam Deputy Speaker?
Madam Deputy Speaker: No. I am sorry, but I have to implement the Standing Order.
8.20 pm
Mr. Edward O'Hara: Tweleve months ago yesterday I took my seat in the House. Shortly afterwards I made my maiden speech. It was widely

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disseminated. The Hansard covering that day was popular and was snapped up like hot cakes—perhaps because my speech followed the resignation speech of the right hon. and learned Member for Surrey, East (Sir G. Howe). I understood then how the B side of a hit record sells as many copies as the A side.
In my maiden speech I described the economic devastation wrought in my constituency by the Government's first recession of the early 1980s. I referred to a nascent revival of industry and commerce in the area, but expressed concern that those delicate buds, to borrow a phrase that I heard someone use the other day, might shrivel in the frost of another recession. This time last year the dreaded "R" word did not pass ministerial lips, although by then the Prime Minister—then the Chancellor of the Exchequer—acknowledged a period of weak activity which he expected to last until early the next year, that is, until six months ago. There was no shortage of other euphemisms for the recession. I remember the Chancellor talking about a downturn. By November 1990, however, it had been admitted that there was a recession. It was forecast that the country would emerge from it by the middle of next year—that is, this year. And here we are.
I took some cold comfort from the unemployment statistics of the ensuing months. The monthly statistics for Knowsley, South registered statistically insignificant fluctuations at first. That made sense, as there seemed only one way in which they could go from their present poor base. In December 1990, according to the Department of Employment statistics, unemployment was 13·5 per cent., but by other methods of calculation which eliminate all the artificial devices that reduce the statistics, it was 21·1 per cent. At that time the recorded number of people registered as unemployed and in receipt of benefit in Knowsley, South was 5,463 and the number of vacancies 83, so 64 were chasing every vacancy. That interpretation also made sense to me because I was aware of the strenuous efforts of the economic development department of Knowsley borough council which was working hard to attract investment into the area by advertising, conferences, advice, assistance and services to potential inward investors, so that at least job losses would be replaced.
I drew cold comfort, if not delight, from the visible trends as I drove home each weekend through the Wilson road trading estate—yes, it is named after him in Huyton. As I drove through. I saw signs of distinguished companies such as BICC Cables, GPT, BT, and Lucas Aerospace. The first three of those companies are symbolic of a great drag on the potential development of my local economy, as BICC Cables, GPT and BT form a consortium poised to develop a world class network of fibre optic telecommunications in this country, but are being held back by the Government policy of allowing a third class system to be developed using foreign technology.
By Christmas 1990 the Prime Minister was admitting that the recession might prove deeper than we had thought —and so indeed it proved for Knowsley. One saw the steady closure of small shops, small businesses succumbing to high interest rates, and small numbers of job losses. Fifty jobs were lost at News International, 20 at the Golden Eagle in Kirby. Then, in the early summer, there was the shelving of a planned technology park—an
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exciting project, and one of the prides of Knowsley's thrust for economic development. Five hundred potential high quality jobs were lost to the local economy.
Then short-time working began at Fords in Halewood. In the early summer the real job losses followed. In June 1991, at Potterton Myson in Kirby— which lies in Knowsley, North, but it is in the same travel-to-work area —130 jobs were lost in a company with more than a century of production and harmonious relations in the area. In the same month, 100 high technology jobs were lost in Lucas Aerospace on the Wilson road, and 140 jobs at Tolemans, a transporter of cars from factory to dealer. That was a warning, revealing the decline in the sales of cars produced at Fords in Halewood.
This month 500 redundancies have been announced at Halewood, with the prospect of a further 500 by the end of the year, leaving a work force of 3,500 in a factory which employed more than 12,000 car workers in the 1970s just before the Government came to power. Management and workers at Fords Halewood arc pulling their hearts out producing the market leader and meeting productivity targets, but they cannot make people buy cars because they are in competition with an outfit with an even more impressive record of productivity. The outfit is the Conservative Government; the product is recessions.
I have not mentioned other redundancies in peripheral areas, such as the 750 jobs lost at Pilkington, two or three miles up the road in St. Helen's. and the 600 at the GPT factory down Edge lane a couple of miles away in Liverpool. I referred to BT earlier, and our BT outfit is taking our share of the 16,000 job losses in the company.
The result has been an increase in recorded unemployment and a further reduction in the already puny number of vacancies. The statistics are startling. I have already said that in August 1990 unemployment stood at 5,463. In August 1991 it was 6,344—an increase of 16 per cent. One might have thought that the August 1990 figure of 83 vacancies was puny enough. but by 1991 that figure had fallen to 49—a decrease of 41 per cent.
There are a number of morals in this cautionary tale of Knowsley. We see what local initiatives could do to attract investment. Knowsley is a victim of' the lack of a regional policy—a graphic example. Down Wilson road, as I mentioned before, we see Plessey—GPT—BT and BICC, which form a potential British world class fibre optic producer held back by deliberate blind ideological Government policy. Ford shows how in many ways the car industry is a victim of the recession. Companies of all sizes are succumbing to high interest rates and are delaying the renewal of their fleets. Also, individuals saddled with mortgages, being made redundant or scared of being made redundant are not buying cars.
There are no bouquets for the Government from Knowsley, but only Knowsley's crown of thorns: a bouquet of barbed wire culled from the business premises closed down in Knowsley.
8.30 pm
Mr. Christopher Gill: I oppose the motion because I believe that no Administration have more accurately diagnosed the role of the Government than this one. That role is to create an environment in which businesses can prosper. We have created incentives by lowering personal and corporate taxes. There is more to be done, and I hope that our Government will see fit to scrap

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capital gains tax, which acts as a severe disincentive for many entrepreneurs. We have brought about sanity in industrial relations: one has only to look at the contemporary strike record to see that that is true. We have brought about stability and consistency. These days we have only one Budget a year and we can predict that it will be about 20 March.
I am proud of my constituency of Ludlow. One has only to scratch the surface to find a great deal of enterprise, inventiveness and small and medium-sized businesses standing on their own feet. They are neither receiving nor seeking grants. That does not mean that we have not felt the effects of other people receiving grants. For example, grants were given to saw mills in Wales, and that has had an adverse effect upon saw mills in my constituency. Ironically, the saw mills in my constituency are still in business, whereas the saw mills receiving grant aid in Wales have failed. There must be a moral in that.
We have also felt the effects of the enterprise zone in Telford. It is common knowledge that 500 jobs were lost in my constituency as a result of Unigate building a new chicken plant in Scunthorpe with £14 million of Government grant. That resulted in 500 jobs moving from my constituency to somebody else's. It did not increase the number of jobs in the chicken industry.
The success that we have achieved in Ludlow is in no small measure due to the independence of the people, the absence of big union domination and remoteness from the hand of Labour-controlled local authorities. There is a moral to that tale, and I should like to endorse the remarks of my hon. Friend the Member for Pudsey (Sir G. Shaw) who called for a little less interference. He also made a plea for the slowing down of the implementation of legislation, particularly that emanating from the European Community.
I, too, experience complaints about legislation. I understand the ambition of politicians, aided and abetted by Government Departments, to pass legislation and have their names on Acts of Parliament. My ambition is uniquely different. I want to remove legislation from the statute book, because we already have too much. The greatest assistance that the House could render to the business community, particularly to small businesses, would be to resist the temptation to legislate. That requires no effort and, more to the point, it costs absolutely nothing.
Some of the additional and irksome legislation is sometimes resented and regarded as unnecessary by my constituents. It is distractive because it bogs down the man who is good at making, marketing and selling products in doing something that he is not good at. Business men resent that. Also, legislation is expensive to businesses and, taken to extremes, can result in businesses becoming uncompetitive against those in other nations. I am sure that the House is aware of how competitive the world is today and the fact that we need to be keen in the way in which we produce, market and price our products.
Legislation can erode motivation, which is the difference between success and failure. The raw materials and markets for all our factories are the same. The difference is the people. The difference in management and motivation can mean the difference between success and failure. Traditionally, the Labour party has been hostile to
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management. The Government's success is due to the fact that we are not hostile to management and because, over the past 12 years, we have established beyond doubt that managers are now in a position to manage.
I always speak briefly, and I am well inside my allotted time. A former Member of Parliament and a director of the Great Western railway said that things worked best when the Government did least.
8.36 pm
Mr. Martyn Jones (Clywd, South-West): Not wishing to rely solely on my 19 years in manufacturing industry, when I had a proper job, so to speak, I took advantage of the recess to visit as many companies as possible in my constituency. With the exception of one in a specialised product area, they all expressed dissatisfaction with the Government's handling of the economy and their seeming disregard for manufacturing industry.
Nationally, every working day, 3,000 jobs are lost and 200 businesses fail. Manufacturing is in crisis. How can we believe the Chancellor and the Prime Minister when they say that the recession is over? We have heard such statements before. The Prime Minister said:
"This period of weak activity should last until early next year".—[Official Report, 8 November 1990; Vol. 180, c. 121.]
In November 1990, he said:
"The country will start to come out of recession around the middle of next year."
On 25 May 1991, he said:
"Our forecasts point to the welcome resumption of growth in the second half of this year."
We have not seen much growth.
The Chancellor of the Exchequer said:
"Pain there may be, but gain there will also be. By this time next year, the prospects will be distinctly brighter."—[Official Report, 21 March 1990; Vol. 169, c. 1144.]
When speaking about the downturn in December 1990, the Chancellor said:
"I think there are reasons why one could believe that it will be relatively short-lived and relatively shallow."
In April 1991, the Chancellor said:
"I expect the recovery in output to begin … in the second half of this year."
The statistics are horrendous. They give the lie to the statements by the Chancellor and the Prime Minister. Glendale Furniture in Sandycroft lost 70 jobs this year; Dennis Ruabon lost 20 jobs; Eurodish Technology lost 60 jobs; GCA Windows lost 50 jobs; Pilkington at St. Asaph lost 130 jobs; the British Steel Corporation at Shotton lost 238 jobs; Rubery Owen, Rockwell lost only six jobs; CM B Bottles lost 77 jobs. Brother Ruabon lost 80 jobs; Kinder Cars in Corwen lost 10 jobs; Pilkington lost 29 jobs; Kimberly-Clark in Deeside lost 36 jobs; Meridian Ladieswear in Wrexham lost 25 jobs; Engineering Concessionaires lost 62 jobs; Heaps of Johnstown in my constituency lost 105 jobs; OCF lost 25 jobs; Monsanto in Cefn Mawr lost 60 jobs; Domeglade in Wrexham lost 80 jobs; Pilkington Woodfibre lost 33 jobs; and just last week at least 200 jobs were lost at Point of Ayr.
Mr. Jack Thompson: That was an impressive list. It would have been nice if all those companies had been increasing their work force by those numbers instead of reducing it. Is my hon. Friend also aware that, at 2 o'clock this afternoon, just over six hours ago, it was announced that in my constituency, where we have parallel problems, 300 jobs are to be lost at an aluminium smelter? The jobs had to go by Monday of next

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week. The 300 jobs represent half of the work force. There are two pot lines in the smelter, and one of them is closing down, it is claimed temporarily. However, as I understand it, when pot lines are closed down, that is the end of it. It seems that in my constituency, as in my hon. Friend's, redundancies will go on and on.
Mr. Jones: I thank my hon. Friend for that intervention. I am sorry to hear of the job losses in his constituency of Wansbeck. It just goes to show that the problems are nationwide and that nationwide we cannot believe the Chancellor or the Prime Minister when they say that the recession is over.
My manufacturers certainly do not believe that the recession is over, and nor do my constituents, who are suffering redundancies such as I have described. They believe that the redundancies are engendered by the Government's policies or lack of them. All the statistics mask the real human problems created for those involved.
True inflation has fallen, but we are expected to believe that it is just 0·2 per cent. higher than Germany's rate. However, the Government conveniently forget that Germany's rate excludes mortgage interest and local taxes, which they used to tell us about. If those items are stripped out, the rate is 5·7 per cent., compared with Germany's 3·9 per cent.
My constituents do not believe the Chancellor or the Prime Minister. They do not believe that unemployment is a price worth paying for inflation which is still almost 2 per cent. greater than Germany's. To my constituents, the Chancellor's green shoots of recovery are the green mould of decay. They need hope, not empty words. They want investment, proper training and regional aid, and they will get them from a Labour Government.
8.41 pm
Mr. Peter Hain: The Government's policy on manufacturing is a lurid cocktail of incompetence, desperation, waste, lunacy, dogmatism, Micawberism and short-termism. The Government are guilty of incompetence because they are indifferent to the wanton destruction of manufacturing capacity that has left industry reeling as if in a war zone. That is why the Government are viewed with such contempt by industrialists and business men alike.
The Government are guilty of desperation because they make constant predictions that recovery is just around the corner. In the summer the Chancellor spoke with glazed eyes on television about "vague stirrings of recovery". That was quickly corrected by his press officer to the more grammatical "faint stirrings". At the IMF meeting in Bangkok at the weekend he hoped valiantly for
"growth at a moderate pace".
He did not specify whether this growth would be vaguely moderate, faintly moderate or just plain mediocre. But his desperation puts a favourable gloss on a critical economic situation. It also took the form of a promise to cut income tax and inheritance tax. That was a promise of cynical irresponsibility, given the parlous state of the British economy and our social fabric. The Chancellor may offer bribes, but he cannot hide from the responsible citizens at the next general election.
The Government are guilty of waste because they continue to waste our resources with all the abandon of a drunken sailor. Some £93 billion of North sea oil revenues have disappeared as if they had burnt away in the oilfields
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of Kuwait. Some £76 billion has been wasted on unemployment benefits which could have been invested in jobs. The Government have wasted £10 billion in tax cuts for the rich. The money was squandered in a yuppie consumption bonanza. The Government wasted £10 billion to ease the pain of the punitive poll tax.
The Government are guilty of lunacy because their obsession with leaving everything to the invisible hand of the market is destroying the balance of payments. For example, in south Wales production has been cut to ribbons. Pits have been closed as if there was no tomorrow. The Welsh valleys contain some of the highest quality anthracite in the world, yet as pits close the imports pour in to till the gap. The latest statistics show that last year imports of anthracite shot up by a staggering 83·2 per cent. In the period from January to July of 1990 anthracite imports were 380,900 tonnes. In January to July of this year, the total had almost doubled to 697,900 tonnes. One day that lunacy will come back to haunt Britain as our future is placed in hock to just about everywhere else in the world from Colombia to China.
The Government are guilty of dogma because their kindergarten economics spurns about £500 million in soft loans and about £100 million in grants from the European Commuity and RECHAR programme. That money would be attracted to areas which are entitled to it, such as Neath, which have suffered a contraction of the coal industry and mining. Unlike Germany, Spain, Belgium and France, the Treasury is robbing local coal communities of those European millions simply to satisfy their doctrinaire obsessions.
The Government are guilty of Micawberism because they have no industrial strategy whatever. They just hope, like Mr. Micawber, that something will turn up. Look at some of our major strategic manufacturers such as British Aerospace, Rolls-Royce and Jaguar. They were all privatised and then thrown to the wolves. British Aerospace is our principal defence contractor. It is in crisis because the Government and the DTI would not involve it in any pre-planning of defence cuts. There was no joint strategy for converting the skills and capital that that company possesses to manufacture high-technology, high-quality products for civilian needs.
Rolls-Royce faces a crisis because another privatised industry, British Airways, decided, with apparent Government connivance, to buy American engines. Other countries look at us with total amazement. They cannot understand why our national carrier failed to award such a crucial order to Britain's flagship aero engine industry. So other world airlines naturally turn elsewhere.
The Government are guilty of short-termism because they cannot see beyond the next consumer bribe or the next tax cut. They have elevated short-termism into a science. They are always striving to boost consumption, but they never resource investment. Labour's alternative is a new partnership of Government-sponsored investment in training, research and development and modernisation of industries, as almost every one of our more successful competitors abroad does. We, alone, do not.
In Wales that means that we shall build on the success of the Welsh development agency and encourage it to extend its work in regional industrial development with a new remit to work with banks and venture capital firms in a new partnership to stimulate Welsh enterprise. We shall also create a new Welsh export service that will be available to help hundreds of local firms. We shall bridge

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Wales's technology gap with a new Welsh technology trust based on universities, colleges, local authorities, research institutes and industries. Together with a Welsh innovation centre, the trust will boost new technology investment. In that way, and together with industry, Labour will help to create a new industrial revolution in Wales and across Britain to build around the skills and abilities of the people of Wales. Come the next general election the people will reject the Government's incompetent economic record and support Labour's investment for the future.
8.47 pm
Mr. Lewis Stevens: The motion is the usual pessimism from the Opposition on everything that happens in the British industrial scene. It would be a novelty if, instead of criticising the Government and industries time and again, as the Opposition Front-Bench spokesman started off by doing, the Opposition stopped and looked and said how well some of our companies have done and recognised the transformation of some of our industries. That transformation is not due to the Government's efforts, although the background that the Government have set has done a considerable amount to assist. Companies transformed themselves from the 1970s and through the 1980s into companies which are unrecognisable and successful.
I spent several years in the machine tool industry. That industry was virtually decimated in the 1970s. To all intents and purposes, the British machine tool industry seemed to have disappeared. Today it is seventh in the world. I went to visit the machine tool company which I had visited perhaps 20 years ago. At that time it was making sophisticated machinery for the time. I went to see it this year and could not recognise it. It had modern plants and machinery and was building highly sophisticated computer machines. But there was nowhere near the same number of people on the shop floor.
We hear little from the Opposition about productivity, yet productivity is one of the keys to improving our manufacturing base in engineering and other areas. Often in the 1960s and 1970s attempts by companies to improve productivity, encouraged by Conservative Governments, were resisted by the Labour party and, particularly, by many trade unions. Today, thank goodness, many trade unions and trade unionists take a different approach towards the importance of productivity.
We have seen dramatic rises in our productivity. I have not heard Opposition Members congratulate companies on how well they have done, although the overall improvement in the productivity of our manufacturing industries has been significant and substantial. Surely we should be talking up British industry. Is it not amazing that we have attracted a huge amount of inward investment from abroad—40 per cent. of all that has come into the European Community?
Japanese and American companies have thought that ours was the European country where their businesses would succeed. If they had listened to the Opposition, this is the last place that they would have thought it worth coming to. They would have heard that our industries were not up to it and could not compete. That is the message that comes time and again from the Opposition. In reality,
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we have a work force that can be trained, introduced to new jobs, take on ideas and methods from abroad and prove to be successful for this country, themselves and the companies that come here.
Training has been mentioned and my right hon. and learned Friend the Secretary of State for Employment is present. The hon. Member for Crewe and Nantwich (Mrs. Dunwoody) said how terrible it was that all apprenticeships had gone. It is true that there has been a vast change and it is a pity if fewer people are trained in areas of need, but we have seen a revolution in training. The types of training that we had undertaken for years were becoming outdated. Some of them were excellent, but a lot were not.
We must recognise, as the Government have done in the past 12 years, that we need different types of training. Yet every time we have introduced new training measures the Opposition have rejected them and those measures have had support only from Conservative Benches. Even some trade unions, which run some excellent training schemes themselves, have got away from necessarily wanting apprenticeships for every trade and skill. They want short, successful, technical courses to introduce skills to and improve the skills of employees in industry. Those are the changes that have come about.
There are opportunities to train, whether on the shop floor in ways similar to those of the old days or in units of training which suit companies and individuals. Open learning has developed over the past 12 years and has been encouraged by the Government. It has a tremendous contribution to make to the employed, the unemployed and companies, in terms of its speed and convenience. Those are steps to improve our manufacturing base, our productivity and competitiveness.
Britain's manufacturing industry has problems indeed, but, my goodness, it is moving forwards, not backwards. That should resound from both sides of the House. Many of our businesses and our engineering and manufacturing companies are looking forwards, not backwards, and some are meeting with considerable success.
The engineering industry is peculiar: its characteristics are different from those of much of manufacturing. The machine tool industry is almost inevitably the first to feel the downward movement of a trade cycle and one of the last to feel the benefits as we come out of a recession in that cycle. Will my right hon. Friend the Secretary of State for Trade and Industry and my right hon. and learned Friend the Secretary of State for Employment consider what possible financial help and encouragement can be given, particularly to some small engineering companies, to develop faster? In particular, will they consider whether, as we move out of the recession, the financial sector and the banks can help and encourage such companies to meet the up-turns faster? I am sure that that would be gratefully appreciated. It is difficult when setting off high capital expenditure in manufacturing to adopt the same approach as in other parts of the commercial world, such as retail outlets. The cycle is different. I hope that both Secretaries of State will bear in mind the pleas made to them by manufacturing, particularly engineering.
The attitude often taken towards our engineering sector suggests that this country is way behind its competitors. That is not so. Higher education is producing high-quality engineers and scientists in proportionately greater quantity than many of our competitors. We are moving in the right direction. Without this Government's measures, that would not have been achieved. We have moved

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forward step by step over the past 12 years. Highly respected, highly qualified people are coming forward and will take our engineering and manufacturing industries forward.
Those industries have had a lot to contend with. Recession has hit them hard, but the future is not bleak. Industry cannot be bought as the Labour party suggests; it can succeed with Government encouragement. We have seen in the past that industry cannot be bought. The Labour Government could buy neither industrial peace nor the survival of industries that were no longer viable. That is not the right way forward. The right way is to encourage industry. It is certainly to praise industry for its work, not to criticise it time and again.
8.56 pm
Mr. Ted Leadbitter: Several hours ago I wandered into the Chamber thinking that I would have a rather restful, pleasant evening. I was looking forward to it, because last evening I celebrated completing 27 years to the day in the House of Commons. I looked around me and I thought, "Well, I have a lot of friends here. The hon. Member for Hartlepool is in an amenable mood. He will be rather placid and listen to an important, interesting debate on the state of the economy."
Somehow or other, it did not take me too long to discover that I had heard it all before. I did not hear about a single new thing, but that does not mean that the whole debate has been mundane or monotonous. Not at all—some arguments are eternally refreshing, because they represent in this remarkable place the fulsomeness of the challenge and the response.
I noticed, for example, that the hon. Member for Ludlow (Mr. Gill), in his nicely presented and brief speech, ended by quoting from a former Member of the House of Commons who said that industry does best when Governments do least. The hon. Member for Amber Valley (Mr. Oppenheim), whose record in the House has been reasonably consistent, preached what has generally been presented as Tory policy—an arm's-length policy of non-intervention in industry. Those two speeches represent the terms of the Government amendment which seeks to leave out from the word "House" in our motion and to add:
"congratulates Her Majesty's Government on its success in bringing down inflation … and in creating almost three million jobs".
Without any prevarication, the Government make it clear that they take the honours for bringing down inflation and for creating 3 million jobs. However, we now have 3 million people out of work—some of us believe that that figure is even greater. Some mental arithmetic reveals that, if we take that figure from the 3 million jobs that have been created, the final answer is nil jobs.
I have a simple proposition for the Government. Why is it that, when they take credit for bringing down inflation and for creating jobs —there is no word about industry and commerce doing it for themselves—without a blush they take no blame for creating the inflation and the unemployment in the first place? They blame everyone else for inflation going up and for the increase in unemployment, but they are happy to take the credit for bringing inflation down.
In this instance, the Government do not have a scapegoat. They cannot turn to the Labour party and say that way back in 1979 we were the cause of the problems.
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Such a claim is about as relevant as trying to blame primitive man for the Government's present condition. The Government are caught in the constipation that they have created for themselves. I note that the Secretary of State for Employment smiles through it all.
I have some other propositions for the Government. Do they honestly believe that they have created an economy that is as successful as their amendment suggests? I would bet a pound to a penny—a lot of people have had their pounds taken off them and only have pennies left —that, if things were as good as the amendment suggests, the Government would have had the general election in November. Gosh almighty, the Government would have had that election and the hon. Member for Hartlepool, instead of walking into the Chamber for a restful night, would have been sitting at home retired.
There are the Government, bless them, clinging on. They have nearly lost their grip. They hope that something somewhere will retrieve the situation and will get the headlines so as to cover up the awful mess that they have created. Do they honestly believe that the record number of bankruptcies in this country is something that industry will forget about? Do they honestly believe that all those people who have had their houses repossessed will forget all about that when it comes to the contrived date of the next general election?
When the unemployed go down to the supermarkets or the cheapest places where they can buy food—many are forced into that these days—will they say, "I understand about this inflation business that I have been hearing about on the telly"? Inflation may be coming down, but in the shops the prices are going up. Will those people be amused for one moment when the local authorities, having been rate-capped and all the rest of it, put up their rents by between £3 and £4 a week?
The Government turn round to people and say, "Don't you be greedy now, fellas. Don't be asking for pay increases of any more than 4·5 per cent." Do they honestly believe that the unemployed will forgive them for the torture that they have gone through and the fact that their expectations have been smashed to the ground? Do they believe that the students will forget that during this past holiday they could not get a button to live on? Those young people form the most generous young generation that I have known in all my adult life. They are creative young people who have been pushed by the Government's legislative requirements to go from one town to the next looking for jobs.
Do the Government think that people in the poverty trap who must pay the poll tax and do not know how to get the money together will forgive them? I remember in particular one man who showed me his room. It measured some 12 ft by 5 ft, and he had to have everything in it, but he was paying more poll tax than me. What a crazy world the Conservative party has brought about. It has been like going back to the dark ages.
We do not have a listening Government. There have been some fine people in the Conservative party, but they have been caught up in a dogma that has not been in tune with the mood of the times. For example, after all the years following the war, I should have thought that the manner in which the Government closed down coal mines would have been avoided. If only they had done what we preached. If a mine must close, we have sufficient knowledge and experience of the geology, the market and the technology to consider the decision, but allow a period

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of some two years in which to regenerate industries in the area. Instead, the Government decide to close a mine and then start to regenerate the area. Those are simple little things that need to be observed.
Only one reference to transport has been made today. Transport is a vital part—indeed it is the bloodstream—of the economy, where Britain does everything wrong. We do not emulate, as we preach from time to time, what is done in Europe. In France and Germany, for example, electronic signalling, stations, track and the general infrastructure are all considered to be part of the social capital. They do not enter the question of finance as they do in Britain. As a result, those countries have a better system and can match up to their freight carriage requirements. They spend several billion pounds a year on developing their railways, whereas in this country £700 million-worth of public service obligation grant will be reduced to some £300 million. That is a pathetic record.
This debate should continue for at least another two or three days, because there is so much to be said and so many challenges to be made. The Government preach a performance that is in the minds of the Walter Mittys of politics. The Conservative party's record is rotten, rotten, rotten.
9.9 pm
Mr. Tony Blair: The purpose of this debate is to hold the Government to account for the long-term damage that they have done to Britain's industrial base and for the short-term effects of a recession which has seen almost 1 million more people join the dole queue since it began, and to say that a Government with such a shameful record over almost 13 long years no longer have any right to claim the trust of the British people.
Over the past year we have lost almost 300,000 jobs in manufacturing, 150,000 jobs in the service industries, including 60,000 jobs in banking, and 70,000 jobs in the retail industry. In the construction industry alone, another 100,000 jobs have been lost.
Until today, we have had this year the fastest rising unemployment not only in Europe but in the whole of the western world. That has occurred not just in every sector of industry, but in every region in Britain. In the south, unemployment has risen by 129 per cent; in the south-west it has risen by 91 per cent., in East Anglia it has risen by 79 per cent., in London it has risen by 78 per cent. and in the midlands it has risen by more than 60 per cent. As my hon. Friends —particularly those with constituencies in the north, Scotland and Wales—have said, the light of recovery from the first Tory recession has barely flickered long enough to be perceptible before being snuffed out by the weight of the second Tory recession.
In every part of Britain, in every type of occupation at the workplace, businesses have collapsed, redundancies have been declared and human lives have been blighted. What did the Conservative party tell us at its conference last week? In the light of that record, the Government ask us to trust them. Let us tell them that the men and women who are the victims of the recession do not trust them, but feel a deep and genuine sense of betrayal at what has happened to them. It is not true, as the Government also tell us, that every other country has suffered equally. In many countries—for example, Germany —unemployment
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has fallen this year. Unemployment has fallen in the Netherlands and even in Spain. Unemployment in Japan remains at 2 per cent., in Portugal it remains at 4 per cent. and in the United States, where it has risen, it is now falling.
In the past year, unemployment in Britain has risen by a greater extent than in the rest of the European Community put together. According to the International Monetary Fund, Britain has not merely experienced the sharpest rise in unemployment, but suffered the largest fall in employment and next year, 1992, we will be the only country of the major countries of the Organisation for Economic Co-operation and Development to suffer a fall in employment.
What has been the attitude of the Secretary of State for Employment? In a debate in the House barely a year ago he said that the scale of what the Government had achieved was far too often taken for granted and that their record on jobs was unequalled in Europe and the envy of much of the world. He said that with impeccable timing, as the next month we became the only country in the EEC to have rising unemployment. As unemployment began to rise, so did the excuses, and the more unemployment rose, the more tortuous and facile the excuses became.
Last May, the Secretary of State told us not to worry because unemployment was rising only in the south. In July, when unemployment began to rise everywhere, he told us that it was concentrated among men, not women. In November, when unemployment stopped that unlikely piece of positive discrimination, he said that the numbers of long-term unemployed were still falling. When, in February, the numbers of long-term unemployed also rose, he opined that it was only the underlying rate of unemployment that mattered, not the increases. When, in May, unemployment fell by less than in April he claimed that it was now an established, downward monthly trend. When, in July, it rose by more than in May or June, he said that he had really meant a three-monthly trend, not a monthly one.
Throughout that period there were plenty of excuses, but not one word of apology. Not one initiative was introduced and there was not one word of admission that unemployment was now rising north and south, among men and women, in services and manufacturing industry and in the long term and short term. If the policies of the Government are not changed, unemployment will carry on rising not just to the end of this year but into 1992.
Mr. Howard: Is the hon. Gentleman's definition of an initiative one that is not boycotted by the TUC? Unless he is using that definition, what he has just suggested about initiatives is a travesty of the truth.
Mr. Blair: We shall come to the employment action scheme, but first I must point out that for 18 months unemployment rose by more than 800,000, yet the Secretary of State did not lift a finger to help the unemployed during that time. More recently he has excelled himself and thrown all caution to the wind. Clearly, he belongs to the school of political thought that believes that the less credible someone's position, the more extravagant the claims in support of it.
Last week on the "Today" programme the right hon. and learned Gentleman was asked by Mr. Brian Redhead

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about the 1,000 jobs to be lost at the Ford motor company. Did he accept that as a problem, a result of the difficulties caused in the economy? He said:
"Well, I think people understand, Brian, that in a dynamic economy you have to have change."
So: record job losses, rising bankruptcies, soaring business failures are all evidence of a dynamic economy. One almost felt as if the right hon. and learned Gentleman thought it unreasonable of the Ford work force not to be celebrating.
There is no bad news, therefore, that is not good news; no disaster that is not, on reflection, a triumph; no evidence of recession that is not, after all, a sign of recovery. And this is the party that asks us to trust it.
No doubt the 400 jobs lost yesterday at the Norwich Union are evidence of a dynamic economy; likewise the closure of Rolls-Royce in Crewe, the 400 jobs lost at Asda, the 300 jobs at Hawker Siddley, the 740 jobs lost the week before at Ferguson television, the 1,000 lost at Eagle Star and the 300 job losses announced in this debate by a Labour Member. Are these really evidence of a dynamic economy? When, after the next election, the Secretary of State loses his job perhaps he will call that the result of a dynamic economy—it is certainly the only guarantee that we shall get one.
Sir Julian Ridsdale: Will the hon. Gentleman be generous enough to admit that this month Nissan is creating 1,000 new jobs in the north-east?
Mr. Blair: Of course we welcome new jobs, but if I will welcome them, will the hon. Gentleman in turn condemn the Government for allowing unemployment to rise by 750,000?
Trust us, says the Secretary of State. What does he offer to back up this exhortation? He offers us employment action, a scheme which is to reach its peak in March next year and which is then to be run down within a year. It has places for at most 26,000—representing fewer than half those involved in one month's increase in unemployment. It represents fewer than 50 places per constituency at a time when most constituencies will have lost more than 2,000 or 3,000 jobs in the course of the recession.
Mr. Riddick: Having just welcomed the news of the new jobs created by Nissan, will the hon. Gentleman take this opportunity to condemn the TUC for describing Japanese inward investment as "alien"?
Mr. Blair: Not only does the Labour party welcome inward investment, but if the hon. Gentleman comes to my constituency he will see that the single biggest investment there this year will be placed by Fujitsu at Newton Aycliffe —an investment welcomed by Labour local authorities and the trade union movement.
Employment action does not pay the rate for the job; it pays benefit plus £10. It was launched during the Tory party conference and the only well-funded part of the scheme was its advertising campaign, in the form of posters that say, "I can work, I can work, I will work, I will work"—as if the problem of the unemployed were the unemployed themselves, not the recession created by Ministers. It is not the will to work that our unemployed lack, it is the opportunity to work, and that is what the Government should give them.
In the past year almost I million people have gone on the dole, vacancies at job centres have halved, and the increase in those claiming benefit is running at more than
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2,000 a day. The Government scheme is woefully inadequate and utterly cynical in the gap between what it can achieve and what is claimed for it, and it shows beyond any doubt that the Government who are responsible for this recession have turned their back on its casualties.
Ministers say, "Trust us." What stands out above all else is not just the depth of the recession, which the Government promised would never happen, but the fact that they have learnt nothing from the recession. Far from disowning the policies that brought the recession, the Chancellor makes it clear that he will repeat them at the earliest opportunity. Over the past few years our central case has been that the mistakes that led to this recession were not merely temporary errors of judgment by an over-confident Chancellor in 1988 but are the mistakes made over 13 years of Conservative government for which all Ministers bear responsibility. Over that time Britain had the bonus over all its competitors of North sea oil, and squandered it. As other countries invested we merely consumed, and the long-term interests of industry were sacrificed to the short-term politics of an unsustainable boom.
In those 13 years manufacturing investment per person grew three times as fast in the Netherlands, twice as fast in Italy and France, and half as fast again in Germany and Japan. It even grew faster in Korea and Singapore than in Britain. Over those 13 years, manufacturing investment in the United Kingdom has declined while it has risen in every other EC country. It rose by 52 per cent. in France, by 48 per cent. in Germany and by 73 per cent. in Italy. Manufacturing output in Britain has risen by 6 per cent. in those 13 years, but it has risen by 62 per cent. in Japan, by 32 per cent. in the United States, and by 26 per cent. in Germany, and is higher in every other OECD country except Greece.
Is not the lesson of those 13 years clear? Unless we change course now and recognise the neglect of our industrial base and take steps to remedy it, and unless, above all, we invest in the skills and talent of our people, we will never achieve the stable growth or enjoy the long-term steady progress that is the hallmark of any successful modern economy. That is our challenge to the Government.
The true dividing line, the real test of competent economic management, is between the Labour party, which has policies for industry and believes in it, and the party which has spent 13 years undermining it. In this, the second Tory recession, we are not seeing a cleaning out of old, inefficient industry or the removal of old, outdated skills. We are losing capacity that we cannot afford to lose and skills that we desperately need to keep. What grounds do the Government have for asking us to trust them in future when they have failed so dismally in the past?
"Trust us with training," they say. Over the past three or four years the training budget has gone down by 23 per cent.—a 1·5 billion cut. I invite the Government to name another country in the Community that would cut its investment in training a year before the single market takes effect. The Government say, "Trust us with industry" which now receives barely one third of the support that it received 10 years ago.
Mr. Howard: Before the hon. Gentleman leaves the subject of training I hope that he will give a specific answer to a specific question. When did the hon. Gentleman make representations to the Transport and General Workers

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Union, which sponsors him, to reverse its boycott of youth training, employment training and the training and enterprise councils?
Mr. Blair: If the Secretary of State spent half the time that he uses to make pathetic attacks on the trade unions in helping training, Britain would be much better off. The Labour party has made its position clear. My colleagues and I have said throughout the past two years that we would not be doing what the right hon. and learned Gentleman is doing with the youth training programme, which is cutting it.
The right hon. and learned Gentleman says, "Trust us, the Government, with unemployment." Surely the most revealing attitude towards unemployment was set out in the letter from the Chief Secretary to the Treasury to the Secretary of State about his Department's budget. It tells us how much we can trust the Government. Let us leave aside the massive cuts that are proposed and consider what the letter tells us about the Government's attitude to training. The Chief Secretary said:
"I see no automatic link between higher unemployment and the need for further Government provision for training."
Is that what we were told by Ministers when the Government launched employment training? The letter continues:
"Employment training offers particularly poor value for money. Nor do I believe that even the recession can account for the failure rate of over 70 per cent. which you project for next year."
Is that right? Is that projected? Has the right hon. and learned Gentleman fought against the terms of the letter? Will he tell us? Is employment training to be starved again of the resources that are required? Is there to be cut upon cut? Should we trust the Government with employment training when they have introduced cuts?
Does the right hon. and learned Gentleman agree with what the Chief Secretary writes about the Government's programme and the higher technology national training initiative, the only initiative dealing with skill shortages and higher technology that the Government have? What is suggested? I talk of an initiative that has apparently helped about 7,000 people over the past couple of years. That is the number who have gained from it. The Chief Secretary says that it should be scrapped. Is it to be scrapped? Are we to be told whether the initiative is to be sacrificed as a result of the Government's short-term approach?
Career development loans have benefited 16,000 people. The Secretary of State says, "Trust us." According to the Chief Secretary's letter, these loans, too, are to be scrapped.
The business enterprise training programme is designed to help employers with their training courses. The Government say that that, too, should be scrapped. Is not that the clearest warning to the unemployed and to industry that whatever the Government say in public, in private their commitment to training is as skin deep as their commitment to industry?
The Government say, "Trust the people." I say that the real issue is why the people should trust a Government with such a record.
Mr. Allen McKay: Has my hon. Friend considered the fate of Astra Services and the training centres? Has he considered what has been
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done to a loyal work force, many of whose members have provided long service? My hon. Friend will be aware that £11·7 million was provided to retain the civil service rates of redundancies and retirement, which were then blatantly disregarded. The result is that some of my constituents are losing about £27,000 each. Will the £11·7 million of taxpayers' money be paid back or will it go into the directors' pockets?
Mr. Blair: My hon. Friend is prescient. I was about to refer to skill centres.
As I have said, the Government ask us to trust them. They do so on the basis of their record. Let us consider what has happened to the 60 skill centres that Britain used to have. It was only a year ago that the 60 centres—centres of excellence for training—were privatised. We, the Opposition, opposed that privatisation and warned against it. Forty-seven of those 60 went to the company called Astra Services. It is a new company. At the time, the Secretary of State said:
"These proposals will be seen to be giving them tremendous opportunity for the future, enabling them to build on the excellence of the centres and ensuring that they can provide training of even higher quality."
I have a copy of a letter that Astra Services sent to its staff. I believe that it was to this that my hon. Friend the Member for Barnsley, West and Penistone (Mr. McKay) was referring. The company is announcing that it is having to scrap the voluntary redundancy scheme for its employees and that it may have to make compulsory redundancies among its own trainers. The reason that is given for this is cuts in Government funding and the recession, which makes it more difficult for the company to exist as a centre of training excellence.
Is that right? Are trainers really to be made redundant at a time of critical provision for Britain? Is the company to be allowed to do that? What explanation does the Secretary of State have, bearing in mind the assurances that we were given that the centres would improve and the reality of what is now taking place?
Worse, four of those skill centres were sold to a consortium headed by a Mr. Lakin. Those four skill centres were dotted around the country, again providing training that we desperately need, but I am told tonight that they are now in liquidation. Is that right? If so, why were we told at the time of privatisation that they had a great new future when we now see them laying off trainers and some even going into receivership and liquidation? "Trust us," the Government say.
The information technology centres, giving information technology training to the unemployed, provide a vital service. Many of my right hon. and hon. Friends will have such centres in their constituency. A year ago the Opposition warned that cuts would put those centres at risk. Today we have been told that within the past few months 40 of those centres have not merely faced cuts but have closed altogether, and at many others there are now substantial queues for the young and unemployed.
The list is endless. Cobalt UK in York has closed with 13 staff made redundant, along with Jobstream in Nottingham and South Durham Enterprise. ApexTrust has closed 17 of its centres. The National Council for Voluntary Organisations reports that 2,000 trainers have been made redundant in the past year. Yet the Government say that we should trust them with the nation's training.

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Because unemployment is rising, matters will get worse. I challenge the Secretary of State to tell us tonight whether it is true that many young and unemployed people are not being given the guaranteed training places which the Government promised but are being shoved from the dole queue to the benefit queue to the training queue; being forced to queue up for the training that they were promised.
Mr. Ian Bruce: Will the hon. Gentleman give way?
Mr. Blair: No, I am sorry, but I must get on.
Today the Secretary of State will be sent a letter from the National Joint Council for the Building Industry, comprising both employers and unions, telling him of a 45 per cent. cut in new apprentices for the building industry —2,000 fewer to be given training now and due to funding cuts the construction industry training board will have some 6,000 fewer trainees.
We see the collapse in those training programmes, the closure of training centres and the cuts in Government provision. Every responsibility has been shirked, every promise broken, every trust betrayed. That is the Government's record for which we hold them to account. Why should we trust them to improve the nation's training when they have cut its spending and despise even their own initiatives? Why should we trust them to bring down unemployment when the Ministers who created it are entirely without policies to combat it? Why should we trust them to revitalise and regenerate Britain's industrial base when for 13 years they have undermined it and even questioned its importance?
Trust in the first year of a Government may be built on promises, but after 13 years it must be built on the Government's record. Why should the public buy the Government's promises when it already knows the Government's record? They do not deserve our trust and they know it. If the Government were confident of the nation's trust this would not be the first Opposition day of a new parliamentary term but the opening day of a general election campaign to decide the government of Britain. The only reason that it is not is the same reason that there was no election in March, June or October. It is because the Government dare not call an election, precisely because they know that they do not have the trust of the British people, so they sit on, clinging with no purpose, no direction, no motivation except fear of action, desperately looking for something to give them the impression that they still exist as a Government.
The Government's business has been derailed by indecision. They are led by a Cabinet stuck in a political waiting room and presided over by a Prime Minister with neither a timetable nor a destination. They are Her Majesty's Opposition in waiting. Whenever they have the courage to call an election it is the Opposition who will have the people's trust to win it.
9.34 pm
The Secretary of State for Employment (Mr. Michael Howard): Perhaps the least edifying part of the debate has been the way in which the hon. Members for Dunfermline, East (Mr. Brown) and for Sedgefield (Mr. Blair) vied with each other to spread bad news and to run our country down. The way to get ahead in the Labour party is to run our country down, to find some unflattering comparisons
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that put British industry, British products, and British workers in an unfavourable light, and to gloat over them with gruesome glee.
Both hon. Gentlemen made much of what has happened to the economy in the past year. They may care to recall that, on average, each day since the Government first took office in 1979, 220 jobs have been created, 440 new businesses have been founded, and new homes purchased by 880 families.
I will deal straight away with the facts about British manufacturing industry—the facts about output, productivity, profitability, and exports, which Labour always chooses to ignore. It is typical of the Opposition to confine their arguments to those statistics which relate exclusively to the recent recession. We all know that there has been a recession in Britain, and we all know that recessions are painful, so Opposition Members have hardly added to the sum total of human knowledge with their litany of woe.
It is important to look at the whole picture over the period since this Government came to office to put the situation in context. If one looks at that picture, one finds that the output of our manufacturing industries has increased under this Government. It fell under Labour. The profitability of our manufacturing industries increased seven times faster in the 10 years to 1989 —the latest period for which figures are available—than it did under Labour.
In the 1960s and 1970s, Britain was bottom of the international league in the growth of manufacturing productivity, but from 1980 to 1990 this country's manufacturing productivity grew on average by 4·7 per cent. per year—the fastest growth rate of all the major industrialised countries. To put it another way, under Labour manufacturing productivity grew by only 7 per cent., whereas under a Conservative Government it has grown by nearly 50 per cent. —at an annual growth rate two and a half times greater than that achieved under Labour. It is already clear that manufacturing productivity has been increasing again, even during the recession. That is an excellent sign for the future.
Manufacturing exports did not increase at all under Labour. Under this Government, they have increased since 1979 by more than half, at an average rate of 3·5 per cent. a year. According to the latest United Nations figures, since 1983 Britain's exports of manufactured goods grew faster than those of all our competitors in the major exporting countries. If Labour Members really cared about what is happening in this country, they would listen to these figures, take them seriously, and take them on board instead of just looking for the bad news to try to run our country down.
Mr. Ian Bruce: Did my right hon. and learned Friend note, as I did, how much was said by the hon. Member for Sedgefield (Mr. Blair) in the course of 34 minutes about Labour's policies —namely, nothing? Has my right hon. and learned Friend received any representations from Labour Members to do away with wages councils? Negotiations between employers and trade unions produced a figure of £2·75 per hour for 18-year-olds, but Labour Members, who say that they believe in wages councils, are proposing a figure of £3·40 at today's values, increasing to £4·20 as soon as possible.
Mr. Howard: My hon. Friend the Member for South Dorset (Mr. Bruce) is right to point to the paucity of

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policies from the hon. Member for Sedgefield in particular, but we are used to that. We gave up hope long ago of Opposition Members advocating imaginative policies. The hon. Member for Sedgefield said that we had no policies and then ran through a long list of the initiatives that we have introduced and bemoaned the fact that he thinks that they will be cut. I shall not be deflected from the good news about the Government's record, and about what has been happening to manufacturing industry.
Perhaps Opposition Members would care to reflect on manufacturing exports. Perhaps they think that those are of no account and they are not interested in what has been happening to them. The average growth in the value of Britain's manufacturing exports between 1983 and 1990 was 13·9 per cent. —higher than the 11·5 per cent. of the United States, higher than the 10 per cent. of Japan, and higher than those of Germany, France and Italy. We have halted decades of decline in Britain's share of the world trade in manufactures. Last year it rose for the second year running.
It is worth noting—Conservative Members will pay attention to the fact—that that is a truly remarkable achievement. It is not only the reversal of a trend that has been running throughout this century. It comes at a time when the competition from other countries involved in exporting manufactured goods is steadily increasing—in Europe, in Latin America, in Asia. Yet now, despite the ever-increasing presence in manufacturing exports of Taiwan, South Korea and others, and on top of that of Japan, Germany, and the United States, we are increasing Britain's share of that trade. And in the three months to August we recorded a surplus in manufacturing trade for the first time in nine years. That in anyone's terms is a record of success.
Mr. Robin Corbett: If that is the case, can the Secretary of State explain why the Jaguar body plant in my constituency is working only three weeks out of every four and why, half a mile up the road, a GKN subsidiary, Hardy Spicer, which makes front-wheel drives, is on similar short-time working? Is that a success?
Mr. Howard: Has it escaped the notice of the hon. Member for Birmingham, Erdington (Mr. Corbett) that the United States, which is the most important market for Jaguar, has been undergoing its own recession? Has he not paid any attention to what has been happening to the United States? Is he not aware of what has been happening in the countries which have been Jaguar's markets? The same applies to many other countries. The hon. Gentleman's question disqualifies him, by the depth of his ignorance, from playing a serious role in these debates.
Mr. Tony Worthington: Will the hon. Gentleman give way?
Mr. Howard: No, I want to press on.
Britain's manufacturers themselves are much more confident about their performance and their prospects. A recent survey by Investors in Industry showed that no fewer than 83 per cent. of respondents thought that British manufacturers were better able to cope with the recent recession than that of ten years ago.
The CBI has spoken of "the transformation" of British manufacturing industry in the 1980s. It is the common
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consensus of those who actually work in Britain's manufacturing industries that they are incomparably better placed to face the 1990s than they were at the beginning of the 1980s. The only doubting Thomases are those like Opposition Front-Bench Members who by background and inclination are more at home on the picket line than on the production line.
With regard to manufacturing employment, it is true —I wish it were otherwise—that employment in manufacturing is falling, but that is hardly a new phenomenon. It has been in decline for a quarter of a century, since 1966. And it is still the case that on the latest available figures there are more people employed in manufacturing industry in Britain than in either France or Italy.
The fact remains that there are still substantially more jobs in the British economy overall than there were in 1979 —and more than 2·5 million more than there were as recently as eight years ago. Furthermore, there are clear signs of new manufacturing jobs being created during the next few years. Many of those jobs will be home grown. Many will be the fruits of foreign investment. In the 1990s we shall continue to build on the record American and Japanese investment in manufacturing in this country which we secured in the 1980s.
Earlier, my right hon. Friend the Secretary of State for Trade and Industry referred to a Nomura Research Institute survey which showed that Japanese investment alone would—over just the next four years—create nearly half a million jobs, contribute £4 billion to our trade balance and add 2 per cent. to Britain's gross national product. Cumulative Japanese manufacturing investment will increase from £1·3 billion in 1990 to £7 billion by 1995. It will increase the output of cars produced by Japanese companies in the United Kingdom from 78,000 in 1990 to 458,000 in 1995.
That investment should be welcomed by hon. Members on both sides of the House. We know, however, that some people in our country still regard Japanese investment in our manufacturing industry as unwelcome. The Opposition Front Bench refused to answer my hon. Friend's question about the TUC vote in September on a motion which described that investment as "alien". The hon. Member for Sedgefield refused to respond.
There the Opposition sit, looking for all the world like a gang that has just been arrested—determined to say nothing that would incriminate them, and ready to pounce on the first of their number who grasses on the boss.
Mr. Brian Wilson: Will the Secretary of State give way?
Mr. Howard: When I last gave way to the hon. Gentleman, he asked a question so frivolous and irrelevant that I made a firm resolution not to give way to him again.
Our manufacturing industries are immeasurably stronger today than they were 12 years ago, and their prospects are excellent. Of course we have experienced difficulties; of course no recession is ever welcome. What is astonishing, however, is that Labour Members, who are ever eager to pick over the entrails of recession, are so much more reluctant to talk about its cause. They are equally reluctant to acknowledge that the recession is a world-wide phenomenon. Unemployment is rising in every

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European Community country except Spain, and in every country in the European Free Trade Association, and it is higher today than it was a year ago in every G7 country.
I do not deny that part of the cause of the recession lies closer to home:, nor do I deny that some of our recent problems stemmed from mistakes that were made in 1987 and 1988. With the benefit of hindsight, it is possible to see that interest rates were cut too far and too fast in the aftermath of the world-wide stock market crash. That, of course, is why the Opposition are so reluctant to discuss the causes of the recession. What were they demanding at the time? Still further and still faster cuts in interest rates.
The right hon. and learned Member for Monklands, East (Mr. Smith) had only just become shadow Chancellor in October 1987, but he was already stuck in the groove in which he has remained ever since—the belief that interest rates are invariably too high, and should always be cut by 1 per cent. His belief in the panacea of a 1 per cent. interest rate cut was being trotted out even then.
It is clear that if the right hon. and learned Member for Monklands, East—Mr. One Per Cent.—had been in office at that time, the inflationary surge that we have faced over the past two years would have been much worse, the task of reversing it would have been much more difficult, and the problems that we are now overcoming would have been infinitely more acute. That is the reality. The Opposition's policies would have made matters very much worse had they been in office—and, as I shall show in a moment, they would make matters very much worse if Labour were to take office at any time in the future.
The hon. Member for Sedgefield talked about training. I agree with his remarks to the extent that it is indeed clear that the future performance of our economy in general, and of our industries in particular, will be greatly enhanced by our national training efforts. As ever, however, the hon. Gentleman then presented a grossly misleading and misrepresentative picture of what is happening to training in this country. Having accused us of taking no initiatives, he then proceeded to list all the initiatives that we had taken, and to express his fear that they might be cut.
What the hon. Gentleman engaged in was a systematic slander of all those involved in the training revolution that is currently under way, and of the new training and enterprise councils —one of the most exciting initiatives that the country has ever seen, and one that the hon. Gentleman claims to support.
Mr. Blair: Does the right hon. and learned Gentleman think that it was a mistake to cut £1·5 billion off his training budget over the last few years?
Mr. Howard: Unlike the hon. Gentleman, who consistently refused to answer the questions that were put to him, I will answer that question directly. What we did —the hon. Gentleman knows it well—was to look again at the way in which we help unemployed people back to work and to appreciate that, although training is an important way to help them, it is not the only way and not always the best way to help them. We are providing more help to unemployed people, but in different ways. That is why we have a wider range of measures than ever before to help unemployed people back to work.
Mr. Blair: So that we get this clear, is the right hon. and learned Gentleman accepting that in real terms the training budget has declined over the last few years in the way that I have described?
Mr. Howard: I have told the hon. Gentleman exactly what happened. I told him that we looked at the way in which we were helping unemployed people back to work. We are determined to make that help as effective as possible. That is exactly what we are doing and the hon. Gentleman knows it well.
As for the reality of the training picture, let us look first at what the private sector is doing. In the six years to 1990 the number of employees receiving job-related training rose by 85 per cent. The latest CBI surveys continue to show that three and a half times as many employers expect to maintain or increase their spending on training as expect to cut it, even during the present economic difficulties. Only latest week, the last survey of employers showed that no fewer than 92 per cent. of employers have maintained or increased their off-the-job training since last year. We know, too, that the quality of training is improving steadily. Gone are the days of rigid, centralised time-serving apprenticeships. Instead we have a much more flexible and dynamic training system which is steadily increasing the proportion of the work force who have qualifications.
Between 1984 and 1990 the number of people with a qualification increased by a quarter to nearly 75 per cent. of all economically active people of working age. The number who hold a qualification at A-level or above increased by a fifth to nearly one out of every two people available for work.
Earlier this month an academic report comparing the training provision available to young people in Britain and in Germany concluded that young people in Britain benefit from training that is more flexible and more relevant to the world of work than that in Germany. Progress on training is now being made every day.
This morning I presented the first Investors in People awards to 28 of Britain's companies, each of which has reached this very challenging standard of commitment to and quality of training. I was able to announce that a further 500 companies have also committed themselves to reaching the Investors in People standard. That is a major step forward in employer commitment to training. It is part of a steadily and sharply improving picture. If anyone were in doubt about the magnitude and momentum of the training revolution that is under way in this country, I wish they had been present at this morning's event just across Parliament square. It would have done the hon. Member for Dunfermline, East the world of good if he had spent his morning there instead of preparinng his cheapskate speech, which served only to reveal the depth of his ignorance of the training that has taken place in this country.
The most damaging single policy for British industry put forward by the Labour party is, of course, its absurd commitment to a national statutory minimum wage. My warnings—that that policy would destroy hundreds of thousands of jobs—have been backed by an ever-increasing chorus of expert opinion. The hon. Member for Sedgefield has tripped, twisted and turned on this issue time and again. Earlier this year he wrote a now notorious letter to The Independent in which he said:

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"I have not accepted that the minimum wage would cost jobs … I have simply accepted that econometric models indicate a potential jobs impact."
Last week on "Any Questions?" the hon. Gentleman stated flatly that no jobs would be lost as a result of the introduction of a minimum wage. Can he name one independent analyst who agrees with that judgment?
Perhaps the most interesting aspect of that programme was that the hon. Member for Sedgefield lectured the director general of the CBI, who knows just a little bit more about industry than does the hon. Gentleman, on the ways in which, he said, a minimum wage would increase British industry's competitiveness. As the CBI has stated that the first stage alone of Labour's minimum wage policy would destroy between 200,000 and 300,000 jobs, it beggars belief that the hon. Gentleman has the impertinence to lecture industrialists on how to make themselves competitive.
Mr. Stuart Bell rose——
Mr. Howard: I have not much time left. I must press on.
On "Any Questions?" the hon. Member for Sedgefield claimed that the only difference between his proposals for a minimum wage and the arrangements in Germany was that the minimum wage in Germany is higher. He knows perfectly well that there is no national statutory minimum wage in Germany at all.
Mr. Blair rose——
Mr. Howard: Ah, the hon. Gentleman is prepared to contribute to our deliberations.
Mr. Blair: As I have often said, in Germany a minimum wage operates in every industrial sector. Does the Secretary of State accept that?
Mr. Howard: The wage is agreed between employers and trade unions. It is legally binding only because all collective agreements in Germany are legally binding. If the hon. Gentleman wants all collective agreements to be legally binding, I hope that he will support the proposals in our latest Green Paper.
Mr. Blair: Let us get this absolutely right—the agreements are binding not merely on unions and the industry but on everyone who works in that sector. Will the Secretary of State confirm that?
Mr. Howard: Collective agreements are legally binding in Germany. They are collective agreements, not something imposed by national statute. If the hon. Gentleman does not know the difference between a national statute and a collective agreement, he is unfit to hold even his shadow portfolio.
I could go on to point out the number of surveys which have shown how many jobs will be lost as a result of the national statutory minimum wage. I could point out how the Leader of the Opposition has withdrawn from Labour's commitment to the second stage of their policy.
I want to say a word about another crucial aspect of Labour's minimum wage policy—its effect on skill differentials. The only conceivable basis on which the immediate negative impact of the minimum wage on jobs, inflation and growth could be minimised would be if it were possible to ensure that there would be no restoration of differentials whatever. Labour Front-Bench spokesmen
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have been patting themselves on the back because they claim to have secured the agreement of the TUC to the proposition that differentials would be eroded rather than restored if a minimum wage were introduced. They do not seem to understand that differentials are not the exclusive concern of union negotiators. Proper differentials are vital to employers and to the health of our economy as a whole.
How can one claim to support training, as the Opposition suggest that they do, when one destroys the differentials that give people the incentive to acquire skills? How can one improve the productivity of the economy when one destroys the differentials that give people the incentive to perform more efficiently? One cannot. The most significant aspect of the Labour party's minimum wage policy is not the damage that it would do to jobs, nor the devastation that it would cause the economy, but the extent to which it reveals the depth of the Labour party's economic illiteracy.
The Government are fully committed to the success of British manufacturing industry. The Labour party is always right behind British industry because it is the best place from which to wield the knife to stab it in the back. We offer constructive policies for the future to build upon the proven successes of the 1980s. The Labour party offers nothing more than smears, fears and crocodile tears. That is the difference between us, and that is why the interests of British industry make it imperative that the Government are returned.
Mr. Derek Foster rose in his place and claimed to move, That the Question be now put.
Question, That the Question be now put, put and agreed to.
Question put, That the original words stand part of the Question:—
The House divided: Ayes 220, Noes 306.

Division No. 230]

[10 pm

AYES

Adams, Mrs Irene (Paisley, N.)

Campbell-Savours, D. N.

Allen, Graham

Canavan, Dennis

Alton, David

Carlile, Alex (Mont'g)

Anderson, Donald

Carr, Michael

Archer, Rt Hon Peter

Clark, Dr David (S Shields)

Armstrong, Hilary

Clarke, Tom (Monklands W)

Ashdown, Rt Hon Paddy

Clay, Bob

Ashley, Rt Hon Jack

Clelland, David

Ashton, Joe

Clwyd, Mrs Ann

Banks, Tony (Newham NW)

Cohen, Harry

Barnes, Harry (Derbyshire NE)

Cook, Robin (Livingston)

Barron, Kevin

Corbett, Robin

Battle, John

Corbyn, Jeremy

Beckett, Margaret

Cousins, Jim

Beith, A. J.

Cox, Tom

Bell, Stuart

Crowther, Stan

Bellotti, David

Cryer, Bob

Benn, Rt Hon Tony

Cunliffe, Lawrence

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

Cunningham, Dr John

Benton, Joseph

Darling, Alistair

Bermingham, Gerald

Davies, Rt Hon Denzil (Llanelli)

Blair, Tony

Davies, Ron (Caerphilly)

Boateng, Paul

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

Boyes, Roland

Dixon, Don

Bradley, Keith

Dobson, Frank

Bray, Dr Jeremy

Douglas, Dick

Brown, Gordon (D'mline E)

Duffy, Sir A. E. P.

Brown, Nicholas (Newcastle E)

Dunnachie, Jimmy

Brown, Ron (Edinburgh Leith)

Dunwoody, Hon Mrs Gwyneth

Caborn, Richard

Eadie, Alexander

Callaghan, Jim

Eastham, Ken

Campbell, Menzies (Fife NE)

Edwards, Huw

Campbell, Ron (Blyth Valley)

Evans, John (St Helens N)

409

Ewing, Harry (Falkirk E)

Martin, Michael J. (Springburn)

Ewing, Mrs Margaret (Moray)

Martlew, Eric

Fatchett, Derek

Maxton, John

Fearn, Ronald

Meacher, Michael

Field, Frank (Birkenhead)

Meale, Alan

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

Michael, Alun

Fisher, Mark

Michie, Bill (Sheffield Heeley)

Flannery, Martin

Michie, Mrs Ray (Arg'l & Bute)

Flynn, Paul

Moonie, Dr Lewis

Foot, Rt Hon Michael

Morley, Elliot

Foster, Derek

Morris, Rt Hon A. (W'shawe)

Foulkes, George

Morris, Rt Hon J. (Aberavon)

Fraser, John

Mowlam, Marjorie

Fyfe, Maria

Mullin, Chris

Garrett, John (Norwich South)

Murphy, Paul

Garrett, Ted (Wallsend)

Nellist, Dave

George, Bruce

Oakes, Rt Hon Gordon

Gilbert, Rt Hon Dr John

O'Brien, William

Godman, Dr Norman A.

O'Hara, Edward

Golding, Mrs Llin

O'Neill, Martin

Gordon, Mildred

Orme, Rt Hon Stanley

Gould, Bryan

Patchett, Terry

Graham, Thomas

Pendry, Tom

Grant, Bernie (Tottenham)

Pike, Peter L.

Griffiths, Nigel (Edinburgh S)

Powell, Ray (Ogmore)

Griffiths, Win (Bridgend)

Prescott, John

Hain, Peter

Primarolo, Dawn

Hardy, Peter

Quin, Ms Joyce

Harman, Ms Harriet

Radice, Giles

Hattersley, Rt Hon Roy

Randall, Stuart

Haynes, Frank

Redmond, Martin

Heal, Mrs Sylvia

Reid, Dr John

Healey, Rt Hon Denis

Richardson, Jo

Henderson, Doug

Robertson, George

Hinchliffe, David

Robinson, Geoffrey

Hoey, Kate (Vauxhall)

Rogers, Allan

Hogg, N. (C'nauld & Kilsyth)

Rooker, Jeff

Home Robertson, John

Rooney, Terence

Hood, Jimmy

Ross, Ernie (Dundee W)

Howarth, George (Knowsley N)

Rowlands, Ted

Howell, Rt Hon D. (S'heath)

Ruddock, Joan

Howells, Geraint

Salmond, Alex

Howells, Dr. Kim (Pontypridd)

Sedgemore, Brian

Hoyle, Doug

Sheerman, Barry

Hughes, Robert (Aberdeen N)

Sheldon, Rt Hon Robert

Hughes, Roy (Newport E)

Skinner, Dennis

Ingram, Adam

Smith, Andrew (Oxford E)

Janner, Greville

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

Johnston, Sir Russell

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

Jones, Barry (Alyn & Deeside)

Smith, J. P. (Vale of Glam)

Jones, leuan (Ynys Môn)

Snape, Peter

Kaufman, Rt Hon Gerald

Soley, Clive

Kilfoyle, Peter

Spearing, Nigel

Kinnock, Rt Hon Neil

Steel, Rt Hon Sir David

Lambie, David

Steinberg, Gerry

Lamond, James

Stott, Roger

Leadbitter, Ted

Strang, Gavin

Leighton, Ron

Straw, Jack

Lestor, Joan (Eccles)

Taylor, Mrs Ann (Dewsbury)

Lewis, Terry

Taylor, Matthew (Truro)

Litherland, Robert

Thompson, Jack (Wansbeck)

Livingstone, Ken

Turner, Dennis

Lloyd, Tony (Stretford)

Vaz, Keith

Lofthouse, Geoffrey

Warden, Gareth (Gower)

Loyden, Eddie

Wareing, Robert N.

McAllion, John

Watson, Mike (Glasgow, C)

Macdonald, Calum A.

Welsh, Michael (Doncaster N)

McFall, John

Williams, Rt Hon Alan

McKay, Allen (Barnsley West)

Williams, Alan W. (Carm'then)

McKelvey, William

Wilson, Brian

McLeish, Henry

Winnick, David

Maclennan, Robert

Wise, Mrs Audrey

McMaster, Gordon

Worthington, Tony

McNamara, Kevin

Wray, Jimmy

McWilliam, John

Young, David (Bolton SE)

Madden, Max

Mahon, Mrs Alice

Tellers for the Ayes:

Marek, Dr John

Mr. Martyn Jones and

Marshall, Jim (Leicester S)

Mr. Thomas McAvoy.

410

NOES

Adley, Robert

Durant, Sir Anthony

Aitken, Jonathan

Dykes, Hugh

Alexander, Richard

Evans, David (Welwyn Hatf'd)

Allason, Rupert

Evennett, David

Amery, Rt Hon Julian

Fairbairn, Sir Nicholas

Amess, David

Fallon, Michael

Amos, Alan

Farr, Sir John

Arbuthnot, James

Favell, Tony

Arnold, Jacques (Gravesham)

Fenner, Dame Peggy

Ashby, David

Field, Barry (Isle of Wight)

Aspinwall, Jack

Finsberg, Sir Geoffrey

Atkins, Robert

Fishburn, John Dudley

Baker, Rt Hon K. (Mole Valley)

Forman, Nigel

Baker, Nicholas (Dorset N)

Forsyth, Michael (Stirling)

Baldry, Tony

Forth, Eric

Banks, Robert (Harrogate)

Fowler, Rt Hon Sir Norman

Batiste, Spencer

Fox, Sir Marcus

Beaumont-Dark, Anthony

Franks, Cecil

Bellingham, Henry

Freeman, Roger

Bendall, Vivian

French, Douglas

Bennett, Nicholas (Pembroke)

Gardiner, Sir George

Benyon, W.

Garel-Jones, Tristan

Biffen, Rt Hon John

Gill, Christopher

Blackburn, Dr John G.

Gilmour, Rt Hon Sir Ian

Blaker, Rt Hon Sir Peter

Glyn, Dr Sir Alan

Body, Sir Richard

Goodhart, Sir Philip

Bonsor, Sir Nicholas

Goodlad, Alastair

Boscawen, Hon Robert

Goodson-Wickes, Dr Charles

Boswell, Tim

Gorman, Mrs Teresa

Bottomley, Peter

Gorst, John

Bottomley, Mrs Virginia

Grant, Sir Anthony (CambsSW)

Bowden, A. (Brighton K'pto'n)

Greenway, Harry (Ealing N)

Bowden, Gerald (Dulwich)

Greenway, John (Ryedale)

Bowis, John

Griffiths, Peter (Portsmouth N)

Boyson, Rt Hon Dr Sir Rhodes

Grist, Ian

Braine, Rt Hon Sir Bernard

Ground, Patrick

Brandon-Bravo, Martin

Grylls, Michael

Brazier, Julian

Hamilton, Rt Hon Archie

Bright, Graham

Hamilton, Neil (Tatton)

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

Hampson, Dr Keith

Browne, John (Winchester)

Hannam, John

Bruce, Ian (Dorset South)

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

Buck, Sir Antony

Hargreaves, Ken (Hyndburn)

Budgen, Nicholas

Harris, David

Burns, Simon

Haselhurst, Alan

Burt, Alistair

Hayes, Jerry

Butler, Chris

Hayward, Robert

Butterfill, John

Heathcoat-Amory, David

Carlisle, John, (Luton N)

Heseltine, Rt Hon Michael

Carlisle, Kenneth (Lincoln)

Hicks, Mrs Maureen (Wolv' NE)

Carrington, Matthew

Hicks, Robert (Cornwall SE)

Carttiss, Michael

Hrggins, Rt Hon Terence L.

Cash, William

Hill, James

Chalker, Rt Hon Mrs Lynda

Hind, Kenneth

Channon, Rt Hon Paul

Hogg, Hon Douglas (Gr'th'm)

Chapman, Sydney

Hordern, Sir Peter

Chope, Christopher

Howard, Rt Hon Michael

Churchill, Mr

Howarth, G. (Cannock & B 'wd)

Clark, Rt Hon Alan (Plymouth)

Howe, Rt Hon Sir Geoffrey

Clark, Dr Michael (Rochford)

Howell, Rt Hon David (G'dford)

Clark, Rt Hon Sir William

Howell, Ralph (North Norfolk)

Colvin, Michael

Hughes, Robert G. (Harrow W)

Conway, Derek

Hunt, Rt Hon David

Coombs, Anthony (Wyre F'rest)

Hunt, Sir John (Ravensbourne)

Coombs, Simon (Swindon)

Hunter, Andrew

Cope, Rt Hon Sir John

Irvine, Michael

Cormack, Patrick

Irving, Sir Charles

Couchman, James

Jack, Michael

Cran, James

Jackson, Robert

Currie, Mrs Edwina

Janman, Tim

Curry, David

Jessel, Toby

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

Johnson Smith, Sir Geoffrey

Davis, David (Boothferry)

Jones, Gwilym (Cardiff N)

Day, Stephen

Jones, Robert B (Herts W)

Dickens, Geoffrey

Jopling, Rt Hon Michael

Dorrell, Stephen

Kellett-Bowman, Dame Elaine

Douglas-Hamilton, Lord James

Kilfedder, James

Dover, Den

King, Roger (B'ham N'thfield)

Dunn, Bob

Kirkhope, Timothy

411

Knapman, Roger

Nelson, Anthony

Knight, Greg (Derby North)

Neubert, Sir Michael

Knight, Dame Jill (Edgbaston)

Newton, Rt Hon Tony

Knowles, Michael

Nicholls, Patrick

Knox, David

Nicholson, David (Taunton)

Latham, Michael

Norris, Steve

Lawrence, Ivan

Onslow, Rt Hon Cranley

Lee, John (Pendle)

Oppenheim, Phillip

Leigh, Edward (Gainsbor'gh)

Page, Richard

Lennox-Boyd, Hon Mark

Paice, James

Lester, Jim (Broxtowe)

Patnick, Irvine

Lilley, Rt Hon Peter

Pawsey, James

Lloyd, Sir Ian (Havant)

Peacock, Mrs Elizabeth

Lloyd, Peter (Fareham)

Porter, Barry (Wirral S)

Lord, Michael

Porter, David (Waveney)

Lyell, Rt Hon Sir Nicholas

Portillo, Michael

McCrindle, Sir Robert

Powell, William (Corby)

Macfarlane, Sir Neil

Price, Sir David

MacGregor, Rt Hon John

Raison, Rt Hon Sir Timothy

MacKay, Andrew (E Berkshire)

Rathbone, Tim

McLoughlin, Patrick

Redwood, John

McNair-Wilson, Sir Patrick

Rhodes James, Sir Robert

Madel, David

Riddick, Graham

Malins, Humfrey

Ridsdale, Sir Julian

Mans, Keith

Roe, Mrs Marion

Maples, John

Rost, Peter

Marland, Paul

Rowe, Andrew

Marlow, Tony

Rumbold, Rt Hon Mrs Angela

Marshall, John (Hendon S)

Ryder, Rt Hon Richard

Martin, David (Portsmouth S)

Sackville, Hon Tom

Maude, Hon Francis

Sainsbury, Hon Tim

Maxwell-Hyslop, Robin

Sayeed, Jonathan

Mellor, Rt Hon David

Scott, Rt Hon Nicholas

Meyer, Sir Anthony

Shaw, David (Dover)

Miller, Sir Hal

Shaw, Sir Giles (Pudsey)

Mills, Iain

Shaw, Sir Michael (Scarb')

Miscampbell, Norman

Shelton, Sir William

Mitchell, Andrew (Gedling)

Shephard, Mrs G. (Norfolk SW)

Mitchell, Sir David

Shepherd, Colin (Hereford)

Moate, Roger

Shepherd, Richard (Aldridge)

Monro, Sir Hector

Shersby, Michael

Montgomery, Sir Fergus

Sims, Roger

Moore, Rt Hon John

Skeet, Sir Trevor

Morris, M (N'hampton S)

Smith, Sir Dudley (Warwick)

Morrison, Sir Charles

Smith, Tim (Beaconsfield)

Morrison, Rt Hon Sir Peter

Soames, Hon Nicholas

Moss, Malcolm

Speller, Tony

Moynihan, Hon Colin

Spicer, Sir Jim (Dorset W)

Mudd, David

Spicer, Michael (S Worcs)

Neale, Sir Gerrard

Squire, Robin

Needham, Richard

Stanbrook, Ivor

412

Stanley, Rt Hon Sir John

Viggers, Peter

Steen, Anthony

Wakeham, Rt Hon John

Stern, Michael

Walden, George

Stevens, Lewis

Walker, Bill (T'side North)

Stewart, Allan (Eastwood)

Walker, Rt Hon P. (W'cester)

Stewart, Andy (Sherwood)

Waller, Gary

Stewart, Rt Hon Sir Ian

Walters, Sir Dennis

Stokes, Sir John

Ward, John

Summerson, Hugo

Wardle, Charles (Bexhill)

Taylor, Ian (Esher)

Warren, Kenneth

Taylor, Sir Teddy

Watts, John

Tebbit, Rt Hon Norman

Wells, Bowen

Thatcher, Rt Hon Margaret

Whitney, Ray

Thompson, D. (Calder Valley)

Widdecombe, Ann

Thompson, Patrick (Norwich N)

Wiggin, Jerry

Thorne, Neil

Wilshire, David

Thornton, Malcolm

Winterton, Mrs Ann

Thurnham, Peter

Winterton, Nicholas

Townend, John (Bridlington)

Wolfson, Mark

Townsend, Cyril D. (B'heath)

Wood, Timothy

Tracey, Richard

Young, Sir George (Acton)

Trippier, David

Trotter, Neville

Tellers for the Noes:

Twinn, Dr Ian

Mr. David Lightbown and

Vaughan, Sir Gerard

Mr. John M. Taylor.

Question accordingly negatived.
Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 30 (Questions on amendments), and agreed to.
MR. SPEAKER forthwith declared the main Question, as amended, to be agreed to.
Resolved,
That this House congratulates Her Majesty's Government on its success in bringing down inflation to German levels and in creating almost three million jobs since 1983; recognises that the defeat of inflation is essential in maintaining international competitiveness, and in further job creation; welcomes the dramatic transformation which has taken place in training in this country and the continuing successes in export markets and in attracting inward investment; recognises that sustained growth depends upon quality and innovation and welcomes the Government's policies to stimulate these; and notes the revival in business confidence, which would be put at risk by the inflationary, job destroying and anti-industry policies of the Opposition, in particular their commitment to nationalisation, state intervention, punitive taxation, renewed union power and a national minimum wage.

Juvenile Offenders
Motion made, and Question proposed, That this House do now adjourn —[Mr Sackville.]
10.16 pm
Mr. Michael Shersby: As the House knows, I am parliamentary adviser to the Police Federation of England and Wales, and I want to declare that interest in this Adjournment debate.
The purpose of applying for the debate is to draw the attention of my hon. Friend the Minister for Health and that of the House to the lack of secure accommodation for juvenile offenders in local authority homes in England and Wales. I am referring to the kind of accommodation to which the courts can remand juvenile offenders, who are often petty thieves and who also have a record of committing violent offences for which, if they were adults, they could be sent to prison for up to 14 years. That distinction is extremely important and, as my hon. Friend will know, it is one of the main criteria for making use of secure accommodation.
The kind of violent offences about which I am talking include actual bodily harm with a weapon, grievous bodily harm with a weapon and burglary, that most unpleasant of crimes from which many of our citizens have suffered as a result of the activities of those youngsters. I should like to make it clear that the young people about whom I am talking are under the age of 17.
Because there is a lack of what is described as secure accommodation, many juvenile offenders have to be placed in what is described as open accommodation in local authority community homes, where they are supposed to be under close supervision. However, such open accommodation is not secure, and I am told that there are problems in recruiting the necessary dedicated personnel to staff those homes.
The grave shortage of secure units in which to confine those petty thieves and other juvenile offenders with a history of violent crime against the person was revealed in answers I received to a series of parliamentary questions I tabled in June. My hon. Friend the Minister gave me details that showed that, in England, there are about 112 mixed-sex places, 133 places for boys and 33 places for girls. That is a very small number of secure places. There are only about 270 places to cope with the large number of juvenile offenders, many of whom have records of violence against the person.
In Wales, the position is much worse. According to information given to me in answer to a parliamentary question, there are two places in West Glamorgan, two places in Mid Glamorgan and two places in Gwent. The situation in Gwent is now so bad that, in August of this year, the Gwent constabulary joint branch board of the Police Federation of England and Wales prepared a memorandum for the Ty Mawr community home inquiry. The federation's belief, which is shared by the chief officer and all senior officers of the force, is that
"the total absence of secure accommodation for juveniles, who have been committed by the Courts to the care of the Local Authority, is a major contributory factor to the high level of crimes committed in the force area, especially domestic burglaries and thefts of and from vehicles".
The federation also believes that
"The total absence of secure accommodation in Wales places the magistrates and the local authorities in an impossible position".
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Although my hon. Friend the Minister for Health, who is listening carefully, may say that she is not responsible for Wales, I should be grateful if she would draw my remarks to the attention of my right hon. Friend the Secretary of State for Wales, because the situation in Wales is little short of a public scandal. A result of the lack of secure accommodation is that juveniles, many of whom should be confined, are remanded to open accommodation in community homes. Together with the thousands who are remanded by the courts to open accommodation under close supervision, they are absconding in droves. I use those words advisedly. Many juveniles remanded to open accommodation have even jumped out of cars at the traffic lights so that they have never reached the community homes to which they were remanded. They have then returned to their place of habitual criminal activity and re-offended again and again.
A recent survey conducted by the Police Federation on the best available evidence reveals a shocking situation. The stunning figures relate to the year ending 31 July 1990. West Yorkshire, which has numerous community homes, had 4,426 absconders. The total number relates to 1,500 individuals, and 781 youngsters absconded more than three times. Of the persistent absconders, 274 committed offences while on the run. That is a huge figure.
In the home counties, Hertfordshire has nine such establishments. There were 883 absconders; only two secure places exist in Hertfordshire, and 63 youngsters absconded more than three times. Lancashire has 39 community homes and there were at least 965 absconders, 89 of whom absconded more than three times. Leicestershire has 10 community homes and 640 youngsters absconded during that 12-month period. Norfolk has 16 homes and 621 youngsters absconded. Cumbria has seven homes and 786 youngsters absconded, while Durham has a terrible record, with 16 establishments and 2,296 absconders. There is only one secure location, with 46 beds, and 122 youngsters absconded more than three times. So the list goes on. Unfortunately, I have no figures for the Metropolitan police area. They are difficult to obtain because of the number of local authorities involved.
The figures that I have quoted show clearly that there is a huge problem of which the House is not aware but which needs to be tackled urgently. That problem will become worse next year, when the Criminal Justice Act 1991 comes fully into force and abolishes remands to prison for juveniles. At present, young people can be remanded to prison where a certificate of unruliness is provided, but that is all to stop under the Criminal Justice Act which the House has recently passed. That Act also prescribes the development and use of alternatives such as diversionary bail, support schemes and secure accommodation.
I have received a letter from the Association of County Councils, which has been kind enough to give me quite a lot of information in advance of the debate. It says that the Home Office consultation paper suggests that at least an extra 30 to 35 places will be needed to meet the demands of the new arrangements. Like all good local authority associations, it is naturally worried about who will pay the bill. It is also worried that the relatively small proposed increase in the number of secure places will not meet the increased need.
These matters require urgent attention. Therefore, I am glad that, in answer to a parliamentary question, I have

415
this week been informed by my hon. Friend the Minister of State, Home Office that the Secretary of State for Health has set up a national steering group to ensure that secure local authority accommodation will be provided to meet the requirements of the Criminal Justice Act 1991 in relation to juvenile remands.
I hope that a representative from the Police Federation will be invited to join that steering group, so that the view of the police on this important matter can be taken fully into account. At present there is a grave and serious breakdown of confidence in the system among many police officers because of the lack of secure accommodation. That problem could easily be remedied by involving police in the steering group so that their expert advice, gained over a long period, may be made available.
The problem of juveniles continually absconding from local authority homes is giving the police and the Police Federation grave cause for concern. Their worry is due to the lack of secure accommodation to which courts can send young people until their cases can be heard. Another problem facing the courts is the fact that, even if it is considered necessary to remand juveniles to secure accommodation, it is often difficult to do so because the facilities are so scarce.
I seem to recall that my hon. Friend the Minister for Health was once the chairman of a juvenile bench, so she will be familiar with such problems. I hope that, now that she is a Minister with direct responsibility for providing such accommodation, she will be able to help other magistrates out of what is now a difficult problem. If those juveniles whom the courts decide should not be in open accommodation in community homes were instead placed in secure accommodation, not only would crime be prevented but the juveniles would be held in care where the necessary medical advice was available while their cases were coming to court. We all know that that process takes far too long, and presents another problem which needs to be tackled.
What are the Government doing about the problem? It is one of the twin problems facing our society today. The other involves the vast number of people who offend while on bail. I know that that issue is the responsibility not of my hon. Friend but of those at the Home Office. If I am successful in catching Mr. Speaker's eye on Friday, I hope to raise the matter in the debate on the policing of London. However, tonight we are dealing with the single very important and serious problem of the lack of secure accommodation. I hope that my hon. Friend the Minister will be able to tell the House what the Government are to do about it. We cannot continue as we are.
10.29 pm
The Minister for Health (Mrs. Virginia Bottomley): I congratulate my hon. Friend the Member for Uxbridge (Mr. Shersby) on once again raising a subject of great concern to the House. He is a powerful and persuasive advocate on behalf of the Police Federation. No one can have lived through recent months without being deeply concerned to know what plans are envisaged for young people who do themselves and the community no good.
I respond warmly to the opportunity to spell out to the House our thinking on the provision of secure accommodation for juvenile offenders.
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Some of my hon. Friend's remarks were more relevant to the general provision of residential care for juveniles. The issue of absconding has more to do with children's homes in the broader context. My hon. Friend will know that Sir William Utting's recent report on residential care, together with the binding regulations under the Children Act 1990, implemented on Monday, sets out in no uncertain terms the criteria for the management of our children's homes, which certainly needed urgent consideration.
There has been a dramatic fall in the number of young people in residential care, just as there has been a considerable fall in the number of young children in penal institutions. Those who remain in need of residential care are often a troubled and a troublesome group, and we must be sure that the staff running the homes are skilled and able to deal with youngsters who need control as well as care.
We are talking about young people who, however vile their crimes, are still impressionable and at the formative stages of their lives. They need both care and control.
I pay tribute to the co-operation that we have received from the police over the years in developing diversionary approaches. All agree that, if we can avoid giving youngsters the old school tie of penal custody at an early age, that is doing them a favour as we send them out into their adult lives. However, we should never jeopardise the well-being of the public for a theoretical or ideological principle.
Restriction of liberty is a serious issue at any time, but particularly so when we are talking about locking up children—in the context of this debate, those under the age of 17. No doubt the vast majority of children being looked after by local authorities—offenders or non-offenders—can be safely and satisfactorily cared for in open homes or in the community. But there are a relatively small number of such young people who, because of their disturbed or disruptive or offensive behaviour, need to be accommodated in the safer environment of a secure unit.
Because of the seriousness of the issue, strict legal criteria exist which must be met before a loal authority can restrict the liberty of any child whom it is looking after, and even when these criteria exist, a local authority can lock a child up only for a short period—72 hours—without seeking the authority of a court to do so. These criteria which enable a local authority to place a child in secure accommodation are either that he is a persistent absconder who, if he absconds again, is likely to suffer significant harm; or that, if he is not locked up, he is likely to injure himself or others.
These legal safeguards, which are designed to protect children from unnecessary, inappropriate or unduly lengthy restriction of liberty, apply just as much to alleged juvenile offenders who are remanded to local authority accommodation as to those accommodated under civil legislation.
Secure accommodation within the community homes system plays an important dual role. By keeping children safely and securely it protects them from the risk of injury or significant harm, and it protects other children and members of the public from the risk of injury.
It is important to remember, however, that the use of secure accommodation in community homes is not confined to offenders or alleged juvenile offenders on remand. Secure accommodation forms but one element in

417
a range of facilities and services provided by local authority services departments for all children that they are looking after—the majority of whom are not offenders.
The Children Act 1989, which we welcomed this week, introduced important new local authority duties which are relevant to the way that they exercise their responsibilities towards alleged juvenile offenders and the use of secure accommodation. The Act requires local authorities to take reasonable steps designed to do two things: to encourage children within their area not to commit criminal offences; and to avoid the need for children within their area to be placed in secure accommodation.
These twin duties are not incompatible. They fit very well into the work being undertaken by my hon. Friend the Minister of State, Home Office. I endorse his work in preventing criminality. It is much better to help youngsters than to punish them. The duties formalise what is already good practice in many parts of the country, and quite properly emphasise the point that, in dealing with young people who get into trouble with the law, or are at risk of doing so, local authorities must ensure that a wide range of facilities and services are made available; and that those services have the confidence of the police, the magistracy and the local community. It is important for such services to inspire that confidence.
My hon. Friend spoke about the time when I was chairman of a juvenile court. I well remember the pleas and exhortations to use intermediate treatment at a time when such treatment which in any sense could be thought to be appropriate for youngsters who had often been involved in quite serious offences was not available. However, there are now many examples of such alternative arrangements to secure accommodation, such as special remand fostering schemes or intensively staffed support Systems either in community homes or in non-residential settings, such as bail support schemes.
I entirely endorse my hon. Friend's point that these young and turbulent people need sufficient control to stop them going headlong down the road to a life of crime which does them no good and terrorises the local community.
Because only a relatively small number of children need to be accommodated in the safer environment of a secure unit, it is not practicable for every local authority to provide its own secure accommodation. There is, however, a national network of such facilities to which all local authorities have access.
At the end of September, there were 280 approved places in secure units in England. During the year ending 31 March 1990, there were 1,428 admissions to secure units, of which 372 involved children remanded to local authority care.
However, we are aware that local authorities have often reported difficulty in finding a secure placement for children in their care. We are also aware of the practical difficulties often experienced by authorities in having to ring up to 30 individual secure units in an attempt to find a vacancy. In the longer term, the objective must clearly be to ensure that local authorities have direct access to an adequate stock of secure accommodation locally. Many local authorities are already moving towards developing a regional approach to the provision and use of secure accommodation, with the active encouragement of the Department's social services inspectorate.
In the shorter term, I am pleased to say that we are addressing the problem of matching demand and supply of
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secure facilities by providing a grant to enable a national bed bank to be established on a pilot basis. We are near to completing discussions with a local authority that is prepared to take on such a service and we hope to he able to make a full announcement shortly. This unit will provide one contact point to assist local authorities seeking a secure vacancy and, at the same time, enable a clearer picture to be formed of the potential demand for such placements.
Regrettably, juveniles continue to be remanded to penal establishments too often because alternative facilities are not currently available in the child care system. As my hon. Friend said, provision has been made in the Criminal Justice Act 1991 to bring this undesirable practice to an end. While we believe that many such young people could be safely dealt with in the community, for example through further bail support schemes, there will clearly be a continuing need for some additional secure accommodation to be provided. I shall shortly turn to how we propose to deal with that, but first I should like to place on record three points about local authority secure accommodation.
First, to allay concerns about the standard of physical containment in local authority secure units, especially in the context of implementing the Criminal Justice Act, we arranged for senior officials of the Home Office prison department to conduct a security assessment of a sample of secure units. Their report, which included some helpful suggestions for improving aspects of security, noted that secure units constructed or adapted according to the Department's revised secure accommodation design guidance would provide the requisite degree of physical security.
Secondly, I remind the House that local authorities cannot operate secure units without the approval of my right hon. Friend the Secretary of State. He is advised in this matter by the Department's social services inspectorate, which regularly inspects each unit to ensure that high standards of safety, security and quality of care are maintained.
Thirdly, I remind the House that social services departments, and within them secure units, have over the years established a good record of handling and containing young offenders convicted of the most serious crimes. I am thinking especially of those youngsters serving life or lengthy determinate sentences under section 53 of the Children and Young Persons Act 1933. My hon. Friend knows that we also have direct experience in managing the secure facilities of the youth treatment centres, to which we have recently given further consideration.
The new remand provisions in the Criminal Justice Act will have important implications for local authority social services departments—in particular, as my hon. Friend mentioned, the new court power to require that certain remanded juveniles are placed in secure accommodation, and the parallel duty to be placed on local authorities to ensure that they are in a position to comply with such court requirements. These provisions emphasise the need for each region of the country to move to a position of becoming self-sufficient in terms of the provision of secure accommodation —a policy that we have been advocating for the past two years. It does no good to the youngster or his family if it is necessary to travel halfway across the country to reach such accommodation.
Mr. Shersby: I am interested in what my hon. Friend is saying. Will she say what additional resources will be

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available to local authorities by way of central Government grant to make the additional facilities available?
Mrs. Bottomley: I am pleased to assure my hon. Friend that all additional new secure accommodation required will be eligible for 100 per cent. grant aid under the normal arrangements, which includes the element of grant-aiding Commissioning costs. He will be reassured to learn also that there is a continuous programme of expansion. Two new secure units will be coming on stream shortly—one in Humberside for 10 children at the turn of the year, and the second in Birmingham for eight children next summer. Firm proposals have been presented to the Department by Avon county council to replace an old, outdated, existing secure unit. There is one proposal in Hampshire, and another has been made by the London borough of Newham, which will increase the size of two existing units. We are also aware of the plans that are being prepared to increase and redevelop a number of other secure units.
The prime need, however, is to ensure that all the proposed developments, including the Government's investment, take place within a well thought out national strategy. I had expected to be able to inform my hon. Friend and the House—I understand that he has already been informed by my right hon. Friend the Home Secretary—of the establishment of a national steering group, whose remit will be to bring forward a national action plan and timetable for the development of services and facilities to ensure that adequate arrangements are in place to enable the abolition of juvenile penal remands to be implemented by the mid 1990s.
The group, which will be having its first meeting on 8 November, will include representatives of the relevant Government Departments, including the Home Office, of the local authority associations, of social services, of the probation service, of, I hope, the Crown prosecution service, and of the police, as well as of the voluntary sector. It will be chaired by a senior civil servant from my Department.
The Association of Chief Police Officers has been invited to be represented on the group, and I shall certainly
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consider further whether the Police Federation should be separately represented. In addition, Wales will be represented on the group and will wish to take account of proposals. But my hon. Friend may be aware that my right hon. Friend the Secretary of State for Wales has recently circulated a consultation document outlining his proposals for developing secure accommodation in Wales. That seeks views on creating a new 20-place secure unit in Wales. My right hon. Friend will, I am sure, wish to take account of my hon. Friend's comments in his considerations.
As I made clear earlier, the number of absconsions from existing children's homes is a source of concern. It is distinct from the question of secure units because absconsions from those are small. This is a subject that we are addressing carefully in the light of our on-going commitment to improve the quality and standing of residential care within social service arrangements for children.
I hope that I have been able to reassure my hon. Friend that the Government are well aware of the need to ensure that adequate levels of secure accommodation are made available; that accommodation is of sufficiently high standard to afford adequate protection to the children themselves and to others who may be at risk from them; and that arrangements are already in hand to achieve those twin objectives within the overall context of a national strategy.
The House is indebted to my hon. Friend for raising this important subject. I hope that I have been able to reassure him on a number of fronts. As he is aware, we already have a date in the diary early in November when we will be able to consider these aspects in further detail, but I hope that as matters stand I have been able to make it clear that for youngsters there is wrong as well as right, that they need control as well as care and that it is essential that the public are protected from youngsters who, in their turbulent youth, are causing distress and havoc in local communities.
Question put and agreed to.
Adjourned accordingly at fourteen minutes to Eleven o'clock.

WALES

  Health Service Pay Awards
  Mr. Michael
  To ask the Secretary of State for Wales what is the amount health authorities in Wales will need to find in 1991–92 from existing funding in 1991–92 to meet the costs of the professions allied to medicine review body's pay awards.

  Mr. Nicholas Bennett
  In 1991–92 health authorities in Wales will need to find an estimated additional £0·2 million, over and above the provision for inflation, estimated at £2·061 million, included in their start of year 1991–92 allocations, to meet the costs of the 1991 professions allied to medicine review body's pay awards.

  The amount to be found by district health authorities from their cash releasing cost improvement savings for all review body awards in 1991–92 is equal to 0·3 per cent. of their notified revenue resources.

  Mr. Michael
  To ask the Secretary of State for Wales if he will publish the cost to health authorities in Wales in 1991–92 of the nurses, midwives and health visitors review body's pay awards for that year, and the amount allocated from Government reserves to meet part of these costs.

  Mr. Nicholas Bennett
  The cost to health authorities in Wales of the nurses, midwives and health visitors review body's pay awards in 1991–92 is estimated to be £32·1 million. The additional amount allocated from Government reserves, over and above the provision for inflation, estimated at £22·371 million, in authorities' original 1991–92 allocation, to meet part of these costs is £7·3 million.

  The amount to be found by district health authorities from their cash releasing cost improvement savings for all review body awards in 1991–92 is equal to 0·3 per cent. of their notified revenue resources.

  Mental Handicap Nurses
  Mr. Michael
  To ask the Secretary of State for Wales how many mental handicap nurses were employed in each health authority in Wales(a) working in hospitals and (b) working in the community, for each year since 1985.

  Mr. Nicholas Bennett
  Complete information is available only on the total staff in post for all nursing and midwifery staff.

  Care in the Community
  Mr. Michael
  To ask the Secretary of State for Wales what additional funds have been made available to local authorities specifically to provide care in the community for the financial year 1990–91.

  Mr. Nicholas Bennett
  The bulk of revenue and capital funding to individual local authorities is provided through 152
  revenue support grant and basic credit approvals respectively. These are not hypothecated to particular services. The local government revenue settlement for 1990–91 allowed an indicative amount for personal social services of £186·8 million, or 5 per cent. over 1989–90 adjusted budgets; the capital settlement for 1990–91 allowed an assumed gross figure of £10·8 million which represented an increase of 21 per cent. over 1989–90. It is for local authorities to determine how resources should be allocated to particular services. Additional funds provided outside the revenue settlement under Welsh Office initiatives and grant schemes were £1·3 million under the elderly initiative; £0·34 million for training schemes on the development of community care and care management and services to elderly people; £0·47 million under the mental illness strategy and £23·6 million allocated under the mental health strategy. In total, these represent a 50 per cent. increase over 1989–90 expenditure.

  Teachers
  Mr. Barry Jones
  To ask the Secretary of State for Wales if he will publish the results of his survey into the supply of teachers in Wales; and if he will make a statement.

  Sir Wyn Roberts
  I announced last month the results of the Department's survey of teacher vacancies. The survey at the start of the new academic year showed that out of a total of 24,500 teaching posts, 40 remained unfilled, representing 0·2 per cent. of full-time teaching posts in Wales.

ENVIRONMENT

  Enterprise Zones
  Mr. Harry Greenway
  To ask the Secretary of State for the Environment how many jobs he estimates that enterprise zones have created; and if he will make a statement.

  Mr. Key
  By December 1989, the latest year for which figures are available for the United Kingdom as a whole, the number of jobs in enterprise zones had increased by 99,800 since the zones were created.

  Propery Services Agency Computers
  Mr. Favell
  To ask the Secretary of State for the Environment what were the total costs of the Property Services Agency THESIS computer system.

  Mr. Yeo
  Further to my reply of 15 February 1991,Official Report, column 597, it has now become clear that some additional costs should be attributed to THESIS. Property Services Agency Services has also had less success than anticipated in finding alternative uses for some of the equipment purchased for the THESIS project. The effect is to increase the net cost of the PSA THESIS computer system to £12·1 million.

AGRICULTURE, FISHERIES AND FOOD

  Veterinary Medicines Directorate
  Mr. Burns
  To ask the Minister of Agriculture, Fisheries and Food when the annual report of the Veterinary Medicines Directorate will be published; and if he will make a statement.

  Mr. Maclean
  The annual report of the Veterinary Medicines Directorate for 1990–91, its first as a next steps agency, was published on 31 July 1991. A copy has been placed in the Library of the House.

  During the year under report, there was a significant increase in the number of applications for product licences of all types and a continuing heavy workload in other areas. Full costs have been recovered across all the sectors of VMD's business activities. This has been matched by improvements in service and the report describes the benefits which have accrued to the VMD's customers from the initiatives that have been put in place since the directorate was established as a next steps agency. The report confirms the high priority which the VMD gives to ensuring that the consumer, the animals themselves and the environment are properly protected through the licensing procedures for veterinary medicines.

  The test results gathered for the calendar year 1990 under the national surveillance scheme, which monitors the levels of veterinary residues passing into the meat for human consumption, are also reported. Under this programme more than 48,500 samples were taken in 1990, an increase of almost 20 per cent. on the numbers sampled in 1989. I am pleased to say that the number of samples exceeding the recommended maximum residue limits were reassuringly low.

  I would like to take this opportunity to congratulate the chief executive and his staff on the progress they have made during this first year and look forward to receiving reports of further improvements in future years.

  Blue Ear Pig Disease
  Miss Emma Nicholson
  To ask the Minister of Agriculture, Fisheries and Food what steps are being taken by his Department to ensure that blue ear disease in pigs is kept out of the United Kingdom.

  Mr. Gummer
  [pursuant to his reply, 25 April 1991, c. 554]: We took steps to deal with farms where pigs showed suspicious symptoms even before it was confirmed that blue ear pig disease was present in England. Once it was confirmed, on 13 June, our restrictions went further than the trade restrictions required by European Community rules, particularly in the designation of large restricted areas and in the controls imposed on farms which had received pigs which might have been carrying infection.

  This framework of controls has enabled detailed studies to be carried out on the nature of the disease and its spread, making use in particular of the blood test developed at the Central Veterinary Laboratory. That research shows that the virus can be present in pigs which show only slight symptoms, or none at all; that infection can persist on pig farms long after clinical signs have disappeared; that fattening pigs, as well as those used for breeding, can be involved in its spread; and that it can be spread by animals which themselves show no sign of the
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  disease. The disease is behaving in the same way as similar conditions have done in north America, Germany, the Netherlands and Belgium.

  The understanding that we have gained of the disease will be central to planning our own future strategy and that of the Community as a whole. Clearly, infection is more widespread than would be suggested by clinical signs alone, and can be expected to spread further, even where farms are subject to restrictions much tighter than those required by Community rules. It is now equally clear that some elements of the controls which we put in place in June do not increase the level of protection to the national pig herd enough to justify the disruption that they cause.

  I have, therefore, decided to remove the elements of our restrictions on national pig movements that research has shown not to be worth while. All movement and area restrictions will be lifted from premises other than those where disease has been confirmed or is suspected. However, the trade restrictions required by Community rules—notably restrictions on exports from infected or suspect premises or the parishes in which they are located—will remain. Restrictions will also be maintained on the movement of pigs from such premises until eight weeks after clinical signs disappear, which clearly can be expected to reduce the extent to which infection is spread. The disease will remain notifiable and movements off restricted premises will remain subject to licence.

  I have greatly valued the close contacts that we have had with the British Veterinary Association and producers organisations since blue ear pig disease was first suspected. In consultation with those bodies we have over the past weeks made a number of adjustments to our controls. We shall continue to consult them fully in the light of any further scientific advice that emerges.

  School Meals
  Dr. David Clark
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on his Department's plans for the working party on school meals; who are the members of the working party; what meetings it has held; what plans it has for the future; and when he hopes to publish nutritional guidelines for school meals.

  Mr. Gummer
  I assume that the hon. Member is referring to the catering working group which was established last year by my Department, the Department of Health and the Health Education Authority. Its purpose is wider than suggested by the hon. Member and is to advise the MAFF-DH-HEA nutrition liaison group, an interdepartmental committee of officials, on ways of increasing the provision of healthier food in all types of catering outlets. In addition to representatives from the sponsoring Departments, the membership comprises representatives from the Department of Education and Science, the Royal Society of Health, the industrial catering sector—company staff restaurants—and the commercial sector. An independent academic chairman has been appointed. The Health Education Authority provides the secretariat. Three meetings have so far been held.

  The working group's terms of reference are to consider and make recommendations regarding:

  (a) raising the catering industry's awareness of the importance of healthy eating to the national diet and inter alia national health;

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  (b) providing guidance to caterers on achieving healthier choice in the methods of food selection, preparation and service;

  (c) identifying and advising those organizations responsible for catering education and training on the importance of including nutritional and dietary education within the curriculum of all courses.

  The group is expected to meet approximately three times a year and its considerations will include the possible need for guidelines for "healthy catering practice" in all catering outlets, including schools.

  Food Safety
  Dr. David Clark
  To ask the Minister of Agriculture, Fisheries and Food (1) if he will consult local authority associations representing trading standards authorities prior to making directions under section 6(3) of the Food Safety Act 1990; and if he will make a statement;

  (2) what plans he has to set up consultative arrangements with local authority associations concerning the financial arrangements of actions taken under section 6(3) of the Food Safety Act 1990; and if he will make a statement;

  (3) what has been the cost of the action taken by his Ministry before and following the making of each direction under section 6(3) of the Food Safety Act 1990; if he will give details of each action taken; and if he will make a statement.

  Mr. Gummer
  I have issued a direction under section 6(3) of the Food Safety Act to four individual local authorities, each in respect of a premises in their respective areas where my officers were carrying out an investigation in connection with alleged widespread irregularities in the marketing of orange juice. The effect of such directions is to remove from the local authority to myself the costs of any investigation and enforcement action. These costs are carried within the general votes of my own department and are thus not readily separately identified. The investigation is in any case not yet concluded. I will endeavour where appropriate to consult with affected local authorities beforehand on the use of the powers in section 6(3); on this occasion I consider that it was correct in the public interest to exercise my powers without any such prior consultation. My overriding concern must be the protection of the public.

  Veterinary Products
  Mr. Raffan
  To ask the Minister of Agriculture, Fisheries and Food (1) what assessment he has made of the reasons for the fall in applications for new licences and animal test certificates in 1990;

  (2) what estimate he has made of the average cost involved and length of time required by veterinary medicine companies in preparing data on safety and quality for submission of an application for new products; and if he will outline the data required to be submitted;

  (3)what assessment he has made of the effect of the cost of licensing veterinary medicine products on the amount of research undertaken.

  Mr. Maclean
  My hon. Friend has written to me asking the same three questions. I will he replying shortly, and a copy of my letter will be placed in the Library of the House and the Public Information Office.

FOREIGN AND COMMONWEALTH AFFAIRS

  United Nations
  Mr. Burns
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Her Majesty's Government's relations with the seven new members of the United Nations.

  Mr. Lennnox-Boyd
  I warmly welcome the entry to the United Nations of Estonia, Latvia, Lithuania. the Republic of Korea, the Democratic People's Republic of Korea, the Republic of the Marshall Islands, and the Federated States of Micronesia.

  We have long had diplomatic relations with the Republic of Korea and now have diplomatic relations with each of the Baltic states. We hope to establish diplomatic relations with the Marshall Islands and the Federated States of Micronesia shortly. Our support for the admisson of the Democratic People's Republic of Korea to the United Nations has meant that we also now recognise the Democratic People's Republic of Korea as a state, but have no plans to establish diplomatic relations.

  Biological and Toxin Weapons
  Mr. Brandon-Bravo
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the recent announcement of the third review conference concerning the 1925 Geneva protocol to the biological and toxin weapons convention.

  Mr. Douglas Hogg
  I am pleased to say that on 27 September the ambassador of the United Kingdom delegation to the conference on disarmament in Geneva announced at the third review conference of the biological and toxin weapons convention that Her Majesty's Government had decided to withdraw that part of our reservation to the 1925 Geneva protocol which maintained our right to retaliate in kind if biological weapons were used against us. The protocol prohibits the use in war of asphyxiating, poisonous or other gases, and of bacteriological methods of warfare.

  Political Union
  Mr. Cash
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will publish in the Official Report a statement on the outcome of the ministerial meeting of the intergovernmental conference on political union on 29 July and 30 September.

  Mr. Hurd
  I attended ministerial meetings of the intergovernmental conference on political union on 29 July and 30 September.

  The meeting on 29 July was procedural. The Netherlands presidency outlined its plans for the negotiations, to include ministerial meetings in September, November and December, and a two to three-day "conclave" of Foreign Ministers in the week of 11 November. The presidency said that it intended after this conclave to prepare a draft Treaty for discussion by the President of the Council, Mr. Lubbers, during his tour of member states' capitals before the European Council at Maastricht on 9 and 10 December.

  On 24 September the presidency tabled a new draft treaty text, incorporating substantive changes from the text prepared by the Luxembourg presidency in advance of

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  the European Council in Luxembourg on 28 and 29 June. The ministerial meeting on 30 September concluded that negotiations should continue on the basis of the Luxembourg presidency text. The Netherlands text was subsequently withdrawn. An inter-institutional conference between the Council of Ministers and the European Parliament was held on 1 October. My hon. Friend the Minister of State, Foreign and Commonwealth Office represented the United Kingdom.

  Foreign Affairs Councils
  Mr. Dickens
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will publish in the Official Report a statement on the outcome of the Foreign Affairs Councils on 29 July, 6 and 30 September, respectively.

  Mr. Hurd
  My right hon. Friend, the Secretary of State for Trade and Industry and I represented the United Kingdom at the Foreign Affairs Council on 29 July. The Council agreed to provide 50,000 tonnes of food aid to Albania and asked the Commission to produce an opinion on the Swedish application to join the European Community. The Council also reviewed progress in the negotiations on a European economic area and on the Uruguay round. Ministers issued statements on the middle east peace process and on Burma. They agreed that the troika of Foreign Ministers should return to Yugoslavia to seek agreement on a ceasefire.

  At the Foreign Affairs Council on 6 September, the United Kingdom was represented by my hon. Friend the Minister of State, Foreign and Commonwealth Office. The Council discussed the association agreement negotiations with Poland, Hungary and Czechoslovakia, but were unable to reach agreement on a revised negotiating mandate for the Commission. Ministers met their counterparts from the Baltic states and issued a statement stressing the willingness of the Community and member states to establish diplomatic relations with them. Ministers also discussed the latest developments in Yugoslavia and agreed to convene a peace conference on 7 September.

  My hon. Friends, the Minister of State, Foreign and Commonwealth Office, the Minister for Trade, the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food and I represented the United Kingdom at the Foreign Affairs Council on 30 September and 1 October. The Council agreed the Commission's negotiating mandate for the association agreement negotiations with Hungary, Poland and Czechoslovakia. The Council also agreed to send a further 50,000 tonnes of food aid to Albania sourced from eastern Europe under triangular purchasing arrangements. The Council asked the Commission to begin exploratory talks with the three Baltic states on trade and co-operation agreements. It also agreed to include these countries and Albania in the Community's PHARE programme and the generalised system of preferences. The Council asked the Commission to begin exploratory talks with Bulgaria on an association agreement.

  The Council agreed on the importance of a co-ordinated western response to the recent Soviet request for food aid on the basis of a full assessment of need, burden-sharing, and conditionality. It amended the regulation on a credit guarantee for the Soviet Union to permit purchases from eastern and central European countries.
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  The Council reviewed progress in the negotiations on a European economic area. It identified three main areas — fish, the EFTA cohesion fund and alpine transit—which needed further work before the joint EC/EFTA ministerial meeting on 21 October.

  The Council agreed the Commission's negotiating mandate for the free trade agreement negotiations with the Gulf Co-operation Council. Ministers reviewed the situation in Yugoslavia. They held an Association Council with Turkey in the margins of the meeting. They also discussed the EC role in a middle east peace conference and the modalities of the appointment of a Commission representative in the occupied territories.

  Councils of Ministers
  Mr. Dykes
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will publish in the Official Report a statement of forthcoming business in the European Community Council of Ministers.

  Mr. Garel-Jones
  The following Councils met between 1–15 October:

  1 October - Environment Council

  7 October - Economic and Finance Council

  7 October - Transport Council

  14 October - Labour and Social Affairs Council

  15 October - Consumer Affairs Council.

  The Agriculture Council will meet on 21 and 22 October and Ministers will discuss the reform of the common agriculture policy, the agricultural aspects of the GATT Uruguay round, and sweeteners in food. Ministers may also discuss meat products, and food quality.

  The Research Council will meet on 28 October. Ministers will discuss, and may agree common positions for, the following specific programmes under the third framework programme 1990–1994: controlled nuclear fusion; nuclear fission safety; and human capital and mobility. Ministers may also consider the Commission's proposal for the joint research centre's 1992–1994 programme.

  The Fisheries Council may meet on 28 October and Ministers might discuss technical conservation regulations.

  The Energy Council will meet on 29 October and Ministers will give further consideration to the proposed energy charter for the development of a free market in energy across the whole of Europe and beyond. Under the heading of "Energy and the Environment", Ministers will examine issues concerning CO2 emissions and response strategies, and may adopt the SAVE decision on energy efficiency. Ministers will also discuss the related hot water boilers directive, proposals to amend the existing Commission powers on oil crisis management and oil stocks, and accession by the Community to the IEA. Ministers might consider proposals to increase competition in the energy sector through the liberalisation of the gas and electricity markets.

NATIONAL FINANCE

  Bank of Credit and Commerce International
  Mr. Andrew MacKay
  To ask the Chancellor of the Exchequer if he has any plans to review the Banking Act 1987 in the light of the collapse of BCCI.
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  Mr. Norman Lamont
  I refer my hon. Friend to the statement I made on 19 July, at columns 715–29, and the statement made by my right hon. Friend the Prime Minister on 22 July, at columns 757–64.

  Mr. Vaz
  To ask the Chancellor of the Exchequer what discussions he has had with the Governor of the Bank of England concerning the latter's statement that BCCI had a criminal culture and the effect of that statement on the careers of members of staff; and if he will make a statement.

  Mr. Maples
  I know that the Governor did not intend to imply that all the staff of the BCCI were dishonest or involved in the fraud which led to the closure of the bank. Such an implication is patently not true. Hon. Members may also wish to know that I issued the following statement to the press on 4 October:"The Government has always made it clear that they would like to see depositors get as much of their money back from BCCI as possible. However, as I said to the House in July, I have always thought that a restructuring would prove difficult to achieve in the circumstances and that now also seems to be the conclusion of the Abu Dhabi Government.
  There was, of course, no question of either the Bank of England or the Government being obstructive in this. The Bank have always said they would look at any proposal put to them and there would certainly have been no question of the Government obstructing a successful restructuring had one proved possible. But in fact no proposal has been put forward.
  I recognise that this is very disappointing for the employees. The Abu Dhabi Government appear to have made generous proposals to assist them. I hope the staff will find work again soon. In July, the Chancellor, commented in the House that it would be monstrously unfair if honest, hardworking employees of BCCI were tainted by the actions of their superiors. I hope that prospective employers will not hold the fact that they worked for BCCI against them.
  Depositors will get compensation from the statutory deposit protection scheme as soon as a winding up order is made. I understand the provisional liquidator is still in discussion with the shareholders about the global position. In the meantime, interim compensation is being provided by the scheme put in place by the Abu Dhabi Government. I understand that the vast majority of depositors with the United Kingdom branches stand to get back 75 per cent. of their full deposit under the statutory scheme. The extent to which depositors will get back the rest of their money will obviously depend on the outcome of the liquidation.

  Mr. Knowles
  To ask the Chancellor of the Exchequer what is being done to help Asian businesses affected by the closure of BCCI to arrange new banking facilities.

  Mr. Maples
  The Government have been most concerned by the continuing stories that Asian businesses affected by the closure of the BCCI are having difficulties establishing new banking facilities. We have therefore taken steps to publicise again the help available from the clearing banks, the provisional liquidator Touche Ross, and Government Departments. The details were again set out in a letter which I sent to Mr. Nirj Deva on 30 September and which was also issued as a Treasury press notice. The text is as follows and has been published in the Daily Jang. We have also placed an advertisement setting out the various helpline numbers in the Asian Trader, which is widely distributed.
  Nirj Deva Esq
  433 Chiswick High Road
  London W4 4AU 30 September 1991
  We have spoken recently about the effect which the closure of BCCI has had on the many small Asian businesses which banked with it. As I told you, I have been concerned about the
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  continuing stories that some of these businesses are still having problems establishing new banking facilities. I have been even more concerned at reports that the Asian community believe that the Government is indifferent to their problems, or worse, that BCCI has closed down because it was an Asian bank. Nothing, I can assure you could be further from the truth.
  BCCI was closed by the international regulators who authorised and supervised it because of evidence of a massive fraud striking at the heart of the operation. The nationality of those involved was irrelevant. The Government has, however, been acutely aware that many of those who have suffered from the closure of the UK branches are Asian businessmen and small depositors and it is a matter of deep concern to us that so many thriving, profitable businesses of such value to the economy have been so badly damaged. We have the highest possible respect for the Asian community. They are hard working, self sufficient and epitomise everything that we have tried to foster over the past twelve years. That they should so disproportionately have been the victims of this bank fraud is truly tragic.
  Because of my concern for the effect on small businesses, both I and my officials have been in regular touch with the Bank of England to ensure that everything that can reasonably be done to help them is being done. I spoke to the Governor again recently because of the continuing stories about the problems small businesses were having, and the Bank pursued the matter with the clearing banks. As I think you are aware, the clearers responded very positively after the closure of BCCI on 5 July, nominating contact points in their branches to deal with potential customers from BCCI. But they have reported that surprisingly few customers of BCCI have approached them.
  Similarly, Touche Ross the provisional liquidators have also been doing everything they can to help. From the outset, they made arrangements for customers to release their banking records to the clearers, and they have also been working very hard to find ways of releasing security held by BCCI. This has been taking some time in some cases. As provisional liquidators, they cannot simply release the security without establishing the customers' net position with the bank, and that can take time where the banking relationship of the particular customer in question was complex. But I understand that they have now dealt with all but a comparatively few difficult cases. Most of the businessmen who approached them for help now have new banking facilities established with one of the clearers. Touche Ross also, however, report that surprisingly few businesses have contacted them.
  Clearly, neither the clearers nor the provisional liquidator can give assistance unless they are actually asked. I am therefore attaching to this letter a list of clearing bank contact points and the telephone number of Touche Ross and copying the letter to the press, in the hope that the information will therefore reach as many of those who need it as possible. If there are other ways in which I could bring this information to the attention of the Asian business community, please let me know.
  I am also taking this opportunity to include some information about the Department of Employment Loan Guarantee scheme and the DTI Enterprise Initiative, both of which may be of use to businesses affected by the closure of BCCI. The Loan Guarantee scheme offers a Government guarantee of 70 per cent. (85 per cent. in Inner City Task Force Areas) on loans of up to £100,000 from participating commercial banks, where a small firm is unable to offer security or lacks the track record normally required by banks and other financial institutions involved in the scheme. Details can be obtained from the address on the attached list.
  Any business which applies will have to provide a business plan, and it has been suggested to us that may present a problem for some of the smaller businesses affected by the closure of BCCI. The DTI Enterprise Initiative can assist in arranging consultancy services to help a small business prepare such a plan. Further information can be obtained from the contacts on the attached list.
  In some cases, however, all that may be needed is guidance and assistance from more experienced businessmen in the

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  local community or a professional advisor, such as the business's usual accountant. Both may be able to assist a small business in presenting its case to the clearing banks.
  I hope this information will be useful. I am very concerned about the continuing stories of Asian businesses having problems and I would welcome any further information you and others can offer about the specific problems being experienced so that we can see what more, if anything, might be done to resolve them.

  John Maples.

  Helpline numbers and points of contact for BCCI customers

  1. The following banks have set up helplines and/or branch contact points:

  (a) Bank of Scotland: 031 243 5524

  031 243 5542

  (b) Clydesdale: 041 223 2532

  041 223 2899

  (c) Lloyds:

  Branch contacts

  London

  Bayswater 071 221 4218

  Berkeley Square 071 491 4239

  Commercial Road 071 790 2445

  Covent Garden 071 836 3045

  Earl's Court 071 835 1464

  Whitechapel High Street 071 709 0491

  Fenchurch Street 071 481 4991

  Kensington High Street 071 938 2171

  Knightsbridge 071 589 2223

  Marble Arch 071 723 4247

  Old Bond Street 071 629 0288

  Paddington 071 723 0131

  Pall Mall 071 839 1288

  Park Lane 071 409 3545

  South Kensington 071 589 4883

  Swiss Cottage 071 722 7144

  Outer London

  Southall 081 574 7922

  Croydon 081 649 7711

  Wembley 081 903 6366

  Provincial branches

  Birmingham, Colmore Row 021 233 1255

  Bradford 0274 783181

  Leeds, Park Row 0532 448181

  Manchester, King Street 061 833 0222

  Isle of Man, Douglas

  Regent Street 071 734 4090

  (d) National Westminster:

  Branch contacts

  London

  Piccadilly Circus 071 434 3151

  Orchard House, Oxford Street 071 408 1232

  Bush House, Aldwych 071 836 5593

  London South West

  Southall 081 574 2300

  London South East

  Croydon 081 681 3199

  Lewisham 081 318 7331

  Tooting 081 672 7611

  West Midlands

  Handsworth 021 523 6111

  Digbeth 021 643 6922

  Birmingham, Bennctts Hill 021 643 8941

  Manchester

  Manchester, 33 Piccadilly 061 236 5642

  Manchester, City Office 061 829 1420

  Oldham 061 633 3005

  London North West

  Wembley 081 903 1303

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  Wembley Park 081 904 1407

  Islington 071 359 3716

  City

  Eastern 071 377 0844

  London, Fruit Exchange 071 247 1077

  London North East

  Limehouse 071 538 2363

  Lancashire

  Blackburn 0254 263571

  Preston 0772 58276

  East Midlands

  Leicester, Granby Street 0533 550033

  Rose Hill, Derby 0332 43279

  Nottingham. Senior Manager's Office 0602 422220

  North

  Glasgow 041 221 6981

  Yorkshire

  Leeds, City Office 0532 443151

  Bradford, Market Street 0274 390801

  Sheffield, City Office 0742 756677

  Newcastle upon Tyne 091 261 2221

  (e) Midland: 071 260 6921

  Midland Branch contacts

  Manchester 061 832 9011

  Shipley 0274 531 666

  Bradford 0274 308 308

  Coventry 0203 256 444

  Hove 0273 724 500

  Leicester 0533 551 515

  Slough 0753 868 161

  London, Hounslow 081 570 2255

  London, Bethnal Green 071 739 6084

  London, Great Portland Street 071 486 7191

  London, Streatham Hill 081 680 9988

  Newcastle 091 232 5792

  Birmingham 021 631 4400

  Bristol 0272 298 111

  Derby 0332 295 200

  Leeds 0632 442 500

  Isle of Man 0624 623 051

  London, Fenchurch Street 071 623 3088

  London, Ealing 081 567 6705

  London, Regent Street 071 287 2000

  London. Southall 081 571 0041

  (f) Barclays Bank

  Barclays has decided not to designate specific branches but rather to invite BCCI customers to contact any of their branches. The branches have received instructions on how best to help these customers and an internal helpline is in operation to deal with any difficulties.

  (g)Royal Bank of Scotland: 071 615 2348–9

  Branch contacts

  Glasgow 041 248 2777

  Leeds 0532 451 815

  Manchester 061 236 8585

  Isle of Man 0624 629 111

  Birmingham 021 212 1166

  London, Cavendish Square 071 499 3601

  London. City 071 623 4356

  2. Touche Ross

  Touche Ross, the provisional liquidator, has set up a helpline.

  The number is 071 480 7766.

  3. Government Services

  (a) The Loan Guarantee Scheme helps small firms which are unable to offer security, or lack the track record normally required by banks or other financial institutions involved in the Scheme. The Government offers a guarantee of 70 per cent. (85 per cent. in the Inner City Task Force Areas) on loans up to £100,000. Details can be obtained from most branches or from:

  163

  Department of Employment

  Small Firms Policy Branch

  Loan Guarantee Unit

  St. Mary's House

  c/o Moorfoot

  Sheffield

  S1 4PQ

  Telephone 0742 597382

  (b) The Department of Trade and Industry (DTI) can help with arranging consultancy services for small businesses. Details of this may be obtained from DTI local contact points:

  DTI North East 091 235 7292

  DTI North West (Manchester) 061 838 5000

  DTI North West (Liverpool) 051 224 6300

  DTI Yorkshire and Humberside 0532 338300

  DTI East Midlands 0602 596460

  DTI West Midlands 021 212 5000

  DTI East 0223 461939

  DTI South East (London) 071 627 7800

  DTI South East (Reading) 0734 395600

  DTI South East (Reigate) 0737 226900

  DTI South West 0272 308400

  Scotland 031 313 6200

  Wales 0443 841200

TRANSPORT

  Unadopted Roads
  Mr. Rathbone
  To ask the Secretary of State for Transport if he will estimate the cost of adopting currently unadopted roads in residential areas in England.

  Mr. Chope
  About £3,000 million.

  Unroadworthy Vehicles
  Mr. O'Hara
  To ask the Secretary of State for Transport whether he will consider further action to tackle unroadworthy vehicles.

  Mr. Chope
  The Road Traffic Act 1991 extended the power of the police to prohibit dangerously defective vehicles and it provided for all classes of motor vehicle to be prohibited. The Act also strengthened the law about the sale of unroadworthy vehicles. If a dealer is offering an unroadworthy vehicle for sale, he will have to make that clear to prospective purchasers.

  Trade Routes to Tokyo
  Mr. Ashton
  To ask the Secretary of State for Transport what discussions he has had with British Airways regarding trade routes to Tokyo.

  Mr. McLoughlin
  The Secretary of State meets senior members of British Airways management from time to time to discuss matters of mutual interest and officials meet more frequently to consider matters of detail.

  Transport Council
  Mr. Bevan
  To ask the Secretary of State for Transport what was the outcome of the meeting of the European Community Transport Council on 7 October.

  Mr. Rifkind
  The meeting of the European Council of Transport Ministers was held in Luxembourg on 7 October. I represented the United Kingdom.

  I am pleased to report that the Council reached agreement in principle on important proposals on aviation technical harmonisation and the mutual recognition of
  164
  cockpit crew licences. A draft directive on the limitation of noisier—chapter 2—aircraft was remitted for further study with the object of reaching a final agreement at the December meeting of Transport Ministers.

  The Council agreed that work should begin on the third aviation package, with a view to completion by the end of June 1992. This work should include discussion on the definition of a Community air cargo carrier.

  On the aviation arrangements with Norway and Sweden, a draft agreement has been approved in principle. As the Council considered that the proper legal base for the agreement was article 84, this has now been passed to the European Parliament for their opinion. I reminded the Commission of the need for its report on state aid to the airline industry, which should be available for the next Council.

  On land transport matters, a directive to harmonise the law on seat belt wearing was agreed, which allows member states flexibility on how to apply the new requirements. The Council also discussed, but reached no agreement on, proposals to liberalise bus and coach operations. I expressed my concern over the bureaucratic restriction of operators' freedom to provide services that was inherent in the current approach. On transit, the Presidency provided details of the latest talks with Austria and Switzerland. The discussions are continuing.

  On inland waterways matters, an agreement in principle was reached on cabotage. Agreement was also reached on a directive on reciprocal recognition of inland waterway boatmasters certificates.

  Rail Use
  Mr. Fry
  To ask the Secretary of State for Transport what steps he has taken to encourage greater use of the railway system.

  Mr. Rifkind
  To encourage more use of the rail network, I have written to the chairman of the railways board asking British Rail to give positive and sympathetic consideration to reasonable proposals from the private sector to introduce new freight or passenger services; to charge fairly for the use of BR track and facilities; to allow private operators to use their own locomotives if they wish; to allow private operators to use their own train crews, if they wish, as long as they are properly qualified.

  A copy of my letter to the chairman has been placed in the Library.

HEALTH

  Dentists
  Mr. Robin Cook
  To ask the Secretary of State for Health what proportion of dentists in each family health services authority offer NHS service only to(a) children on a capitation arrangement, (b) adults exempt from NHS charges and (c) a combination of (a) and (b).

  Mr. Dorrell
  The figures in the form requested are not collected centrally. However, we are currently analysing the results of a recent sample survey of dentists providing NHS treatment.

  Recycling
  Mr. Speller
  To ask the Secretary of State for Health what steps he intends to take to encourage the use for foodstuffs of which are disposable and recyclable.

  Mr. Leigh
  I have been asked to reply.

  The Government have set the challenging target of recycling 25 per cent. of the domestic waste stream—which includes packaging materials for foodstuffs—by the year 2000. Achieving this aim requires the existence of technologies to use recyclable material, and markets for the resulting products. The Government are addressing these elements through the support that they are providing to business-led collaborative projects under their environmental technology programmes. Many such projects feature the recycling of packaging.

  The Government are also monitoring eight kerbside collection schemes the results of which will help to promote and establish best practice and will encourage the take-up of such schemes.

ENERGY

  Video Recordings
  Mr. Redmond
  To ask the Secretary of State for Energy, pursuant to his answer to the hon. Member for Don Valley of 18 June,Official Report, column 115, if he will make it his practice to keep central records of lists of titles of the video recordings purchased by his Department.

  Mr. Wakeham
  No.

  Energy Efficiency
  Mr. Day
  To ask the Secretary of State for Energy if he will report on the progress of the interdepartmental ministerial committee on energy efficiency.

  Mr. Wakeham
  [pursuant to his reply, 12 November 1990, c. 79]:I now have pleasure in placing copies of the ministerial group's annual report on energy efficiency in the Libraries of the House.

HOME DEPARTMENT

  Prison Visitors
  Mr. Maclennan
  To ask the Secretary of State for the Home Department what proposals he has to extend training provision for prison visitors; and if he will make a statement.

  Mrs. Rumbold
  The prison service does not provide formal training for prison visitors. The National Association of Prison Visitors issues guidance and advice on the role of prison visitors, which is supplemented, as necessary, by governors and their staff.

  BBC Borrowing Limits
  Sir John Wheeler
  To ask the Secretary of State for the Home Department if the BBC's borrowing limits are to be increased.

  Mr. Kenneth Baker
  I am today placing in the Library a copy of a supplemental charter which has been approved 166
  today by counsellors of state on Her Majesty's behalf. This increases the BBC's borrowing limit under article 3(w) of the charter from £100 million to £200 million, with power for the Secretary of State to approve further sums up to a maximum of £250 million. These changes are intended to allow for the expected effects on cash flow of the budget payment scheme for television licences and the licence fee settlement announced earlier this year.

  Squatting
  Mr. Maclennan
  To ask the Secretary of State for the Home Department what proposals he has to amend the law on squatting; and if he will make a statement.

  Mr. John Patten
  I refer the hon. Member to the statement made by my right hon. Friend on 15 October at columns 151–2.

TRADE AND INDUSTRY

  EC Regional Policy
  Mr. Michael J. Martin
  To ask the Secretary of State for Trade and Industry when he next intends to meet representatives of the European Commission to discuss regional policy.

  Mr. Leigh
  At an informal meeting of EC regional policy Ministers which has been called at The Hague on 18 and 19 November 1991.

  Car Exports
  Dr. Michael Clark
  To ask the Secretary of State for Trade and Industry if he will make a statement on exports of British-made cars.

  Mr. Hind
  To ask the Secretary of State for Trade and Industry if he will make a statement on exports of British-made cars.

  Mr. Dykes
  To ask the Secretary of State for Trade and Industry if he will make a statement on exports of British-made cars.

  Mr. Sainsbury
  Between 1988 and 1990 the number of cars exported from the United Kingdom increased by 60 per cent. The number of cars exported in the first eight months of this year exceeded 400,000. This is an increase of 82 per cent. on the same period last year.

  World Trade
  Mr. Brazier
  To ask the Secretary of State for Trade and Industry if he will make a statement on the trends in the United Kingdom's share of world trade.

  Mr. Sainsbury
  The United Kingdom's share of world exports of manufactures volume has been stable since the early 1980s after decades of decline. The United Kingdom's share of total world trade has been stable over the last five years.

  Scotch Whisky
  Mrs. Margaret Ewing
  To ask the Secretary of State for Trade and Industry when he next intends to meet representatives of the Scotch whisky industry to discuss the promotion of exports.
  167
  Mr. Sainsbury
  My right hon. Friend has no immediate plans to meet representatives of the industry. Ministers take every opportunity to press for improved access to overseas markets for Scotch whisky.

  Quality Management
  Mr. Stevens
  To ask the Secretary of State for Trade and Industry what steps Her Majesty's Government are taking to promote the implementation of total quality management standards by British companies.

  Mr. Wilshire
  To ask the Secretary of State for Trade and Industry whether he will make a statement on Government initiatives to support the implementation of total quality management standards.

  Mr. Leigh
  The Government are actively promoting total quality management through their "Managing into the '90s" awareness programme and through assisted consultancies under the consultancy help scheme.

  Export Policy
  Mr. Alan. W. Williams
  To ask the Secretary of State for Trade and Industry if he has any plans to meet representative of British exporters to discuss Government policies on exports.

  Mr. Harry Barnes
  To ask the Secretary of State for Trade and Industry if he has any plans to meet representatives of British exporters to discuss Government policies on exports.

  Mr. Lilley
  I frequently meet members of the United Kingdom business community involved in exporting for Britain.

  West Midlands Development Agency
  Mrs. Maureen Hicks
  To ask the Secretary of State for Trade and Industry what Government assistance has been given to the West Midlands development agency since it was established.

  Mr. Leigh
  Since its establishment in 1983, a total of £2–94 million in grant in aid has been provided to WMDA for its inward investment promotion activities. In 1991–92, £670 thousand was offered in grant in aid for inward investment, representing a 67·5 per cent. increase in funding over the last two years.

  Textile and Clothing Industry
  Mrs. Heal
  To ask the Secretary of State for Trade and Industry what representations he has recently received from the textile and clothing industry.

  Mr. Sainsbury
  My right hon. Friend has received representations on a number of issues from representatives of the textile industries.

  Postal Services
  Mr. Bowis
  To ask the Secretary of State for Trade and Industry what discussions he has had with his EC counterparts on extending consumer choice and commercial competition in postal services.

  Mr. Leigh
  Officials in my Department have been closely involved with their EC counterparts and with the 168
  EC Commission in the formulation of an EC policy to extend consumer choice and commercial competition in postal services. There have also been a number of discussions in the EC Council of Ministers in which we have participated. The EC Commission expects to publish its policy proposals as a green paper shortly.

  Company Liquidations
  Mr. Ron Brown
  To ask the Secretary of State for Trade and Industry if he will make a statement about the current level of company liquidations.

  Mr. Redwood
  The total number of company liquidations due to insolvency in England and Wales during the first six months of 1991 was 11,055. This represents an annual rate of about 2 per cent. of the stock of companies.

  EC Industrial Policy
  Mr. David Marshall
  To ask the Secretary of State for Trade and Industry when he next intends to meet representatives of the European Commission to discuss industrial policy.

  Mr. Lilley
  My colleagues and I maintain regular contact with representatives of the European Commission on a range of issues, including industrial policy.

  Shark Products
  Mr. Tony Banks
  To ask the Secretary of State for Trade and Industry if he will make it his policy to ban the import of shark products.

  Mr. Sainsbury
  No. Sharks are not currently recognised as being endangered. Were evidence to be produced that any species of shark was becoming endangered, consideration could be given to controlling the trade under either the convention on international trade in endangered species of wild fauna and flora—CITES—or the Endangered Species (Import and Export) Act 1976.

  Manufactured Goods
  Mr. Darling
  To ask the Secretary of State for Trade and Industry what was the trade balance in manufactured goods in(a) Germany and (b) Britain in 1990.

  Mr. Sainsbury
  Only sections 5 to 8 of the standard international trade classification are included as "manufactured goods". In 1990 the United Kingdom's trade deficit in manufactured goods was £13·7 billion. The Federal Republic of Germany, excluding East Germany, had a surplus of £58·6 billion.

  Inward Investment
  Mr. Burns
  To ask the Secretary of State for Trade and Industry if he will make a statement on the level of inward investment from the United States.

  Mr. Leigh
  The United Kingdom has maintained its successful track record as the preferred location within the European Community for inward investment from the United States of America. Britain's share of United States direct investment in the EC stood at 38 per cent. at the end of 1990.

  Company Audits
  Mr. Butler
  To ask the Secretary of State for Trade and Industry whether he proposes any increase in the audit requirements for small limited companies.

  Mr. Redwood
  No.

  Employers' Costs
  Mr. Tredinnick
  To ask the Secretary of State for Trade and Industry what representations he has received about the cost burden on employers in the United Kingdom; and what information he has on comparable figures for other European Community countries.

  Mr. Redwood
  The latest figures published by the Central Statistical Office show that in 1988 the tax burden on business in the United Kingdom, including employers' social security contributions, was 8·9 per cent. of GNP compared with 17–2 per cent. in France, 13·9 per cent. in Belgium and the Netherlands and 10·5 per cent. in Germany.

  Footwear Industry
  Mr. Vaz
  To ask the Secretary of State for Trade and Industry what representations he has received seeking further assistance for firms in the footwear industry.

  Table 1

  United Kingdom exports of manufactured goods1 to Latin America: 1975–1990

  Top ten importing countries—ranking by value of United Kingdom exports of manufactures for each year

  1975

  1976

  1977

  1978

  1979

  1980

  1981

  1982

  1983

  1984

  1985

  1986

  1987

  1988

  1989

  1990

  Brazil

  1

  1

  1

  1

  1

  1

  2

  2

  1

  1

  2

  1

  1

  1

  1

  1

  Mexico

  2

  2

  4

  4

  2

  2

  1

  1

  2

  2

  1

  2

  2

  2

  2

  2

  Venezuela

  3

  3

  2

  2

  4

  4

  4

  4

  3

  3

  3

  3

  3

  3

  3

  3

  Chile

  7

  7

  7

  6

  6

  5

  5

  5

  6

  6

  5

  4

  4

  4

  4

  4

  Colombia

  8

  8

  6

  5

  5

  7

  7

  7

  4

  4

  4

  6

  5

  5

  5

  5

  Argentina

  4

  4

  3

  3

  3

  3

  3

  3

  —

  —

  —

  —

  —

  —

  —

  6

  Ecuador

  9

  9

  5

  7

  8

  9

  9

  9

  8

  8

  7

  8

  8

  6

  7

  7

  Peru

  5

  6

  8

  8

  10

  6

  6

  6

  9

  9

  9

  7

  6

  8

  9

  8

  Cuba

  6

  5

  9

  9

  7

  8

  8

  8

  5

  5

  6

  5

  7

  7

  8

  9

  Panama

  10

  10

  10

  10

  9

  10

  10

  10

  7

  7

  8

  9

  9

  10

  —

  10

  Guatemala

  —

  —

  —

  —

  —

  —

  —

  —

  —

  —

  —

  —

  —

  —

  6

  —

  Dominican Republic

  —

  —

  —

  —

  —

  —

  —

  —

  10

  10

  10

  —

  10

  —

  10

  —

  Uruguay

  —

  —

  —

  —

  —

  —

  —

  —

  —

  —

  —

  10

  —

  9

  —

  —

  Note:

  1 Sections 5 to 8 of the Standard International Trade Classification.

  2 Current prices.

  3 The remaining countries in Latin America (Bolivia, Costa Rica, El Salvador. Haiti, Honduras. Nicaragua and Paraguay) did not rank among the top ten in any of these years.

  Source: Overseas Trade Statistics of the United Kingdom (HMSO)

  Table 2

  Main United Kingdom manufactured goods exported to Latin America 1975–1990

  £ million1

  Value of exports

  1975

  1. Machinery other than electric

  241·5

  2. Transport equipment

  84·8

  3. Manufactures of metals nes

  43·2

  1976

  1. Machinery other than electric

  260·5

  2. Transport equipment

  100·2

  3. Electrical machinery, apparatus and appliances

  62·7

  1977

  1. Other transport equipment

  154·0

  2. Machinery specialised for particular industries

  97·3

  170
  Mr. Sainsbury
  My right hon. Friend and I have received representations from a number of organisations, representing companies in the footwear industry.

  Kuwait
  Mr. Hayes
  To ask the Secretary of State for Trade and Industry whether he will make a statement on the number of new contracts which have been won in Kuwait by British companies since the end of the Gulf war.

  Mr. Lilley
  I refer my hon. Friend to the answer I gave today to my hon. Friend the Member for Romsey and Waterside (Mr. Colvin) and the hon. Member for Linlithgow (Mr. Dalyell).

  Latin America (Exports)
  Mr. Wray
  To ask the Secretary of State for Trade and Industry if he will list British manufactured goods exported to the top 10 Latin American importing countries for each year since 1975, expressing the value of such exports in 1991 moneys.

  Mr. Sainsbury
  [holding answer 14 October 1991]: The available information is shown in the tables.

  Value of exports

  3. Power generating machinery and equipment

  74·4

  1978

  1. Machinery specialised for particular industries

  105·1

  2. Power generating machinery and equipment

  86·3

  3. Other transport equipment

  82·2

  1979

  1. Other transport equipment

  113·2

  2. Machinery specialised for particular industries

  92·8

  3. Power generating machinery and equipment

  79·1

  1980

  1. Machinery specialised for particular industries

  110·9

  2. Power generating machinery and equipment

  109·5

  3. Road vehicles (including air cushioned)

  82·2

  171

  Value of exports

  1981

  1. Power generating machinery and equipment

  108·3

  2. Machinery specialised for particular industries

  100·8

  3. Road vehicles (including air cushioned)

  84·9

  1982

  1. Power generating machinery and equipment

  83·6

  2. Machinery specialised for particular industries

  74·0

  3. Other transport equipment

  70·3

  1983

  1. Other transport equipment

  52·9

  2. Machinery specialised for particular industries

  44·4

  3. General industrial machinery and parts

  40·2

  1984

  1. Other transport equipment

  137·4

  2. Metal working machinery

  57·5

  3. Power generating machinery and equipment

  56·8

  1985

  1. Other transport equipment

  96·4

  2. Road vehicles (including air cushioned)

  82·9

  3. Machinery specialised for particular industries

  76·3

  1986

  1. Road vehicles (including air cushioned)

  93·4

  2. Power generating machinery and equipment

  90·4

  3. Machinery specialised for particular industries

  78·2

  Table 1

  United Kingdom imports from Latin America: 1975–1990

  Top ten exporters to the United Kingdom—ranking by value of United Kingdom imports for each year

  1975

  1976

  1977

  1978

  1979

  1980

  1981

  1982

  1983

  1984

  1985

  1986

  1987

  1988

  1989

  1990

  Brazil

  1

  1

  1

  1

  1

  1

  1

  1

  1

  1

  1

  1

  1

  1

  1

  1

  Chile

  3

  4

  3

  3

  3

  2

  5

  3

  5

  5

  4

  2

  3

  2

  2

  2

  Mexico

  9

  9

  5

  5

  7

  5

  4

  4

  3

  3

  3

  3

  2

  3

  3

  3

  Argentina

  4

  3

  2

  2

  2

  4

  2

  6

  —

  —

  —

  9

  7

  5

  6

  4

  Venezuela

  2

  2

  4

  4

  4

  3

  3

  2

  2

  2

  2

  4

  4

  6

  5

  5

  Peru

  6

  5

  6

  7

  5

  6

  6

  5

  4

  4

  6

  6

  5

  4

  4

  6

  Colombia

  7

  7

  8

  8

  8

  7

  8

  7

  6

  6

  5

  5

  6

  7

  7

  7

  Uruguay

  —

  10

  9

  9

  9

  —

  9

  8

  7

  7

  7

  7

  8

  8

  8

  8

  Guatemala

  5

  —

  —

  —

  —

  10

  —

  —

  —

  —

  —

  —

  —

  —

  —

  9

  Cuba

  —

  6

  10

  10

  10

  9

  10

  10

  10

  10

  —

  —

  —

  9

  9

  10

  Costa Rica

  —

  —

  —

  —

  —

  —

  —

  —

  8

  8

  8

  8

  9

  10

  10

  —

  Bolivia

  8

  8

  7

  6

  6

  8

  7

  9

  9

  9

  —

  —

  10

  —

  —

  —

  Ecuador

  —

  —

  —

  —

  —

  —

  —

  —

  —

  —

  9

  10

  —

  —

  —

  —

  Panama

  —

  —

  —

  —

  —

  —

  —

  —

  —

  —

  10

  —

  —

  —

  —

  —

  Nicaragua

  10

  —

  —

  —

  —

  —

  —

  —

  —

  —

  —

  —

  —

  —

  —

  —

  Note:

  The remaining Latin American countries-E1 Salvador, Honduras, Paraguay, Haiti and the Dominican Republic—did not rank among the top ten in any of these years.

  Source: Overseas Trade Statistics of the United Kingdom (HMSO)

  Table 2

  Main United Kingdom product imports from Latin America 1975–1990

  £ million1

  Value of imports

  1975

  1. Petroleum, petroleum products and related materials

  133·0

  2. Sugars, sugar preparations and honey

  108·9

  3. Metalliferous ores and metal scrap

  81·2

  1976

  1. Petroleum, petroleum products and related materials

  100·4

  2. Sugars, sugar preparations and honey

  95·5

  3. Non-ferrous metals

  94·4

  172

  Value of exports

  1987

  1. Power generating machinery and equipment

  115·0

  2. Metal working machinery

  105·0

  3. Road vehicles (including air cushioned)

  80·7

  1988

  1. Power generating machinery and equipment

  101·1

  2. Road vehicles (including air cushioned)

  98·4

  3. Organic chemicals

  71·2

  1989

  1. Power generating machinery and equipment

  93·5

  2. Organic chemicals

  81·2

  3. Road vehicles (including air cushioned)

  74·1

  1990

  1. Other transport equipment

  118·6

  2. Machinery specialised for particular industries

  88·1

  3. Power generating machinery and equipment

  87·5

  1 Current prices.

  Source: Overseas Trade Statistics of the United Kingdom, (HMSO).

  Mr. Wray
  To ask the Secretary of State for Trade and Industry if he will list the top 10 Latin American countries exporting to Britain for each year since 1975, indicating the type of products imported by Britain and their value in 1991 moneys.

  Mr. Sainsbury
  [holding answer 14 October 1991]: The available statistics are shown in the tables.

  Value of imports

  1977

  1. Coffee, tea, cocoa, spices and manufactures thereof

  102·4

  2. Metalliferous ores and metal scrap

  101·5

  3. Non-ferrous metals

  97·6

  1978

  1. Metalliferous ores and metal scrap

  111·0

  2. Non-ferrous metals

  81·3

  3. Coffee, tea, cocoa, spices and manufactures thereof

  77·4

  1979

  1. Non-ferrous metals

  145·9

  2. Metalliferous ores and metal scrap

  142·2

  173

  Value of imports

  3. Coffee, tea, cocoa, spices and manufactures thereof

  100·6

  1980

  1. Non-ferrous metals

  197·8

  2. Petroleum, petroleum products and related materials

  150·7

  3. Metalliferous ores and metal scrap

  137·9

  1981

  1. Petroleum, petroleum products and related materials

  183·3

  2. Non-ferrous metals

  130·1

  3. Meat and meat preparations

  128·0

  1982

  1. Petroleum, petroleum products and related materials

  214·9

  2. Non-ferrous metals

  153·1

  3. Meat and meat preparations

  110·0

EDUCATION AND SCIENCE

  Boxing
  Mr. Menzies Campbell
  To ask the Secretary of State for Education and Science when he last met the chairman of the British Boxing Board of Control; and what topics were discussed.

  Mr. Atkins
  I met the general secretary of the British Boxing Board of Control and medical advisers today, to discuss safety arrangements in professional boxing.

  Mr. Menzies Campbell
  To ask the Secretary of State for Education and Science if he will set up an inquiry into amateur and professional boxing.

  Mr. Atkins
  No.

  Mr. Menzies Campbell
  To ask the Secretary of State for Education and Science what statistical information his Department maintains on the incidence of death or serious injury arising as a result of participation in amateur and professional boxing.

  Project

  Period of research

  Researcher

  Guidance and Choice in the 16+ Action Plan

  August 1984 – July 1987

  Scottish Council for Research in Education

  Articulation of the 16+ National Development Programme

  September 1985 – August 1988

  Jordanhill College of Education

  Assessment in the 16+ Development Programme

  October 1985 – June 1988

  Scottish Council for Research in Education

  Accreditation of Work-Based Learning

  April 1986 – March 1988

  Scottish Vocational Education Council

  Competency Testing

  October 1986 – September 1988

  Scottish Vocational Education Council

  Marketing of Further Education by Further Education Colleges

  January 1987 – March 1987

  Stirling University

  The Induction of Teaching Staff into Further Education Colleges

  October 1987 – September 1988

  Scottish Council for Research in Education

  Assessment of Generic Aspects of Competence

  October 1987 – September 1989

  Edinburgh University

  Marketing in Further and Higher Education: A Development Model

  December 1987 – March 1988

  Stirling University

  Young People's Experience of National Certificate Modules

  September 1988 – September 1991

  Edinburgh University

  National Certificate Guidance Information System

  October 1988 – September 1990

  Jordanhill College of Education

  174
  Mr. Atkins
  The Office of Population Censuses and Surveys provides information on deaths during sporting and leisure activities through its annual monitor series DH4. The number of deaths in England and Wales where boxing was mentioned are as follows:

  1986—2 deaths

  1987—1 death

  1988—nil

  1989—nil

  1990—nil

  The Department does not maintain information on serious injuries, although the Sports Council collates general information on sports accidents.

  Mr. Menzies Campbell
  To ask the Secretary of State for Education and Science if he will establish a study to ascertain the long-term physical and mental consequences of participating in both amateur and professional boxing.

  Mr. Atkins
  No.

  Mr. Menzies Campbell
  To ask the Secretary of State for Education and Science if he will make it his policy to see that the incidence of brain stem injuries as a result of boxing accidents is monitored.

  Mr. Atkins
  It is for the boxing authorities to consider what specific information on boxing it is appropriate to collect and monitor.

SCOTLAND

  Further Education
  Mr. Worthington
  To ask the Secretary of State for Scotland what research he has conducted into the working of the further education system in Scotland in recent years; and if he will publish it.

  Mr. Michael Forsyth
  In the years 1984–1991, the Scottish Office Education Department grant aided the following external research projects particularly relating to the further education system.
  175

  Project

  Period of research

  Researcher

  Teaching, Learning and Assessment in the National Certificate

  October 1988 – March 1991

  Scottish Council for Research in Education

  The Single European Market: Implications for Vocational Education and Training in Scotland

  October 1989 – September 1990

  Glasgow University

  Evaluation of Advanced Courses Development Programme in Further and Higher Education

  October 1990 – September 1991

  Scottish Council for Research in Education

  Evaluation of the Installation of the New Further Education College Council System

  August 1991 – December 1991

  Scottish Further Education Unit

  Evaluation of Scottish Wider Access Programme

  September 1991 – August 1992

  Scottish Council for Research in Education

  Details of recent SOED funded further education research projects arc contained in the 1989–90 and 1991 editions of the Department's publication "Educational Research", copies of which are in the Library.

  Publication of the results of research projects is governed by contracts between researchers and the Scottish Office Education Department. The general policy of the Scottish Office is to encourage the dissemination of research findings by publication of reports or by other means.

  Higher Education
  Mr. Worthington
  To ask the Secretary of State for Scotland what percentage of the relevant age cohort attained minimum qualification standard for higher education in each year since 1979.

  Mr. Michael Forsyth
  The qualified leaver index, calulated as the number of school and further education leavers with three or more highers or equivalent qualifications expressed as a percentage of the population aged 17 years, is shown in the table.

  Qualified leaver index

  1978–79

  18·7

  1979–80

  19·7

  1980–81

  20·0

  1981–82

  20·7

  1982–83

  22·0

  1983–84

  22·7

  1984–85

  21·5

  1985–86

  21·2

  1986–87

  22·0

  1987–88

  22·5

  1988–89

  24·0

  11989–90

  25·2

  1 Provisional.

  Feudal System
  Mr. Maclennan
  To ask the Secretary of State for Scotland if he will bring forward legislation to abolish the rights of feudal superiors as recommended by the Scottish Law Commission; and if he will make a statement.

  Lord James Douglas-Hamilton
  The Scottish Law Commission is currently carrying out a major review of property law in Scotland. As part of this work, the commission published a discussion paper in July 1991 176
  seeking comments on various proposals for reform or abolition of the feudal system. Once responses have been received and analysed, the commission will submit a report to the Government making specific recommendations for reform. My right hon. Friend proposes to await this report before deciding whether a change in the law is needed.

  Polytechnics
  Mr. Maclennan
  To ask the Secretary of State for Scotland if he will publish the criteria by which his Department determines that educational establishments in Scotland have achieved polytechnic status; and if he will make a statement.

  Mr. Michael Forsyth
  The criteria for granting polytechnic status in Scotland are essentially those which have been used in England and Wales modified to take account of Scottish circumstances, particularly the different subject programmes used by the Scottish Office Education Department for funding purposes. The criteria are:

  1. accreditation for taught degrees by the Council for National Academic Awards;

  2. a higher education enrolment of at least 4,000 full-time (including sandwich) students and substantial part-time provision (of the order of 1,500 students on substantive courses leading to a higher education award);

  3. at least 300 full-time higher education students in a majority of funding programmes: and

  4. over two-thirds of full-time higher education students on degree level courses.

  Mr. Maclennan
  To ask the Secretary of State for Scotland if he will list those educational establishments in Scotland which his Department has determined as having achieved polytechnic status.

  Mr. Michael Forsyth
  Two Scottish higher education establishments have been granted polytechnic status— Napier polytechnic of Edinburgh and Glasgow polytechnic.

  Mr. Maclennan
  To ask the Secretary of State for Scotland on what criteria the Robert Gordon Institute of Technology has failed to achieve polytechnic status.

  Mr. Michael Forsyth
  The Robert Gordon Institute of Technology has not submitted any application to the Scottish Office Education Department to be granted polytechnic status.

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

Lord Craig of Radley
Sir David Brownrigg Craig, Knight, having been created Baron Craig of Radley, of Helhoughton in the County of Norfolk, for life—Was, in his robes, introduced between the Lord Bramall and the Lord Colnbrook.
Lord Vivian Lord Vivian—Sat first in Parliament after the death of his father.

Soviet Union: Food Distribution Aid
2.48 p.m.
Lord Campbell of Croy Lord Campbell of Croy asked Her Majesty's Government:
Whether they have decided to sponsor a programme of assistance to the republics of the USS (formerly USSR) in the distribution and retailing of food.
The Minister of State, Foreign and Commonwealth Office (The Earl of Caithness): My Lords, yes. We have already made it clear that in addition to EC food aid, food distribution is one of the four priority areas for the £50 million know-how fund for the Soviet Union.
Lord Campbell of Croy: My Lords, I thank my noble friend for that Answer. Does he not agree that this expertise is as important as the food being supplied through the EC and G7? Can he say whether an effective operation will be undertaken before the severest part of the winter?
The Earl of Caithness: My Lords, I agree with my noble friend on the requirement that there should be as much expertise as money. That is why we are grateful to Sir Ronald McIntosh who visited Moscow and St. Petersburg and brought back the report that he did. The work will follow from that. As regards emergency supplies for this winter, that is not strictly part of the know-how fund although the training that we shall be able to give will benefit the Soviet Union. That is much more a matter for the European Community.
Lord Cledwyn of Penrhos: My Lords, does the noble Earl agree that this is a huge problem which cannot be resolved quickly or even in 12 months? Does he further agree that it involves careful long-term planning as well as financial aid? Can the noble Earl say what steps are being taken to offer a co-ordinated plan to seek to resolve the question of distribution and retailing? Finally, can he say what is the latest assessment of the food shortage?
The Earl of Caithness: My Lords, perhaps I may answer first the last question asked by the noble Lord the Leader of the Opposition. It is difficult to get a precise and clear picture at the moment. I agree that this is a problem which will last for some time. That is why we are taking forward the good work of Sir Ronald McIntosh. Three projects have already been agreed and a further four are under consideration. We shall continue to try for the right balance to the answer.
Lord Renton: My Lords, bearing in mind that the three Baltic republics are now independent, can my noble friend say what is their position in relation to his original Answer?
The Earl of Caithness: My Lords, as I understand it, the three Baltic republics can, as before, benefit from the know-how fund.
Lord Mellish: My Lords, can the noble Earl add to his Answer as regards distribution? It is important that the right people get the right food.
The Earl of Caithness: My Lords, it is equally important that the right food comes from the right place for distribution. That is what Sir Ronald McIntosh was looking at, and that is where we are going to give help.
The Earl of Halsbury: My Lords, does the noble Earl not agree that one of the problems is that throughout the whole of Eastern Europe, which is now in a state of reconstruction, there has been no tradition of middle-level management for at least two or three generations?
The Earl of Caithness: My Lords, as the noble Earl has said, there are severe problems in that area. It is not necessarily the question of a shortage of food. There is the question of producing the right food and a system of distribution to go with it. That requires management.
Lord Taylor of Gryfe: My Lords, is the Minister aware that one of the largest experts in food distribution in this country, with a volume of over £7 billion per annum, is the Co-operative movement? That movement has direct association with Centrosoyuz, the non-state food distribution agency in the USSR. Will the Minister assure me that the advantage of that particular circumstance is used in the arrangements which are now being made?
The Earl of Caithness: My Lords, we seek to make use of every advantage. The noble Lord will be pleased to know that private farmer training given by Scotland is particularly useful.
Lord Campbell of Croy: My Lords, can my noble friend say whether the representatives of the British Government are meeting willing co-operation from the officials and others concerned in operating the previous system?
The Earl of Caithness: My Lords, yes. The offer made by the British Government through the know-how fund has been extremely well received in the Soviet Union.
Lord Molloy: My Lords, does the Minister agree that this is an enormous problem for the British Government and one that we should not be landed with entirely on our own? Can he say whether it is possible for other governments, particularly those that we regard as allies, to form some kind of permanent commission to be present in the various countries so that we can continue to make sure that the evil of communism can never arise again and thereby set these various countries on the true road of freedom and democracy? Does the noble Earl agree that Britain, as regards matters which it cannot achieve alone, deserves the support of many other countries?
The Earl of Caithness: My Lords, we are doing a great deal bilaterally but as the noble Lord says, the support of other countries is needed. That is why, through the Community, 250 million ecus are being given in grants and 500 million ecus in food credits. On 7th October the EC presidency announced a further 1.25 billion ecus of which we contribute something like 16 per cent. to 17 per cent. That shows that other countries are involved.
Lord Holme of Cheltenham: My Lords, is the Minister aware that among the British farming community there is considerable uncertainty as to the amount of grain that may be required over the winter? While appreciating the efforts that the Government are making, the sooner food aid can be established the better the chances of orderly pricing in the grain market.
The Earl of Caithness: My Lords, it is not only the British farmer who is unaware of exactly what is required in the form of grain. However, that is more on the emergency side. In the long term the know-how fund will seek to remedy these deficits.

Adult Education
2.57 p.m.
Baroness David Baroness David asked Her Majesty's Government: What are their plans to change the statutory basis of adult education.
Lord Cavendish of Furness: My Lords, the noble Baroness will have to wait for Her Majesty's most gracious Speech.
Baroness David: My Lords, I do not think that I need thank the Minister for that Answer! However, as the White Paper states that the funding council should devote its funds to vocational courses leading to qualifications and that fees should be charged for other courses, will the Minister confirm that the Secretary of State's statement on 24th September means that he will not proceed with that proposition? Does the Secretary of State still hold the view that there is a clear distinction between vocational and non-vocational courses, bearing in mind that everyone in adult education disagrees?
Lord Cavendish of Furness: My Lords, the Government do not suggest a division between vocational and non-vocational education. The new
1092
FE funding councils will support a very wide range of courses: courses leading to academic and vocational qualifications; courses enabling adults to gain access to higher education; return-to-learn courses; basic skills courses; courses to develop proficiency in English as a second language and, in Wales, proficiency in Welsh. The LEAs will have a duty to secure provision on all further education for adults which does not fall into the councils' duty.
Baroness David: My Lords, the Minister has not answered the second part of my Question.
Lord Cavendish of Furness: My Lords, my right honourable friend the Secretary of State for Education and Science addressed the anxieties, as the noble Baroness said, on 24th September. He reaffirmed the Government's commitment to the further education of adults. He made it clear that recreational and leisure courses would not disappear and fees would not need to be increased as a result of the proposed reforms.
Baroness Phillips: My Lords, is the Minister aware that the very powerful women's organisations, who in the main are supporters of the Conservative Government, are watching this matter very carefully? If the Government are really anxious about their image in the country they certainly should not continue in the way that they are. If there is an increase in rents many organisations will go out of existence.
Lord Cavendish of Furness: My Lords, I am aware that there are anxieties and misunderstanding. I happen to believe that those anxieties are groundless. I am particularly aware of the fears expressed by women's organisations. I had hoped that my right honourable friend the Secretary of State's statement on 24th September might have gone some way to allay those fears. However, I am pleased to be able to tell the noble Baroness that the Minister of State for Education and Science in another place, Mr. Eggar, has invited the chairman of the National Federation of Women's Institutes to see him to discuss their anxieties.
Lord Glenamara: My Lords, is the noble Lord aware that the statement by the Minister which he has just quoted was on the basis that local authorities would make a subvention towards non-vocational courses. However, is he further aware that there are well-justified fears that a whole range of non-vocational courses throughout the country will have to close because local authorities will not be able to support them? If he wants evidence of that will he look at an article on the education page of yesterday's Guardian?
Lord Cavendish of Furness: My Lords, I have seen the education page in yesterday's Guardian. One should be cautious about what one believes in the Guardian. I manage very well with believing very little. As it happens, I do not believe that any of the facilities need close. The average increase in education spending assessments overall for 1991–92 is 16 per cent. up on last year—well above the rate of inflation.

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Included in the spending assessment is 13 per cent. for adult provision. I believe it is for the local authorities to make provision along those lines.
Baroness Carnegy of Lour: My Lords, does the Minister agree that it would be very helpful to the Open University if the clear distinction that has hitherto been made between the funding of part-time undergraduate education and the funding of adult education ceased to exist? There would then be more flexibility between the two areas of funding? Would the Government be in favour of the funding council, once it takes on the funding of the Open University, increasing that flexibility which would be so much more appropriate in the 1990s?
Lord Cavendish of Furness: My Lords, the flexibility is there. There will be flexibility between the funding council and the LEA, thereby providing a degree of overlap.
Baroness Blackstone: My Lords, following on from the question of my noble friend Lord Glenamara, in providing funding for local education authorities to put on so-called leisure courses will the Government take into account the cuts in adult education provision that have taken place in recent years and provide enough funding to restore provision to earlier higher levels?
Lord Cavendish of Furness: My Lords, the noble Baroness cannot have been listening when I said that there had been no cuts. For the year 1991–92 there was a 16 per cent. increase. In the spending assessment coveting adult provision the increase was 13 per cent.
Lord Strabolgi: My Lords, is the noble Lord aware that the steep rise in fees may have an adverse effect on those seeking to study foreign languages in their spare time? Do not the Government think that rather short sighted since as a country we lag behind many other countries in this respect? Should not the study of foreign languages be encouraged by the Government?
Lord Cavendish of Furness; My Lords, I do not accept that there need be a steep rise in fees. I agree with the noble Lord about the importance of languages. If there is a division between how the new funding councils and the LEAs work, one might put it like this. The new funding councils will cover those areas which might be described as being strongly in the national interest. Other areas may be just as important and closely reflect the needs of local people. Therefore, it is most appropriate that those should be provided locally.
Baroness Seear: My Lords, if the noble Lord believes that there has been no reduction in funding, why is it that adult education classes are being cut out throughout the country and fees are going up everywhere? How does he square those two aspects?
Lord Cavendish of Furness: My Lords, it is not for me to instruct LEAs on how they distribute their funds. I merely tell them what has been the increase in funding.
Viscount Eccles: My Lords, will the Government consider allowing students in adult education to apply for loans in the same way as undergraduates?
Lord Cavendish of Furness: My Lords, that is a little wide of the Question on the Order Paper, but I shall look into it and let my noble friend know.
Lord Dormand of Easington: My Lords, in view of the difficulties now facing adult education, what will the Government do about the residential adult colleges? That does not need to appear in the Queen's Speech. Is it not unrealistic, as some of my noble friends have already said, to expect local education authorities to increase their contribution in that respect? In this fast-changing society, are not residential adult education colleges more important than ever?
Lord Cavendish of Furness: My Lords, I see no reason why residential colleges should not continue as before. They will get their fees from LEA grants and from other grants, as they have previously.
Lord Taylor of Blackburn: My Lords, is the Minister aware that many of us still feel—and I am certain that the public as a whole feel—that the Government are completely out of touch with what is going on in the adult education world? The Government are passing this on to the local authorities again. The Government talk about extra money, but that is not true. Before the Bill is introduced we ask the Government to get their thinking right. We can then have a real debate when the Bill is presented to us.
Lord Cavendish of Furness: My Lords, with the greatest respect, I am not passing this back to the LEAs. The question is asked whether adult education could be taken out of any new legislation. That cannot be done because the education of adults is already statutorily part of further education. Further education means education for those over the age of 16. It therefore encompasses adults and must continue to do so.

South Africa: Sanctions
3.4 p.m.
Lord Hatch of Lusby Lord Hatch of Lusby asked Her Majesty's Government:
Whether they will investigate whether any Members of the two Houses of the Parliament received financial assistance from the South African Government for their opposition to sanctions.
The Earl of Caithness: My Lords, no.
Lord Hatch of Lusby: My Lords, is the noble Earl aware that I heard the Foreign Secretary of the South African Republic state publicly in Pretoria that he had a secret fund which he had been operating in order to combat sanctions by any means? He then added,

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"and these means include bringing politicians and other leaders from different parts of the world in order to convince them that they should be supporting us in opposing sanctions".
Is it not the responsibility of the Government to find out whether any Members of either House of our Parliament have been in that way influenced by the South African Government in their opposition to sanctions?
The Earl of Caithness: My Lords, in answer to the noble Lord's first question—yes, now that he has told me. In answer to his second question, every Peer in this House should know the standing orders on declaring an interest.
Lord Harmar-Nicholls: My Lords, as my noble friend's answer makes clear that his department has no knowledge which would justify the innuendo that honourable Members of another place and noble Members of this House have accepted bribes to work with a foreign government against the best interests of this country, how can a Question such as this be allowed on the Order Paper?
The Earl of Caithness: My Lords, we have no knowledge of any allegation. The issue of whether it is a Question fit for the Order Paper has nothing to do with me.
Lord Mellish: My Lords, perhaps I may put it on record that I am opposed to sanctions—I've never had a penny off anybody.
Viscount Tonypandy: My Lords, is it not the custom of both Houses that we respect each other's integrity? The rule has been firmly followed in another place, to my certain knowledge. Nothing but trouble can come if we start abusing another place or if it starts abusing us, old though we may be.
The Earl of Caithness: My Lords, I am sure that the noble Viscount speaks extremely sage words.
Lord Kinnaird: My Lords, does my noble friend not agree that an apology might not come amiss for asking such a Question?
Lord Hatch of Lusby: My Lords, the noble Earl has quoted the guidelines on the declaration of interests. I think I have been in this House for every debate or Question on South Africa. I have never heard of any interest declared among those who have opposed sanctions. I quote again to him the Foreign Minister of South Africa, who has said publicly that he has been using South African Government funds in order to bring anyone he could get to the country in order to persuade them to oppose sanctions overseas. That is the basis of my Question. I am making allegations against no one. I am simply asking the Government to investigate whether the assertions made by Pik Botha apply to any Member of our Parliament.
The Earl of Caithness: My Lords, I have already answered that question.

Manufacturing Industry: Employment Figures
3.8 p.m.
Lord Dean of Beswick Lord Dean of Beswick asked Her Majesty's Government:
What were the levels of employment in each of the last six months in manufacturing industry.
The Parliamentary Under-Secretary of State, Department of Employment (Viscount Ullswater): My Lords, the number of employees in employment in manufacturing industries in Great Britain in February 1991 was 4,917,000, and in July 1991 was 4,748,000. Figures for the intervening months are available if required.
Lord Dean of Beswick: My Lords, I am grateful to the Minister for that reply. He must be aware that the latest figures show that over the past six months approximately 3,000 jobs a day have been lost in the manufacturing sector. That has occurred under the present Prime Minister and the present Government. Bearing in mind that the Select Committee of your Lordships' House on this subject has twice signified to the House and to the nation the dangers of allowing the manufacturing base to be continually reduced, why is the Chancellor of the Exchequer going abroad and saying that everything is coming right?
Viscount Ullswater: My Lords, we should put the figures into context. During the past 10 years, employment in manufacturing in Great Britain has fallen from 6.1 million to 4.7 million. That reflects the introduction of modern technology, computerisation and robots. During the same 10-year period, employment in service industries has risen from 13.1 million to 15.2 million. Of course, many jobs have been reclassified.
Baroness Turner of Camden: My Lords, is the Minister aware that during the Summer Recess, when I had the opportunity to visit the Daf Leyland site near Preston, I discovered that the site, which once employed 13,000 people, now employs only 3,000? Is he also aware that those people, despite a very good record of labour/management relations and a very good productivity record, are most concerned about their future? That is fairly typical of areas of British manufacturing industry. What assurances can the Government give to people in that situation?
Viscount Ullswater: My Lords, I believe that the best assurance the Government can give is to point out that during the past 10 years manufacturing has consistently accounted for just under one quarter of total output, the same as in other developed economies such as France and the United States. The United Kingdom is not alone is having a constant ratio in manufacturing output to GDP. In the past 10 years, many countries, such as France, Italy and Germany, have shown the same trend. Therefore, I believe it would be wrong to think that our manufacturing base is being whittled down.
The Earl of Onslow: My Lords, is it not true that for the first time in recent years—indeed, for the first time in quite a long time—we have become a net exporter of cars? Due to overseas foreign investment we are producing better cars, more economically and more efficiently, than anyone, including the Germans, in the whole of the European Community. Is that not something for which we should not only be grateful to our Japanese competitors but also to the British working people who have put habits into practice better than their Japanese teachers?
Viscount Ullswater: My Lords, I am not certain that my noble friend is correct. However, manufactures were in trade surplus in the three months to August, with exports up by 5.5 per cent. Cars are a particular success story. In the first eight months of 1991, car exports were up 82 per cent. on the corresponding period of last year. Car exports are now worth 75 per cent. of imports compared with 33 per cent. of imports in 1979.
Baroness Turner of Camden: My Lords, I thank the Minister for his response to my previous question. Is he aware that, so far as concerns Leyland, its problems arise from the fact that the bottom has dropped out of the UK market? That is largely because of the general recession. The problems which the company faces are caused by lack of orders in this country.
Viscount Ullswater: My Lords, we now live in a greater Europe. We have to deal with the market-place in Europe and internationally, and, I am afraid to say, not just rely on our home market. Of course I understand the pressures put upon individual companies. The employment service has a range of ideas and expertise available if people should lose their jobs. However, it is very much the competitive nature of British industry which we must safeguard.
Lord Stallard: My Lords, the noble Viscount said that manufacturing employment is not being whittled down. He is quite right in that respect; it has been dramatically reduced. Is he aware that a recent survey of the Amalgamated Engineering Union found that so far this year 122,576 people have been made redundant and are now unemployed? That contributes towards the total figure for the unemployed in this country of over 3 million. How can the Minister be so glib and try to tell us, and people outside the House, that everything in the garden is lovely?
Viscount Ullswater: My Lords, I never tried to give that impression. The noble Lord is wrong to suggest that I said that employment was not going down. I said that the manufacturing base is not being whittled down. It remains the same percentage of GDP as it has done over the past 10 years. It is most important to indicate that our output is going up; indeed, it has increased by a quarter in the past 10 years. I also pointed out that many jobs have been reclassified. For example, cleaning and catering are being contracted out and no longer count as manufacturing jobs. Design, marketing and personnel are also being
1098
undertaken by outside contractors and no longer count as manufacturing jobs whereas they did when carried out in-house.
Lord Bruce of Donington: My Lords, can the noble Viscount inform the House whether the figures that he gave in reply to the first Question, and those to which he directed our attention, include part-time workers? If they do, can he tell us how many?
Viscount Ullswater: My Lords, I cannot give that number. I shall have to investigate the matter to see whether it is possible to arrive at such a number and then write to the noble Lord.
Lord Stoddart of Swindon: My Lords, the noble Viscount mentioned the proportion of services as against manufacturing industry. However, does he recall the Aldington Report of 1985 which warned at the time that we would reduce our manufacturing potential at this country's peril? We need a large manufacturing potential to support such services. Bearing in mind that our overseas earnings from services are reducing, is it not now essential that we substantially increase our manufacturing base? Will the Government take that fact on board and try to do something to increase—and not merely maintain—our manufacturing base? It is upon the increase of that base that this country's future prosperity depends.
Viscount Ullswater: My Lords, not only have the Government taken notice of that fact; they have acted upon it. I say that because in the three months to August the UK's trade in manufactured goods was £100 million in surplus and, since 1981, the UK's volume of world trade in manufactures grew faster than that of France, Germany, Italy, the United States and Japan. That is a fine record.
Lord Dean of Beswick: My Lords, is the Minister aware that his noble friend who sits behind him who referred to the motor car industry actually painted a somewhat glowing picture? Is the Minister also aware that the domestic market in this country has shown a 20 per cent. drop in the purchase of cars? Is he further aware that, if the decline continues, the threatened layoffs now in the pipeline among motor car manufacturers will obviously take place, bringing danger to the motor car industry? I understand that we may have an opportunity to debate the motor car industry shortly. Therefore, today is perhaps not the time to go into the matter in detail. It would be better to deal with it in a few weeks' time.
Viscount Ullswater: My Lords, I believe that I have already answered the noble Lord's question. I said that we cannot now rely entirely on the home market to satisfy the sales demands of the car industry. I also indicated that our exports are 82 per cent. up on the corresponding period of last year.

Business
3.18 p.m.
Lord Hesketh: My Lords, at a convenient moment after 3.30 p.m. my noble friend Lady Hooper will, with the leave of the House, repeat a Statement on NHS trusts that is being made in another place.
British Railways Bill
Hook Island (Poole Bay) Bill

London Docklands Railway (Lewisham, etc.) Bill
The Chairman of Committees (Lord Aberdare): My Lords, I beg to move the first Motion standing in my name on the Order Paper. This and the second Motion which is also tabled in my name are the usual carry-over Motions to enable these Private Bills to continue their progress in another place.
Moved, That this House do agree with the orders made by the Commons set out in their Messages of 12th, 17th, 24th July.—(The Chairman of Committees.)
On Question, Motion agreed to, and it was ordered that a Message be sent to the Commons to acquaint them therewith.
British Railways (No. 3) Bill [H.L.]
Commercial and Private Bank Bill [H.L.]
Greater Manchester (Light Rapid Transit System) (No. 4) Bill [H.L.]
Llanelli Borough Council (Burry Port Harbour) Bill [H.L.]

Mersey Docks and Harbour Bill [H.L.]
The Chairman of Committees: My Lords, I beg to move the second Motion standing in my name on the Order Paper.
Moved, That the Commons Messages of 10th, 17th, 18th, 24th July be now considered; and that the promoters of each Bill have leave to suspend any further proceedings thereon in this Session in order to proceed with the Bill in the next Session of Parliament, notice of their intention to do so having been deposited in the Office of the Clerk of the Parliaments;
That such Bill be deposited in the Office of the Clerk of the Parliaments not later than 3 p.m. on the second sitting day in the next Session with a declaration annexed, signed by the agent stating that the Bill is the same in every respect as the Bill at the last stage of the proceedings thereon in this House in the present Session;
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That the proceedings on such Bill in the next Session of Parliament be pro forma in regard to every stage through which the Bill has passed in the present Session, and that no new fees be charged to such stages;
That the Private Business Standing Orders apply to such Bill in the next Session only in regard to any stage through which the Bill has not passed during the present Session.—(The Chairman of Committees.)
On Question Motion agreed to, and it was ordered that a Message be sent to the Commons to acquaint them therewith.

Defence
3.19 p.m.
The Parliamentary Under-Secretary of State, Ministry of Defence (The Earl of Arran)The Parliamentary Under-Secretary of State, Ministry of Defence (The Earl of Arran) rose to move, That this House takes note of the White Paper on the Defence Estimates (Cm 1559 I and II) and the White Paper on Britain's Army for the 90s (Cm 1595).
The noble Earl said: My Lords, this year's White Paper marks the clearest break from the past in any year since the end of the Second World War. Previous White Papers have reported changes in strategic doctrine, force structures or equipment purchases. On other occasions my predecessors have reflected on the changing relationship between East and West. There have been periods of hope and improvement but equally there have been times of tension and crisis.
The relationship was founded, not merely in great power rivalry—a commonplace in the history of Europe—but more intractably in ideological conflict. That framework overshadowed all else in both Europe and the developing world. It infused almost all aspects of international relations. Today that is at an end. The rigid divisions and mutual antagonisms which characterised the European security environment of the past 45 years have all but evaporated. The demarcation between East and West is increasingly irrelevant. Many, many issues remain to be resolved but most seem capable of resolution. We welcome unreservedly the opportunities which now present themselves, but in doing so our optimism is hope tinged with caution.
SDE 91 is obviously not merely a review of those events, crucial as they have been. It carries, and we believe lives up to the title, Britain's Defence for the 90s. It contains our analysis of the demands of the new strategic environment. It sets out, with great clarity, the dramatically altered conditions under which we have been able to reassess and restructure our defence forces. Together with the Army White Paper, Britain's Army for the 90s it contains our response to the new challenges with which we are faced. We recognise that the situation is dynamic. Change which would once have taken a decade now unfolds month by month. Few could possibly anticipate the speed and breadth of those changes.
Since I spoke in the corresponding debate last year the pace of change has quickened. Germany has been united. The Warsaw Pact has dissolved itself voluntarily. Soviet forces are withdrawing from

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Eastern Europe. They have left Hungary and Czechoslovakia. They are due to leave Poland by the end of 1992 and what was East Germany by 1994 at the la test. That process should be complete by the mid-90s and we estimate that by 1995 Soviet forces from the Atlantic to the Urals will have fallen by nearly half, from 138 divisions in 1989 to a maximum of 70–75 divisions. NATO now faces well over a million fewer troops. Ten days ago President Gorbachev announced a reduction of 700,000 in the manpower of the Soviet armed forces and there are some within the Soviet Union who are talking about even more swingeing reductions.
The Soviet Union has signed the CFE and START treaties. The independence of the Baltic states has introduced some technical difficulties in the process towards ratification but we are confident that those can be resolved and the treaties implemented; and, on 27th September, President Bush unveiled an historic new Western initiative, to achieve unprecedented reductions in the superpower's nuclear weapon holdings, and greater security and stability in the remaining force structures. Your Lordships will no doubt join me in applauding that initiative which you will recall included the destruction of all US ground-launched short-range nuclear weapons, the removal of all tactical nuclear weapons from submarines and surface warships, and an end to 24 years of round-the-clock standby for US strategic bombers.
We are equally glad that President Gorbachev has been able to make such a positive response, picking up many of the challenges set by the American President. Your Lordships will be aware that we are making a significant contribution to that process, with the reduction of our strike aircraft squadrons form 11 to eight with the withdrawal of all our maritime tactical nuclear weapons to land storage, and by giving up our battlefield nuclear capability. Indeed, we have played all along a leading role in shaping the alliance's nuclear strategy. It was after all the London declaration which indicated the alliance's willingness to eliminate all its nuclear shells from Europe provided that the Soviet Union reciprocated, which foresaw a revised alliance strategy placing reduced reliance on nuclear weapons generally, and which signalled NATO's readiness to give up all battlefield nuclear weapons.
The results of NATO's review of its nuclear requirements, set in train by the London summit, will be considered by Defence Ministers when they meet in Sicily over the next two days. Large cuts into the NATO nuclear stock pile are in prospect, including the in-the-air delivered element which will remain when the ground systems are eliminated. As my right honourable friend the Secretary of State for Defence made clear in another place on Monday, we shall again be playing our full part in those reductions.
Within the Soviet Union the momentum of change has been no less phenomenal and, as the ideological home of communism, all the more radical in its range and depth. The impetus that was created by President Gorbachev through his reform programme has gathered in pace. The Soviet people have fed on the
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freedoms unveiled to them by glasnost and perestroika. What has developed is not yet democracy as we understand it. Democratic institutions and values cannot be created at will. They take time to establish themselves within the political culture of a society. Individualism and self-expression, the seeds of liberal democracy, were never part of the political tradition of either Czarist Russia or the Soviet Union. But we are hopeful that true democracy will emerge in time and that greater enterprise, self-reliance and the growth of a market economy will become the bedrocks of a new democratic culture.
The attempted coup against President Gorbachev may yet prove to be the final blow for the old guard; the death throes of a discredited system; the end for those who support a closed society and a closed economy. We applaud the bravery of those who stood against the coup. We welcome the outcome: the maintenance of legitimate government against those who would overthrow it by force. Though we cannot yet be certain that the hard-liners will not try again to reassert their power, the omens are good. The monopoly of the communist party is at an end. Its influence within the armed forces is to be eliminated. The Soviet defence ministry is to be placed under civilian control. The KGB is to be reformed and its activities severely restricted.
The litany of change seems never ending, but not all is based on altruism. The Soviet system has failed. To use a phrase which communist hard-liners would understand: it was undermined by its own inherent contradictions. Not only was it unjust, it was inefficient and unresponsive to change. Today its economy is in tatters, unable to sustain existing levels of defence expenditure and perhaps more importantly in the eyes of the average Soviet citizen, unable to feed its own people, not because the Soviet system of agriculture produces too little food but because it is incapable of distributing it efficiently.
But, however welcome, the very process of change creates its own uncertainties. For all its past ills, the Soviet Union was a relatively stable superpower. It had enormous military capability, but at least in Europe it was rarely adventurist. The new USSR, or whatever state succeeds it, is almost certain to be less stable if not an immediate military threat. The post-war settlement in which there were two dominant powers with distinct spheres of influence lasted for nearly half a century. It is no more. In its place we see a re-awakening of nationalism and a desire for national self-determination. We welcomed the independence of the Baltic states and gave formal recognition to them on 27th August; but nationalism can have a destructive dimension. In Yugoslavia it has found expression in bloody civil war. Tension, ethnic division and territorial ambition are widespread in the Balkans and threatened elsewhere. Further afield the conflict in Iraq and that of nine years ago in the Falkland Islands illustrate that crises are of their very nature often unexpected. The timing and the location of conflict are in the hands of the aggressor, not ourselves.
Thus the legacy is mixed. The world remains turbulent and uncertain; but it has altered,

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irreversibly. The magnitude of change was not contemplated three years ago and its full implications cannot yet be known. It would be implausible and mistaken to have continued as if nothing had occurred. The opportunity to move away from confrontation might have been lost for ever. But this has not been an impetuous scurry to grasp some ill-defined "peace dividend". Our response has been to adapt to new circumstances so that we do not endanger our security. SDE 91 outlines a positive approach which balances our enhanced confidence in the peaceful intentions of the Soviet Union with our recognition of their political instability and continued military strength.
From a military and strategic perspective the immediate Soviet threat in the central region has all but disappeared, although we should not forget that it retains the largest and most powerful armed forces of any state in Europe. In such circumstances Britain has reassessed the strategic environment. We have done so not unilaterally but in close consultation with our allies. This process has been vindicated by events in the Soviet Union, not least the failure of the attempt to overthrow President Gorbachev.
The process of reassessment has developed in a cumulative fashion. We have built on the analysis of change which I have just outlined. We acknowledge that there has been a move away from a clear and quantifiable threat and have sought to redefine what is needed to maintain the security of the United Kingdom and its dependencies. That goal remains paramount and will not be abandoned in an attempt to secure short-term financial savings. This is not to say that prudent economy and cost-effectiveness are ignored. As my right honourable friend the Secretary of State said in his evidence to a committee of the other place, our deliberations,
"have been strategy-led but resource disciplined".
Where savings can properly be made we will welcome them but they remain secondary to our primary task, which is to maintain the security and interests of the nation.
We retain our belief in the primacy of NATO. It has been the instrument of collective defence and peace for over 40 years. It has been the institution through which the United States and Canada have expressed their belief that the security of Europe is indivisible from that of North America. Its role is well defined. It draws strength from this when so much else is new. Nothing is immutable. NATO is nearing the end of a review process covering every aspect of its activities, military and civil, from strategy to infrastructure.
Much has been said of the need to strengthen the European pillar of security. The practical implementation of that widely held belief requires further definition, but clearly the Western European Union will have its part to play. The role which it has undertaken in, for instance, mine-sweeping operations in the Gulf illustrates its potential if political and organisational difficulties can be overcome. In the future we must of course look also to the over-arching security structures provided by the Conference on Security and Co-operation in Europe and the United
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Nations. They also have their parts to play in ensuring continued peace and stability. The CSCE summit of November 1990 has, through its charter for a new Europe, already provided a workable framework for confidence and security-building between member states. The United Nations, as the Gulf conflict demonstrated, has a new-found determination to uphold the rule of law in the international sphere.
A pivotal factor in those deliberations has been the extent and nature of our existing defence commitments. These have been reviewed as part of the continuous dialogue with our allies and that has resulted in a series of key announcements. First, there was the London Declaration of July 1990, issued by the leaders of the NATO nations, which outlined the fundamental principles in determining future NATO force structures.
Secondly, later in July my right honourable friend the Secretary of State set out his initial thoughts on our future force levels in his Options for Change announcement. They were refined and developed in a series of statements culminating in this year's Britain's Army for the 90s White Paper and SDE 91. The main features of that process are complete and we are now in the period of implementation.
Thirdly, in May this year NATO Defence Ministers, meeting in Brussels, agreed new force structures for the alliance. These will comprise a new triad of reaction forces, main defence forces and augmentation forces. They will be more flexible and more mobile than existing formations. They will place much greater emphasis on multinational co-operation, not merely in the most senior reaches of political and military command but at ever wider levels of subordinate command and organisation. No doubt this will pose new challenges. Servicemen of different nations will work together more frequently. Equipment will need to be more widely inter-operable than at present. But such co-operation can succeed. It was practised successfully in the recent Exercise "Certain Shield". It was proven by coalition forces in the Gulf, embracing, as they did, many nations of diverse culture and military tradition.
The process will continue. My right honourable friend the Prime Minister will attend a meeting of heads of state and government of the NATO nations in Rome on 7th and 8th November to conclude the fundamental review of the alliance's political and military strategy which they mandated at the London summit. We shall then be in a position to bring to a conclusion much of the work which is in progress within the alliance, including the streamlining of the command structures and the review of the crisis management procedures and reinforcement planning.
Britain's principal contribution to restructured NATO forces will be in the Allied Command Europe Rapid Reaction Corps, for which we will provide the commander and much of the headquarters infrastructure. The UK contribution will include an armoured division based in peacetime in Germany, a predominantly mechanised division based in the UK, an airmobile brigade, also based in the UK, and a corps combat support, including communications, reconnaissance, depth fire and air defence units. In all, this

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is a contribution of 55,000 regular soldiers, in addition to a substantial number of individual reservists and Territorial Army units. German, Belgian and Dutch contributions are planned for an airmobile division within the RRC, and a second multinational RRC division will be formed from forces from NATO's southern regions nations.
The decisions we have taken about our contribution to NATO forces on the mainland of Europe have been the principal factor which has led us to our conclusions about the most appropriate size for the Army of the 90s.
In recent weeks the debate has focused on the reduction in infantry battalions from 55 to 38. Will we have enough? Will there be overstretch? Perhaps I may give a few figures. By 1997 infantry commitments will drop by a third. The reduced threat in Germany will save seven battalions in BAOR and three in Berlin. The rundown in the garrison in Hong Kong will save four and we can reduce our commitment to home defence by five regular battalions because we will now have much longer to prepare for any conflict. Although we have reduced our commitment by 19 battalions we will reduce the Army by only 17 battalions. The extra two battalions will be available to support our role in the Rapid Reaction Corps.
In terms of manpower numbers the figures are equally convincing. Our commitment to Europe will be reduced by about 35,000 troops. On top of that we shall pull out of Hong Kong about 6,000 men and there will he substantial savings in Army support activities in the United Kingdom. Against that background the planned cuts amount to 40,000.
In the eternal debate about manpower, equipment and resources each service will lay claim to the largest possible portion of the budget. We fully accept this but in the Ministry of Defence we have a central defence staff which takes a tri-service view of these matters. Naturally those with direct responsibility or particular ties with a regiment or a squadron will be profoundly saddened by its loss and fight for its retention. It is a tribute to regimental tradition that they do so, but equally it has been a regimental tradition that they have always been prepared to accept change.
Changes in the size of the infantry must be looked at in this context. These have been difficult decisions, taken after extensive debate within the department and as part of the review process I have described. Serving officers have been fully involved in those discussions but of course final responsibility rests with Ministers. Changes will be gradually phased in over a number of years.
All this will help the problem of overstretch and ease the problem of emergency tours in Northern Ireland. Since we will have much greater warning time, our forces in Germany and elsewhere can be used more flexibly. The increased availability of the Royal Marines and the use of other arms will also reduce the burden of emergency tours.
The practical result of our re-assessment has been a restructuring of our forces. These will be smaller than in the past but our emphasis will continue to be on quality. The catchphrase "smaller but better" is not a blind but an accurate and concise summation of our
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intentions. We will retain strong professional forces supported by well trained reserves. Your Lordships will know that a Statement on the reserve and Territorial Army is expected later this year. Without prejudice to the detail of that announcement it is quite clear that even though their overall numbers will reduce in the long term to a figure between 60,000 and 65,000, the essential role of the reserve forces will be maintained in our new force structure. The decreased threat from the Soviet Union will allow them to carry out substantial portions of the defence of the United Kingdom, currently sustained by the regular Army. This will both increase the role of the reserves and reduce the overstretch on regular infantry battalions.
Our servicemen will be better equipped than ever before. We will continue to modernise our forces to give them equipment based on the most advanced technology. As the all-party House of Commons Defence Committee affirmed in its recent report on the White Paper:
"A fully Challenger-equipped Royal Armoured Corps, mechanised and armoured infantry battalions equipped with the most modern APCs, and artillery regiments equipped with AS90 Howitzers and MLRS would constitute a strikingly well-equipped Army".
In addition to this the Army will be improved by the acquisition of the Starstreak missile and Rapier Field Standard C and in the anti-tank role the ageing Lynx will be replaced by a new attack helicopter. The other services will also undergo substantial equipment modernisation. The new Boeing E-3D aircraft will improve our airborne early warning capability very substantially and by the end of the decade we expect the European Fighter to play a major part in the defence of the United Kingdom. The Royal Navy has seven new Type 23 frigates on order and we have invited tenders for three more. On 2nd September we announced an order for 44 Merlin ASW helicopters and in the longer term we would hope to introduce the Future Frigate in place of the Type 42.
This emphasis on quality rather than size is an essential feature of our new management strategy and extends into the headquarters and civilian staffs, both in the centre and in the support areas. The more recent Prospect Headquarters Study had as its task a study of the size and structure of the Ministry of Defence. Its recommendations make clear that we should continue the twin process of strengthening the centre but with less duplication of task and fewer people and wherever possible the delegation of management and financial responsibility.
The concept of "smaller but better" of course presents another challenge—implementing reductions while minimising personal hardship for those affected. Much will be achieved by natural wastage but a requirement for a substantial redundancy programme cannot, I am afraid, be avoided. Precise numbers cannot yet be determined, but in excess of 10,000 service personnel are likely to be affected between now and the mid-1990s; it is hoped that most will be on a voluntary basis though some compulsory redundancies are likely.
A whole range of new measures to help those being made redundant are under very careful consideration. These will be in addition to the resettlement briefings

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and up to 28 days of training which service personnel would receive on normal completion of engagements. The first of these we are hoping to announce shortly. The financial terms for redundancies—which are the same as for all previous service redundancy schemes since 1975—will be fair to all those concerned.
On the question of housing, there may be redundant servicemen and women who will experience difficulty in meeting their housing needs, and we are again looking at a range of new measures to assist, including giving priority to those wishing to buy married quarters under the discount scheme. Equally there will be civilians who will be affected. Some 20,000 United Kingdom Civil Service posts will be lost by 1996–97, over and above the accumulative loss of 40 per cent. of such posts since 1979. Inevitably there will be some redundancies and as much as possible will be done to advise and assist those who lose their jobs. Wherever possible alternative employment will be found within the Civil Service. To help those for whom this is not possible we hope to introduce a redundancy and outplacement service in the near future. I trust noble Lords will join me in paying tribute to the civilian workforce of the Ministry of Defence, a very large part of whom work in direct support of uniformed servicemen and equipment projects. They are an integral part of our overall defence capability.
I turn briefly to an issue of particular concern to many noble Lords; namely, HMS "Endurance". She is now 35 years old and following damage in 1989 no longer satisfies the stringent safety standards necessary for ships which operate in ice. We have concluded that it will not be possible for her to return to the Antarctic. Since there is no suitable replacement flying the White Ensign we have chartered the Norwegian Ice Breaker MV "Polar Circle" to continue the work of HMS "Endurance". She will be taken into commission by the Royal Navy for the period of her charter. Decisions beyond this season's deployment will depend on an assessment at the end of the season.
To conclude let us consider for a moment the activities of the services over this past year. Their work is always arduous, often dangerous and all too often unsung. In the past year we have seen the most comprehensive deployment of British forces since the Second World War. In all, some 45,000 British personnel saw active service in the Gulf. The success of the coalition in achieving the objective of liberating Kuwait was the result of the widespread international support for a firm response to Iraq's aggression, an act which threatened hopes for a new, stable and peaceful international order based on the rule of law. The remarkable campaign which reversed that aggression is, I am sure, still fresh in all our minds, and the victory over Iraq stands as a tribute to the dedication, skill and professionalism of our soldiers, sailors and airmen. It was not achieved without cost, however, and our thoughts remain with the families of those who lost their lives during the campaign.
Finally, we must never forget that the Armed Forces continue to support the Royal Ulster
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Constabulary in the fight to defeat terrorism in Northern Ireland. The statistics which noble Lords will have read in SDE 91 give only the dimmest reflection of the human misery which the terrorists' campaign of violence and intimidation has brought about in all sections of the community. Equally, the figures can only hint at the bravery and professionalism of the security forces in the face of such an insidious threat. The story of Warrant Officer Barry Johnson, whose heroism in a dangerous bomb disposal operation won him the first George Cross for 11 years, is set out on page 49 of SDE, and for many encapsulates the spirit which makes our Armed Forces so exceptional, and of which—I am sure noble Lords will agree—we should all be immensely proud. I beg to move.
Moved, That this House takes note of the White Paper on the Defence Estimates (Cm 1559 I and II) and the White Paper on Britain's Army for the 90s (Cm 1595).—(The Earl of Arran.)

NHS Trusts
3.47 p.m.
Baroness Hooper (The Parliamentary Under-Secretary of State, Department of Health): My Lords, with the leave of the House, I shall now repeat a Statement being made in another place by my right honourable friend the Secretary of State for Health on National Health Service trusts. The Statement is as follows:
"Mr. Speaker, I will, with permission, make a Statement about NHS trusts.
"On 4th December 1990 I reported to the House that I had received 66 applications from hospitals and other units wishing to operate as NHS trusts from 1st April 1991 and that I was able to establish 57 of these as the first NHS trusts.
"The decision to pursue trust status was one which the managers and the clinical staff in those units took for themselves. Honourable Members will recall that in the great majority of the 57 first wave trusts most of the consultants expressly supported the applications.
"The experience of the first wave confirms the confidence which was shown by the managers and professional staff, who recognised the benefits to be gained from putting management responsibility back where it ought to be in the hospitals themselves. Many of my honourable friends have constituencies, as I do, which are within the catchment area of trusts. They will know, as I do, that it is easy to find examples of the new, devolved arrangements improving care for patients. I will give just four kinds of examples out of the many which are available.
"On waiting lists, the Royal Liverpool University Hospital Trust now sees 90 per cent. of all its patients within 10 months—one of the best performances in the country. On activity levels, the Freeman Hospital Trust in Newcastle has treated 4,700 more patients in the first five months of this year compared with last. On front-line recruitment,

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the East Gloucestershire Trust is to recruit an additional seven consultants to meet growing demand for its services and the South Devon Trust is recruiting an extra 55 nurses and midwives. On improved quality, the Norfolk Ambulance Trust has speeded up its training programme for paramedics and aims for a target of 24 paramedic teams for its ambulances each year.
"Independent surveys, for example by the consultants Newchurch and Company and by the Sunday Times, point to the same conclusion that the trusts are improving their performance, treating more patients and cutting waiting times. A BMA survey published this week has also shown increasing consultant support for trusts. This has strengthened our commitment to the trust programme through which more and more NHS patients can benefit from the clearer and simpler management structure which trust status gives to hospitals and other services. I was glad therefore to receive applications from 113 hospitals and other units—double the number of first wave trusts—wanting to become trusts in the second wave from 1st April 1992.
"I have considered all these applications very carefully and assessed them against the same criteria that I used last year. Each one has been the subject of a full public consultation.
"As a result, I have decided today to establish 99 hospitals and other units to operate as trusts from April 1992. The details are available in the Vote Office and have been placed in the Library.
"In addition, I have agreed to approve applications from the four London teaching hospitals in the second wave. As the House will know, I have recently commissioned Sir Bernard Tomlinson to act as my adviser on health services in London, supported by a high-powered team. It is obvious that he may have recommendations to make which would affect the shape of the London teaching hospitals. In order to allow the four new London teaching hospital trusts to develop their plans with the benefit of Sir Bernard's advice, I have therefore decided to delay the date on which they become operational until April 1993. However, I have asked the NHS Management Executive to establish devolved management in these hospitals at the same time as the other trust boards are established. In this way these four great hospitals will get as early as possible the benefits of devolved management.
"Seven other units have the potential to become successful National Health Service trusts, but I have not felt able to establish them in the second wave. I am sure that they will benefit from having longer to develop their applications and I hope that they will reapply next year. A further three units have withdrawn their applications from 1992. However, I can tell the House that I have today agreed that 153 expressions of interest from hospitals and other units may be pursued for the third wave, starting in 1993. I have also made this list available in the Vote Office and placed a copy in the Library.
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"All trusts are accountable to me through the National Health Service Management Executive. I have now asked the Management Executive to strengthen and expand its monitoring arm in order to ensure that the growing number of trusts remains fully accountable to the centre. This will be done without increasing overall NHS administrative numbers.
"The campaign against trusts and against devolved management fostered by the Opposition has failed. Throughout the National Health Service, as the British Medical Association has confirmed, there is increasing recognition of the benefits which trust status brings. My Statement today is good news for the National Health Service and good news for its patients. After next April, when the new trusts which I have announced today will begin operating, over one third of all National Health Service hospital and community health services will be in the capable hands of the trusts. Despite a truly scurrilous campaign by Opposition parties, no informed observer can now doubt that trusts represent a necessary modernisation and simplification of National Health Service management, which is already proving itself good for patients, good for staff and good for the country. It is a tribute to their commitment to the National Health Service that so many doctors, nurses and managers have put so much work into preparing the applications which I have been able to approve today."
My Lords, that concludes the Statement.
3.53 p.m.
Lord Ennals: My Lords, I thank the Minister for repeating the Statement made in another place by her right honourable friend. Contrary to the views of the Secretary of State, I believe that this decision is the height of irresponsibility. This Government, regardless of the genuine and widely-held concerns among all sections of the public, seem prepared to gamble with the health of the nation against the better judgment of the professions which provide health care. The Government seem to have learnt nothing from the problems met by the first wave of trusts and seem determined to force the pace of undermining the powers and responsibilities of the newly-established, business-oriented district health authorities. I believe that that is leading to the fragmentation of a once national health service.
The behaviour of this Government confirms the fears that they are incapable of being trusted with the running of the National Health Service. Of course they will keep a small, poor man's service for those who cannot pay.
Before making further comments perhaps I may ask the Minister some direct questions. First, apart from his selective comments in the Statement, has the Secretary of State published a report on the progress made by the first wave of 57 opted-out trusts? If not, why has he not done so? I noted that there were four indications of success. Has he published a report? I ask the Minister directly, in view of debates which we

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have had in your Lordships' House: what about the promises made to this House concerning the new, untried NHS trusts? What about monitoring, analysis and assessment and learning as we went along? We are entitled to know what the evidence is.
Secondly, have the business plans of the applicants in the new round been published for public scrutiny, not only by those in your Lordships' House and in another place but by people locally who look to their local hospital to provide a service? If such a report has not been published, why not? Why the secrecy? Has the new accountants' survey by Coopers and Lybrand Deloitte been published? If not, why not? Once again, why the secrecy?
Thirdly, what is the cost of introducing these new market-oriented proposals? Does the Minister accept the BMA's figure of £400 million, which is enough to treat every patient on hospital waiting lists at the present time? It is a disgraceful use of scarce resources.
Fourthly, what note has been taken of the strongly expressed views of the doctors, nurses and other professionals and of many of the regional health authorities? Despite the bland comments in the Statement by the Secretary of State none of them approves this Gadarene swine-like rush into a new opt-out pattern. They believe, as I believe, that it is sheer Tory dogma.
Fifthly, have the Government studied the recent BMA survey—which was referred to by the Secretary of State? That survey indicated that trust status was presented to BMA members as inevitable; there were fears for the survival of the hospitals in the face of competition from other trusts; and,
"in only a few hospitals was there positive enthusiasm for trust status".
That is quite contrary to the impression given by the Secretary of State in his Statement.
Sixthly, what answer did the Government give to the recent pleas from the BMA and the Royal College of Nursing for a delay in taking the decision which has been announced today?
Does the Minister accept that increasingly NHS patients are being forced to go private, not just because of the imposition of sight tests and dental charges but because of creeping privatisation in the NHS trusts and in the rest of the service? The private sector will be delighted by the Statement today because it will see it as part of the process of the disintegration of the National Health Service, although I note that some private sector firms are going bust as a result of the recession.
Finally, what significance are we to give to ministerial promises, which are being broken every day? Before the 1979 election, when I was Secretary of State for Social Services, Mrs. Margaret Thatcher told me in answer to a question that she had no plans to increase prescription charges. Since then they have been increased 17-fold, from 20p. to £3.40. I believe that this decision will be deeply resented by the public, who do not want those changes, and that they will show their anger when the Government are eventually forced to go to the polls.
Baroness Robson of Kiddington: My Lords, we on these Benches also thank the Minister for repeating the Statement made by the Secretary of State in another place.
I intend to be circumspect in what I say and stick exactly to the Statement. We are worried that another 99 hospital trusts are to be established during the next year. We are worried because, if the noble Baroness remembers, when we debated the new health reforms in this House many Members of this House urged the Government to have a pilot scheme on the system before going ahead. In the event, 57 trusts were established last year. Why could not the Government have left those 57 trusts for a little longer as a pilot scheme? Why another 99?
I say that because those 57 trusts are not functioning properly under the provider and purchaser principle as the contracts that have been entered into are based on historical factors going back before reorganisation. They are not ready, though one hopes that they will be ready on 1st April 1992, properly to cost their services so that the provider-purchaser principle can begin to function. That is why I regret that another 99 hospitals have been thrown into the melting pot before we know where we are.
We welcome the statement that an advisory committee on services in London has been set up. It is unbelievable that that should not have been set up a long time ago. We have all been aware of the problems of over-provision in London for many years. We have the problem of an excessive number of teaching hospitals within Greater London. It is a pity that two hospitals have already been granted trust status before the inquiry has taken place. I sincerely hope that the inquiry will have reported and solved the problems of which hospitals survive in London before the next four are introduced in 1993 because the commercial principle of provider and purchaser could wreck some of the best hospitals in London and perhaps allow some of the not-quite-so-good ones to half survive. It must be done on a balanced basis.
There is a sentence in the Statement to which I take great objection. It contains the phrase:
"Despite a truly scurrilous campaign by Opposition parties".
We have not taken part in any scurrilous campaigns. We are interested in the survival of the NHS. We have criticised and commented, but we have not taken part in any scurrilous campaigns.
4.3 p.m.
Baroness Hooper: My Lords, I am grateful to the noble Lord, Lord Ennals, and the noble Baroness, Lady Robson, for their comments. I am particularly grateful to the noble Baroness for her note of welcome and her positive and constructive approach. I strongly contest the noble Lord's initial suggestion that we are fragmenting. It is interesting to note that we have moved away from the use of the word "privatisation", since the definition has been questioned, via commercialisation into fragmentation. Fragmentation has many benefits and effects, but I define it in the context in which we are speaking as giving proper control at the grass roots to the people who

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work in the National Health Service for the benefit of patients in the National Health Service. I therefore well understand the welcome of the noble Baroness, Lady Robson, for this example of an effective way in which the National Health Service can be improved.
The noble Lord, Lord Ennals, asked a number of questions. He asked whether we had published a report of the first wave trusts. He also made some comment about the discussions in your Lordships' House during the passage of the Bill on whether a pilot project should be set up. The noble Baroness also referred to that point. At the time we argued that delay would lose the momentum and enthusiasm of the many people who supported the idea. We said that the best people to monitor the trusts and ensure that they were working effectively were the people standing on the sidelines who wished to become second and third wave applicants. Given the great enthusiasm that has been shown and the number of applications that have been made, we have been proved absolutely right.
As regards evaluation and monitoring of what has been going on, we want to avoid unnecessarily increasing bureaucracy, so we have a small unit at the centre as part of the National Health Service Management Executive. It is part of the role of the Management Executive to monitor all the activity within the National Health Service. We are developing that unit, as my right honourable friend's Statement described, by establishing zonal units throughout the country. We have the benefit on the medical front of the clinical standards advisory group monitoring the resulting clinical standards. Most importantly, as I said, we have the second and third wave applicants standing on the sidelines. Furthermore, there is the monitoring process which is made possible by the contractual system so that, in purchasing on an annual basis rid revising their purchasing requirements, the purchasers take into account the effectiveness and performance of those various units. In any event, annual reports will be published for each and every trust.
The noble Lord, Lord Ennals, asked about business plans for second wave candidates. Those reports are not due to be prepared until next spring and will then be published. The Coopers and Lybrand reports are confidential to my right honourable friend the Secretary of State and contain confidential commercial information. It would therefore not be proper to publish them more widely. They include issues such as potential land sales, which everyone recognises as being important in terms of confidentiality.
As to the administrative costs, this is an unsubstantiated allegation by the BMA. Although I welcome the fact that many of the BMA's members consistently make clear that they support the concept of National Health Service trusts, I must point out that the Government have certainly consistently spent more on health than the previous Labour Government.
The suggestion that trust status is being forced is absolute nonsense. Doctors and staff are increasingly supporters of the trust status. No obligation is put on any individual unit to apply to become a trust. Trust status is an entirely voluntary activity. As for the
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suggestion that the trusts are part of any kind of creeping privatisation, the Government have enabled more patients than ever before to be treated on the National Health Service. That must be good news. In that context the suggestion of the noble Lord, Lord Ennals, that many patients are being forced to go private is nonsense. If he cares to study the scene he will find that the private sector itself is worried that the vastly improving services being provided under the National Health Service are causing difficulties for it.
It is very interesting to note on an international comparison basis that because of the effectiveness and efficiency of our National Health Service—which we are currently making more effective and more efficient—fewer people choose to use private sector services than in any other country in the EC whatever their shade of government. All told, I believe that we have here a very happy picture and we look positively toward the future.
Perhaps I may say one final word to the noble Baroness, Lady Robson, who raised the matter of London. It is widely accepted that changes in the structure of London's health services are long overdue. We believe that the effect of the reforms has been to bring the issues into sharper focus and uncover what we call the London paradox; namely, the fact that more resources are available for London patients but there are fewer services than for patients in the provinces.
Sir Bernard Tomlinson and his team will take a strategic look at the issues and be a source of independent advice to my right honourable friends the Secretary of State for Education and the Secretary of State for Health. They will be invaluable in helping to take the key strategic decisions about the future pattern of health provision and medical teaching in London. London is not starved of resources but we need to work carefully to ensure that all the specialist services and the factors of education, research and management are taken into account. We shall benefit from the valuable advice given by the experienced person who has been appointed for that task.
4.12 p.m.
Lord Glenarthur: My Lords, perhaps my noble friend will accept from me an endorsement of the fact that many who work in the National Health Service will wholeheartedly welcome the Statement which she has repeated. They will do so not from any party political perspective, as appeared from the manner in which the noble Lord, Lord Ennals, condemned the Statement, but because the Statement spells good news for them. They hope to achieve a better throughput of patients, better use of resources and hence better quality services as well as more accountability from those who are responsible for the delivery of the service to those who need it.
I shall put to my noble friend two questions about the four London teaching hospitals, which will welcome the news that they are to be granted trust status in April 1993, subject to any recommendations of the Tomlinson Report. I immediately declare an interest as (at this stage) the prospective chairman of

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St. Mary's, Paddington. Can my noble friend say when the non-executive directors of the trusts will be formally appointed and when the shadow trust status in an advisory form, or whatever, is likely to be brought into effect? Can she also say a little more about the nature of the devolved management to be given to those hospitals? If she cannot do so, can she perhaps ensure that any decisions on this matter are promulgated as soon as possible?
Baroness Hooper: My Lords, I am grateful to my noble friend for showing a very positive attitude and emphasising the enthusiasm that exists at the place where responsibility properly lies; namely, at the grass roots of our National Health Service. On the matter of timing, my right honourable friend the Secretary of State will be writing immediately to ask the non-executive assistants to work with those hospitals from November this year in order to prepare for trust status. They need to work closely with their respective district health authorities, which will continue to be statutorily responsible for the hospitals. I hope that that responds to the questions raised by my noble friend.
Lord Hunter of Newington: My Lords, in the light of what the Minister said, will she be good enough to tell us how the Government see the future of regional and district health authorities?
Baroness Hooper: My Lords, the future of district health authorities is clear. They are the bodies which are responsible for providing health care for all the people who are resident within their district. They have the responsibility of entering into contracts with both the directly managed units and National Health Service trusts within their district, and indeed when necessary outside. The role of the districts has changed to the extent that they are no longer involved in on-the-ground management of the hospital units. But they have a clear responsibility to ensure the provision of services for the people living in their area. The role of regions will remain important in terms of co-ordinating activity and covering financial needs within their wider areas.
Lord Stoddart of Swindon: My Lords, perhaps the Minister can help me with a couple of points. She said that trust status was a voluntary activity and that it was welcomed. How does she test the feelings and views of the people in the localities where hospitals are to be given trust status?
My second and related question is to ask what kind of consultation takes place in the hospitals, not only between management and government but between management, government, trade unions, doctors, nurses and other staff? Is it formal consultation, or can she say exactly how the views of all the staff concerned are gathered and taken into account?
Baroness Hooper: My Lords, clearly the views of the people working within a particular unit are vital for the wellbeing of the unit and its future efficient operation. It is for the people who make the application on behalf of that unit to ensure that all
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bodies and categories of individuals have been involved in the consultation process. Indeed, that is something which the Secretary of State takes into account when considering applications and ascertaining the benefit of granting such status to any unit. The recent BMA study showed that, from a sample of 43 hospitals in which consultant medical staff were balloted about support for the unit to pursue NHS trust status, a majority of consultants supported the application. The study rejects what was said about the level of support for trust status for clinicians. I should add that there was one expression of interest from the Devon Ambulance Service Unit where NUPE was very much in favour of such status. That rather proves that unions also take part in this process.
In addition, there is public consultation. The large responses to public consultation exercises centred on ballots of the local population—which are often masterminded by local branches of political parties and couched in terms such as, "Do you agree to your local hospital opting out of the National Health Service?"—can result in misleading and wrong effects. However, there has been wide public consultation although it varies from unit to unit.
Lord McColl of Dulwich: My Lords, I congratulate my noble friend on the splendid news of more hospitals becoming self governing. Perhaps I may thank her very much for making it possible for Guy's and Lewisham hospitals to become a self-governing trust because we have some marvellous news. Since 1st April, by implementing our business plans, we have been able to save £6 million, at the same time treating 12 per cent. more patients.
With regard to the comment of the noble Lord, Lord Ennals, about the Government promoting private practice, does my noble friend agree that the greatest encouragement to private practice was given inadvertently by a Labour Government in the 1970s in their attempt to reduce private practice when at the same time the trade union movement was taking out contracts to enable its members to have private treatment?
Does my noble friend also agree that an Opposition spokesman in another place has thrown a flood of light on what she means when accusing the Government of privatising the NHS? She stated that what she means is that, for instance, where previously patients could have free eye tests, they now have to pay. But who were the villains who in 1951 first introduced prescription charges after a Labour Government lasting for six years?
Baroness Hooper: My Lords, my noble friend makes a most interesting point. Who indeed was it who introduced prescription charges in the first place? On the important point about the progress being made in the Guy's and Lewisham Trust, it is clear that the management team has had to tackle problems that had built up over a number of years. It has had the energy and enthusiasm to do so and the figures quoted by my noble friend prove that it has been successful in the action taken.
The Earl of Onslow: My Lords, does the Minister agree that within the European Community, and indeed Western medicine as a whole, the British health service has the lowest element of private practice; that we probably receive better value for money than most others; and that what the Government are doing through their practice and research for greater efficiencies is common to all medical systems in the Western world? The Government should therefore be encouraged to continue along the line that they take at present.
Baroness Hooper: My Lords, my noble friend makes a valuable point. Last week I was in the Netherlands attending a conference of European Community health ministers entitled Critical Choices in Health Policy. We all have the same problems, in part caused by increased technology but also by the demographic factor of an explosion of demand and therefore an explosion of cost. There is need therefore to be very sure of our priorities. It is perfectly true that our National Health Service is such that the private sector is the least used among European countries.
Lord Winstanley: My Lords, since the Prime Minister said that there should be greater co-operation between the private sector of medicine and the National Health Service in Britain, will the Minister confirm that the private sector in Britain faces difficulties which are every bit as great as those faced by the National Health Service, as any member of a private body will know from the amount of small print on his membership documents?
Baroness Hooper: My Lord, yes. The explosion of demand and explosion of cost clearly equally affect the private sector. We clearly wish to have choice in this country; we want a viable private sector running alongside the National Health Service. However, the increased efficiency of our National Health Service is really putting those private bodies on the line.

Defence
4.25 p.m.
Debate resumed.
Lord Williams of Elvel: My Lords, we now resume our debate on the Defence White Papers. The House will be grateful to the noble Earl, Lord Arran, for introducing the Motion to take note of the White Paper on the Defence Estimates and the White Paper on Britain's Army for the 90s. I am sure that we all look forward to the maiden speeches of the noble Lord, Lord Cheshire, the noble Duke, the Duke of Westminster, and the noble Lord, Lord Wedgwood.
The noble Earl has recognised that the international climate in which these documents were issued—only a short time ago—and the climate of today are substantially different. I say that with no intention to criticise. It is simply to make the point that during the long Recess events have made today's debate take on a rather different tenor to the debate that we might have had in this House at the end of July.
The noble Earl spent a good deal of time on recent history. The Soviet Union has, for the moment at
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least, collapsed as a repository of political power. The attempted coup against President Gorbachev moved power away from Moscow, the Kremlin, to the republics. Indeed, the question now is whether President Gorbachev has any power left at all. At the same time it has become clear that the economies of the individual republics are in a shambles. Massive aid will be required if there is not to be a complete breakdown in the period of transition from command economies to market economies with consequent potential for political upsets which themselves might well have defence implications. By "political upsets" I mean possible taking of power by people who have been encouraged simply by the move to what is called democracy to have consumer expectations which cannot be fulfilled.
The situation in other Eastern European states is not much better, as the noble Earl pointed out. Yugoslavia has effectively broken up and may never be put together again even if the present state of virtual civil war is brought under control. Poland, Bulgaria, Romania and Czechoslovakia are all economically sick or at best convalescent. The Balkan problem that so plagued Europe in the last century and at the time of the First World War is with us again.
In the Middle East, instability persists. It is not a stable area. Iran has still not shown herself ready to be a full participant in the international political process; Iraq is now known to be nearing the point of nuclear capability; and there is still no easy solution in sight to the Palestinian problem. The final settlement of the difficulties that provoked the Gulf War is, to say the very least, far from clear.
Of course there have been extensive changes in the balance of forces in the Middle East. Iraq appears to have been defeated in the Gulf War but the conclusion has been uncertain and confused. We have yet to see whether any stability will come to the area as a result of the United Nations negotiations over hostages, the inspection of Iraq's true capabilities or, indeed, as a result of Secretary Baker's efforts to achieve an overall peace settlement. All are still matters of great uncertainty with defence implications for the Western world.
At the same time the organisation of the defence of Europe and of Europe's relationship with NATO has erupted as a major and contentious issue in the Community. As I understand it, it is to be high on the agenda of both the Rome NATO conference and the European Council in December at Maastricht. So since early summer all of those developments have in their own way changed the defence outlook for the West and consequently for ourselves. We must now look at that change.
First, and in a sense most importantly, perhaps I may echo the words of the noble Earl that the nuclear equation has changed yet again. On 27th September President Bush announced his intention not just to send the Strategic Arms Limitation Treaty to the United States Senate for immediate approval but also to make unilateral cuts in the United States nuclear arsenal: all nuclear artillery shells and warheads for ground-based short-range missiles will be destroyed;

1119
all tactical weapons will be removed; and the nuclear short-range attack missile will be cancelled. He further proposed that there should be early agreement to eliminate all intercontinental ballistic missiles with multiple warheads. In his turn, President Gorbachev replied with enthusiasm, looking forward to a world free of nuclear weapons. Those initiatives require an early response from us.
Secondly, partly as a result of the Gulf War and of the failure of the European Community to act as a cohesive unit, there have been suggestions that the Community should take responsibility for its own defence policy. It would be wrong to pretend that there is yet a clear Community view on the matter. There is an obvious difference of opinion between those who believe—as the French and German Governments appear to believe—that the Community should have its own defence force, even to the point of its use being determined by majority vote, and those who believe—as the British and Italian Governments appear to believe—that any European defence pillar (to use the expression that is currently in vogue) should be firmly bound into NATO.
So the world has moved on rather fast since your Lordships last debated defence matters, and we are entitled to ask what we should make of it all. My first comment is that we cannot rely on what we say today being true tomorrow. As the noble Earl said, the world is moving very fast.
Nevertheless, in uncertain and fast-moving times we must try to make some sense of what is happening and determine our response, for the very simple reason that defence procurement programmes have such long lead times that decisions cannot be made from minute to minute. So we have to do our best. In that spirit I must say that I have a sneaking sympathy for the Government, in these times of great fluidity, in having to make decisions of a far-reaching nature, but that is what they are paid for as a government.
In the light of all that, and with due reservations, perhaps I might take what seem to me to be fundamental questions and attempt to express what we on these Benches see as possible ways forward. As I emphasised in an earlier debate, as an Opposition we are not, and can never hope to be, in possession of all the information necessary to make a fully considered judgment. That will have to wait until we take office. I hope noble Lords will excuse me, but that is why some of my comments may be in interrogatory form rather than as precise statements.
First, allow me to look at Britain's strategic nuclear arm. We know that President Bush is not yet ready to accept President Gorbachev's admittedly ambitious goal of a nuclear-free world. Given the Middle Eastern situation, possible proliferation elsewhere, and uncertainty in Eastern Europe, particularly in what remains of the Soviet Union, it is not difficult to understand his concerns. But Mr. Bush seems to have announced a basic principle: that the United States will content itself with the minimum deterrent necessary and halt the absurd overkill policy of the last decade or so.
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Obviously, until and unless Mr. Gorbachev's ideal and the ideal of all of us can be achieved, as we must hope it can, it makes sense for the United States to retain a nuclear arm as an insurance policy, and as far as we are concerned it seems sensible to keep our own—admittedly limited—nuclear arm to continue the linkage with the United States within NATO that has served us well over the years. The Trident programme should therefore be continued. However, I am bound to say that I should much prefer to put our nuclear arm into the negotiations that President Bush has launched and see—in all seriousness and genuine commitment—whether it can, in combination with much stronger non-proliferation measures, be negotiated away alongside the nuclear forces of other countries, and in that way—it may be a long way—achieve Mr. Gorbachev's ideal of a nuclear-free world. But I frankly and openly accept that that will require us to retain our nuclear capability right through those negotiations.
That programme is very ambitious, and I recognise that we are a long way from that goal. Just to make a simple point, as a matter of urgency we must be much clearer than we are now on where responsibility will lie for the Soviet nuclear arsenal in the event of the dissolution of the Soviet Union. After all, if we compile a list of nuclear powers in a league table it reads as follows: one, the United States; two, the Russian Federation; three, Kazakhstan; four, the Ukraine; five, France; and six, Great Britain. That is not a very comforting league table for us.
In spite of all the difficulties, I do not think that we should be deterred. I hope that answers to those questions will come in the course of time, but on our side we must also be honest and flexible. Even if we keep the Trident programme intact we should recognise that it is a matter of curiosity, to say the least, that while Mr. Bush is attempting to limit the United States to a minimum strategic nuclear deterrent Britain is proposing to multiply its nuclear capability by a function of up to eight by equipping Trident with multiple and independently targeted warheads.
Allow me to make our view quite clear to your Lordships. Our position is that we will deploy three Trident submarines, but if an order is placed for the fourth boat before the general election the incoming Labour Government will be faced with an important decision. That decision can be made only after a full examination of the contract and cancellation charges associated with it. But we shall cancel the current plans to increase the number of nuclear warheads on Tridents; and, as a second stage, might it not be more in keeping with the new spirit of the times to limit Trident, if we are to keep it, to single warheads?
Most importantly, however, is it not time that we got into the act of negotiating down all nuclear arms, as Mr. Bush suggests? What is wrong with that, and why do the Government from their Statement seem hostile to the idea? It must be better to talk than to stand aside.
I have spent some time on the problem of nuclear forces because it has been thrust into the forefront of

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defence debate by President Bush's initiative of last month. But that does not mean that it is the only matter with which we have to deal today.
The two White Papers and the current controversy within the Community are also on the agenda, and I shall now address them. Looking at the White Papers first, their importance is obvious, as the noble Earl said. Taken together, they set out the biggest changes in Britain's Armed Forces since the 1960s. They will reduce the Army to its lowest strength since 1830. The 55 infantry battalions will be reduced to 38 and the total number in the Army from 156,000 to 116,000.
We accept that it may well be possible to operate an army of that size. Certainly—and it goes almost without saying—it must be a much better equipped army that we do not have to cannibalise every unit in order to put together a credible force as we had to do for Operation "Granby". But even with the best equipped army it does mean and will mean, as night follow; the day, a reduction in our military commitments. That is where we differ from the Government who appear to believe that we can retain all our commitments and yet decimate the Army at the same time.
The point has been made publicly by the Chief of the General Staff, Sir John Chapple. What we need to know and what we do not yet know is what commitments the Government are prepared to sacrifice. Is there something in the NATO reviews which is soon to appear but about which we do not know? Do the Government really believe that Northern Ireland will be less of a military burden? If the answer to either of those questions is yes, will they please tell us and say why?
The same is true for the Navy. We still have no clear idea about what it is meant to do in its reduced form and how it is meant to do it. The only positive news that the noble Earl announced is that it now appears that a replacement has been found for HMS "Endurance" in its vital role in the South Atlantic. Even that concession was due to persistent questioning in this House led by my noble friend Lord Shackleton. Furthermore, as the noble Earl announced, it will he only temporary. We still do not know whether the replacement will exist on a permanent basis; nor do we know what it will be called. It is most important that it should be called "Endurance" and that all the associations should be continued.
Still less have we any idea of what is proposed for the reserve forces. However, it must be obvious that no rapid reaction corps in Europe will hold up an attack from the East in the unlikely event of that ever happening. If such a threat is to be met it can be done only mobilising a reserve force. But the reserve force must already be in a reasonable state of training. The warning time for an attack, whatever it may be, will certainly be less than in previous land wars. That is why the future of the Territorial Army and the Air Force Reserve is so very important.
As a result it becomes abundantly clear that we need a full and coherent statement of what the Government perceive to be our defence needs. I say frankly to the noble Earl that until that appears the
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suspicion will linger that Options for Change may have started as a serious review of our whole defence effort but has deteriorated into an unseemly haggle between the Ministry of Defence and the Treasury with the Treasury, as always, winning. It is not a suspicion that the Government should allow to take root.
I do not propose to spend a great deal of time on the proposed reorganisation of regiments in the Army. Such changes must happen and, painful as they may be, they are best done quickly. The only point I wish to make is that it is vital to ensure that recruitment and retention levels are affected as little as possible by the changes. That is easier said than done, but I am sure that all noble Lords will agree with me. I am equally sure that many noble Lords will wish to speak today on that particular issue.
Lastly, there is the question of how the defence of Europe should be organised. Again, I recognise that opinions are strongly held and equally deeply divided. We take a pragmatic view. As long as NATO serves a function it makes sense for the European pillar, whatever form that may take, to be part of it. It does not mean that there may not be a European defence force or, indeed, an extension to the Rome Treaty allowing for a collective European defence policy. All that may be possible in the future; I wish to make only two points.
First, it is a matter of historical fact—and I offer it as such—that the last time French and German troops served and fought on the same side was at the battle of Leipzig in 1813. Since then there have been three bitter and bloody Franco-German wars which are engraved deep in the folk memory of both those countries, whatever their politicians may say. Besides, Leipzig does not really count because the German troops from Saxony and Wurttemberg rather sensibly deserted before the battle leaving the French to fend for themselves. Secondly, I cannot conceive of any British cabinet of whatever party or mixture of parties sending British troops into battle on the basis of a majority decision of the European Council where Britain had been in the minority. I may be out of date and I may in the future be persuaded, although I doubt that, but at the moment I cannot see that happening.
None of this means that we should not seek to involve ourselves as far as possible in seeking ways and means for the Community to act together in defence matters. If M. Jacques Delors' suggestion of a European superpower of 30 nations is in the end realised, it will be a mighty task to weld together a collective defence effort but one possibly worth doing. All we have to remember is that it is a long way—a very long way—from here to Tipperary and the path cannot be taken at breakneck speed.
I have taken enough of your Lordships' time. Many speeches made in the debate will be more expert than mine and will contain persuasive arguments on the subjects under review. In the words of the Chinese curse, we live in interesting times. What I have said today, as I warned your Lordships, may turn out to be irrelevant tomorrow. But of our guiding principles I am clear: we must have a proper defence of our

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country; we must have value for money; and, above all, we must know precisely where we are going. Your Lordships are entitled to look to the Government of whatever party to give a clear and decisive lead.
4.47 p.m.
Lord Mayhew: My Lords, both White Papers are controversial. Therefore I shall begin by stating a major point with which we on these Benches agree with the Government and somewhat disagree with the noble Lord, Lord Williams. We support the four-submarine Trident project. As has often been said in this House, we believe that the power of the Trident project, its throw weight, can be adjusted by diminishing the number of missiles and/or warheads. However, the technical advantage of four submarines over three submarines is decisive and on that point we part company with the noble Lord, Lord Williams.
It is unfortunately true that in recent years the conventional threat to this country has greatly lessened but there has not been an equivalent reduction in the possible nuclear threat. Even when Mr. Gorbachev has carried out his promise of huge reductions in the Soviet strategic and tactical nuclear capability what will remain will be a formidable nuclear capability indeed. We have now a new and worrying development; that much of the nuclear capability will not be under central control. It is not now under central control. The Ukraine has declared its independence and declared that for the moment it will keep its nuclear weapons on its own soil. The same position has been taken by Kazakhstan. The noble Lord, Lord Williams, did not mention Belorussia but that may well go the same way. That produces nightmare scenarios. It is not impossible to envisage one of the republics defending itself by nuclear blackmail. One of them, falling into anarchy or civil war, may lose control of its nuclear weapons to some totally irresponsible group, perhaps a terrorist organisation. Even more extreme but not impossible, a republic driven by bankruptcy may consider flogging some of its tactical nuclear weapons to wealthy third world dictatorships.
There is another new and alarming development. We have learnt from the experience in Iraq how difficult it is to locate and eradicate nuclear capability in a dictatorship. Even when backed by unanimous United Nations resolutions and air power the operation continues to present problems that have not yet been solved. That throws further doubt on whether or not the world can ever become nuclear free.
The noble Lord, Lord Williams, said that he was prepared to negotiate away the British nuclear deterrent. He spoke, I thought kindly, of an objective of a nuclear-free world which in our hearts we may all want. However, working towards that objective could easily disarm the democracies of their nuclear weapons, but not the dictatorships. It may confer a nuclear monopoly on precisely those states least fit to have it. Those new developments reinforce the view that, while other countries possess nuclear weapons or can obtain them, Britain should keep hers.
1124
Where my noble friend and I disagree with the Government is on the scale of Britain's nuclear capability. Even without is full complement of missiles and warheads, Trident its far more than a minimum deterrent; it is much more than Polaris and more than we, in our position, need. In addition, the Government are committed to developing an entirely new nuclear weapons system; that is, a £1 billion system of air-launched nuclear missiles. The Government must make clearer than they have done so far against what threat they are directed. What is the threat which TASMs are supposed to meet? What is their deterrent value additional to that of Trident?
As the prospects for peace improve and as the Americans and Russians undertake massive nuclear disarmament, the United Kingdom is going in the opposite direction. The United Kingdom is greatly increasing its nuclear capacity. It is hard to imagine a more untimely, more bizarre decision than that.
The main controversy over the White Papers has been on the proposals to reduce the size of the Army. The Government are paying the penalty for not explaining the changes in the country's defence needs earlier and more realistically. That was the view of the Commons Defence Committee in its latest report on the Defence Estimates. At paragraph 2.1 it stated:
"Anyone buying 'the White Paper' in order to discover the strategic rationale for the changes proposed would be sadly disappointed. What 'the White Paper' regrettably fails to do, and does not even set out to do, is to argue in any detail the rationale behind the changes proposed, or to provide a coherent strategic overview".
Year after year from these Benches we have criticised successive White Papers on that count. It is hardly surprising that, when the Government announce a reduction in army manpower to 116,000, it upsets many people including many on their own Back-Benches.
It goes without saying that resources must match commitment. However, as we strongly argued on these Benches, by far the biggest defence commitment has, for the foreseeable future, disappeared. We no longer need to make provision for deterring, and if necessary defeating, a full-scale Soviet conventional attack on the West. Until recently that was overwhelmingly the purpose of our defence forces. We are told that events in Eastern Europe and in the Soviet Union are unpredictable. That is true; it is only too possible that there may be new outbreaks of ethnic violence and new coups. That goes without saying. However, one thing can confidently and certainly be predicted. For the foreseeable future our former enemies will not be sufficiently strong or united to present a credible conventional threat. That is the prediction that matters most for defence planning. It means that large reductions in defence resources can be made with safety. Precisely how large is not easy for the Government to decide. Frankly, it is almost impossible for outsiders to decide that delicate point of exactly how many battalions must go. I do not feel inclined to offer a firm view in that regard.
When one reviews the remaining commitments one by one it is arguable that they present problems of logistics, politics and the nature of our resources rather than of the scale of our resources. I believe that

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to be true. It is entirely proper and predictable that the armed services should resist reductions. They all do it, the Army, the Navy and the Air Force; they always will. It is simply a measure of the pride they take in their role and in their achievements.
Other people are entitled to emphasise the other side of the equation—the improved prospects of peace; a decline in commitment; likely help from allies; the cost of defence, and so on. Nevertheless, through their own fault the Government have been strongly attacked for their proposed reductions in army manpower. They have been strongly attacked also for their handling of the merger of regiments. In certain cases the Army Board appears to have taken the wrong decisions.
During the war I landed in Sicily with the 51st Highland Division. I do not need reminding about the fighting qualities of the Scottish regiments. However, if we are honest, we must acknowledge that, to the extent t hat we support reductions in Army manpower and the regimental system, as we should, we are bound to be faced with decisions that are agonising and cause great rain. That is so and needs to be said in the Government's defence.
On these Benches we shall watch carefully to see that the problems of officers and men facing the shock of redundancy are treated generously and sensitively. We shall watch to see that the Government fulfil their pledges that the smaller Army will be a better Army. We welcome the withdrawal of land-based tactical nuclear weapons and the end of what was always a dangerous and impracticable policy, that of flexible response. We welcome the modest moves towards European defence unity included in the Anglo-Italian agreement. We salute the victorious campaign of the noble Lord, Lord Shackleton, over "Endurance". However, there are still important disagreements between us on these Benches and the Government and we shall continue to press our views on Ministers until they are accepted.
5 p.m.
Lord Cheshire: My Lords, I feel that I cannot start my maiden speech without acknowledging the honour that I feel at being among you. For 12 years I watched my wife, Sue Ryder, make space in what I thought was already a totally full life in order to attend the debates, study the papers and prepare her speech. The warmth with which she spoke of the quality of the debates and the courtesy that she received is at least an encouragement. When she told me that her maiden speech was the easiest that she had ever made, I cannot say that that gave me great encouragement.
But as I stand here I am conscious that we ourselves stand at a critical threshold of world history. The century that we are now leaving must rate as one of the most momentous that the world has ever seen. Never have so many men, women and children been killed in war as in this century: never has state-organised tyranny so violated human dignity. Even the existence of civilisation itself has been threatened by the confrontation between two nuclear superpowers. Now, as we move through the closing years, nearly everything has changed. There is opening up a hope of
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a safer and better future and one that more conforms to the dignity of the individual. But whether we achieve that will depend on us. It will depend on governments primarily but also on every single person in his private capacity. So it is with the thought of what has happened in the past that I make my comments.
I look first at the mistakes. In 1914 there was euphoria in the nation. From on high there was the statement that the war would last for only a few weeks. It was said that it would end before the autumn leaves fell. Well, the leaves did fall, regiment upon regiment of them. They were not autumn leaves but green, spring leaves in the full vigour of first youth. By the time it was all over 25 million had died across the reaches of the warring countries. One would have thought that we had learnt our lesson. But we were thrown to the other end of the spectrum. There was fear of war, and disarmament and appeasement were the cries of the day. When Chamberlain took off from Croydon in 1938 it is reported that he looked down on the suburban houses and said, "If I fail in my mission these will be destroyed by bombing". But when he came into land at Munich he did not look down—or so it is reported—at Dachau, which was then in its fifth year of carrying out Hitler's oppressive extermination programme, and consider that issue.
I say that in no sense of criticism because for the most part, with some very notable exceptions, the nation thought the same. I say it because I think that we tend to be short-term and not long-term thinkers. Although as an air force man I do not like looking at other services, we do not have a crow's nest looking out at the distant horizon. We are concerned with the immediate. Much of what I have heard in the debate today is focused on the change in the perceived immediate threat.
The world has changed. The nature of war has undoubtedly changed, but human nature has not. Men of violence will still stalk the world. There is still greed for wealth and lust for power. I can see the possibility of new, strong ideological forces gathering, linked to national ambition. Technology not only gives the great state immense destructive power and high precision capability; it is going to give increasingly great power to the undercover terrorist. We do not know what lies ahead. No generation has ever before faced such an unknown, uncharted future. Therefore, I ask that we think deeply and carefully and do not jump too quickly.
I want to look at something which has not been discussed—that is to say, the full role of the Armed Forces. What the police force is on the national scene, the Armed Forces are on the international scene. There is as yet no world army so our own Armed Forces have to perform that role. We think of them as purely meeting external aggression, but we should start thinking of them as the keepers of law and order in the whole human family. That is not my own personal first thought because others have said it.
The United Nations is built on the sovereignty of the individual state. If there is one issue that all 165 members, or whatever it is, will agree on it is the necessity to respect that. But the human individual

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also has a sovereignty, and that sovereignty needs to be respected. If it is grossly violated in a nation either through the regime's active fault or because it cannot be bothered, then the United Nations should have the authority and the teeth to go in and do something. I realise that that is a step-by-step process but we should move towards it. If we are to move towards it we have to have Armed Forces that are capable of implementing it.
The policeman not only stops crime and keeps law and order but he helps people under certain circumstances. Now, as we sit here, Somalia is in civil strife. Only 10 or 20 per cent. of the food and aid convoys going there are getting through. I believe that there should be armed soldiers in blue United Nations berets escorting them and guaranteeing to the host country and to the donors that the aid is going exactly where it is needed and nowhere else and not being diverted into the black market.
The Armed Forces have a role to play in disaster relief which nobody else can play. They are organised and disciplined; they have communications, rapid deployment, medical and construction units and so on. They should be used more and more. We should move towards the day when there is a United Nations disaster relief force or capability. When nations are asked for a specific unit for a particular disaster, given availability, it should be sent. That means that those countries with disaster relief expertise in the military should pass that expertise on to smaller countries. Then the world would have a disaster relief capability which is far more effective and cost-effective than what we have today. Also, we need better intelligence—undercover work. I heard it said today that the initiative lies with the aggressor. If that is so it is because we lack the intelligence. We should know; we should be prepared; we should be stalking the aggressor, ready to stop him.
Only those who have served in the Armed Forces, particularly in war, know the value of tradition. When one joins one's first squadron, regiment or ship, one is a little frightened in war. But then one realises that one is walking a road that other men before you have walked. In a sense, one is in their shoes. One knows that one has to try and live up to the example they set. I am saying that the Armed Forces have a far greater role to play in the future good of mankind than we may think at present. I hope that we shall not let that opportunity go. I thank your Lordships for the courtesy of listening to my maiden speech.
5.12 p.m.
Viscount Whitelaw: My Lords, I have had many great privileges in my comparatively short time in your Lordships' House, including that period when I had the great honour of being its Leader, but I do not think that I could possibly have a greater privilege than that which has been given to me this afternoon to thank and congratulate the noble Lord, Lord Cheshire, on a really remarkable maiden speech. It is very rare that one is given the chance to congratulate someone who one knows in one's heart is one of the really great men of our generation in peace and in war.
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We cannot be more grateful that the noble Lord has come to our House and will take part in our debates. The noble Lord said it was an honour for him to be here. I can only say to him in return that it is a very great honour for all of us to have him here. We are deeply grateful for what he said. It would be fair to say that from the number of people who have listened to the noble Lord's speech we shall be very anxious indeed to hear him again at the earliest possible opportunity. Following him I can make only the rather mundane comment that to make one's speech now is a very humbling experience indeed. I feel suitably humble in seeking to do so.
My attitude to changes in defence policy is conditioned by my experience in 1939. As a newly commissioned Army officer, much of my time was spent in training for trench warfare. We were instructed in all the details of life in the trenches; the doubts and every other aspect one could think of. Old officers who had been recalled to the colours after serving in the 1914–18 war were in their element. We younger ones—and just to get that into perspective it was, after all, 52 years ago—thought that it was all a terrible waste of time since we believed that we were being trained for the previous war and not the one in which we were about to be engaged. Within a year Hitler proved us right as his armed columns sped through Holland and Belgium, right up to the Channel coast at Dunkirk. I have never forgotten that harsh lesson. Therefore, I am an enthusiastic supporter of my right honourable friend the Secretary of State in his determination to plan for the future, however difficult that may be.
The noble Lord, Lord Williams, was perfectly fair in what he said. Planning for the future today is a very difficult exercise. It must be right to have your eyes on the future and to plan for the future. There can be no advantage for anyone to look back to the past and think we are going to fight the wars that have gone. Of course, the dramatic changes in Russia and Eastern Europe as a whole, leading to the end of the Warsaw Pact, demand substantial reductions in our Armed Forces. I hope that cliché will not go too far because it is very easy to say, "Of course that must be true". But there are many factors before one can just leap simply and totally to that conclusion. We have to recognise that we in Britain have substantial commitments of our own; for example, in Northern Ireland, Belize, Cyprus, Hong Kong and the Falklands. In the future we shall also have to find our contribution to the Rapid Response Corps in Europe.
In addition, there are many occasions when special forces are required to deal with sudden and totally unforeseen developments. It is well to remember how often in recent years we in Britain have had to help in such situations. Nor can any of us forget—unless we are very unwise—that we live in the most uncertain world possible; that any firm conclusions can easily be turned up the very next day. All that leads us to some very difficult answers in regard to the Government's proposals. I want to try to explain how I see it.
We have to decide whether it offers the right balance between the forces we are to retain in the future and the various commitments which we shall

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undoubtedly have to fulfil—those that we know about and, indeed, many that we do not know about. The trouble, of course, is that in these circumstance no one can be sure. It is one of the wisest things in life when one does not know the answer not to pretend that one does! So many people I have found in public life have failed on that score on so many occasions. They suggest that they know all the answers when it is perfectly obvious that they could not do so. One simply has to do one's best.
What I am clear about is that in the conditions that we face we must err on the side of safety. I feel that very strongly. There will be those who say that I have always erred on the side of safety too much. They are entitled to their view, but I feel sure that it is wise. I feel sure, too, that my right honourable friend the Secretary of State for Defence feels the same.
On that basis I have no reason to question many of his decisions. Indeed, I strongly support them. It seems to me that changes for the Royal Navy and the RAF ire widely accepted. Some of his recent decisions over equipment appear to be wise and, on the whole, generally welcome—though nothing can ever be wholly welcome. But when it comes to the Army there must be anxiety, particularly since his decisions are being so widely questioned. It is the Army which has to bear the brunt of the long-standing commitments such as Northern Ireland.
All these demand infantry battalions and these infantry battalions have to be found without overstretching the units concerned and without affecting the time for training which they must have and, I hope, will always be properly recognised and given. Nor must there be any question of robbing Peter to pay Paul in order to meet established commitments on a short-term basis. There have been many occasions in recent years when that has happened. I offer an example of that. It would surely be the height of folly for the Army to get into the position of having to take troops out of Northern Ireland in order to meet the requirements of the Rapid Response Corps in Europe. Such action, if it had to be taken. would give great heart to the IRA. With some experience of Irish affairs I can only tell your Lordships that if one chose to do that heart would be given to the IRA just at the moment when it needs to be presented with a particularly firm front.
On the other hand, I fully understand that there will be a substantial reduction of infantry battalions in Germ my and that as a result many extra battalions will be accommodated in the United Kingdom. That will cause some considerable administration problems for a e Army but in many other ways it will be workable. Taking all those considerations into account I simply have to admit that the reduction of 17 infantry battalions causes me real anxiety. Fortunately, however, I understand that this reduction will be phased out over a number of years and that some of the regimental amalgamations, particularly the highly contentious Scottish ones, will not be completed until 1994–95. There is, therefore, time for reflection by the Government. I hope,
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therefore, that there will not blow up in the Ministry of Defence an obstinate determination to cling to the present plans whatever the changes in circumstances.
Those of us who are anxious about the present reductions in infantry battalions may well be wrong. But as there are many far more knowledgeable than I am who appear to feel like this, I hope that my right honourable friend the Secretary of State for Defence will be ready at least to accept, and to consider his actions accordingly, that maybe—just maybe—we shall be proved right.
There is another important reason for avoiding too rigid a position on the plans. Regimental amalgamations once made will mean far more than a reduction in a battalion. I wish that the people who deride the regimental spirit would understand the feelings of those who have served in a regiment and who are immensely proud of what they regard as a family. I thought that the noble Lord, Lord Cheshire, gave us a very good example of that this afternoon. I admit freely that I am deeply attached to the Scots Guards, in which I had the privilege to serve. Naturally, I regret our loss of a battalion, but I do not intend to argue on that score, or indeed against the decision. But I want to refer to some of the other amalgamations, and briefly to one which I understand but do not so fully appreciate as the others.
The Cheshire/Staffordshire amalgamation is deeply felt in the area and it should be looked at alongside the Scottish regimental amalgamations, which are different. The regimental family becomes part of the life not only of those who serve in it but of the area in which it recruits. The disruption of the family, therefore, not only affects the men in the regiment itself; it changes the whole attitude to the Army in the areas concerned. If I speak particularly on the feeling in Scotland it is because I am a Scotsman. I was brought up in the area closely concerned with one of the amalgamations and my wife comes from the other. Therefore I find it a little boring when people say, "You don't know anything about it. You're only an old buffer and you're much too old to have any views". I mind that because I do not think it is wholly fair. I know the feelings aroused in these parts of Scotland because I am frequently there and know the people very well. I have seen how the people there have provided generations to serve in those regiments, both in peace and in war.
Whatever the cynics may say, many of those connected with these regiments at all levels feel betrayed and disillusioned. I say specifically "at all levels" because I have heard the excuse that these protests are all officer led; I must tell anyone who thinks that that he is totally wrong, I believe in local pride and local loyalties, and therefore I hate to see such hard feelings aroused in people who feel proud of the British Army and all that goes with it. If, therefore, in the years immediately ahead there is a good reason to change some of these plans, I hope the opportunity will be taken to do so, for the future of the Army will be much improved if regimental spirit can be fully maintained and some of the feelings inevitably aroused by what, as the noble Lord, Lord Mayhew, said, are very difficult decisions can be overcome.

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These considerations, although on the fringe of the big decisions, need to be voiced for they are held by many people and in my view have real importance for our future.
In conclusion, I return, as is right and proper, to the basic strategy. As I have made clear throughout my speech, on that I strongly support my right honourable friend the Secretary of State for Defence, and I applaud his considerable courage in facing up to many difficult decisions.
5.25 p.m.
Lord Shackleton: My Lords, the noble Viscount need provide no explanation as to his authority to speak with great knowledge. We fully accept that his knowledge is based on experience. Furthermore, he had the most difficult job I have known anyone in your Lordships' House to have—namely, to follow the noble Lord, Lord Cheshire. The practice in our House is that only the noble Lord who follows a maiden speaker congratulates him on his speech, but it will be very difficult for your Lordships not to take note of a remarkable achievement. It emphasises a point that I should like to make.
It is difficult in your Lordships' House to get through 40 speakers in a couple of hours. We damage our activities in trying to do so. I do not know whether we should have continued the debate on a Friday or whether there is some other way we could have done it. I do not blame the leadership. If I blame anyone, I blame all the leaders. We are in danger of damaging our activities. Here we have the most expert community. We have noble and gallant Lords of great authority who will speak in the course of a debate in which 40 others have put down their names to speak. I recall that in the Commons—this may be remembered by those who were there in 1945—we used to have a mini-debate in the course of the Estimates. It did not work very well. On one occasion I was due to make my maiden speech when the Speaker got up to return the House to the main debate. I did know whether I should get up. I left the Chamber suffering from the worst of all frustrated speeches, a frustrated maiden speech. However, there is something to be said for setting time aside. I ask for consideration to be given to that suggestion.
The theme on which I wish to speak is HMS "Endurance" and I shall do so briefly. First, I shall do something very strange for me. I shall congratulate the Government. The noble Earl, Lord Arran, has had a difficult time in your Lordships' House when we have bombarded him with questions to which, through no fault of his own, he did not know the answer. I am grateful to noble Lords and noble Baronesses, including the noble Lords, Lord Callaghan, Lord Chalfont and Lord Boyd-Carpenter, who put across the case for a successor to HMS "Endurance". Now we know that there is a splendid ship, the "Polar Circle", which was first mentioned in your Lordships' House. We urged the Government to look at it and finally, rather slowly and rather reluctantly, they did. Now, this ship—I offer this information to the noble Earl—is coming into Portsmouth tomorrow morning.
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I do not know whether he can confirm that. He is not always told these things, I fear. The Ministry of Defence is the most secretive body I know, but I shall not go on with that because I want to say some nice things about the "Polar Circle".
Will the noble Earl arrange for a description of the "Polar Circle" to be placed in the Library. A number of noble Lords have asked me whether this Norwegian ship is any good. I should like to say that it is outstandingly good. It is the best ship available in the world for the purpose of peace in the Antarctic. The "Endurance" has fulfilled a peacekeeping role down there. It is important not just to the Falklands. It is used for maintaining the Antarctic Treaty and for carrying out hydrography. By the way, I say to the House that there is not the slightest danger for a good many years of anyone mining through 1,000 feet of ice. Ships do go down there and "Endurance" has rescued many people who otherwise would have been drowned when ships have hit unidentified rocks.
"Endurance" was originally brought on by the Hydrographer, Admiral Sir Edmund Irving, who was well known to many of us. She has done a wonderful job. Can the Minister say what the procedures are for the switch from HMS "Endurance" to the "Polar Circle"? Will there be a decommissioning ceremony? When the old lady "Endurance" goes, we ought to say goodbye to her in style. She has done a wonderful job down there. I believe that many people have great affection for her.
Indeed, the commissioning of the new ship is also important because she will carry many responsibilities. For example, there is the maintenance of the Antarctic Treaty and the continuation of the scientific work. I shall give your Lordships a whole list of activities. She is well equipped as a ship. She is an ice-breaker, which HMS "Endurance" never was. She can ram a piece of ice three feet thick at three knots and break it. No other British ship can do that. She also has splendid passenger accommodation. In fact we have got a snip. My only complaint is that we ought to have bought her or taken her on a long lease. However, the Ministry of Defence was so nervous about the whole thing that it has taken her the most expensive way, on short-term charter. But thank goodness we have her. A decision will have to be made some time soon as regards the future.
I should like to ask the noble Earl—although he may not know the answer—what arrangements have been made for members of the press to see the new ship so that they can realise what her role will be. The crew are already on board in Norway. The captain is ready to return to England. I hope that the Ministry of Defence finally order him back. I do not know the reason for the delay, although perhaps he may know. It is one of the mysteries.
I believe that the cost of hiring the ship for one season is far more than it would have been had we hired her for five years. The Minister in another place in a winding-up speech (made late at night so that the press never received it) gave a sort of half promise that the Government were determined—the noble Earl will correct me if I am wrong—to continue the

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programme of HMS "Endurance" which is supporting British Antarctic Surveys and many other things. In January when a final decision has to be taken, I hope that the option which the Government now have to acquire the "Polar Circle" will be activated. The best thing would be to buy the ship. She is cheap at the price—cheaper, I am sorry to say, than anything we could build ourselves.
Perhaps I may mention one further point—the name of the ship. I feel a slight embarrassment in urging the name of HMS "Endurance" because of the family connection. But it is such a well-known name and well identified in the Falklands. I should stress that the new ship is not going down to defend the Falklands because they are already adequately defended. She is a symbol and a symbol to other countries down there. It is important that she should have a name which is recognisable. I hope that HMS "Endurance" will be the name. Many people have advocated this. All the captains of HMS "Endurance" and the crews want it.
In conclusion, can the Minister, who has had quite a lot to cope with in the past—I promised that I would be kind to him today, not that he needs anyone to be kind to him because he can look after himself—take note of the following? If we take the name HMS "Endurance", there is a bit of money to be saved—for example, the cap ribbons, the ship's badges, life-belts, stationery and stores. All those could be moved across from one ship to the other. As the Admiralty's purpose these days seems to be largely to save money rather than spend it, that should be a strong argument.
If in the end, as I hope, the Government honour their undertaking to continue the work of HMS "Endurance"—and that is what they said in the other place—I trust that all my colleagues, including those in the House of Lords, will give firm support to the reappointment of the "Polar Circle" in January. I hope that she will continue for many years. We shall get excellent value for money and the world will get excellent value from her.
5.34 p.m.
The Duke of Westminster: My Lords, I am deeply grateful and, indeed, honoured to have been given the opportunity to speak in this immensely important debate, especially as it is my debut.
Perhaps I may turn your Lordships' attention to the Territorial Army. I am compelled to do so because I have served as a Territorial Army officer for some 19 years. I am presently second-in-command of my regiment and, God willing, due to command it early next year.
Along with many thousands of other men and women, we in the TA have spent some of the happiest and most rewarding moments of our lives on regimental duty; otherwise, frankly, we would not do it. By and large, we believe in service not for reward but because service in itself is a fine thing. Some sections of opinion have referred to us as the "army of the unemployed". That is not so, and clearly and demonstrably not so. For example, my own regiment, which recruits in the North East, the North West and in Scotland, has 83 per cent. in full-time work. This,
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alongside some of the public misconceptions as to our dedication and sense of duty, is frankly an insult to the soldiers and their families who have given up so much.
We fundamentally believe that what we are doing is right. We believe that we are making a contribution to society within the limitations of our family and business lives, and we believe that the unique spirit of the volunteer is good for the individual and the nation.
My regiment, as well as others, has had to face change before and we will face change again with understanding and maturity. However, it is my hope that out of change we can achieve better things and emerge with a stronger, more flexible and better trained reserve force. Otherwise the exercise of change is fruitless and will have a subsequent effect on morale, recruiting and retention—bearing in mind that we also provide a constant stream of well-trained soldiers and officers for the Regular Army.
The TA soldier serves for different and more complicated reasons than his regular counterpart. However, he has exactly the same hopes and aspirations for the well-being of his regiment or battalion. The loyalties that stretch back some 300 years are still as strong now and indeed as vibrant as they were on formation. Therefore, out of change it is crucial that we are able to maintain many of these links of loyalty and preserve our identities and our traditions.
The Army that I joined some 19 years ago as Trooper Grosvenor has changed over the ensuing years out of all proportion. We are better equipped, better trained and infinitely more professional in our outlook and in our attitudes; and for over 20 years we have provided the substantial part of the NATO reserve and the defence of the home base. I have to pose the question—at what cost? In the 1990–91 Defence Budget, it is estimated at some 2 per cent. of the whole.
We have trained our soldiers to a high standard, at considerable cost in terms of family and business life—notwithstanding the substantial investment of taxpayers' money. We have built an esprit de corps based on the traditions of the volunteer—those being loyalty, self-sacrifice, courage and above all a sense of fun. In terms of self-sacrifice, who is this person who will leave or change jobs because his or her employers will not allow time off for regimental duties? Who is this person who takes unpaid holidays to attend courses or annual camp? Who is this person who turns up on a Friday evening, straight from work, and returns late on Sunday night in order to return to the workplace on a Monday morning? It is that conundrum which is the TA soldier. I hope that we shall never waste these spiritual and material ingredients. I feel that they are crucial for us.
I believe that the TA commands a very special place in the hearts and minds of local communities, as do its regular counterparts. The TA centre plays an important pivotal role in terms of the social and regimental life of the soldiers and the community as a whole. The best methods of recruiting, despite the substantial sums of money spent on advertising, are still by word of mouth and through friendships at home or in the workplace. That is demonstrably so.

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I have already referred to the fact that if change is to take place, we should look for better things to emerge. Perhaps I may be bold enough to share a few quick thoughts with your Lordships. First, I believe that the future of the TA lies in a general purpose role, against a background of an ill-defined threat. I further suggest that to meet that role both TA cavalry and infantry battalions should be issued with the same equipment respectively in order to give us a flexibility and the ability to rotate to provide interest and opportunity.
Secondly, Options for Change suggests a better and smaller Army. However, I urge that for the TA we need a proper level of sustainable funding to provide the training, aids and facilities that we require. Furthermore, perhaps a contract of service should be considered with, say, some 40 to 42 training days per man. The difficulty that my regiment faced, alongside many others, during the current training year, having been given 46 training days per man and having planned its training programme accordingly, was that the days were cut to 36 at four months' notice, and then to 35, but six months later reinstated to 40. To say that I have difficulty in training a regiment under those conditions is perhaps an understatement of British proportions.
Thirdly, there are our terms of service. The current system—waiting for Queen's Order to be signed before call up—reduces our credibility. They should be reviewed to meet the ill-defined threat and national emergencies; in other words, call up when required. It is interesting to note that under our current terms of service the volunteer had to volunteer once again for service in the Gulf—he had to volunteer twice.
Fourthly, I am aware that much effort has been made to strengthen the links between the TA and employers, with some success in terms of TA soldiers being allowed time off for regimental duty. However, the situation is still not satisfactory, and I urge the Government to address their minds further to that crucial problem against the background that the culture and understanding of service in the Armed Forces among employers is not as strong now as it has been.
Finally, the changes will be traumatic for many soldiers, especially the senior ranks with long and distinguished service. I suggest that there should be a transitional phase of three to five years so that they may readjust and replan their lives just as our regular counterparts have to readjust and replan their lives.
Bearing in mind convention on these occasions, I have been able to give your Lordships only a thumbnail sketch of the hopes and aspirations of some 75,000 men and women who constitute our reserve—who serve without fuss or flamboyancy under sometimes trying conditions at home and in the workplace. Our hopes are now in the hands of those managing our change and our trust lies in the fact that they understand us. I thank your Lordships for the courtesy that you have extended to me. I thank you for listening.
5.44 p.m.
Lord Bramall: My Lords, I am delighted to be following the noble Duke, the Duke of Westminster, and to have an opportunity to congratulate him on his most telling and excellent speech. He contributes enormously to the community in a number of ways, but no more so than in the reserve forces and the Territorial Army, which he leads from in front. As your Lordships have heard, he will shortly be commanding a regiment. I sincerely hope that after Options for Change, which has announced plans for the Territorial Army, he will still have a regiment to command.
Noble Lords: Hear, hear!
Lord Bramall: My Lords, I am sure that he will. His contribution to the debate has greatly enriched it. We hope that we shall have the benefit of his informed wisdom in the months ahead. Perhaps I may also say how inspiring it was for me to listen to the maiden speech of my noble, and I feel I should say gallant, friend Lord Cheshire, who knows war so well in all its aspects and has done so much for mankind in peace as well. His words will long remain in our minds.
This is an important debate, because what the Government intend in Options for Change is bound to have an effect, long after Ministers have gone from the scene, on this country's influence and interests abroad; on the general security of the United Kingdom and perhaps the world; and on the performance and professionalism of the Armed Forces, to say nothing of the well-being of 63,000 servicemen and their families from the Army alone who will be returning to civilian life between now and the spring of 1995, 17,000 of whom will have been made redundant.
It is important to get the end product as right as possible. I do not have to remind your Lordships that there is in the Armed Forces a widespread feeling that, far from having got it right, those who have served the country so steadfastly in peace and war have been badly let down; and that the cuts, although in many cases inevitable and sensible, have now gone too deep. They especially resent the final few turns of the screw on manpower which they attribute almost entirely to Treasury pressure about which their Ministers and senior officers can of course only advise and have been unable to resist as they would have wished. Over that, they are of course right. If the Minister continues to refute that, I can easily produce chapter and verse.
Of course some will say, "They would say that, wouldn't they?", but, as someone who can perhaps more easily distance himself from the raw emotions of those who in the prime of their service can expect to find themselves redundant and facing a most adverse labour market, I too view the exercise with sadness and considerable scepticism: sadness that this Government should have found it necessary to reduce a great national asset quite so greatly when the world is still an uncertain and dangerous place; and scepticism that, as presently funded, the Government will be able to deliver all the rhetoric on page 40 of the White Paper and in the Minister's speech about the dangers that still lurk and forces which, although

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smaller, are somehow better and able to meet efficiently and without the present overstretch the day-to-day commitments that invariably keep coming their way and that in the event have had little to do with the possibility, or now impossibility, of an attack in central Europe.
That the Secretary of State had to do something, there was of course no doubt. The disappearance of any imminent credible threat of a general European war galled for some significant political gesture at least, and perhaps as much, if not more, as regards what I believe remains our belt and braces nuclear capability. With defence expenditure having already declined by 11 per cent. in real terms over the past five years while force structures remained largely unchanged and, according to the Chancellor's Statement of last November, due to fall a further 6 per cent. over the next two to three years whatever emerged from the Options exercise, decisions on the size and shape of the Armed Forces were urgently needed. Without them the defence programme would have drifted even more out of alignment and would have faced arbitrary "salami" cuts and a return to the 1930s, when, as many in your Lordships' House will remember, there were men but no equipment or ammunition and no ability to train and everything was done with gas rattles.
From that starting point, I welcome the review and accept that some of the force reductions were necessary, merely to put the programme into better balance. There is sadness nonetheless that continuing financial pressures have forced those cuts to go as deep as they have when we consider not just the contribution made by the Armed Forces to the country's general life but also those ongoing commitments which have been mentioned and which are unique compared with other European countries.
It is no good saying, "We must be doing the right thing because everyone else is doing it". Our commitments and responsibilities are unique in Europe. Other than the forward defence along the inner German border—the forces for which were in any case doubly earmarked for Northern Ireland and other emergencies—the commitments and responsibilities show little sign of change in the time period we are talking of. In Hong Kong 1997 is still a long way off.
Certainly, the Soviet Union, as it was, is down and out, though whether more so than the Germans in the 19203 under the Weimar Republic, I do not know. However, a mixture of rampant ethnic rivalries throughout Europe, suspect and inexperienced governments struggling with unaccustomed democracy and a number of hard-line and ambitious activists either on the march or sulking in their tents makes it far too early to say how the balance of power and stability in Europe and the Mediterranean will be affected five, 10 or 15 years ahead. Look what happened between 1919 and 1939.
In any case, even at the height of the cold war when I was a chief of staff, I was always conscious that events outside NATO were more likely to involve this country in the deployment of military force in some capacity than the more obvious threat which was
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largely taken care of by the stability of NATO and the balance of terror. This was historically borne out by such crises as required us to dig deep into our total military resources—the Gulf was a good case in point, with the Rhine Army completely grounded—occurring with unfailing regularity every nine to 10 years.
In all of these, whatever the conventional wisdom before or since, the government of the day felt obliged to become involved in military terms. With many unresolved problems in the Middle East and elsewhere and with man's propensity—about which my noble friend Lord Cheshire spoke—to resort to violence at the drop of a hat, there is little reason to believe that the sequence will be broken.
Yet the professionalism and quality that was seen in the Falklands and again in the Gulf and to which the noble Viscount, Lord Whitelaw, drew attention cannot be turned off and on again at the drop of a hat. It must be nurtured over the years from a basis of confidence, self-respect, esprit de corps and commitment which is now being put under strain. Thus the sadness tinged with apprehension is all too understandable.
However, much will depend on what these reduced forces will be capable of at the end of the day. If they turn out to be truly differently organised, fully recruited and funded, better equipped and thus able to maintain operational capability and, with the help of the Territorial Army and other reserves (much more easily mobilised than they are at present), to expand rapidly in any emergency, then we could just get by for a bit. Some of the strategic thinking which has emerged in the review seems admirable. I refer to the British-led rapid reaction force, which, apart from its value for and in NATO, is still the cornerstone of European collective security, as the Prime Minister said. It would give us, from within the United Kingdom components, the capability to operate outside Europe with allies, if the need arose, or to operate in support of the United Nations as was suggested, or in disaster relief.
I also welcome the Government's statement about not turning away volunteers for the Territorial Army and the other reserve forces which, at extremely low cost, provide not only much needed reserves and reinforcements but also valuable roots for the regular forces in the civilian community—something which is more than ever needed now.
I should like an assurance from the Minister that the 63,000 to 65,000 personnel announced as the new and proper figure for the Territorial Army will be funded at that strength. Otherwise, there is no incentive to recruit to the maximum, and no ability for commanding officers to train a full establishment.
This is where my scepticism comes in. In making these claims an important point seems to have been overlooked or swept under the carpet. It is tilt physical changes of this magnitude require a great del of money up front if the requirements are to be properly met in the timescale allotted: money to ray for the necessary redeployment, movement cots,

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alteration and rebuilding of accommodation and above all the good employer measures relating to redundancy—vital resettlement and housing.
Nothing to speak of had actually been done about houses for service people as opposed to it being talked about and studied endlessly over the past 10 years. As a result, through no fault of their own, particularly in the Army, such people have one of the poorest levels of home ownership of any group in the country. If they continue to be so immensely disadvantaged in this way, it will impose an additional strain on those facing redundancy and trying to resettle in civilian life and on their families. I hope that the Secretary of State's statement about preferential mortgage made in the other place will be a start to a more specific commitment on home ownership as part of a resettlement package. I hope that there will not just be further promises of yet more studies. However, this will all need more money up front. It does not seem to be there; as the Minister well knows, the shortfall is still colossal.
Then, with a strong armoured division remaining in Germany, I strongly question—indeed I know it is impossible—whether 116,000 men (which means 104,000 trained men) will be sufficient to support both operationally and logistically not only those forces at proper unit strength but all the Army's other commitments. As the noble Viscount, Lord Whitelaw, said, that includes particularly the Northern Ireland commitment, which shows no sign of diminishing and from time to time has a nasty habit of sucking in more troops.
The 116,000 (or perhaps I should say 104,000) figure is now doubly suspect. Not only has the military advice been consistently set at around or even just above the original figure of 120,000, with only the Treasury dissenting, but since the reduced figure was released two extra battalions have, for whatever reason, been retained without any extra manpower or money to sustain them. Thus either equally important parts of the programme will have to suffer or all units will have to be made correspondingly weaker. Such cheeseparing over unit strength will greatly reduce motivation as well as efficiency and make a mockery of the "smaller but better" image.
There are similar question marks over the equipment programme, which is already slipping for financial reasons, although some good decisions have been taken. That could have a serious effect on the operational capability and viability of all three services. However, I shall leave other noble Lords to talk about it. For the moment, it is manpower, particularly for the Army, and the funding to support it that concerns me most. Unless the Secretary of State wins the Prime Minister's backing in order to obtain more money out of the Treasury in the short term—which must include some alleviation of the manpower ceiling—the aspirations of the White Paper will be meaningless. We shall end up for sure with smaller forces, equally overstretched and under-funded and with considerably less operational capability for any emergency. The flaws in the Options for Change exercise will then be there for all to see.
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There is much to do before anyone can be really satisfied with the outcome of Options for Change and before the Government can live up to their promises and keep faith with the splendid men and women who serve in our Armed Forces and who, we must trust, will continue to do so. I hope therefore that Ministers will show a degree of flexibility and use the next few months to correct the review's more obvious flaws which their professional advisers, who are quoted when it suits Ministers and not when it does not suit them, will be only too ready to point out to them.
6 p.m.
Lord Wedgwood: My Lords, I feel thoroughly humble at being included among the maiden speakers who are to speak in this debate in your Lordships' House today, especially in view of the fact that for a moment I thought I would have to use my parade ground voice.
Sometimes referred to as Pontius Pilate's bodyguard, but undoubtedly raised by Royal Warrant in 1633, the Royal Scots, who are the Royal Regiment, the 1st of Foot and Right of the Line have been included among other famous regiments for proposed amalgamation. They will therefore be lost at the stroke of a pen. As a past serving regular soldier with the Royal Scots I declare a special interest. However, the possible demise of this and other great regiments that have protected and fought for this nation for a combined total of many hundreds of years is more than an emotive subject of precedence based on heritage.
I am most grateful to my noble friend the Minister for granting me an early interview. Although sympathetic to my point of view he was unable to agree with me. I am sure other noble Lords have found that to be the case. However, the implications of the proposed reductions are extremely serious and I am bound to stand before noble Lords and raise them today.
The ability of Her Majesty's Armed Forces to react to the deployment in the Gulf during the recent crisis was a credit to the leadership, training and professionalism of those forces. The crucial role that all units played in supporting the United States' offensive and effectively cementing the precarious coalition was admired and applauded around the world. But troops had to be mustered, primarily from Germany. It is argued that the threat in Europe at that time had sufficiently decreased so as to make this a natural option. If it was not clear before it must be abundantly clear today that the balance of power in Eastern Europe and the Soviet Union is not stable. The threat today is conceivably more dangerous than it was during the so-called Cold War.Not only did "Desert Storm" leave the forces in BAOR shamefully depleted but it greatly reduced our ability to react to any other call to arms. On the home front there may be a desire to bury heads in the sand over Northern Ireland. The force levels there are low and at any time regiments may be required to reinforce them. Where will they come from? Civil disturbances or crises will not go away. Who goes to clear the rat-infested streets of Glasgow and man ambulances

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or ancient fire-fighting machines, as I did in the mid-1970s with raw recruits? We obviously did not have adequate forces then and we certainly shall not have them in the future on the basis of the reductions.
It is admirable for my right honourable friend the Secretary of State for Defence to seek ways to reduce the defence budget. That is his responsibility. It is also most considerate that he consulted,
"widely within the Army on how the restructuring should be achieved".
On 23rd July in this House the noble and gallant Lord, Lord Bramall, expressed his anxiety about the remaining number of units. He said of the proposed Army strength of 116,000,
"as far as I know the professional advice has never deviated from tie figure of 120,000".—[Official Report, 23/7/91; col. 674.]
Further anxiety was shown when the noble Lord, Lord Williams of Elvel, asked what "magic calculation" had led to the statement. It seems that the Army Board's professional advice was not sufficient and other figures were required in the magic calculation. It is no wonder that there is considerable anxiety throughout the nation on the subject of our defence.
Perhaps that anxiety is most poignant in Scotland, where the injustice, and more specifically, the inequities of the proposed amalgamations have outraged the population, who do not like to see their military history and traditions decimated here in Westminster without due cause. The loyal serving officers and men of the Scottish regiments are required to support these reductions while personally feeling immense betrayal.
Wales has escaped the hammer on any of its cap badge; and although collectively in England five are to be lost, including one close to the heart of my kinsman, the potters of Staffordshire, none is going from the King's Division; yet just to the north of this division, the Scottish Division will lose four cap badges, creating misery for us all. Of course there is anger and outrage. These regiments are well recruited, with a proven potential to sustain strength in the future. This is most significant in the Lowland area, where the Royal Scots are headquartered and excess recruits are taken by the Highland regiments. The added pain is that such a well recruited regiment will increase, through certain redundancies, the already desperate unemployment situation in Edinburgh and the Lothians.
My right honourable friend the Secretary of State for Defence said at the end of his Statement:
"Everyone who recognises the great benefits that flow from regimental loyalty and tradition understands that, as with amalgamations in the past, that same spirit is carried forward into lb; reformed Regiments".
Again, one of the great benefits of the British Army is that loyal officers and men act on and obey orders. Of course that spirit will be carried forward. Many noble Lords will remember the amalgamation that took place in 1959 between the Highland Light Infantry and the Royal Scots Fusiliers. Members of the amalgamated regiment, the Royal Highland Fusiliers, are still asking each other which side of the family they
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are from. That division has not healed in 32 years. Those fine regiments have lost their identity in their respective regimental areas.
Edinburgh will be even further angered in losing its regiment after cementing its 350-year association with the Royal Scots by allowing them to march through the streets of the city with drums beating, bayonets fixed and colours flying. Clearly that spirit will never be carried forward through this form of disbandment.
In any theatre of conflict, whether it is a crisis at home, protecting our interests abroad or in support of our allies, the infantry must play a role and most often bears the brunt of all activity. My right honourable friend the Secretary of State for Defence said in his Statement on the Defence Estimates that the strategy for future defence policy,
"is based on the ability to adapt to change both internationally and in NATO; the maintenance of force structures with the flexibility to respond to new circumstances".
That is admirable rhetoric but how can this be done? The infantry battalions are and will be outnumbered by commitments.
The figures simply do not add up. The ACE rapid reaction force—we have heard a great deal about that today—will have an allocation of 19 infantry battalions. In order to be effective this force must train and work together from top to bottom and front to rear in a very close relationship. As we initiated the idea of such an organisation, it would be futile to steal units from this force for other operations. Our overseas garrisons will occupy a further five battalions.
Fifteen battalions remain for the direct defence of the United Kingdom, including Northern Ireland. A meagre two and a half battalions will be available for roulement in the Province, which makes that programme impossible, even if Royal Marines are loaned from the Admiralty. It also means that there will be no available battalions for public duties or any form of exercise or training, even the special training which is an absolute requirement for service in Northern Ireland. Under these circumstances the much valued and respected professionalism of our troops will be hopelessly diminished. The Army will chase its own tail, deaf even to the bark of a small-time despot.
In summary, the Army Board suggested a strength of 120,000, which was dismissed for the figure of 116,000. We should deduct from this 12,000 non-combatants, recruits or others not at arms. A new figure of 104,000 makes a mockery of the July Statement and would leave this country perilously short of a vital link in the already overstretched chain of defence.
Prior to the Statement it was announced that two infantry battalions, one of which was incongruously a parachute battalion would be "added back". That is another indication that the magic calculation was imprecise. It is not too late to remove the "magic" and provide realistic numbers in this vitally important calculation.
My right honourable friend the Secretary of State for Defence may talk about "smaller but better". However, until we are assured of a less volatile world

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and the ACE rapid reaction force is well established and fully supported by our allies there will be many deserving regiments included in additional "add-backs". At the top of the list will be a well-recruited Lowland Scottish regiment, raised in 1633, standing at the right of the line.
It is worth remembering that the motto of the First of Foot is also that of the ancient kings of Scotland: nemo me impune lacessit.
6.10 p.m.
Lord Jenkins of Putney: My Lords, on behalf of the whole House I have great pleasure in congratulating the noble Lord, Lord Wedgwood, on his maiden speech. Noble Lords will probably be aware that I did not agree entirely with every word of it, but the noble Lord expressed his point of view with such clarity and persuasiveness that I am sure that we shall all listen to what he has to say in future whether or not we agree with every word. I am not entirely without sympathy for his argument, as I hope I shall make clear.
Following an earlier debate on a White Paper a colleague said to me, "You really ought not to do that". I said, "To do what?" He said, "To talk about the White Paper in the debate about the White Paper because it is really not done. It is not the thing. You can refer to it and talk around it but not talk about the White Paper". I thought that that was a lot of nonsense and I propose once again to refer to the White Paper. However, I shall do so only briefly because, for reasons which I shall make clear, the Defence White Paper which we are discussing tonight has been rendered out of date by events.
The speech of the noble Earl, Lord Arran, today was very much more to the point than the White Paper. The noble Earl has at least moved to a considerable degree with events. In fact, I am tempted to welcome him as a nuclear disarmer. He suggested in the course of his speech that a large quantity of nuclear arms would be disposed of. It is true that the Government are trailing behind the United States of America and certainly behind Mr. Gorbachev, who talks of a nuclear-free world—something I have hoped to see—but for the first time we are beginning to see a movement in that direction. That movement, supported by the main sources of arms—the United States and the USSR—has become so strong that we in this country are also moving in that direction. Therefore, for the first time—and I did not expect it—we have heard the noble Earl, Lord Arran, say openly that he wants to get rid of a large number of nuclear weapons. He has reached a conclusion with which I do not agree, but nevertheless that conclusion is very much better than some conclusions which he has reached on earlier occasions.
The White Paper is an attractive package of charts, words and colour pictures. There is a picture of a mountain rescue team and of Archie Hamilton talking to the kiddiwinks in a London nursery, but not a word about killing anyone, although the object of the exercise in war is to kill more of them than they do of us. Nevertheless, it is a well-produced document. I had intended to talk quite a bit about it but I have since
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decided that that would be futile because we are no longer talking about that document; we are talking about subsequent events.
The Government are not as wholehearted as I would wish in their move towards nuclear disarmament, but we must be thankful for small mercies. The requirement for nuclear weapons in Europe now is nil, as Bush and Gorbachev have perceived. That perception has not yet dawned upon Her Majesty's Government but I think that it will. I expect that it will eventually be realised that the boss in Washington is turning unilateralist and that all the money that we intend to spend on Trident will be wasted, as all the money that the world has spent on nuclear weapons since Hiroshima and Nagasaki has been wasted. Perhaps the money spent on the weapons used at Hiroshima and Nagasaki was not entirely wasted. Tens of thousands of people were killed and injured, cities were razed and our civilisation entered into what may be, if we are not very careful, its final stage.
The intense danger, the inevitable catastrophe, of nuclear proliferation has at last been grasped by the two main sources of nuclear weapons. They intend to reduce the danger by moving back to the status quo post bellum and the days when the world was dominated by the two great stocks of strategic ballistic missiles—that is, back to mutually assured destruction (MAD). It is better to go back to MAD than to continue on our present path of proliferation which, as I shall show in a moment, cannot be stopped for reasons which I believe are incontrovertible.
It has been realised at last that one cannot stand still. One either goes forward to the end of the process upon which one has embarked or one retreats to a safer position. I believe that Gorbachev and Bush have concluded that we must now retreat to a safer position. I want to go back beyond that position, but it will undoubtedly be an improvement to return to two large stocks of strategic ballistic missiles rather than have a proliferation of nuclear weapons all over the face of the globe.
Although I attacked the policy of mutually assured destruction—as, incidentally, did Neil Kinnock by my side from the same platform more than once—one would have to be really insane not to appreciate that MAD plus proliferation equals nuclear war. That is a proposition which it is hard to refute.
In turn, proliferation cannot be stopped while the major powers deploy some strategic nukes all over the world and proliferate vertically themselves all the time. That is only one reason why the decision to retain Trident is so wrong.
The division of states into nuclear and pre-nuclear nationalities warring with each other enhances the danger, as the noble Lord, Lord Mayhew, pointed out. However, he did not carry that perception to the proper conclusion. If the present effort by the two great nuclear states—the USA and the USSR, as I still call it from habit—involves the sacrifice of our Trident, that is a price which the Americans will be willing to pay. Therefore, it is not much good talking about putting the unfinished Tridents into the negotiations when the big boys have gone unilateral.

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As I have said, the White Paper was written before that and the penny had not dropped when the Labour Party was in Brighton the week before last. With the Liberals it has still not dropped apparently. The nuclear disarmament bandwagon has at last begun to roll. Alas, the Labour leadership has chosen this moment to jump off. Sooner or later it will have to climb on again because everyone else is getting on. The wagon is moving, so I hope that Labour will jump on quickly even if it involves an exchange of duties by some slow-coach shadows.
The White Paper refers to our strategic nuclear force as,
"the cornerstone of our defence capability".
It is a good job that it is not. What building could exist long with such a grotty, rust-ridden and collapsible cornerstone? We might as well get rid of it and keep some regiments for a while. That may be sentimental, but I AM rather persuaded by the speech of the noble and gallant Lord, Lord Bramall, that it is not all sentimental. In many cases it is better to be sentimental about the past than to blow the world to pieces in the present. If we are within sight of a non-nuclear world, is it not better to have the Royal Scots than the alternative? Of course it is. They could even march through the City of London doing whatever it is that they do.
TASM now seems likely to be another massive waste of money. As for the European Fighter Aircraft, who is going to attack Europe—Africa or Asia? Surely it will not be America. I view with some alarm the proposed Rapid Reaction Corps, as I do the spectacle of NATO thrashing about the Continent looking for an enemy. The adoption of the Western European Union as a military cloak also seems to be rather an oddity.
Is it true, as the White Paper states, that Britain is leading endeavours to stop chemical proliferation? I thought it was, but there now seems to be some evidence to the contrary. This matter wants looking into if the Government's intention, as I believe it to be, to take the lead in avoiding chemical proliferation is being got round. I understand that the Government are looking into this question. I am glad that they are because if we are to take the lead the Government must not only do that, but they must not allow economic considerations to get round their own intentions in the matter.
The Defence White Paper died the day after it was published. It is now no more than an interesting and well-produced historic document. However, it was nice to see a picture of Archie and the kiddies.
6.27 p.m.
Lord Carver: My Lords, I am well aware that it is a convention of the House that only those speakers who follow the maiden speakers act on behalf of the whole House to express their congratulations, but I find it impossible not to express my admiration for the eloquence of all three maiden speakers and for the obviously genuine strong feelings which lay behind their speeches. It was a particularly nice concatenation of circumstances—I do not think that it was a coincidence—that my noble friend Lord Cheshire,
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whom I find it rather difficult not to call gallant, made his maiden speech on the same day that my noble friend Lord Craig of Radley was introduced, thus restoring a little degree of joint service balance to the group of noble and gallant ex-Chiefs of Defence Staff in this House.
I am not joining the chorus of those old and bold types who protest that the reductions in the Armed Forces, originally announced in July 1990 and confirmed with some minor changes in the two Defence White Papers that we are discussing today, have gone too far; and that, in the light of the Gulf war, the uncertain situation in the Soviet Union and events in Yugoslavia, the Government should have revised their proposals and been more cautious in the reductions that they propose over the next five years. That view was taken by the Defence Committee and others in another place, influenced no doubt by pressure from representatives, mostly retired, of the organisations that were to be seriously affected by the reductions.
I do not take that line and I have not changed the views that I expressed in this House when we debated this paper's predecessor on 17th July last year and again in the debate on the Address on 13th November. I believe that the Government have produced a sensible plan for about the next five years. It does not involve very radical changes either in NATO or in our own Armed Forces—reductions, yes, but not basic changes. It is an interim plan to cover a period in which there will be profound political changes in Europe, largely dependent on what happens within the Soviet Union. Until we can see more clearly than we can today where they are leading us, it is right for the Government to be comparatively cautious and to rely on existing institutions—NATO in the military and the European Community in the political and economic field, whatever the current disagreements within the latter.
The Government's critics have complained that the proposals were not based on any strategic rationale and that there had not been any formal review of strategy. But what did they expect—a list of all the forces available to everyone and a catalogue of all the things that could go wrong? Over centuries this country's strategy or defence policy—whatever you like to call it—has had to meet two demands which have always been in conflict with each other. The first was to protect by armed force our possessions overseas and the trading interests which were the original reason for having those possessions. Those had been transformed into responsibilities which, in the last half-century, were only remotely, if at all, connected with trade. The second was to ensure that no single power or group of powers hostile to our interests dominated Europe and especially Western Europe. We have never been able to ensure that by ourselves. It has always involved an alliance.
The first of those strategic imperatives has virtually disappeared. There are vestigial traces in Gibraltar, the Falklands, Hong Kong and Belize, but Gibraltar's garrison is now raised from the colony itself; Hong Kong will soon cease to be a commitment; the Falklands are likely to remain at their present low

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level for some time; and it is surely high time that some other more local solution was found to preserve the security of Belize, which has been independent for 10 years, against threats from Guatemala. Northern Ireland has been mentioned and is, of course, one of the main justifications for the number of infantry battalions in the Army, but I do not regard the present number of battalions in Northern Ireland as sacrosanct. The RUC has had primary responsibility for law and order for a long time. I realise that it always causes the most immense political rumpus to reduce the number of battalions at any time, but I suggest that we do not regard the number of battalions there now as fixed for ever.
No one now suggests that, save in some very exceptional circumstances, armed force is the way to protect our trading interests. If it has to be used, as it was in the Gulf war, we could not act on our own. We share those interests with many other countries. If force has to be used, it will be as a contribution, probably to a force led by the United States. That is what, so far as the Army is concerned, the European reaction force is intended to be. It is the purpose of much of the proposed strength of the Royal Navy and of a fair proportion of that of the Royal Air Force.
As the noble Earl made clear in introducing the debate, the most far-reaching change in our strategic commitment is in Europe. There appear to be some members of the Conservative Party who believe that there is a group of powers hostile to our interests attempting to dominate the Continent and intent on having its own armed forces in order to be able to do so—that it is the European Community and that Jacques Delors is its Bonaparte. That is hardly realistic in strategic terms. The threat that has hung over Western Europe since 1945—which led to the formation of NATO and which has provided the rationale for the organisation, equipment and training of all three Armed Forces since then—has virtually disappeared. Can anyone now seriously envisage a major Soviet invasion of Europe by land, a naval campaign in the Atlantic or other oceans, or a major air or missile attack, conventional or nuclear? Trouble with neighbours on the Soviet borders—yes, perhaps—but not the major offensive, launched from the centre of Europe, which NATO was designed to deter or, if that failed, to stop.
In any case, NATO's forces, whatever was written in its own documents or our defence White Papers, were not based on any strategic review. That was tried once in 1952 and it came up with a demand for 100 divisions. Nobody was going to produce those. NATO's forces were based on a political estimate by its European members of how much they had to do to keep the United States committed to the defence of Western Europe and to sheltering the continent with its nuclear umbrella. Our own forces were based on that and on the need to ensure that our influence within the alliance was not eclipsed by that of the Federal Republic of Germany. That has been the strategy of successive British governments of both political persuasions ever since Winston Churchill embraced it when Dunkirk, in May 1940, signalled the
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failure of our attempt to protect our interests and maintain our security by a European alliance. The Government's proposals are based on much the same strategy.
But times are changing. I believe that it would be foolish, and indeed undesirable, to continue to rely too strongly on American support for whatever security organisation is needed in Europe in the longer term; that is, beyond the next five years. We must rely on an alliance which is more truly European and less dominated by the Americans, in the way that NATO now is and always has been. That means that France must play a full part. I believe that we should advance in that direction by stages.
The first stage is that on which the Government are engaged. I congratulate the Ministry of Defence on having achieved agreement within NATO to the British contribution to the rapid reaction force and on accepting that it could also in certain circumstances—with French participation, one hopes—act as a European reaction force outside NATO.
I congratulate the Government also on their belated conversion to the concept of strengthening the Western European Union, even though the reason for the change of heart is to avoid letting the European Commission have anything to do with defence. During this first stage, which could last about five years, I should expect to see a significant reduction in the United States forces stationed in Europe and the withdrawal of all Soviet forces behind their own borders, as well as major reductions in nuclear weapons and their delivery systems, which we are already seeing as a result of President Bush's initiative and Mr. Gorbachev's response. Sooner or later, the Government themselves will have to do something, such as cancelling the fourth Trident submarine.
The second stage would then, I suggest, see a radical change in NATO back to the pattern of its original conception. That was a treaty arrangement by which the United States and Canada gave support to an integrated European defence community, not necessarily by stationing their forces on the continent. If one looks back at the record, it will be found that that was the original concept.
In that second stage the Western European Union should be converted into such a community and the NATO command system, with its American supreme commanders and their subordinate regional international commanders-in-chief, should in my opinion be abolished. By then I hope that the current bickering about the relation of that community to the Economic Community would have been settled. But in the first stage, while NATO remained much as it is at present, I believe that the two communities should be separate. In the second stage, therefore, there would be developed a strong European defence and security organisation which in stage three would have to be converted into, or associated with, whatever security organisation was by then thought appropriate for Europe as a whole.
At present it is not possible to say whether that would still take the form of conventional forces—sea, land and air—more or less like those of NATO today, or be something much more like a peace-keeping

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force, or a combination of the two. What is certain is that in all those stages most nuclear weapons and their delivery systems will be irrelevant to the security problems of Europe and other places in the world. The main problem will be to bring about an orderly reduction to a level at which, if they are retained, they will cancel each other out and be no longer considered to be keeping us "on the brink of the abyss", as Lord Mountbatten described it in his much quoted speech at Strasbourg in 1979.
Therefore, I welcome the Government's proposals but offer a word of warning. Having made their decisions and persuaded the Armed Forces to accept them and get on with them as a programme for the next five years, the Government must stick to them. There are already rumours that pressure from the Treasury is leading to suggestions for modifying them downwards. If the Government or their successor start monkeying about with the programme in that way they will forfeit the trust of the Armed Forces in changes which, for many of the individual sailors, soldiers and airmen, involve very hard personal decisions.
while implementing the changes the Government must turn the mind of the Ministry of Defence, and the minds of its fellow members of NATO, to consideration of the sort of security organisation which will be needed in the longer term, to a closer relationship with Europe in defence matters, not least in arms procurement, and to less reliance on an organisation dominated by the United States. If my picture of the future pattern of Europe's security is even approximately correct it will involve much more radical changes than those outlined in the defence White Paper. The Armed Forces, and particularly the infantry and cavalry elements of the Royal Armoured Corps, must organise themselves so that every change does not lead to screams of anguish, putting pressure on politicians and others to favour tradition-bound special interests against the real requirement of the nation's security.
I congratulate the Government on having stood firm against the clamour. Had they given way they would not only have been favouring those whose eyes are fixed firmly on the past at the expense of those who look to the future but they would also have incurred the resentment of those elements of the Armed Forces—the great majority—which did not try to exploit sentimentality, political sensitivity and connections in high places to preserve their own outfit.
6.37 p.m.
Lord Trefgarne: My Lords, I have had the privilege of speaking in your Lordships' House on this topic over a number of years and from different places in the Chamber, most often from the Government Dispatch Box. On a number of those occasions I have had to reply to a speech from the noble and gallant Lord, Lord Carver. I am bound to say that I found his speech today as perplexing as I have found them on earlier occasions. I have no idea what advice the noble and gallant Lord tended to Ministers when he was Chief of the Defence Staff. But if it was as incomprehensible as some of his speeches to your
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Lordships have been—incomprehensible to me at least—I am not surprised that the policy of that Government was such as it was.
Be that as it may, I want also to make reference to the speech of the noble Lord, Lord Williams, and to the policy of the Opposition. It was not so long ago that the Labour Party was wholly opposed to the Trident programme and everything for which it stood. We were told that what we should do was cling on to Polaris for ever, or at least for as long as was necessary. It was a kind of rust-away policy rather than a give-away policy, which seems to be more in line with Labour's present thinking. I believe I am right when I say that the party is now in favour of Trident. If so, I am glad to hear it, although the noble Lord, Lord Williams, referred to doubt about the need for a fourth Trident submarine, a matter to which I shall venture to return in a moment. The need for that submarine seems to be a doubt assailing the mind of the noble and gallant Lord, Lord Carver, also. I shall attempt to deal with that in a moment.
Of course, I accept the need for change. The wor1d, especially the Eastern bloc, has changed out of all recognition in the past two or three years. But thesize of our armed forces required to meet whatever threat remains must surely be calculated not by reference to the amount of money which the Treasury is prepared to make available but to the nature and extent of the threat.
We have seen a sea change in Soviet political motivation for aggression and lesser mischief such as subversion, but for the moment the size of the Soviet military machine is still pretty formidable. It is many times that of our own. I recall reciting the extent of the Soviet threat, as it then was, from the Government Dispatch Box—85 divisions (was it?) confronting u on the central front, and 55,000 main battle tanks, in, my memory serves me right. I have forgotten the number of nuclear powered and nuclear armed submarines and the exact detail of the formidable array of nuclear tipped missiles that confronted us, not to mention the vast arsenal of other nuclear warheads of every kind.
What exactly is left now of that formidable threat? When my noble friend Lord Arran replies, I hope that he will be able to tell us in more detail to what extent that physical military threat remains. As we have starkly learned so recently, the threat is not confined to whatever is left of the Soviet bloc. The world is full of crackpots and tyrants whose names will come easily to your Lordships' minds. We therefore need to maintain the capability—as the noble and gallant Lord, Lord Bramall, explained so clearly—to deploy our forces outside the NATO area, sometimes on a purely national basis, as in 1982, but more often in conjunction with allies, as in the Gulf.
While the Government are entitled to say that the world has changed, as indeed it has, they ought to be more forthcoming as to exactly what the threat now is, as they see it, and how our forces, sometimes in conjunction with allies and sometimes not, will meet it. I fear that we have had too little information on this new threat to enable us outside Government to reach an informed view on Options for Change. I hope that

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my noble friend will be able to say more about that tonight. I recognise that some information cannot be deployed in a public forum. However, I am sure that certain facts can be made available and I hope that my noble friend will take this opportunity to do so.
I now turn to a related subject; namely, the possibility of an enhanced role for the European Community in defence matters—a topic that has been much discussed recently. I am not much attracted to the various options so far canvassed—for example, an extended role for the Western European Union—at least not as I have heard them described so far. I would much prefer to change the existing NATO treaty to enable the organisation to operate out of area. That is not so simple as it sounds. Some members of NATO, for example our German friends, are constitutionally prevented from deploying forces outside the NATO area and a way will have to be found to accommodate that difficulty. But there may be other countries, for example the Republic of Ireland, which are not members of NATO but would like to take part in such operations if the opportunity arose and would be willing to do so. We may need to find an opt-in and an opt-out formula if that is to be theway forward. I do not believe that such difficulties would be insuperable.
Whatever changes may now be appropriate to the level of our conventional forces, I believe with total conviction that we must remain an independent nuclear power. I am in no doubt that our possession o a credible independent nuclear deterrent over the past 40 years or more has contributed to our place at the world's top table, so to speak, but, much more importantly, has contributed greatly to the peace that Europe has enjoyed by and large over that time.
Our nuclear weapons are primarily assigned to NATO. However, by reserving the right, as we have, to use our nuclear weapons for our own purposes when our supreme national interest so requires, we have succeeded in sowing the seeds of doubt sufficiently firmly in the mind of a potential aggressor to ensure that no major attack, certainly no nuclear attack, has been launched on us or the alliance.
I therefore very much agree with the Government's decision to maintain the Trident programme and to maintain it at a level of four submarines as proposed. While there may be various ways of increasing or decreasing the effectiveness of the Trident system, the one thing you cannot do is to reduce the number of submarines. If you do that, you are no longer able to guarantee one submarine at sea at all times; and when you cannot do that, you are, in short, no longer a serious nuclear player. The potential aggressor must know that whenever he launches his aggression he runs the risk of a nuclear response. That means four Trident submarines. I hope that my noble friend will today confirm Her Majesty's Government's commitment to the submarine fleet.
The main thrust of Her Majesty's Government's proposals is probably right. But the Government have not yet succeeded in persuading many of us that their plans are not Treasury led rather than threat led. I invite my noble friend to do so tonight.
6.46 p.m.
Lord Judd: My Lords, defence policy is essentially about protecting people. It is important that defence programmes should be subject to high standards of economic efficiency and performance as are other areas of public activity. However, if it is to be effective defence policy, it must be tailored to meet careful strategic analysis of the dangers.
Where, on the part of the Government, is the evidence for that post cold war strategic analysis? Options for Change began the necessary response to the tumbling cold war barriers. But change has swept on with increasing rapidity. New problems have emerged—or old problems have re-emerged—to pose new threats to peace: racial and national hatreds such as have dragged Europe into past wars; the instability created by oppression, poverty and despair; and civil conflicts. Those are the new challenges to peace, underlined, as they are, by the disturbing techniques of terrorism. Our new world order is paradoxically more volatile and insecure and less predictable than ever before. For many the challenge to peace is certainly as great as ever and with it the challenge to us all to respond intelligently and imaginatively to the new dangers. My noble friend Lord Williams is right. The need for careful strategic analysis has never been greater.
Nevertheless, I wish to follow the point made by the noble Lord, Lord Cheshire, in his wise and challenging maiden speech, and to deal primarily with the role of our defence forces in disaster relief—a role sadly conspicuous in Options for Change only by its absence.
Disasters come in all shapes and sizes—man made or from natural causes, suddenly or as a result of long-term failure of governments to act, as in the present situation in Africa. In all cases we need to consider how to streamline our own internal capacity to respond effectively and how our national response can be part of an effective international effort.
Victims of any disaster share immediate common needs: food, water, medical care and shelter. Aid agencies and governments alike have done much sterling work to try to meet those needs, but the supply and demand situation in a disaster is not simple. The first priority is always for reconnaissance. Equally important to the provision of supplies and services is the means to get them where the need is and to ensure their speedy distribution. Those are not tasks which voluntary agencies are always best equipped to fulfil but they are very much part of the basic training of the armed services. Our servicemen and women have participated in relief work increasingly often in Africa, Asia and Latin America, and most recently in the aftermath of the Gulf war where they rapidly established an impressive relationship with the Kurdish refugees.
Our armed services have capacities, skills and resources which can be highly useful in disaster emergencies. Field hospitals, ambulances, burns units and field hygiene sections, the Royal Marines Medical Squadron and Logistics Unit, the RN Fleet Clearance Diving Team, Royal Engineer squadrons, the RAF Air Evacuation Squadron and the Tactical

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Communications Wing are just a few of the units with relevant skills. But many have never been approached to help in cases where they might have made a valuable contribution. My list ignores the skills of command and control so essential to emergency relief operations. Many service personnel would welcome an increased role in that field and see it as potentially beneficial to their own training, providing, as it does, hands-on experience, the opportunity to apply specialist experiences in an overseas situation, and an additional element of job satisfaction which can help to recruit and retain the best skilled manpower.
The major problem seems to be that the Ministry of Defence has not yet been allocated a formal role. It can only respond when asked to do so by the Overseas Development Administration, and evidence indicates that ODA has not always been aware of all that the Ministry of Defence can offer. There is now a strong case for establishing an effective permanent structure to replace the ad hoc situation which has prevailed to date. Implementation of the following priorities could be a useful start.
The Ministry of Defence should be asked to take the initiative in identifying units which could contribute to disaster relief and organise stand-by arrangements. The necessary relevant additional skills training should be built into the current MoD training programme. A desk should be established within MoD with a uniformed officer who would liaise both with the ODA unit and with voluntary agencies in order to identify and implement training needs and to alert commands when the need for assistance arises. The current iniquitous charging procedures which the Treasury forces MoD to adopt when dealing with the ODA—almost £6.5 million, I understand, for help with the Kurdish relief programme—should be urgently reviewed.
Mere significantly, the ending of the cold war superpower confrontation has brought with it a new opportunity for nations to work together through the framework of the United Nations. The old bipolar collective security of the great power blocs represented by NATO and the Warsaw Pact has been radically trimmed and slimmed. Yet the need for concerted effort against aggression seems highly likely to remain in a world where huge investment has been made in dangerous modern technology of destruction.
How can that best be organised? What lessons can be learnt from the Gulf war, with its failures as well as its military successes? How seriously are we now taking the need to train our forces for a role in ever wider collective security? And how can we together find the political will and military means to deal with civil conflict and with the difficult but essential problem of protecting people from their own governments or from terrorist inflicted anarchy? It is disturbing to note that in the Second World War 52 per cent. of the recorded war-related deaths were of civilians but that today, by the most professional calculations, the proportion is almost 90 per cent.
To meet this huge humanitarian challenge the international community must determine to improve access to, and protection of, people in danger. The Iraqi situation has led to a gradual acceptance that
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sovereignty, particularly when claimed by governments with no democratic legitimacy, should not be used as an excuse for inaction. The United Nations, with its considerable experience of working in conflict situations, has increased its role in establishing greater access to protect people in dire need. We must build on those UN successes in establishing peace corridors and cross-border operations, monitoring peace and relief arrangements, and becoming directly involved in helping to negotiate peace agreements as a vital element to improve relief operations. Mechanisms must be set up to bring any acute civil war or emergency to the attention of the Secretary General and the Security Council, obliging them to consider action. If the right of the UN to access to protect life is to be more firmly established, the UN must act consistently in response to emergencies, using humanitarian criteria as the trigger for action and not the foreign policy considerations of any one nation, however powerful.
Defence is about security, and security can be achieved only in a firm cohesion of effective national and international, social, educational, agricultural, health, economic, industrial, trade, employment and carefully integrated military policies. It is about the quality of governance and the fulfilment of economic, social and political rights of children, women and men everywhere. It is about freedom and justice. Only by our success in building the total fabric of a humane, decent and fair world society can we hope to achieve enduring peace and security.
6.55 p.m.
Lord Holderness: My Lords, in view of the fact that almost twice as many noble Lords are waiting to take part than have so far spoken in the debate, I suspect that it would be welcome if I—dare I suggest it to other noble Lords too?—compress my speech into the shortest available period.
Nothing I have heard today or in the past few weeks is likely to remove the anxiety which I have been feeling and which I believe is shared by soldiers and civilians about the future shape of both the Regular and the Territorial Army and even more about its likely morale. Naturally I speak with diffidence about the Regular Army after service only in wartime nearly 50 years ago, but I have seen a great deal of the Territorial Army and I am greatly concerned about the future facing the volunteer services.
I was much cheered by the force and power of the maiden speech of my noble friend the Duke of Westminster. My noble friend Lord Arran has promised another Statement this year about the Territorial Army, which I gather is likely to be within the next few weeks. I do not know whether it will concentrate on details of reorganisation or range more widely over general matters, but this is neither the time nor the place to comment on the agonising discussions now taking place to reduce territorial strength in London or elsewhere.
Several other probable detailed changes worry me, including reductions in the help that regulars will be able to give to territorial battalions. It may certainly make mathematical sense to reduce the number of

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regulars training a smaller territorial force, but a strong case can be made against that on practical grounds, both in raising still further the efficiency of the Territorial Army and in reducing redundancies among senior regular NCOs who have invaluable experience. Furthermore, if territorial strength is likely to settle down to between 60,000 and 65,000, as the Government expect, I beg my noble friend to give the assurance which my noble and gallant friend Lord Bramall requested that the budget for that strength will be fully met in both manpower and equipment.
We are now nearing the end of the rather peculiar half century since the war, when it is to be hoped that a combination of nuclear weapons and political developments has made a third world war very much less likely. In these circumstances it is not unnatural for many to question the basis of the Territorial Army and to ask whether that force, part civilian and part soldier, is ever likely to be fully used except in the sort of situation that we faced in 1914 and 1939. I suppose that the most honest answer is that we do not know. However, we know that the Territorial Army offers the only sensible means rapidly to expand the Regular Army if such expansion ever becomes necessary. At a time when the Regular Army is to be reduced by 40,000 during the next four years, the case for an efficient, well-trained and cost-effective volunteer force is stronger than ever.
If Her Majesty's Government accept that argument, as I hope they will, they have a big job ahead. First, they must convince volunteers that they enjoy the Government's full confidence. At present I find the strong feeling in the Territorial Army that whatever the Government say, they do not appear to care much whether it thrives or even exists. Therefore, the morale of volunteers is the first priority. Close behind comes public opinion. The Territorial Army cannot possibly thrive unless it stands high in general esteem. Why should recruits join? Why should employers cooperate in respect of training and annual camps? At present I have the impression that the proposed reductions are going through with relatively little public interest. For obvious reasons that may suit Her Majesty's Government. However, once they have got their way it is clearly in their interest to build up the strength and morale of the Territorial Army and the esteem in which it is held. I hope that that is the course which my noble friends will do their best to follow.
7.2 p.m.
Lord Ironside: My Lords, first, I congratulate our maiden speakers. The noble Lord, Lord Cheshire, mentioned disaster relief but is not now present in the Chamber to hear my comments. Around the world defence exhibitions are showing more of the police and security services. They are basically emergency services dealing with disasters. The Defence Manufacturers Association in this country, of which I am a council member, is trying to discover whether there is a customer and supplier base for equipments and systems which are used in the field so that the trade association can look at the business of disasters, if one can call it that.
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Of the 90 pages of this year's Statement on the Defence Estimates only 10 are devoted to what I call the muscle on the defence body for the 1990s; that is, the new management strategy. Perhaps as the strategy has been in place only since 1st April this year not much more can be said. However, the glossary and index in the SDE occupy 10 pages and I believe that the new management strategy rates a little more. It represents the biggest change across the spectrum of options.
Our defence forces will be smaller and it follows that they must be better managed to achieve the same results and respond rapidly. In the recent crisis it was interesting to see that only ourselves and America were contributors to all parts of the Gulf war coalition effort. In a war in which logistical support played an important part it was a well deserved tribute to Fleet Support, RAF Support Command and the Quartermaster General that the success of Operation Granby depended so much on their efforts. Above all, Granby showed that money spent on international exercises is money well spent. I hope that the Government will not cut back on such exercises even if the ability to respond with our own resources is still a reality. More and more we shall have to consider joint action, and joint exercises help us to succeed better if a crisis arises.
No one can place the defence requirements for the future in proper prospective without reading the plethora of statements and announcements made by the Government since July 1990. I was greatly assisted by the aide mémoire in the report of the Defence Select Committee of another place, which brought me up-to-date or nearly so. Even the statement which was presented on 9th July is not the hottest piece of news. The Navy support review of 16th July and the Army restructuring statement of 23rd July are hotter.
The Defence Select Committee of another place criticised the Government for not giving a rationale for the important decision being made and the noble Lord, Lord Mayhew, felt that there was no rationale for the decision making. However, I believe that he is wrong. The Secretary of State has clearly stated what it is. In his foreword to the Statement on the Defence Estimates he said that the strategy was based on:
"the ability to adapt to change both internationally and within NATO; the maintenance of force structures with flexibility and mobility to respond to new circumstances".
Since publication we have had to do just that. It is hoped that short-range tactical nuclear weapons are to go. An EC defence posture may surface at Maastricht. Developments in the USSR and Iraq may go off course disastrously. It is difficult to have a rationale for decisions when circumstances are changing rapidly. The best rationale is what was stated by the Secretary of State.
Export control may prevent excess defence equipment build-up elsewhere but we still rate third in the world defence export stakes. We do not want to lose that position. The approach being taken by the Government to base change on the ability to adapt to it surely offers the best value for money. I also believe that the changes cannot proceed effectively without the new management strategy being in place. Raising the quality of equipment simplifies logistics and

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contractorisation is another valuable tool in the process of adapting to change, with Next Steps principles being applied to the defence support agencies now being established. Some have been announced, but will my noble friend Lord Arran say what further progress is being made to create more of these? A large number of people in the Ministry of Defence are involved and are waiting for those decisions.
Thy contractorisation of AWE is now going forward. I supported that in debate in this Chamber as a logical follow up to the privatisation of the SSN reactor design and supply and the commercial management in the Royal Dockyards of the SSN refits. In saying that, I naturally declare my interest as a council member of the Defence Manufacturers Association and as a consultant to a group with a significant original equipment contribution to the Trident programme in the broadest sense of design, supply and support. Trident, as the way forward in submarine warfare and as the deterrent to the very advanced Russian nuclear boats still patrolling the oceans, makes sound sense. I am very glad that it is to be retained.
As regards the number of boats and warheads, it is important to ensure that we have four boats. We have seen how difficult it is to keep one nuclear submarine at sea when considerable engineering repairs have to be carried out on some of the others, as is happening at present. Therefore, it is important to have four boats in order to ensure that one is on patrol at sea at any one time. Surely no potential opponents will ever know how many warheads each submarine is equipped with. The deterrent still remains effective and the important point is to ensure that we have enough boats.
In this debate I shall touch on only one other issue—the defence industrial base and MoD's dialogue with industry. The UK industry has been shocked into a no-holds barred competition policy as regards defence procurement of platforms, weapons and services. It has been shocked into the race for quality. It is no longer an arms race; it is a race for quality. At the same time it is caught up in worldwide defence cutbacks, recession and overcapacity. I should like my noble friend to give me assurances as to how those realities fit in with MoD's new management strategy and its procurement policy for the rest of the nineties and beyond.
Should the Ministry of Defence expect so much more value for money from industry than ever before, and continue to do so, then the dialogue between customer and contractors ought to be much smoother and more constructive; yet it is not. I listen to comments made by many of my colleagues in industry which indicate that they are disturbed that their efforts to improve relationships with the Ministry of Defence are being frustrated. Perhaps that is part of the price we are paying for change. Perhaps the dialogue will improve as we want it to. UK industry needs to be taken much more into MoD's confidence. Again and again the Government have said that they intend to follow the high-tech equipment trail, yet the 11,000 contractors on the Ministry of Defence's unpublished
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list of contractors who form the defence industrial base, are wondering where the trail is heading and whether it will bypass the shop-floors of this country.
I am encouraged by what the Minister of State in another place said yesterday regarding the Government's intention to retain the technological edge in defence, which is so vital to fighting capability, and to seek to improve communications with industry in these uncertain times. Should that be linked with the Department of Trade and Industry's new initiative to bring chief executives of small and medium-sized companies together at the seminar table to assess strategic issues arising from worldwide shrinkages in defence spending, it means facing the realities of opting out rather than searching for ways of staying in the defence business. I hope that the intentions of the Ministry of Defence are to find ways of strengthening the UK defence industrial base in the face of foreign competition, rather than telling industry to look for other markets; that they will be helped as much as possible to find them but not in defence.
The start-up of the project definition phase on the "Fearless" and "Intrepid" replacements—the amphibious warfare capability replacement—is perhaps a sign that UK contractors can look forward to being better placed to compete for business in the UK defence market.
I hope that my noble friend Lord Arran can give assurances in this Chamber that the Government's endeavours to encourage industry will not be at the expense of getting the last ounce out of competition policy. We need the last ounce out of British industry in defence.
7.4 p.m.
Lord Chalfont: My Lords, I hope to be brief, if only because the recent debate in another place seems to indicate that on the subject of defence policy the Government are not a listening government. They seem reluctant to listen even to their own military advisers or the Select Committee in another place. I venture to say that they do not listen to anyone very much except the Chancellor of the Exchequer. Their response to any dissenting voice seems to be the classic reply: "My mind is made up; pray do not confuse me with the facts".
It pains me to say these things, but it is clear that our defence arrangements need to be reassessed in the light of new strategic realities. It is equally clear that the Labour Party's reported solution of reducing our defence spending on the basis of some spurious European average is totally irresponsible. I was pleased that that idea found no place in the thoughtful speech of the noble Lord, Lord Williams of Elvel.
Since the present Government have been in office I have rarely found myself in serious disagreement with their policies, especially in their handling of national security. However, on this occasion I find it impossible to offer my support. The first duty of any government of a democratic sovereign state is the long-term safety and security of its people. By that criterion I am driven to the conclusion that on this occasion the Government have, quite simply, got it wrong. Here I tend to agree with my noble and gallant friend Lord

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Bramall rather than with my noble and gallant friend Lord Carver. I believe that the Government have got it wrong not only over such relatively detailed though important matters as the number of infantry battalions, aircraft or submarines needed for our national defence. After all, they are decisions which can be reversed, with difficulty, should a new threat to our national security emerge.
I should here make my usual declaration of interest as chairman of VSEL. Due to that interest I do not intend to comment on such matters as the independent nuclear deterrent or the strength of the submarine force. It would clearly be improper for me to do so. My comments are of a more general kind.
The fundamental weakness of the current defence proposals seems to me to be of a profoundly serious kind and one which goes to the heart of this country's long-term place in the structure of international relations. The Secretary of State for Defence and the noble Earl may well protest that Options for Change is not a Treasury-led exercise. It would be surprising if they said anything else. But if it is not a Treasury-led exercise, or, as it seems to me more likely, a Treasury-ambushed exercise, I ask the Government the one fundamental question being asked wherever these matters are seriously discussed. Where is the evidence that the measures proposed under Options for Change are based on a rigorous assessment of all the relevant geopolitical and strategic factors?
The first of those factors in any serious assessment of defence policy is the military threat, actual or potential. The Government understandably concluded that one important element in the threat has receded or even disappeared. With the disintegration of the Warsaw Pact and the unification of Germany the danger of a concerted land/air attack on Western Europe has for all practical purposes disappeared. Certainly no conventional attack could be mounted without substantial political and military warning. On the other hand, the Government concluded that a nuclear threat from the Soviet Union remains, including the threat of a surprise attack.
So far so good. But that is not the whole story, even in relation to the Soviet threat. Huge conventional forces remain in being in many of the republics of what is now the Soviet Union rather than the USSR. Military procurement programmes continue virtually unabated. The modernisation of the armed forces continues. There are nuclear weapons on the soil of several of the republics, including the Ukraine, Russia, Belorussia and Kazakhstan. No one—I dare to say "no one"—in London, Washington, Brussels or even Moscow can have the remotest idea of what will happen in the coming months and years. All that we can be certain of is that there will be massive instability. Should history have taught us anything, it is that internal instability often leads to external adventures.
Of course the residual Soviet capability is not the only threat to our national interests. Until 1997 we hold the responsibility for the security of Hong Kong; we hold interests in the South Atlantic; we have not seen by any means the last of terrorism, either of the
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home-grown kind in Northern Ireland or the international kind. It may have gone into temporary recession, partly due to the disappearance of the Soviet Union as a world power, but no one should believe it has disappeared for ever. I am surprised that the point has not been made earlier in the debate that it would be foolish to ignore the possibility that one day we may be subjected for some political reason or other to blackmail by nuclear or chemical threat by some unpredictable third world adventurer.
The Government will say, and have said, that they have taken all these threats into account. But there is not much evidence that I can see that they have had any great effect on the minds of the planners. In any case, the threat to national security in the narrow sense of the defence of the realm is only one of our concerns. If we are to play a responsible role in world affairs commensurate with our history and traditions, there are other factors as well which have to be taken into account.
The world is undergoing great paroxysms of revolution. We tend to focus our attention, understandably, on the dramatic failure of Soviet communism and to push into the background some of the other great rearrangements which are taking place in the world power structure. There is the revolution of rising aspirations in Southern Africa; the terrible and explosive mixture in the Middle East of post-colonial bitterness, nationalism and religious fanaticism. There is the precarious balance of conflicting forces in the People's Republic of China which I believe before too long may lead to a major conflagration in that part of the world. There is also the growth of Japan as a world power dominating the most powerful economic region of the world. Over-arching all this there is the growing pressure of isolationism in the United States.
What role is Britain to play as this epic drama unfolds? Are we to be leading players, supporting actors or just spear carriers? Are we to give in to the fashionable self-deprecating whining that we are no longer a great power and we had better get used to it, or are we, as we have always done, to make an effective contribution to the construction of a new world order? Yes, of course, we are members of NATO, but what precisely does that mean at this moment in our history? NATO's operations, as we know, are confined by artificial geographical limits. The whole role and strategy of the Atlantic alliance is in a state of flux. I seem to be in a minority in believing that the so-called rapid reaction force is not even a paper tiger. It is a mythical animal of dubious political parentage with not much military reality.
Who is to be our role model in Europe or in the Western world as all these changes take place? Is it to be France, which is self-centred and self-sufficient? Is it to be Germany, which is Euro-centric and introverted? Are we to support the idea of a separate Western European force according to the Franco-German pattern and separate from NATO, or are we to have perhaps a role of our own in which we are deeply involved in the protection of free nations against aggression and the defence of the values of the free world wherever they may be under threat?

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I am sorry to have to say this, but I suspect that these ire questions which in Options for Change the Government have not really asked. If they had, it is very unlikely that Options for Change would have been the answer. Tinkering and fiddling with the three services on the basis of equal misery for all, or nearly equal misery for all because some are more miserable than others, and chipping away at the defence programmes in order to save X per cent. on the defence budget without any apparent consistent strategic pattern are no substitute for a systematic and long-term defence review.
It is not so much that great infantry regiments disappear, although that is sad; or that shipyards and aircraft factories close down, with thousands of men and women being made redundant and thrown onto the labour market, which is also tragic. In my view the real shame is that all this is being done without any clear vision of the kind of Armed Forces that this country will need either to discharge its responsibilities as a member of the community of free nations or to ensure its own national security in the 21st century.
However, the Government have made it clear that the cuts are to be made over a period of several years. Perhaps I may therefore ask them, and in the most constructive spirit, before the really serious and irreversible changes begin to bite, to undertake a radical review of our defence needs driven by geopolitical and strategic considerations as well as by the inhibition of resources, but not the other way round.
It may be that I am on the wrong side of a generation gap which separates me from our present leaders, but I believe that this country, with all its unique qualities and capabilities, is not yet ready to be relegated to a tame or minor role in world affairs.
Damon Runyon, the American humorist, once said that although the race is not always to the swift or the battle always to the strong, that is where the smart money goes. Strong, well-equipped armed forces may not be the only ingredient of political influence in the world But without them no country can take its place in the front rank of the international community. The Government's current defence policy suggests that they have not made up their mind whether they want Britain to continue to be a great nation, exercising a decisive influence on the emergence of a new world order. I believe that it can be and that it should be.
It has often been said that political leaders may be relied on to make wise, intelligent and statesmanlike decisions—having first exhausted all other alternatives. Options for Change looks to me very much like one of the alternatives.
7.26 p.m.
Lord Middleton: My Lords, as always I shall pay heed to the very good advice of my noble friend Lord Holderness and keep this short. In the debate on 12th June many noble Lords expressed anxiety about the Government's defence policy. In the debate today it is clear that much anxiety remains and it has not been allayed by the two White Papers that have appeared since. I always listen with enormous respect to what the noble Lord, Lord Chalfont, has to say. Having
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heard what he has said, I wonder whether the anxiety which I share can be allayed by recent events in Russia.
In the June debate my noble friend Lady Park of Monmouth referred graphically to the situation in the Soviet Union as,
"a loose cannon if ever there was one".
That was before the August putsch in Moscow. With great perspicacity she described the situation as,
"fragile, volatile, chaotic and potentially fissiparous, in which the whole position including military intentions, could be reversed overnight".—[Official Report, 12/6/91; col.1133.]
I believe that to be even more true today. Although the position did change dramatically there is infinite scope for further change and reversal.
I was in Russia in September purely as a sightseer, but I heard what Russians had to say. I was made well aware of the appalling difficulties in the path of economic reform, the urgent need to recreate some kind of confederation of states and, above all, the threat of famine this coming winter. The effect of the hiving-off of the Moslem republics on an already disturbed Middle East has yet to be assessed. In such a situation should we really be in such a hurry to disarm?
Of course, the Government have to keep the strength of our Armed Forces under review and they are right to do so in the light of the current extraordinary developments in the world. The volatility and uncertainty of the international situation and the possible military threats have been rightly spelt out today by my noble friend Lord Arran. However, to conclude that Britain's Army for the 1990s is therefore to be reduced seems to me to be a non-sequitur. The Government are rightly committed both to the continued defence of Europe and to preparedness for other eventualities. It is the ability of a reduced Army—I leave air and naval matters to others—to fulfil these commitments that I question. I have a feeling that the real area where the pinch will be felt is in our continuing to fulfil our peacetime commitments with what are substantially reduced force levels, particularly in those areas where traditionally the capability is found; that is, the infantry. Thirty-eight battalions must be insufficient and I share the anxiety of my noble friend Lord Whitelaw.
In the days when, with TA responsibilities, I had the privilege of watching one or two NATO exercises I had the gut feeling that levels of sustainability were probably inadequate to allow the 1st British Corps to maintain operations in war. I believe that this inherent weakness is likely to be perpetuated in the new structure through inadequate resource provision. The statement on Defence Estimates describes the Gulf war in some detail. It does not describe what happened to the British NATO forces remaining in Germany, though that has been referred to briefly this evening.
At that time there were, and still are, some 17 Russian divisions in East Germany, plus the other Soviet forces facing west in considerable and probably overwhelming strength. Also at that time the 1st British Corps was denuded of all its Challenger tanks and much of its artillery. Many officers and men were

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deployed away from their parent units to reinforce those in the Gulf. The effect was to render our NATO contribution virtually non-operational.
If it took the vital components and material of an Army of 144,000 to bring one armoured division onto a war footing—that is, before slashing our Army by nearly 30 per cent.—how can we possibly believe in an effective rapid reaction force after the Government have had their way? My noble friend the Minister told us that in future we shall maintain one strong armoured division in Germany and another division, the third, in the UK. We are told that this division is also to provide a national strategic reserve capable of undertaking a range of operations beyond the NATO area. Indeed, with the experience in the Falklands and the Gulf who can argue against such a requirement?
However, given the Gulf experience which I have described these two components of the rapid reaction force are unlikely ever both to be on a viable war footing at the same time. Either the third division will be needed to reinforce the first armoured division, or vice versa. I hope I am wrong. No doubt I shall be told that I am impossibly out of date in applying to this argument my own memory of the speed at which men, weapons and ammunition are used up when it comes to a fight. If I am not wrong then it is essential—here I am in total agreement with the noble Lord, Lord Williams—that a very great deal of thought will have to be given to the constitution and role of our reserve forces, both regular reserves and the TA.
I have tried to avoid that which makes these proposals so unpopular in the country—the fate of the regiments that are to be disbanded. However, I have to ask the Minister to tell me what is to be the future role of the Foot Guards? By tradition these regiments have first and foremost been fighting soldiers and their reputation as such is second to none. At the same time they have the enormous privilege of guarding the Sovereign. Even after being chopped in the 1950s they have maintained their dual role. Three battalions are deployed operationally outside London at any one time while the other five carry out public duties in London. I believe that of these five one is usually either training, or earmarked for any emergency overseas. Now the Grenadier, Coldstream and the Scots Guards are to lose their second battalions and so there will remain five battalions of Foot Guards. I ask the Government whether these remaining five battalions are to be confined permanently on public duties in London, or are they to be trained to be fit to fight? As things are now they certainly cannot do both.
In order to sustain the military effectiveness and high standards of the Foot Guards it will presumably be necessary to provide the same opportunities for training and operational deployment as hitherto. That leads me to conclude that the current level of public duties will need to be reduced. I am aware of the sensitivity of the subject, but I hope to hear from the Minister that it is being urgently addressed.
In common with so many other noble Lords I am deeply disturbed by these proposals. It may well be necessary, in co-operation with other nations, to
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redeploy our troops in Germany but I cannot believe it right to pay lip service to the very unstable world situation and then to propose reducing our small but highly professional Army by nearly 30 per cent. To reduce the Army to a size which probably makes it no longer attractive as a career option to those potential regular officers and NCOs who are vital to its continued efficiency seems to me—and I wish I could be as moderate in my language as my noble friend Lord Whitelaw—to be so unwise as to be verging on lunacy.
7.37 p.m.
Lord Wynford: My Lords, I wish to address the matter of overstretch as it affects the infantry. Long before Options for Change the infantry in particular was certainly suffering overstretch despite its 55 battalions then available. Any senior serving officer in the 1970s and 1980s would bear me out on that point. In addition yesterday we had the admirable clarity of Brigadier Rhoderick-Jones's leading letter in The Times. He explained that five years ago he was a brigadier at the headquarters of the United Kingdom land forces. As such he was required then by the C-in-C Home Forces to study overstretch. He did so. I shall quote two very brief comments that he makes in the letter to which I refer. He says that "unacceptably high levels of turbulence" were created and that commitments substantially outweighing resources had to be undertaken.
The running sore of Ulster is really most grievous, but I would not want to say that we cannot contain it. It is a repetitive engagement and is being coped with extremely well. My own regiment, the Royal Welch Fusiliers, has served there nine times; three times on long duty and six times on short tours. However, the repetitive grind of those short tours, unaccompanied as they are, must be watched with the greatest care. Overstretch causes slip; and by "slip" I mean that the short tours come at more irregular and generally shorter intervals. That has unfortunate effects. I need not go into the detail.
With the advent of Options for Change came the threat of reduction to 38 battalions. Here, then, is overstretch piled on overstretch. My right honourable friend the Secretary of State in another place assures us that the new deployment between mainland Europe and the United Kingdom can somehow see us through difficulties. Several noble Lords have pointed to the danger of this reliance. I emphasise that point. It is not a way to provide reserves. Noble Lords may remember an article in The Times of last July by the noble Lord, Lord Wyatt. It was a fairly long article but the short heading read like this: "When cutting forces we should prepare for the unexpected". That wisdom simply points to the absolute necessity of reserves in an increasingly volatile and disturbed world situation; and since last July things have certainly not improved. So it seems that we could suddenly have a deficit of deployable battalions.
It is the progression from the present day, through 1992 with 50 battalions to 39 by 1995, which seems so dangerous. At this point—1995—provision for the unexpected and the lack of a sizeable reserve signals

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danger. Surely the worst aspect of the present proposals is the relegation to "suspended animation" of three battalions of Foot Guards. My noble friend Lord Middleton has just mentioned this point but I have perhaps a slightly different slant on it. I certainly would not want it to be missed. The disciplined excellence, the incomparable standards and the expert performance in every conceivable activity of ceremonial, demonstration or fighting of any kind—for all those the Household Brigade has worldwide acclaim. Why must we really lean over so far backwards as to deny ourselves, even temporarily, even a small part of this incomparable asset. That is my point.
The second battalions of the Grenadier Guards, the Coldstream Guards and the Scots Guards should be retained in full active service. To my mind, one-battalion regiments are a nonsense. In the West Country we call it something or nothing. Wherever and whenever it is found that events are getting beyond our present hopes—the hopes upon which the White Paper suggests we should rely—I recommend a properly allocated reserve. When new battalions are needed I recommend, first, that the Irish Guards and the Welsh Guards should form second battalions; and, secondly, that the strongest recruiters and best "retainers" among our line regiments should form second battalions, as they may be needed, not excluding those which have already been amalgamated with others. Those can be activated according to the unpredictable needs of the moment.
It may be that it would be prudent to proceed to the planning of the second battalions at once and then to put them in suspended animation. It is for the staffs to discover a way. I am quite sure that the operation will have to be quick and cheap.
7.46 p.m.
Lady Saltoun of Abernethy: My Lords, the Options for Change proposals planned for a reduction of 14 battalion tasks by 1997, but the Secretary of State wants to cut 17 battalions by 1994. Nineteen of the 38 battalions remaining in the Army will form part of the ace Rapid Reaction Corps, which the United Kingdom will command. The remaining 19 battalions will have to fill our commitments in Hong Kong until 1997—that is, two battalions; in Belize, one battalion; in Brunei, one battalion; in Cyprus, two battalions; in the Falkland Islands, half a battalion plus half in reserve; and in Northern Ireland, 10 battalions. Only two battalions will be left over at home and to meet the unexpected.
The Northern Ireland force currently consists of six resident battalions and four roulement battalions. Three times in the past 18 months Northern Ireland has had to be reinforced by a fifth roulement battalion. It is the stated aim of the Ministry of Defence that the gap between tours of duty in Northern Ireland should be two years. In order to achieve that, a minimum of five battalions is required for each roulement slot. Even if units committed to ARRC are used—they should not be—the figures do not make sense. No defence review has taken place. No statement of how the Army can sustain the anticipated level of activities has been made. Only this
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morning we heard—I heard anyway—that a new EC defence force is under consideration. It may or may not be formed, but if it is, how are we going to find infantry battalions to make our contribution to it? Or are we not going to find them?
Since the proposals for cuts in defence were made, a coup has taken place in the USSR which failed. The union itself is creaking at the joints and its future is uncertain. It is in a state of disarray, politically and economically, and some of its component states are proposing to form their own private armies. No permanent settlement has yet been reached in the Middle East, between Israel and Palestine in particular. Nor does it seem likely that one will be. Yugoslavia has broken apart and civil war rages there. If her neighbours are flooded with refugees, it may well be that NATO forces will be required to assist in restoring peace in the region. The world has become a much more unstable place, and instability is always dangerous.
That is looking to the present and the future. Looking to the past, no one foresaw that the murder of an Austrian archduke in 1914 would trigger the First World War, of which the noble, and perhaps I may also say gallant, Lord, Lord Cheshire, spoke so movingly in a poetic and beautiful maiden speech. In 1969, no one foresaw that terrorism in Northern Ireland would reach anything like the scale that it has. No one foresaw the Falklands war in 1982. No one foresaw the Gulf war last year. I believe that both of the latter were foreseeable. But that is beside the point; they were not foreseen. Therefore, we cannot say that there is now no unexpected source of danger to us or to the territories we are committed to defend. We must be prepared always for the unexpected—for what we have not foreseen.
Even with the Army at its present strength of 55 battalions, we were hard-pressed to find and train sufficient units for the Gulf war. In order to send two brigades, men as well as material were taken from virtually every element of the Army, leaving the remainder unfit for war. Lack of joint warfare experience was only rectified by a period of intensive work-up training. Units deployed in the early phases knew that no replacements existed should the campaign be prolonged. The emergency tour interval was reduced dramatically and for some individual units a second operational deployment was starting within eight months of returning from a previous tour. The current proposals would leave the UK unable to deal with another such emergency, whatever the Secretary of State may say.
I see in the proposed cuts an aspect of the present Tory ethos which is not always wise—the principle that everyone must be over-working the whole time or they are not considered to be earning their pay, and that therefore the Army must be reduced in size until that state of affairs and the resulting economies are achieved. Where the Army is concerned, this is just not sensible. Soldiers, unlike civil servants, serve for six months at a time away from their wives and families, with few comforts, often in unpleasant conditions and often in danger. Being a soldier on active service is a stressful occupation and not like being a civil servant

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sitting in a ministry in Whitehall. They and their families badly need the recuperation time which is provided by such postings as Berlin, which is to cease.
Two major problems which have faced the infantry for the past 20 years have been job satisfaction and separation from family. Loyal and devoted as they are, there comes a time when, because of lack of opportunity to obtain qualification for advancement, coupled with separation and stress for all concerned, officers and other ranks leave. If this has been the case with more battalions available for commitments than there are to be in the future, it does not require abnormal brain power to see that unit training will suffer, efficiency will drop, individual qualifications will be lower and separation from families will increase.
The Secretary of State did his national service in the Somerset Light Infantry for about two years when he was a very young and unmarried man. So he has no first-hand experience of what it is like to be a regular soldier on active service with a wife and children. If the Secretary of State wants to have attractive careers for high quality people and units fully manned, there is only one answer: more battalions before it is too late. He should go back to the original figure of 120,000 for army manpower. He must remember that our soldiers are not conscripts; they are voluntary employees. They do not have to join the Army and, if they dislike it enough, they can leave it. Even before Operation "Granby", the frequency of tours overseas, particularly in Northern Ireland, was a cause of discontent among wives. Many experienced and highly trained men were leaving, with the result that the turnover in the training organisation increased and the expertise of units diminished.
I turn now to the Scottish regiments. I am sorry not to see more Scots Peers here to speak for those regiments. I live in Grampian region, the recruiting ground of the Gordon Highlanders with which my father and two of my uncles served in the First World War. I shall therefore speak for them.
It was made plain when considering cuts in the Army that regiments with a good recruiting record would be retained in preference to those which had difficulty in maintaining their strength. The Scottish division has maintained all its battalions at full strength and has been able to provide reinforcements for battalions from other divisions when required to bring them to a viable strength. None of the Scottish regiments has any problem either recruiting or retaining personnel. There are 35 British infantry battalions at present undermanned by a total of nearly 3,000 men: not one is a Scottish battalion.
A cardinal principle of war is that you reinforce strength. Why, therefore, reduce the Scottish regiments by three battalions? For that will be the effect of the proposed amalgamations of the Royal Scots and the King's Own Scottish Borderers and the Queen's Own with the Gordon Highlanders, together with the abolition (for what else can "suspended animation" mean?) of the 2nd Battalion of the Scots Guards. That is a 33 per cent. cut in Scotland, as opposed to a 30 per cent. cut in the rest of the United
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Kingdom. What is the sense in destroying the individual identities of four magnificent regiments, one of which, the Queen's Own, is already an amalgam of two regiments—namely, the Camerons and the Seaforths—in order to keep two battalions in some English regiments, some of which have difficulty in recruiting and retaining their full complement of soldiers? From the point of view of the defence of the realm, it is so senseless that I am driven to suspect that there is a political reason for it.
I suspect that the Government, with the impending election in mind and knowing how poor their chances are of even retaining the seats that they have in Scotland, have decided to let the brunt of the cuts fall where they think things are politically so bad that they could not be any worse and to try to preserve a few votes in England where they think they have more votes to lose. For make no mistake, the Scots are up in arms about the proposed amalgamations, and about the loss of over 3,500 jobs which will come on top of those in the steel and mining industries in recent years. Such a scale of redundancies will not apply in other parts of the country where the battalions to be cut have not been at their full strength.
The noble Earl, Lord Arran, referred to the reawakening of nationalism in the world. The fire of Scottish nationalism is burning very brightly. Surely the Government realise that what they intend to do will add fuel to it. Or are their claims to be a unionist party false? Do they really want Scotland to leave the union?
We are told that the Secretary of State has consulted widely. That is as may be. Receiving advice is not the same as taking it. Clearly the only advice he has taken is that of the Treasury. I wonder whether those in the Treasury have remembered that the savings made in soldiers' pay will be to a great extent offset by increased social security payments. Experienced generals, retired field marshals and noble and gallant Lords have all begged him not to reduce the Army below 41 battalions. Why does he not listen to the people who really know? Why does he make up his mind before he has heard what either Members of another place or this House have to say? That is not democracy; that is dictatorship.
7.57 p.m.
Earl Haig: My Lords, in the interests of brevity I shall not enter into the wider issues of strategy. However, perhaps I may just express a word of appreciation for the maiden speech of the noble Lord, Lord Cheshire. I found his speech about stability and peace for mankind to be deeply moving. He emphasised the question of individuality which I think was very much the guiding principle of the school which we both attended many years ago. I believe that both our lives were somewhat affected by what happened thereafter. It is possible that the end of the Second World War came about faster than it might otherwise have done thanks to the fact that the opposition appointed a corporal to be their commander in chief.
When my noble friend the Minister wrote to me last spring about the need for a reduction in our armed

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forces in the wake of the break up of the Warsaw Pact, it appeared to me at first sight that there were no grounds for criticism, especially in view of the need to equip and modernise a small elite army. However, when a number of past GOCs of Scottish Command wrote to the press questioning the wisdom of the cuts, I realised that there was a case to be made against them, especially in Scotland. As all Scottish regiments are at full strength, they will suffer more redundancies per battalion than other regiments which are below strength. There is a greater percentage of cuts to Scottish battalions compared with infantry as a whole, while there are to be no cuts to battalions in the north of England or Wales.
When the Scottish generals and colonels of regiments came out strongly against the proposals, it was clear that there had been a lack of communication between the Government and the Army. That generated a certain amount of ill will in the Army and among local authority officials. It takes a great deal of abuse to bring local authority councillors on to the same platform with retired generals to speak with one voice. I confess that I am a borderer and will be sad indeed to lose the King's Own Scottish Borderers. I am proud to have served in a Scottish regiment—the Royal Scots Greys. It was amalgamated with the Carabiniers, whose catchment area is in Wales. Both regiments knew that there were difficulties to be overcome, and they were. The two formed one united regiment for the sake of the Army and the country. The same will apply today, wherever it is necessary and right to do so; but there are questions which must be asked about the rightness of making those harsh cuts to the infantry in Scotland, where so many young men per head of the population are employed in it. Their skills and guts were recognised during the recent conflict in the Gulf. They have not been altogether recognised in the present proposals.
Whatever my noble friend the Minister may say, there is a real danger that there will be insufficient troops to carry out the tasks set out in the Government White Paper on Britain's Army for the 90s. In addition to our various commitments in Northern Ireland, Europe and garrisons throughout the world, there is a need for protection in the fact of unexpected hazards such as the firemen's strike in 1977.
Infantry battalions are already overstretched, and as a result many families are in difficulties. That applies to the regiment of my noble friend Lord Whitelaw, the Scots Guards, even before any reduction. One of its battalions which served in the Gulf is in Germany for six months and is due to move to Northern Ireland next year. As a result, families will have been separated three times in four years.
In addition to our military commitments, we should not forget the needs of tourism and visitors who attend ceremonial occasions at Buckingham Palace, the Tower of London and elsewhere, which are so much a part of our history.
With regard to redundancies, however generous redundancy payments may be, the effects will be painful Options for Change envisages the redundancy of some 1,800 men in the Scottish Division. There will
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be a need to look after those men, and it will be the special concern of the Royal British Legion and the Haig Fund to do everything possible to help. Due to the recession and shortage of jobs, there will be a need for close co-operation nationally between the Government and the legion. Special measures may have to be taken to enable local authorities to give preference to ex-servicemen. Men who served their country in the Falklands, Northern Ireland and the Gulf should enter civilian life with a chance to work and to be useful members of society. They should be treated with fairness and justice and, if they are, they will help to enhance the life of their communities.
Things are easier than they were in 1919, when there were over 250,000 unemployed ex-servicemen, but the pattern is similar today. We should remember that the legion was formed to help with those problems and was able to bring home to the Government, employers and the trade unions the needs of the unemployed. I hope that its expertise and experience will be as useful today. Unemployed and ill-housed ex-servicemen would have a bad effect on local communities with a long history of deprivation. Some of those communities in the central belt of Scotland, for example, have a good recruitment record. It would be sad to see those loyal citizens put into dole queues. My noble friend the Minister, with his Scottish military ancestry, must have a special understanding of conditions in Scotland. I thank him for his speech. I give him my support for the changes that the Government are planning. I recognise the Government's undertaking to preserve the regimental system, but I am dubious as to whether they really will preserve the Territorial Army. In view of the criticisms expressed by military experts, I hope that my noble friend will be willing to listen to what has been said, especially in regard to Scotland, and in regard to jobs and housing.
8.6 p.m.
Viscount Ridley: My Lords, the vote in another place last night more or less destroyed the options in Options for Change, at least so far as the regular forces are concerned. But I believe final decisions on the reserve forces have yet to be made and there may still be options in that field for us to consider. As your Lordships are aware, it has been announced that the TA will be reduced from its present strength of 71,000 to 63,000 men and some women. On the face of it, that does not sound to be a drastic cut, but we must compare like with like. Those simple figures are somewhat misleading. The actual cut is much greater. The TA's present establishment is 91,000. To reduce the establishment to 63,000, even according to my mathematics, means that there will be a 33 per cent. cut. If, as is probable, recruiting does not reach establishment—it never has in peacetime—or, as is equally possible, several units disappear, we shall be lucky to end up with a TA of more than 50,000 in practice.
It has been reported that once again the infantry will bear the brunt and that the number of TA battalions—now 41, with 169 rifle companies—will be reduced to 33 battalions with 99 companies. That will

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be at a time when, as the Minister said today, the increased need for the reserves is recognised, and in particular, when the regular Army will require the assistance of the TA in home defence to the tune of five battalions.
Everyone accepts that some reductions are necessary if they can be achieved. I wish to suggest another way of achieving them—a compromise, if one likes. Let us try to keep the 41 battalions that we now have but let us have only three companies in each. That would give 123 companies as against the present 169. There are several advantages. First, we might maintain a presence in many more cities and counties which would otherwise have no TA or other military presence. Three of the east Midland counties expect to have no army presence of any kind in large populated areas. Secondly, as they would all continue to exist none of the anguish and potential political fallout which we have seen with the regular Army reorganisation—what the gallant and noble Lord, Lord Carver, called "the regimental rumpus"—will happen, because they will all still exist.
Thirdly, in time of need it would be much easier to expand those battalions with an additional company or more. That could be done much more easily and quickly than starting new battalions from scratch. It would of course cost less—about £12 million per annum—than the present system and what we are paying for the TA infantry. There may be other disadvantages, however. It might be that the new battalions would be top heavy with too many chiefs and sergeant majors and not enough soldiers and Indians, but of course as they are part-timers the cost would not be great. Though it would cost more to have 41 battalions than 33, as we have already heard, the total costs of the TA are so trivial that to achieve this change within the ceiling seems to be perfectly possible and would have no noticeable effect on the estimates.
We should be increasing the establishment figure from 63,000 to about 68,000, but this does not seem to me to be a severe price to pay for what I have suggested. However, whatever figure is decided upon, I beg the Government to look at a much more important point: that the reserves are properly paid and equipped. There must be no more of the shortages of pay, ammunition, fuel and so forth which have been plaguing the reserves for so long.
Tonight we have heard what happens in graphic detail from the noble Duke, the Duke of Westminster, in his splendid maiden speech. We heard it from the front line. Here perhaps I may be permitted to break the rules. Having had the privilege of being an honorary colonel of the regiment that he is about to command, I know what a tremendous contribution he has made to the TA and to the regiment. I am certain that they are all delighted that he will shortly become Lieutenant-Colonel Grosvenor and not Trooper Grosvenor. He will achieve even more.
I wish to turn to something quite different: the human aspects of Options for Change. I am sure that we all welcome the statement made by Mr. Hamilton in another place late last night on resettlement and
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rehousing. I hope that the House is aware that in all the three services approximately 64,000 people over and above those who might normally be expected to leave the services will be put into a difficult labour market fairly quickly as a result of Options for Change. Only 16,500 of those will receive the redundancy package which was announced. The problem is therefore sizeable and, if it is mishandled, it may have a drastic effect on the morale of those who remain.
It is a particular pleasure to follow the noble Earl, Lord Haig, in mentioning the thoroughly excellent and important ex-service organisations, the British Legion and SSAFA, which are very concerned about this problem. They held a seminar 10 days ago in London to discuss it. I am delighted to hear that the Government have decided to consult them. I stress how urgent it is to do so in full and to realise how much they are concerned not only with the short-term aspects of the problem but with those of the long term as well.
An important priority must be realistic retraining for jobs so that ex-servicemen and women can compete on an equal footing with their civilian counterparts. Remember, many will have lived abroad for years. I have even heard that in some cases children of forces in Germany speak better German than English because they have been at school there all the time.
Mr. Hamilton said last night that with careful planning the system would cope. However, we must realise it will cost far more than careful planning; it will cost a great deal in resources to get this right. Temporary housing is the first aspect of the problem and I hope we can use the large number of empty dwellings already in the Government's possession.
Last but not least, we come to the permanent housing of these people. I am particularly grateful to the noble and gallant Lord, Lord Bramall, who mentioned this in some detail. Your Lordships will be aware that in the past we have discussed the suggestion that soldiers and other servicemen might contribute while they were serving to a fund to allow them to obtain a mortgage theoretically on a house, and more important, to receive tax relief on the sum, even though they had no house. Despite many promises and much talk, this has not happened. It must now be brought about and it would have been a great help if it had been done because people would have been in a much better position to find a house. I hope that the Government will realise that they must pay to put this right. It is clear that local authorities are not at the moment in a position to offer much. Let us hope that housing associations can fill the gap. We received much encouragement from the statement last night.
I wish to make the final point that all this will cost a great deal of money over a long period. It is estimated that in this country 16 million people regard themselves as in one way or another members of the ex-service community. They will watch carefully what happens. We owe nothing less than a total commitment, a totally generous and thoroughly supportive treatment to all these people who have

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served us loyally as members of the forces over the years and whose careers will be drastically and suddenly altered.
8.15 p.m.
Lord Murton of Lindisfarne: My Lords, in both political and military terms it was a perilous 72 hours for the United States and its Western allies when on 18th August this year the Soviet eight-man committee attempted to seize control of the central government of the USSR. We were to learn later from the press that when President Gorbachev was held incommunicado in his Crimean dacha even his red telephone linking him to his military commanders was cut off. Presumably too he was deprived of the codes controlling the Soviet offensive/defensive nuclear capability.
That crisis has now passed, but we now know that at the time the port of Vladivostok, the base of the Soviet Pacific fleet, with its nuclear armed submarines, came out in support of the eight-man committee. To think in intelligence terms, capabilities are always easier to assess than intentions. Although for the time being the situation may appear reasonably quiescent militarily within the Soviet state—or perhaps it is now "states"—it is a brave man indeed who would be prepared to say that there will not be another politico-military adventure.
The reports of the formation of national guards in the Russian republic, in Kazakhstan and in the Baltic republics will not have been noted with enthusiasm by the senior commanders of the central Soviet armed forces. National armies do not like private armies.
Now there is civil war in Yugoslavia, where Croats and, I believe, Slovenes have raised national guards against the Yugoslav federal army and in which both the air force and the navy are engaged. Elements of the European Community have even been canvassing some form of military intervention, fortunately without wide agreement.
Where does all this leave Options for Change and, more significantly, the statement on Britain's Army for the 90s? I find it almost inconceivable that the Army Board can have agreed voluntarily to these most drastic cuts now proposed which will pare the Army to the veritable bone. It has all the hallmarks, I believe, of a Treasury-led exercise and it is greatly to be deplored if that is the case. The morale of the Army will suffer in consequence over the four years of indecision which now face it.
The unexpected has an uncanny habit of arising like a monster from the deep. Let us not forget that there was little planned capability to meet the unforeseen emergencies of Korea, Suez, the Falklands and indeed the Gulf. Now we are assured that the restructured Army as planned has taken full account of the Gulf experience, demonstrating clearly, we are told, the greater value of all professional forces and the flexibility they offer vis-à-vis other forces and conscript armies.
If this statement is to have any validity, the proposed contribution by the United Kingdom to the Allied Rapid Reaction Corps must be up to full operational establishment at all times, apart from
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personnel missing on courses, and must remain thus. Likewise, these formations must have their full complement of armour, other tracked vehicles and APCs and their full and complete A and B echelon transport. Moreover, there will have to be a less restrictive regime as regards fuel, ammunition expenditure for training and spare parts.
It is understood that for Operation "Granby", comprising one armoured division of two armoured brigades with divisional troops under command, virtually every serviceable tank on the strengths of all armoured regiments in BAOR had to be deployed to the Gulf and many others less reliable in Germany and the United Kingdom had to be cannibalised for spares.
The manpower situation also left much to be desired. As a positive example, let us take the third battalion of my regiment, the Royal Regiment of Fusiliers, based in Germany. Initially, under the original Operation "Granby 1", one-third of the battalion was earmarked as a pool of reinforcements for the 7th Armoured Brigade. In addition some fusiliers were also required as individuals to fill deficiencies in other units for Warrior crewmen. Under "Granby 2" another rifle company from the battalion was earmarked to reinforce 1st Battalion the Royal Scots, who were under strength.
When "Granby 1/" superseded "Granby 2" on the decision to send another armoured brigade to the Gulf (that is 4th Armoured Brigade), the 3rd Battalion Royal Regiment of Fusiliers had all its former orders cancelled and it was instructed to reform as an armoured infantry battalion in its original role and then be prepared to deploy to the Gulf. This time the 3rd Battalion had itself to be reinforced to bring it up to operational establishment. This was done by providing elements of 1st Battalion the Grenadier Guards and 1st Battalion the Queen's Own Highlanders.
Why was this necessary? The answer is that the Royal Regiment of Fusiliers had twice in recent times had its recruiting capped. That was done because the Queen's Division, of which it is part, was better placed in the manpower table than other divisions. Therefore recruits were diverted elsewhere.
One could not run a successful business in this manner. It is an administrative nightmare. Only the resourcefulness of a highly dedicated and uncomplaining professional service could overcome such obstacles. If the Army is to be 25 per cent. smaller by 1995 I hope most sincerely that it will then be fully up to strength and that it will be kept that way.
I hope I may be allowed briefly to indulge in a reminiscence, however antediluvian it may appear to be from my appearance. I wish to reflect on the most extraordinary changes that have occurred in the composition of the Army over the past 46 years. In 1945 I happened to be in the War Office. Among other matters I was charged with preparing preliminary studies for the composition of the post-war Army. I well remember the minutes of the first CIGS conference in October of that year held at the Staff

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College, Camberley. I remember the minutes as it was my duty to write them. It was a hard task and I have kept the notes.
To meet the then commitments worldwide it was estimated that we would need a Regular Army of 275,000 soldiers, bolstered by a National Service element of 133,000, plus a women's service of 2,000. There would also be a volunteer or TA element of some 210,000. That makes a total of 620,000. With all reservists embodied on mobilisation the Army could have fielded a grand total of 1,370,000. That of course was the position in 1945. By the following year the draft plans had been modified considerably, principally because of a change of government. National Service remained but overseas commitments began to shrink and by 1947 the need for British forces in India had disappeared. The rest is history.
In passing, let us examine the regression over the years in terms just of armour and infantry. In 1945 the planners envisaged 30 RAC regiments and 138 infantry battalions. Now in 1991 there are 20 RAC regiments and 55 infantry battalions. By 1995 it is proposed that there shall be 12 RAC regiments and 38 infantry battalions. Based on the present establishment there will be a reduction by 1995 in RAC regiments of 40 per cent. and in infantry battalions of 31 per cent. Those figures are fairly devastating and the proposed reductions highlight the fate of famous regiments in the rundown of the Regular Army to only 116,000 men and women. In the infantry in particular, because of its county connections, there is deep concern. In this round of cuts no fewer than 22 regiments, if one includes the Brigade of Gurkhas, are to suffer by amalgamation or reduction.
I shall describe the position in my own regiment as an example. The first round of cuts was made in 1958. It was hoped in the Infantry Directorate of that time that by forming an English Fusilier Brigade of four battalions, comprising the old 5th, 6th, 7th and 20th Foot—they were all fusilier regiments—each would keep its own identity and positive geographical connection with Northumberland, Warwickshire, Greater London and Lancashire respectively. That was an example of one of the original proposals mooted in the 1945 plans for the post-war Army when certain regiments might be grouped but for administrative convenience only.
Unfortunately some 10 years later it was decided by the Army Board to move to the large regiment. My own regiment, the 5th Fusiliers, virtually disappeared as such on becoming 1st Battalion Royal Regiment of Fusiliers. In due course there was a further cut and 3rd Battalion, the Lancashire Fusilier battalion, had to go. That battalion was the most junior in the Army List of the four battalions in the regiment.
In the present plans another battalion has to disappear and the regiment, which originally had four battalions, will consist of only two. This is another form of death by a thousand cuts. The same fate is to befall the other large regiments, for example the Royal Anglian, the Light Infantry and the Royal Green Jackets. It is interesting that this possibility was foreseen by the CIGS Conference in 1945 when it was
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considered undesirable to move into large regiments principally because of the danger of regiments losing their identity in their traditional recruiting areas.
To be quite fair, however, there has always been a body of opinion which has advocated a closer grouping of regiments than the present six administrative divisions. It is always possible that if there had been more large regiments and rather fewer single battalion regiments the present painful decisions would not have been felt so intensely, nor such anger generated in certain counties of England and the traditional recruiting regions of Scotland.
I make one final plea, which is for the Territorial Army. I understand that it is to be reduced by one-third, to about 63,000 men and women. As a pre-1939 Territorial myself I have always recognised the importance of the close affinity which binds the volunteer unit to its regular counterpart. With the amalgamation of yet more regiments, the Territorial unit will have increased importance because it will wear the badges of the regiment in the area from which its regular counterpart recruits. It will also remain an important link between the regiment and the general public, whose good will is vital if young men are to be encouraged to join the colours. Every effort should be made to maintain at least one company of a Territorial battalion in an area from which its regular counterpart recruits.
Northumberland is fortunate in having a well-founded battalion which is almost at full strength. That battalion, together with its affiliated battalion of the Army Cadet Force, are a useful source for regular enlistment. I mention those units in particular as that is where my military background lies. I ask my noble friend not to allow such important links as these between the Territorial Army and the Regular Army to be in any way diminished.
8.28 p.m.
Lord Kennet: My Lords, for 40 years we have had a certain world political structure and a certain technology of weaponry around the world. We have had the Cold War and we have had nuclear weapons. The world political structure has given way but the weapons have not. They are still there, and it is not at all clear what they are supposed to do or what is the best thing to do with them. The weapons are still with us and they are still secret. They are still an undeniable threat and deterrent and they are still determining our political actions in ways that we are not aware of. They are still shaping the world scene.
Attempts over the past 40 years to remove the weapons have failed and will probably continue to fail. We proceed from milestone to milestone in our attempts at disarmament, but they are not true milestones. The latest attempt to get rid of strategic nuclear weapons—START—is not nuclear disarmament. The nuclear warheads are not to be destroyed or recycled; they are to be retained. Why is that? It is because the United States' warhead material installations were closed down two years ago on environmental grounds. Therefore the Americans are not yet willing to destroy the warheads of those strategic missiles. The missiles themselves are being

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retained for possible alternative use. There is no disarmament in that instance, simply some mothballing or some provisional unscrewing. Nevertheless, it count; as disarmament, and in international treaty law it will figure as disarmament of a sort.
We in Britain have to ask ourselves at what point the American-Soviet agreed reductions, which amount almost to a reduction race, will strike the United Kingdom's proposed increase in nuclear weapons—the acquisition of the Trident submarine missiles. We must remember more than ever, as we have been saying for five or eight years, that those missiles come to the United Kingdom only on the personal whim of the President of the United States. There is no treaty, and Congress is not involved. It is a mere administrative arrangement between individuals. The President can say no if he ever chooses to do so.
Meanwhile, all sorts of strange chimeras are stirring in the undergrowth—if that is what chimeras do. What is the United States' military and industrial complex doing trying to sell anti-ballistic missile defence in the Soviet Union? In the past three days newspapers have been full of what appears to be some form of agreement between certain persons in the Russian military establishment and certain persons in the United States whereby Russia would acquire a Star Wars strategic defence capacity of its own.
I wonder what the Government think about that. Supposing it were to work, and a sale from California to Russia were to be effected which would help to defend Russia against stray minor nuclear strikes, not only from Iraq or a future nuclear armed Iran, but from the Ukraine, Kazakhstan or other Soviet republics, where we know there are nuclear weapons? That would constitute a Russian-American defensive alliance against everyone in the world, would it not, including France and Britain? Do we want the United States to sell ABM equipment to Russia, or indeed to the Soviet Union, supposing by some outside chance the Soviet Union does not fall apart?
Let us look further ahead. The Soviet Union has fallen apart because its constituent peoples cannot bear to live together any longer. The Russian republic itself is also a federal republic. It consists of 30 or 40 separate peoples. It is easy to forecast that within five or 10 years they too will find it difficult to live together and the RSFSR, as it used to be known, will also break up. Who will then have the Soviet nuclear weapons which now exist, and the American anti-missile equipment which some people evidently want Russia to have?
We must also recognise that the nuclear armament of Iraq, which has been filling the press recently, was brought about not solely by the original sin and remarkable individual wickedness of President Saddarn, though God knows that is real enough, but also by the Israeli attack on the Iraqi nuclear establishment eight or 10 years ago, which went unpunished by the world. It had the inevitable effect that the Iraqis started again with a more secret nuclear development programme, the extent of which is only now being revealed.
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I do not know what the moral to all this is. Perhaps it is that governments such as ours, and the French and German Governments are in much the same boat, have to look a great deal further ahead than I believe they are doing. I do not see any of those thoughts or dangers reflected in the document before us—Options for Change. I do not believe that the Government are yet thinking on the right level. What is the right posture for a country such as this in a world scene such as I have described? Are the Government capable of finding it? They have better information than anyone else, and we must all, party or no party, hope that they find it and get it right.
8.35 p.m.
Lord Swinfen: My Lords, I have not spoken in a defence debate since December 1977. I was originally motivated to speak in this debate because I learned that my regiment, the Royal Scots—the oldest regular regiment in the regular Army—was to become extinct by amalgamation. My noble friend Lord Wedgwood, in an excellent maiden speech, went into detail on that matter earlier. I was confirmed in my desire to speak by the fact that a number of people, not only service people and ex service people but even more civilians who had never served in any of our forces, spoke to me about Options for Change and told me that they were deeply concerned that the Government cuts were going too far. Of course, it is important to me that my regiment is to go. It is certainly the oldest regiment in the regular British Army and probably the oldest in the world because before it became part of the British Army it provided a regular fighting force for the Swedes for at least a hundred years before that.
I do not want to take up too much of your Lordships' time. However, I wonder whether my right honourable friend the Secretary of State will take the trouble to read the report of the proceedings in your Lordships' House and, more importantly, to take note of them. I understand that when proposals were put before him concerning the units which were to move out to the Gulf he agreed a list verbally, but when a list was typed out one infantry battalion was missed off that list. Later, when my right honourable friend was given a revised list which included that infantry battalion he said, "No, they are not to go". On that occasion my right honourable friend was in an awkward position because the kit of the battalion in question had already been sent off by sea and its advance party was already in the Gulf. Without his knowledge the Army had to smuggle the rest of the battalion out. They had more sense than he had. That incident makes me think that my right honourable friend is a stubborn individual who does not pay a great deal of attention to other people and their advice. This evening he has been given a great deal of good advice which is not necessarily to his liking.
I understand from those who are better informed on these matters than I am that what is proposed is already likely to result in a shortfall of three infantry battalions in relation to our present commitments. That allows for no sudden, unexpected demands on the Army.

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How much warning did we have of the Argentine invasion of the Falkland Islands? I believe that the first warning was when they came ashore. How much warning did we get of the trouble in the Gulf? There was certainly not time to raise and train units to send out there. How much warning will we get of any other potential conflict?
Before the attempt to depose Mr. Gorbachev we were in a logjam. We were stuck. We were in a position of stalemate. Everyone knew that if the USSR moved the West would throw nuclear weapons at it, and the USSR knew that if we were to move it would throw nuclear weapons at us. At present we are going through life as nations pitching and tossing on a violent stream, not knowing what is happening. Yugoslavia is a case in point. We do not know what will happen in the old USSR. Anything could happen. Armies can get out of control. We can see that happening in Yugoslavia.
We should be extremely careful about what we are doing to reduce our Armed Forces. It is essential that we keep sufficient forces of a good enough quality and well enough recruited to act as a proper insurance against troubles ahead. I wonder whether the right units will be done away with. Are they possibly units that are well recruited with the potential to recruit in the future and with a high retention rate? I suspect that some that are to be retained are not. That matter may need considering.
The infantry is extremely versatile and can be used to do many jobs. As the noble Lord, Lord Cheshire, said, they can be used in many forms for relief in times of trouble that do not require a strictly military commitment.
What is the position with the RAF regiment? Do we need special Royal Air Force units to guard our airfields? Could that not be done by regular infantry battalions, possibly strengthened with a troop of properly trained artillery? It would certainly improve future co-operation between the RAF and the infantry for any time when they need to operate together.
What is the point of keeping the Gurkhas? They have a lead increment which means that they have to have a higher number of men in each battalion than a British battalion. That will cost more. We have to fly their families away from Nepal to wherever the battalion is stationed. Can we go on using mercenary units? Should we use mercenary units at the cost of our own infantry regiments, particularly regiments that are recruited in areas of high unemployment? I should have thought that it would be cheaper and just as effective to send to Nepal the money that is returned home by the Gurkhas. That can be in the form of aid to help Nepal to stand on its own two feet.
I am worried about what will happen to the soldiers who are discharged as a result of the reductions. Those leaving the Armed Forces should be given an effective and comprehensive resettlement service to enable them to plan and to manage their life and career change so that they resolve their future, especially as regards obtaining a job in civilian life. Will my noble friend therefore reassure me that the Tri-Service Resettlement Organisation, as the effective service
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organisation, will be given the freedom to provide a resettlement service? Will he further reassure me that adequate outplacement and employment assistance services will be delivered to the Tri-Service Resettlement Organisation during the vital six months prior to discharge, ensuring that at least equivalent treatment is given to soldiers as to civilians who face similar changes in their lives? I wonder whether the Education Corps is able to cope with the resettlement training that is needed. Somehow I doubt it.
I understand that my noble friend Lord Arran is producing a task force paper on housing for those leaving the services. Will that be made available to the three services and to the public at large to help in planning? With reference to paragraphs 1020 and 1021 of the third edition of the 1991 Homelessness Code of Guidance for Local Authorities, when will the DOE and Welsh Office circular 54/75, which was written before the right to buy came into operation with regard to housing for ex-servicemen, be withdrawn and rewritten to bring it into line with current housing policy?
Finally, has sufficient funding been allocated to ensure that the home headquarters of regiments due for amalgamation or disbandment are kept open and manned for at least three years following that amalgamation or disbandment to assist and support the resettlement, rehousing and employment of the servicemen affected?
8.47 p.m.
Viscount Allenby of Megiddo: My Lords, as far as the regular Army, the Navy and the Air Force are concerned, Options for Change are no longer options. They are now decisions which our Armed Forces have to implement by becoming smaller but better, which, we are told by the Minister, is no catchphrase. Few of us doubt that the changed international situation demands a review and a different balance between and within the three armed services.
Sadly, there has been widespread criticism of the Government's performance on defence in another place, in the media and within the Armed Forces themselves. After the two major conflicts, the Government have got away with it by the most slender of margins. The inescapable truth is that to make two brigades operational in the Gulf, it was necessary to make the remainder of three divisions in the Rhine Army virtually non-operational. I question whether that could be done in an explosive and potentially hostile East, Central or Southern European climate—a perfectly possible scenario for the future.
There is an upsurge within the ranks of the Army of frustration, uncertainty and disillusionment, caused by the lack of manpower within the existing structure, overstretch and lack of money, so often wrongly attributed to the introduction of the new management strategy referred to by the noble Lord, Lord Ironside.
Today, as the Army moves towards the implementation of Options for Change, most units are now well below strength, making tours such as Northern Ireland extremely difficult due to the shortage of men. We have heard a great deal about that already today. Often, additional companies have to be posted in from

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battalions which are themselves overstretched. There is a need to avoid the present almost permanent overstretch. One looks in vain for any match of actual and potential commitments to the proposed size of an army of a strength of 116,000 men—an army within which: here is to be a massive reduction of the combat units which must carry out the future front-line commitments.
Over the past few weeks I have heard by letter and telephone call from serving officers both in the infantry and the armoured corps saying, "We need another 30 men to make this new structure work if the battalion or regiment is to function efficiently". One wonders whether such calls are getting through to the service chiefs and what they are doing about it. I am convinced that the Army needs to be increased by about 5,000 to 7,000 men and women above the proposed 116,000 and that it must include at least four additional infantry battalions on whom the bulk of the peacetime commitments fall. Like many noble Lords, I could expound on the infantry being at the forefront and therefore the most important people of the future.
I referred earlier to a feeling of uncertainty because of the knowledge that in the future many men and women must leave the Army. These are young people, often in their mid-forties and with families, who have suddenly begun to realise that their six, nine or 12-year option will not be extended to 22 years as they could reasonably have considered would happen in the past. Because they have been encouraged to follow the flag, they have no home and now have no job. While I welcome the package of measures to help with redundancy and housing, I ask the Government whether serious consideration has been or could be given t) direct transfer of some of those redundant servicemen to, say, the police, the prison service, the fire brigade or ambulance service. These men and women are all well trained, mid-career people who deserve a future. It may be that some of the forces around this country would accept direct transfers.
I turn to the Territorial Army and make no apology for declaring a personal involvement. In Cm. Paper 1595, entitled Britain's Army for the 90s, the Government states at paragraph 37:
"We are giving careful consideration to its future and to the size and number of TA units".
The paper goes on to state that the strength will settle at between 60,000 and 65,000. It is all rather woolly and certainly leaves one in considerable doubt as to the size and shape of the Territorial Army in the future.
We now learn that proposals are up for discussion to culminate in a government decision just before Christmas. These proposals will virtually eliminate all infantry TA from the counties of Lincolnshire, Leicestershire and Northamptonshire. I wonder what the Lord Lieutenants of those counties will think when they learn that they will have no Territorial Army in their counties. They are proposals which include the virtual disbandment of the senior and most experienced Territorial Army armoured recce regiment (the Royal Yeomanry) and the oldest regiment (the Wiltshire Yeomanry) by the removal of their armoured cars and changing what remains of a
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decimated regiment to the role of Land Rover mounted recce. Of course the Territorial Army will respond to the changes in role.
However, there is one matter to which the Government need to give serious consideration in the future; namely, the call-out and mobilisation of reserves. Unlike the national guard counterparts in the USA, our system is complex and difficult to operate. The noble Duke, the Duke of Westminster, referred to the problem in his speech. I should like briefly to quote from the 10th report of the Defence Committee in another place, which says:
"The current general review of Reserve forces provides an opportunity for reconsidering how best to ensure that … the legal and military framework within which their services arc to be required is sensibly framed and operated, enabling Reservists to be called up short of a general mobilisation".
I make no apology for mentioning that again. It is a problem that must be tackled. I hope that the study which is currently taking place will point the way ahead and that the Government will find time to introduce the necessary legislation.
I make just one plea to the Government. Will they please consider most carefully the 563 TA centres and drill halls and not dispose of any of them in the interests of saving money? Those drill halls are an essential network, as was described by the noble Duke. They play an important pivotal role throughout the country. It is easy enough to knock them down or sell them off but it is not so easy to replace them when an emergency arises and we need to expand further our reserves, as we hope to be able to do in future.
Both in the Territorial Army and the regular Army the sense of belonging to a family is of paramount importance. Throughout a long history and many changes, that has enabled young men to play their part in many areas of the world. They will not let the family down. The Government are to be congratulated on standing firm on the abandonment of the regimental system, which we abandon at our peril and which rightly is the envy of every other army in the world. It is rigid, bloody-minded, individualistic, over-protective and stubborn—all that and more is true. But those are the strengths and not the weaknesses of our Army. Regiments will adapt and change—even the Royal Scots—given time. If it is clear that the Government have fully made out the long-term case, they will then work as hard for the new as they did for the old.
As a staff officer at the Ministry of Defence told me, life in the Ministry of Defence today is like lying on a billiard table with all the balls above your head waiting for them to drop. I hope that they drop in the right pockets and fit snugly, with not too many balls in one pocket and not enough in another.
8.56 p.m.
Lord Pearson of Rannoch: My Lords, I have to confess that I have no military experience whatsoever beyond remaining stuck at the rank of private in the Eton College Combined Cadet Force some 30 years ago. However, I hope that my comments will not be considered any the less objective for that. I should like to comment briefly on three aspects of Options for

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Change and ask my noble friend the Minister a few questions. Those areas are, first, his claim that the cuts are not Treasury led; secondly, the suggestion that they have been carefully thought through; and thirdly, the inappropriate secrecy in which that thinking has taken place.
First, as to my noble friend's denial that the cuts have been more inspired by the Treasury than may be good for the future defence of the realm, I have two questions by way of example. Does he accept that the Treasury instructed the Ministry of Defence to budget on an inflation rate of some 4.5 per cent. for the years 1988 to 1990? If so, must there not have been a bit of a gap in the budget when inflation turned out to be nearer 11 per cent?
Can he tell us whether there is any truth in the rumour that the diminishing threat from the Soviet Union in those years led defence contractors to finish some contracts early, fearing that they might otherwise be cancelled? Did the resultant earlier payment for those contracts make another hole in the budget? I wonder whether my noble friend can put a figure on those two holes in our defence budgeting, if they existed, and explain how the shortfalls cannot have inspired the Treasury to cut costs to cover them.
In my second point I come to the claim that the cuts have been properly thought through. My noble friend seems to agree with other noble Lords, and perhaps particularly with the noble Lord, Lord Chalfont, that there has not been a proper strategic defence review as such. But, even if there had been such a review, things have changed so much internationally in the past two years that it is doubtful whether it could have reached the right conclusions. After all, Options for Change was conceived in March 1990 and published in July of that year. Saddam Hussein invaded Kuwait a couple of weeks later. Since then we have seen the events of August this year in the Soviet Union, leaving much uncertainty behind them, and we have the present conflict in Yugoslavia. Ethnic unrest and nuclear proliferation now face us on a scale that was inconceivable when these cuts were supposedly being thought through. So I fear that we must be unlikely to have got right the broad sweep of the strategy.
However, it is when we come to the detail of some of the proposed cuts that we can see that we have clearly got some of them badly wrong. I shall refer to some details of the infantry cuts.
Most people seem to accept that it may be sensible to cut nine infantry battalions to reflect the withdrawals from Germany. But to disband five more battalions without reducing commitments does not seem prudent. Let us look for example at the planned fate of the Brigade of Guards, to be cut from eight battalions to five. At the moment the Foot Guards have three battalions abroad and the remaining five on very profitable duty in London. The proposed cuts will mean either committing almost the entire remaining elements to London duties on a permanent basis, which will not work because men join the Brigade of Guards for the excellence of its overseas service rather than for its ceremonial duties in London, or a drastic reduction of those very profitable
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ceremonial duties. To be faced with such a dilemma surely cannot be right. It certainly shows an almost complete lack of accurate, detailed planning. My noble friend may suggest that perhaps the Brigade of Guards' contribution to the Exchequer from its ceremonial duties is not all that great. Have the Government attempted to quantify that element? Whether or not they have, the Director of the London Tourist Board wrote in yesterday's Daily Telegraph that tourism brings more than £5 billion per annum to London alone. He said that 40 per cent. of all visitors watched the changing of the guard at Buckingham Palace and that no less than 66 per cent. visited the Tower of London. Twenty per cent. of all long-haul visitors give pageantry as the main reason for their visit.
If one goes into still finer detail, the result of these cuts can look even more ill advised. For instance, one Guards officer and 22 men guard the Crown jewels at the Tower of London. If, as is being suggested, they are to be replaced by uniformed policemen, the cost will at least double, and—with all due respect to our police—I doubt whether they will provide quite the same tourist attraction.
There is one further more general point relating to these cuts. They seem to fall equally on the best and on the not so good regiments. Everyone who has had the great unpleasantness of having to make redundancies in commerce or industry knows that one keeps the best and lets the less good go. Can my noble friend inform us why the Government are not following that philosophy for such an important matter as the defence of the realm?
I turn now to the inappropriate secrecy about Options for Change which the Ministry of Defence appears to have imposed on very senior serving officers over the past 15 months or so. I have to suggest to my noble friend that this gagging of the people who presumably know more about their duties than just about everyone in the Treasury, and more than many in the Ministry of Defence, must have seriously reduced the chances of a proper outcome to the debate. I am of course aware of the Official Secrets Act but I am referring to the discussion of facts which were and are already in the public domain. The prohibition of discussion of these matters appears to have been an abuse by the Ministry of Defence of Queen's Regulations. I refer my noble friend to Part 14 of Queen's Regulations, paragraph J5.581, which restricts the political activities of service personnel. Paragraph (a) states:
"Regular personnel are not to take any active part in the affairs of any political organization, party or movement. They are not to participate in political marches or demonstrations".
That seems clear and reasonable enough. The trouble is that the Ministry of Defence has issued written orders to all serving personnel to the effect that the prohibition against taking,
"any active part in the affairs of any political organization, party or movement",
includes the lobbying of Members of Parliament, even their own Member of Parliament, which has therefore been expressly forbidden by the Ministry. Will my noble friend let me know whether I have got that right,

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and, if so, whether he will make sure that the Ministry does not improperly stifle this vital source of wisdom in future?
I end by reminding the Government that the dark side of human nature is always with us and that it did not crumble with the Berlin Wall. Saddam Hussein, the events in the Soviet Union of 18th August, and Yugoslavia today should all confirm that eternal fact. I fear that there may be too much optimism that the countries and republics of the former Warsaw Pact are all moving towards democracy and capitalism as fast as possible. As one of the few of your Lordships who has opened an office in Warsaw, and who is also close to the growing ethnic unrest between Azerbaijan and Armenia, Russia and the Ukraine, and between other republics which used to be part of the Soviet Union, I have to say that I am not so sure. I do not see how the Government can be sure either. I therefore join other noble Lords in asking the Government to consider again and to reduce the savagery of these intended cuts.
9.5 p.m.
Lord Monkswell: My Lords, I rise hesitantly to speak in support of the Government. We have heard many speeches today stating that they are going too far too fast and getting rid of a number of famous regiments, and so on. We have also heard from a number of noble Lords who have said in effect that the Government are doing the right thing and are on the right course. I am one who says that they are not going far enough fast enough. It is curious to state that in the context of asking the Government to take a long-term view of the situation—not to react just to the current situation but to think in terms of the future for the benefit of the country.
One of the advantages of speaking late in the debate is that one has heard some notable contributions. It was good that the noble Viscount, Lord Whitelaw, reminded us that there is a tremendous tendency for the Armed Forces to plan on the basis of the last war that they fought rather than wars that they may have to fight in the future.
However, we also need to remember that the way to succeed in war and conflicts is by pulling together. I am concerned that some members or ex-members of the Armed Forces feel isolated and threatened because of apparent attacks on their regiments. I understand that.
We have only to look at what has happened over the past 20 or 30 years in industry. Some famous household names have disappeared from our ken. If I mention a handful of them noble Lords will understand what I am talking about. Riley, Triumph, Wolselcy, Morris and Austin are famous names of motor cars that we can no longer buy but which workers were once proud to produce. The famous names which we are left with in the British motor industry are Rover and Jaguar.
But those companies are no longer British and their names are not where they should be on the roll of honour. The people who worked for those companies
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had just as much pride and esprit de corps as the soldiers who served in the famous regiments about which we have heard this afternoon.
I would say to the soldiers in the regiments who may be worried about their famous names disappearing and being merged with others that life goes on and we survive. The famous names will survive in memories and in the history books, and maybe that is for the best. Some of those names are associated with the populous counties that used to exist 100 or 200 years ago but which are no longer populous. People now live in cities and there are no longer so many agricultural workers in the big shire counties, so perhaps we should think in terms of an Army structure based on the large conurbations. Let us make it a people's army.
I should like to touch on the contribution made by the noble and gallant Lord, Lord Carver. He gave a very interesting and thought-provoking analysis. I was a little sad that the noble Lord, Lord Trefgarne, could not understand it, but perhaps that says more about his intelligence than the intellect of the noble and gallant Lord.
Defence diversification has been mentioned in this debate in a positive way. This has been discussed quite a lot in the trade union movement because of the need for workers to protect their jobs and for defence manufacturers to diversify into peaceful production capacity. We have heard from the noble and gallant Lord, Lord Cheshire, and from the noble Lord, Lord Judd, and others, of the need for the Armed Forces to diversify their operations and in particular to provide support in disaster situations. That has much to commend it, and I hope that the Government will consider the contributions that have been made by noble Lords much more illustrious than I, and I should like to support that point of view.
We must recognise that over the past 30 or 40 years countries that have not spent a lot of their gross domestic product on defence are now stronger and wealthier and their people are healthier and better educated than those in countries that have spent a high proportion of their gross domestic product on defence. If one looks at the performance in world terms of Japan and Germany, if one looks at the success of Austria and to a lesser extent Sweden, one can see the tremendous benefits that have accrued to the people in countries that have spent less on defence and more on education, health services and housing and more in supporting peaceful manufacturing capacity.
Over the next 15 years we must transform our nation, our society, so that we can strengthen our economy and improve the living standards of all our people. We can do that only by reducing defence spending at least to the level of our peer countries in Europe, and in the long term we may have to spend less on defence than they do. But it is not just a question of money but of the tremendous intellectual and energy capability of the people who currently work in the defence industry and who serve in the Armed Forces. Those tremendous human abilities

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must be used to the advantage of the people in a more positive way than serving in the Armed Forces and absorbing defence expenditure.
One of the other actions that we must take in the longer term, as has been mentioned by other noble Lords, is to work to rid the world of nuclear weapons. We should not do that solely on the basis of altruism, horror or morality, although all of those factors should come into the equation. I hope that the decision will be made on defence criteria. It must be realised that nuclear weapons do not contribute to the defence of our realm; they do not contribute to the defence of France, the United States, the Soviet Union, China or India. One must look at other countries around the world. If not having nuclear weapons makes countries vulnerable, why has not France, for example, taken over Germany? Why does Italy still remain an independent country? There are many countries which do not have nuclear weapons.
Those are some of the long-term objectives at which we must aim. I return to a point that I made at the beginning of my contribution—sympathy for those who face redundancy, the loss of famous names and the feeling that they will lose the esprit de corps that has existed for a long time. I say to them, "Yes, the rest of the country, the people who are not in the Armed Forces, have sympathy for you, but at the end of the day we must all move forward together to make progress in the best interests of all the British people".
9.15 p.m.
The Earl of Carnarvon: My Lords, I had the honour to serve for five years in the Household Cavalry, joining the Royal Horse Guards (the Blues) in 1942. That is 50 years ago, at the same time as the noble and gallant Lord, Lord Bramall. In due course I saw service in the Middle East and in Italy. After the war in Europe ended I was posted to the mounted squadron in London for two years.
I understand that it is intended to amalgamate the Life Guards and the Blues and Royals into one operational regiment of four squadrons and to have in addition one mounted regiment of two squadrons. Patently there will need to be a regimental training element in order to prepare those transferring from the operational to the mounted role.
The mounted element provides a significant part of the Household Division's public duties and at a cost far outweighed by the benefits it brings. Apart from its contribution to security, as was said by the noble Lord, Lord Pearson of Rannoch, a recent London Tourist Board report assesses the Household Division's contribution to revenue from tourism as lying between £500 million and £1 billion.
I fail to see how an amalgamated regiment of this size can carry out both these important roles and at the same time train its personnel, allow them to take leave and retrain those transferring from one role to the other. All work and no play will not make Trooper Jack a happy soldier. He will leave and I submit that it will not be easy to recruit the necessary quality of
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young men to fill his place. The savings must be insignificant when set against the benefit from tourism.
Although serving in a combined regiment, one remained a member of the Royal Horse Guards; once a Blue, always a Blue. However, we were all of us, Life Guards and Blues, proud of our 1st and 2nd Household Cavalry regiments. What I fear today is not the amalgamating—the Blues and Royals are already amalgamated—but the impossible task set them by the Secretary of State unless—and I say again "unless"—the main regiment has a sufficiently large establishment to allow for servicing the mounted squadrons and for training for its dual role.
I hope that the Minister will give me a satisfactory reply regarding this very special problem faced by the Household Cavalry, which, whether on duty in London or overseas, is a superb fighting force.
9.20 p.m.
Lord Fanshawe of Richmond: My Lords, on Monday afternoon this week, on a glorious sunny October day, I visited the battlefield of Waterloo. I had not been there before but many other noble Lords may have visited it. It was an impressive sight. The fields are still tilled; the farmland is there as it was 176 years ago when the battle was fought. Although there are main roads near the area the actual battlefield is virtually as it was.
Lord Renton: And the buildings.
Lord Fanshawe of Richmond: My Lords, as I wandered around the site, which was empty of tourists, I came upon the farm of Hougoumont, which was defended by the 2nd Battalion Scots Guards against Napoleon's army in the battle. In fact it held the right wing of Wellington's forces. As my noble friend said, it is exactly as it was 176 years ago; the buildings are there and the plaque which I saw commemorated the defence of the farm of Hougoumont by the Scots Guards. That is one of the battalions which is now to be disbanded.
I visited La Haye Sainte, the other farm on the left wing of the British front. Again that stands today as it did 176 years ago. I wandered across the fields and found where the cavalry brigade formed up, and my old regiment, the Life Guards, which fought at Waterloo, stood to before it charged. It was a moving occasion to think that those men fought on our behalf in Belgium all those years ago. One felt the losses and the bloodshed on that field as one stood there. As a result of their efforts they saved the British Army from fighting another war in Western Europe for 100 years.
It was not until 1914 that the Household Cavalry was again in action in Europe at the Battle of Mons down the road from Waterloo, accompanied by many of the members of the Footguard Division who fought at Mons and in the battles immediately afterwards at the beginning of the First World War. When one moves forward to 1944, at the time of the liberation of Europe, one may ask who the soldiers were at the forefront of the battle from France into Belgium in

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1944. It was a Household Cavalry regiment accompanied by tanks of the Welsh Guards and also the Grenadiers, who liberated Brussels.
One follows the theme through of those soldiers who fought in war after war and were again present as the Blues and Royals were in the Falklands war and the Life Guards only recently in the Gulf war. Those people who believe that the Household Division consists merely of chocolate soldiers who appear on parade in London and attract the tourists should realise that they are fighting soldiers who have fought for this country for hundreds of years. They fought over a great length of time in a way which has no comparison.
Some people probably feel that noble Lords who speak in this debate are pursuing their own interests and the old and the bold are on parade supporting their regiments. There is a certain element of that in the debate this evening. But I wholeheartedly support the noble Earl, Lord Carnarvon, in what he said regarding the Household Cavalry, which was the first time it was mentioned in the debate. The composite regiment proposal recently put forward was forced on the Household Cavalry and is much resented. We know that in the last war, and indeed in the First World War, the two regiments of the Household Cavalry—the Life Guards and the Blues—came together and fought as a combined regiment. Of course during wartime the mounted regiment was not needed and did not exist. They therefore did not have the problem of supplying officers, NCOs and troopers to provide for the mounted squadrons in London as well as the fighting troops overseas.
Many members of the Household Cavalry resented the letter that was sent to several Members of another place signed by my noble friend's colleague, the Minister of State for the Armed Forces. It was dated 28th August and was sent to the honourable Member for Westbury. In yesterday's debate in another place the honourable Member for another Wiltshire seat, Sir Charles Morrison, said that he had received a similar letter. The letter says:
"I would like to emphasise that the concept of the combined regiments originated from the Life Guards and the Blues and Royals themselves and is seen by all concerned as the best way forward for the two original regiments".
That is just not correct. I should be grateful if my noble friend would comment on that.
This proposal saves the minimal amount of money, particularly when one takes into account the amount earned from the tourist industry which was mentioned by the noble Earl, Lord Carnarvon, and by my noble friend Lord Pearson earlier in the debate. I believe the real reason is that the Army Board, consisting of four Ministers and three generals, believes that the Household Division should take a share of the cuts. That is not based on any military or economic factors whatsoever. I hope that my noble friend and his colleagues will reconsider their decision, and there is plenty of time to do so. If they will not reconsider it, the regiments—the Blues and Royals, who were merged in 1969 and have already taken their share of mergers, and the Life Guards—will try to make it work. They will have to because they are loyal servants of the Crown.
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But the damage to morale for the operational unit of these regiments will be considerable. The career structure of officers and NCOs will be damaged for the reasons set out by the noble Earl, Lord Carnarvon. The difficulties for the mounted regiment to carry out the mounted duties in London will be great unless further thought is given to providing a training squadron for the operational regiment, which is to have four sabre squadrons and a headquarters squadron (two sabre squadrons for the Life Guards and two sabre squadrons for the Blues). I hope that my noble friend will discuss with his colleagues the possibility, in dealing with the problems that face the Household Cavalry of providing the right number of men and the right amount of equipment if this decision has to go ahead.
If an assurance is not given, I believe that it will be very difficult for this new composite regiment to meet its duties. The theoretical establishment which has been given to it is not enough and at the moment the numbers will not allow a satisfactory career structure. When my noble friend made his statement in July on Options for Change, in referring to the infantry battalions he said:
"I can certainly say that the 38 battalions will be properly manned, properly equipped and properly financed".—[Official Report, 23/7/91; col. 675.]
I assume that this pledge will apply to the Household Cavalry as well. I also hope that it will apply to the line cavalry regiments who are also taking a great number of mergers and amalgamations which are not wanted but which have been loyally accepted.
Other much more distinguished noble Lords have covered the macro-defence scene in the debate today. It has been a long debate and I do not wish to hold up proceedings by discussing the wider issues. However, despite Ministers' protestations it seems to me that the cutback is clearly Treasury driven. It is not good enough for Ministers to say time after time both here and in another place that it is not Treasury driven. That criticism has been made by noble Lords who have spoken in the debate this afternoon. They have made it quite clear that the Government are losing all credibility on this issue. The noble and gallant Lord, Lord Bramall, made it clear that he has evidence to prove that it is resource driven and Treasury driven. The letter that was sent by the Chief of the General Staff, General Chapple, also takes what certainly is the view of the many soldiers and serving officers—that this drive is being masterminded by our friends in the Treasury.
Perhaps my noble friend will comment on a statement that was made to me today that Sandhurst, where I was trained, is now using gas rattles to indicate machine-gun fire because the Treasury does not allow for sufficient equipment for it to provide machine-guns. I should be grateful if he would confirm whether that is true.
I am also told that there is a Territorial Yeomanry unit in the North of England which is about to go on exercise for three weeks and it has been given one blank round for each soldier during the three-week training. I should be grateful if my noble friend would confirm whether that is true. It is very depressing if

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this is the state of play which has been reached with our Armed Forces as the result of Treasury pressure. I do not blame my noble friend. I blame the Treasury.
My noble friends Lord Whitelaw and Lord Middleton made their fears about the Foot Guards very plain in their speeches earlier, as did my noble friend Lord Pearson. We are all anxious about the Government's decisions. We hope that they will once more take time to reconsider them.
9.31 p.m.
Baroness Strange: My Lords, we are all grateful to my noble friend the Minister not only for initiating this debate on the defence White Paper and for sitting so patiently through so many speeches, but also for giving us the opportunity to hear three absolutely splendid maiden speeches. I must say that the moving, deeply thoughtful speech—without notes—of the noble and gallant Lord, Lord Cheshire, was one of the most heart-stirring I have heard in this House and it made me cry.
When I was re-reading my noble friend Lord Home's debate on the Western Alliance on 19th April 1989 I was particularly struck by the almost clairvoyant nature of what my noble friend said. He foresaw in his speech the total economic collapse of the Soviet Union and, in col. 776, he said that:
"the retreat from Afghanistan, the withdrawal of Cuban troops from Angola and the orders to North Vietnam to leave Kampuchea imply that the communist aim for world domination has had to be modified and is very likely to be abandoned".
Re-reading old Hansards is rather like reading the backs of old newspapers when you are pricking out seeds in the greenhouse—fascinating and irresistible. With some trepidation I even turned back to some of my own speeches on the same theme, wondering if I had said anything so unlikely that I should have to eat my words, as some people nowadays eat other, usually inedible, garments. I was relieved and surprised to find that most of what I said still stood. In January 1989 I said:
"all over the Soviet Union little candle lights of freedom and friendship are beginning to twinkle"—[Official Report 25/1/89; col. 740.]
In November 1989 I said:
"Every day … another piece of freedom emerges. It is like a huge glacier rushing into a greenhouse-warmed sea. The slow, solid ice is cracking into boulders, icebergs and rocks … Secondly, when we are in a river full of floating and dangerous rocks we need to keep ourselves secure".—[Official Report, 22/11/89; cols. 117–8.]
With the collapse of the eastern bloc countries and their emergence into freedom, that was true. It is still true with all that has happened this summer in the Soviet Union itself.
There are just three points I should like to make and I can reassure your Lordships that I shall be brief. The first is that we are still in the whirlpool at the end of the glacier. My noble friend Lord Carrington has said that the world has never been in a more dangerous situation than it is now. He is right. We are in the middle of change. Now more than ever we need to be strong and resist any sudden emergency which
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might occur. My right honourable friend the Prime Minister has stressed the need for a strong defence. He is absolutely right.
One of the most encouraging things has been the reduction of nuclear weapons. We all hope that this will continue rapidly, as President Bush and President Gorbachev agree. One nuclear deterrent we must have, but vast economies can be made here. Our forces must also be well equipped with up-to-date weapons to defend us. However, as I have said before, no weapon is much use without someone to use it. And if we reduce our infantry by 17 battalions to 116,000 men, we will not have enough manpower to undertake the commitments we already have. I have not been able to track down a speech from King Harold on his smaller but better army but I am sure that his speech before Tostig's invasion in the north and Duke William's at Senlac in the south was very similar to that of my noble friend the Minister today. Smaller elastic, however good, can only stretch a certain extent.
With their present 55 battalions, our infantry is hard pressed to train for war and to achieve their garrison duties in Belize, the Falkland Islands and Cyprus, all of which I have visited, and have seen just how busy their tours are. There is also the question of Northern Ireland, where I have also been and have seen the conditions under which our men live and operate. With 38 instead of 55 battalions the tours would become more and more frenzied, like a mouse running round a tiny treadmill. And this is without our commitments to the new rapid reaction force, and in the case of the Brigade of Guards, their ceremonial duties. With the 2nd Battalion Grenadier Guards, the 2nd Battalion Coldstream Guards and the 2nd Battalion Scots Guards swept into suspended animation, it will be almost impossible to achieve a full turnout for the Queen's Birthday Parade, and ceremonial duties will come round even more frequently. Has nobody, except for my noble friend Lord Pearson, the noble Earl, Lord Carnarvon, and my noble friend Lord Fanshawe, thought of what this might do to our tourist trade?
Surely it must be wrong to amalgamate the Queen's Regiment with the Royal Hampshire Regiment, the Cheshire Regiment with the Staffordshire Regiment, the Royal Scots with the KOSBs, and the Queen's Own Highlanders, already amalgamated from the Seaforths and the Camerons, with the Gordon Highlanders. Feelings in Scotland run very high on these last two proposed amalgamations. We are all proud of our Scottish regiments, as we are of the Brigade of Guards, and indeed of all our Army.
We may appear to be knocking our heads against a wall of intransigence, yet we have all seen what happened to the Berlin Wall. My right honourable friend the Secretary of State for Defence said that these cuts as announced in the White Paper are final. Nothing in this world is final—except death. Cannot my right honourable friend the Secretary of State think again?
9.38 p.m.
Lord Palmer: My Lords, I feel privileged to have the honour of addressing your Lordships' House this evening, most especially as I am among the very small band of speakers in this debate who did not serve in one of Her Majesty's forces, although I did have the good fortune for three years to be commercial ADC to the deputy Supreme Allied Commander Europe. Although my main duties were purely ceremonial, I did have to ensure that a steady supply of good quality biscuits was always on hand in the local NAAFI!
Many of your Lordships may accordingly wonder why I have risen to my feet. I am doing so with a view to making a special plea on behalf of the Scottish battalions and to putting the case for the infantry as a whole. The infantry are the most flexible fighting component within the Army and help to maintain our peacetime commitments at home and abroad as well as meet the out of area contingencies which are always just round the corner, as was so well illustrated by the Gulf war.
As many of your Lordships have said, and as is widely known, the Scottish regiments are well recruited. If the Government cuts are to go ahead, tragic redundancies will follow. I feel that I must ask: do the Government really want to swell the numbers of unemployed in an already severely disadvantaged area with a major housing problem?
Is the Minister aware that, proportionally, the number of soldiers applying to leave the Army south of the Border greatly exceeds the number applying to leave north of the Border? This emphasises the high degree of loyalty and retention within the Scottish Division which, in providing good value for money, must surely please the Treasury. The noble Earl and his Government must take that into serious consideration. It must not be forgotten that it was the Scottish regiments that helped to keep Scotland in the Union. Mr. Nicholas Fairbairn in another place on Monday night stated that the survival of the Union was now in great danger.
There are three brief questions that I should like to ask. First, why are two battalions of Gurkhas being retained at the expense of the British infantry? Secondly, the King's Division, recruiting in the north of England, has got away almost unscathed by these draconian cuts: why? Thirdly, why has the 3rd Battalion of the Parachute Regiment been retained? The answer is not apparent, especially as there seems to be no role for a 3rd Battalion of the Parachute Regiment. Why destroy four Scottish battalions just to perpetuate a 3rd Parachute Battalion? I beg the noble Earl to look again at the White Paper and to see how these cuts can be modified so that, for example, the Royal Scots, so nobly mentioned by the noble Lord, Lord Wedgwood, in his excellent maiden speech and which, formed in 1633, is the most senior regiment in the British Army, is not wiped out at the stroke of a pen after 350 years of distinguished service.
9.41 p.m.
Lord Mottistone: My Lords, before I get going I should like to make a point about the contribution made by my noble friend Lord Pearson of Rannoch regarding the fact that people in the Ministry of Defence are not allowed to communicate with the public or with Members of either House of Parliament. I remember very well entertaining a very senior naval officer who is a great friend of mine. When we had finished our lunch in this noble place I said, "Is there anything I can do for you?" He replied, "Well, I really can't answer that, except to tell you that before I had lunch with you as a Back-Bench Opposition Peer"—Labour was in power at the time—"I had to ask permission from my Secretary of State". However, he then told me nothing at all. If the Opposition are thinking that they can benefit from this great release of information from my noble friend Lord Pearson, they cannot do so. It has been going on for a very long time. I suspect that it stems from the disgraceful behaviour of the generals and admirals at the beginning of the century and during the First World War.
While I am talking about the Opposition, I must say that I think the noble Lord, Lord Williams of Elvel, who I am delighted to see is now in his place, must have had a wonderful time to be able to make such a speech. I thought that it was a very good one. I say that because for the whole of the past eight or nine years noble Lords speaking on defence matters from the Opposition Front Bench have had to be terribly mealy-mouthed because those ghastly people down the Corridor have been telling them that they cannot say this, that or the other and that they ought to say what the noble Lord, Lord Monkswell, was saying. But he was able to be thoroughly open and all on our side. It was splendid. I just hope that it is real.
Lord Williams of Elvel: My Lords, as the noble Lord mentioned me by name, perhaps I may say that I speak for the Opposition from the Front Bench. What I say from the Opposition Dispatch Box is what the Opposition feel.
Lord Mottistone: My Lords, I am sure that that is so, but for how long?
Evaporation of the Soviet threat is to my mind most doubtful. As many noble Lords said, it could come back unexpectedly. We must know that. The noble Lord, Lord Mayhew, appeared to have confidence in the disappearance of the threat from Eastern Europe. He seemed to think that we could reduce our forces as a result of that. I believe that his confidence is entirely misplaced. We must be very sure of what is happening in Eastern Europe before we can start taking any steps to take advantage of the position, if that is the right expression. In any case, as was said by the noble and gallant Lord, Lord Bramall, we have always needed the forces declared to NATO to enable us to perform our duties elsewhere. He put that in a different way, but that is in effect what he was saying. We must be sure that we keep the right level of forces for the purposes for which they are needed.

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I agree strongly with the noble Lord, Lord Cheshire, who made a brilliant speech and who said that UK forces must be the keepers of law and order under the United Nations. I was pleased at what happened over the Gulf war because that was the first event of importance in which the nations of the world went to the United Nations and said, "Look, this chap in Iraq has broken all your rules, we must do something positive against him". The United Nations said, "Yes", and it happened.
When I was in the Navy 40 years ago, I believed that that was what the United Nations was for and what it would do. It did it during the past 12 months in a positive way for the first time. That must continue. We must ensure that the United Nations is always used and referred to as the authority for the use of armed force to keep peace in the world. That is most important. Our contribution must be to have forces big enough and of the right type to do the job. I doubt whether the Government have given that matter the priority it deserves.
In the 1950s and 1960s I was commanding small ships. I always saw us as performing a police role in the way to which the noble Lord, Lord Cheshire, referred. I saw us doing that under the Crown, not under the government. As a serving naval officer, I was the Queen's servant and not the government's servant. When I found occasion to quarrel with the government, I left the Navy to do so.
I also agree with the value that the noble Lord, Lord Cheshire, placed on the United Kingdom forces and other forces with regard to disaster relief. They have been used many times in the past and will no doubt be used many times in the future. Your Lordships can find examples in paragraphs 438 and 439 of the Statement on the Defence Estimates.
The United Nations is the backbone of all aspects of peacekeeping. European Community efforts to operate in Yugoslavia without first ensuring United Nations support was unwise. The United Nations came in as an afterthought. That was a mistake of the first order. The German and French proposal for a European armed force independent of NATO is a step backwards and is unacceptable, especially if, as other noble Lords have said, it is governed by majority voting. Surely narrow defence alliances are out of date now.
I question whether the proposed size of the forces will be enough. The Navy is to have about 40 escorts instead of about 50. The 50 target seemed to mean about 35 operational ships. Presumably 40 will mean about 28 operational ships. Peacekeeping depends greatly upon those maids of all work. From having commanded a couple of the ships at different times in the 1950s and 1960s, I know.
The Army clearly also questioned the planned numbers. The noble and gallant Lord, Lord Bramall, made this point as did many other speakers, particularly my noble friend Lord Wedgwood in his forceful maiden speech from the heart. As the current president of the East Wessex TAVR, I also question any reductions in the Territorial Army and the RNR. The point about the Territorial Army was made very
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well by my noble friend the Duke of Westminster and other noble Lords. We must be allowed to recruit to the level that we can reasonably retain and have the resources to do so. Two per cent. of the Army Vote, as I have heard from one noble Lord, is derisory for the services given to the regular Army by the Territorials.
For the RNR, I fear that the reductions already announced have been forced on the Royal Navy administrators by cash limitations rather than by examining how the RNR in its various roles can best supply support for the Royal Navy. For example, why phase out the RNR chaplains? They are dedicated people who help greatly. One of my rectors is now on his way to the Falklands. He was an RNR chaplain who helped enormously by taking over the job when the Royal Navy chaplains went on leave. Phasing out chaplains seems to me petty and will save only tiny sums of money. A chaplain is paid for only 14 days during the year and to phase them out is absurd.
Why reduce the Territorial Army doctors? So far as I can see, they are the only people on whom the Army called to help in the Gulf. We would like to have had the help of more Territorials in the Gulf, but the doctors were the ones who were called for. The fact that they were not used is quite unimportant. The suggestion to reduce them is ridiculous.
In conclusion, I refer to an answer given to me by my right honourable friend the Secretary of State at a private meeting at the end of July when my noble friend the Minister was present. The Secretary of State told me that the changes would be implemented gradually over the next four years. My noble friend Lord Whitelaw told us that he recently received similar reassurance. I fervently hope that the Government will stick to that programme and make few changes until we can see how the present world uncertainties work out, and then proceed slowly. I suspect that gradual reduction over, say, nine years would be much more economical in the long run. Slowing down recruiting must be cheaper than paying lots of redundancy money. That should appeal to the Treasury.
I should be grateful if my noble friend the Minister could indicate that the four years for implementation of the proposals is not rigid and could be extended. For heaven's sake, let us not, by false understanding of its value, ruin the immense contribution to world peace provided by the splendid British Armed Forces who are truly second to none.
9.54 p.m.
The Earl of Onslow: My Lords, what have 1763, 1783, 1815, 1856, 1918 and 1991 in common? In all those years there were Treasury-driven reductions in the Armed Forces. I do not know whether it is realised that since 1792 there have always been at least 50,000 British soldiers serving abroad, in the West Indies under Pitt, in India, Ireland or Germany. Now the Curragh has gone, Rawalpindi has gone, the West Indies have gone, Palestine has gone, Egypt has gone and Germany is probably going. Therefore there will obviously have to be cuts and no one will argue to the contrary.

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Having accepted the need for cuts, I wish to address your Lordships' House on the duty and the role of the Household troops and of my own local county regiment. The Household troops must be chosen from the best troops for the job. Sir John Moore exclaimed, "Now I am safe" when he saw the Grenadier Guards arriving at Corunna. Wellington felt he was safe when he saw the 2nd Scots Guards arriving at Hougoumont. He thanked the Life Guards as they charged down the hill and right into D'Erlon's Corps, although admittedly they were helped by the Scots Greys and a few others. However, those of us who are former Life Guards like to think it was really the Life Guards who saved the day with only a few of the Blues and even fewer of the Union Brigade.
The Scots Guards saw action at Tumbledown and the Life Guards saw action in the Gulf. The Blues saw action at Warburg, Waterloo and in the Falklands. These are absolutely top quality fighting troops and they have earned the privilege of being on the right of the line by virtue of being the best fighting troops. However, if five battalions of Foot Guards must perform the same amount of ceremonial duties as eight battalions of Foot Guards, the ceremonial duties will be carried out in a sloppy fashion and the five battalions of infantry will not be as good as they should be.
My noble friend Lord Fanshawe and the noble Earl, Lord Carnarvon, referred to the Life Guards and the Blues. Those regiments will not be able to achieve the balance between real soldiers and, as it were, toy soldiers which will enable them to do either job properly. We must achieve the proper balance. The Government may make cuts if they wish, but they should not expect the ceremonial duties in London to be carried out other than by a big line infantry detachment. Some of us may feel it would be good for the Staffordshire Regiment to have a big, hairy Scots Guard sergeant chasing them around the drill square and hat that might smarten the regiment up. However, the point is the duties must be carried out properly. The same applies to the Household Cavalry. It may be possible to reduce the proportion of ceremonial duties by having a Hussar ceremonial troop and a Lancer troop. That may be possible but one cannot have the balance between the ceremonial soldiers and the real soldiers upset.
There has been an immense amount of squeaking from the Scots. There is nothing unusual in that. They have made an immensely good living out of the English taxpayer since 1707 by squawking and irritating the English, who then pay up as meekly as lambs. My local county regiment, the Queen's Regiment, has a band known as the Albuera Band. The band was known by that name as Marshal Beresford made a mistake at Albuera and their colonel said, "Die hard 57th! Die hard!" and they all did. God knows how many people were shot to pieces by French guns in the square. That event is remembered.
The Buffs have gone. My mother came across an Irish soldier in a hospital during the war. She asked him which regiment he was in and he answered that he was in the Royal West Kent Regiment. My mother was slightly surprised at this and asked him why he
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was not in something like the Ulster Rifles. Horrified, he replied that the Royal West Kent Regiment was the finest regiment in the whole of the British Army. Soldiers have certain loyalties.
The suburban regiments of Kent, Surrey, Sussex and Middlesex have been cut to pieces. After this amalgamation there will be two regular infantry battalions alone in those counties and in Hampshire serving a population which I would guess is not far short of that of the whole of Scotland. So that is why I suggest that the Scots have whinged: those other regiments have behaved in a reasonable way and they are deeply unhappy about the present position.
Other noble Lords have mentioned the shortage of infantry battalions. I should have thought it would be possible to save a little money by amalgamating the Schools of Music. After all a naval trombone is the same as an army trombone. Nor do I believe that in the medical schools the toothache of an air marshal is treated any differently to that of a field marshal and I should have thought that the job of the RAF Regiment could have been taken over by line infantry regiments.
I should like to leave your Lordships with the words of Marshal Foy: "The British infantry are the finest in the world. Thank God there are so few of them."
10 p.m.
Lord Dunleath: My Lords, the hour is late. I shall confine myself to two points. First, no one could wish more than I that the time would come when it was no longer necessary for us to have a military presence in continental Europe. Secondly, even more sincerely I wish the time would come when it was no longer necessary for us to have anything other than a garrison presence in Northern Ireland.
For all I know, the Secretary of State for Defence's judgment as to our future requirements for a BAOR contribution to NATO may be correct. I am not competent to say. However, perhaps I may be permitted to express some concern about the requirement in Northern Ireland.
I must confess that my thinking has been influenced by the fact that one, if not more, retired General Officer Commanding or Commander Land Forces in Northern Ireland has said that in his time there were barely enough personnel to cover the commitment. Those officers ought to know what they are talking about. Another factor which has influenced my thinking is that sources, as they say, close to general headquarters at Lisburn say that the present senior command has similar apprehensions. Those senior officers ought to know what they are talking about if anyone does. Therefore our apprehension about the future military capacity is not without foundation.
The noble Viscount, Lord Whitelaw, rightly pointed out that in the event of the Rapid Reaction Corps having to mobilise we would not want to see the security presence in Northern Ireland reduced. As he said, that would be the moment when the IRA would choose to take advantage of the situation.
The role of the soldier in Northern Ireland is far from enviable. Unlike a tour of duty in Germany,

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there is no social activity. There are no opportunities for interesting training. It can be boring for much of the time and then suddenly terrifyingly dangerous. On an ongoing basis, perhaps the worst aspect is the separation of soldiers from their families during short-term tours of duty.
We should seek two assurances from Her Majesty's Government. The first is for manning levels in Northern Ireland to be maintained at a level which is sufficient to deal with the task which our forces face together with sufficient reserve capacity to meet those needs in the event of an emergency. The second is that, in the interests of the soldiers, short-term tours of duty should not become more frequent or be extended, because of the separation from family which that involves. Otherwise, it would be a betrayal, not only of the vast majority of people in Northern Ireland who are law-abiding, as I am sure your Lordships know, and of the hard-pressed RUC but, most important of all, a betrayal also of the soldiers from England, Scotland and Wales who serve in Northern Ireland. Those soldiers have all our sympathy. As an Ulsterman, I feel guilty that we need to have soldiers from Great Britain in Northern Ireland at all. Many of us feel that we should join the Ulster Defence Regiment to try to do our bit and show that we do not just leave it to other people to try to solve our problems. We believe strongly that the soldiers who come to Northern Ireland should be fairly treated and not put under undue duress.
It is a statement of the obvious to say that when a reserve force is needed in the case of an unforeseen emergency the Territorial Army is the most cost-effective type that one can have. It is fully trained and equipped; it has a command structure; it can, unlike retired soldiers who may belong to the reserve, react quickly; and in peacetime its members are not paid when they are not on duty. It would therefore be a false economy to reduce the TA, particularly in those areas where it is best recruited and where there is the least wastage. That is where it is most cost-efficient.
It is with that point in mind that I express the grave anxiety of many of us over the proposal to cut the Territorial Army in Northern Ireland by rather more than 40 per cent., which is over twice the national average of 19 per cent. It may have been perceived that the TA in Northern Ireland is more expensive to maintain because, when its members have to do weekend training, it is often necessary for them to travel to Scotland. However, any additional costs incurred in that way are more than offset by the units' cost efficiency in that they are so well recruited and that wastage is so low. That in turn means that the units are that much more effectively utilised.
To reduce the Territorial Army by the suggested 40 per cent. would mean closure of 15 TA centres, dismissal of over 1,500 trained volunteers, redundancy for more than 50 permanent staff and loss of work for 60 or more local contractors and many small businesses. As a result, approximately £10 million would be taken out of the Northern Ireland economy.
The White Paper Britain's Army for the 90 states that it is planned to redeploy military establishments
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from the South East of England. If the North of England and the West of England need the economic input that military establishments give, how much more does Northern Ireland, where we have the highest unemployment rate in the United Kingdom, need it?
I implore the Government, first, to give an assurance that security in Northern Ireland will not be endangered by the proposed reductions in the Regular Army, and, secondly, to rethink their proposals for the Territorial Army, which has nothing to do with security but which represents one of our most cost-effective contributions to our BAOR role in NATO.
10.10 p.m.
Baroness Park of Monmouth: My Lords, perhaps I too may pay my tribute to the three excellent maiden speeches, and particularly to the inspiring speech from the noble and gallant Lord, Lord Cheshire.
The Secretary of State said in another place that there had to be a significant response to the transformation in Eastern Europe. What has that transformation been? A well defined, major threat held in balance by the NATO deterrent has been succeeded by a situation in which a vast country is breaking up and is out of control. It is volatile and dangerous.
Much of the effective power is still in the hands of people in the armed forces, the KGB and the former party, who will fiercely resist any call on them to relinquish power. Moreover, the spectre of a resurgent Nazi movement in Germany, however small its beginnings, and the projection of a Franco-German force rather than the former brigade, has placed in the hands of the neo-Stalinists a strong argument for maintaining their armed strength. We know very little about how many of the CFE cuts have yet been implemented. The fear of a strong Germany is still a gut feeling among Russians—not only Russians—and would make only too successful a rallying cry for the Stalinists.
The situation in the Soviet Union is still most dangerous. Shevardnadze, Yakovlev, Yeltsin and even Mr. Gorbachev himself all foresaw that there would be a coup. Nothing was done. It was possible for the heads of the armed forces and the KGB and senior party members to prepare warrants for the arrest of Yeltsin and others, to telegraph secret orders throughout the Soviet Union, to co-operate with "healthy forces", to impose a harsh regime of repression, to imprison the President, to put tanks on the streets of Moscow and to threaten the RSFSR Government and its President. During these proceedings the Supreme Soviet, the political masters of the country, did not meet and did not even propose to meet until a week after the emergency broke. They asked for no proof of the initial lie that Mr. Gorbachev was ill, nor of the equally false statement that all the republics had been consulted by the emergency committee.
The country was saved for three reasons only. First, Yeltsin was in Moscow and free. Without him there would have been no one to lead the people. He had

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only returned from Kazakhstan the day before. Secondly, he had set up his own KGB in April and had appointed as his military adviser General Kobets, who had previously controlled all special communications (army and party). He had also appointed General Rutskoy, a hero of the Afghan war, as an adviser. Through those two he had invaluable access to communications, intelligence and the army. Last but not least, the people of Moscow had had five years of glasnost. They saw the danger. They took to the streets. They trusted one another as they would never have done in earlier days.
Since the coup there has been a flurry of action in terms of statements and the setting up of commissions at tale top. The new Minister of Defence, Shaposhnikov, and General Lobov have announced plans for cuts and reorganisation. But the true number of men under arms in the Soviet Union remains as obscure as ever. The figures released in Vienna on 26th September (excluding KGB, MVD, Speznast and strategic rocket troops) add up to 3.25 million. Shaposhnikov said on 27th September that forces will shortly be reduced to "just over 3 million". However, the USSR Supreme Commission on Defence under Ryzh soy, also in September, said:
"According to recently published and totally convincing figures, the number of those carrying out military service in the USSR at present is 5.5 million".
Shaposhnikov's announced anti-crisis measures after the coup included the replacement of 80 per cent. of the military command. Very soon he was correcting that statement to say that he had meant 80 per cent. of the collegium of the Ministry. The KGB too is to be reorganised but it is not to be abolished.
I shall not weary your Lordships with more detail. What is important is that these statements and plans are as yet only words. There is all too much evidence to show that the political leadership has very little power to carry through any major reform which threatens the entrenched power of the party, the KGB and the army. The journalists who interviewed Mr. Gorbachev on his return asked him why he chose cadres against whom he was repeatedly warned and what he could effectively do to remove those outside Moscow who had supported the coup. He had no answer. Subchak, the St. Petersburg leader, said on 26th August in the Supreme Soviet:
"Gorbachev's mistake was that for six years all the political and economic changes in the country were slowed down and adjusted to … fit the level of acceptability of a particular change in the process of perestroika to the needs of the Communist Party … It should have been recognised that … it would not yield to reformation".
The KGB collegium in disowning and deploring the coup after it failed said that unless the power of the party in the KGB and the army was broken there was,
"no guarantee that this tragedy will not be repeated in the future".
The RSFSR Assembly is in some disarray now because of its frustration over being unable to get any serious action on the problems of the economy that must be solved. Yeltsin's health is becoming an anxiety and he, like Shevardnadze, has said that the coup has not gone away. It could be repeated, this time with lessons learned by the conspirators. Meanwhile there is a fragile, if not explosive, situation
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in Georgia—which has recently decided to create its own naval, air and land forces—in Armenia and Azerbaijan and to a lesser extent in part of Soviet Central Asia.
I have much respect and admiration for the immense efforts which many of Russia's leaders are putting into the cleansing of these Augean stables, but they themselves recognise that to do what needs to be done, to remove simple obstruction let alone outright villainy, is very difficult. How can they translate words into action through the entrenched infrastructure that confronts them? Quis custodiet custodes was never more true. Meanwhile the people grow impatient and more vulnerable to a more sophisticated second coup. The situation in some of the republics is explosive and the economy is grinding to a halt.
On the nuclear front, Syria and other countries are, we are told, bidding for Soviet nuclear scientists and the Soviet defence industry is looking forward to good arms sales. I cannot believe that this is the time for us to make irrevocable cuts in our own modest defence capacity. I beg the Government to wait at least two years for the situation to stabilise. Only when we are strong can we exert a real influence for peace. I cannot believe that we are about to repeat the mistakes of the 1930s.
10.17 p.m.
Lord Richard: My Lords, it has been a remarkable debate for two main factors: first, the three maiden speeches that we heard in the course of the debate and, secondly, the almost unanimous criticism in one form or another of the Government's proposals.
I begin by referring to the three maiden speeches. We heard an extraordinary speech from the noble Lord, Lord Cheshire. It was moving and indeed almost visionary. Few of us who heard the speech today will forget it. The noble Duke, the Duke of Westminster, spoke with feeling of his patently sincere attachment to the Territorial Army. Perhaps I may say one thing to him. He will find—he is probably aware already—that in this place things are never quite what they seem. When I came to the House I found it strange that people suddenly had taken on different names. A person whom I had known as Mr. Short suddenly became the noble Lord, Lord Glenamara. A person I had known as Sir Anthony Royle suddenly became the noble Lord, Lord Fanshawe. But I do not believe that there has ever been such a transformation as that of Trooper Grosvenor to the sixth Duke of Westminster. It was clearly an interesting vignette of his past career and he spoke with feeling and sincerity.
The noble Lord, Lord Wedgwood, spoke with great knowledge, and with controlled anger, of his feelings over the Government's proposals for his old regiment. We were most interested to hear what he said. Perhaps I may say to all who made their maiden speeches today that I hope we shall hear a great deal more from them in the future and not only on this subject.
The second remarkable feature of the debate has been that virtually every speaker has in some form or another been critical of the Government's proposals. I shall say something about the basis for those proposals in a moment. However, I should have

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thought that the extent and depth of the criticism that has been expressed today must give the Government some food for thought when they consider what has been said in another place over the past two days and in this House today.
I have three specific points to raise with the Minister. I do not necessarily expect answers from him tonight except perhaps on the first matter. What is the difficulty about naming the new ship HMS "Endurance"? That name has been attached to a ship doing a specific job in a specific part of the world where it has a reputation for doing that job, and if the ship is to be replaced the name should clearly be retained. I hope that the Government will see sense on that point.
Lord Mottistone: My Lords, if I might intervene, it would be totally against all naval practice to retain a name for a particular job. That has never been done before and I do not understand why people think it is important. I am sorry to say that, but that is the way it is.
Lord Richard: My Lords, I have heard the argument and I am bound to say it is one which seems to be excessively clerical, if I may say so. In a situation in which HMS "Endurance" has become the symbol of Britain's presence in Antarctica it is only right that the name should be continued. However, there is a difference between the noble Lord—I nearly said the noble cleric, but perhaps that is the wrong way of putting it—and myself on this issue.
Secondly, there is the question of defence lands, of which we have heard very little in the course of this debate and little was said about them in the debate in another place. Presumably if the Army is shrinking certain areas of defence lands will be available and will be released. We should like some indication from the Government at some stage as to which portions of defence lands may be available.
Thirdly, I read with great interest what the Minister of State said last night in another place about redundancies. I merely say to the Minister tonight that we shall be watching very carefully the progress of the proposals made by the Minister of State.
This debate takes place against the general background of what has happened in Eastern Europe and particularly in the Soviet Union in the past few years. The main characteristics that now seem to predominate in our continent are instability, unpredictability and disorder. The issues raised by the Gulf war, the collapse of the Warsaw Pact, the recent instability within Eastern Europe and particularly inside the Soviet Union are issues which must be fundamental to any consideration of Britain's defence effort, the size of our forces and the commitments into which they have to enter.
Following the failure of the recent coup in the Soviet Union, President Gorbachev has given a commitment to cut defence spending. Obviously, the situation inside the Soviet Union is dangerously fluid and it remains to be seen where power will lie and what shape the country will eventually take. There seems to be a growing belief inside the Soviet Union that
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defence cuts are vital to the allocation of western aid and economic development. However, there is the distinct possibility of national and ethnic disintegration and, indeed, the threat that that poses. As my right honourable friend Mr. Healey pointed out in another place, it is remarkable that last week the Ukraine announced that it proposed to produce an army of no less than 420,000 men, far larger indeed than any army in Western Europe. I understand that it already has on its territory 100 strategic nuclear warheads. Azerbaijan is going to produce a smaller army of its own and I understand that it is already appealing to Turkey and Iran to provide it with the necessary weapons. Kazakhstan has no less than 200 strategic nuclear warheads on its territory already.
It is against that background that the Government's position has to be considered, and one of the main questions posed by the coup and the growing incidence of ethnic conflict within Eastern Europe is how best to proceed with or modify the defence cuts which NATO members are currently planning or implementing. In our view that is where the Government's position is at its weakest.
Recent events in the Middle East and Eastern Europe underline the need for a complete reappraisal of United Kingdom strategic priorities and the inauguration of the fundamental defence review for which the Labour Party has consistently called.
I pray in aid the report of the Select Committee on Defence, a body which has a Conservative majority on it in another place. That is a devastating document when viewed against the background of the Government's proposals. The committee concluded that the Ministry of Defence has,
"failed to argue in any detail the rationale behind the changes proposed or provided a coherent strategic overview".
The committee also stated the view that the Government have mistakenly made their priority the pursuit of,
"some academically conceived ideal figure for the percentage of the UK's GDP to be devoted to defence spending".
It went on to argue that it was high time that Ministers gave the public,
"an indication of when defence spending cuts are expected to end and at approximately what level of public spending".
The committee called on the MoD to produce a clear and detailed view of expenditure and future priorities by Christmas 1991. I suspect that we shall not have a clear and detailed view produced by that date. Furthermore, according to the committee any such clear and detailed view must be undertaken against the background of,
"insensitive cash planning mechanisms vulnerable to the effects of over-optimistic assumptions on inflation".
Those are not my words or necessarily my views; they are the views of the House of Commons Select Committee on Defence. They are powerful views which I hope the Government will take into consideration.
Against that background what has the Government's approach been? Last night the Minister of State in another place said:
"Yesterday, the House heard how the reduced number of battalions relates to our revised commitments, and perhaps I might repeat the figures tonight. The reduction in Germany will reduce demands on the infantry by 10 battalions—three in Berlin and seven elsewhere. Four battalions will go from

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Hong Kong and five regular battalions committed to home defence can be replaced by Territorials. That means that our regular infantry commitments come down by 19 battalions, against 17 which will be amalgamated or reduced".—[Official Report, Commons, 15/10/91; col. 247.]
That mathematical approach to our defence commitments is frankly absurd. It is deeply flawed. First, it assumes that there is no overstretch at present, which is clearly not so. Secondly, it assumes that a depleted Army can fulfil its commitments because it has been calculated that those commitments can be fulfilled at a lower level. Certainly that is another questionable assumption. Finally, it assumes that no additional new commitments are likely to arise. It substitutes arithmetic for analysis and number taking for a sober assessment of requirements and manpower. As such it is fallacious and in our view flawed.
What we need and what we have not had is a considered statement of what the Government see as our necessary commitments together with the reasoned basis for that assessment. We then require a properly argued determination of the size and mix of forces we need to fulfil that.
In the debate tonight we heard from the noble and gallant Lord, Lord Carver, an intellectually powerful speech which no doubt will be seized upon by the Secretary of State for Defence as giving him the necessary intellectual and logical framework for his proposals. This is the first time that we have had an intellectual justification for the proposals put forward by the Government in Options for Change. If they share the view expressed by the noble and gallant Lord. Lord Carver, please will they kindly say so? If it is their view, it is something for this House, another place and the country to consider and consider properly.
The noble and gallant Lord gave an intellectual lifeline to a Government who are floundering. That has not been the Government's approach; they have not tried to set these proposals in some kind of intellectually respectable framework. On the contrary, they have carried out a mathematical exercise as I suggested earlier.
We in the Labour Party have called on a number of occasions for a proper defence review to be conducted on the lines that I have indicated this evening. It will be impossible to arrive at any sensible and rational judgment as to what the size of our Armed Forces should be until we know precisely what commitments it is proposed they should fulfil in the future. As such, I fear that we find the Government's position flawed.
Lord Trefgarne: My Lords, before the noble Lord sits down, perhaps he will tell us a little in regard to the policies of his own party. Is it, or is it not, the case that they propose to reduce defence expenditure to the average of our European allies?
Lord Richard: My Lords, the noble Lord really must stop playing politics. If we are to have a political knock-about, let us have a political knock-about. The one thing that impressed me today—save for the speech of the noble Lord, Lord Trefgarne, whose contribution I thought waspish in the extreme—was a genuine attempt to look at these problems on a
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non-party, objective basis. The noble Lord expostulates and turns his head away. Certainly, that is what I tried to do, and certainly that is what my noble friend Lord Williams tried to do. If we did not satisfy the noble Lord, Lord Trefgarne, perhaps the fault lies with him and not with us.
10.30 p.m.
The Earl of Arran: My Lords, this debate has been as serious and profound as I had expected and has reflected the deeply felt passions and convictions which are endemic in your Lordships' House. While that is true in many other areas of discussion, it is particularly true of security and defence where we draw together those noble Lords who have served this country with distinction in both foreign and military affairs.
I wish to make specific mention of the three noble Lords who have served your Lordships' House so magnificently in their maiden speeches today. My noble friend the Duke of Westminster has served in his regiment in the Territorial Army for many years. He gives up a great deal of his time to do so and speaks with authority and knowledge on a subject so obviously close to his heart. I turn next to the Cross-Benches and to the noble and gallant Lord, Lord Cheshire, whose deeds of heroism, courage and skill are so well known by all of your Lordships. It is good to see that that skill, albeit of a different nature, did not desert him here in his maiden speech today.
Back on these Benches, I turn to my noble friend Lord Wedgwood, whose knowledge and whose pride in, and loyalty to, his regiment were so ably expressed. I am sure that each and all of your Lordships will eagerly anticipate more contributions in this House from such distinguished servicemen.
We debated at great length the new international situation which gave rise to the changes announced in our Armed Forces. Let me now pick up on a number of issues raised by noble Lords in today's debate. First, there is the continued assertion that the changes we have made or are about to make have been the result of Treasury diktat rather than strategic analysis. I discussed that analysis at length in my opening speech. The programme to restructure Britain's Armed Forces, which came to he known as Options for Change, arose as a direct result of the wide-ranging political, strategic and military changes which have taken place in Europe over the past three years. It has not been driven by some arbitrary financial target, as some noble Lords suggested. The purpose behind Options for Change was to restructure our forces to match new circumstances. Since my right honourable friend the Secretary of State first set out Options for Change last July, our work has taken account of developments in the European security environment and elsewhere, our relations with the Soviet Union, progress in arms control and consultations with NATO and our allies over our future contribution to the alliance. Our plans were set out in full in Chapter 4 of the 1991 Statement and are in line with those of our major NATO allies.
We are planning for prudent and measured change. I was pleased to hear of, and interested to note, the

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broad agreement by the noble and gallant Lord, Lord Carver. He said that we had not gone too far and that he considered our plans sensible. But not so the noble and gallant Lord, Lord Bramall. He thought very differently. Both noble Lords are former Chiefs of the Defence Staff.
As I made clear during our debate on defence on 12th June, the opportunity to realise savings in expenditure must also be taken but without prejudice to our commitment to maintain strong and flexible forces. We have placed a new emphasis on mobility and flexibility, making use of dual-roling and re-roling of forces where this is operationally sensible. Also, we have retained in the defence programme substantial investment in new equipment projects and we are continuing our search for substantial savings in the support area as part of our drive towards cost-effective support for the new force structures.
In my opening speech I provided the rationale behind our decision to restructure the Armed Forces. The threat has diminished; warning time has increased; the Soviet troops have been moved back some 600 miles; and our commitments have been reassessed. Few deny the need for change although some dispute the degree to which it is necessary. Behind this debate lies the central question of defence. Do we have the ability to defend ourselves and our vital national interests? This has been the basis of our reassessment and, despite the unpredictability of potential crises—a matter of which I spoke earlier—we believe that where appropriate, with our allies, we still have the capability to respond to such eventualities. On that point I can reassure the noble Lord, Lord Chalfont, and many other noble Lords.
What has brought about the present debate has been one element—and it is only one element—of that programme of change; namely, the decision to reduce our infantry battalions from 55 to 38. Most of your Lordships speaking today accept the need of some reduction. But again the issue has been degree—by how much and which battalions. Before turning to that issue, I must emphasise that nothing which has occurred undermines the Government's commitment to the regimental system, be it for the regulars or the Territorial Army. It is not merely a proud tradition but one of the greatest strengths of the British Army. It draws individuals together and binds them in devotion and loyalty to a fighting unit which is greater than the sum of its parts and all the more powerful for the cohesion of its members.
Many noble Lords have served in such regiments and in many campaigns. In a more humble way, I, too, in Cyprus, during the troubles, served in the Grenadier Guards during my National Service. I know of the fierce pride and loyalty to regimental ties and traditions and remember the profound sadness when we too had to give up a battalion—and indeed we are now on the point of rendering another. Noble Lords have defended the traditions of regiments which are to amalgamate or go into suspended animation, and understandably so. It is not my purpose today to deny the virtues of particular regiments. I am sure all could argue their case with merit. But since there is
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agreement that some reductions were necessary, it was inevitable that some regiments would feel themselves adversely affected.
An enormous amount of thought and consultation went into the decisions we have taken, much of it with the regiments themselves. Inevitably, we were unable to meet the wishes of all those we consulted. But our underlying aim has been to maintain an Army of high quality and within it retain all that is valuable in the regimental system. In looking at individual regiments we have had to balance their interests and views with those of the Army as a whole. Recent history reminds us that such decisions are never popular but that almost always the resilience of regiments who are to be amalgamated overcomes their natural disappointment. Those who amalgamate—and let us remember that none is to be disbanded—take with them their existing traditions and, with their new colleagues, develop new and vibrant ones. The history of the British Army has been one of continuity and change. There has seldom been an era when the structure of our regiments has remained constant. Every regiment faced by amalgamation or suspended animation has its supporters and although it is somewhat insidious to mention any by name I have been struck by the strength of feeling expressed from and about Scottish regiments. A number of noble Lords—particularly including the noble Lady, Lady Saltoun—have referred to them today and your Lordships will recall that a large petition for their retention was delivered to my right honourable friend the Secretary of State. I do not doubt the sincerity of that opinion. Nevertheless, it is not the case that Scotland has been singled out for adverse treatment. Scottish infantry regiments will be reduced but the Scottish Division fares no worse than four of the five other infantry divisions. Scotland will lose four regiments as currently organised but gain two amalgamated regiments. I have little doubt that they will carry forward the traditions, identities, local affiliations and seniorities of their constituent parts. The timing of the amalgamations will take place over a period of years and none of the Scottish regiments is in the initial phase which ends in March 1993. Scotland will continue to provide a substantial and largely unchanged proportion of infantry overall. Equally importantly, if we look more widely—as we should—Scottish Army units as a whole fare rather better than others. As a proportion of the whole, Scottish armoured regiments and artillery actually rise.
I fully understand the concern in Scotland but it is misplaced. Likewise, this could be demonstrated by reference to the other two services which have, as some would rather unfairly argue, a disproportionately high presence in Scotland.
Finally, I should like to make brief mention of the Household Division, to which many noble Lords have referred, including my noble friend Lord Fanshawe and the noble Earl, Lord Carnarvon, among others. The Army's commitments to public and ceremonial events such as the Queen's Birthday Parade is undiminished. After the grouping together of the Life Guards and the Blues and Royals the combined regiment will fulfil two roles. First, they will serve, as

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before, in the role of the Household Mounted Cavalry Regiment and, secondly, perform in their operational role of armoured reconnaissance for which each existing regiment will provide two squadrons. As tradition demands, the Foot Guards will also continue to perform their public and their operational duties. My noble friend Lord Middleton was anxious on that point. We acknowledge that there will be fewer Foot Guard battalions from which to draw reinforcements for battalions assigned to public duties. To ensure that their ceremonial and operational tasks and all the attendant training are properly carried out we envisage that each may need to be augmented by a manpower increment. The size of that increment is still to be determined. I am sure that your Lordships will not need to be reminded of the extra provision which will enable the Guards to fulfil their new commitments, as tradition dictates.
A feature of our debate tonight has been concern for t le Territorial Army. I know the strength of feeling of my noble friends Lord Holderness and Lord Ridley and so many other of your Lordships who have raised the matter this evening. Your Lordships will know that final decisions have still to be announced as to its size and structure. I cannot guess those here this evening. However, an unhappy element of this debate has been the anxiety expressed by a few about the degree of consultation with TAVRAs on our proposals for restructuring the TA. In his announcement on 23rd July about the regulars my right honourable friend undertook that TAVRAs would be consulted before a similar announcement was made on the TA later in the year. The subsequent work on TA restructuring has addressed the TA orbat and provisional deployment plan, and has been based on the principles which were widely discussed and agreed earlier in the year following consultation with the TAVR associations and military staffs.
Considerable further work has been necessary befog: the Army department was ready to put forward a plan for consultation, but on 24th September the department was able to brief the TAVRA Council and association chairmen and secretaries on the draft plan and explain the proposed changes in the role and structure of the TA and their likely implications for the deployment of units. Consultations with TAVR associations on the recruiting and accommodation implications are now going ahead. At the same time discussions on the restructuring guidelines are also proceeding between regimental colonels and arms and service directors. This process of consultation will be followed by a series of tri-lateral meetings, involving both Army districts and TAVR associations.
The noble and gallant Lord, Lord Bramall, my noble friend Lord Holderness and the noble Viscount, Lord Ridley, were concerned about the provision of adequate funding for the TA. I should like to reassure them that a great deal of thought is being given to the various levels of readiness required to complement our regular forces and the scales of equipment and training necessary to achieve their standards.
Turning back from organisational matters to human ones, it is, I believe, absolutely essential to say a few words about housing and resettlement. Many
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noble Lords have raised this point. As a result of the Government's decision to restructure the Armed Forces quite proper concern has been expressed by your Lordships and others as to its effect on the resettlement and rehousing of service families. In tackling these issues head on we are able to draw on a range of experience in handling similar, if less extensive, problems. Each year we provide resettlement facilities to about 14,000 service personnel. By the very nature of military life a service career is for many shorter than for most civilians and we have always recognised our responsibility to help those in the services adapt to what may be unfamiliar challenges. The new demands on our resettlement programme will be substantial but we believe manageable—at its peak perhaps 50 per cent. more than we handle today.
All those leaving their respective service will be eligible for resettlement advice whether they are being made redundant or leaving more normally. Naturally the advice we offer is not static but is developed to match the needs of the service personnel and the demands of the wider civilian employment market. We are introducing a number of new measures to enhance this programme. We will provide helplines to answer basic but often fundamentally important questions and will buttress this by use of professional private sector experts wherever possible. Since many of these issues are best handled face to face, our normal resettlement courses and other activities will be supplemented by teams of experts who will travel to the areas where most service personnel are presently living. In addition we will continue to seek the advice and active participation of a range of charitable and ex-service personnel organisations which have a wealth of experience to offer.
An obvious corollary to the issue of resettlement is that of housing—again we have the advantage of substantial experience. Many service personnel own their own houses but it is true that the percentage who do is smaller than the national average. The Government fully recognise the needs of those leaving the services and, with some success, have urged local authorities to treat them sympathetically. We do not doubt that cases of hardship arise which have to be dealt with under the homelessness legislation. For those leaving the services in the next few years, for whatever reason, terminal bonuses and lump sum payments will help many enter the housing market. Our belief is that most ex-service personnel who choose to take redundancy will have made housing provision for their families and themselves. We will do our best to assist those who are less fortunate and find themselves no longer eligible for housing in married quarters.
The resettlement arrangements to which I have already referred will include professional advice on finding housing and putting the redundancy payments and pensions which service personnel will have to best use. Those made redundant will receive substantial special capital payments in addition to their terminal grants and pensions. For example, a staff sergeant with 14 years' service will receive a lump sum based on current salary levels of £33,000, plus a pension of

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around £3,900 a year. A major aged 41 with 20 years' service will receive a lump sum of some £73,000, plus a pension of £9,300 a year. We will also, wherever possible, make available to housing associations some surplus service homes to give temporary help to service personnel who are in immediate housing need while they make more permanent arrangements. We have had some constructive discussions with housing associations and I hope that it will be possible to make an announcement about this in the near future.
I have already referred to the fact that the proportion of service personnel who own their own houses is lower than that in the civilian community. In part this is due to the much wider opportunities for home ownership developed in the past 10 years but which have not been extended to service personnel. At the request of my right honourable friend the Secretary of State I chair a task force which is made up of housing experts from the public and private sectors, service officers and officials from the Ministry of Defence and other government departments and agencies. I am pleased to say that the Royal British Legion, SSAFA and the Federation of Army Wives have also accepted my invitation to join the task force. I know that that will give particular pleasure to my noble friend Lord Haig. As well as looking at ways in which the short-term problems faced by service personnel can best be handled, the team is working on a new range of home ownership opportunities. These could include new ownership opportunities such as part-ownership.
Our intention is to enable service personnel to enter the housing market and get used to the costs and responsibilities which home ownership always carries with it. In addition, my honourable friend the Minister of State for the Armed Forces announced yesterday in another place that agreement had been reached with a leading building society whereby service personnel will be able to apply for mortgages at reduced rates. The preferential rate will apply for the length of the mortgage whether or not the borrower remains in the services.
At this point I should state that I am aware that I have been speaking for quite some time. However, I should like to deal with a few further matters which I consider to be important before I close my speech. First, my noble friend Lord Whitelaw asked about force levels. Force levels are based on a detailed assessment of what is required to meet our future commitments. As I pointed out in my opening speech, circumstances can always change suddenly and unexpectedly. I should like to reassure him, and indeed other noble Lords, that we are well aware of that fact. I can also tell my noble friend that we are satisfied that 41 infantry battalions will be sufficient to meet all our commitments, including Northern Ireland, while allowing proper training for the Rapid Reaction Corps.
Perhaps I may now turn to HMS "Endurance"—
Lord Williams of Elvel: My Lords, I am sorry to interrupt the noble Earl but did I hear him say 41 battalions, or is it 38 battalions?
The Earl of Arran: My Lords, it is 38, plus three battalions of the Royal Marines.
As I was saying, I turn now to one of the favourite topics of the noble Lord, Lord Shackleton. I apologise to him if I do not always bear the wisdom of Solomon upon my shoulders and know the answer to every question. Perhaps I may now give him a few very quick answers on the points he raised.
The Government are committed to maintaining the programme of work of HMS "Endurance". Decisions on how to do so will follow the assessment of the performance of "Polar Circle" at the end of the season. As regards the ship's name, that will be decided upon before she sails, towards the end of November. However, I have taken account of what the noble Lord said. I shall place the specifications of the "Polar Circle" in the Library of the House. I can also confirm that the "Polar Circle" is due to arrive at Portsmouth tomorrow at 8.30 a.m. She will birth alongside HMS "Endurance" and it is intended that the press will have the opportunity to take photographs.
There is one particular point that I should like to mention. I refer to the Gurkhas. The subject has been mentioned by several noble Lords. I can confirm that the Gurkhas, as all noble Lords will know, have served with the British Army loyally and with distinction over the years, including during two world wars. They form an integral part of the British Army and I can confirm that it is our intention to retain Gurkhas in the British Army after 1997.
This has been a vigorous debate. I expected that. It is what the subject demanded. Nothing is more important than to maintain the security and vital national interests of our country. As a consequence of the unprecedented changes in Europe, we have made a careful appraisal of our future defence requirements, the results of which have been announced to your Lordships. I do not pretend that all of the decisions have been easy or popular. We have had to make some difficult decisions. They were led by my right honourable friend the Secretary of State, and I thank my noble friend Lord Whitelaw for his recognition of that fact.
I do not doubt that anxiety exists. I understand that its cause is a concern that our country is not put at risk. We have taken stock of all the changed circumstances. We firmly believe that our decisions have been prudent and realistic. Some have said that they are over-cautious, that we should search for a longer peace dividend; but we will not squander our security in the pursuit of short-term savings. Our forces will be smaller but they will be highly capable, and well able to meet the challenge of the unexpected. We shall ensure that they are manned, trained and equipped as we as a nation need and they deserve.
Lady Saltoun of Abernethy: My Lords, before the Minister sits down, is it true that members of the Armed Forces who receive redundancy payments will have to repay some or all of those payments if within a certain time—I believe that it is two years—they take up employment in government service again?
Tit Earl of Arran: My Lords, I do not have that information. Perhaps the noble Lady will allow me to write to her on that point.
On Question, Motion agreed to.
Aire and Calder Navigation Bill
British Railways (No. 2) Bill
Cattewater Reclamation Bill
London Docklands Railway Bill
London Regional Transport (Penalty Fares) Bill
London Underground Bill
Midland Metro Bill

Midland Metro (No. 2) Bill
A Message was brought from the Commons that they have considered the Lords Message of 24th July last and have made the following orders—
That the Promoters of the Aire and Calder Navigation Bill, the British Railways (No. 2) Bill, the
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Cattewater Reclamation Bill, the London Docklands Railway Bill, the London Regional Transport (Penalty Fares) Bill, the London Underground Bill, the Midland Metro Bill and the Midland Metro (No. 2) Bill shall have leave to suspend proceedings thereon in order to proceed with the Bills in the next Session of Parliament, provided that in the case of each Bill the Agents for the Bill give notice to the Clerks in the Private Bill Office of their intention to suspend further proceedings not later than the day before the close of the present Session and that all fees due on the Bill up to that date be paid;
That on the fifth day on which the House sits in the next Session the Bills shall be presented to the House;
That there shall be deposited with each Bill a declaration signed by the Agents for the Bill, stating that the Bill is the same, in every respect, as the Bill at the last stage of its proceedings in this House in the present Session;
That each Bill shall be laid upon the Table of the House by one of the Clerks in the Private Bill Office on the next meeting of the House after the day on which the Bill has been presented and, when so laid, shall be read the first, second and third time and shall be recorded in the Journal of this House as having been so read;
That no further Fees shall be charged in respect of any proceedings on the Bill in respect of which Fees have already been incurred during the present Session;
That these Orders be Standing Orders of the House.
House adjourned at three minutes before eleven o'clock.

  TIBET: HUMAN RIGHTS
  TIBET: HUMAN RIGHTS
  EC TRANSPORT COUNCIL, 7th OCTOBER
  EC TRANSPORT COUNCIL, 7th OCTOBER
  THE RAILWAY SYSTEM: MEASURES TO ENCOURAGE USE
  THE RAILWAY SYSTEM: MEASURES TO ENCOURAGE USE
  NON-RENTED HOUSING: CODE OF PRACTICE
  NON-RENTED HOUSING: CODE OF PRACTICE