Sitting of 11 March 1992

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

  AVON WEIR BILL [Lords]
  Order for consideration read.
  Ordered,
  That Standing Order 205 (Notice of Third Reading) be suspended and that the Bill be now read the Third time.—[The Chairman of Ways and Means.]
  Queen's consent, on behalf of the Crown, signified.
  Bill accordingly read the Third time, and passed, without amendment.

  FOLKESTONE HARBOUR BILL [Lords]
  Order for consideration read.
  Ordered,
  That Standing Order 205 (Notice of Third Reading) be suspended and that the Bill be now read the Third ti me.— [The Chairman of Ways and Means.]
  Queen's consent, on behalf of the Crown, signified.
  Bill accordingly read the Third time, and passed, without amendment.

Oral Answers to Questions
  TRADE AND INDUSTRY

    Libya
    Mr. Ron Brown: To ask the Secretary of State for Trade and Industry if he will make a statement about trade with Libya.
    The Minister for Trade (Mr. Tim Sainsbury): United Kingdom exports to Libya have been about £250 million annually. Imports have been just over £100 million.
    Mr. Brown: Does not the Minister understand one thing? During my recent visit to Libya with George More, a top Scots lawyer, the British community told us that it does not want sanctions or reprisals against the Libyan regime. Whatever the problems about Lockerbie, surely the matter can be discussed sensibly around the table? That has not happened. What are the British Government doing to resolve that question? It should be remembered that trade with Libya is important. It is important for jobs as well.
    Mr. Sainsbury: Does not the hon. Gentleman understand that, in spite of his apparent admiration for Colonel Gaddafi and his regime, the United Nations Security Council unanimously adopted resolution 731 and called on Libya to respond positively and effectively to the
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    demands made by the United Kingdom, France and the United States? It has not responded and further action may be required.
    Mr. Bill Walker: When my right hon. Friend is dealing with trade with Libya, will he bear it in mind that the United Kingdom is happy and willing to trade anywhere in the world, because that is important to us as a trading nation, but we must never sacrifice our values and standards, particularly those concerning our attitude towards international terrorism? We must make that clear to any country with which we deal, including Libya.
    Mr. Sainsbury: As always, my hon. Friend puts his point clearly and effectively. I am sure that the House—at least, I hope that the House—will join in condemning international terrorism, particularly when it is state inspired.
    Mr. Kilfedder: Has Colonel Gaddafi yet given Her Majesty's Government a detailed list of all the guns, ammunition and Semtex explosives which Libya supplied to the Provisional IRA, much of which has already been used to kill and mutilate British citizens?
    Mr. Sainsbury: The hon. Gentleman makes a valid point about the regime which the hon. Member for Edinburgh, Leith (Mr. Brown) appears to admire. I am not aware that any such list has been provided.

    Industrial Policy
    Mr. Eadie: To ask the Secretary of State for Trade and Industry when he next plans to meet representatives of the Association of British Chambers of Commerce to discuss industrial policy.
    The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Peter Lilley): I meet representatives of the Association of British Chambers of Commerce from time to time to discuss a range of policies.
    Mr. Eadie: The Secretary of State must be aware that 125,000 jobs were lost in the first 10 weeks of 1992. If the projection is to be believed, another 400,000 jobs are a t risk unless there is a change in industrial policy. Does the right hon. Gentleman agree that the most scathing indictment of the Chancellor's Budget judgment was his admission that unemployment would increase? What kind of Government would plan the economy on the basis of increasing unemployment?
    Mr. Lilley: I am afraid that that is not the view of the Association of British Chambers of Commerce, about which the hon. Gentleman asks. It welcomes my right hon. Friend the Chancellor's brilliant Budget for its changes in the uniform business rate, which it says are of enormous help to business, a great deal of assistance to growing firms and just what businesses have requested. It also welcomes the changes in VAT, which are clearly of benefit to commerce, and the measures to encourage prompt payment of VAT, the delays in which it says are a vital factor affecting a great number of firms.
    Mr. Charles Wardle: Will not the control of inflation continue to be the cornerstone of industrial policy, because it will allow Britain to become more competitive in world

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    markets? Did not the remarks made yesterday by my right hon. Friend the Chancellor of the Exchequer reinforce that policy?
    Mr. Lilley: My hon. Friend is absolutely correct. That point has been made by many business organisations: Sir John Banham, for instance, welcomed my right hon. Friend's prudent Budget and the priority that he gives to reducing inflation, while the Institute of Directors said that the Budget was prudent and correct in every way.
    Mr. Gordon Brown: In what will be his final appearance at Question Time as Secretary of State for Trade and Industry, will the right hon. Gentleman confirm the facts of the Budget statement? Will he confirm that investment will fall in 1992; that business investment will fall by 3 per cent; and, that hundreds of thousands of men and women in this country are in danger of losing their jobs if the Government continue in office?
    Given that the Prime Minister told us in January that a recovery had started when patently it had not, will he now apologise, tell us when a recovery will happen under Tory policies and agree with the country that the first step towards saving the jobs of thousands of people is for the Government to lose theirs?
    Mr. Lilley: The hon. Gentleman's response to the Budget is as empty as that of his right hon. Friend the Leader of the Opposition, whose comments yesterday, I thought were proof positive that the Michelangelo virus was alive and operating inside the Labour party. It has wiped Labour Members' minds clean. What we want to hear from them is what they plan to do about the tax proposals in the Budget: will they vote against them, or will they support them? I shall be happy to give way to the hon. Member for Dunfermline, East (Mr. Brown) if Mr. Speaker will allow him to answer that question.
    Mr. Squire: Does my right hon. Friend agree that there is no serious argument about the fact that the members of the Association of British Chambers of Commerce are fearful about a possible change of Government, and that the only question open to debate is whether higher taxation is worse than higher interest rates, and whether either is worse than higher inflation?
    Mr. Lilley: Indeed: that is absolutely true. A recent study by James Capel and Co. showed that, of 105 leading businesses in this country, 86 per cent. believe that Labour policies would make the economic position dramatically worse. I have no doubt that, after the Budget, an even higher proportion will prefer our policies to those of the Opposition.
    Mr. Turner: To ask the Secretary of State for Trade and Industry when he will next meet representatives of the West Midlands chambers of commerce to discuss industrial policy.
    Mr. Lilley: Together with the hon. Gentleman, I had the pleasure of attending a meeting with the Wolverhampton chamber of commerce last Friday.
    Mr. Turner: The Secretary of State is right. He was well wined and dined by the Wolverhampton chamber of commerce last Friday. Why, then, did the Department of Trade and Industry try to gag its president and not allow him to deliver a part of his speech that was mildly critical
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    of Her Majesty's Government? Will the Secretary of State answer that question truthfully because it strikes at the very heart of democracy?
    Mr. Lilley: The president of the Wolverhampton chamber of commerce delivered precisely the same speech as the one of which he sent me a copy beforehand and I have it here. He called for a reduction in the special car tax, and I am sure that he will be delighted that it has been halved. He also called for measures to favour lower-paid employees in respect of income tax, and for measures to help small businesses. I have no doubt that the Wolverhampton chamber of commerce will give a warm welcome to the Budget, as it did to my speech last Friday.
    Mr. Gerald Howarth: Is my right hon. Friend aware that the measures introduced yesterday by our right hon. Friend the Chancellor, the harmonious industrial relations restored by the Government and the substantial investment from home and overseas mean that manufacturing in the heart of England is deeply grateful for all that the Government have done in the past 13 years? The last thing that manufacturing wants is a Government who adopt the European social charter which would destroy the advantage that we have in the west midlands.
    Mr. Lilley: That is absolutely right. A study of leading businesses shows that a vast majority of British firms believe that if we had a Labour Government there would be slower growth, less investment, higher inflation and worse unemployment. The hon. Member for Dunfermline, East (Mr. Brown) has spent much of his time over the past few months telling industry about his policies. It has clearly listened and understood.

    Trade Balance
    Mr. Cohen: To ask the Secretary of State for Trade and Industry when he expects exports to reach the same level as imports.
    The Minister for Corporate Affairs (Mr. John Redwood): My Department does not forecast the balance of payments. The hon. Gentleman might like to know that last year saw record levels of exports from this country and that our share of manufactured exports in world trade has been rising since 1984.
    Mr. Cohen: Is not the truthful answer to my question, "Sometime never", because the Government have not invested in British manufacturing? To achieve an export-import balance under current Tory policies would mean an even worse slump than we have at present because the only thing made in Britain under the Tories is a Tory-made recession.
    Mr. Redwood: The hon. Gentleman is wide of the mark. There have been good levels of investment for business and manufacturing in recent years, as the hon. Gentleman should know. It is way above the levels when the Labour party was last in control and understandably so, because Britain is now a good home for investors with much better labour relations, much better quality, much better business management and much better relations between employees and management.
    Mr. Norris: How much more quickly does my hon. Friend think that we might achieve a balance between

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    exports and imports when we introduce a minimum wage, increase taxes on investment, increase personal taxes and allow the trade unions to ride rough shod once again?
    Mr. Redwood: My hon. Friend makes his point extremely well. Those policies would be ruinous. They would drive away inward investors, make manufacturing investment much more difficult and defer the day when we improve our balance of trade in televisions, cars and all the other things that are now improving so strongly uncler the Government's policies. That is why it is important that those policies should continue.
    Mr. Hoyle: Yes, but will the Minister say how he could ever expect to balance exports and imports when the Chancellor has forecast growth of only 1 per cent; when we have rising unemployment, falling investment and companies going bankrupt? Is not that a terrible record on which to fight a general election, in which the Government will be defeated?
    Mr. Redwood: The trading performance of many sectors is very good, and that trading performance has been strengthening in recent months, as the hon. Gentleman should know. I draw his attention to the fact that we are now net exporters of televisions whereas we were net importers under the Labour party and to the fact that motor output has been expanding in recent years whereas it was declining under Labour. That is the heart of British manufacturing and it needs our policies to carry on its renaissance.
    Mr. Roger King: Does my hon. Friend agree that one way in which we can cut down imports is to buy British? Will he extend warmhearted support to the Labour party, which advocates such a policy, but dissociate himself from the actions of the shadow Home Secretary and the Leader of the Labour party who buy foreign cars?
    Mr. Redwood: I agree entirely. What humbug it is for some Opposition Members to say that one should buy British and then travel around in foreign cars. I bought a British car and I am proud of it. It works extremely well. Many of my hon. Friends have done the same. That is the best way to back Britain and British industry.
    Ms. Quin: Has the Minister had time to have a look at the table published in European Economy, which clearly shows that in terms of the annual change in the volume of exports of goods and services between 1979 and 1990, the United Kingdom had a worse record than any other European Community country? Will the hon. Gentleman confirm that the Budget statement envisages a widening trade deficit over the next few years, especially in manufacturing products? The honest answer to the question asked by my hon. Friend the Member for Leyton (Mr. Cohen) is that under this Government there will never be a balance between exports and imports.
    Mr. Redwood: That last statement was wild and silly. The hon. Lady should know that in the past 10 years exports of British manufactured goods have grown faster than those of France, Germany, America and even Japan, because manufacturing is doing so much better and needs our policies. She might like to know that the imports of manufactured goods amount to 17 per cent. of our national income—the same proportion as Germany.
    Mr. Warren: Does my hon. Friend agree that it is appalling that the Opposition whinge on about the failure of this country to export, when we know that what we need from both sides of the House is unanimity to help exporters and not complaints about them?
    Mr. Redwood: I agree and go further: let us congratulate them. They have achieved much in recent years, but the Labour party never gives them any credit and is always moaning. There have been fine achievements in the export of cars, televisions and other consumer durables. Let us hear some praise for a change and congratulate exporters.

    Footwear Industry
    Mr. Vaz: To ask the Secretary of State for Trade and Industry if he will make a further statement on initiatives to help the footwear industry.
    Mr. Sainsbury: The footwear industry, like other industries, is eligible for a range of Government assistance.
    Mr. Vaz: Does not that answer prove that the past 13 years have been wasted years in terms of the Government's commitment to the footwear industry? Hundreds of thousands of jobs have been lost in Leicester, the midlands and elsewhere in the past 13 years, yet the Government have done nothing to support the industry. Now that the election has been announced, will the Minister take the opportunity to apologise to the industry's workers and employers for failing to do anything to protect them in the past 13 years?
    Mr. Sainsbury: I hoped that the hon. Member would be aware of the changes in fashion with which our footwear industry has had to deal and would have noticed the internationally competitive conditions in which it has had to operate. I hoped that he might be prepared to congratulate it on its 30 per cent. improvement in productivity during the past decade.
    Mr. Michael Morris: My right hon. Friend the Minister should ignore the gloom and doom of the hon. Member for Leicester, East (Mr. Vaz). In very difficult trading circumstances, footwear exports in the past 12 months were up 11 per cent. in volume and 15 per cent. in value. Nevertheless, will my right hon. Friend continue to put pressure on the 35 countries that still place restrictions on our exporters?
    Mr. Sainsbury: Indeed. My hon. Friend has been a close supporter of the industry for many years and has taken a close interest in its activities. I join him in congratulating the industry on its export achievements—something that we never hear from the Labour party. It has almost doubled exports since 1985 and we shall continue to work to ensure that more and more markets are open to the high-quality products that are produced in my hon. Friend's constituency.

    Beer
    Mr. Canavan: To ask the Secretary of State for Trade and Industry what response he has made to the complaints he has received about measurements relating to the head of a pint of beer in the current year.
    The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Edward Leigh): After careful consideration of the complaints, I have decided that section 43 of the Weights and Measures Act 1985 should be implemented and that the trade should be allowed two years to make the necessary changes.
    Mr. Canavan: Is the Minister aware that there would be widespread opposition, particularly in Scotland, to any Government imposing legislation that led to the disappearance of the traditional head on a pint of beer or to increased costs being passed on to the consumer in price increases? We all agree about the need to protect the general public against short measures, but does not the Minister realise that flat beer is just as bad, if not worse, than small beer?
    Mr. Leigh: There is no question of having to serve flat beer in Scotland. I am only implementing the weights and measures legislation that the previous Labour Government introduced. I should be interested to see whether an Opposition Front-Bench spokesman will intervene on this point. Surely we all agree that no one should be served a short measure. If one pays for a pint of beer, one should get a pint of beer. If the hon. Gentleman and some brewers say that prices will increase, I can only quote a leading national newspaper which said:
    "Why should a pint be a pint everywhere but in a pub? Just imagine how the brewers would react if their customers decided to hand over only 99p out of every £1 they were charged."
    Mr. Nicholas Winterton: Will my hon. Friend give greater and more sympathetic consideration to the question that has just been asked, because those of us who understand cask-conditioned ale—real beer—know that it is extremely damaging for it to be dispensed under pressure? The head is an important part of a pint of beer and if beer is dispensed in the way that he is advocating through the implementation of section 43 of the Weights and Measures Act 1985, the taste, texture and colour of cask-conditioned beer could be altered to the detriment of the discerning beer-drinking public.
    Mr. Leigh: My hon. Friend is quite rightly a great traditionalist, and so am I. Nothing that I am proposing will result in hand pumps being phased out. I am giving the industry two full years to bring in lined glasses. The entire stock of the nation's glasses turns over in two years so there is no reason why this measure should result in any implementation costs or why the price of a pint should go up. It is right that when one pays for a pint of beer, one should get a pint of beer.

    Electronics Industry
    Mr. Simon Coombs: To ask the Secretary of State for Trade and Industry what is his estimate of overseas earnings by the United Kingdom electronics industry in 1979 and 1991.
    Mr. Redwood: Exports of electronics from this country in 1979 amounted to £2·7 billion and rose to £13·6 billion in 1990, the last full year for which I have the figures.
    Mr. Coombs: Will my hon. Friend speculate on the effect on jobs in the electronics industry in my constituency and elsewhere of a Labour party proposal to increase value added tax on luxury items to 25 per cent? Does he agree
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    that the right way to encourage the electronics industry to export is to help it at home by tax cuts such as those announced yesterday by our right hon. Friend?
    Mr. Redwood: I agree. Such a big increase in VAT would be very damaging. I was delighted to learn recently that Arcam has announced that it will be the first British company in 10 years to make a cassette deck here in the United Kingdom. That builds on the success of the television industry and other electronic industries to which I referred in answer to earlier questions. We need to develop a good strong home market, and for that we need relatively light taxation so that people have more money in their pockets to spend. That is what the Labour party does not understand: there is no investment unless there is demand.
    Mr. Flynn: What plans does the Minister have to ensure that the British-designed and British-invented transputer continues to be manufactured in this country? Is he aware that the parent company, which was nationalised as part of a French and Italian consortium, has threatened to remove the transputer from this country because of the British Government's failure to support British industry in the way that the French and Italian Governments have? Is another marvellous British invention—the miracle transputer which will be sold all over the world—about to be employed and manufactured by foreigners?
    Mr. Redwood: There are many examples of good inventions developed here thanks to our industrial market-oriented policies. The United Kingdom is one of the leaders in open systems, which is a very important technological development. As for the future of the transputer, that, of course, depends on commercial decisions, but we have the right environment for many types of technological developments. We have an extremely lively electronics industry. What a pity that the Opposition never tell us any success stories.

    Industrial Policy
    Mr. Bill Michie: To ask the Secretary of State for Trade and Industry when he will next meet representatives of the Yorkshire and Humberside regional CBI to discuss industrial policy.
    Mr. Austin Mitchell: To ask the Secretary of State for Trade and Industry when he will next meet representatives of the Yorkshire and Humberside regional CBI to discuss industrial policy.
    Mr. Lilley: Ministers and officials of my Department keep in touch with the CBI on a wide range of matters.
    Mr. Michie: Does the Secretary of State recall that in answer to an earlier question of mine to his colleague at the Department of Employment, I was told that 25,000 manufacturing jobs had been lost in the past 12 months in Yorkshire and Humberside? Has it occurred to the Secretary of State to discuss that with the CBI and perhaps also to nudge his colleague, the Chancellor of the Exchequer, to try to change that trend?
    Mr. Lilley: If the hon. Gentleman is in contact with the CBI on Humberside, I am sure that he will have noticed its comments on the Budget. It especially welcomed the measures introduced by my right hon. Friend the Chancellor to encourage late payment of bills—[HON.

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    MEMBERS: "Oh!"]—to encourage early payment of bills, and to overcome late payment of bills. The regional CBI believed that that would be of great benefit and was grateful for my right hon. Friend's measures to alleviate the uniform business rate. I do not think that any business men whom I know support the Labour party's policy of unleashing local authorities to raise the poundage for the uniform business rate without capping. During the 1980s, local authorities raised business rates by 37 per cent. more than inflation. We have frozen them, but the Labour party intends to unleash them again.
    Mr. Austin Mitchell: With the Government, it is more a question of the late delivery of policies. The Secretary of State will be aware how crucial the textiles and clothing industries are to Yorkshire, Humberside and, indeed, Grimsby. Is he also aware that those industries have been losing 2,000 jobs per month in addition to the 60,000 jobs already lost and the 7 per cent. fall in production since the recession began? It is too late now to ask the right hon. Gentleman what he intends to do about that, as he will lose his job over it on 9 April, but can he tell me of any other Government who have allowed their textile industry to bleed to death in that fashion without helping it?
    Mr. Lilley: The textile industry is and remains important to this country. That is why we have taken up the position that we have over GATT, a position which is widely welcomed by that industry. The hon. Gentleman's region has benefited greatly from diversification, not least because we have encouraged inward investment. I am sure that the hon. Gentleman, like me, condemns the Trades Union Congress motion which rejected "alien investment" in this country, as the TUC saw it. I am sure that the hon. Gentleman is as amazed as I am that Labour Front-Bench spokesmen refuse to dissociate themselves from that position, and therefore stand to reject "alien investment". That is one reason why they will be rejected by the electorate.
    Mr. Batiste: Is my right hon. Friend aware that in many parts of the Yorkshire and Humberside region unemployment is significantly lower than it was at the time of the previous election, and that what the regional CBI fears above all else is the havoc that would be caused by a Labour Government, with their commitment to a statutory minimum wage, which would wipe out so many jobs, and to the European Community social chapter, which would make British industry uncompetitive in world terms?
    Mr. Lilley: My hon. Friend is right. I receive a great many representations from business men worried about the threat of a minimum wage and about the social chapter. Business men find it especially odd that the Labour party intends to introduce a minimum wage with one hand while with the other hand it would remove our tax cuts for the lowest paid. Thus its Budget—if it ever got the chance—would hit the lowest paid disproportionately.
    Mr. Michael Brown: Will my right hon. Friend totally reject what the hon. Member for Great Grimsby (Mr. Mitchell) has just said, bearing in mind that only four days ago my hon. Friend the Under-Secretary of State was in my constituency, which adjoins Great Grimsby, to announce that Kimberly-Clark from America was to build
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    a factory at Barton-upon-Humber involving 770 new jobs, thanks to the Government's industrial policy and a large Government grant to that company?
    Mr. Lilley: Indeed, I was especially delighted that we won that contract for this country. The investment will create 750 jobs directly and a great many more indirectly. We pulled out all the stops and gave the company a response in record time.
    Mr. Henderson: After 13 years of so-called Tory economic miracle, how does the Secretary of State explain to industrialists in Yorkshire and Humberside why manufacturing investment there is now below the 1979 level, and why there were no measures in the Budget for manufacturers and manufacturing investment?
    Mr. Lilley: The hon. Gentleman knows that if we compare the position now with that of 10 years ago—at the same stage of the economic cycle—we see that manufacturing output is up by a quarter, manufacturing investment is up by a third, manufacturing productivity is up by more than a half, and manufactured exports are up by almost three quarters. Industrialists do not want to return to Labour party policies because they know full well that that would mean Front-Bench Labour Members taking decisions instead of them. They know that the Opposition team consists of a television producer, a psychiatrist, a social anthropologist, a trade union official and a charity worker—and that is about it. Not one of them has a day's experience of working in British industry.
    Mr. Riddick: Is my right hon. Friend aware that a survey conducted recently among the top 200 companies in this country, many based in the north of England and in Yorkshire, showed that 86 per cent. of industrialists believed that a Labour victory at the next election would be bad for the economy? They believed that inflation would go up and that interest rates would go up, which would clearly lead to higher unemployment in Yorkshire and Humberside.
    Mr. Lilley: Yes. I am sure that, following the Budget, support among business and industry will be even higher than the 86 per cent. recorded beforehand. The fact is that industrialists are scared stiff of a Labour Government and are determined to do all that they can to ensure that we achieve, as we shall, a resounding and decisive Conservative victory. That is the best thing for industry and for a strong recovery from the recession.

    Regional Development Areas
    Mr. Hind: To ask the Secretary of State for Trade and Industry when he last discussed with his EC opposite numbers revision of regional development areas; and if he will make a statement.
    Mr. Leigh: Our intention is to review the map early in the next Parliament after we have won the election.
    Mr. Hind: When my hon. Friend returns to his desk after the next election has been won by the Conservatives, will he bear it in mind that in the past 10 years west Lancashire has benefited greatly from being a development area? It has attracted inward investment, there are new factories and jobs, and unemployment is now 22 per cent. lower than it was when I was elected in June 1987. In the negotiations, will my hon. Friend especially ensure that

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    west Lancashire and Skelmersdale are adequately supported with European and regional selective assistance through his Department?
    Mr. Leigh: When my hon. Friend has been returned with an increased majority in his marginal seat, he will no doubt wish to make representations to me as I carry on with my present job. Our review will be objective and it will be based on supporting areas in which there is a disparity in unemployment rates. Of one thing I am sure: the last thing that business in west Lancashire wants is the election of a Labour Government, who will put up business taxes, put up costs and impose a minimum wage.
    Dr. Kim Howells: As the Minister knows, regional development grants have played an important part in helping to replace some of the jobs lost in mining and steel in south Wales. Is he aware that many of us are concerned because the next generation of inward investment will be attracted not by a low-wage economy or a low-wage work force, but by the best trained and educated work force in Europe? Day by day, the Government are unwilling to put more money into training. Indeed, the Department of Trade and Industry actually agrees with cuts in training imposed by the Department of Employment. Those cuts mean that regions such as south Wales will be less able to compete with other regions in Europe than they are now.
    Mr. Leigh: That was a very moving speech. If it is true, why is this country the No. 1 location for inward investment? Why do we account for 41 per cent. of Japanese investment in the EC and 36 per cent. of American investment in the EC? The reason is that foreign companies want to come here for a highly trained and highly motivated work force who work for good British companies. That is the truth.

    Post Office
    Ms. Hoey: To ask the Secretary of State for Trade and Industry when he next plans to meet the Post Office chairman to discuss Post Office efficiency.
    Mr. Leigh: My right hon. Friend regularly meets the chairman of the Post Office, Sir Bryan Nicholson. I have no doubt that after 9 April he will meet him equally regularly.
    Ms. Hoey: I am sure that the Minister is aware of the widespread concern about the threat to postal services that the Government are determined to impose by bringing in tin-pot competitors who will make the rural services a threatened species. Does he realise that throughout the country in the election people who care about the Post Office and Post Office services will vote Labour as the only way to preserve a good postal service?
    Mr. Leigh: I do not think that the hon. Lady really believes all that. We already have the best Post Office in the European Community. What harm is there in trying to achieve better value for money and more choice for the consumer by more competition—always giving an assurance, which I repeat today, that we will ensure that the uniform tariff structure remains in being even in rural areas? What possible harm can there be to the Post Office from more competition? More competition will lead to better service, and the whole House knows it.
    Mr. Fry: When my hon. Friend sees the chairman of the Post Office, will he impress upon him the need for absolute efficiency in delivering election addresses from Labour candidates? Should not every household in the country know that the Labour party officially wants to deny the low paid the tax reductions given by our right hon. Friend the Chancellor yesterday?
    Mr. Leigh: It is extraordinary that the Labour party, which we all know want to tax the rich, now wants to tax the poor as well. [Interruption.] Are we about to hear an Opposition spokesman telling us their tax plans? The House wants to know. Do they intend to reverse those tax cuts? Will they tax their people more? We want to know.

    Manufacturing Industry
    Sir John Farr: To ask the Secretary of State for Trade and Industry what has been the change in manufacturing industry productivity in the past 10 years.
    Mr. Leigh: Manufacturing productivity rose by over a half between 1981 and 1991.
    Sir John Farr: I thank my hon. Friend for that encouraging news. Does he agree that, at the same time, manufacturing exports increased by more than two thirds? Is that not a significant springboard for the future for British manufacturing industry?
    Mr. Leigh: I am grateful to my hon. Friend. He is right that manufacturing exports have increased by nearly three quarters since 1981. In fact, they have grown faster than in the United States of America, Japan, France and Germany.
    Mr. Roy Hughes: Does the Minister recognise that between 1979 and 1981 much of British manufacturing industry was razed to the ground? Will he now give us the figures for the whole period since 1979, when the Government came to office? I believe that they tell a rather different story.
    Mr. Leigh: If we compare this stage in the economic cycle with the previous stage, we see that output is up a quarter, investment is up a third, productivity is up a half and exports are up three quarters. [Interruption.] Opposition Members may not like it, but we will keep saying it. One thing is absolutely clear: why should manufacturing industry benefit from a quadruple whammy with higher costs, higher prices, higher inflation, a minimum wage and more red tape? That is the question that the Opposition need to answer.

    Iran and Russia
    Mr. Thurnham: To ask the Secretary of State for Trade and Industry what representations he has received about Export Credits Guarantee Department cover for Iran and Russia; and if he will make a statement.
    Mr. Sainsbury: I have received a number of representations about ECGD cover for Iran and Russia.
    Mr. Thurnham: Will my right hon. Friend join me in congratulating Beloit Walmsley in my constituency on winning a £63 million contract in Russia and a £90 million contract in Iran? Is not that the way for us to gain

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    increasing shares of world markets for the fourth successive year, in contrast with the strike-torn, tax-weary years of decline under Labour?
    Mr. Sainsbury: Not only am I happy to join my hon. Friend in congratulating that successful exporter, but I congratulate my hon. Friend on the energetic and effective way in which he has supported Beloit Walmsley in winning those contracts.
    Mr. Godman: Do we really want to develop trade with a country whose Government sanctions the murderous fatwa placed upon the shoulders of Salman Rushdie? Should not the Government, in the last few days of their existence, bring to bear upon the Iranian Government the utter condemnation that is felt by the people of the United Kingdom for the disgraceful action in imposing a death threat on a British citizen in the capital of the United Kingdom? Nothing should be done to further trade with the Iranian Government until that fatwa is lifted from the shoulders of Salman Rushdie.
    Mr. Sainsbury: The Government have made clear their opposition and abhorrence for the fatwa to which the hon. Gentleman referred, but he differs from the view of his colleagues on the Opposition Front Bench if he wishes to stop trade or perhaps impose an embargo on trade with Iran or, indeed, any other country. It is the policy of the Government to encourage our exporters and to congratulate them.

    Manufacturing Output
    Mr. John P. Smith: To ask the Secretary of State for Trade and Industry what representations he has recently received about manufacturing output.
    Mr. Leigh: My right hon. Friend has recently received the excellent report by the CBI's manufacturing advisory group which showed that there had been a transformation in manufacturing performance during the 1980s.
    Mr. Smith: Given that 80 per cent. of manufacturing jobs were lost in Barry in my constituency in the last Conservative recession, manufacturing growth is down 3·7 per cent. on last year, we now have one of the lowest growths in manufactured output in Organisation for Economic Co-operation and Development countries, and 3,000 manufacturing jobs are being lost every day, why did the Government fail yesterday to take any action to bring about a recovery in wealth-creating manufacturing industry?
    Mr. Leigh: All right, let us talk about yesterday if the hon. Gentleman wants—let us talk about giving more than £1 billion to industry over the next two years to ensure that there is no increase in business rates. If the hon. Gentleman wants to talk about that, we shall talk about it even more. Let us talk about reductions in corporation tax, which are still feeding through the economy and will be worth £1 billion to industry in the next year. Those are the facts that industry wants to hear. That is why industry, the Confederation of British Industry, the Institute of Directors and the Association of British Chambers of Commerce all support the Budget. That is what puts Labour Members on the spot.
    Mr. David Shaw: Is my hon. Friend aware that high levels of manufacturing output lead to high levels of
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    exports and that the Dover ferry industry has done well under the Government out of high levels of exports? Can my hon. Friend confirm that he will do all in his power to ensure that the Government are returned so that the Dover ferry industry can continue to benefit from high levels of exports?
    Mr. Leigh: Yes. We will be returned. We are winning the debate. We are winning the debate this afternoon. Opposition Members have not scored one hit so far, and nor will they during the election campaign.

    Exports
    Mr. Jacques Arnold: To ask the Secretary of State for Trade and Industry if he will make a statement on the current performance of British exports.
    Mr. Sainsbury: British exports in 1991 were at an all-time record high.
    Mr. Arnold: To what does my right hon. Friend attribute that success in the middle of a world recession?
    Mr. Sainsbury: My hon. Friend asks a relevant question. British exporters achieved all-time record exports partly because in 1991 we had all-time record low numbers of strikes and days lost through industrial action. That was because we had a sensible framework of industrial relations laws. The success of British industry in exporting last year was also attributable to having the right framework for taxation, which encourages and rewards enterprise on the part of both individuals and companies.
    Mr. Leadbitter rose—[HoN. MEMBERS: "Hear, hear."] This may be my last question, Mr. Speaker. Will the Secretary of State respond to a question that I have put several times since the Select Committee on Science and Technology in another place produced its recommendations for the Government? It said that the Government had no policy for industry and no policy for the country, and that if they did not take a new direction there would be no British-owned manufacturing industry left in this country—now answer!
    Mr. Sainsbury: The success of British exporters, which apparently does not get one word of congratulation or praise from the Labour party, gives the lie to what the hon. Gentleman has just said.

    Short-termism
    Mr. Dunnachie: To ask the Secretary of State for Trade and Industry what plans he has to combat short-termism among investors in British industry.
    Mr. Redwood: The way to combat short-termism is to have the right policies for the support of industrial investment—policies based on competitiveness, lower taxation, good industrial relations and a belief in quality.
    Mr. Dunnachie: Does the Minister agree that it is a disgrace, when British industry is striving desperately to find a starting point for recovery, that the Government have not provided tax incentives for investment in industry?
    Mr. Redwood: My right hon. Friend the Chancellor put forward a number of measures which give a lot of cash

    847
    flow help to British business—and none more important than that on the unified business rate, which means £500 million extra for business and relief from any increases in business rates. Under Labour, businesses suffered greatly from the increase in business rates. Labour's plans would make British companies wide open to easy takeovers because they have proposals for company law, to renationalise companies, which would leave many other companies vulnerable.
    Mr. Quentin Davies: Has my hon. Friend seen the latest survey from the Institute of Purchasing and Supply—[HoN. MEMBERS: "Reading!"] which publishes a regular report based on surveys of purchasing managers throughout British industry, studying their purchasing activities and intentions. That is an important survey—[HON. MEMBERS: "Reading!"] Clearly Opposition Members do not care to brief themselves with such important information—[Interruption.]
    Mr. Speaker: Order. Let us get to the question. Please hurry up.
    Mr. Davies: I am sure that my hon. Friend has seen this survey—[Interruption.] Has he noticed that for the first time, in February, the indices for orders and output show a rise?
    Mr. Speaker: Order. That was a very long-winded question.
    Mr. Redwood: I agree entirely with the bit of the question that I heard. I thought that it was a most helpful question. Its length was entirely related to the fact that it contained good news and, once again, Opposition Members did not want to hear it.

    Regulatory Burdens
    Mr. Bill Walker: To ask the Secretary of State for Trade and Industry what recent representations he has received from business men about the impact of regulatory burdens on industry.
    Mr. Redwood: I have received a number of representations from business men about the need to cut regulatory burdens. What a first-class job my right hon. Friend the Chancellor did by cutting a large number of them in his Budget yesterday. The business men came, we heard, the Chancellor listened, and he has incorporated in his proposals a large number of deregulatory measures, which will ease cash flow and make it easier to deal with the VAT man and the Inland Revenue. How much I welcome that. I hope that Opposition Members will support it in the Division Lobby when the time comes.
    Mr. Walker: Does my hon. Friend agree that the CBI, in its publication, "Competing with the World's Best", drew attention to the fact that industry does not want to be organised, run and intervened in by TV producers, social workers and others? Industries want to be left alone so that they can continue to export more than the Japanese. In particular, the Scotch whisky industry, with such a splendid export record, does not want its business to be run by politicians, who should only consume the stuff and not organise and manage the businesses.
    Mr. Redwood: My hon. Friend is a great champion of the Scotch whisky industry, and many of my hon. Friends
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    and Opposition Members support British business by drinking Scotch—and how wise they are. This Government will ensure that discriminatory taxes are not imposed on that industry by our friends in Europe, because it is a vital British interest. My hon. Friend is also right that business wants regulations kept in bounds, with decent regulations so that markets are fair and open, but it does not want the masses of red tape that the Opposition are always recommending day after day in the House.
    Mr. Douglas: Turning from the attractions of the Scotch whisky industry, can the Minister give us more information about the important regulatory aspects of getting companies which sub-contract to the Ministry of Defence to pay their bills or have them paid quickly? As I am sure that the Minister will appreciate, it is important for the cash flow of small businesses that settlements be paid appropriately and quickly. Can he give us more information on how that might be done?
    Mr. Redwood: I cannot improve on the information that my right hon. Friend the Chancellor gave in his statements to the House yesterday and in the papers supporting the Budget. Yes, the Government are insisting that the bills are paid on time when the work has been done, and that that should flow through the system from the main contractors to the sub-contractor. I know from my discussions with business men that prompt payment is vital. The Government should and will give a lead.
    Mr. Allason: Is my hon. Friend aware that a large proportion of those employed in the south-west, and certainly in Devon, are part-time workers in residential homes? Is he aware that the owners of those homes are already burdened by a large number of regulations and that any new regulations from Brussels should be resisted by him and his colleagues, particularly regulations on part-time workers and the implementation of a minimum wage?
    Mr. Redwood: My hon. Friend is quite right. For that very reason, the Government are standing up for British businesses and British services in Brussels as we want more jobs, not fewer. Some of the regulations from Brussels would destroy jobs as surely as the policies of the Labour party would if they were ever to be followed.
    Ms. Mowlam: Is the Minister satisfied with his Department's record on regulating financial businesses after Blue Arrow, Guinness, Maxwell and this morning's extremely critical report from the Treasury and Civil Service Select Committee on the Bank of Credit and Commerce International? Does he not recognise that his Department has failed, because the electorate will on 9 April?
    Mr. Redwood: The hon. Lady seems to be confusing the regulatory record of my Department with the regulators outside my Department, who were deliberately set up as independent regulators as a result of legislation passed by the House. Unless she asks a more precise question about a particular regulator and a particular action, I cannot comment on the detailed points that she makes. I believe that the legislation passed by the House has created a strong regulatory framework and I am always encouraging the regulators to root out fraud, incompetence and crime wherever it may be.

    Home Income Equity Plans
    Mr. Flynn: To ask the Secretary of State for Trade and Industry what initiatives he intends to introduce to assist those in financial difficulties arising from their involvement in home income equity plans.
    Mr. Redwood: There are several ways in which assistance might be available to people who have been caught up in some of those unfortunate schemes. If, for example, there is any question of repossession, the individual should go to his building society, because those societies have said that they want to avoid repossessions wherever possible. If there has been an investment failure, people may be eligible for compensation either from the investment company or from the compensation scheme, depending on the precise circumstances of the individual case.
    I do not want to hold out false general hope, but in some cases assistance might be available. I suggest that any hon. Member with a constituency problem should get in touch with the Securities and Investments Board, which is taking the lead in this matter and which knows the individual details of specific cases.
    Mr. Flynn: The Minister is trying to do a Pontius Pilate act on the weakness of the regulatory system set up by his Government. There are thousands of victims of those home income equity plans. Virtually all are elderly people, mostly widows, who have bought their own homes and were sold those plans through so-called independent financial advisers. We should make it clear that those people are not independent at all, but profit-hungry, commission-hungry salesmen. They have conned those elderly people who now have the dreadful prospect of losing their homes in their 60s and 70s because of that or because of the weakness of financial regulation. Will the Minister give a guarantee in the last few days of his Government that none of those elderly people will have their home repossessed?
    Mr. Redwood: Obviously I want to avoid that, which is why I said that those people or their advisers or friends should get in touch with the building societies, which have told us that they want to avoid repossession wherever possible.
    The hon. Gentleman's extraordinary attack on independent financial advisers was very unwise. If someone is registered as an independent financial adviser, it is his or her duty to give independent advice and that adviser is regulated by the appropriate body to do that. If the hon. Gentleman can give examples of IFAs who have
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    failed to give good independent advice, he should refer them to me, or direct to the regulatory body, which will take them up as a matter of urgency. Of course I give the hon. Gentleman the pledge that we shall take up any of those cases, should he send the details to me. However, the SIB is in charge of this and I refer hon. Members to it if they have problems.
    Mr. Butterfill: Will my hon. Friend accept my thanks for the helpful way in which he dealt with my representations on this subject? Does he accept that it is largely due to the regulatory framework that he has put in place that the activities of, for example, the Aylesbury Group have now been accepted for the investors compensation scheme? Will he also impress upon the building societies involved that they have a duty and an obligation to ensure that people are not evicted from their homes until the compensation scheme can take effect?
    Mr. Redwood: I give that undertaking. My hon. Friend's comment is extremely helpful. He has done a great deal of important work to expose the problem and to help us find a solution to it. As he said, in some cases there are already agreements that compensation could be made under the investors compensation scheme. I welcome that, as it is important that compensation should be made available where appropriate.

    Manufacturing Investment
    Mr. Alan W. Williams: To ask the Secretary of State for Trade and Industry if he will give the total of manufacturing investment in 1990 and 1991 and the percentage fall (a) in cash terms and (b) in real terms.
    Mr. Leigh: Fifteen per cent.
    Mr. Williams: The level of manufacturing investment is now lower than in 1979, and the growth in manufacturing output since 1979 is just 4·9 per cent.—far lower than in Germany, where it is 26 per cent., the United States where it is 33 per cent., and Japan where it is more than 60 per cent. Against that appalling background, why did yesterday's Budget contain nothing to help investment in manufacturing industry?
    Mr. Leigh: There is a great deal in the Budget to help investment. How would investment be helped by the Labour party's policies of higher costs, higher taxes, more red tape and a minimum wage? They would drive British industry into bankruptcy. That is why industry will vote Conservative and we shall win the election.

Business of the House
3.30 pm
The Lord President of the Council and Leader of the House of Commons (Mr. John MacGregor): With permission, Mr. Speaker, I should like to make a short business statement.
In the light of the announcement earlier today by my right hon. Friend the Prime Minister, the business for Friday 13 March and for Monday 16 March will be rearranged. In the meantime, I shall be tabling a motion later today which will be set down for the commencement of business tomorrow. This will enable the House to conclude the remainder of its business in an effective manner which I trust will be for the convenience of the whole House.
The main provisions of the motion will be to enable you, Mr. Speaker, to bring the debate on the Budget to a conclusion at 10 o'clock on Thursday night, to enable Government business to be taken on Friday and to enable the House to meet at 9.30 am on Monday 16 March for Government business.
Following discussions through the usual channels, I shall make a further statement tomorrow on the detailed arrangements for business for Friday and Monday next.
Dr. John Cunningham: Does not everything that the Leader of the House has just said flatly contradict the assurances that he gave my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) and the House last week? He said that we should wait and see—
Hon. Members: Hear, hear.
Mr. Speaker: Order. I ask the House to behave in an orderly manner.
Mr. Cunningham: Is it not also typical of this discredited Administration that, having wrecked the nation's economy, they cannot even conclude their parliamentary business without the imposition of more guillotines to bring matters to a conclusion in a shambles, just as they have made a shambles of the nation's affairs? May I make it clear to the Leader of the House that he and his colleagues should not assume that much of their outstanding business, which is controversial and which we oppose, will be nodded through on Friday? We shall go on exposing the inadequacies of the Government's legislation until we finally put their record and our alternative to the people, and we know what the outcome of that will be.
Mr. MacGregor rose—
Mr. Cunningham: I have not finished yet.
The most important issue today is not the statement by the Leader of the House but the speech of my right hon. and learned Friend the Member for Monklands, East (Mr. Smith), and the sooner we get on to that business the better.
Mr. MacGregor: The statement that I made about business last Thursday was exactly as the business for this week was at that point. I am making another statement today because of the decision by my right hon. Friend the Prime Minister this morning, with the consent of Her Majesty the Queen.
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The hon. Gentleman is absolutely wrong to suggest that we shall end this Parliament in a shambles. We shall be ending in an orderly and highly effective way, with a programme of Government business that is very much in the nation's interests and which, in a shortened Parliament, will be largely completed. That is a sign of a Government who know what they are doing and do it well.
It was entirely in character for the hon. Gentleman to suggest that, on Friday, he and his party will oppose a number of measures that are entirely in the nation's interests—I guess that they will be taken on Friday, but that will depend on discussions through the usual channels. The vast majority of higher education institutions want the Bill that we are currently taking through Parliament. The Education (Schools) Bill greatly increases the rights and choice of parents, which is what millions of parents around the country want.
Above all, the Finance Bill contains a set of proposals that today's reactions clearly show are warmly welcomed by business, especially by small businesses. On Friday, the hon. Gentleman will be fighting vigorously the proposal to reduce the taxes of the lower-paid. That is in character for the Labour party, which is a high-spending, high-taxing Opposition, and will remain so.
Mr. James Wallace: May I start on a constructive and conciliatory note by asking whether the Leader of the House intends to make provision for the Charities Bill, on which so much has been done in another place, to be enacted before the dissolution? Does not the Leader of the House agree that no business that he can announce tomorrow to foreshadow any measure taken before dissolution will do anything to take this country out of recession? The Liberal Democrats look forward to the Leader of the House announcing in the next Parliament measures to take this country out of recession and embarking on a programme of needed political reform.
Mr. MacGregor: On the latter point, it is clear that the British economy is now in a highly competitive position, as the Confederation of British Industry acknowledges. The CBI is making it clear that we are much better placed than we were at the beginning of the 1980s to meet international competition and, as the world recession clears, the British economy will receive greater benefit from that due to the policies pursued by the Government.
I agree that all charities would like to see the Charities Bill on the statute book. I hope that we can attain that goal, but that will depend on discussions through the usual channels.
Several Hon. Members rose—
Mr. Speaker: Order. This is a very narrow statement. The Leader of the House has announced that he will be making a fuller business statement tomorrow. In equity, I shall call two Back Benchers, one from each side, and we shall then move on to the Budget debate. As there is great pressure on business today, I shall have to impose a limit on speeches.
Mr. Ian Bruce: A very large number of Conservative prospective parliamentary candidates will want to know on which day they will be reporting for duty after the election. Will the Leader of the House tell us?
Mr. MacGregor: Monday 27 April.
Mr. Dave Nellist: In warmly welcoming the right hon. Gentleman's statement as a sign of the approaching general election, may I say that it would be entirely inappropriate, in the discussions that he has through the usual channels or elsewhere, to urge the Government to use the mandate of 1987 in the entirely different political circumstances of 1992 to push through under the guillotine the measures on education and asylum, or the economic ones contained in the shortened Finance Bill? He should put those policies to the people of this country, not ram them through on Friday and Monday.
Mr. MacGregor: The hon. Gentleman had better await my statement tomorrow, following discussions through the usual channels.

Orders of the Day
  WAYS AND MEANS
  Order read for resuming adjourned debate on Question [10 March],

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

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

  (b) for refunding any amount of tax;

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

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

  Question again proposed.

Budget Resolutions and Economic Situation
[Relevant document: European Community Document No. 10212/91 and COR2, the Commission's Annual Economic Report 1991–92.]
3.39 pm
Mr. John Smith rose—
Several Hon. Members rose—
Hon. Members: Goodbye!
Mr. Speaker: Order. This takes time out of the speech by the Opposition Front-Bench spokesman.
Mr. Smith: The most notable omission from yesterday's Budget was that there was not a word of apology—
Mr. Speaker: Order. I am sorry to interrupt the right hon. and learned Gentleman, but I was taken aback by all this noise. In view of the large number of right hon. and hon. Members who want to participate today, I propose to put a precautionary 10-minute limit on speeches between 7 pm and 9 pm, but I hope that it will not be necessary if Members called to speak before then are brief.
Mr. Smith: The most notable omission from yesterday's Budget was that not a word of apology was uttered by the Chancellor in this Government, a Government who have caused the longest recession since the war. There was not a word of apology to the 1 million people who have lost their jobs since March 1990; not a word of apology to the 47,800 businesses which failed last year; not a hint of contrition for the families who lived in the 75,500 homes that were repossessed last year.
Nineteen ninety-one was the year in which the economy shrank by 2·5 per cent.; it was the worst calendar year of recession since the 1930s. Last night, in his Budget broadcast, the Chancellor described 1991 as a year of achievement. Some achievement—record-breaking levels, certainly, but record-breaking levels of business failures, of house repossessions, of homelessness and of economic decline. If that is a year of achievement, what on earth would the Chancellor describe as a year of failure?

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Not only is there no apology from the Chancellor or the Prime Minister—[HON. MEMBERS: "Where are they?"] I confess that I am slightly surprised that the Chancellor is not here to take part in this debate—
Mr. Phillip Oppenheim: Get on with it.
Mr. Smith: I am quite prepared to get on with it; the Chancellor might have done us the courtesy of attending the debate to hear what I have to get on with. Perhaps the hon. Gentleman will go and see him and ask him if he will trot along.
Indeed, it was the Chancellor who told us in this House at Treasury questions:
"Rising unemployment and the recession have been the price that we have had to pay to get inflation down. That price is well worth paying."—[0fficial Report, 16 May 1991; Vol. 191, c. 413.]
It was the Prime Minister who told us when he was Chancellor: "If it isn't hurting, it isn't working." We see on the Government Front Bench for a few days more some of the guilty men who told us first that there would be no recession, then that there would be a soft landing for the British economy and that the recession would be shallow and short-lived, that recovery was around the corner, that the green shoots of recovery were sprouting, that the housing and construction industry would exhibit the first signs of the vague stirrings of the recovery, and that all we needed to do was to wait in patient expectation for Conservative economic policies to bring a triumphant end to the dark days of decline. I note that the Chancellor is so worried about justifying all that that he did not bother to turn up in the House this afternoon.
It has been the hallmark of Majorism to promise that good times are just around the corner. Unfortunately, we never seem to turn the corner. The technique is deployed again in the economic forecast in the Budget. The economy is in a much worse condition than was predicted in the autumn statement only a few months ago. Last November, the Chancellor told us that growth in 1992 would be 2·25 per cent. Yesterday, he had to scale that down to just 1 per cent. Manufacturing output was forecast last November to grow by as much as 3·25 per cent. this year. Yesterday, he revealed that it is expected to grow by just 0·5 per cent. Investment, forecast to grow by 1·25 per cent., is now expected to decline again this year and, alarmingly, the balance of payments is forecast to deteriorate sharply once again to a £9 billion deficit in 1993. Of course, borrowing has doubled from £14 billion to £28 billion. Clearly, we are heading for yet another year of what the Conservatives choose to call achievement.
As the Chancellor told us yesterday:
"unemployment is likely to go on rising for some time."—[Official Report, 10 March 1992; Vol. 205, c. 747.]
What is perhaps even more revealing is that that prediction of rising unemployment was made on the explicit assumption that growth will resume in the course of the year. So much for the Budget for jobs forecast by the Secretary of State for Employment. But perhaps we should not pay too much attention to him because, like the Secretary of State for Trade and Industry—[Interruption.]
Mr. Speaker: Order. There is no need for this.
Mr. Smith: I am glad to see the Chancellor of the Exchequer. Perhaps I should start at the beginning again.
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[Interruption.] I can understand why Conservative Members do not want to hear it twice. They do not want the double whammy of the Conservative party's measures. It was too painful even for the Chancellor to listen to, so he lurked outside until he thought that I was about to come to another part of my speech, and then he sneaked in.
I was referring to the Secretary of State for Employment, who promised a Budget for jobs, and I was observing that we should not worry too much about him, because, like some others, he is not in the election A team. But we had a glimpse of how the A team deals with the problem of Conservative economic failure in the interview given last Sunday by that tyro of the casual knockabout, the Secretary of State for Education and Science. He was asked by Mr. Walden last Sunday what he would say to a viewer—
Mr. Robert G. Hughes: Does not the right hon. and learned Gentleman mean the hon. Member for Livingston (Mr. Cook) being roasted?
Mr. Smith: The other one.
The Secretary of State for Education and Science was asked what he would say to a viewer who blamed the Conservatives for hundreds of thousands of people having lost their jobs, for 100,000 people having lost their homes, and for some having lost both. The Secretary of State replied:
"It's been a bad recession through which most people actually have not suffered any of the consequences you have described."
What country is that member of the A team living in? It is simply not good enough to dismiss the unemployed and those who have lost their homes as a minority of the population. [Interruption.] I see that there are some who agree with the Secretary of State.
Mr. Ian Bruce: The right hon. and learned Gentleman is right to point out that we all have to be concerned about unemployment, but, as he is talking about loss of jobs and unemployment, and so that we can consider the figures that he will be coming up with in a week's time, will he tell the House today what the pledge of a half median wage amounts to? Is it £4 per hour now, rather than the £3·40 that it was two years ago?
Mr. Smith: The hon. Gentleman should read the newspapers. It is £3·40 per hour. That is the figure that the Labour party is committed to.
The Secretary of State for Education and Science said that most people had not suffered the consequences of the recession, and that basically that was all right. The depressing facts are that, in 22 months, 1 million people have lost their jobs; if we take 1990 and 1991 together, almost 130,000 homes were repossessed; and in 1991 alone, 275,000 households were six months or more in arrears with mortgage payments.
The latest study by the Policy Studies Institute, published only last week—the most detailed study yet undertaken of the problem of debt—showed that 2·5 million households in Britain are struggling with a combination of household debt and unpaid consumer credit. I can tell the Conservative party that there is no way in which it will be able to ignore these facts, or to minimise their significance, in the course of the forthcoming election.
Mr. Patrick Nicholls: Will the right hon. and learned Gentleman give way?
Mr. Speaker: Order. Interventions will take a great deal of time out of the subsequent debate.
Mr. Smith: The hon. Member for Teignbridge (Mr. Nicholls) has provided me with such useful interventions in the past that I think that I ought to give way to him again.
Mr. Nicholls: The right hon. and learned Gentleman said yesterday that now was not the right time to reduce taxes on the lower paid. When does he think is the right time to do that?
Mr. Smith: What I said, was absolutely clear about and will repeat today is that I think it wrong in our economic position to borrow for tax cuts for anyone. I think that, when the country can afford such a reform of the tax system, it ought to be introduced.
The Chancellor of the Exchequer (Mr. Norman Lamont): If the right hon. and learned Gentleman thinks that it is wrong to borrow for tax cuts, why was it right for the Government of which he was a member to do so in 1978? The public sector borrowing requirement was high then, too.
Mr. Smith: We did not borrow on the eve of an election in 1979, as the right hon. Gentleman knows very well. [Interruption.]
Mr. Speaker: Order. There is great pressure from Back-Benchers to be called today, and this kind of thing takes a great deal of time.
Mr. Smith: I should like to know whether the Chancellor stands by what he said on 28 November last year. Then, he said:
"He asked how we are going to pay for the borrowing. We shall pay for the borrowing by borrowing—that is the normal way in which one pays for it."—[Official Report, 28 November 1991; Vol. 199, c. 1062.]
If the right hon. Gentleman disagrees with that, or wishes to explain his statement, I shall be happy to give way to him. [HON. MEMBERS: "Answer"] I fear that the Chancellor does not have a typed response to that question. There it stands, unamended: Conservative economic policy—borrowing should be paid for by more borrowing.
The other device that will be used by the A team—and by all the other apologists for this discredited and incompetent Government—is that, even if things are bad, it is not the Government's fault; it is the fault of the nasty foreigners from whom we contracted the infection of recession. That comes in two forms. First, we got the recession from abroad, and nothing much could have been done about it; secondly, other people's recessions are worse than ours, and for that we should be grateful to our Government.
The Secretary of State for Education and Science was running the Saatchi-approved line in the Walden interview. He said:
"it's not been a catastrophic recession of the kind that we had in the past or even the Americans are suffering now."
Let us look at the facts. In 1991, the United States economy declined by 0·5 per cent. In Britain, the figure was 2·5 per cent.
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However, facts do not deter a member of the A team. The Secretary of State went on to make the following international comparison—again, I quote from his interview—
"I mean, the Germans and Japanese looking at Britain under the Conservatives must say, boy they've got good, actually being able to get themselves into a steady competitive state, when they faced difficulties, certainly in the States, they'd like to have a government which was so competent in actually restoring good conditions for economic recovery."
I must say, I have not met a single Japanese—I doubt whether any other Member of Parliament has either—whom I have heard say, "Boy, they've got good," let alone express any wish to emulate Britain's economic condition.
The Chancellor himself, in a bid to retain his uncertain position in the A team, tried the same trick in his Budget broadcast last night. He displayed a graph which tried to show that, of all countries, Japan was suffering more in terms of industrial decline than Britain. I have to tell the Chancellor that my considered view is that that was an error of judgment, scarcely forgiveable in a member of the A team. In the past three years, Japan's investment has risen by 41 per cent., whereas Britain's is down by 4·2 per cent. Over the past three years, Japan's GDP has risen by 15·5 per cent., while Britain's grew by only 1·1 per cent. That is a background against which it is imagined that the Japanese whisper to each other, "Boy, in Britain they've got good."
Mr. Oppenheim rose—
Mr. Smith: I shall give way to the hon. Gentleman, but I must make it clear that I was not issuing an invitation to him: I am just giving way.
Mr. Oppenheim: The right hon. and learned Gentleman, rightly, mentioned the need to boost investment. He will know that investment and saving rates are closely linked. How will his policy of clobbering savers with higher taxes boost investment?
Mr. Smith: Our proposals are designed to create fair treatment between those who receive unearned and those receiving earned income, and that is what they will achieve.
Against the background of such depressing economic failure, the Budget was a missed opportunity. There was nothing in the Budget for investment, nothing for jobs, training or skills development, nothing for the construction industry and nothing for sustained recovery from recession. Once again, the Chancellor rejected the plea for increased capital allowances for investment in manufacturing. Once again, he failed to restore the tragic cuts in the training budget. He failed once again to realise the seriousness of rising unemployment, and he took no action to permit the release of local authority capital receipts to help fund much-needed house building and modernisation programmes.
Why do the Government not comprehend the plain common sense of enabling unemployed building workers to earn a living by providing houses for families who lack them, thereby helping to regenerate confidence and growth in the construction industry, which, on present trends, sees no prospect of recovery in the whole of 1992? From the vantage point of prudent financial management, why do the Government not realise that it costs the Exchequer £8,000 a year in benefits and forgone taxation for every person who becomes unemployed?

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We needed a Budget for investment and recovery and for industry and employment. Instead, we got a Budget the only purpose of which was to seek to rescue the Conservative party from its imminent election defeat.
Mr. Roger King: Would the right hon. and learned Gentleman care to cast his mind back to early January, when he and the shadow spokesman on trade and industry came to Longbridge in my constituency to visit the Rover car factory as part of a "buy British" campaign? Does he recollect standing on the shop floor of Rover and being asked whether Labour would reduce the special car tax? He replied, "No, we would not reduce the special car tax." That was a clear indicaation that Labour would not back the British car industry. Has he changed his mind?
Mr. Smith: The question I was asked in Birmingham was whether I would abolish the special car tax—[interruption.]
Mr. Roger King rose—
Mr. Speaker: Order. The right hon. and learned Gentleman has given way once.
Mr. King: On a point of order, Mr. Speaker.
Mr. Speaker: Nothing out of order has occurred.
Mr. King: The right hon. and learned Gentleman cannot get away with a reply like that. He had every opportunity to say that he would reduce the tax, but he said that there would be no reduction at all.
Mr. Speaker: I am not responsible for the replies.
Mr. Smith: I bear the hon. Gentleman no ill will, because his remaining period in this House is very short. In the few days that remain, I should not want to fall out too sharply with him. But he is simply wrong. We made it clear that we could not afford to abolish the car tax—and nor have the Government done so: they have reduced it. Let me make it clear that our car industry is in such a dire state as a result of the Conservative party's policies that it needs the relief that has been given on this occasion. [Interruption.] Hon. Members can shout if they like, but we shall press on with the debate.
As is now being increasingly realised, the public will not be fooled by the Chancellor's Budget. The Government are borrowing money that they do not have to buy votes that they do not deserve. In the context of the doubling of the Government's financial deficit, voters ask, "How can it make sense to borrow money for tax cuts?" They do so particularly because they have repeatedly been told by the Conservative party under its former leader, as well as, from time to time, its present head, that borrowing now means higher taxes later.
If I may say so, the co-ordination and management of the Government's presentation of their Budget, particularly through the Tory tabloids, have not reached their usual skill. Those who opened the Daily Mail today and turned to the political column would read the ex-editor of New Statesman and Society, Mr. Paul Johnson, who wrote:
"Now Major's on the road to victory"—
[HON. MEMBERS: "Hear, hear."] Let me repeat what he said:
"Now Major's on the road to victory".
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There follows a glowing account of all the virtues contained in this Budget. Indeed, there never was a Budget of such all-consuming virtue as the one to which Mr. Paul Johnson had his attention drawn yesterday by the spin doctor from the Conservative party.
Unfortunately, the spin doctor from the Conservative party failed to call on the City desk, where Mr. Andrew Alexander has as his headline, "Lamont misses his chance". There follows a gloomy account of Britain's parlous economic condition, stressing how serious our condition is and making statements such as this:
"It also makes it hard to take seriously the Chancellor's pledge that the Government will successively reduce income tax in the years ahead."
The distinguished writer of the City column continues — [Interruption.] Conservative Members do not like listening, but I shall tell them any way. He continues:
"Thatcherites, viewing the prospects of six years of budget deficits stretching all the way to 1997 (and suspecting that they are understated anyway) may well feel that the Government is simply squandering its inheritance of fiscal prudence."
That is quite different from the account of the Budget that appears in the political column.
Mr. John Butterfill rose—
Mr. Smith: No doubt the hon. Gentleman wants to clear this matter up for me, so I shall give way to him in the hope that he will do so.
Mr. Butterfill: Would the right hon. and learned Gentleman compare the PSBR of 4 per cent. that we are running with the 6 per cent. average of the previous Labour Government and the 9 per cent. peak that they reached?
Mr. Smith: During the years to which the hon. Gentleman refers, most deficits were higher in most countries because we were suffering the oil price shock throughout the western world. The proper comparison would be a comparative one, not a historical one, which the Conservative party would not want to make.
However, I cannot confess that I am dismayed at the lack of co-ordination. My only worry about drawing it to the attention of a wider audience is that it might go on the agenda of the A team and the spin doctor from the Conservative party will have to widen his round to the square mile and elsewhere.
On the question of the Conservative party borrowing, which is one of the interesting features of our present political debate, my right hon. Friend the Leader of the Opposition challenged the Prime Minister on just this point last month during Prime Minister's Question Time. He quoted from a Conservative party publication called "Towards 2000", which was issued last year and which says that it was written by the Prime Minister himself. That might be stretching credulity, but that is what it says on the document—that it was written by the Prime Minister himself, the right hon. Member for Huntingdon (Mr. Major). The document states that
"if borrowing takes the strain, taxes—not just our taxes but the next generation's too—have to go up."
That was the Conservative view just a few months ago.
The Prime Minister, clearly irritated by my right hon. Friend's question and even more irritated by the fact that very recent Conservative party propaganda stated the position so clearly, challenged the Leader of the Opposition to do some more research. On 25 February—last month—he told the House:

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"If he"—
my right hon. Friend—
"had done a little more research and had seen the evidence that I gave to the Treasury and Civil Service Select Committee in 1987, he would have seen then—when we had a fiscal surplus of many billions—that I indicated that it would be right, in a downturn, to borrow money in a recession."—[Official Report, 25 February 1992; Vol. 204, c. 808.]
Apparently, that is a complete defence to the charge against them.
Of course, taking the Prime Minister at his word, a number of interested parties—including BBC's "On the Record" programme and my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Sedgemore), who is a member of the Treasury and Civil Service Select Committee—decided to do some research. They looked for the evidence of the former Chief Secretary, the right hon. Member for Huntingdon. They searched right through the Select Committee's evidence for 1987, but they searched in vain, because the right hon. Member for Huntingdon did not give evidence to the Select Committee in 1987 at all. Not a word did he utter to the Select Committee.
Undaunted, our intrepid researchers kept working, and discovered some evidence given in 1988 by the then Chief Secretary after that year's autumn statement. Perhaps that had got confused in the right hon. Gentleman's mind. On these matters, given the stresses and strains of the House of Commons, one should take an indulgent attitude but, unfortunately for the Prime Minister—[Interruption.] I think that I am entitled to be reasonably patronising about this kind of thing. Unfortunately for the Prime Minister, his 1988 evidence is not so helpful after all. He was wrong about the year—
Mr. Butterfill: What would you do?
Mr. Smith: Well, I would not say that I had given evidence to a Select Committee if I had not.
The right hon. Gentleman was wrong about the year, but he was also wrong about the contents of the evidence that he revealed to the Select Committee on 23 November 1988. He did not say anything at all about running deficits in recessions. What he said was far more revealing. As reported on page 18 of the Select Committee's report on the 1988 autumn statement, he said:
"Over a run of years it remains our policy to reduce public expenditure proportionately to national income and we plan to achieve that. If we found that our projections were that growth in the economy would level off quite significantly, clearly we would have to look at the impact on public expenditure and whether we had to take a very clear, fresh and draconian look at the levels of public expenditure that were appropriate."
Note the words
"clear, fresh and draconian".
We know—it cannot be a matter of doubt—that unfortunately growth has not only levelled off but disappeared. According to the Prime Minister's own rules, he should be taking a
"clear, fresh and draconian look"
at public spending, but of course he is not, because he has just called an election.
If he were to win the election, we could expect "clear, fresh and draconian" action. That would come in one of two ways: either through increases in taxation in the favourite Conservative manner—by raising the level of VAT or extending its range of application, or both—or by cutting public expenditure sharply. The Conservative party is engaged—
Mr. Norman Lamont rose—
Mr. Smith: Will the right hon. Gentleman allow me to finish the sentence? It is not bad my giving way twice to him when he did not have the courtesy even to turn up for the debate, but I shall do so.
The Conservative party is engaged on a three-card trick. It is promising to maintain levels of public expenditure, to cut the basic rate of income tax to 20 per cent. and to balance the budget. In our economic situation, they cannot do all three things at once.
Mr. Lamont: I am afraid that what the right hon. and learned Gentleman says about borrowing is totally unconvincing. He should remember the lectures that the Leader of the Opposition used to give my right hon. Friend the Member for Finchley (Mrs. Thatcher) when she was Prime Minister, urging her to borrow ever more money. A few years ago, the Leader of the Opposition said:
"The vitality of the US economy has been initiated by Government … borrowing. To renovate our economy we have to generate expansion in much the same way."
The question that the right hon. and learned Gentleman must answer is—
Hon. Members: Speech.
Mr. Speaker: Order. The right hon. and learned Member for Monklands, East (Mr. Smith) has given way.
Mr. Lamont: The right hon. and learned Gentleman must answer this question: is the present level of borrowing too high, or is it about right? If it is too high, will he tell us which taxes he will put up, or which spending programmes he will drop from his manifesto?
Mr. Smith: The right hon. Gentleman took some time to put his question—some people will think that he wants to have another run at presenting his unsuccessful Budget to the House. It is a bit rich to be asked questions about borrowing by the right hon. Gentleman, but I shall answer his question directly, and I shall be obliged if he will do me the courtesy of answering me, and explaining the quotation from him that I cited.
I shall fulfil the first part of that bargain by saying that I shall accept the public sector borrowing requirement which exists after we win the election. I shall have no choice, because it will be there, and we shall operate on that basis. Having given that answer, I shall give way to the Chancellor if he will explain to us what he meant by saying:
"We shall pay for borrowing by borrowing—that is the normal way in which one pays for it."
I shall give way to the right hon. Gentleman now if he wants to explain that.
Mr. Lamont: The right hon. and learned Gentleman has not answered the question that I put to him—[HON. MEMBERS: "Answer."] The right hon. and learned Gentleman says that he accepts the borrowing requirement, yet he also makes promises that would cost some £37 billion. Which promises is he prepared to drop?
Mr. Smith: The right hon. Gentleman did not behave terribly honourably there. I gave way to him on the basis that he would answer a specific question. However, he will now have to live with the fact that the quotation will go into the record uncontradicted. He said:

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"We shall pay for borrowing by borrowing—that is the normal way in which one pays for it."—[Official Report, 28 November 1991; Vol. 199, c. 1062.]
That is not the normal way at all; it is the Conservative way.
The Government cannot do all three things at once. Most people will therefore conclude that in this context reductions in income tax are a cynical pre-election device, which, as the history of the Conservative party shows, could be equally cynically overturned if the Government were to achieve their purpose at the polls.
The Conservative party's professed concern for lower-paid people is equally cynical. The proposed income tax cut is designed to reduce everyone's tax bill by just under £2 a week—I do not think that the Government could deny that. The reduction is not £2·64 per week—the figure which appeared in newspapers and, I believe, in Government statements— because 72p of that sum results from the annual indexation of allowances in line with inflation, and should not be regarded as a genuine reduction. Of course, the gain is less for the 250,000 people in taxpaying families on family credit. They will lose 70p in benefit for every pound that they gain in tax cuts.
It was revealing that, in his Budget broadcast last night, the Chancellor, on his own initiative, took as the example of a lower-paid person a taxpayer earning £70 per week. He asked whether we could charge so much tax to a person earning £70 a week.
Mr. Tim Smith: Will the right hon. and learned Gentleman give way?
Mr. Smith: I will not give way to the hon. Gentleman. I have given way frequently in the debate—more than most people would have done. I have given way, although it has been to little purpose.
Mr. Neil Hamilton: You have not given any answers.
Hon. Members: You are a Whip. Be quiet.
Mr. Smith: Yes. It is a sad state of affairs that the hon. Member for Tatton (Mr. Hamilton) is a Whip. I did not know that the Conservative party had descended to a condition in which the hon. Gentleman had been made a Whip. I see that it has now happened. Perhaps the hon. Gentleman will become the Government Chief Whip as well. He certainly looks as if he aspires to that office.
I return to the subject of the taxpayer on £70 a week, whom the Chancellor told us he had in mind when he made his tax change. The tax reduction offered to that taxpayer is just under 19p per week. That is the price of a box of matches, which may be why the Chancellor referred to the tax on matches.
If the Conservative party truly cared for the interests of the lower-paid, the Government would increase retirement pensions for all pensioners—by £5 for a single person and £8 for a married couple—instead of £2 and £3 only for pensioners on income support, and they would uprate child benefit to £9·95 for every child in the family. That would have been its level if the Conservatives had updated it in line with inflation, as is customarily done with tax allowances. That neglect may not be surprising in a Cabinet that does not have a single woman member.
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The money that the Conservatives have borrowed for tax cuts should be used for investment in our public services and in the improvement of our economy. That is the preferred choice, and the better choice which will be made by families throughout the country who depend on our national health service for all their health care needs and who look to our education system to provide the opportunity for their children.
Over the past 13 years, Britain has been subjected to the rollercoaster economics of boom and bust—of stop, go and stop again. We have had to suffer two recessions. The one at the beginning of the decade was the deepest since the war, and the one that we now endure is the longest since the war. Separating those two recessions were the years of an inflationary boom. During the Conservatives' period of office, economic growth has averaged 1·7 per cent., which is the worst record for economic growth of any Government of any political colour since the end of the second world war.
Despite all the benefits of North sea oil, with those revenues alone worth more than £100 billion, and despite selling off the family silver, our public finances are now in debt and in disorder. Fortunately for our country, time has run out for a party living on borrowed money and on borrowed time. The time for choice is now; it is time for Labour. [Interruption.]
Mr. Speaker: Order. I hope that we shall now proceed in good order. Will hon. Members please leave quietly if they are not remaining in the Chamber?
4.18 pm
The Chief Secretary to the Treasury (Mr. David Mellor): I am glad that Labour Members enjoyed the speech by the next Leader of the Opposition. To those of us who attend these events more regularly than some of those who were cheering, it was yet another of the "green" speeches of the right hon. and learned Member for Monk lands, East (Mr. Smith)—endlessly recycled. He chanced his arm in a number of respects—for instance, the mention of Japan, and the "Boy, they've got good" remark. I wonder whether the right hon. and learned Gentleman has studied the figures that I gave in a parliamentary answer to his hon. Friend the Member for Leeds, West (Mr. Battle). They actually tell us something about the Japanese attitude to Britain.
In 1978, the last full year of a Labour Government, when the right hon. and learned Gentleman held quite high office, Japanease investment in this country was minus £10 million. In other words, there was disinvestment. The Opposition were not saying, "Boy, they've got good." In 1989, there was Japanese investment in this country of £1·12 billion. Whether or not the Opposition were saying, "Boy, they've got good," that is what the investment is actually telling us they felt. They are doing that in the teeth of nonsensical opposition to overseas investment by the Labour party, including the Trades Union Congress speech from the rostrum denouncing it as alien—something never repudiated by the Opposition Front Bench.
The right hon. and learned Gentleman trailed his coat by making reference to the Frost programme last Sunday. I am astonished that the Opposition wish to be reminded of the performance of the hon. Member for Livingston (Mr. Cook), unless the byzantine complexity of the politics of the Labour party at the moment mean that the right

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hon. and learned Member for Monklands, East was quite happy that his colleague should remember what a fool the hon. Gentleman made of himself.
Mr. David Howell: Is my right hon. and learned Friend aware that, last weekend, Japan's second biggest investor in the United Kingdom, the president of the Toyota motor company, was here and that he made it crystal clear that he regards Britain as one of the most successful countries in the entire European Community?
Mr. Allan Rogers: Cheap labour.
Mr. Howell: He intends to build on his investment here, and he has undiminished faith in the economic success and dynamism of this country. Does my right hon. and learned Friend agree that the right hon. and learned Member for Monklands, East (Mr. Smith), by bad-mouthing Britain in the eyes of the Japanese and undermining our reputation and success, is doing no good whatsoever to this nation?
Mr. Mellor: It is interesting that, even this early in the debate, we have revealed the two faces of the Labour party —on the one hand the attempts at moderation and understanding of a market economy by Front-Bench Members, and on the other hand the real voice of the guts of the Labour party. The hon. Member for Rhondda (Mr. Rogers) shouted out "Cheap labour" when my right hon. Friend the Member for Guildford (Mr. Howell) referred to Japanese investment. Even more extraordinary is that he from south Wales should shout "Cheap labour" when the economy of south Wales has been transformed by inward investment from countries such as Japan. [Interruption.] If the hon. Gentleman wishes to withdraw "Cheap labour", I shall give way to him. After all, in four weeks he could be a Defence Minister, so we should hear a bit more. He is laughing. He does not think that that is very likely.
Mr. Stuart Bell rose—
Mr. John Home Robertson rose—
Mr. Mellor: I shall push on for a bit now. [Interruption.] I shall give way to the devolutionist tendency a bit later.
This is a Budget for recovery, and I warmly congratulate my right hon. Friend the Chancellor on it. But, as it happens, I do not need to add a single word of commendation of my own; I can let the business men and industrialists of Britain do that for me. Contrary to the picture that has been portrayed by the Opposition, what has been said by business and industry is a tremendous vote of confidence in this Budget, my right hon. Friend the Chancellor and the Government. The Confederation of British Industry said:
"This is a prudent and positive Budget—reflecting the prime importance of keeping inflation under control. Business welcomes, particularly, bringing forward the benefits of the Uniform Business Rate reforms, and the measures to help small firms and the car industry."
The Institute of Directors said that the Budget was
"prudent, sound and correct and producing a realistic base for business recovery."
[Interruption.] Opposition Members do not like it, but they will have to deal with the business community in Britain. They do not understand for a moment— [Interruption.] During the election they will have to deal with what the business community of Britain thinks of them. It is better that they prepare now by knowing what the business community has said about the Budget.
Mr. John Garrett: Will the Minister give way?
Mr. Mellor: I shall come to the hon. Member for Norwich, South (Mr. Garrett) in a moment, if he will contain himself. I wish to remind him of a comment of his.
Mr. Home Robertson: Will the Minister give way?
Sir Patrick Duffy: Will the Minister give way?
Mr. Speaker: Order. We must get on.
Mr. Mellor: The president of the Association of British Chambers of Commerce, Mr. Miles Middleton, said:
"The combined effect of these measures will provide considerable assistance for businesses fighting their way out of the recession. UK business believe that the Chancellor is wholly justified in his continuing priority of defeating inflation. The Chancellor has the full support of British firms, who had not asked for nor expected cuts in corporation tax." He went on to commend the uniform business rate.
Mr. Home Robertson: He would, wouldn't he?
Mr. Mellor: I hear the hon. Gentleman say, "He would, wouldn't he?" One scratches the surface of the Labour party and that is its attitude to business men in Britain.
Sir Patrick Duffy: Will the Minister give way?
Mr. Mellor: No. I am not giving way for the moment. The hon. Gentleman is an experienced parliamentarian. I shall give way to him when I have finished telling him what the business community says about the Budget.
The Society of Motor Manufacturers and Traders said:
"The Motor Industry is pleased with this year's budget. We are delighted Car Tax has been reduced to 5 per cent.… We believe that about 70,000 extra sales should result, with all the implications this has for employment."
The Federation of Small Businesses has sent a letter to my right hon. Friend the Chancellor this morning from its chairman of financial affairs. It says:
"Dear Mr. Lamont,
I am writing to congratulate you on your budget statement, which contained many proposals which will be of benefit to many small businesses … It has been most refreshing to see that you have listened to the recommendations put to you and have been able to act upon a number of them."
The Road Haulage Association said:
"It was a very clever Budget."
The secretary of the National Farmers Union's taxation committee said:
"This is a substantial help for the farming industry and something we will welcome."
[Interruption.] The childish attitude of Opposition Members shows that they are not remotely interested in dealing with the central issue. If they wish to take issue with the suggestion that the Budget is a Budget for recovery, they ought to weigh in the balance what all the business men and industrialists of Britain are saying about it. Their unwillingness to do so reflects no credit on them. Perhaps they might listen to this—
Mr. John Battle: Will the Minister give way?
Sir Patrick Duffy rose—
Mr. Home Robertson rose—
Mr. Speaker: Order. Let us settle down. Several of the hon. Members who are rising to put questions seek to participate in the debate. It will make it difficult if they take time now.
Mr. Mellor: Peugeot Talbot, which manufactures at Ryton in Coventry, said:
"Reports coming in from dealers are of increased retail sales and fleet enquiries. I would estimate that we have taken over £3 million worth of additional sales in the first morning of post-Budget trading."
Sir Patrick Duffy: The Minister challenged my hon. Friends to listen to what the business community was saying. May I remind him of the views published only last week of the regional secretary of the Yorkshire and Humberside Association of Chambers of Commerce? He called on the Government to rescue the sinking economy in Yorkshire and Humberside and went on to say that sitting there and doing nothing was no longer an option.
Mr. Mellor: The essence of what is being said is that, far from doing nothing, the Government have produced a Budget which has been welcomed by the Association of British Chambers of Commerce in the quotations that I employed. The Association of British Chambers of Commerce has welcomed the Budget in unequivocal terms.
Mr. Colin Shepherd: Before my right hon. and learned Friend leaves the subject of what the business community has said, will he accept that the cider industry is delighted at the Government's robust attitude? The many people whose jobs depend on that industry will look with great gratitude upon the Government's robust approach.
Mr. Mellor: I had many more quotes, including one from the cider industry. It is simply that, after a while, the barracking from the Opposition gets to the point where it may be sensible to move on. There is a proliferation of quotes from many of the affected industries, making clear how much they welcome the measures introduced by my right hon. Friend.
Also, it was a Budget for people—21 million taxpayers gain £140 a year, there will be a 20 per cent. cut in the marginal rate of tax for 4 million taxpayers, including 570,000 single people and 1·3 million pensioners, and 5 million poorer pensioners will see increases of £2 or £3 per week from October.
Again, the House should not just hear that from me. Let us hear what Help the Aged had to say:
"All too often we find ourselves grumbling after Budgets but this time we have something to cheer about … It is a positive Budget that will make a positive difference to older people."
We also heard a contribution—
Mr. Battle: Will the right hon. and learned Gentleman give way?
Mr. Mellor: If the hon. Gentleman, who is a Whip—although Whips are not subject to vows of silence—
Mr. Battle: I am not a Whip.
Mr. Mellor: Was the hon. Gentleman dismissed? I shall give way.
Mr. Battle: I am grateful to the right hon. and learned Gentleman. What will he say to my constituent who is on £120 a week and has worked out that, with what he will
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lose in family credit, he will gain 19p a week as a result of the tax changes? When the tax changes are put together with the loss in family credit, is it not a fact that many people will not gain the sort of money that the right hon. and learned Gentleman is trying to con them that they will?
Mr. Mellor: That sounds like a desperate plea in mitigation for the Opposition's foolish decision to oppose that change. I shall give the hon. Gentleman the figures.
Mr. Battle: Is it true?
Mr. Mellor: I am about to deal with that—it is not true. Of the £1·8 billion in tax reductions due to that 20p move, only £18 million is taken back under the family credit arrangements, which is less than 1 per cent.
I am sorry that I accused the hon. Member for Leeds, West of still being a Whip. I appreciate that he was one of those who was honourable enough to resign from the Front Bench because he disagreed with policy.
Mr. Derek Fatchett: Will the right hon. and learned Gentleman give way?
Mr. Mellor: No. I shall push on—[Interruption.] I do not think that the Labour party wants to listen to this speech, Madam Deputy Speaker—[Interruption.]
Madam Deputy Speaker (Miss Betty Boothroyd): Order.
Mr. Mellor: The Leader of the Opposition delivered the wrong speech about the wrong Budget yesterday. Notwithstanding the fact that the shadow Chancellor, the right hon. and learned Member for Monklands, East, had supplied him with the wrong speech for the wrong Budget —whether deliberately we do not know—astonishingly the Leader of the Opposition decided to plough on anyway. I wondered what was going on. Was this the first human brain to be affected by the Michelangelo virus? In case that may be thought to be unfair, let us consider what Mr. Matthew Parris of The Times had to say about the performance of the Leader of the Opposition. He said:
"Mr. Kinnock decided to read the speech anyway. Who can blame him! We have all experienced moments of intellectual panic and at such times there is comfort in having in one's hands a speech, even if it isn't the right speech.
But it wasn't the right speech, and, on the faces of his party around and behind him, it showed. John Smith, tight-lipped and (in Richard Page's phrase) 'knee-deep in shot foxes', looked as though his mouth was full of live spiders."
It was not that much different last year. In a sense it is a shame that the Leader of the Opposition was not away from the House yesterday, as he was from Twickenham on Saturday when, perhaps, he was the only Welsh penalty that was not missed.
During his speech, the right hon. Gentleman said that it was all
"a panic-stricken pre-election political sweetener."
The only thing that was panic-stricken was the look on the right hon. Gentleman's face when he realised what the Chancellor of the Exchequer was saying, matched only by the even more panic-stricken look on the face of the right hon. and learned Member for Monklands, East, the shadow Chancellor, when the Leader of the Opposition chose to give way half way through his speech. The right hon. and learned Gentleman knew that a question would be asked that his right hon. Friend would be unable to answer.
Mr. Paul Boateng rose—
Mr. Mellor: The hon. Gentleman seems very frisky. Let us see if he has got something worth saying that matches the smug look on his face.
Mr. Boateng: The chairman of the Conservative party has said that debt is deferred taxation. Which taxes have been deferred and by how much will they be increased?
Mr. Mellor: I do not think that that has anything to do with the point. [Interruption.] At least it is one thing in life if one can satisfy oneself and the hon. Gentleman is satisfied that he made a very clever intervention, but it was not.
I want to know why the Leader of the Opposition was unable to tell us straightaway the attitude of the Labour party to the 20p tax reduction. Instead, the right hon. Gentleman came out with a feeble excuse. When the history of feeble excuses comes to be written, it must appear as one of the feeblest and also one of the longest ever uttered. He said:
"We have been treated for months with teases about the Budget. We have been treated to the sight of the Chancellor of the Exchequer and other members of the Treasury team saying that they could not disclose anything. I think that, in the name of reasonability—
that word is a good argument for more expenditure on adult education—
"they could at least give us another six days to produce our own statement in opposition to, an alternative to, what we have heard this afternoon." [Official Report, 10 March 1992; Vol. 205, c. 763–65.]
That is what the Budget debate is for and that is why the right hon. Gentleman was supposed to make his speech. After all, one could say that they have had 13 years to get their attitude straight on such matters. Why the delay of six days? The answer is that the launch of the shadow Budget was designed to happen the morning after the Budget debate was due to finish, in order, of course, to avoid proper scrutiny.
Why have neither the Leader of the Opposition nor the shadow Chancellor been able to produce for us now, at this historic moment when the election has been announced, what they intend to do? Why can we not know now? I have got the back of an envelope here and the shadow Chancellor could do that for us now. After all, most of the calculations that the Labour party has made and has had to move away from, had to apologise for and give contrary explanations for in the past eight weeks, all seem to have been worked out on the back of an envelope. [Interruption.] The hon. Member for Workington (Mr. Campbell-Savours) is being extremely noisy, particularly about my electoral prospects in Putney. He might ask the Labour party why it has not targeted it as a seat that it expects to win, because it knows a bit more about Putney than he does. I shall give way to the hon. Gentleman and then, I hope, he will shut up for the rest of my speech. What has he got to say for himself? [HON. MEMBERS: "Up, up."] The hon. Gentleman has one of the most remarkable bodies that I have ever seen. His mouth works when his bum is on a seat but not when he is standing on his feet.
Sir Donald Thompson: Will my right hon. and learned Friend explain why, after 13 years of Conservative rule, my constituency and most constituencies are spending 30 or 40 per cent. per pupil more in real terms than in 1979? Why is Calderdale the best area health authority, universally accepted by people of all sides, not
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just in Great Britain but in Europe? Why do we have massive land grants from the Government in a non-selected area? How have the motorways, railways and roads been improved after 13 years' Conservative rule?
Mr. Mellor: My hon. Friend points to the Government's remarkable achievement of making substantial increases in public expenditure, while bringing down the taxation rate for so many people. That is what happens when an economy works successfully, as the British economy worked for most of the 1980s, when we had eight years of continuous growth.
Mr. Fatchett: Will the right hon. and learned Gentleman give way?
Mr. Mellor: No, I wish to push on.
Mr. Fatchett rose—
Mr. Mellor: The Labour party does itself no credit by trying repeatedly to disrupt my speech.
Madam Deputy Speaker: Order. The Minister has made it clear that he will not give way. The hon. Gentleman should not persist.
Mr. Mellor: The right hon. and learned Member for Monklands, East told us last night that he intends to oppose the reduction of the basic rate to 20p for the first £2,000 of earnings. That was said at about the same time as the hon. Member for Great Grimsby (Mr. Mitchell) was telling me on Sky that he intended to vote for it, and the same time as the hon. Member for Norwich, South, who has unfortunately now left us, had obviously been telling a Lobby correspondent—it was reported in this morning's press—that it was a good idea because it would help the poor.
The truth is now out about the right hon. and learned Gentleman's plans—Labour would soak not only the rich but also the poor.
Mr. Michael Brown: I am appalled and amazed at what my right hon. and learned Friend has just said. The hon. Member for Great Grimsby (Mr. Mitchell), in a radio interview on Radio Humberside just before I was interviewed, told the people of south Humberside that of course the Labour party would support the Government's proposals for a 20p tax plan and of course the Labour party would not reverse it. I cannot understand how the shadow Chancellor could oppose what the hon. Member for Great Grimsby said.
Several Hon. Members rose—
Madam Deputy Speaker: Order.
Mr. Mellor: We shall come to the explanation for that. We have an absurd spectacle of the Labour party proposing a minimum wage as an imperative to help low earners, while proposing to fund the cost of that minimum wage by increasing the marginal rate of tax on those same low earners back to 25 per cent.
Dame Elaine Kellett-Bowman: Is my right hon. and learned Friend aware that 4,600 people are employed in the hospital service in Lancaster, the vast majority of whom will gain immensely from the 20p rate of tax? They will be incensed beyond measure if the Labour party undoes that reduction in their taxation.
Mr. Mellor: Obviously. I cannot think of a more ludicrous position for Labour Members to get themselves into. Over the years, they have got themselves into more ludicrous positions than those in a Jane Fonda workout, but to propose a minimum wage and express compassion for the low paid and then propose to claw back 25 per cent. in taxation must be the most ludicrous of all.
Mr. Campbell-Savours: Will the Minister give way?
Mr. Mellor: The marvels of medical science.
Mr. Campbell-Savours: Who will gain most out of the 20 per cent. concession—a Member of Parliament or someone earning £70 a week? Will the Minister give an honest answer?
Mr. Mellor: The answer is that everyone-21 million people—will gain.
Mr. Campbell-Savours: Answer the question.
Mr. Mellor: The hon. Member for Workington is abusive beyond reason. The answer is that everyone who is within the tax bracket gains. The impact of the 20p band means that those who gain more are those within that bracket and anyone who is outside the tax system gains because of the increase in social security benefit, income support, family credit and so on. That has been announced.
Mr. Patrick Thompson: The hon. Member for Norwich, South (Mr. Garrett) was reported in the Eastern Daily Press this morning as welcoming the 20p tax band that we have introduced. What does my right hon. and learned Friend say to the hon. Gentleman and the Opposition Front Bench?
Mr. Mellor: The Labour party is in a muddle and a mess, and I think that I know why. Is this a pamphlet that I see before me? Was it not published in February 1992, which is quite recent, even for the Labour party? Is it not a Labour party publication entitled "Pocket Policy Guide"?—[Interruption.] As the hon. Member for Workington will rely on it to mislead the citizens of Workington, he should at least open his ears and close his mouth.
Do I not see a section marked "Fair Taxes", and does it not say:
"Labour's plans—a move towards a starting income tax rate of 20 per cent."?
We have already moved there, so perhaps the right hon. and learned Member for Monklands, East will tell us what the problem is—[HON. MEMBERS: "Answer."] What is the problem? It is interesting to see that the Opposition Front-Bench Members, who are supposed to represent the party, sit mute while the Opposition Back Benchers shout their heads off from a sedentary position.
Mr. John Smith: The Minister will have heard my speech earlier. He may not have comprehended it, but he must have heard it. I made it clear that we oppose any tax cuts that are financed by borrowing. Will the Minister explain what the Chancellor had in mind last night when he drew our attention to people on £70 a week who will receive 19p out of that great concession?
Mr. Mellor: I shall not deal with that evasion, as I have already said.
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Is the right hon. and learned Gentleman's excuse the fact that he does not think that we should reduce tax through borrowing? May I remind him of what happened when he was a Minister in 1977? After the International Monetary Fund had intervened, the public sector borrowing requirement was down to 4 per cent.—
Mr. Campbell-Savours: Here we go again.
Mr. Mellor: Indeed, here we go again. Notwithstanding an improvement in the economy, the Government of which the right hon. and learned Gentleman was a member drove up borrowing to 5·5 per cent. to finance tax cuts of tuppence off income tax and reductions in VAT. The right hon. and learned Gentleman was in no danger of resigning, so what is the difference? There was no difference whatsoever.
Mr. A. J. Beith: Will the Minister give way?
Mr. Mellor: No, not yet.
The Labour party was enthusiastic about a 20p tax band. Not long ago, the Leader of the Opposition said on television:
"I'd like to introduce a lower rate band so that people don't leap immediately into what's called standard rate."
I think that the 20p band is a bit like the exchange rate mechanism—it is advocated by the Labour party only when it thinks that we are not going to implement it.
Many Labour candidates now have lots of words to eat. They have no need to go to Luigis, but can have a satisfying meal eating their own words about the 20p band.
Mr. Beith: Why did the right hon. and learned Member for Surrey, East (Sir G. Howe) speak so clearly against the reduced rate band when he led Conservative Members to oppose it? Why did the present Minister of State, Department of Education and Science, the hon. Member for Enfield, North (Mr. Eggar), say that the reduced rate band was not the way to help the low paid and was
"a measure … forced upon a reluctant Labour Treasury team by the TUC as part of the pay-off for an incomes policy … a price that was too high when it was introduced, and … too high now?"—[Official Report, 2 June 1980; Vol. 985, c. 1161–62.]
Mr. Mellor: The reason is that this band is intended ultimately to remove the 25p band. That is a good reason, and another is that we had to endure criticism from the hon. Member for Berwick-upon-Tweed, (Mr. Beith) and others that we were not serious about the 20p income tax. Our proposal is the best way to demonstrate just how serious we are so that people are offered a real choice between this Government who cut taxation and, among other options, the Liberal Democrats who say that they will put up the basic rate. At least they are honest in saying that they will increase that rate; the Labour party seems to think that it can increase spending and it will not have any impact on taxation.
Mr. Ian Bruce: Will my right hon. and learned Friend give way?
Mr. Mellor: No, I must push on—I think that my hon. Friend has intervened a couple of times.
The Leader of the Opposition talked about bribes. He should learn one lesson: taxation is a takeaway, not a giveaway. He seems to assume that the state has some moral right over everything that anyone earns, and that it

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is an act of magnanimity by the state to allow people to keep some of their earnings as pocket money. That is not how it is.
The right hon. Gentleman came out with a remarkably ill-judged comment that I do not think that he will be allowed to forget, when he likened the reduction to
"borrowing to go away for a day at the races."—[Official Report, 10 March 1992; Vol. 205, c. 766.]
What about the improved standard of living that the money will buy for many hundreds of thousands of people? The right hon. Gentleman believes that he knows how to spend people's money better than they do, which is patronising and inappropriate, and calls into question all aspects of Labour and tax.
If the Labour party is prepared to claw back from the least-well-off taxpayer, what else might it do to feed its spending ambitions and what price the sanctity of the 25p basic rate, which Labour opposed through thick and thin as it came down to 25p? Why should we expect the Labour party to honour its commitment when it is prepared to increase taxation for those just within the tax bracket?
The reason that the right hon. Gentleman thinks that the clawback is acceptable is that he said that it would be spent on public services. He thinks that £1·8 billion is available. One can see how far that would go, given the ambitions of the hon. Member for Oldham, West (Mr. Meacher), the greatest serial spender at liberty, or the hon. Member for Livingston or the hon. Member for Kingston upon Hull, East (Mr. Prescott). That money will be spent more times than even Bob Maxwell would have managed.
The Leader of the Opposition mentioned the health service, and here we come to an interesting fact about the Labour party and the health service. By the time vie take account of the money that it will have to spend to honour the minimum wage, which the hon. Member for Livingston recognises to be between £400 million and £500 million, the £365 million cost of abolishing the charges, getting rid of competitive tendering and introducing no-fault compensation, we reach a total of more than £1 billion of public money that is to be spent on the health service without one penny of it going on patient care.
Therefore, the assumption that the Government would spend money more wisely than the individuals who have it in their pockets is unsustainable. I expect that a Labour Government would spend the money as wisely as the Labour-controlled councils of Lambeth, Haringey, Hackney and Liverpool. If people want to know the difference between the parties, it is that the Conservatives believe that the public have a right to retain as much as possible of their income and spend it. We do not believe in state direction that penalises everyone, rich and poor alike.
The nonsense is that the Opposition's critique of the Budget proceeds on the assumption that money is not being spent on crucial public services, and that tax reductions are being preferred. Nothing is further from the truth. Capital spending on hospitals next year is up 76 per cent. since 1978–79 in real terms. More than £2 billion will be spent in the next 12 months. The Government have completed 600 major building schemes costing more than £1 million, and there are currently 435 major building schemes in progress, each worth more than £1 million. That is the record of a Government who need no lessons in how to provide for public expenditure on sensitive services from a Labour Government of which the right hon. and learned Member for Monklands, East was then a complacent member, with none of the sparky, critical
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tongue of which we hear so much, enjoy so much and look forward to enjoying from the Opposition Benches in whatever office he is called on to serve. The Government of which the right hon. and learned Gentleman was a Member cut capital funding by 30 per cent.—22 per cent. in real terms—in 1977–78 alone, despite driving up the public sector borrowing requirement during that period.
Mr. Harry Cohen: Will the right hon. and learned Gentleman give way?
Mr. Mellor: No, I shall carry on for a bit.
The Labour party condemns a PSBR of £28 billion, but only £1·8 billion of that is tax cuts. The rest reflects our determination to sustain our public expenditure commitments across the cycle and the fall in revenue. The Labour party criticises us for borrowing, and fails to recognise that that reflects the consequences of public expenditure plans that Labour spokesmen have persistently denounced as inadequate. They think that they do not have to square that circle—
Mr. Dick Douglas: Will the right hon. and learned Gentleman give way?
Mr. Mellor: No.
Labour Members think that they do not have to square that circle. The deficit is nothing like—
Mr. Douglas rose—
Mr. Mellor: The hon. Gentleman can catch Mr. Deputy Speaker's eye later.
The deficit is nothing like that of the Labour Government. We have already given the figures. They were running a persistent deficit, which was not due to cyclical factors, but increased as the economy came out of the 1975–76 recession.
Mr. Douglas rose—
Madam Deputy Speaker (Miss Betty Boothroyd): Order.
Mr. Mellor: The reality on borrowing is that the Labour party offers no path back to a balanced budget. In The Mail on Sunday, the right hon. and learned Member for Monklands, East did not even claim to try—
Mr. Douglas: On a point of order, Madam Deputy Speaker. The right hon. and learned Gentleman has been lecturing everyone on public sector borrowing requirements. In the heat of the debate I may be in danger of misquoting him, for which I apologise, but I think that he said that it was right to have a £28 billion—
Madam Deputy Speaker: Order. I simply want to know what the hon. Gentleman's point of order for me is, as I must deal with it.
Mr. Douglas: It is a matter of putting the record straight. I think that I am correct in saying that the Chief Secretary to the Treasury has been lecturing the House—
Madam Deputy Speaker: Order. I am trying to be helpful. This is an excitable day, and if the hon. Gentleman seeks to catch my eye later, I shall certainly look his way. If he has a point of order with which I can deal, I must do so, but I cannot involve myself in an argument.
Mr. Douglas: I am asking you, Madam Deputy Speaker, to assist the House in setting the record straight. The Chief Secretary to the Treasury made a statement about the public sector borrowing requirement, and said that it was because the Government had to finance certain expenditure, but the reason for the £28 billion rise in PSBR is—as everyone knows—that the right hon. and learned Gentleman miscalculated the depth of the recession—
Madam Deputy Speaker: Order. That was the most bogus point of order that I have taken in the past 48 hours.
Mr. Mellor: The right hon. and learned Member for Monklands, East knows that the Labour party offers no path back to a balanced Budget. In an extraordinary article in The Mail on Sunday, as well as criticising the Government's level of borrowing, he sought by means of intellectual evasion to claim that additional borrowing would be all right as it was to be used on policies that the Labour party believed to be in the public interest. He cannot even agree with his hon. Friend the Member for Derby, South (Mrs. Beckett), who said on "Newsnight" last night that Labour accepted the level of the PSBR and would not increase it. I wonder whether she realises the implications of what she has said: it means that there is no room for any of Labour's spending plans unless Labour puts up taxes.
We know why the right hon. and learned Gentleman is producing his shadow Budget. He did not want to produce one at all. He is doing it because of protests from Labour Back Benchers about the implications of the limited tax increases that Labour is prepared to consider. We know all about the pressure on the right hon. and learned Gentleman to tone down his tax increases, thereby making it even more difficult for the Labour party to be responsible with the PSBR.
Mr. Peter Shore rose—
Mr. Mellor: As it happens, the right hon. Gentleman is a constituent of mine, being wise enough to live in my constituency while representing another, so I give way to him.
Mr. Shore: The right hon. and learned Gentleman has been justifying the size of the PSBR at 4·5 per cent. this year and, according to the Red Book, probably more than 5 per cent. next year. I do not quarrel with that, but does he agree with me that we should say "Thank God" that we are not members of economic and monetary union stage three? If we were to sign the Maastricht treaty as it stands, when it came into force we would all be compelled to limit our public sector borrowing requirements to 3 per cent. In the light of the telling experience of a full-scale recession, does the Chief Secretary draw from that the obvious lesson: that we should on no account subject ourselves to such foreign intervention?
Mr. Mellor: The right hon. Gentleman might more pertinently ask Labour Front-Bench spokesmen that question. EMU restrictions do not preclude moving above 3 per cent. in certain instances. The restriction applies across a period of years. How would the Labour party deal with this, given its determination to drive up spending, with the inevitable consequence of having to drive up borrowing above what we have disclosed, or of having to put up taxes to which it is not prepared to admit? As was recognised in the leader in The Independent and in many
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other parts of Fleet street yesterday, we offer the opportunity to go back to a balanced Budget across the cycle and to be well within the 3 per cent. limit.
Mr. Chris Smith: I am pleased that the Chief Secretary has touched on this matter, because looking at page 17 of the Red Book the question that occurs to me is: what does the right hon. and learned Gentleman mean by "across the cycle"? Five years' worth of PSBR is laid out in the Red Book; every single one of them shows a substantial deficit.
Mr. Mellor: The hon. Gentleman should have asked me two years ago to help him with the questions that he had left on the photocopier about how Labour would handle these matters. None of them has yet been answered. To answer the question, the problem will be resolved when the economy returns to trend growth. The hon. Gentleman knows that we moved into balance in 1987. Everything turns on how quickly the economy grows; but there is nothing for the Labour party in this, because it would not be able to stimulate growth over and above what we have achieved. It will not be able to manage the PSBR given its expenditure plans, either.
We have produced a Budget that allows us to restate our commitment in three crucial areas. We believe in low personal taxation—brought down by 3p in our first term, by another 3p in our second term and by 2p by the introduction of the 20p band in our third term. That is a steady record of achievement, of returning spending power to the people. Real take-home pay for the typical family has increased by £78 a week since 1978–79. My right hon. and hon. Friends and I are proud of that. The money has been used to good effect. Millions of people have bought their homes and improved them. Millions more now own shares or have bought equipment that would have been beyond the dreams of families years ago. They have travelled abroad more; foreign holidays have doubled in number since 1981.
This is a Budget for people which allows us to reaffirm our determination that the living standards of the British people should rise. It is also a Budget for proper public provision. That provision has been a hallmark of this Government, which shows that, with growth in a successfully managed economy, it is perfectly possible substantially to increase public expenditure in priority areas while reducing taxation.
Miss Joan Lestor: If the right hon. and learned Gentleman is so concerned about public provision and helping families, why was there nothing in the Budget to help women back to work by helping with child care? Single families and people living in poverty will receive nothing. Child benefit, which would have helped people in need, was not increased either.
Mr. Mellor: Most of those assisted by this measure are working women, because they predominantly constitute the category of people most helped by the 20p band. What the hon. Lady has said in her well-intentioned way is exactly the sort of stuff that we will be hearing from the Labour party. The shadow Chief Secretary does not propose any increase in the PSBR; on the other hand, when the hon. Member for Eccles (Miss Lestor) gets on the hustings, she will offer all sorts of inducements to working women, outlining what Labour will do even though what she says is not part of Labour's spending programme.

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Will Labour put up taxes or will it put up borrowing? Or will it repudiate the priorities that the hon. Member for Eccles and so many other Opposition Members are peddling?
Mr. Campbell-Savours: Will the Minister give way?
Mr. Mellor: No. The hon. Gentleman seems even more than usually disturbed.
Mr. Campbell-Savours: I am trying to be helpful—
Madam Deputy Speaker: Order. I cannot help that, but it would be helpful to the Chair if the hon. Gentleman would resume his seat, as the Minister is not giving way.
Mr. Mellor: I can outline some matters to the hon. Gentleman later in private; he might like to follow them up.
The conditions for the recovery of the British economy exist: low inflation, competitive interest rates, improving productivity, the best industrial relations since records began a century ago, a good export record and money in the pockets of consumers.
Mr. Campbell-Savours rose—
Mr. Mellor: The hon. Gentleman is just trying to be disruptive. Although he takes advantage of the rights of Parliament, he does not like others to do so.
The response of the business community to the Budget showed that its members feel the wind in their sails. What is needed now is a return to confidence. And what is the single greatest obstacle to confidence? The prospect of the election of a Labour Government. Today, we embark on the great and necessary task of removing that obstacle.
Yesterday, the Leader of the Opposition said:
"They are hollow men—and the Tory Government ends not with a recovery bang but with a bribery whimper."— [Official Report, 10 March 1992; Vol. 205, c. 768.]
I beg to remind Opposition Members of how the last Labour Government ended. The following are some headlines from the last six months of that Labour Government:
"999 cover only by ambulances …
1,100 hospitals under siege …
Ambulance strikers ignore emergencies"—
Mr. Campbell-Savours rose—
Madam Deputy Speaker: Order. The hon. Gentleman must resume his seat. The Minister has made it clear to me and to the House that he is not giving way.
Mr. Mellor: The Opposition do not want to know, Madam Deputy Speaker. Other headlines read:
"Cancer ward sent home …
Rees ready to use troops to move medical supplies
Callaghan says: I see no chaos".
Many people in this country remember what the last Labour Government were like. Those who fail to learn the lessons of history are doomed to repeat them. Judging by their performance this afternoon, the right hon. and learned Member for Monklands, East and his colleagues have learnt nothing except—and this only with partial success—the art of evasion.
Some say that everything has changed about the Labour party. Its members have certainly been willing to change inconvenient attitudes. The right hon. and learned Gentleman says, "These are my principles; if you don't like them, I have others." In that sense everything has changed,
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but nothing has really changed. The Labour party is as incompetent as ever, as unready to listen to reason as ever, and that is why it must be defeated.
5.9 pm
Mr. Merlyn Rees: This will be my last speech in the House of Commons. If it were not, I would have been tempted to take up the point made by the Chief Secretary to the Treasury when he chided the Welsh rugby team for being so bad at Twickenham. That I agree with, but I found his nasty anti-Welshism nauseating. When I speak in Cardiff next week in a marginal Tory seat, the constituents will not be highly amused at the sage of Putney who hates the Leader of the Opposition largely because he is Welsh and from the mining valleys. I am prepared to give way to the right hon. and learned Gentleman but he does not seem to wish to intervene. He would be anti-Welsh to the nth degree, and he always is when it comes to the Leader of the Opposition.
Mr. Mellor: I am sure that the right hon. Gentleman is capable of recognising the difference between being anti the Leader of the Opposition and being anti-Welsh. He has made a thoroughly unworthy point.
Mr. Rees: I would repeat it because I feel it, even if it were the last thing that I said in the House. I would join the right hon. and learned Gentleman in having a go at the Welsh rugby team, but not in having a go in the way that he does in the snobby phoney accent of outer London against a decent man whose only crime is that he has a Welsh valley accent.
In most of my parliamentary career, I have not spoken on economic affairs, even though it was my academic interest for a number of years. Therefore, I finish in a way that I should have started 30 years ago, when my first speech was on education and its implications for technology. Today I want to talk about the Budget. I shall be brief, but it will be sufficient to bring out the issue that dominated my formative years. I was born in a village with 80 per cent. unemployment. My father walked to London during the depression. Therefore, I cannot shake off an abiding hatred of unemployment in any form.
In the south Leeds part of my constituency and in the area represented by my hon. Friend the Member for Leeds, Central (Mr. Fatchett), unemployment is still more than 20 per cent. I cannot glory in that. People say that we must grin and bear it, but many of those 20 per cent. have been unemployed for years. Nothing in the Budget will help them. In The Independent today, a research fellow from the London School of Economics makes it clear that the majority of non-taxpayers will not be helped by yesterday's Budget. That is the group I am talking about.
In his Budget speech yesterday, the Chancellor said:
"Even with a resumption of growth, unemployment is likely to go on rising for some time. But while the increase will moderate over the months ahead, a sustained reduction in unemployment over the longer term will depend crucially on our success in keeping inflation down".—[Official Report 10 March 1992; Vol. 205, c. 747.]
In the 1930s, inflation was low because of high employment. The moment one moves to full employment, one has inflation. Unemployment is one of the reasons —not the only reason—why the Government have been able to bring down inflation.
The Financial Secretary to the Treasury (Mr. Francis Maude): If unemployment is so easy to solve, why have every Labour Government left office with unemployment higher than when they started?
Mr. Rees: If the Minister looks at the figures for 1951 and 1979 he will see that the relative increase is right, but the figures overall were falling. I shall come to that point in a moment.
In no way will unemployment in my constituency be reduced by the upturn. That is not how the upturn works. It works in that way in the city, the suburbs and in the affluent middle of Leeds where there is a boom at the moment, but it has no effect on the sort of people whom I and my hon. Friends from Leeds represent. That is one of the gaps in the Government's thinking.
Mr. Rogers: Earlier in the debate, despite having mentioned me, the Chief Secretary to the Treasury would not give way. I said that Japanese investment was coming to Britain because of our cheap labour. The Chief Secretary, in his usual reptilian way, is still not listening. As well as the levels of unemployment that exist in many of our communities that the Chief Secretary is not prepared to accept, he is also not prepared to accept the low wage levels of the economy surrounding those levels of high unemployment. One reason why the Japanese are investing in Britain is that our wage levels are so much lower than those of France, Germany, Holland and Belgium. Until the Government recognise that, our communities will continue to suffer.
Mr. Rees: My hon. Friend knows that in south Wales, which I left many years ago, the work of the Japanese firms is to the credit of the area. They have brought in better management and they make a product. They are in manufacturing. I approve of that.
The unemployment that I am concerned about is the unemployment in my constituency and that of my hon. Friend the Member for Leeds, Central. The reason for it is the decline of manufacturing industry. My constituency —I have always said that I do not like that phrase—the constituency that I represent was a manufacturing area with engineering and clothing industries. Those industries have gone. Manufacturing there has been decimated. It is no longer a proud manufacturing area. Sometimes I think that one of the things that is wrong with the Government is that they have never understood the value of manufacturing, because their Members come from areas where manufacturing is not the norm. It was the norm in my area.
I am the last person to want a return to the smokestack industries and the old collieries with the 1ft 6in and 2ft 6in seams—which, thank heavens, were shut down in the 1960s; no one wants to go back to those—but we need a Government who are concerned with a return to manufacturing, with training and education. As my hon. Friends know, we talk in the House about the great changes in education, but we see nothing of those in my constituency. The number of people who stay on at school after 16 is remarkably small. I often used to meet my young constituents in Northern Ireland. They were in the infantry battalions, in the KOYLIs and the Duke of Wellingtons and so on. There is much talk about picking out one or two to go to independent and direct grant schools. That might be a good idea in some respects, but it has no effect on my area in the sense in which I am
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talking. The Budget played little part in what I want to see in my area in training, educational changes and investment.
I have a memory of the day when people began to be concerned about full employment. They were not so concerned in the inter-war years, when the heavy unemployment was largely due to the decline in manufacturing and there were the hunger marches and so on. Seeing the films of that time, one would have thought that the majority of people in Britain cared. They did not. Otherwise, the election results would have been different, but, as a result of the war, people began to be concerned.
I was doing other things at the time, but some years later the speech of Ernest Bevin introducing command paper 6527 on employment was brought to my notice. Before I came here today, I had it looked up in the Library. He introduced it in June 1944, just after D-day. That saw a resumption of the years when we tried to do something about unemployment with employment exchanges; when we tried to get labour mobility with schemes for bringing people from the depressed areas. He said:
"It is now and universally accepted the primary responsibility of Government to maintain a high and stable level of employment. We are turning our back on class doctrine."
I was gald to be able to find one section that was at the back of my mind. Mr. Bevin said:
"The Government"—
the coalition Government, that is—
"welcome the fact that Parliament is—I hope irrespective of party, and with widespread agreement—at last facing this problem as a fundamental issue. We are … grappling with the problem which is uppermost in the minds of those who are defending the country to-day, at home, overseas".
Mr. Bevin described a visit, with the Prime Minister, to the 50th Division, who were in boats off Portsmouth. They leaned over the side of the boats and asked:
"'Ernie, when we have done this job for you, are we going back to the dole?'"
A clever dick who was in the House when I was in the House many years later—Mr. Pickthorn, representing Cambridge University—sneered, and said, "For you?" Mr. Bevin replied:
"Yes … they knew me personally. They were members of my own union."—[Official Report, 21 June 1944; Vol. 401, c. 212–3.]
He was referring to the 50th Northumbrian.
In those days, people were concerned about unemployment. In one way, I regret leaving the south Leeds part of my constituency. I know that things have been done over the years. The back-to-backs have been cleared; only one section is left in the area represented by my hon. Friend the Member for Leeds, Central. But there are people there who will never find jobs, and nothing is done about it.
The situation is viewed through the eyes of writers on The Times, The Guardian and The Independent—people who are mobile. Those people in Leeds, however, are not mobile, and they will not find jobs. They are brought up to go into unemployment, and nothing is done about it. The training programme in Leeds has been cut in half: that was announced only the other day.
For a while, following Beveridge and the work of the coalition and then the Labour Governments, full employment mattered. It is not enough to get out of a slump—call it what you will. In the 1930s, when I was first active in politics, we heard all the arguments that were advanced in the old days of Keynesian economics—was it deflation? Was it reflation? My hon. Friend the Member

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for Sheffield, Attercliffe (Sir P. Duffy) and I attended the London School of Economics together as ex-service men. Such questions did not matter very much; it just meant that a lot of people were out of work.
Even reflating the economy is not enough: it will not have any effect. People in areas such as "up the tops", in the constituency of my hon. Friend the Member for Rhondda (Mr. Rogers) and in my village, represented by my hon. Friend the Member for Pontypridd (Dr. Howells), will be affected. They will not vote for any party other than Labour. No one cares. We see the odd programme on television about how dreadful the situation is, but nothing is really done. If it happened in the south of England, something would he done, but it is happening in the wrong place.
The Chancellor seems to be querying that statement. Why is nothing done? If this were happening even in the northern part of Leeds, something would be done. The position is accepted, and the community as a whole does not really care. That is what it boils down to; it is not just about political parties.
Mrs. Gwyneth Dunwoody: Has it occurred to my right hon. Friend during his long and distinguished service in the House why we have benefited from men of his calibre? His Welsh heritage has made it very clear to him that we must never again treat people with the disrespect with which his parents and mine were treated.
Mr. Rees: I am grateful for that comment. Although he belonged to a slightly older generation than mine, my hon. Friend's father was of the same generation as my father, and came from the village round the corner. I have been away from that area for a long time, and I am proud to be a northern Member of Parliament, but I have never forgotten living in a home where we had very little. As I leave this place, I want others not to forget that: indeed, it was part of what brought me here. I am aware that nothing is being done about it.
There is a cycle of boom and slump. We shall return to the previous position at some time or other, but it is not enough to provide extra demand. Perhaps my hon. Friend the Member for Attercliffe remembers the arguments advanced by President Hoover. The change to Roosevelt was an attempt to do something more fundamental. It will all come back. We always get out of a slump; we always experience the drop—the quick drop that we experienced between 1929 and 1931—and then the slow movement along the bottom, followed by the pick-up. In this country, that will happen the year after next. It is all annotated: the eight-year cycle can be traced all the way back to 1793. It is as clear as a bell.
Sir Patrick Duffy: I am grateful to my right hon. Friend. He has been gracious enough to refer to me on two occasions, and he is right—we have shared much together. We are almost lifelong friends, having shared wartime service and post-war studies at the London School of Economics.
More important, our formative years were shaped by the great slump of the 1930s. Does not my right hon. Friend agree that the present developing recession—perhaps almost a slump, in terms of its configuration, certainly in terms of its length and perhaps soon in terms of its depth—will come as near to the great slump of the 1930s as anything that we have known since?
Mr. Rees: The Chancellor mentioned in his speech yesterday the fact that some people hold that view. I felt a strong pang when he said it. Nowadays, people say that the failure of the Austrian banks in 1929–31 need not have happened if only the world banks had acted together, and I imagine that that is true. There is a danger that a similar position could arise now. The Secretary of State for Education and Science is a political ruffian—I say that with a smile on my face—but he speaks up occasionally. He has said that the country's problems are to do with the present Government—and of course they are—but there is also a world recession. Of course that is true. There is a danger that the situation will not pick up as much as before. My point is that we have learnt that investment is required.
I am speaking off the top of my head—perhaps the Chancellor will check the figures—but I believe that we moved slowly out of the big slump of 1931, and that by 1937 the economy was not as high as it had been in 1929. Then it began to drop again. At the beginning of rearmament, the activities of the shadow factories masked the position to an extent, but we did not return to full employment until 1942. By then, millions of people were in the armed services, and Barnbow in Leeds was making guns and tanks. It takes a long time to get out of such situations, and the economy does not necessarily rise to its former level. Therefore, investment is required: members of all political parties in the House should consider that.
Schools in my constituency were badly built in the 1960s—it does not matter whether they were built under a Labour or a Conservative Government. Corporation houses were badly built as well. They need to be knocked down or repaired. Old people's homes are to close because it costs too much to rebuild them; the same applies in the constituency of my hon. Friend the Member for Leeds, Central. Building work could be done on schools and houses. We are short of houses. I shall continue to interview my constituents until polling day. Currently, families of owner-occupiers are telling me that their houses have been repossessed and that they are being put into hostels because there are no houses for them to go to.
Now is the time to go in for capital investment and to build houses. Let me tell the Financial Secretary to the Treasury, in regard to taxes for current spending, that it is wrong to have a deficit on current spending. It is wrong to use receipts from privatisation for current matters. Borrowing must be for investment. Unless this country goes in for investment in the same way as the Japanese and the Germans, we shall have a problem. We may not enter a world slump, but we may always remain a third-class nation, never able to pull out of the recession.
The poverty that exists in some cities of the western world shows that the position is not peculiar to this country, but I want to stress the problem of unemployment in my area. I would be exaggerating if I referred to sub-standard living, but the point is that people are not going to move out of their present circumstances. Their houses often contain a photograph of the grandfather of the family in uniform, taken during the war, and perhaps one of a grandmother who may have been in the WAAF. Those people are citizens of this country, yet we do very little for them. I do not think that the Budget meets the needs of the moment.
Mr. Martin Flannery: I lived through the same period as my right hon. Friend. The

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Conservatives are now taking refuge in what they describe as a world recession. The fact is that it is a slump here and a recession there. Figures can be obtained from the Library to show that, last year, new unemployment throughout Europe amounted to 972,000. Of those people, 777,000 were British—80 per cent. That is four times as large as the figure for all the rest of Europe put together.
Mr. Rees: It is my last go at this, and I am not just being wet, silly and soggy. Unless the whole House puts its mind to these problems, we will not get out of them. The Budget was a little like the Budgets of the 1930s. The first Budget that put its mind to accounting in the sense of savings and investment was that of 1941. I believe that there will be another Budget in a few weeks' time, whoever wins the election—I have my views about who will win. Unless we become involved in investment and think about the structure of the country and the problems in certain areas such as those that I have tried to represent over the years, I believe that we will fail.
The Chancellor referred to the danger of a world recession. With a bit of luck, we will not get into that. The Budget is too near the election to have any real sense of the country's needs.
I often wonder—it happened this afternoon—what in heaven's name I do in this place. One can think of the problems of the world and then the office-boy humour that comes from both sides of the House. Never again will I —well, I will for a while—have the antidote of travelling on the sleeper and arriving in an area that makes one feel that it is worth it because at least one might be able to do something.
The House will do itself a disservice if it ignores the real problems facing the country. I went to the funerals of two Popes during the time I was a Minister. I remember going into a room at the Vatican and looking at who mattered. I realised that I did not. We have been bit players since Ernie Bevin's speech. Since that time, the Americans and the Russians have mattered, and look what has happened to them. If we are to count in the world and in foreign affairs, and if the words that we speak are to matter, we have to produce; we have to produce modern manufactured goods. Only in that way will we provide the schools and education that we need. My grandchildren will receive such an education, have no fear about that. What about the others? What about the kids in my village, represented by my hon. Friend the Member for Pontypridd?
I have said it, and I have done it. Parliament is a good place. One can speak one's mind. There are people on both sides who have done that and that is what makes it worth while. That is why it is here.
5.32 pm
Mr. Terence Higgins: There is a tradition in the House that, after a maiden speech, the next speaker makes complimentary remarks about the person who has just spoken. I do not know if there is a tradition that one should act similarly after a valedictory speech, but if there is not, I shall try to start one. I should like to pay tribute to the right hon. Member for Morley and Leeds, South (Mr. Rees). I do not believe that I have ever followed him in a debate speech before. In my experience in the House
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over many years, he has been a fine parliamentarian and he was a brave Secretary of State. The House will be a poorer place for his departure.
I share the view expressed by the right hon. Gentleman about unemployment. For whomever it affects, unemployment is a great personal tragedy. The Budget presented by my right hon. Friend the Chancellor will help to reduce the level of unemployment. It has been recognised as a balanced Budget that is imaginative in many ways. It will create a situation with which the Conservative Government will be able to live on their return. So, in that sense, it is not an electioneering Budget.
I pay tribute to my right hon. Friend the Chancellor for effectively announcing the demise of Budget day as we know it. His proposals for transferring the arrangements to December, when one takes into account both public expenditure and taxation, are a long overdue reform. It will enable the actions that the Chancellor takes to regulate the economy—an immensely difficult task for whoever is in office—to operate in a more effective way.
On this occasion, however, one should look at both sides of the equation. The Budget deals only with raising money, not spending money. We know that decisions on spending are taken in the autumn. Therefore, on this occasion, we need to look at expenditure and taxation. The argument is sometimes used that the money used for cuts in income tax, such as those announced by my right hon. Friend yesterday, could be spent on the national health service. We must consider the enormous increase that was announced in the autumn statement in the amount expended and planned to be expended on the NHS. One could say that tax cuts and increases in spending on the NHS are election bribes. That enormous increase in spending on the NHS went on last year, the year before and the year before that. If it is an election bribe, it has been going on for a long time. The same is true of income tax cuts.
The Budget contains a number of aspects that I welcome, not least for Worthing, which I represent. I welcome the help for pensioners on income support, the proposals for the uniform business rate which will certainly help small businesses at a difficult time, and the provisions for charities. I should have thought that those measures would have support on both sides of the House.
I had grave doubts about the proposal for reducing the standard rate of income tax, despite the fact that the Conservative party is committed to reducing the standard rate to 20p. My right hon. Friend's proposal is a much better way of working towards that objective than simply leaving the standard rate at 25p and reducing it salami-like until we reach 20p. It is much better to have a reduced rate of 20p and gradually to raise the level at which that becomes applicable until, perhaps over the life of a Parliament, we eliminate the 25p rate. I welcome that. It is of considerable help to those on low incomes, not least working women, many of whom fall into that category. The basic approach is imaginative and correct.
I shall deal now with the public sector borrowing requirement and the question whether tax cuts are being paid for by borrowing. I find the arguments of the Opposition Front Bench spokesmen extraordinary. There have been very few years in the past century when the situation has been such that the Government have not borrowed in one way or another. It is almost true to say that whenever taxes have been cut the Government, certainly in recent times, have done that against a

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background of borrowing. There is nothing unusual about that. I cannot recall any year when a Labour Government cut taxes without borrowing, so it is a strange argument for Opposition Front Bench spokesmen to use. Perhaps there will be some comment about that in the reply to the debate.
Mr. Campbell-Savours: Will the right hon. Gentleman give way?
Mr. Higgins: No. I should like to deploy some rather complex arguments.
Another question is whether the PSBR is excessive as a percentage of gross national product. One should compare the present level—4·5 per cent. of GDP—with the percentage when the right hon. Member for Leeds, East (Mr. Healey) was Chancellor of the Exchequer. I believe that the figure was double the current rate. That puts the matter into perspective. At all events, the level of borrowing in the Budget is entirely appropriate against a recessionary background, about which the right hon. Member for Morley and Leeds, South rightly expressed concern. I believe that that borrowing will help to get the economy out of recession. A large percentage of it has been caused by the recession—by the reduction in Government revenue from taxation and the increase in public expenditure on unemployment benefit.
The Treasury and Civil Service Select Committee made it clear that the use of automatic stabilisers is entirely appropriate in a recession.
Mr. Campbell-Savours: The right hon. Gentleman is a distinguished Member and Chairman of the Treasury and Civil Service Select Committee. The Red Book refers to borrowing of £110,000 million—£110 billion—over the next five years. Does he find that excessive? Is he saying that even when we borrow £6 billion in year five or £19 billion in year four we shall still be borrowing to gel out of this recession? How long will it take?
Mr. Higgins: I make two points. First, the economic effect of borrowing depends on the extent to which it is funded. That is what affects the money supply. Secondly, on every occasion since the war the Treasury has underestimated turning points—both going down and coming up. I therefore treat with much scepticism the figures to which the hon. Member for Workington (Mr. Campbell-Savours) refers. As the recovery continues, borrowing will reduce substantially below the estimated figure. If someone says, "That is the official forecast", I shall be happy to express my views on forecasts in greater detail, as I have in the past.
Against that background, it is appropriate not only to use automatic stabilisers, but to do more. My right hon. Friend the Chancellor has been modest, and the foreign exchange markets have recognised that. That is an important point, because we are constrained by those markets. None the less, the further stimulus that he has given the economy is appropriate.
It has been said that this is a massive reversal of policy, that suddenly the Government are borrowing when they said that they would not do so. There has indeed been a change in policy: we have joined the exchange rate mechanism of the European monetary system, which has resulted in a rapid reduction in inflation. It has been possible to combine that with a welcome reduction in interest rates. As the Treasury and Civil Service Select
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Committee pointed out, when we are constrained by the ERM from acting in the way that we are now acting, it is all the more important to have active fiscal policy in order to manage the economy efficiently.
In that context, to answer the point made by the right hon. Member for Bethnal Green and Stepney (Mr. Shore), I am glad that the Government have resisted Mr. Delors' attempts to force us into a fiscal deficits straitjacket.
I share many of the concerns that have been expressed, but I still believe that the Budget is prudent and appropriate. It will provide a firm basis for the Conservative Government when they return to power in a few weeks' time. I regret that the Treasury and Civil Service Select Committee will not be able to take evidence from the Chancellor, when we could have gone into greater depth and at a more sophisticated level. None the less, my overall feeling is that this is the right Budget at the right time and I believe that it will help to improve the economy, to the benefit of my constituents and those in the country as a whole.
5.44 pm
Mr. A. J. Beith: It is always a pleasure to follow the right hon. Member for Worthing (Mr. Higgins), who is Chairman of the Treasury and Civil Service Select Committee. I work with him on that Committee and have much respect for his fairness and objectivity. However, I cannot remember a single occasion during the period of the Conservative Government when he has not felt that, broadly speaking, the Chancellor's Budget judgment was sound and that it was the right Budget at the right time—even the 1988 Budget introduced by the right hon. Member for Blaby (Mr. Lawson), which helped to get us into this recessionary mess. Perhaps I can excuse the right hon. Member for Worthing on the grounds that he will shortly be off to Worthing to fight an intense election campaign, but his analytical and objective skills are not brought so obviously to bear in debates on the Budget.
It is a pleasure to begin a speech on the Budget by welcoming the inclusion, in virtually the first sentence of the statement, of Liberal Democrat policy—the sensible proposal to integrate the Budget in a single revenue and expenditure statement. I wonder why it has taken the entire life of the Government to persuade the Treasury that that is feasible. Even at this late stage, I am glad that the conversion has been made. No party will want to go back on that proposal. I assume that it will proceed with general support.
There are other measures in the Budget that I can welcome and support. It was obviously right to index alcohol duties and obviously sensible—we had argued for it—to take steps to deal with the business rate. We argued for the cancellation of this year's 4·1 per cent. increase. The Government chose a slightly more complicated method which amounts to something short of, but on the way to, the same level of relief as we propose. It will be appreciated that that will be helpful, especially after the enormous increases in the business rate last year. Its main benefit may be stopping some small businesses going to the wall, but it is none the worse for that and 1 am glad that it was included in the Budget.
It was useful to have some first steps on the problem of small and large business debts. That issue may have to be reconsidered in the context of the charging of interest.

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I broadly accept that there was a strong argument for some measures to be taken for the car industry, although the Government did not choose to do so in an environmentally helpful way. They halved the special car tax, so a high fuel-consuming Rolls-Royce Corniche will have £12,400 knocked off its sales price while a much more fuel-efficient Metro City with an 1,100 cc engine will be cheaper by only £482. In changing car tax, it might have been possible to send a signal in favour of more energy-efficient cars and greater fuel efficiency. The Chancellor could have taken the opportunity to use more effective environmental measures as part of such a substantial change.
The Government are increasing petrol prices through petrol tax by an average of 5·4p per gallon for unleaded and 10·4p per gallon for leaded petrol on the pump price. That means that since 1979 the Conservatives have increased petrol tax by more than 50 per cent. in real terms. According to the Automobile Association, the petrol tax will cost the average rural household more than £60 extra per year.
Conservatives often accuse Liberal Democrats of being ready to increase petrol prices; indeed, they think that we are almost keen to do so. They now find that senior Ministers are pointing out that energy prices will have to rise to deal with the environmental consequences of the way in which we use energy. The Secretaries of State for the Environment and for Energy and the Chancellor of the Duchy of Lancaster have argued publicly for higher energy prices. As that is the way things are going, it is important to consider the problems of rural areas and to look for ways of compensating rural motorists—who are not the main contributors to the pollution problem and who do not contribute at all to urban congestion—and also disabled drivers. The Government must address that issue if they are going to make steady increases in petrol prices, of which the Budget is an example.
There are disappointments in the Budget for various groups of people. It contains nothing on tax relief for child care. Many campaigners thought that, after we had pressed for that in one Finance Bill after another, we were reaching the point where it would be accepted by the Government. That has not happened this year.
The Budget contains nothing for merchant shipping. All hon. Members will be aware of the concern about the state of the merchant shipping industry and its apparently disadvantageous position compared with the shipping industries of other countries. That will cause considerable disappointment.
The real shock of the Budget was the scale of the public sector borrowing needed merely to fund the recession. The Chancellor's announcement of the figure of £28 billion was greeted with gasps from all parts of the Chamber. There were gasps from behind the Chancellor from the seat in which the right hon. Member for Finchley (Mrs. Thatcher) sits and gasps from the Opposition parties.
We sat through the speech, waiting to find out how the Chancellor was going to spend the largesse. Would there be a 3p giveaway, with some additional investment spending? As the Chancellor reached the end of his speech, we realised that there was no giveaway because the £28
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billion public sector borrowing requirement was necessary as a direct consequence of the recession and the resulting higher cost of benefits and lower tax revenues.
When we received a copy of the Red Book, we found that the PSBR will be £32 billion next year, all without any significant tax giveaway—or one of only 1p on income tax, or £2 billion—and without any additional investment. That was a genuine shock to most hon. Members. It was an admission by the Government that the recession is much worse and that its effects will last longer than they had previously forecast. That means that the Government have moved from forecasting that they would repay £19 billion of debt to telling us that we would be borrowing £28 billion—a pretty wide margin of error by any standard.
We must act to get out of the recession, but the Budget offers no hope of that. It is not a Budget for recovery. Perhaps it was not intended to be a Budget for recovery. There are three possible objectives for the Budget. First, it could have been intended to make voters feel better off, thus putting them in a better mood to support the Government at the election. Secondly, it could have aimed to kick-start recovery. Of course, the Chancellor said early on in his speech that he was not going to do that.
Thirdly, it could have been designed to wrong-foot the Labour party. If that is so, it is ingenious in one sense because it includes the lower rate band proposal, which is an expensive way to try to bring relief to the low-paid. I quoted the hon. Member for Enfield, North (Mr. Eggar), the Minister of State, Department of Education and Science and who clearly ridiculed such a proposal last time round.
The lower rate band proposal is an issue on which every party has changed its mind. The Conservative party is different because it changed its mind twice during its term in office. The Conservatives abolished the band, but have now decided to restore it. It is an expensive way of helping the low paid, as the Government themselves argued previously. If there is no spare revenue for investment, now is not the time to introduce such a proposal.
The Government's image of the voter after the Budget is clearly that of the happy citizen, making his or her way to the polling station in a newly purchased British-made car, stopping on the way to buy some British-made goods from a major department store and going to vote Conservative. All that is based on a £100 tax cut, which is not even enough to buy a copy of the Daily Mail every day for a year. Of course, the Daily Mail and The Sun believe that this is a wonderful Budget. One could just about manage to buy a copy of The Sun every day for a year with the tax cut, but one could not afford the News of the World on Sundays as well. That would be no loss for anyone, but it reveals the limited scale of the cut.
Mr. Kenneth Hind rose—
Mr. Beith: I see an enthusiastic hon. Member leaping to his feet to defend one or both of those newspapers.
Mr. Hind: The point that the hon. Gentleman is making shows clearly that it is nonsense to suggest that the cut is a bribe because clearly it is not. The hon. Gentleman is showing that the amount that the Chancellor has pumped into the economy is fairly small. The Budget is well targeted and very prudent, which perhaps undermines some of the hon. Gentleman's arguments.
Mr. Beith: If I was Tammany hall boss and I wanted to engage someone to bribe the voters, I would not engage the Chancellor of the Exchequer because he is not very good at it although he thinks that he is. He has fallen between the devil and the deep blue sea.
The Budget will not engender recovery or make people feel that they are substantially better off. Rather than the enthusiastic driver on his way to the polling station having bought extra goods leading to a consumer recovery, the likely voter will be someone who is already unemployed, or who fears the loss of his job or who fears that someone in his family will not get a job, whose children will not receive an adequate education because of school cuts or will not get adequate training because of training cuts. People are very aware of those deficiencies in our system, just as they are aware how little they can do with £100. Indeed, the voter may not be driving a new, British-made car to the polling station but wasting hours struggling to work on an inadequate public transport system, or a pensioner just above the income support level. When Conservative hon. Members return to their constituencies to fight the election, they will meet an awful lot of pensioners just above the income support level who receive neither income support nor any of the other benefits which automatically go with it. They will tell hon. Members how hard the going is.
Investment is clearly a more appropriate subject for whatever resources can be gathered, and the Treasury model shows that. If one runs the alternatives of tax cuts and investment measures through the Treasury model, one finds that investment measures have a much more rapid effect on the economy. In addition, investment does not create a public sector borrowing requirement in subsequent years. Any tax cut must be paid for the following year and the year after. If recovery is slow, one must continue borrowing to pay current expenditure, which is no way to run the country.
If the Government invest and get a return on that investment, they can pay debts in the future. That is the Government's objective. The idea is to have a balanced Budget over the cycle, but this is the longest cycle I have ever heard of. Even if one believed the optimistic forecasts in the Red Book about the PSBR for later years, by the end of the next Government's tenure of office we would still not be at the end of this amazing cycle. We have to spend quite a few years making up for the PSBR level of the preceding years. I have heard of a stretched Mercedes, but this is the longest cycle anyone has ever attempted to describe.
Investment is best made when the construction industry is in its weakest condition—that is how one gets the most favourable prices for repairing schools and hospitals and for railway construction and work on rolling stock—not when the economy starts to heat up, which is when public expenditure has to be reined in because at that point the economy may begin to overheat and generate inflation.
We need a programme of investment in an economy that is firmly anchored with a proper anti-inflation policy, including an independent central bank, a proper commitment to Europe and entry into the single currency, a real commitment to free enterprise and the promotion of competition—not the rigged market of massive privatised monopolies that the Government have created—a Government stimulus to research and development in industry, a savings target to ensure that we rein in public expenditure when its effect would be damaging, and social
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justice in the tax and benefits system. Neither the voters nor I will take promises or lectures about lower taxation from the Government who gave us the poll tax and who increased VAT to 17·5 per cent. Their days are numbered.
5.58 pm
Mr. Robert Boscawen: I thank you, Madam Deputy Speaker, for calling me at this early hour. The only thing that I can say about the previous speech is that the Liberal Democrats seem to be united only about one idea, and that is that they would greatly increase the public sector borrowing requirement.
The hon. Member for Berwick-upon-Tweed (Mr. Beith) could say only that we should spend more. When he and the other Opposition parties talk about investment they should realise that what matters is the investment made five years ago, four years ago or three years ago. Investments made now, next year and the year after will not assist recovery now—it will assist the post-recovery period.
My right hon. Friend, our Chancellor, faced the most difficult and daunting task that any Chancellor has faced for a long time—a serious recession, with an election on top of it—and he has come out of it extremely skilfully and prudently.
The Budget was carefully constructive. My right hon. Friend has not given away too much; in fact he has given away far less than anybody expected. As for the public sector borrowing requirement, in my time I have listened to Labour Chancellors of the Exchequer, Labour Prime Ministers and other Labour Ministers telling us time and again their Keynesian theory that in times of high unemployment it is right to borrow, and that if one does not borrow unemployment will increase. I find it strange that the Labour party has reversed all that it tried to teach years ago.
We shall not take lessons in deficit financing from the Labour party. Labour Governments used deficit financing to purchase all the nationalised industries, and year after year those industries ran on immense deficits, which had to be taken on as part of the public sector borrowing requirement. It was not until the Conservative Government came to power in 1979 that we changed that, got to grips with the nationalised industries and started selling them off, making them into profitable companies and corporations in the private sector. So it is pretty rich to get lessons from the Labour party on high public sector borrowing requirements.
The Budget was good because it helped where the shoe pinches. Unfortunately, we have high rates of inflation, and in those circumstances the shoe pinches hard on certain groups of people. Those people have been helped by the 20 per cent. income tax band, and also by increases in income support. I find it surprising that the Labour party wants to vote against that, after all that it used to tell us about trying to increase help for those very people—the people who come to our surgeries and tell us how difficult life is. For the Labour party to oppose those measures is quite wrong, and out of character.
The Government have helped the industries in the sort of area that I represent, in southern England, where unusually—unemployment is higher than it has been in the past. In many cases the reasons for that are not really clue to the recession. Let us take the defence industry as an example. Who could have foreseen the climatic change in

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the world order that has taken place in the past five years? Although we shall not need so much highly sophisticated defence equipment, I am glad to say that in the past two or three years my right hon. Friend the Secretary of State for Defence has been helping the defence industries in our part of the world—those industries are concentrated in southern England—by giving sensible orders for re-equipping our forces so that, although they may be smaller in the future, they will be very good, right into the next century.
That is the other side of the Budget—the public expenditure side, which I am glad to say that my right hon. Friend the Chancellor now intends to merge with the raising of the money. In future we shall be able to see at the same time how much money will have to be raised, and how it is to be spent. That change has long been needed, and I am delighted that the Chancellor has suggested it.
My right hon. Friend has helped farmers in my constituency. That is a difficult thing to do in the present uncertain times. It has been wrong to take so much capital out of farming through inheritance tax over the years—but we know that the Labour party has always hated the idea of private ownership of property. My right hon. Friend will help many owner-occupiers and tenant farmers by keeping that capital there, to enable farmers' sons and families to restock the farms—that is, perhaps, their most expensive necessity.
Many measures to help small businesses were announced in the Budget—not least the fact that money, albeit a small amount, will be put into the hands of those who need it most. Those people will spend that money quickly in local shops and businesses, where it means so much to have a little more trade. Too many shops are empty at present, and we want to see them filled.
This will certainly be the last time that I shall speak in the House. Since I have been in Parliament there have been two enormous changes. I come from the generation born within five years of the first world war; we were just old enough to be cannon fodder almost throughout the second world war. In those days, when we could find time to think about serious things, we used to ask each other, "How the devil can we ever stop this damn stupid thing from happening again?" I have always remembered those conversations. Many thousands of my contemporaries did not survive that war, and I believe that those of us who were fortunate enough to have lived happy and long lives since then owed something to them. We owed it to them to do something about trying to stop those stupid things from happening again.
The first step was that the European nations came together and realised that they had to co-operate, and trade together to improve each other's economies. During the time that I have been in Parliament we have entered the European Community, which cements the relationship between France and Germany, whose past hatred of each other was the basis for those two terrible wars.
The second thing that has happened is that while my right hon. Friend the Member for Finchley (Mrs. Thatcher) was Prime Minister the Governments of this country and of the United States demonstrated to the Soviet Union that it could never win. By their firm resolve
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in demonstrating that, those Governments helped to bring about the most enormous change for the future better peace and prosperity of the world. Let us not forget that.
It would be churlish to say that the whole of the Labour party has been slow to come round both to Europe and to standing up to the Soviet Union, because many individual Labour Members whom I have known have taken a strong stand on both those issues. But on the whole the Labour party does not have a good record either on Europe or on standing up for the defence of the western world against the Soviet threat. Now that that threat is a thing of the past, let us be sure that it never happens again.
I thank you, Madam Deputy Speaker, and Mr. Speaker and your two fellow Deputy Speakers for all the courtesy and kindness that you have shown me. It is greatly appreciated.
I also thank my constituents in Somerset—the lovely part of the country which I represent. I have represented two constituencies, and I thank all my constituents for having sent me here for such a long time. I am very grateful indeed to them.
6.9 pm
Mr. Denzil Davies: I am sorry that the hon. Member for Somerton and Frome (Mr. Boscawen) made some pejorative remarks about the Labour party towards the end of his speech. Despite that, it is a pleasure to follow him and to record his distinguished service, about which we all know, both to his country and to the House. My right hon. Friend the Member for Morley and Leeds, South (Mr. Rees) has also given distinguished service to his country and to the House.
The hon. Member for Somerton and Frome mentioned Europe and I have no intention of following him on that. My right hon. Friend the Member for Morley and Leeds, South mentioned the problems of the world slump. He may be a gloomy Celt and perhaps the Chief Secretary would endorse the view that here is another gloomy Celt speaking. However, I believe that my right hon. Friend expressed a fear that the slump, or depression, may not disappear as quickly as we think.
When I consider the Maastricht treaty, for example, I am concerned that we are enshrining or codifying certain economic principles, such as price stability, and that we may find ourselves in difficulties. It may have been Hoover or William Jennings Brian who said that we must not crucify mankind on a crock of gold. Perhaps we should not do things that may crucify mankind on price stability, as codified in the neo-European Bundesbank if it ever comes about.
My object is to consider the Budget resolutions. As we have been reminded, this debate comes almost 13 years since the forerunner of the Government came to power in 1979. I remind the House and the Financial Secretary—I am sure that he does not need reminding—that the Government were elected in 1979 preaching the virtues of sound money, of monetarism and even of a balanced budget. The image was given of the grocer from Grantham —I mean no personal disrespect—who demanded cash on the nail and who gave credit to no one. There was the image of the housewife from Grantham who managed the household finances and who looked after the pennies so that the pounds would look after themselves. It has not worked out.

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Thirteen years and many Budgets later, the ideology is in tatters and with it the British economy which suffered from that ideology. The finances of the public sector are heavily in debt and the finances of the private sector, both individuals and companies, are heavily in debt. The balance of payments is heavily in the red even at a time of recession. Unemployment is rising and, if its growth next year is 1 per cent., will continue to rise. Our manufacturing base has been decimated by 30 to 35 per cent. over he past 13 years. Some £100 billion of oil money has been dissipated, swept away in a sea of imports and crushed under the mountain of debt.
The Chancellor announced yesterday a public sector borrowing requirement of £28 billion, twice what it was last year. For next year, it will be £32 billion. I should have thought that it was extremely difficult to prophesy what the PSBR would be from one month to the next. Next year's PSBR is apparently to be £32 billion on the basis of a growth in gross domestic product, for the first half of next year, of 3 per cent. I do not know whether we can go from 1 per cent. growth in the coming year to 3 per cent. growth in the first half of next year. If we cannot, the PSBR for next year will be higher than £32 billion. Such is the order of borrowing on which the Government have now embarked.
The requirement of £28 billion this year and £32 billion or more next year is the epitaph on the ideology with which the Government's predecessors were elected in 1979. Ministers are doing their best to distance themselves from that ideology and they are desperately trying to justify the claim that they are all Keynesians once more. Despite the seriousness of the economic situation, I have derived a certain amusement from the build-up to the Budget when I have listened to Ministers and especially to their apologists in the City and in the media trying to justify the massive change. It is not a U-turn but a gyration of 360 degrees in Government policy and ideology.
Some ideologists have prayed in aid Europe and the exchange rate mechanism. Others have resorted to cliches —or to clich after clich, as Ernest Bevin would have said. I will deal first with the Europe excuse. The other day, I was listening to the "Today" programme, the fount of all wisdom and knowledge. A rather teenaged pundit from one of the right-wing think tanks argued that borrowing was all right now because, as we were in the ERM, there was a bigger pool of savings from which to draw. He implied that that meant that we could borrow money without interest rates going up. The trouble is that there are piranhas in the pool which are quite as big as the British Government—one or two are bigger, believe it or not. Those piranhas will also look for some goodies out of the pool. The idea that because we are in Europe or in the ERM we can now borrow without interest rates going up is ridiculous, and the Government know it. I believe that we shall win the election. However, whichever party come to government, the cost in interest rates of borrowing for a £28 billion or more PSBR is certain to go up.
With the ERM, the poor monetarists cannot practise monetarism. The great Satan of ERM now stalks the land, so the monetarists cannot practise the old religion. I heard one argue the other day that the only thing that the monetarists could do would be to become Keynesians and to borrow money because they could not reduce interest rates. The monetarists have all gone to the Keynesian chapel next door because they cannot worship at the shrine of monetarism as a result of the terrible ERM. I suspect
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that, for most Conservative Members, the reason for borrowing is not to save the economy or the country, but to try to save their seats at the forthcoming general election.
Others have resorted to cliches. We heard one from the Chancellor yesterday, from the Chief Secretary today and from other hon. Members in the debate. They have found the old economic cycle. I suppose that it was somewhere in the Treasury basement in Great George street and that it has now been brought out again. It is an endearing—if one can use the word "endearing" in respect of the Chief Secretary—image to think of the Chancellor of the Exchequer practising before the Budget along the long corridors in the Treasury with the Financial Secretary watching and an officious permanent secretary ensuring that the Chancellor does not fall over. One can imagine him practising on the old economic cycle with the ghost of John Maynard Keynes keeping an eye on everything.
As has been said, the problem is that we do not know how long the life of the economic cycle is. We are told that everything will be all right over the economic cycle. What is its life? There was an economist with an unpronounceable name—
Mr. Rees: Kondratieff.
Mr. Davies: My right hon. Friend, who went to the London School of Economics, knows the name. Kondratieff thought that the economic cycle was 250 years—
Mr. Rees: Fifty years.
Mr. Davies: I thank my right hon. Friend. I did not go to the LSE. I am the product of a Welsh Sunday school and I am a great authority on the Bible, if not on Kondratieff. The bible talks about seven lean years and seven fat years, which is a kind of economic cycle. Perhaps we should settle for that. I do not know what the length of this economic cycle will be. It certainly looks more like a Tour de France than a 100m sprint. I have no idea when the balanced Budget will be balanced, and neither have the Government.
Let us move on to the next cliché, which is the automatic stabiliser, about which we have heard again today. I thought that it was something to do with motor cars, but apparently the automatic stabiliser is a higher being or higher spirit which looks over Treasury Ministers and Chancellors, keeps an eye on them and makes sure that the free market operates smoothly along the byways and the freeways. The automatic stabiliser is looking over everything.
There is nothing stabilising about a £28 billion or £32 billion PSBR. I should have thought that that would be destabilising rather than stabilising. There is nothing very automatic, either, about items of public expenditure that cause a £28 billion or £32 billion PSBR. Most of the items are as a result of Government decisions on public expenditure and taxation. I suppose that there was an element of automaticity. It is the Pavlovian automaticity which makes the Tory Chancellor instantly reach for the printing presses when the Tories look like losing an election.
The Government's ideology is in tatters. What went wrong? It is not for politicians to answer such questions; they are matters for political philosophers, historians, and perhaps even for theologians. However, I make one brief

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suggestion. There was always an inherent—perhaps Marxian—contradiction in their ideology. In 1979, the Government came to power preaching a desire to control the money supply. However, they wanted a free market in money. I could not see how the control of money and the deregulation of money could march hand in hand for very long. To his credit, the right hon. Member for Blaby (Mr. Lawson) recognised that fact, because he gave up that practice. He left the monetarist chapel, shut the door, went off and listened to false prophets, followed false gods and started to shadow the deutschmark, and we ended up in the ERM, because the system could not work. A system that wants to control money on the one hand and wants to free everything on the other hand and treat it as any other commodity is inherently contradictory. In fact, it destroyed the Government's ideology.
All that is history. Unfortunately, the people of Britain will have to live with the consequences of much of the nonsense that occurred. At least there is one consolation. The children of the ideology of 1979—no doubt the Financial Secretary is one of them—will also have to suffer some of the consequences. Many of them will not be in the next Parliament, and those who are in the next Parliament will have the pleasure of sitting on the Opposition side of the House and watching my right hon. and hon. Friends clearing up the mess that they have created.
6.22 pm
Sir Ian Stewart: I compliment my hon. Friend the Member for Somerton and Frome (Mr. Boscawen) and the right hon. Member for Morley and Leeds, South (Mr. Rees) on their speeches. They have both been Members of the House for many years longer than I have. It is sad for me that I, too, am probably making one of my last contributions to the proceedings of the House. I am profoundly grateful to the constituents of Hertfordshire, North for having returned me in five elections. I had much hoped that I should be in a position to ask them to continue to do so for at least another Parliament or two, but that was not to be. I was impressed and moved by the contributions by my hon. Friend and the right hon. Gentleman about their many years in this place.
I mention one oddity in passing, and that is the difficulty which we put in the way of retiring Members in maintaining even the most tenuous connections with this place. I am not a nostalgic person—I would not want to hang about the Lobbies and look over the shoulder of my successor—but it is an oddity that, although I have the privilege of being a Privy Councillor and have automatic right of access to listen to debates in another place, I have no such automatic right of access to the Palace of Westminster to listen to debates in this House. That seems anomalous. Not long ago, when we passed a resolution whereby right hon. and hon. Members who had been here for 15 years or more could enter the Palace of Westminster or certain parts of it as a matter of right, we attached a strange condition that they had also to be in receipt of a pension. Unfortunately, because I injured myself before I reached pensionable age, that will not apply to me. I do not want to make a personal point, but I use those examples to illustrate the strange way in which, although many of us may spend many years in the House, we find
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those odd and perhaps irrational obstacles to our maintaining even a tenuous connection, as we might wish to do.
My constituents will have looked at the Budget, in particular for the way in which it deals with the problem of economic recovery, and indeed the matters of unemployment which were mentioned by the right hon. Member for Morley and Leeds, South. I assure him that many hon. Members have great concern about the situation in different parts of the country and the uneven distribution of jobs and prosperity. That is something which all Governments find it difficult to deal with, but it does not mean that we are not conscious of them. My grandfather's brother was commissioner for the distressed areas in the 1930s. It has always been a point in my family to be acutely conscious of those matters—certainly such matters have been in my mind since I have been in the House and have had to consider economic and related matters.
The most important point that the constituents in Hertfordshire, North and elsewhere will look for from the Budget and its aftermath will be a return to confidence. There is no doubt that after a period of recession there are widespread anxieties as to how the process of recovery will be generated and how the measures that Governments can take through Budgets and so on can assist the process. The measures in the Budget dealing with the uniform business rate, VAT, and inheritance tax for family businesses will contribute significantly to restoring the necessary confidence.
I do not wish to make a particularly partisan speech, but I must say that one of the factors which are retarding the recovery of confidence is the inherent belief of most people in the business community that the return of a Labour Government would mean higher taxation and higher borrowing costs. Neither of those things is needed at present. I shall leave it at that because other right hon. and hon. Members have already made those points, and no doubt many others will also do so. However, I do not underestimate the nervousness in the business community about what a Labour Government might bring, because in the past year or two Opposition Members have been expressing commitment to a substantially increased range of public expenditure without giving any clear idea of how they would finance them. The difficulty with their proposals may be made clear next Tuesday when the Budget debate is over—that is a pity—but, so far, nothing has been made clear about how that finance would be provided. Inevitably, the business community has held back on investment and increasing activity for that reason.
I am sorry that I shall not be here in the next Parliament to debate economic matters with the right hon. Member for Llanelli (Mr. Davies). As he and I have often faced each other on the subject, on a personal basis I sincerely hope that he will find himself on one or other of the Front Benches. His speech this afternoon was typical in that it was penetrating, witty, showed insight on several matters and was more powerful than we sometimes hear from the Opposition Front Bench.
The public sector borrowing requirement and the level of borrowing proposed in the Budget is one of the matters that has attracted the greatest attention. I shall make only two main comments because there is no point in repeating what others have said. First, the structural changes in the tax system which were introduced in the 1980s have had the practical consequence of tending to increase revenue

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when the economy is growing above its trend and to decrease revenue more substantially when the economy is below that trend.
I instance two factors. The first is the switch to some extent from taxes on income to taxes on spending. That tends to exaggerate the revenue in times of economic boom because of higher expenditure in the high street and so on and the greater level of activity in industry. As we now see, with retail sales depressed until the past few months, it tends to create a sharp reduction in the level of the economy as a whole.
The other factor is perhaps even stronger. The change in the structure of corporation tax from a high basic rate with a large number of allowances to a much lower basic rate with significantly fewer allowances means that the profitability of the companies sector is reflected more substantially and directly in the levels of corporation tax revenue than under the previous structure. There is a time lag of perhaps two years between the performance of a company and the time when that performance shows up in dividends and corporation tax payments. That is because a company pays tax on a basis which is calculated historically. That time lag led to an overemphasis of the amount of revenue available to the Government at the end of the 1980s. It leads now to an underestimate of the level of revenue available to the Government as the economy recovers in the next few years. The time lag factor has exaggerated the swing.
I suspect that five or 10 years ago not many people in the House or elsewhere expected that the Government would go into substantial surplus two or three years ago. We had double figure billions of pounds of surplus and a substantial level of repayment of debt. In the same way, the scale of the PSBR has caused some surprise. But I believe that those wide swings are caused by structural changes in taxation which are likely to continue to operate in the future and must therefore be taken into account in the formulation of economic and budgetary policy.
On this occasion, I cannot avoid saying something about interest rates and the exchange rate mechanism. A few years ago, I was invited by my right hon. Friend the Member for Blaby (Mr. Lawson) to speak in a debate on the European monetary system and to make my speech as boring as possible. Not long ago, I looked back at that speech. It was marvellously boring. I obviously carried out my instructions with great efficiency. At that time, my right hon. Friend was anxious that the subject should not be given too much prominence. I believe that I managed to soothe the House into a mood of almost complete disinterest in the subject. Given the attempts of some other hon. Members to do the opposite, I felt that my speech was one of the more important, if less dramatic, achievements of my time in Parliament.
As a result, I became extremely interested in the exchange rate mechanism and its interaction with monetary policy. I caution the Goverment about being over-hasty in going into the narrow band of the exchange rate mechanism. I am not one of those who are absolutely opposed to economic and monetary union, but I have a greater degree of scepticism than many others—purely because the lessons of history are not strongly supportive of monetary union when not accompanied by political union. I am far from believing that the states of Europe are prepared and ready to undertake the degree of political commitment that would be necessary to make monetary union effective in practice. I hope that we shall not take
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any particular further steps in that direction unless and until we are satisfied that there is the greater degree of cohesion, and political cohesion, which is necessary if the thing is not to end in serious tears.
I have once before quoted an historical example in the House to illustrate my point. I repeat it only because so many colleagues in the House have mentioned it to me as being of interest. When the Crowns of Scotland and England were united in the person of James VI at the beginning of the 17th century, the coinages of the two countries had previously been entirely separate. They were united and put on a standardised basis under James VI in 1603. Although for the most part the coinages managed to keep approximately together during the next half century, increasing strains were felt. By the end of the 17th century the currencies had significantly diverged. They were brought back together only when political union was achieved in 1707. That illustrates the fact that before the countries of Europe make any commitment to monetary union they must understand all the democratic implications of it and that it would not work, certainly in the medium and longer term, unless it was part and parcel of a much greater degree of political union than the leaders of most of the countries of Europe have yet contemplated.
Mr. William Ross: Would the right hon. Gentleman care to carry that analogy further by considering the situation that arose when the Irish Republic separated from the United Kingdom? The Republic tried to keep the currencies on a par, and for many years succeeded, but eventually it had to break and the currencies diverged.
Sir Ian Stewart: The hon. Gentleman makes an important point. I could draw several other analogies. The only occasions when a common currency has been applied successfully throughout Europe were under the Roman Empire, when the currency was backed by the legions of the Roman army, and 200 years later under Charlemagne when the currency was imposed by military force. No other protracted period of monetary union in Europe has worked. I offer that as a cautionary tale.
I am not absolutely opposed to proceeding in the direction of monetary union, but it is necessary for the future health of democracy and Parliament—and, indeed, of other countries in Europe—that before such steps are taken the full implications are understood. It is essential that we do not take steps in the dark, only to realise afterwards what they involved.
Clearly, membership of the ERM imposes a substantial discipline on the Government's flexibility to alter interest rates. In the past year, my right hon. Friend the Chancellor has come in for considerable criticism for not having reduced interest rates more rapidly. He deserves a word of congratulation on having been cautious and responsible and not being rushed into that process. I hope that he will be able to reduce interest rates further in due course. However, given the commitment in the exchange rate mechanism, I am sure that it would do far more damage to reduce interest rates and find that they had to be raised again—the damage to confidence would be considerable —than to be more cautious in taking that step in the first place. That is my parting word to my right hon. Friend on that subject.
I must declare an interest as a director of an investment trust. I am pleased that the whole of personal equity plans

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can now be invested in investment or unit trusts. I have always believed that people beginning to invest in equities can best do so by the collective mechanism of such trusts, where expert management is available and risk is not concentrated in a small number of shares. Perhaps I may now reveal that when we were contemplating the introduction of PEPs a few Budgets ago I suggested that policy. Although it did not prevail at the time, I am delighted that it has been introduced.
Finally, on income tax, I strongly support the proposal to introduce a 20p band. I do support it not merely as a band, but because it is the first stage in moving to a substantial range of income to be taxed at 20p. There are a number of ways of moving from 25p to 20p. One way is to take 1p or 2p off across the whole band. We adopted that method to get down from 33p to 25p. In recent years, I have been of the view that the starting rate of tax—even at 25p, let alone 33p or anything in between—is too high. However, I do not consider 25p to be too high on a taxable income of £15,000. By having a wide basic rate band, the starting rate of tax is bound to be higher than it ought to be for those people at the bottom of the income tax paying scale. Therefore, I especially welcome the introduction of the 20p rate for those on the lowest levels of taxable earnings, particularly as I understand that my right hon. Friend the Chancellor intends that that band should be expanded, so that a broader range of income could be taxed at 20p rather than at 25p. That gives him greater flexibility. Whereas one needs £2 billion to take one penny off the basic rate, once one has established a 20p band, one can increase it by a greater or a lesser amount, according to available revenue. That is an important reform and I hope that it will be carried forward. I hope to be able to applaud that, albeit from a distance, in future Budgets.
6.43 pm
Sir Patrick Duffy: It is a personal pleasure for me to follow the right hon. Member for Hertfordshire, North (Sir I. Stewart). When he was a Defence Minister, I shadowed him from the Opposition Front Bench and I always found him to be effective, impressive and, in other small ways, pleasant and entirely admirable. I have no doubt that the House will be the poorer for his premature departure.
Also, it would have given me the greatest possible personal pleasure to follow the hon. Member for Somerton and Frome (Mr. Boscawen), who will know that there are between 30 and 36 hon. Members who served in world war two. As far as I can estimate, there will only be five in the next Parliament. The hon. Gentleman and I were subject to the most prolonged post-war medical treatment. Although my condition was by no means as grievous as his, for as long as seven years after the war, I was classified as 100 per cent. disabled and my classification has never dropped below 30 per cent. That did not prevent me from contesting my first two parliamentary elections as early as 1950 and 1951.
I listened with interest to the hon. Gentleman's recollection of his wartime reflections. I believe that I shared them and I feel privileged—along with my hon. Friend the Member for Walsall, South (Mr. George)—to
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have been able to play a small part in recent years in ending confrontation in Europe, in strengthening security generally and in making new structures possible.
I feel that the hon. Member for Somerton and Frome and I have shared a special brand of comradeship through all those years, although we have never talked about it. The House will not be the same without him, and there is no one for whom I have entertained, at a distance, more respect and concern.
This time last year, the Government thought that they would be going to the polls against a background of economic recovery. Some financial gurus in the City were sitting back anticipating another five years of Tory rule. Although the recession is now an enormous embarrassment, the official line put out by No. 10 Downing street is that Britain is the victim of international recession. However, we all know, do we not, on both sides of the House that, in its origins and its severity, it is a home-grown recession, caused by the Government's mismanagement of the economy?
Policy mistakes, especially those made in 1987–88, have been the major cause of the recession. The latest figures show that the output of the British economy has been declining for six successive quarters. The latest gross domestic product figures confirm that the recession is the longest in post-war history. Last year's decline of 2·5 per cent. was the biggest annual fall since the 1930s. There has not yet been a slowdown in that decline.
For all the House knows, we may be in free fall, for economic recovery continues to be elusive. From time to time, one gets a fleeting glimpse of a speck of light trying to pierce the gloom, but then it disappears, just as hope begins to rise. The same is true in the United States of America.
Weighed down by prolonged recession, Britain's ailing economy seems unable to find that pathway to growth. Yet, in his Budget statement, the Chancellor made a virtue of not wishing to kick-start the economy. He expects growth to pick up gradually as the year goes on and to be reasonably strong by 1993, but his Treasury advisers have been disastrously wrong in recent forecasting and weighty authorities see continued depression, unless policy is changed radically.
One problem with recessions is that they do not start and finish on a particular date. The recovery is never tidy, and we are likely to get confused signals for several months after the upturn has begun.
In the United States, there have been two upturns, but they are back in a state of recession. Given previous experience, including that of post-1931—it is salutary to look at the figures—recovery from a slump of this magnitude will be delayed and prolonged and unlikely to achieve anything like full utilisation of capacity. As my right hon. Friend the Member for Morley and Leeds, South (Mr. Rees) reminded us, we were pulled out of the depression of the 1930s only by rearmament and the onset of war. He and I were brought up in mining communities which were plunged into debt as a result of the general strike. We knew many households that were only rescued from that debt, after many years, by the fuller employment that war produced.
Unemployment, inevitably, is still going up. Figures published yesterday show that the Government are continuing, although not maliciously, to underestimate it. An unemployment level of 3 million people is already in

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sight. There is little prospect of an export-led recovery, given the latest trade figures. A consumer-led alternative would risk making the trade deficit even worse.
Against that unpromising background, the Chancellor was expected to deliver not merely the Budget, but the ballot. It is too late for that. The Budget will not act as a significant stimulus to the economy—all that should have been provided for last year. The deficit is almost certainly out of control, and the prospective borrowing requirement is significantly worse than expected. The Chancellor will be lucky to see growth at half the rates he has forecast, given the form. It will be a case of hard times rather than great expectations. Companies need help as cash flow and complicated reliefs to the uniform business rate are not enough. However, that is all that the Chief Secretary to the Treasury could offer when I challenged him earlier.
It is a disappointing Budget, and the Chancellor has failed to produce the election-winning trick that everyone thought he had up his sleeve. There must be a question mark over whether the measures taken are even affordable and sustainable. We all know that the City is cautious—the PSBR has undoubtedly prompted a sense of disappointment. The evidence is there and plain to see. The policy of borrowing to finance tax cuts has already come in for much discussion in the debate, but surely that can make sense only if the borrowing Government are prepared to raise taxes later with a view to restoring the balance—assuming the economy moves on.
Borrowing to finance sound and necessary long-term public sector investment is preferable, for it should pay for itself over time. That is Labour's preference. The obvious areas for such investment are our preferred ones of infrastructure—roads and railways—and, above all, industrial efficiency, with a view to improving productivity.
The latest issue of the National Institute Economic Review puts the lingering adverse productivity gap between Britain and Germany down to the fact that Germany has constantly made a greater investment in its workers and factories. I can properly apply that test to the Budget, and I naturally wish to apply it first to my city of Sheffield.
Sheffield council's employment department now finds unemployment to be as high as 17 per cent., whereas the Government figure is less than 12 per cent. I am in touch with Ministers at the Department of Employment about that.
In Sheffield, the engineering industry is a mirror of the health of the city's economy. In the past year, the Engineering Employers Sheffield Association has seen its members fighting hard to survive in a hostile trading environment. It has called for all genuine investment to be made fully and immediately tax-deductible. It has pointed out that many foreign Governments provide their manufacturing industries with support for research and development. It also believes that there is ground for greater incentives to export. It believes that perhaps the most important and far-reaching area in which the Government can encourage the manufacturing industry is by providing a better education system and raising the attainment and quality of school leavers. That is another preferred Labour objective.
This is not a Budget of recovery for Sheffield; nor is it a Budget for recovery for the Yorkshire and Humberside region. Of the many complex issues and problems facing that region, three stand out as far as the regional and local
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authorities are concerned. One is the environment, in particular the redevelopment of the older industrial areas, which have been identified as the key to the region's future. Interestingly enough, that was the subject of my maiden speech in this place 29 years ago. I recall that my right hon. Friend the Member for Morley and Leeds, South was kind and gracious enough to join me for that occasion.
Secondly, training is critical to the region if it is to catch up with foreign competitors' skill levels as the single market approaches and to make the best use of the declining numbers of young people who will be seeking work in the next few years. Thirdly, good communications will also be vital to the region, because they are undoubtedly a prerequisite to success as the momentum of the single market builds up.
The final judgment on the Budget must turn on competence and on how far the Government can be trusted to steer the country out of a recession, which domestic misjudgments have made uniquely severe. The Government must be found wanting in three crucial aspects. First, after 13 years of administrative responsibility, many of Britain's fundamental economic problems remain—the level of structural unemployment, especially in the Yorkshire and Humberside region, a deficiency of investment, an inadequate manufacturing base, a shrunken one in Yorkshire and Humberside, and a poorly educated work force.
Secondly, no one recalling the 1980–81 recession could really have expected that the country would ever again be called upon to go through all that. Yet we are now doing it all over again and no one can say that, as yet, it is working.
Thirdly, the cost of money is too high for an economy in recession—the single biggest factor holding back recovery. Sterling stays weak and in its turn denies the opportunity for any adjustment of interest rates, because traders believe that Britain is still prone to slipping back into the bad old days of demand management. One suspects that yesterday's Budget has confirmed their fears. A PSBR of £28 billion, rising next year to £32 billion—it will be surprising if those figures are maintained and not adjusted upwards—has wrecked the Conservative Government's claim to be the party of fiscal prudence and thereby hopes of much lower interest rates.
We not only have a deeper recession than foreseen, but a worse fiscal state than the pessimists feared.
Mr. John Townend: I accept what the hon. Gentleman says about the need for lower interest rates, but I am surprised that he makes that point while extolling the virtues of ERM. Does he not agree that the Government are constrained by membership of ERM? If we had not been members, it would have been possible to reduce interest rates much earlier.
Sir Patrick Duffy: If we were within the narrow band, I would find it difficult not to agree, but there is much room for movement. The truth is that we are too low down —we are only just off the bottom. One need only look at what happened to sterling after the Budget. It made earlier gains, but lost most of them after the Budget. That was not coincidence.
We need an interest rate cut and a firm grip on public finances. What we have got, however, is a Conservative Government. That is why we are likely to have sustained

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high interest rates and a burgeoning public sector deficit. The Chancellor has not delivered a relevant Budget, and he will not deliver the ballot.
I recall, as did my right hon. Friend the Member for Morley and Leeds, South, that the experience of the great slump in the 1930s provided the first impulse towards political interest, political involvement and political activity. We both come from similar backgrounds with similar families. Our fathers were miners. They were the same kind of men—both Celts. In appearance, they could have been brothers. They had the same kind of background of bitter industrial experience, but they were never bitter men.
It was that early impulse that eventually led both of us to gain privileged membership of the House of Commons. It is poignant—perhaps worse, it is ironic—that in our final speeches we should both recall the slump of the 1930s and wonder whether we are now in a similar slump. As I said in an intervention which my right hon. Friend kindly made possible in his speech, in its present configuration and perhaps soon in its length and breadth, this recession more closely resembles the great slump of the 1930s than any recession in the past 50 years.
My right hon. Friend the Member for Morley and Leeds, South and I arrived in the House at the same time. We arrived in good company, through by-elections, just after Guy Barnett as a result of a by-election in Dorset, Neil McBride as a result of a by-election in Swansea, East, John Silkin as a result of a by-election in Deptford, Brian O'Malley as a result of a by-election in Rotherham, and Gregor Mackenzie as a result of a by-election in Rutherglen. With the exception of Gregor, all the others —who were good Members of the House and became Ministers and good friends—died prematurely. I have never doubted that they were casualties of the parliamentary warfare of the 1970s. My right hon. Friend and I still grieve for them.
My right hon. Friend and I have spent most of our membership of this House on the Opposition Benches, but we feel deeply privileged to have trodden the flagstones of this historic Palace. To have moved within walls that have nurtured and inspired the history of all the peoples of these islands is the greatest privilege that the people of this country can confer on any individual.
My last words to you, Mr. Deputy Speaker, are that you were my Member of Parliament and my Deputy Speaker and I could not have been better served. We have both been fortunate and I thank you for all your courtesies and your friendship.
Mr. Deputy Speaker (Mr. Harold Walker): I am grateful for the hon. Gentleman's kind remarks.
Mr. Speaker originally announced that he was imposing a cautionary limit on speeches between 7 o'clock and 9 o'clock. In view of the small number of hon. Members seeking to catch my eye, I shall withdraw Mr. Speaker's imposition of a 10-minute limit, accompanied by the request that hon. Members show restraint in the length of their speeches, to ensure that all those who wish to take part have an opportunity to do so.
7.4 pm
Mr. James Hill: I am pleased to follow the hon. Member for Sheffield, Attercliffe (Sir P. Duffy). He has had a most distinguished career here, having been president of the North Atlantic Alliance, which was a close-knit reason why we were able to communicate—I was in the Council of Europe at that time. We also had a thin wall between our two offices, so he could hear my singing and I could hear his dictating to the rest of Europe. It will be a sad day when we lose so many able people at the election.
There is not much left to say on the Budget except to point out that inflation has fallen from II per cent. to about 4 per cent. We have brought interest rates down from 15 per cent. to the present 10·5 per cent. and I hope, despite the exchange rate mechanism and the doom and gloom that we heard today, that there will be a decrease of at least 0·5 or even I per cent. to encourage everyone who has had to borrow money during these difficult times. I hope that that will be announced before the general election. The convention is that that cannot be announced during the election campaign.
One of the great lessons that I have learnt is that strikes have always been the most dangerous aspect of industrial progress. I think particularly of the port of Southampton, where a whole year passed without a single ship entering or leaving the port. There was a series of strikes, almost one after the other, by British Rail workers, crane drivers, the dock labour force and so on. Ultimately, although I love the port of Southampton, it was not pleasant to see the absolute desolation, so I was pleased when we privatised Associated British Ports. After that, there could be only one conclusion—the Government had to do away with the national dock labour scheme and all that that entailed. We were then able to compete with the new giant port of Felixstowe on the level playing field on which we all insist when dealing with Europe.
The Southampton port's growth denies Opposition claims that people are not investing. The port has just agreed to invest £15 million on improvements and business has been and is extremely buoyant. Last year, more than 400,000 container units went in and out of the port. Considering that the port has only three container-ship jetties, that is an enormous number.
We have a tremendously buoyant business in car exports and imports. In 1991, the throughput in cars amounted to 300,000 and two thirds of those were new cars leaving this country, so the port of Southampton proves conclusively that there is still life in the United Kingdom. I sometimes wonder whether those who do not look at the minutiae of industry and its problems realise the effect that their doom and gloom have on business throughout the world.
The 5 per cent. reduction in car tax means that more cars will pass through the port of Southampton. Let us hope that British and British-Japanese manufacturers in this country can still compete with all other marques of cars being imported from other parts of the world. All established dock workers, whether crane drivers, office workers or stevedores, will welcome that reduction. When the national dock labour scheme was done away with and the stevedores received their redundancy payments of about £20,000 to £25,000 if they had served a fair amount of time, 450 of them sensibly invested that money in a

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co-operative stevedoring business. They had the good sense to take on one of the dock managers to help and guide them, and it is now a flourishing business.
The old disputes are forgotten—even the old salaries are forgotten. Most of those in the industry are doing extremely well because they now work in partnership. They will welcome the 20p rate, even though it applies only to the first £2,000. I was wondering whether, if the other political parties had stated their polices here today, they would have kept the 25p and the 40p rates intact. I very much doubt whether they would. It is a happy Budget in that, although it does not give back a great deal, it does it in such a way that there is no increase in taxation.
If we are to go down memory lane, I point out that I am a former president of the Motor Schools Association of Great Britain. That does not seem of great rank in these illustrious circles, especially when compared to the role of president of the North Atlantic Alliance, but I felt that it was a way of involving myself in that industry's problems. For a long time, one of its problems was that when a new driving school car was purchased, the VAT could not be deducted. Now, in one fell swoop, taxi and car hire firms, and driving schools can recover the VAT on their cars. That policy will operate from 1 August, and will cost £50 million, spread over 1992–93. That is a welcome aspect of the Budget, which I do not think has yet been mentioned, and as a former president of the Motor Schools Association I am pleased to be able to state it clearly to anyone with a small business involving taxis, hire cars and so on.
Another small item in the Budget that people will tend not to mention is inheritance tax. Now, the old guvnor of a small business or small farm can sign over the business before he dies. We have long waited for that, and I am sure that no one here would wish that, every time the owner of a small business died, everything had to be sold up to pay the inheritance tax on the business. I am grateful for that aspect of the Budget. One of my constituents is a newsagent—the policy is not aimed too high—and he is worried about leaving the business to his family. Now he will have the freedom to do so.
The proposal on car tax was helpful. I had lunch with the Ford Motor Company only about three or four weeks ago—it was not a bribe. Its representatives were in the doldrums, as are those of General Motors and many other car giants in the world. We are suffering not merely a British recession, but a world recession. Suddenly, overnight, due to the imaginative 5 per cent. cut in new car tax, those businesses are beginning to take advantage of that proposal by reducing their prices, which can only be good. After a home, a car is probably the second biggest item for a family—and why not? Why should it be only Ministers who drive around in new Montegos? Why should not the average family man do so? The concession will be extremely useful.
I have talked about the port and the car industry in my constituency, and the difficulties of the system. We cannot do everything at once, but we have done a little to help many of my constituents. We have provided extra help for pensioners on income supplement. It does not involve a great deal of money—many hon. Members would think that they could not buy a meal with it, but the money must be seen in the context of those who receive it. The amounts involved are £2 for a single person and £3 for a couple, which will be welcomed by all my constituents in that
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category. For the over-65s, the income tax allowances have been lifted in line with inflation, which will also be welcomed.
When talking about one's own constituency, the difficulty is that one tends to become emotional. That is especially true if, like me, the Member was born in the constituency and, like me, had a grandfather who was, unfortunately, killed in the boiler room of the Titanic. I have links with my constituency, as we all do. My mother, who lived there, died only a couple of years ago. We do not normally like the carpetbaggers, but we sometimes have to put up with them. I believe that, if one is a Member of a home constituency—born, bred and educated there—one almost becomes part of it; it is a living thing.
Mr. Roy Beggs: I share the hon. Gentleman's sentiments in respect of his port arid constituency in Southampton, as I have a similar constituency in Antrim, East with the second busiest ferry port at Lame. Does the hon. Gentleman agree that those who are deeply interested in the future of British shipping would have liked the Budget to contain measures to encourage British shipping and get British crews back on to British ships? Perhaps we should continue to press Governments so that, next time round, such action will be taken.
Mr. Hill: That is an interesting point. Like the hon. Gentleman, I have been to the London General Chamber of Shipping and received its information packs. I know that flagging out has depleted the British fleet. I know that, sometimes, ships are flagged out so that cheap, overseas labour can be employed. Years ago, when I was in the European Parliament, I was very much for the scrap and build policy. That was thought almost revolutionary in those days, but it would have meant that ships that did not measure up to the highest safety standards and were perhaps not governed by fuel economy could be scrapped and rebuilt. Whether it comes from Europe or the British Government, there must be more understanding of the problems of running a merchant ship.
When we consider Taiwan—soon China, too, will have one of the great fleets in the world—we can see the competition which will be difficult to beat. Those countries pay less and have new ships—some of those countries have been in the shipbuilding business for only 15 or 20 years, so they have good, modern fleets. Something must be done, whether in future by the European Commission — which we may object to—or by Governments getting together. In this country we cannot buy a ship off the rack; there is no prebuilding. We have to place an order and might receive it in three of four years. Very few can survive in that way.
If a future, successful Conservative Government are in office, perhaps we shall be able to look deeper into this matter. Flagging out brings with it many evils. I am not being sentimental; in the port of Southampton it was always the "red duster". There are evils in all our fleets, dispersed throughout the world. There are ships owned by British companies that we never see. They are flagged out, they go to Florida or on cruises in the Mediterranean, and they have their repairs done in places like Athens. All this is a problem for Governments of the future.
The day of Government intervention in shipping is over. Governments never seem to get it quite right. Keen European though I am, I would be against too much

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intervention by the European Commission in this delicate matter. Sometimes the Commission plays a ducks and drakes game—there is not always complete fairness.
I would like to think that a successful Conservative Government of the future, well supported, I hope, by Northern Ireland Members, will examine the problem raised by the hon. Member for Antrim, East (Mr. Beggs).
I still remember my maiden speech, although I do not suppose that anyone else does. I described everything happening around the port. Were I to make the same speech now, I would have to explain that everything has grown. The university has grown; the general hospital has grown to be the second largest in the United Kingdom. We have a first-class medical school. There are exciting high technology developments, and we have a science park. There are new marinas in the docks and—unheard of before—shopping parades in the port.
Southampton is a prosperous city which just needs a kick-start. Opposition Members do not believe that this Budget offers that kick-start. They will have to wait and see. I think that it is the beginning of the way out of the recession. Someone told me that we were last into the recession and would be first out. Actually, we were the first into it and it looks as though, with the United States, we may emerge from it last—
Mr. Eric Martlew: Will the hon. Gentleman give way?
Mr. Hill: Let me finish what I was saying—good heavens alive, what is happening to the House?
Not all businesses go into a recession at the same time and not all of them come out of it at the same time. Some businesses are already beginning to flourish. First-time buyers of property are beginning to be active; there are "sold" boards in my constituency. As with cars, so with properties—the recovery is beginning.
Mr. Martlew: If the hon. Gentleman said, as I believe that he did, that we were first into the recession and we were going to be the last out, does he not accept some of the blame for that as a member of the Conservative party?
Mr. Hill: Recessions are a law unto themselves. Anyone who has been in business will know that everyone wants to buy certain goods but not others. I remember that I took up a Parliamentary Fellowship Trust position with a large conglomerate that owned 200 companies throughout the United Kingdom. One of those companies made giant presses. As an ordinary business man I asked about break-even figures for the company. I was told that it could sell nine presses a year. I asked about the figure for the world market, and was told that it was 17. The position was clearly impossible. People have to be alive to changes in the business world, whatever business they are in.
I am an investment manager. I know exactly what is going on in business—if I did not, I would not make any money. Investment is the right way forward, but that does not necessarily mean Government investment. It means private sector investment, and that can come from any country.
I do not know whether there was resistance in northern and southern Ireland to foreign capital arriving in years past. The Republic was given a jolly good kick-start by it. It enabled the Republic to get its accounts together so that
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it could join the EC. Over here, there was terrific resistance to foreign capital. The unions held talks about whether we could allow one union for one factory. I wish that we had had one union in the port of Southampton all those years ago; instead, we had about a dozen. We resisted foreign investment for as long as we could. Now, people are building on green-field sites in some parts of the country in highly successful ventures—[Interruption.] I do not know whether you were signalling to me, Mr. Deputy Speaker, or just wanting to know the time. Of course one must be obedient to Deputy Speakers, so I conclude by saying that this has been an extremely good debate so far. I am happy with the Budget. It has certainly done a power of good for my more poorly paid constituents, and I hope that when I go back to my constituency to do canvassing they will be appreciative.
Several Hon. Members rose—
Mr. Deputy Speaker: Order. May I re-emphasise my earlier appeal for brief speeches? I had hoped that the hon. Gentleman, given the 10-minute limit that was to have been imposed, had a 10-minute speech in his hand.
7.26 pm
Mr. Bruce George: I come to the debate with a curious mixture of happiness and sadness: happiness because the call to arms has at long last arrived; sadness because I see colleagues departing and making valedictory speeches. My right hon. Friend the Member for Morley and Leeds, South (Mr. Rees) and my hon. Friend the Member for Sheffield, Attercliffe (Sir P. Duffy) both have enormous experience in the House but are retiring. It will be sad to see them go, and sad to see colleagues departing who have no intention of departing. Whether this is to be my own valedictory speech, only the good people of Walsall, South will be able to determine. I hope that they will show the same good sense this time as they did on five previous occasions.
I was fortunate enough to have the last Adjournment debate of the 1974–79 Parliament. The Minister who replied was the late Guy Barnett. The debate was about what had happened in the previous five years in my constituency. I am pleased to be able to speak again now at what I hope will prove to be the fag end of the Conservative Government. That provides me with a good perspective from which to look back on the past 13 years, and to compare the policies of those 13 years with those of the previous five—all against the background of this Budget.
When I spoke at the end of the 1974–79 Parliament I was able to mention unemployment in my constituency of 5 per cent. and council house starts at 1,000 per year. There were 12,000 crimes per year. I mentioned big companies in my constituency such as GKN, Rubery Owen and Charles Richards, which I said had fine prospects. I said that Eaton Axles and F. H. Lloyd had high investment programmes. That 1974–79 period was wrongly assessed by contemporaries and historians. It was hardly an idyllic period for government but, according to many people, Labour's defeat in 1979 ushered in a new dawn. Few Governments came into office with such advantages as the next one—the bonanza of £100 billion worth of North sea oil, the sale of much of the public sector to the private sector and higher taxation—but they blew it. I now look back 13 years later and see unemployment in my constituency not 5 per cent.

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but 12 per cent. officially and, in reality, probably half as high again. In the west midlands, 40 people are chasing every job. Council house starts stand not at 1,000, but at zero, and there are 12,000 unmodernised houses with no chance of being modernised because the council has only enough money to modernise between 50 and 75 a year. The companies about which I spoke—GKN, Rubery Owen, Charles Richards, Eaton Axles, F. H. Lloyd, and many others—have all gone. Of those companies which remain, some are now in receivership, some have been rationalised and reorganised, and some are hanging on by their fingertips.
In the country, there are record bankruptcies, cripplingly high interest rates—for companies in my constituency and elsewhere, these interest rates have been killers—prices have doubled and the pound in our pocket in 1979 is now worth about 40p. There have been two recessions and growth is the lowest since the war, lower than under the 1974–79 Labour Government and much lower than under the 1964–70 Government. My constituency and elsewhere have seen manufacturing output plummet, great divisions between regions, enormous disparities of income and the creation and consolidation of a large underclass. We have seen sleaze and corruption and now a PSBR requirement of a staggering £28 billion and rising—add to that the huge trade gap, and one sees the enormous consequences of the past 13 years.
At the turn of the century, one politician called my town of Walsall the town of 100 trades. The number is now probably far less than that as a result of Conservative Governments, history and the decline of the region's fortunes. Many industries are in decline. What we have left are leather goods, metal manufacture, machine tools, iron castings, motor components and, in Willenhall, locks. It is amazing that so many industries are in severe decline. We need to sustain existing industries and to attract newer and high-tech industries to the town. I do not want the town to become nothing more than a town of warehouses, superstores, leisure complexes and what is left of the smokestack industries which have survived the crises of the past 13 years. I want to see increased investment in manufacturing industry, in equipment, in training and in marketing. We do not want simply to neglect manufacturing industry as has happened during the past 13 years.
It is essential that we have better training. It is important that local authorities are used in creating and sustaining industry, providing guidelines, investing in housing programmes and providing better and more relevant education. Those are some of the things that are needed, but above all we need the election that is about to come, which will give us a new Government, a new Budget and a new set of policies.
The industrial revolution began in the west midlands two centuries ago. Until about 20 years ago, the region was the engine of the British economy, but now we are in deep decline. We have seen two major recessions and manufacturing output has plummeted. During the past 13 years, employment in manufacturing has declined by 372,000 and an even sharper decline has taken place recently.
John Owen, president of the Engineering Employers West Midlands Association, has published his presidential review of the previous 12 months. When that gentleman's company in my constituency was desperately seeking
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assistance in 1980 to prevent its collapse, which eventually took place, I went with him to see the then Minister of State at the Department of Industry, the right hon. Member for Chingford (Mr. Tebbit). We asked for assistance, but we were simply told that the derelict land clearance scheme could be used to grass over the site when the factory eventually closed.
John Owen, in his report, which is worth quoting, said:
"Now, at the end of 1991, as my Presidential term draws to a close, it is even more disappointing to record that engineering industry in the West Midlands has experienced perhaps its worse recession ever; and, significantly, there is no convincing evidence that the recession is over nor indications of impending recovery. It would be accurate to state that for many companies manufacturing output has stabilised at a very low and unacceptable level; that would account for five companies out of ten. Four out of ten continue to report a deterioration in their business trends; and only one out of ten reports an improving trend or more buoyant circumstances. Expectations for recovery extend into the second half of 1992; confidence is low and employment prospects are not good."
The Budget will not reverse that decline, nor was it intended to—it was intended as a recovery Budget for the Government rather than for the country. I note from today's Financial Times that the average score for the Budget from six experts was five out of 10.
I welcome some aspects of the Budget, but I warn the electorate to beware of Normans bearing gifts. The Chancellor told us yesterday that responsibility for the economy belonged to industry. It would be wrong and unfair to put all the blame for the failures of industry on the Government, but one must remember that the Government have been in office for two thirds of the past 60 years—all of the 1930s, I exclude the 1940s because of exceptional circumstances, almost all the 1950s, almost half the 1960s, just about half the 1970s and all the 1980s. During that period of tenure, our economy has declined. We have gone from being a powerful economy to being the 13th largest economy in the western world and our position is dropping.
The Conservatives have much to feel responsible for. The Budget was less than a spectacular success. The Prime Minister said that the Budget was well received and that it was a popular Budget throughout the country. That proves that life in the bunker can distort one's view of what is happening outside.
I was greatly amused yesterday to be told that interest rates might go down if interest rates go down in Spain. It is one thing to have to kow-tow to Germany, but now we are looking for straws in the wind in Madrid. That is a sign of how we have declined as a nation. We heard this afternoon the argument that it was wrong to attack Japanese investment, and I welcome Japanese investment, but it is unfortunate that there is not enough indigenous investment. The reasons for Japanese investment in Britain are complicated. One is clearly the desire to slip into a country so as to circumvent the restrictions of 1992. Secondly, the Government are receptive to inward investment. Thirdly, the Japanese are attracted by low wages. That is why there is so much inward investment. I do not want to take the argument to an extreme, but in the same way one would invest in a third world country where labour costs are relatively low. Fourthly, the Japanese are keen to invest in this country because, like us, they know about suicidal tendencies, and perhaps they recognise the same tendencies in us.
As a west midlands Member, I welcome the limited assistance that has been provided for the motor vehicle

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industry—although, as a certain rugby commentator would say, they must be ringing the bells in Paris, Milan, Tokyo, Taipei, Seoul and almost everywhere else tonight. Clearly, the boost to the British motor vehicle industry will give a boost to the motor vehicle industry of every other country.
My constituency contains much small industry, and I feel that some benefits have been conferred on small manufacturers; but I do not believe that the Budget will increase confidence. The economic advantage is marginal, and what is really crushing is the unacceptably high level of interest rates.
Over the past 13 years, a number of myths have been destroyed. One is the myth that the Conservative party is the party of fiscal responsibility, efficiency, competence, law and order, and defence. This is not the occasion on which to discuss the way in which the Government have perceived issues affecting defence and national security, and have acted on those perceptions; but I should like an opportunity to discuss that with any hon. Member who argues that the present Government are fiscally responsible, efficient, competent or preservers of law and order—and I hope that I shall have such an opportunity.
As for my colleagues who are going their separate ways after the general election, I wish them well. Whatever happens, the new Parliament will be very different from the one that I entered in the early 1970s. I know that, as with the world of football and the theatre, the old guys who were around when one first arrived are always more significant than the present generation, but I see in the departure of many of my colleagues the departure of men and women who are highly competent. We can only hope that a future generation of politicians will be able to perform as ethically and, to an extent, as honestly and competently as some of their predecessors.
We now depart for the pre-election campaign. The judgment of the Budget will be set against judgments about the competence of Government and Opposition, and I trust that the people will see that the time for change has come.
7.42 pm
Mr. John Townend: This is a rather sad debate, because we are losing a number of right hon. and hon. Members at the election. Four or five have spoken today. I pay special tribute to two Opposition Members —the right hon. Member for Morley and Leeds, South (Mr. Rees) and the hon. Member for Sheffield, Attercliffe (Sir P. Duffy), two fellow Yorkshire Members. They have been highly respected by Conservative Members, and I, as a Yorkshire Member, have always been shown personal kindness and consideration by them. They were particularly helpful when I first entered the House. In my opinion, those two Members epitomise the best in the Houses of Parliament: Members on opposite sides treating each other with respect. Although we disagree about politics, I thank them both for the help that they have given me. They will be a loss to the House.
I am also sad that my right hon. Friend the Member for Hertfordshire, North (Sir I. Stewart) is leaving. He was a Treasury Minister in the golden era of monetarism, between 1983 and 1987, when he played a distinguished
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role. He will be sadly missed, as will my hon. Friend the Member for Somerton and Frome (Mr. Boscawen): he, too, has played a significant part in the House.
In reply to the hon. Member for Walsall, South (Mr. George), let me say that it is not really the Opposition's place to criticise the decline of manufacturing industry when referring to the automobile industry, or to express regret about Japanese investment. The British car industry was in a very strong position at the end of the war; it later destroyed itself with inferior management, militant trade unions, restrictive practices, too many unions, go-slows and a refusal to accept new technology and new machinery. If the British car manufacturers had been able to secure the same deals from the trade unions that the unions, in desperation, gave the Japanese, we would have a much stronger car industry today.
One of the Government's great achievements was their introduction of a new industrial environment. They did that by reforming the trade unions and encouraging investment, and as a result most Japanese investment in Europe came to this country. Over the next few years, we shall be able to re-conquer the motor car markets of Europe through those Japanese companies.
Let me say to those who criticise Japanese companies that, in my view, they are no different from the American Ford and General Motors, or from the French Peugeot. We all regret the fact that they are not British companies, but it is better to have 80 per cent. of the cake than no cake at all. It is interesting to note that the Italians and the French are petrified by the onslaught on their car markets that they envisage over the next four or five years. That is why they have gone to such lengths to ensure that cars produced in the Japanese-owned British factories are not classed as Common Market cars.
I support what was said by my hon. Friend the Member for Southampton, Test (Mr. Hill) about the Government's great achievements in the industrial resuscitation of our great ports. My constituency borders Hull, which, when I was a boy, was the third port of this country. The dockers went on strike, and engaged in go-slows and demarcation disputes; the port went from third to fourth and, eventually, to 15th. Along with my hon. Friend the Member for Test and others, I urged the Government to grasp the nettle and abolish the national dock labour scheme. After many years, they did so, and the port has now begun to prosper again. My hon. Friend the Member for Boothferry (Mr. Davis), who is now sitting on the Front Bench, also played his part. Trade to the port is now up by 40 per cent. A container terminal that was lying idle because a decent manning agreement could not be secured has reopened, as has Alexandra dock, which has been shut for three or four years.
I strongly welcome the move in the Budget to bring together decisions on public spending, Government borrowing and taxation. The Treasury Select Committee, on which I am privileged to serve, has urged such a move for some time. I believe that that will prove a real advantage, and that it will help the Treasury to control spending Ministers. Throughout my time in the House, I have felt that one of our great problems is controlling spending Ministers, whichever party is in government.
That move will bring the Government much more into line with industry. Our way of hanging on to traditions really is archaic. Who in industry would consider

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producing an annual financial budget for the expenditure side of a profit-and-loss account, and then deal with the sales side six months later?
We face a world recession, whatever anyone says. America is in a deeper recession than we are; Australia is worse off than us; France is heading for a worse position than us, and has probably already got there. Even the great economic powers—Japan and Germany—are moving into recession.
In my northern constituency, male unemployment is at 21·5 per cent.: I know what recession means. Our economy needs a stimulus. My first choice, of course, would be a monetary stimulus, but I accept that the Chancellor's hands have been shackled by membership of the exchange rate mechanism, and that he cannot drop interest rates by 2·5 per cent. None the less, it ill behoves Opposition Members to criticise the Government for the level of interest rates, given that, month after month, they called for us to join the ERM. In view of those restrictions, the Chancellor has produced a very well drafted Budget. As he could not give a monetary stimulus, his only alternative was to give a fiscal stimulus to help the recovery, and he has done that to the extent of £2 billion.
It has been said today that that is not enough to provide a stimulus. It must be considered in the context of the increases in public expenditure announced in the autumn statement. Spending in the coming year will increase by no less than £22 billion—10 per cent.—which is double the rate of inflation. Expenditure on the health service in the past two years—from last year to next year—will increase by no less than £5·2 billion.
We are all seeing the benefit of that in our constituencies. In my constituency, there was a very old hospital. Government after Government have promised since way before the war to rebuild it. This Government have done that, and it is now one of the finest community hospitals in the country. It does not end there. There was another old hospital, the Alfred Bean hospital, in Driffield in my constituency. That has been completely renovated and had many new additions. Now we have two of the finest community hospitals in the country, with dedicated staff providing a service that is better than ever.
Mr. William O'Brien: I am interested in the hon. Gentleman's contribution, and I am following his speech carefully. He said that some of the money that has been spent on the health service has been used in his constituency to provide two new hospitals. Imagine what we could have done with the £14·5 billion that the Government used to prop up the poll tax. Surely the hon. Gentleman should take into account the money that was wasted on the poll tax and the way in which that could have been channelled into building hospitals, schools and so on. Will he comment on that?
Mr. Townend: I find that incredible. Every year, Opposition Members call for more support for local government. Local government spending, financed by the Government, has increased by about £14 billion. If we suggested taking that away from local government and spending it on the health service, Opposition Mernbers would complain bitterly. Our increase in expenditure on the health service has been massive, and everybody knows it.
I find it strange that Opposition Members should criticise the level of the PSBR this year. It has increased
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partly because of all the extra expenditure. If the Opposition did not want it to increase, they should have opposed the expenditure. Far from opposing it, they have proposals to spend more. Whenever Labour representatives appear on the television, whether they are dealing with education, pensions, health, overseas aid or whatever, they have one answer—more expenditure. That expenditure totals £37·5 billion. Opposition Members cannot get away from that. They have either lied to the public or they will have to borrow that money or put up the standard rate of tax by 10p.
Mr. O'Brien: The hon. Gentleman is misguided, particularly when he refers to local government. I remind him that, in 1979, rate support grant to local government was 67 per cent. This year, it is 25 per cent. The reduction in the amount that has been pumped into local government is substantial. The £14·5 billion had to be used for the poll tax because so much money has been taken from local government previously. Will the hon. Gentleman accept that, under this Government, local government has had a rough time and that there is no future for it if they are re-elected?
Mr. Townend: I have probably had far more experience of local government than the hon. Gentleman. I was leader of a county council. As always, the Labour party never gets its figures right. The correct figures, on page 61 of the public expenditure White Paper, show that Government support for local authorities in 1991 was £42·5 billion; in 1991–92, it was £53·3 billion, an increase of 40 per cent; and in 1992–93, it will be £58·5 billion. We have lavished money on local authorities. Unfortunately, many Labour authorities have wasted that money.
I want to look at the proposals for small businesses, as I have the honour to be the chairman of our Back-Bench committee for small businesses. The Government have done more than any other in history to help small businesses. As a result, more small businesses have been created since 1979 than at any other time. We accept that small businesses have suffered under the recession. I made representations to the Treasury on behalf of small businesses, and I am delighted that my right hon. and hon. Friends have listened. Perhaps the most significant proposal for small businesses in the long term—I have heard no comment on this from the Opposition, and I am interested to know whether they would implement it—is to exempt most business assets from inheritance tax. That will be of enormous help to family farms and businesses and will affect the regions tremendously.
We need more control over the destiny of our businesses in the regions. That is what family firms do. In the past, because of excessively high rates of inheritance tax, and before that of capital transfer tax or death duties, when somebody died, particularly if they died out of turn, many good local firms had to sell. They always sold to a bigger firm or a national or multinational firm. The decision making and reinvestment go from the area and, as soon as there is a slump, it is the branch factory that is closed.
I have faced that in my constituency over the past three weeks. In my constitutency is a firm called Bridport Engineering. It was bought out years ago and is now a subsidiary of an American company with another factory in Leicester. The machine tool business is bad, and the Bridlington factory has been closed down, and all the

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production transferred to Leicester. If that had been a locally-owned company with the management living in the town, I accept that there would have been redundancies, but the factory would have been kept open, and after the recovery the men would have been taken back. My right hon. Friend's proposals are the most historically significant help that small businesses have had this century. I challenge Opposition Front-Bench spokesmen to say whether they will oppose them.
I am delighted with the other measures taken to reduce VAT penalties, particularly for minor mistakes. The level of penalties for what were often arithmetical mistakes was farcical. I strongly welcome the requirement for contractors to pay their bill from suppliers promptly and for larger companies to state in their annual report how quickly they pay their bills.
I hope that my right hon. and hon. Friends on the Front Bench will take note of the fact that I do not think that that will be as effective as they hope. The large suppliers of large companies are equally powerful, and they will probably have to be paid on time. If small suppliers are not paid on time, it will probably show in the figures, because the figure in the annual accounts will be an average.
I am delighted with the easing of the burden of the uniform business rate. For my constituency, I am particularly pleased that the transitional relief can be transferred to a new occupier. The fact that the transitional relief stopped on change of ownership meant that many shops and warehouses were left empty. That is bad for an area: it gives it a dilapidated appearance, and people will not look at those properties. That will no longer be the case. Does the Labour party support those proposals?
I strongly support the 20 per cent. rate of income tax. It helps the low paid and is a signal of the Government's intention progressively to bring down the standard rate to 20p. I find it strange that the Labour party is so paranoid about tax cuts. It seems to hate the idea of giving the people a little more of their own money to spend as they wish. The Labour party likes bureaucracy. It thinks that the man in Whitehall knows best. Is there anybody in the country who really believes that, if we had had a Labour Government since 1979, the standard rate would now be 25p? Most people believe that it would still be 33p or more.
I represent a constituency with many old-age pensioners. The £3 a week for married couples on low incomes will be welcomed.
We need to reduce interest rates, even within the ERM. As soon as the election is over and the fear of a Labour Government has disappeared, there might be scope to reduce interest rates. It is highly important that we do so.
I strongly support the Government's policy of a balanced budget. I accept what table 5.1 says, but I have been a member of the Treasury and Civil Service Committee for many years and have seen slippage year after year. A balance will not be achieved by 1994, but when Treasury Ministers are re-elected they will have to keep a tight control on public sector spending, especially public sector wages. One reason why our public sector borrowing requirement is so high is that many public sector wage settlements have been higher than inflation, and considerably higher than those in the private sector.
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I believe that this first-class Budget will win us the election and that I shall again be here, with my 17,000 majority, chivvying Treasury Ministers to continue good, sound monetary policies.
8 pm
Mr. William Ross: At times, this has been a rather noisy day in the House. It then became sleepy, but the hon. Member for Bridlington (Mr. Townend) livened things up somewhat.
It has been a day of some sadness. At least four speeches have been made by right hon. and hon. Members who will leave the House after the election, two of whom served in the Northern Ireland Office. The right hon. Member for Morley and Leeds, South (Mr. Rees) made a most powerful and moving speech about the conditions in his constituency, which he became a Member of Parliament to correct. I have no doubt that when the right hon. Gentleman became a Northern Ireland Minister he discovered that, although political divisions in Ulster ran rather differently from those in Leeds, South, many of the same problems existed in many parts of the Province. As his career in the Northern Ireland Office progressed, I know that, being a Celt, he became steadily more Unionist in his view, no doubt believing that that was the best way to protect the interests of the people of Ulster.
The debate has been interesting in a number of ways. We are discussing the last Budget before the general election—the launching pad for the election—and it would be difficult to think of a Chancellor who had been handed a worse hand of cards to play. However, he made the most of that poor hand. We could debate at length whose fault it was that he had a hard hand but I shall try to express my view on that before I sit down.
The new Budget date seems sensible. All hon. Members will welcome that because at least we shall know where we are at the beginning of the year. I regret that more was not done to increase industrial output, because although service industry is valuable, real wealth is created by manufacturing industry. The hon. Member for Bridlington was happy about Japanese investment, but I am not happy about the ownership of industry not being in the hands of citizens of the United Kingdom because our own people should reap the benefit of the brains and skills that they bring to bear on any industrial problem. That is a sore point with me, so I regret that more help was not given to increasing industrial production and bringing new products to market.
The new tax band may complicate matters. It will certainly ease the burden on many of the most poorly paid people but, like all tax changes to the lower end of the scale, to some extent it will be self-financing because there will be a change from social security benefits to earned income. Therefore, many people will not be much better off. None the less, it is welcome. I hope that we shall widen the 20 per cent. band and drop the start point of the 40 per cent. tax band to a lower level.
We welcome the halving of car tax, which will help many workers in the car industry. But against that we must set another burden that is inadvertently placed on the poorer section of community who buy second-hand cars which cannot be converted to run on unleaded petrol. They must now bear the extra cost of leaded petrol. The help with rates for business will be welcome.

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As a farmer in Northern Ireland, where farmers are owner-occupiers, I give a particular welcome to the inheritance tax changes. They offer real relief to everyone in small business and the farming community. The Government are to be praised for making that change, especially as in the 1970s we had to live with the capital transfer tax introduced by the previous Labour Administration, to which many hon. Members objected. This is one of the best things that has happened to the farming industry in many years. It is welcome and the Chancellor is to be congratulated on that aspect of the Budget.
What causes everyone who thinks for a moment the deepest concern, however, is a PSBR of £28 billion, or 4·5 per cent. of gross domestic product. We are returning to the situation that prevailed in the dying years of the Labour Administration. I well understand that some Government expenditure is not easily reduced, especially social expenditure. In the past, it was possible for a Chancellor to cut capital expenditure, not least on construction works. As unemployment is so bad, it has been decided that that is not possible.
The deficit also reveals another sad tale. Not only will revenues fall but unemployment will continue to rise for quite a long time. Huge sums must be hidden in those figures to cover the cost of that unemployment. The Government will undoubtedly be hoping for recovery and for the business cycle to turn upwards yet again. There are signs that that is happening in the United States, which has experienced a W-type recession rather than a U-type. We hope that there will not be a third dip before the recession finishes.
In 1980–81, the PSBR was 5·3 per cent. of gross domestic product—13·2 per cent. of revenue. We shall return to those levels next year or the year after. We went from a PSBR of 5·3 per cent. of GDP in 1980–81 to a surplus of £14·5 billion in 1988–89. That shows what good housekeeping can do, albeit at some cost. In the coming year, the deficit will be £28·5 billion. According to the Revenue, by the end of 1995–96 we shall have accumulated an extra debt of £104 billion, and in the year after that it will rise to £110 billion. A debt of that magnitude is very serious and is bound to have the most dreadful consequences for the years in which the debt is run up to those astronomical levels, but it will also influence what the country can do in the years after that.
Time and again, we have heard the Prime Minister and the Chancellor talk about the balance in the business cycle, but it has already been drawn to the House's attention that no one can judge the length of that cycle in years. I suppose that it is as long as a piece of string, and can vary as much as the lengths of various pieces of string. At best, the Government expect an improvement by the late 1990s, but that is a very long cycle from the previous peak in 1988. Whenever the business cycle turns, with the best will in the world it will be a lot harder to climb the financial stairs down which the Government tripped so eagerly in the past few months and getting back on level ground will be a very painful operation. And even when we get there, how long will it take us to repay the £104 billion?
The lower inflation is, the more real that £104 billion becomes. I hope that we are not going to get out of this situation by using inflation. Surely, whatever Government are in power, we shall make an effort to keep sound
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money. Therefore, we are talking about a real £104 billion, not a £104 billion which is halved or quartered by allowing inflation to soar.
In an intervention, the right hon. Member for Bethnal Green and Stepney (Mr. Shore) drew attention to the straitjacket of the 3 per cent. of gross domestic product contained in the Maastricht agreement. Only one hon. Member said, "Hear, hear" to his conclusion, and that Member was me. The right hon. Gentleman did not get much support from his colleagues or from Conservative hon. Members, for the good and simple reason that he spoke of something about which neither Front Bench wanted to hear. He uttered words which both Front Benches want to sweep under the carpet until the election is safely over and until the country has been sold out arid is so deeply enmeshed in the Common Market that it will never have any freedom of action.
In recent weeks, the Chancellor has made it clear—this was thrown at him across the Dispatch Box yesterday—that, even if he had known the exact course of the recession, he would not have behaved any differently. As we are in the exchange rate mechanism, surely he should have said that he could not have behaved any differently and that he merely had to defend the value of sterling within its band, come what may. We are now back where we were a long time ago—a point that I had hoped that we had finally left behind us—and constantly trying to rig the exchange rate to buck the market. It did not work before and I cannot see it working this time.
If the Chancellor had thought about it—I am sure that he has because he is a fairly canny lad—I am sure that he now wishes that he had had the power to lower interest rates in the past 18 months for the benefit of British industry, for the recovery, and for the Conservative's electoral prospects. If we could go back a year or so, would there still be a cry to go into the ERM if the Government could have accurately forecast how the recession would develop? Would not that reduction of interest rates have been a far wiser way to spend the time, rather than wrestling in these past weeks with how to rig the exchange rate? The Chancellor could have dropped interest rates and we would not have been in such a deep recession because the recovery would have started a great deal earlier.
Would the Chancellor have introduced this Budget if the election were a month behind him rather than a month ahead? The answer must be no, absolutely not. He would have behaved very differently. Would he not have taken the type of action taken by the right hon. and learned Member for Surrey, East (Sir G. Howe) whenever he found himself in the same circumstances in the early 1980s?
If the Labour party wins the election, when will it introduce its Budget proposals? What will its different and extra expenditure be? I cannot see any means by which it can easily cut that which has already been decided. If the Government win the election, will we have another Budget before the year's end which will be more in keeping with the canny Scot who gave us the Budget yesterday, or at any rate the canny Scot standing behind him like a shadow as he uttered his words? I believe that that prudent man will have to tax or cut to balance the books. He will have to find where he can tax and cut because, come what may, the books must be balanced at some time.
Whichever party wins—whether the hon. Member for Derby, South (Mrs. Beckett) changes place with the hon.

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Member for Norfolk, South-West (Mrs. Shephard) after 9 April—one group of people will still be in the House, and they are those who sit here. Nobody will be able to call "Labour gain" as we walk out to supper this evening because there ain't going to be any Labour gains from the Ulster Unionist party or any gains for any other party from the Ulster Unionist party.
8.15 pm
Mr. Alan Haselhurst: There have been so many metaphorical handkerchiefs on display this afternoon that one almost feels that one must apologise to the House if one is seeking to be a Member of the next Parliament. However, I associate myself with the comments already made about right hon. and hon. Members who are leaving us after distinguished service. Without being unduly discriminatory, may I remark especially on my right hon. Friend the Member for Hertfordshire, North (Sir I. Stewart), who is a neighbour of mine and who, during his time here, has been a model of the efficient, courteous, effective and highly capable Minister and Member of the House. He will be missed, especially as he is leaving prematurely because of ill health. He has been a very good Member of Parliament and a good neighbour.
Most of us can feel at ease with the general tone of the Budget. It seems to have hit the right spot in terms of national needs. I begin by commenting favourably on the Budget's green tinges. I follow in part what the hon. Member for Londonderry, East (Mr. Ross) said. I was pleased that the Chancellor widened the gap between the duty on leaded and unleaded petrol. It was entirely right to give a further push to unleaded petrol, although I know that that causes problems for some people. However, if people are encouraged by the difference in duty and by the reduction in the car tax to buy new cars, most of which are now fitted with catalytic converters—in parenthesis, I declare an interest—that must be good for the environment.
Although it did not please everyone, I also welcome the extra duty on cigarettes. I listened to a number of people commenting on the radio last night about how that would offset any gains from the cut in taxation. One must emphasise that it is their choice to smoke. The evidence is now conclusive that they are not doing themselves any good. They do not have to spend that money and should make more of an effort not to spend it in that way.
There is a whole raft of measures that are helpful to business. I am delighted that many people in the business community have expressed their satisfaction at what the Chancellor has done. It seems that the totality of those measures will sustain and create jobs in the business and commercial sector. Taken with the boost to consumer spending, they should also help the economy.
An especially welcome feature of the tax changes was that they have been tilted to those on low incomes. Surely the rationale is that people on low incomes are more likely to spend any extra money that comes their way. I therefore found it strange—for two reasons—that the Leader of the Opposition said that much of what he is pleased to call the borrowing giveaway would be spent on imports.
One reason is that the Opposition have already justified their intention to increase pensions and child benefit on the
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precise ground that they believe that the money would be recycled in the economy, through extra purchasing power, and would therefore be used. Do they think that that money would be used on imports? It is rather improbable, is it not?
My second comment on the Leader of the Opposition's criticism is that it seems rather fanciful to say that lots of grey-haired members of our community, when extra money is available to them, will be responsible for a surge in imports of video recorders, CD players or karaoke machines. The fact is that, as any sensible person must recognise, extra money in the hands of the elderly and low paid is likely to be spent on many of the routine, ordinary necessities of life, providing a helpful boost to the economy.
The debate is a tale of two Budgets—the actual Budget so capably placed before us by my right hon. Friend yesterday, and the shadow Budget, which is haunting the debate. We occasionally see glimpses of the shadow Budget, but it has never materialised before us. As my right hon. and learned Friend the Chief Secretary said, it is not here to be debated and scrutinised.
Because of the evanescent nature of the alternative Budget, I cannot help feeling that the right hon. and learned Member for Monklands, East (Mr. Smith) may be termed not so much the shadow Chancellor as the phantom of the Treasury, in whose mouth the words of the theme song, "All I ask of you", might take on a note of menace rather than endearment, if he ever got the chance to control our finances.
The Leader of the Opposition told us yesterday that the shadow Budget—or the alternative Budget, or the phantom Budget—has not appeared because the Opposition need more time. They have had every bit as long to prepare their measures as my right hon. Friend the Chancellor has had to prepare his. The Leader of the Opposition says that they need another six days. As far as I am concerned—I am sure that my right hon. and hon. Friends would agree—they can have another six years, if they want, to mull over what they might do.
Mr. Oppenheim: As long as they need.
Mr. Haselhurst: As my hon. Friend says, they can have as long as they need.
The Leader of the Opposition majored heavily—no pun intended—on the size of the public sector borrowing requirement. Apparently £28 billion was too much for him. He held it up as an example of irresponsible finances. If he deprecates the tax reduction, which amounts to about £2 billion, and would cancel it, the PSBR would come down to £26 billion. We should like to know whether £26 billion would be acceptable to him, or whether he considers it too high. If he thinks that the PSBR should be lower, what does he think should happen? Should there be a commensurate increase in tax to bring the PSBR down to the level that he finds acceptable? Yesterday he said:
"if there is to be borrowed money available, it must be invested in industry, construction, capital works, transport and other essential services."
What on earth does the right hon. Gentleman think that the bulk of the PSBR is being spent on? It is being spent on precisely such developments as those for which he calls.
If the Leader of the Opposition says that the PSBR should be reduced, there could certainly be no tax cuts. There would have to be either substantial tax increases or substantial cuts in the very public services which he says

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should be expanded. What he says does not make sense. Yesterday the right hon. Gentleman sought to contrast the "borrowed giveaway", which he said might be spent on imports, with borrowing for investment.
The right hon. and learned Member for Monklands, East also referred, in a critical tone, to the fact that the trade deficit next year might be as much as £9 billion. We should all recognise that if there is to be a recovery in this country, with a recovery in investment, that, too, would have implications for imports. If substantial extra investments are made, more raw materials will come into the country, and so will more machine tools and capital goods. That will be a necessary part of a recovery in investment. Whatever course we take, be it further investment or an increase in consumer spending, there will be balance of payments implications.
The Leader of the Opposition said that all that would have to be paid for in the end, and that it was a
"basic truth that money borrowed for tax cutting would soon have to be repaid by tax raising".—[Official Report, 10 March 1992; Vol. 205, c. 767.]
He insisted that that must be true, and Hansard records that my right hon. Friend the Chancellor shook his head. Well he might. The Leader of the Opposition continually makes the mistake of failing to understand that there is a difference between tax rates and tax revenues. As was repeatedly demonstrated in the 1980s, lower tax rates can, in the right conditions, succeed in producing higher revenue. In the end, the way in which the budget will be balanced is that if the policies are right the economy will expand, and that is how the extra resources will be produced.
There is a much greater chance of that happening under the formula employed by my right hon. Friend than by using some of the Opposition's strategy and those of their ideas that we have glimpsed. The mechanism for recovery is now largely in place. The question is whether that recovery will be assisted more by my right hon. Friend's Budget or by the Opposition's phantom Budget, which has not yet been fully substantiated before us. For all that we can tell, that will be a cocktail of high borrowing and high taxes. If the Opposition wish to deny that, it is incumbent on them to be much more specific about their spending promises, both explicit and implicit.
The Labour party has placed an advertisement about the NHS in the national press today, in which they imply the tragic death of one child would not have happened if they were in power. That would have huge cost implications, and if they say that they will fund the NHS so that not one single person's life will ever be lost unnecessarily they should tell us how much that would cost, and how they would fund it. If they cannot put up the funds and tell us how they would raise them, they should give up that nauseating line in tear-jerking advertising, which seems wholly hypocritical.
I believe that Labour's plans would snuff out rather than encourage recovery. Probably the only blockage to recovery, now that the right mechanistic steps have been taken to enable it to take place, is the worry that a Labour Government might be elected. On 9 April the electorate can remove that doubt from everyone's mind. For their own sake, and for the sake of the country, I hope that the electorate will clearly do their duty.
Mr. Deputy Speaker: Order. Unless speeches are briefer I am afraid that one or two hon. Members who wish to speak may be disappointed.
8.28 pm
Mr. Michael J. Martin: I shall try to be brief, Mr. Deputy Speaker.
The hon. Member for Saffron Walden (Mr. Haselhurst) talked about how the Government had helped the health service. I do not know how they can have done that, when they have put up prescription charges. Yesterday, in the Budget debate, the Minister of State and her right hon. Friend the Chancellor of the Exchequer claimed that they were giving working people and the lower-paid a better deal. How can they say that when, only a few weeks ago, they increased prescription charges? Conservative Members know that nowadays a doctor may specify not one but several items on a prescription, and they all have to be paid for separately.
No one in my community or in my hon. Friends' communities will be kidded by the Budget yesterday.
I was concerned by the talk at Question Time today about Britain being a trading nation. I am the son of a merchant seaman who, like my hon. Friend the Member for Liverpool, Garston (Mr. Loyden), had a career in the merchant navy during the war. Many of his friends were lost in shipwrecks then. My late father always hoped that there would always be work for seafarers in the fleet. As a result of the taxation system and the lack of incentive, shipowners have been forced to go abroad to find foreign seamen to man our navy, and they are sometimes badly trained.
Hon. Members have referred to our bad industrial relations and strikes. My father was a seaman all his life, as were many men in the community in Glasgow in which I was brought up. There were few strikes by the National Union of Seamen. A strike was planned in 1938, but because war was imminent, the seafarers did not go on strike for better conditions. They put aside their demands on conditions and wages because they knew that the country needed them. It is a pity that the Budget did nothing for our seafarers.
Something could have been done about the building industry. Any hon. Member who was served in local government knows that, the minute a housing contract goes into the system, bricklayers, plumbers and joiners are taken off the dole. I know that the Government say that bricklayers, plumbers, joiners and electricians should be self-employed. Many of them are. They have severe difficulties when big companies do not pay them for six or seven months after the contracts are completed. A self-employed journeyman cannot stand that, because it means that he has to go to the banks, which charge rates that could put him out of business.
The Chancellor said yesterday that the increase in duty on beer was small and was in line with inflation. The Minister knows that the brewing industry is an excellent employer of labour. The Tennants Caledonian brewery is in my constituency. The men and women employed in the industry enjoy reasonable rates of pay and a good pension scheme. If we keep putting up the price and the duty on such commodities, we are in danger of losing. The Treasury gets a great deal of money. The Minister must know that people are moving away from beer to wine because of the duty. We are in danger of overkill.
We could have done more for the whisky industry. The hon. Member for Londonderry, East (Mr. Ross), who has now left the Chamber, talked about farming. It is not widely appreciated that farmers in the north-east of

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Scotland depend greatly on the whisky industry because they sell barley to that industry. It takes good farmers to produce barley for the whisky industry. If the industry is damaged, there is a knock-on effect, not only for people in constituencies such as mine, but for farmers in the rural areas. Farming communities in England also depend on the whisky industry. The industry buys at home rather than abroad.
We face the prospect of harmonisation. The French do not care too much about cognac, because the cognac owners also own the vineyards. As long as they do all right in terms of taxation on wine, they are prepared to throw the cognac industry away. We cannot do that in Scotland, because we produce a distilled product. Other Community countries, such as Spain, Italy and France, will gang up against the whisky industry if the Minister of State does not watch out. I think that she is well aware of that.
I have been in the House for almost 13 years. I have served in opposition, so I hope that after 9 April I will sit on the Government Benches as a Back-Bench Member supporting Labour Ministers. It looks good. I have seen many sad faces among Conservative Members. I do not mean hon. Members who are retiring, some of whom I am sorry to see going because I have had a good relationship with them through the British-Italian group and through the Christian Parliamentary group. There are some long faces: Tory Members know that they will lose because they have taken the people of Britain for granted for too long. Many issues will come home to roost on 9 April. I shall be pleased to sit on the other side of the Chamber next month; it will make a change.
Mr. Oppenheim: Don't hold your breath.
Mr. Martin: Despite what the hon. Gentleman says, I am willing to put a bet on it, although I am not a gambling man.
In 13 years of Tory Government, I have seen terrible unemployment in my constituency. I cannot remember the great depression, but I was brought up in a home in which my father was forced to be a seaman because he could not get work in Glasgow. My mother brought us up to appreciate what happened with the means test during the great depression. In my constituency, I see men and women who are now married and have never had decent jobs. The Chancellor could have done something for them.
The Chancellor could have given incentives to employers to take on adult apprentices. I have never heard Tory Members mention adult apprenticeships. A young man who has missed out because he has never been able to get an apprenticeship as a carpenter or as an electrician must still want an apprenticeship. They must want a trade. I had the chance of a trade when I left school in 1960. Why did not the Government bring in incentives and say to employers, "Take on a man or woman of 30 or 32 as well as a youngster—give them a decent wage and we will subsidise you to get skilled labour into the market"?
One problem is that, if we ever have an upturn in the economy, the scream will go up that there are no skilled workers. I was a trained sheet metal worker. Many of my colleagues who have jobs tell me that the average age of those skilled men is getting higher, because no youngsters
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are coming in to take their place. I could not do heavy plating or climb as high as I did when I was 22. No incentive has been given.
I watched the Kilroy-Silk programme this morning and saw that the Minister had a rough time. It is all credit to her that she handled herself well. She must have done it for Lent; her penance must have been to go on "Kilroy". Hardly a friendly voice spoke in favour of the Budget—
Mr. Graham Riddick: BBC bias.
Mr. Martin: The hon. Gentleman talks about BBC bias. The BBC is not noted for being friendly towards the Labour party.
There has been much tub thumping about how the extra money will help the poor. The Minister knows that there are many hidden costs that people in our communities must bear. Scotland has had an extra year of the poll tax. VAT is up to 17 per cent. The hon. Lady says, "You cannot have it every way. We have cut the poll tax, and that is why VAT had to go up to 17 per cent." But it was her fault that we had the poll tax. She went into the Division Lobby to vote for the poll tax, which, in the end, brought down the right hon. Member for Finchley (Mrs. Thatcher). Conservative Members blamed her, yet they cheered her when she brought the poll tax into Scotland.
Now there are rent rises. The Government will say that Labour-controlled authorities are bringing in rent rises. They cannot say that about Scottish Homes. One of my constituents is to pay £25 a month extra in rent. By the way, she lives in a tenement. Seven of her neighbours will not suffer that rise because of special legislation. Those who came late into local housing associations are in the same situation as the previous deregulated tenants. Is the Minister telling me that that lady is better off with this Budget when she gets a bit of a tax cut working in a local hospital but will be hit for £25 a month more than her neighbours?
It will not stop there. The housing association has told her that her rent will go up another £25 a month next year. That is Tory control. Hand-picked Tory lackeys have been put into Scottish Homes. I hope that I receive a commitment from the Government that the placemen and women who have been put into quangos will be dumped.
Mr. Bob Cryer: I heard the Minister's rather quiet remark about the BBC packing the "Kilroy" show this morning. That is entirely mistaken. The "PM" radio programme has not had a single letter or telephone message of support for the Budget. If Ministers try to get around that, they are saying that the BBC is trying to pack the nation, which is hardly the case—the nation rejects the Budget.
Mr. Martin: I agree with my hon. Friend.
What about the hidden costs for the elderly? Conservative Members have tears in their eyes when they talk about the elderly. One could not find a more responsible local authority than Strathclyde regional council. It is not packed with lunatic left nutcases—it has traditional Labour party men and women such as those who are present this evening. They have been screwed into the ground so hard that they have been forced to take away warden schemes and the sheltered housing complex. The Secretary of State for Scotland has done nothing to . ease the situation. Those are the hidden costs that nobody beats a drum about when we talk about the Budget.

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When there was a decline in traditional Scottish industries, Tory Ministers said, "We cannot interfere in business." However, they give ammunition to the nationalists to say to the people of Scotland, "Break away." That is the last thing that I want. 1 want constitutional change, but 1 do not want to break away from the men and women—my brothers and sisters—in England and in Wales. Scottish nationalist Members appear to be respectable men and women, but there is a fascist element within the nationalist movement. I have seen them at polling stations during by-elections bullying old men and women who arc handing out leaflets for other parties. I have seen them let down tyres. I have heard of them putting bricks through shop windows and those of opposition parties.
I am proud of my heritage and of my roots in Scotland, and I am ashamed when people behave in that manner. The Conservatives give them ammunition when they denude our railway industry and places such as Ravenscraig, acting like Pontius Pilate and washing their hands of them.
I look forward to a Labour victory and to a more caring society than we have had in the past 13 years. I want to be on the Government side of the Chamber.
8.45 pm
Mr. Phillip Oppenheim: It is always a pleasure to follow the hon. Member for Glasgow, Springburn (Mr. Martin). He mentioned that Conservative Members do not have a policy of intervening to save old and dying industries. He should address his remarks to his own Front Bench because Opposition Front-Bench Members have had many opportunities in the past two months to commit themselves unequivocally to save Ravenscraig if Labour comes to power, but they have never once committed themselves to doing that.
It saddens me that two of my colleagues from Derbyshire have decided to stand down at the election. One is my hon. Friend the Member for Erewash (Mr. Rost). He has always been a very kind and decent neighbour. I inherited part of his previous constituency. The other is my hon. Friend the Member for High Peak (Mr. Hawkins) whose trenchant economic views in the Tea Room and Smoking Room I have enjoyed over the past nine years. Over that period, my hon. Friend has moved from what has sometimes misleadingly been called the wet wing of the party to the rather drier wing of the party. I welcome that move. Perhaps it is a good thing that he is standing down because he might be tempted to go the full circle in the next Parliament. I regret that he is standing down. I shall miss his company and his fine economic mind.
Over the past day or so, there has been much comment that somehow the Budget signals the end of monetarism or Thatcherism. Some pundits and journalists sometimes confuse monetary policy with fiscal policy. There can seldom have been any time in recent history when monetary policy, which controls the supply of money—which, of course, is monetarism—has been so tight. In fact, supposedly in the heyday of Thatcherism or monetarism between 1983 and 1989, broad money in Britain rose by a massive 150 per cent. At the same time, the rise in broad money in France was only a third of that. There is a little irony there. Under the nominally socialist Government of President Mitterrand, monetary policy
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was far tighter in France in the mid-1980s than it was under the nominally monetarist Government of my right hon. Friend the Member for Finchley (Mrs. Thatcher) in Britain. As a leader in the Financial Times pointed out a couple of years ago, Mitterrandism was perhaps more Thatcherite than Thatcherism. I do not accept that the Budget represents a retreat from monetarism, for the very reason that monetary policy is extremely tight at the moment. Of course, fiscal policy is looser.
Once again, let us cast our minds back to 1981, to the previous recession, and consider the PSBR then. Public borrowing in 1981 was higher as a proportion of GDP than it is projected to be next year. Certainly, next year's projected PSBR is far lower than it ever was on average under Labour in the 1970s. Another important point to remember is that public sector debt has been halved over the past 13 years, which puts us in a far stronger position to borrow when necessary during a recession, which we are doing at the moment.
However, we must remind ourselves of the disadvantages of too much dependence on state borrowing. For one thing, the state is competing with private industry in the capital market and has a tendency to push up interest rates at the expense of private industry in raising capital. That is the crowding-out effect. It is important that my hon. Friends should remember that. So long as we have a firm commitment to bringing the budget back into balance over the economic cycle, state borrowing should not be detrimental to the economy. It is obviously right and proper that we should borrow during a recession.
Opposition Members have a cheek to criticise the Government for the public sector borrowing requirement, not only because their record in government was one of massively greater PSBRs in real terms than we have now or will have under the projected PSBR next year, but because every time in the past few years a Labour spokesman has gone on tour around the country and has been asked what might be the spending commitments of a future Labour Government, he or she has committed the party to extra spending, whether on overseas aid, education, health, the railways, or whatever, and, when pressed, have stated that that extra spending would be the priority of a future Labour Government. So Opposition Members have no right whatever to criticise the PSBR projected for next year by the Government.
As my hon. Friend the Member for Saffron Walden (Mr. Haselhurst) said, there is a deep dishonesty in Labour's current advertising campaign. It says that a child died as a result of lack of funding in the national health service. Under no Government ever has the NHS been able to guarantee immediate help or medical aid on the spot for everyone who has ever required it. If Opposition Members suggest that a future Labour Government could guarantee that, they are leading the electorate up the garden path in an unpleasant and irresponsible way. They are taking advantage of the sick and vulnerable for political ends.
In their heart of hearts, Opposition Members know that no Government can fund the NHS up to the level where it can guarantee immediate and full medical treatment for any condition that anyone might have. They should admit it. If any Opposition Member wants to challenge that and say that a future Labour Government would commit themselves to a policy of treating everyone absolutely on demand, regardless, I will happily give way. Will the Front

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Bench spokesman commit himself to that? If not, the Labour party should drop its demeaning and sick advertising campaign.
I also find Labour's position on tax somewhat odd and unsatisfactory. For one thing, Labour was in favour of a low base rate. It originally had a lower base rate. All its policy documents speak of the need for a lower 20p band for the low paid. In the past 24 hours, several Opposition Members of Parliament have expressed their support for a lower tax band. Yet the Opposition Front Bench spokesman said today that the Labour party would vote against that in the Lobby.
The Labour party's argument for voting against the lower tax band is that public spending is more important than tax cuts and we must use public borrowing to fund improvements in the infrastructure. To an extent, I agree. But what do Labour Members think the autumn statement last year was all about? It signalled massive increases in public investment and public spending. That was part of a long line of significant increases in public spending under the Conservative Government. We have seen huge rises in funding for the NHS, education and, particularly in the past year, the railways.
The amount of money that has gone into public investment as a result of the autumn statement outweighs by a factor of about 10 to one the amount of money that has gone into tax cuts. It is astonishing that Opposition Members should begrudge tax cuts to the lower paid. It shows a strange attitude. Labour Members seem to believe that somehow people owe their money to the state and if the state allows them to keep a little, that is very nice. Tax cuts for the lower paid and increases in support for pensioners have been widely welcomed in my constituency.
Time and again, Opposition Members call for investment in industry. I agree with them. We need more investment in industry. But they know that savings and investment are closely linked. To have people saving large amounts of money in an economy not only makes a pool of capital available to industry but tends to bear down on both inflation and interest rates. Everyone knows that savings rates and investment are closely linked.
So the best that one can do is to lower taxes for savers. That is what the Government have done. The worst that one can do is to clobber savers with an investment income surcharge. Above all, Labour's proposal to return to the investment income surcharge of the 1970s shows how little it has learnt in the past 13 years and how shallow is its commitment to getting investment going in Britain.
It is worth reminding Labour Members that, under the Conservative Government in the past 13 years, investment in manufacturing industry has been significantly higher in real terms. Manufacturing output is significantly higher. It fell under the last Labour Government. Productivity in manufacturing industry is 50 per cent. higher that it was in 1979—it rose faster than in any other major economy during the 1980s—and our exports of manufactures have increased by about a quarter during the past three years.
I would be the first to admit that we have pi Jblems in my constituency of Amber Valley. Certainly, the recession has caused problems. But it is worth hon. Members casting their minds back to the 1970s, when areas such as mine were dependent on largely low-paid jobs in the coal industry. Now the constituency enjoys a diverse
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manufacturing base. There are many companies in my constituency, covering a wide range of manufacturing activities from repairing turbine blades and making chemicals used in the manufacture of semi-conductors to making carpets, making chocolates and engineering. Many of those companies are flourishing despite the recession, and many have done very well indeed.
To flourish further, however, the companies in my constituency need, first, steady non-inflationary conditions. Our monetary policy is delivering and will deliver that. Secondly, they need ready availability of capital. The economy is going through a fundamental shift from over-consumption as a result of a reduction in tax breaks on consumption. Less tax on savings will also increase the availability of capital for industry.
Thirdly, companies need pro-business attitudes. Conservative Members have such attitudes, but I am afraid that great hostility to business, enterprise and industry still manifests itself among Opposition Members.
Fourthly—and perhaps most importantly—industry needs a well-educated population to provide the skilled, sophisticated work force required in a modern economy. Our reforms are delivering that.
Fifthly, industry needs incentives in the form of lower taxation. Labour would tax savings, it would tax business, it would tax individuals, and it would end our education reforms. All those policies would do tremendous harm to business and would mean that our industry would be less likely to create the wealth required to pay for the higher living standards and improved public services that we all want, regardless of party.
At a time when socialism is being rejected all over the world, in virtually every country except Cuba and North Korea, I find it extraordinary that Opposition Members are proposing the policies of renationalisation and higher taxation which have been so resoundingly rejected. I admit that mistakes have been made, but they should not obscure the significant progress made by our economy since 1979. In my area industry, and especially manufacturing, is far better off than it was in 1979. The Budget will help the lower-paid, it will help business and it will help us to resume the growth that we enjoyed in the 1980s.
8.59 pm
Mr. William O'Brien: I noted the length of time that the hon. Member for Amber Valley (Mr. Oppenheim) took over his speech. He has denied his hon. Friend the Member for Lancashire, West (Mr. Hind) the opportunity to make a contribution. If I spoke for the same amount of time as the hon. Member for Amber Valley, we would be into the winding-up speeches. He has demonstrated the way in which the Conservative party works and the selfishness in its make-up.
The hon. Member for Amber Valley referred to income tax reductions. Someone has already asked, "Who gains most from the reduction to a 20p tax band, a Member of Parliament or a person earning £70 a week?" That is the crux of the issue of tax reductions. It is not the poorest members of society who will gain most from the Budget, but the wealthiest. That is typical of what Tory Chancellors do at Budget time, but it is significant because this is a Budget for the general election and not for the general well-being of the country.
Neither the Chancellor nor any Conservative Member has referred to the need for housing. The housing situation

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has created a social problem and further resources must be used to build affordable houses for people to rent, especially in rural areas where there is a massive shortage of such housing, yet little has been done in the Budget to provide facilities for building those houses.
If local authorities were given the opportunity to use their resources to provide council houses, it would resolve a social need and generate employment in areas where there is massive unemployment in the construction industry. If the Chancellor had made any suggestions in the Budget to help areas with housing shortages, it would have helped those communities in many other ways. No provision is made in the Budget to solve that social problem—the housing problem.
When I hear Conservative Members talking about the necessity of resolving the economic problem facing this country, I wonder who created that problem. For 13 years we have been hearing about what the Government intend to do to put the country right. Yet tonight we are being told of the necessity for certain action to arrest the decline in the economy. That decline has been brought about by Conservative Members pursuing and voting for policies which have created the slump and the decline of manufacturing and other major industries in this country. Those problems have been created by the Conservatives.
When Conservatives talk about what the Labour party is offering to the nation, they should hang their heads in shame because they have made such a mess of the economy. They have created greater hardship for people. The policies of the Government and of Conservative Members have created 3 million unemployed.
We have been advised that there will be a reduction in car tax, and that that will help to stimulate the car industry. I welcome the fact that there has been some suggestion that manufacturing industry should be helped, but it stops there. That reduction will not do a great deal for other industries that depend upon the car industry to generate employment. It will not do much for a factory in my constituency, Woodhead, which manufactures hydraulics for the car industry. A great deal of money and energy have been spent trying to defend jobs at the factory and to keep it together. The reduction will not offer much help to those workers. The Government could have announced greater investment and more schemes designed to help industries, such as Woodhead, in my constituency. In turn, that would generate further wealth for the local community in particular as well as for the country.
The Chancellor would prefer to give money in tax handouts to Members of Parliament and other wealthy earners than to channel available national resources into the provision of employment in engineering and other manufacturing industries. That demonstrates the difference between the Labour party and the Conservative party. We want resources to be channeled into generating wealth, which, in turn, could generate more resources to provide better facilities to help people.
The VAT increases imposed by the Government have not helped engineering industries and factories such as Woodhead. The constant increases in VAT have not helped to generate employment. Yesterday the Chancellor said that the Government had no plans to increase VAT. He was asked for how long we could be assured of no such increase—he refused to answer.
I put the same question to the Financial Secretary to the Treasury, because there is a fear and suspicion that a further increase in VAT will soon be announced. We all
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remember how, in 1982, the right hon. and learned Member for Surrey, East (Sir G. Howe) said that the Government had no plans to increase VAT. However, it was then increased from 8 to 15 per cent. Therefore, the people cannot trust the Tories when they make such promises. Perhaps we can have some suggestion about what the Chancellor means when he says that the Government have no plans to increase VAT.
I welcome the fact that the uniform business rate has been frozen. After all, for the past 18 months the Labour party has said that something must be done to help businesses, particularly small ones. The Chancellor has taken some action, but it is too little, too late. If the general election had not been arranged for 9 April I wonder whether such a freeze would have been introduced.
The local authorities have already set their budgets for next year. They have set the uniform business rate and the bills have been sent out. If changes have to be made as a result of the Chancellor's announcement, will local authorities be reimbursed the full cost of those changes? Will the Minister assure me that there will be no loss to local authorities because of the Government's lame declaration that action had to be taken to help small businesses? I welcome such action. Indeed, I wrote to the Prime Minister saying that something should be done in the interest of small businesses. But I want an assurance that local authorities that have notified businesses of their charges for rates under the uniform business rate for the coming year will be reimbursed fully. I am afraid that local authorities will have to find additional resources to meet the late changes which the Government have made.
Other people also rely on local services and many people want their local authorities to provide a better quality service, but the Budget gives no assistance for that. Why did not the Chancellor take the opportunity to abolish the 20 per cent. contribution paid by old-age pensioners, people on income support and those on low incomes? Opposition Members have often pushed for action to be taken to reduce the problems faced by local authorities in collecting the poll tax from people who are charged that 20 per cent. Will the Minister think about that matter carefully, because it has a bearing on local authorities' activities and work?
Had the decision on the uniform business rate been taken a year ago, 50,000 businesses that have gone bankrupt in the past year would have had an opportunity to take advantage of the proposals. Some of them might have been in business today if the Government had heeded our request that more should be done to help small businesses. Had action been taken a year ago, some 100,000 families who have now lost their homes because of the Government's policies would still be in their homes. Conservative Members say that something must be done to get the country out of that mess, but they created the mess.
A further issue that is causing great concern, in Yorkshire and Humberside in particular but in the country in general, is the increase in crime, yet the Budget provides nothing to help stop that increase and the suffering that it causes to communities. The resources for preventing and combating crime—funding to the police authorities—have been capped, but the means for committing crime are left to free market forces, which is the Government's philosophy. Again, the Government have missed an opportunity.

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West Yorkshire police have made it abundantly clear what they want in their area to combat crime. All they need are the resources to be able to do that. But Conservative Members and Ministers restrict police forces' ability to combat crime. There is the issue of reducing taxes to be considered before they allow those services to be provided.
With reference to the increase in pensions of people on income support, can we be assured that, as income support is means tested, people who receive housing benefit or poll tax refunds, or people from the mining districts of West Yorkshire who receive fuel allowances because they or their husbands have worked in the mining industry, will not lose out? When the Minister winds up, will he address that issue, as it means a great deal to many people in coal mining districts? Housing benefit and poll tax rebate apply to every community in the country. Therefore, we make a plea for some assurance that those people will not lose out due to the hidden agenda within the Budget.
The Budget contains no provision for new housing, new hospitals, new schools, new sheltered schemes and all the facilities that people need. Consequently, people cannot wait for 9 April, when they can change the Government and ensure that some of the social provisions necessary to sustain a reasonable standard of life are introduced.
9.16 pm
Mr. Chris Smith: Today's debate has been marked by a number of speeches from retiring Members. My hon. Friend the Member for Sheffield, Attercliffe (Sir P. Duffy), the right hon. Member for Hertfordshire, North (Sir I. Stewart) and the hon. Member for Somerton and Frome (Mr. Boscawen) gave gentle and considered speeches, and we shall miss them greatly.
The most abiding memory that I shall take away from this debate is that of the moving contribution of my right hon. Friend the Member for Morley and Leeds, South (Mr. Rees), who spoke of the impact of unemployment on his constituency. He described how his district had been devastated and was no longer a proud manufacturing area. The concern with which he spoke rang true to many Labour Members. He has had a distinguished career in the House, and has contributed greatly to the business, both of the House and of the Government. We shall sorely miss his wise counsels.
Speaking as he did about the scale of manufacturing decline in his constituency, my right hon. Friend the Member for Morley and Leeds, South highlighted the background against which we must examine the Budget. When the Chancellor stood up on 19 March last year to deliver his Budget speech, he said:
"To sum up, the prospect for the year ahead is for an end to the recession, growth of about 2 per cent. in the 12 months to the first half of 1992 … This does not seem to me an unpromising outlook."—[Official Report, 19 March 1991; Vol. 188, c. 166.]
What has happened since? We now know—the Chancellor confirmed it in his speech yesterday—that in the past calendar year, growth fell by 2·5 percentage points. We are still deeply enmeshed in the recession. Indeed, the hon. Member for Southampton, Test (Mr. Hill) gave the game away. In recent weeks and months, we have heard a great deal from the Government about how we are in a world
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recession and about why the Government should not be blamed for it. The hon. Member for Test gave the lie to that when he said—when challenged, he repeated it—that we had been the first country into recession and were likely to be the last country out.
Unemployment is still rising steeply, and it has risen for 22 consecutive months, during which there has been a cumulative increase of 1 million people out of jobs. Growth has been poor. Not only did our economy shrink last year by 2·5 percentage points, but between 1979 and 1991 the average annual growth rate was 1·7 per cent., the lowest achieved by any post-war Government.
Britain is the only European Community country in which manufacturing investment is lower than it was in 1979. The average interest rate under the Tories has been 12·4 per cent.; under Labour in the 1970s, it was 10·7 per cent. We have the highest number of business failures on record. In 1991, there were 47,800 of them. There were 75,000 house reposssessions in 1991. Those figures show the scale of the difficulties facing our economy.
Miss Emma Nicholson: Does the hon. Gentleman agree that only 2·3 per cent. of all mortgagees are over six months in arrears and therefore liable to repossession; and that the additional measures for the business expansion scheme announced in the Budget will go a long way towards remedying that? The problem is much smaller than he would have us believe.
Mr. Smith: I am surprised to hear the hon. Lady write off the problems of 270,000 home owners so lightly. Thousands of families are falling victim to repossession or are struggling to make their mortgage payments—as a direct result of the interest rate decisions taken by the Government.
Every working day in Britain, 3,000 people lose their jobs, 200 businesses go bust and 300 homes are repossessed. That is what life is like in Conservative Britain after 13 years.
The Budget revealed the extent of the difficulty that our economy is in. What emerged eventually from what the Chancellor said in giving that £28 billion PSBR figure and then revealing that he was only giving a stimulus of about £1·5 billion within that figure was that the underlying PSBR, the one that existed even before he got to his feet yesterday, was £26·5 billion. That was a much worse figure than any commentator, anyone in the City, any of the analysts, had been expecting, and it revealed the sheer extent of the difficulty that faces us in our economy.
In such circumstances the overwhelming, overriding priority should have been a Budget for recovery, a Budget to build our way out of recession. My hon. Friend the Member for Sheffield, Attercliffe (Sir P. Duffy) in his fine speech focused on the issue of what the Budget should have done. When he introduced it, the Chancellor said that it was a Budget for recovery, and the Chief Secretary repeated that this afternoon, but, of course, it was not a Budget for recovery. Against the test of whether the Budget will help to provide an engine for economic recovery, it fails miserably to live up to the task.
Mr. John Garrett: Is my hon. Friend aware that, after I left the Chamber this afternoon, the Chief Secretary to the Treasury implied—said, I believe—that I was partial to a 20p tax band? He was joined in that contention by the hon. Member for Norwich, North (Mr. Thompson), whose sole purpose in the House, as far as I can tell, is to

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make his colleagues feel dynamic. I have since checked with the journalist to whom I gave the interview, and what I said was that a lower tax band was a good idea. Who would disagree with that? It was a good idea in principle, but my constituents will not benefit from the palliative, given the depth of the recession that has hit my constituency for the last 18 months, the prospect of which is never ending.
Mr. Smith: My hon. Friend makes a valid point and usefully puts on the record a correction of the misinterpretation which has been placed on his supposed remarks by some Conservative Members.
The Budget will not be of any real help to the 3,000 people who will have lost their jobs today. I doubt whether many of them will find that their jobs have been saved by what the Chancellor did yesterday. Of course the Budget offered a little help to business. The measures on the uniform business rate, for example—deferring increases which will none the less subsequently be levied, so it is a deferral rather than a cancellation of uniform business rate levies—are welcome. But we must point out that it was the Government who invented the uniform business rate in the first place and who forced it in along with the poll tax, and now they expect us to cheer because they have had to sweep up some of the debris that has resulted from it.
The car tax measure is also welcome for the motor industry. It is not particularly well targeted, because it applies to foreign-made cars every bit as much as it applies to British-made cars. None the less, it is a welcome measure, as the car industry has been suffering grievously over recent months. Apart, however, from those measures and a few bits and pieces relating to value added tax—most of which are indeed welcome—the Budget contained little for business, industry, investment and recovery.
Many things that should have been done in the Budget were totally ignored, or in some cases rejected, by the Chancellor. He could have used it to provide improved first-year capital allowances for investment in manufacturing industry. Many people up and down the country have called for such an improvement, and a Labour Government will wish to provide it. The Government could have used the business expansion scheme, rather than cancelling it completely, as they have now decided to do in two years' time: they could have switched it into support for growing businesses, especially in manufacturing industry.
I must say that it was a bit rich for the Chancellor to say that nowadays only a small part of the total invested in the business expansion scheme goes to small businesses. Who is responsible for that? It was the present Government who brought in provision for BES investment in private rented housing; it was the present Government who gave it a £5 million limit, as opposed to the general limit of £500,000 for BES investment. It was the present Government who threw the direction of BES completely out of kilter. Now, having realised some of their mistakes—about which we have been telling them for years—they say that they will cancel the scheme completely.
The Budget could have included incentives for investment in research and development. It could have made real provision for the imposition of penalties for late payment of bills by firms to other firms. It could have set out a national programme of training and work experience
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to get some of our young people back to work and to give them the skills that they need to compete in the modern industrial world.
The Budget could have provided a real deal for pensioners, rather than a restricted deal aimed only at those receiving income support, and ignoring the genuine difficulties experienced by pensioners who are just above the income support level and who are suffering very much at present. It could have included a programme of phased release of capital receipts, as my hon. Friend the Member for Normanton (Mr. O'Brien) suggested. Such a programme would not only provide the construction industry with a much needed boost: it would help to house some of our homeless families. All that would have been a real agenda for a Budget for recovery, but none of it was done.
My hon. Friend the Member for Walsall, South (Mr. George) said that the Budget would not reverse the decline of our economy. He was absolutely right: the Budget represents a savagely wasted opportunity. Some measures in it, most of them small, are welcome none the less, the first and most important being the combining of tax and spending decisions in a single exercise. We have called for that for years, but the Government have hitherto rejected it totally; now they have seen the light.
There is also some welcome help for the film industry. Although I note that the comments this morning by some people in the industry have not been ecstatic, they welcome the fact that their position has been eased somewhat.
The Budget rightly recognises the need to use a scale other than engine size for company car scales of benefit. There is also a welcome indication of a preference for diesel over leaded petrol, along with the introduction of a wider differential between leaded and unleaded petrol, and the welcome removal of the VAT that is levied when a choice is offered between a company car and salary.
There is the removal of the £3,000 limit on the amount that can be invested in a personal equity plan via unit trusts and investment trusts.
We have been advocating all those measures for a substantial time, and we are pleased that the Government recognise the need for them.
Mr. John Townend rose—
Mr. Smith: I will not give way, because time is short.
An element of choice is introduced into the distribution of the married couple's allowance. We have been asking for that change ever since the allowance was invented by the previous Chancellor in 1988. Every year we have advocated it, and every year the Government have said that it was impossible. Now, they say that they will do it, and that is welcome.
We need to lay to rest a few Government myths about the Budget. First, the Conservatives claim that theirs is the party of low taxation. It is not. The Red Book gives it away. It shows that the overall tax burden as a percentage of GDP has increased from 34·75 per cent. in 1979 to 37·25 per cent. last year and 36·75 per cent. this year. We have known that for some time.
The Red Book also reveals that, in 1996–97, the proportion of national wealth taken by the tax burden is scheduled to increase to 38 per cent. The Government have not only put up the overall tax burden, but it is scheduled to go up even further during the next few years if they remain in office.

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Secondly, the Government claim that they are giving special help to the low-paid by the tax measures in the Budget. The 20 per cent. band will apply to everyone, not just to the low-paid. For people at the very bottom of the income scale, there is a real and devastating tax and benefit trap. Those on family credit, housing benefit and poll tax benefit and those facing rent rises such as those described by my hon. Friend the Member for Glasgow, Springburn (Mr. Martin) will find that virtually all the trumpeted tax reduction will be gobbled up by their loss of benefit entitlement.
Hundreds of thousands of people will be cruelly deceived by the Government saying that the tax change will be an enormous benefit to them. It will not. Some people are likely to be worse off after the change than they are now. Taking account of the spending tax increase that the Government are introducing, 250,000 taxpayers could be up to 76p a week worse off after the Budget.
Thirdly, the Government claim that they will balance the budget over the cycle. I shall repeat the question that I asked the Chief Secretary earlier: what precisely do the Government mean by "the cycle"? The Red Book shows that public sector finances are scheduled to be in deficit by £28 billion this year, by £32 billion next year, by £25 billion the year after, by £19 billion the year after that, and by £6 billion the year after that. All that assumes a 3 per cent. rate of growth, and I shall be surprised if the Government achieve that. Where does the cycle end? It is off the scale. The Government predict that, in five years, the public sector will still be in deficit.
Perhaps that is what the Chief Secretary meant in evidence before the Select Committee on 25 November, when he said:
"If you are asking me to say how long the next cycle is, I am not being perverse when I say I do not know, because we do not know."
That is revealed by the borrowing figures in the Red Book.
The essential priority of the Budget should have been the building of economic recovery from recession. It should have been the restoration of our public services. It should have been investment in industry. It should have been ensuring that our young people can get the training and jobs that they need. It should have been the ending of the nightmare of repossession and homelessness. It should have been paying attention, just for once and just for a change, to the needs of manufacturing industry, which were so eloquently identified by my right hon. Friend the Member for Morley and Leeds, South.
Those are the choices that should have been made. Instead, the Chancellor chose the route of tax cuts, and of borrowing to finance them. That is not sensible economics and it will prove not to be sensible politics.
The Budget was best summed up this morning by a business man on Radio 4, who said that the
"economy was in a mess before the Budget. It's still in a mess after the Budget."
That will be the verdict of the voters in four weeks' time. A Labour Government will then take over and begin to sort out the mess and set us firmly on the road to recovery.
9.41 pm
The Financial Secretary to the Treasury (Mr. Francis Maude): This has been a fascinating day's debate, not always perhaps at fever pitch, but one has sensed that much of the drama has been going on elsewhere than in the Chamber.
It has been notable for a number of splendid speeches. My hon. Friends the Members for Bridlington (Mr. Townend) and for Amber Valley (Mr. Oppenheim) and many others made fine fighting speeches. It has been notable also, as the hon. Member for Islington, South and Finsbury (Mr. Smith) said, because a number of right hon. and hon. Members made what they predicted were their final speeches in the Chamber. I join the hon. Member for Islington, South and Finsbury in paying tribute to them, particularly to my right hon. Friend the Member for Hertfordshire, North (Sir I. Stewart) and to my hon. Friend the Member for Somerton and Frome (Mr. Boscawen). I had the privilege of serving in the Whips' Office with my hon. Friend the Member for Somerton and Frome, and I count it a great honour to have had him as a colleague and friend. The House will miss him, my right hon. Friend the Member for Hertfordshire, North and the other right hon. and hon. Members who are leaving the House at the election.
It may be helpful briefly to set out how the Government propose to handle the Finance Bill in the light of today's announcement. We propose to introduce a short Finance Bill with 11 clauses containing the Budget measures that we judge essential to become law before Parliament is dissolved. Principally, they are the Chancellor's proposals for excise duties, most of which were implemented at 6 pm yesterday, and for income tax, including the provision of a lower rate of 20p. In any case, income tax requires renewal before 5 May each year.
Mr. Beith: Will all stages of the Finance Bill be taken on Friday?
Mr. Maude: I am sure that my right hon. Friend the Leader of the House will make a further business statement to set out the arrangements.
The Budget contains a number of measures to help business. It has rightly been described as a Budget for the recovery not only by my right hon. Friends but by many others. Rather than rely on the words of politicians, perhaps we should consider what business people have said. For example, the chief executive of the Weir Group said:
"I think the general conditions of the economy are absolutely right for recovery. Perhaps the thing we need most is to get the election out of the way."
The chairman of Williams Holdings said of the Chancellor:
"He was right not to attempt to stimulate the economy too much, because I think we are coming out of the recession anyway."
Of course, there are a number of measures already in the pipeline which will have substantial benefits for business in the coming year: the reductions and changes to corporation tax in last year's Budget will come through this year in the shape of reductions worth in the region of £1 billion to businesses, which is a substantial benefit; the changes to the uniform business rate, which have been widely welcomed, will benefit no fewer than 900,000 business properties and that, again, has been widely welcomed; allowing more businesses to make quarterly

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payments of tax deducted under the pay-as-you-earn scheme so that now 750,000 businesses are able to do that; the four measures that we announced to encourage prompt payment of debts, another long-running problem to which we are bringing the possibility of a solution; and the changes to inheritance tax will enable those who work hard to create businesses to feel able to hand them down to their families. We have heard very little from the Opposition about that, and it would be interesting to hear whether they propose to support the measure which has been widely welcomed by the business community as one that would be of great benefit. I do not know whether any Opposition spokesman wishes to say whether the Opposition support that measure. [HON. MEMBERS: "Answer."] Perhaps they are dithering on that as on so many of the important economic issues that face us.
Let me say a word about the motor industry in this country. It has made many substantial advances in recent years. There has been a lot of inward investment, and Nissan recently announced that it is to begin exporting engines from its car factory in Sunderland for the first time this year, in addition to exporting cars.
A lot of the changes that have occurred are revealed in the fact that our motor industry became a net exporter in the last quarter of 1991. Last year, exports of cars went up by 20 per cent. and imports went down by 29 per cent. That shows a very good story, but we recognise that, due to the recession, the car industry has been under pressure so we have taken some measures to assist which have been widely welcomed: the changes in car tax and in capital allowances and some VAT changes add up to a major boost, as the car industry has recognised.
The chief executive of Peugeot said:
"The car industry employs 1 million people in this country and they will benefit one way or another from this cut in car tax. It is going to be a real boom for the whole economy. This Budget is good for our industry."
The Society of Motor Manufacturers and Traders said:
"We believe that about 70,000 extra sales should result, with all the implications this has for employment."
Therefore, we have introduced a worthwhile package of measures which will be of substantial benefit.
The same is true for the film industry, which has many merits. We have one of the finest film industries in the world but it has been going through a difficult period. Clearly, the long-term future of the industry depends on the industry's talents being fully and productively used, but there is one issue where the Government have decided that it is right to act. Therefore, we have announced a substantial package to boost incentives for the United Kingdom film industry: relief for all pre-production expenditure and the writing off over three years of production expenditure from the time of completion of a film. Those measures offer substantial assistance, especially to smaller companies but also to the British film industry, and the film industry in general has warmly welcomed them overall.
The Budget has been good for business, and that has been recognised by what businesses have said rather than the self-styled experts in the Opposition—people who actually run businesses have said how much they welcome the Budget. The president of the Association of British Chambers of Commerce—never an organisation to support the Government slavishly, but ready to be critical when it thinks right—said:
"The combined effect of these measures will provide considerable assistance for businesses fighting their way out of
938
recession. United Kingdom business believe the Chancellor is wholly justified in his continuing priority of defeating inflation. The Chancellor has the full support of British firms".
The country is entitled to place some reliance on words such as those. The truth is that Britain is now a very good place in which to do business—in particular, it has increasingly become a good place in which to manufacture.
Let us look at the figures for inward investment. In 1988–89 the United Kingdom accounted for 39 per cent. of total inward investment by OECD countries in the European Community. Much of that investment came from Japan. We welcome that. Not for us is the knee-jerk reaction of the TUC, which describes such investment as "alien". We have constantly and continually invited Labour Front-Bench spokesmen to dissociate themselves from those extraordinarily offensive and damaging remarks, but on every occasion they have chosen to remain silent—craven in the face of those disgraceful remarks; craven and afraid to dissociate themselves from the words of their paymasters.
The benefits of that inward investment can be seen, for example, in the fact that we are now a net exporter of television sets. The trade balance in cars is set to be in surplus by the mid-1990s.
What do investors see? They have a free choice to go wherever they choose. What do they see that makes it so worth while to come to Britain? First, they see the transformation of Britain as a workplace. It used to be a country riddled with ailments, restrictive practices, red tape and market distortions. But it has now transformed itself.
The twin symptoms that most people saw were the strike record and the poor productivity. Now we have a record on both which is the envy of the world. In the past 10 years, productivity has grown by more than half. In the 1980s, our growth in productivity was the fastest of all the G7 countries, whereas in the previous two decades Britain had the slowest growth. That, and our natural skills base, explains why people who have to make choices about where to manufacture goods choose to do so in Britain.
What would happen under Labour? Would those who have that choice still freely elect to manufacture in Britain? What would they face? They would face a strikers charter, which would blow away our new record in industrial relations which is, as I have said, the envy of the world. They would face a minimum wage, adding endlessly to business costs, and a Government committed to the social chapter of the Maastricht treaty, which would impose on businesses huge additional costs about which businesses in Europe are just beginning to become alarmed. They would face all the red tape of the 283 quangos that the Labour party proposes to set up—and all those disadvantages come well before we have even considered the question of taxation.
What does business think of that? It is worth finding out what those who make the decisions say. Not the Government, but a City firm—no doubt one that has had the benefit of the attentions of the Labour Front-Bench spokesmen—asked 105 people who take decisions in large and important businesses what they thought. One of the questions was:
"Do you think a victory by Labour would be good for the economy?"
I have to give credit where credit is due, and admit that 5 per cent. thought that it would be good, and that 9 per

939
cent. had no view. However, 86 per cent. thought that a Labour victory would be bad for the economy. The next question was:
"Do you think a victory by Labour would be good for your business?"
Again, to give all due credit, the results there were better for the Labour party. Sixteen per cent. thought that a Labour victory would be good for their business, and 21 per cent. had no view. Only 63 per cent. thought that it would be bad for their business.
The respondents were than asked:
"under a Labour Government…would you be more or less optimistic on the outlook for"
a number of matters. Labour came closest to getting a positive result in the area on which the party majors—on the question whether people would be more or less optimistic about the outlook for investment spending. But even there, more people thought that a Labour Government would be bad for investment spending.
Mr. Michael J. Martin: Would the Minister be prepared to do a survey on all the companies that have gone bust in 13 years of Tory Government? Would he ask them what they think about the Tory Government?
Mr. Maude: The number of businesses is, after all, at an all-time record. The hon. Member for Islington, South and Finsbury, with his notorious gloom, talked about the record number of business failures. He failed to talk about the record number of business successes. There are one third more businesses in existence and flourishing today than has ever been the case—certainly more than was the case when we came to office. There is a good record.
Those surveyed were also asked what they thought about Labour's plans to introduce tax incentives to encourage investment spending. They were asked whether that would encourage them to invest more. Some 17 per cent. said yes and 68 per cent. said no. We know that a case has been made for additional capital allowances and for speeded-up capital allowances. The system is already generous. Obviously, many people want to be enabled to pay less tax, but all the evidence shows that faster write-off of investment and capital allowances would not generate significant extra investment.
If one is talking about ways in which to encourage investment, one cannot think of a better way in which to discourage it than to introduce extra taxes on savings, because savings are needed to provide investment. What is Labour's answer? It is to increase the tax on savings. That is the worst discouragement to investment of which one can think.
Labour talks as if investment is its own property and its own strong suit. It talks as if it is the party of investment. Incredibly, Labour claims to be the party of private investment as well as of public investment. A brief look at the facts is worthwhile.
In the three years to 1989, business investment rose by 45 per cent., the fastest ever such rise over such a period. Even last year, a recession year for investment, we still devoted more than 14 per cent. of our total resources to business investment, compared with under 13 per cent. in the best year under the previous Labour Government. Even in a poor recession year, investment was higher as a proportion of GDP than it was in the best year that
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Labour could manage. The case is clearly proven. There is more investment under a Conservative Government than there ever was under a Labour Government.
One might think that public sector spending should be good ground for Labour, but when one studies the matter it begins to look a bit different. General Government capital spending fell by 45 per cent. under the previous Labour Government—an average of 11 per cent. a year. The hon. Member for Islington, South and Finsbury is avid for news. I tell him that general Government capital spending fell under this Government—by less than 1 per cent. a year compared with Labour's average of 11 per cent. The reason is that privatisation has transferred much previous public sector investment into the private sector. Investment in public services is up under this Government compared with the record under Labour, when it was slashed.
It is revealing to consider one or two specific areas. In education, real capital spending per pupil fell by 60 per cent. under the Labour Government. It has risen by a total of 13 per cent.—1 per cent. a year—under this Government. There is the same story in the health service. We see the same story in infrastructure, roads and transport. There were falls under Labour and rises under the Conservatives. On virtually every measure, investment has been down under Labour and up under the Conservative Government.
The Labour party says that it is okay to borrow for investment. Let us consider Labour's investment plans. What Labour means by investment is not investment at all; it is spending. It means spending other people's money. It does not mean spending money on building the future, as Labour claims. Let us not buy that rubbish. It means spending taxpayers' money on swelling the pay packets of the public sector trade unions. Labour speaks about £1 billion extra on the health service, yet not a penny would go to extra patient care because of the effects of introducing the minimum wage, of scrapping competitive tendering and of scrapping charges. Some £1 billion extra would be spent on the health service before a single pound would be spent on improving patient care.
Let us consider income tax. The Leader of the Opposition dithered yesterday about what stance the party would take on our new lower rate band of 20p. There has been disarray today.
The hon. Member for Norwich, South (Mr. Garrett), who has prudently left the Chamber, made a valiant attempt to safeguard his position. It is clear that many members of the Labour party support what we are doing—indeed, the Labour party's own policy document supports it. Pride of place in its pocket guide is a move towards a starting income tax rate of 20 per cent. What will we see? Will it be an erratum slip inserting "not", or an apology stating, "We may have inadvertently given the impression that we thought that this was a good idea. It is a jolly good idea, but we are going to vote against it. This is a really respectable position"? If they think that it is a good idea, when will they do it? Will they do it when a Labour Government have the Budget in balance, as if that could ever happen under a Labour Government? If they do not mean it, they are conducting a deliberate fraud on the British people, and they should apologise for it.
It being Ten o'clock, the debate stood adjourned.
Debate to be resumed tomorrow.

PETITIONS

  A1
  10 pm
  Mr. John Home Robertson: I come to the House with the hon. Members for Berwick-upon-Tweed (Mr. Beith) and for Roxburgh and Berwickshire (Mr. Kirkwood), and in association with my hon. Friend the Member for Wansbeck (Mr. Thompson), to present petitions calling for the upgrading of the A1 road. The petitions bear about 40,000 signatures from both sides of the border. I pay a special tribute to Lothian regional council, East Lothian district council, the Edinburgh Evening News and the local press for their vigorous support and assistance in mounting this important petition.
  The Government held a press conference about the A1 last week, but the people who signed the petition want action not words. The petition states:
  The Humble Petition of road users and other citizens in Scotland and England,
  Sheweth that the Al trunk road between Musselburgh and Morpeth is intolerably dangerous with an average toll of one death each month; and seriously congested, to the detriment of the interests of local communities and other travellers.
  Wherefore your petitioners pray that your honourable House should:—
  Deplore the loss of 133 lives in ten years on the single carriageway section of the A1 between Edinburgh and Newcastle and Demand that Her Majesty's Government should implement a programme to improve the whole of the Al between Edinburgh and Newcastle to dual carriageway standard as soon as possible.
  And your Petitioners, as in duty bound, will ever pray &c.
  I notice that the top two signatures on one sheet of the petition are those of my constituents Mr. and Mrs. Bell of East Linton, whose daughter was killed on the A1 in 1985. That is what the petition is all about.
  To lie upon the Table.
  10.1 pm
  Mr. A. J. Beith: It is my privilege to present 20,000 signatures of the same petition relating to the A1 road, which have been gathered in co-operation with local authorities on both sides of the border, the Members of Parliament on both sides of the border and the people who live along and use the A1 road. Also, 4,450 of the signatures were collected by The Journal, a Newcastle newspaper which has fought a vigorous campaign, and other local newspapers have been closely involved. The petition deplores
  the loss of 133 lives in ten years on the single carriageway section of the A1 between Edinburgh and Newcastle.
  Since the petition was printed and distributed, more lives have been lost on the single carriageway section of road. Announcements have been made about the desirability of dualling it, but no commitment at all has been made to that dualling. Therefore, the allegations in the petition remain true—that highly dangerous single carriageway on an important strategic road should not be allowed to continue.
  Many of my constituents and people from neighbouring areas have added their names to the petition, and I strongly support their plea that that road should be brought to a reasonable dual carriageway standard.
  To lie upon the Table.
  10.3 pm
  Mr. Archy Kirkwood: It is my privilege to follow my hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) and the hon. Member for East Lothian (Mr. Home Robertson) in respect of the A1 trunk road petition. I, too, have a number of constituents who have lost members of their families. Some of my own friends have been injured or killed in the recent past on the stretch of the A1 that passes through my constituency. Therefore, it is with that aspect in the background that I
  Deplore the loss of 133 lives in ten years on the single carriageway section of the A1 between Edinburgh arid Newcastle,
  20 or 30 miles of which run through my constituency. Like the hon. Member for East Lothian, I pay tribute to the cross-community support that the petition has received and in particular to the professional support that has been given by the relevant roads authorities to the efforts of those who organised the petition in each of our parliamentary constituencies.
  Therefore, I subscribe these extra few signatures gathered in my constituency, to add to the demand that Her Majesty's Government should implement a programme to improve the whole of the A1 between Edinburgh and Newcastle to dual carriageway standard as soon as possible.
  To lie upon the Table.

Sunday Trading
10.5 pm
Mr. Donald Anderson: It is my pleasure to present a petition about Sunday trading. The petition has been signed by a substantial number of Christian citizens of Swansea who are worried by the decision of the Attorney-General to take no action on illegal Sunday trading. They say that that amounts to a licence for the law to be ignored with impunity by those who wish to do so. It is also their view that the decision puts pressure on retailers who wish to obey the law to open on Sundays or suffer an unfair loss of their market share. They beieve that the decision of some major retailers to continue to defy the law constitutes a challenge to the rule of law, which the Government are wilfully ignoring.
Hence the petition calls on the House to take notice of the case urged by me and by other hon. Members from all parties and to require that the law be enforced until amended. The petitioners urge that it should be amended on the basis of the REST principles—that is, the principles advocated by the "Keep Sunday Special" campaign.
To lie upon the Table.

Mifegyne
10.6 pm
Mr. James Wallace: I have the privilege of presenting a petition of approximately 100 of my constituents who are worried that a product licence has been given to the drug Mifegyne, known as RU486. This is one of several similar petitions which have been presented from many parts of the United Kingdom.

943
My constituents deplore the fact that the drug causes the death of unborn human beings. The petition prays that the House,
which is committed to upholding respect for human life and protection of the weak and vulnerable, will do everything possible to prevent the distribution and use of Mifegyne (known as RU486) and any other drugs which, like it, are produced with the deliberate intention of destroying innocent human life.
To lie upon the Table.

Insurance Companies (Supervision)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Boswell.]
10.7 pm
Mr. Michael Colvin: We shall need a bigger petition bag, Mr. Speaker. You were in the Chair when I made my maiden speech many years ago and it is my singular pleasure that you are in the Chair for the Adjournment debate this evening. I am sure that the House will join me in wishing you well in your retirement. You have fulfilled your office with great distinction over the years.
The subject that I wish to raise is the supervision by the Department of Trade and Industry of insurance companies, particularly in relation to home equity schemes. I shall keep my remarks brief as the hon. Member for Redcar (Ms. Mowlam) hopes to catch your eye later, Mr. Speaker, and both I and my hon. Friend the Minister for Corporate Affairs, who is to respond to the debate, hope that she will succeed.
In two sectors of finance—pensions and insurance—the Financial Services Act 1986 provides for self-regulation. Neither I nor the thousands of people—many of them pensioners—who have lost money and are at risk of losing their homes because of home equity schemes believe that the system of self-regulation is working as it was intended.
Originally the home equity scheme was based on a mortgage with a fixed rate of interest. The money borrowed was invested in an annuity to produce a fixed return for the rest of the pensioner's life. Such schemes enabled pensioners who were just managing to survive on their state pensions to release the capital tied up in their homes to provide extra income. The problem was that the rules on annuities ruled out those people between retirement age and 70, so the alternative investment bond scheme was devised, enabling money to be raised on remortgage and reinvested in a unit-linked investment bond—in other words, in the stock market.
Following the Wall street crash on black Monday in October 1987, high interest rates, falling stock markets and the collapse of the property market have meant that those stock market bonds were bound to be unable to provide the income to cover the costs of the mortgages. The result was that pensioners needed to use their capital to make the necessary payments. That compounded the problem. It ate up the capital and reduced the income in a rapidly increasing spiral which could exhaust funds within three or four years. Very often the client had no idea what was happening because of the inadequate information.
The schemes were designed not by rogue high pressure salesmen or by dubious companies, but by household names such as Royal Life, Guardian Royal Exchange, Norwich Union and Cheltenham and Gloucester, to name a few.
Throughout the late 1980s insurance companies increasingly deployed high pressure salesmen on a naive and financially unsophisticated public. The salesmen were given intensive courses in sales techniques, but little instruction in the intricacies of the financial services industry. Business cards and letter headings which pronounced them to be financial advisers and representatives of leading insurance companies gave them a cloak

945
of respectability, which made the public trust them, and they were set loose to earn their living on a commission-only basis.
When some turned out to be rogues, the insurance industry sought to hide behind the Financial Services Act 1986, arguing that the salesmen were not giving financial advice within the terms of the Act, or selling the companies' product. When the advice was bad or negligent, they argued that clients—financially unsophisticated pensioners, in the main—knew and understood the risks. They seriously suggested that pensioners would gamble their homes and risk losing all they possessed for £100 a month or less.
The failure of the schemes is leading to untold misery for tens of thousands of people who may lose their homes. I know of one person who committed suicide.
Following the Financial Services Act, the regulatory bodies, the Life Insurance and Unit Trust Regulatory Organisation and Financial Intermediaries, Managers and Brokers Regulatory Association—LAUTRO and FIMBRA—controlled by the Securities and Investments Board, and under the direction of the Department of Trade and Industry, were set up to prevent such problems and to ensure that when they occurred compensation could be paid without the need for expensive and prolonged litigation.
As recently as 6 March, the SIB announced new proposals for a common approach, involving FIMBRA, the solicitors indemnity fund, the insurance ombudsman and the building societies ombudsman. However, that approach does not apply to LAUTRO, which covers insurance company cases, and the proposals were unclear.
I have read the SIB's press release on its scheme and have discussed it with interested parties. No one understands it. It is unclear whether all the bodies would work together on FIM BRA's arbitration scheme or the ombudsman scheme, or whether it is merely an extension of the complaints system. That needs clarification.
Many of my constituents are affected by Royal Life and other hon. Members have informed me of similar problems among their constituents, especially in the south of Hampshire. I have met with those clients and with the group executive of Royal Life and the lawyers involved. I have arranged for leading lawyers in the field to meet my hon. Friend the Minister to explain their concerns, which I believe led to the SIB proposals. However, I regret that the problems with Royal Life remain unresolved some 16 months after my first involvement.
The Royal Life case involves investment bond schemes, based on the guarantee that people would not lose their homes but would have sufficient income to pay the mortgage and to produce an income. The schemes, which were also sold to people below retirement age, simply did not work. I do not believe that they ever could have worked. That must have been known to the companies and the lenders involved but, because of the misleading financial forecasts, investors did not see the inevitable high risks. Even though the schemes arose during the infancy of the Financial Services Act, the problems must have been detectable.
We now know that many of the advisers and salesmen were dishonest and have been sent to prison or await trial for fraud. How could those people have been allowed by the companies concerned to compound their fraud under a regulated system?
In the Royal Life case, I have evidence that, even after
946
complaints and compliance checks by Royal Life, the problems remained undetected. The complaints were sent by the company to the adviser for him to check. The compliance checks gave him the opportunity to choose the clients to be examined and even allowed him to sit in and prompt answers to difficult questions. The cavalier attitude adopted by large companies defeats the whole object of the Financial Services Act—that of protection —and leads to problems not becoming public until too late.
LAUTRO and FIMBRA are the main regulators—the former for company representatives and the latter for independent representatives. LAUTRO has issued an enforcement bulletin, No. 11, which laid out recommendations for compensation. However, on 31 May 1991, Royal Life responded through its solicitors as follows:
"EB 11 does not support your client claims in the way you contend and we think it would be unfortunate if you were to raise your clients' expectations unfairly in this regard."
In other words, it was a brush-off.
In an example involving the Guardian Royal Exchange, the company even failed to have contracts of employment with its tied agents. It described that as "a technical offence." How can companies be allowed to take that cavalier and complacent attitude? It can only be supposed that it has something to do with the fact that the major insurance companies fund the regulators and also sit on their boards.
Although one might expect problems to arise in the early years of self-regulation, I am alarmed that they appear to be continuing. The claims against companies running "failed equity schemes" amount to hundreds of millions of pounds. Insurance companies and the lenders involved have followed a policy of delaying compensation or under-compensating in order, I believe, to avoid having to meet their liabilities. The regulators should have the power to order companies, including the lenders, to compensate fully and quickly. One company stands out as an example—Norwich Union, which has swiftly compensated nearly every victim. I am amazed that other companies have not followed its lead.
The solicitor handling most of the claims against Royal Life has obtained counsel's advice. I am satisfied that, in law, those claimants should have been compensated by being returned to the situation they were in prior to their dealings with the salesman. However, if writs are involved, an unholy war will break out between the lender, the insurance company, the salesman, solicitors and others as to who is liable. The only people to lose will be the innocent. LAUTRO has, once again, made recommendations that the insurance companies should compensate and claim any contribution from others later.
This whole sorry tale raises three questions. First, how could such schemes ever have been permitted to be sold? Secondly, under a regulated system, how can complaints be ignored and compliance fail? Thirdly, can multinational companies—household names—disregard regulatory bodies and fail to compensate adequately?
The Department of Trade and Industry has responded in part to FIM BRA problems, as evidenced by the SIB on March. I now want my hon. Friend to take urgent steps to ensure that all victims are compensated in accordance with the law and, further, that the whole system which allowed those problems to occur in the first place is reviewed to prevent a repeat.

947
I understand that a report on self-regulatory organisations, SROs, by Sir Kenneth Clucas, is due soon. If his report recommends a merger of FIMBRA and LAUTRO, or perhaps a super SRO, will the SIB be able to implement those recommendations or will that require legislation? I should like the Minister's opinion on that.
Suggested further action should include the compulsory raising of compensation funds for LAUTRO and FIM BRA through a levy on each policy written or upon premiums, backed up by compulsory indemnity insurance for salesmen. Secondly, a totally independent regulating authority should be set up with compulsory membership. Thirdly, although this is not a big problem, I should like my hon. Friend to consult with the Inland Revenue on the question of tax indemnities from the insurance companies in respect of compensation payments made to bond holders.
I pay tribute to Nigel Hodkinson and Neil Stevens, the solicitors at the centre of this tragedy, and to Mrs. Jan Prowting, the secretary of Action Group South. They have done, and continue to do, much to help those who have suffered; I now want the Government to help, too.
10.20 pm
Ms. Marjorie Mowlam: I am glad that I have managed to catch your eye, Mr. Speaker. I have been here for a shorter time than the hon. Member for Romsey and Waterside (Mr. Colvin), but I wish you and your wife well in your retirement at the end of this term.
I shall be brief because the hon. Member for Romsey and Waterside has explained clearly not only the failure of the present regulatory system but also the origins of the problem in relation to home equity income plans, which is now well known. I should add that the numbers involved have been grossly underestimated. Age Concern England now estimates that the figure is about 40,000, and some specialist financial journalists such as Paul Cooper think that it is closer to 100,000. The stream of letters that I receive from pensioners who feel that they have been neglected shows that the figure is larger than we think.
I wish to add four questions to those asked by the hon. Member for Romsey annd Waterside. The hon. Gentleman mentioned the liaison committee of regulators of the Securities and Investments Board—the one-stop procedure for registering complaints. We welcome that, but it does not amount to a solution. When will the liaison committee reach decisions on the individual cases about which it now has information? We should like the Minister to answer that, for the simple and crude reason that many of the victims are elderly and cannot wait much longer.
Secondly, how far is it proposed that victims should be compensated? Are we looking at full restitution or the limits of the investors' compensation scheme? Thirdly, has the Minister any proposals to deal with the sharks operating schemes towards the end of their existence? Some of them had a history of dubious business deals and, although they are now banned from membership of FIMBRA, many still operate on a tied basis through some of the insurance brokers.
Finally, has the Minister any plans to resolve uncertainties about FIM BRA's financial viability? This is the flip side of the question asked by the hon. Member for Romsey and Waterside. If many of those cases are
948
resolved through the investors' compensation scheme, FIMBRA may be in danger of terminal financial problems, as we have seen in the past.
10.22 pm
The Minister for Corporate Affairs (Mr. John Redwood): I too would like to add my best wishes for your retirement, Mr. Speaker, and my thanks for the courtesies that you have shown me and my hon. Friends over the years that I have been in this House.
My hon. Friend the Member for Romsey and Waterside (Mr. Colvin) raises some important issues. I am grateful to him for coming to my Department a little while ago to stress the urgency of the matter. As he knows, I then discussed it with the chairman of the Securities and Investments Board, and I am pleased that the SIB is taking the lead in bringing the regulators together to see how best those problems can be tackled. I also wrote recently to all hon. Members detailing the measures that are now being taken, and I hope that that was helpful.
Procedures for dealing with complaints about those schemes are already in operation. Both FIMBRA, which regulates independent financial advisers, and LAUTRO, which regulates the marketing of life offices and their tied agents, have effectively prohibited further unsuitable sales of investment-bond-based home income schemes to prevent recurrence.
The Financial Services Act regulators have also been working to secure redress, where appropriate, for investors who took up such schemes as a result of unsuitable advice. They are in contact with the building societies Commission, the building societies ombudsmanan and other bodies. Following my discussions with the chairman of SIB, they are making progress in bringing together those regulators and ensuring that there is effective co-ordination. I shall ensure that my hon. Friend's comments and those of the hon. Member for Redcar (Ms. Mowlam) about the liaison committee and the need for it to come to rapid decisions on how those matters will be handled are brought to the attention of Sir David Walker at the SIB following this debate, because I share their concern that justice should be seen to be done, and be done speedily, in those important cases.
Those investors who are facing difficulties with mortgage repayments as a result of investments in home income schemes no longer meeting all their requirements to service the debt should contact their building societies immediately, if they have not already done so, to discuss interest and repayment arrangements. I am sure that hon. Members will give that advice to their constituents when asked. The societies have stated that they are anxious to avoid repossession, and I renew the Government's plea to the societies that they should consider the cases sympathetically, understanding the background to them.
Those who invested through a reputable firm, such as a life office, and think that they should be compensated should in the first instance apply to that office, and to the regulator—LAUTRO, in the case of life offices, or their tied agents—if they are not satisfied with the result. My hon. Friend is right to say that the Norwich Union has led the way in giving compensation in many cases, which I also welcome.
Some firms selling home income plans have been declared in default by the investors compensation scheme —ICS—and in such cases investors may be eligible for

949
compensation through that scheme. Aylesbury Associates and Fisher Prew-Smith fall into that category. The relevant regulatory body will advise the customers of those former businesses, or hon. Members taking up their cases, if a claim on the ICS can be made and how to make one.
The hon. Member for Redcar asked how much compensation we are talking about. That depends on the procedure being followed and the case of individual constituents. If it is a claim on the ICS, it will be governed by the ICS rules and the maximum limits of the ICS scheme—the £48,000 allowed against the £50,000 claim. If the individual is seeking redress from the investing institution—the insurance company—different levels of compensation will be appropriate, depending on the agreement reached between the customer and his representative, and the company.
Some investors may not have been subject to gross misselling, but may have bought a product whose value has gone down, leading them to embarrassment. It may he that those values are only temporarily depressed, and such investors should seek specialist investment advice as to whether their investment value could increase again, thereby removing the problem, or whether they need to change the investment to try to recoup some of their losses or ensure that they do not have further losses. It is important that those investments that have been made and are still there should be well looked after, as the main solution for those customers would be for their money to be well looked after and therefore grow in the future.
My hon. Friend the Member for Romsey and Waterside mentioned a case involving Royal Life. I am advised that Royal Life has already made compensation following a number of claims, some of them involving substantial amounts. I am told that Royal is anxious to deal with all the outstanding cases as quickly as possible, and is devoting considerable resources to the matter. However, it has apparently experienced some difficulty in obtaining all the information it needs to deal with the claims.
LAUTRO has met, and is continuing to meet, both Royal and the solicitors acting for the investors to discuss progress. LAUTRO will continue to use its good offices to ensure a satisfactory outcome. Like my hon. Friend, I wish to see a prompt conclusion after all these months, and will ensure that LA UTRO sees a copy of the report of tonight's debate so that my hon. Friend's sense of urgency can be communicated to LAUTRO, which is trying to intermediate in those cases.
Mr. Colvin: I am told that Royal Life has set aside a large amount of money—£12 million—for payments, and has so far paid out £3·5 million. In the southern group, which involves my constituents, there have been 270 claims, only 39 of which have been fully settled. I think that there is some dragging of feet.
Mr. Redwood: I am grateful for that information, which was why I worded my answer cautiously and said that I associated myself with my hon. Friend's wish to see matters dealt with as expeditiously as possible. I will, of course, ask LAUTRO to take account of that information, following tonight's important debate, as it is necessary that justice is dispensed with reasonable speed.
If investors remain dissatisfied with the outcome of their claim after Royal has dealt with it, they can raise the matter with the Insurance Ombudsman Bureau—a
950
recognised complaints authority for LAUTRO. The bureau provides an independent and impartial method of resolving disputes between insurers and complainants, and its services are free to the complainant. The ombudsman's decision is binding on the insurer but not on the complainant, and it does not affect the latter's right to take legal action afterwards. I believe that some complainants have already approached the ombudsman in this matter. It provides a safety valve if things have gone wrong in the preferred method of settling directly with the company.
My hon. Friend mentioned another case, involving a representative of Guardian Royal Exchange, and I know that other hon. Members are also interested in it. LAUTRO is looking into this case, and has been in touch with GRE. Some investors have already been compensated by the insurer, and other claims are being considered. I understand that LAUTRO's chief executive will be meeting investors' representatives next week to discuss the next steps. I repeat that I will ensure that LAUTRO sees the report of this debate; this matter too should be governed by the wish of the House that it should be dealt with expeditiously and fairly.
My hon. Friend said that he thought that some of these difficulties arise because we have a system of self-regulation. I cannot entirely agree. We do not have a system of self-regulation: we have a system of professional regulation under statute. There is practitioner involvement at board level, but the people doing the day-to-day regulation—those who have to go out and interrogate, investigate and bring suspicious circumstances to the public eye—are all full-time paid professionals who do this work and nothing else. [Interruption.] I do not know whether the hon. Member for Redcar wants to intervene. She seems to find this funny; it is not—it is a serious matter.
Ms. Mowlam: I was not amused by the subject matter. We have had correspondence from many people who are suffering as a result of all this. I am amused only by the change in the Minister's language since a year ago, when he upheld the idea of self-regulation. Now that all these problems for individual and corporate investors have emerged, he has changed his language—another example of the shifts in Government language that we have heard more and more as the election nears.
Mr. Redwood: The hon. Lady is absurd. I have used the same language on this matter throughout my time in the DTI. I have always characterised what we have as professional regulation with practitioner involvement. I will look out speeches and press releases on the subject if the hon. Lady wants to challenge me further. We are talking about a group of professional regulators trying to do a difficult job and needing the support of those who want an honest market.
My hon. Friend the Member for Romsey and Waterside asked why such schemes were permitted in the first place. With the benefit of hindsight, that is a good question, but there was a legitimate purpose to many of the schemes—to enhance pensioners' incomes by pledging their assets. The problem was that bad investment advice was given to some, and things were even worse in some cases. Action is being taken to root out those abuses. In the interests of caution, regulators have now decided that many of the schemes are unsuitable, and they have learnt from what has happened in the past.

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I do not believe that all the complaints were ignored. I do not believe that all the major companies are failing to compensate. My hon. Friend has mentioned one that has compensated reasonably quickly, and I have mentioned two others which will compensate or which have started to compensate. It is important that these steps be followed up.
I was asked whether the Kenneth Clucas report will require legislation. None of us knows what the report will recommend, but, as some press rumours suggest, were it to recommend mergers between the regulatory bodies, I understand that we are unlikely to require primary legislation to achieve that end. Two regulatory bodies recently merged without the need for statutory changes.
The hon. Member for Redcar asked me what action would be taken to deal with what she called sharks. She should well know by now that, if cases are established of malpractice, of criminal action or of abuse of the system, they will be pursued by the prosecuting authorities in the usual way. If she has evidence that will help the prosecuting authorities in their task, she should send it to them immediately, so that the right action can be taken.
952
My hon. Friend, who is well informed in these matters, told the House that some action has already been taken against some of these people, and rightly so. We want these problems to be dealt with in the right way.
Finally, the hon. Lady asked me about the future of FIMBRA and its financing. I suggest that she awaits, as I do, the final outcome of the Clucas review, but I know of no current financial embarrassments of FIMBRA, and I trust that the hon. Lady is not trying to create problems where there are no immediate problems on my desk.
There are a number of tragedies here which we have discussed tonight. Of course I wish to see action taken. I am grateful for the work that my hon. Friend has put into exposing the issue and his arguments on behalf of the many customers who have been upset by such schemes, particularly his constituents. I shall ensure that the content of the debate is relayed to the Securities and Investments Board and to LAUTRO so that they see the urgency of the problem and the wish of Members from both sides of the House who are here tonight, and who I think are representative of many others who are not here, to see solutions as soon as possible.
Question put and agreed to.
Adjourned accordingly at twenty-five minutes to Eleven o'clock.

ENVIRONMENT

  Construction Industry
  Mr. Redmond
  To ask the Secretary of State for the Environment when he next expects to meet representatives of the Building Employers Federation to discuss the effects of the recession on the industry.

  Mr. Wray
  To ask the Secretary of State for the Environment when he next expects to meet representatives of the construction industry to discuss the effects of the recession on the industry.

  Mr. Yeo
  My right hon. Friend the Secretary of State and Ministers in the Department have regular meetings with representatives of the construction industry to discuss matters of mutual interest.

  Planning Controls
  Mr. Dykes
  To ask the Secretary of State for the Environment when he expects to publish his final legislative proposals to increase local planning controls over the unnecessary demolition of dwelling houses by developers prior to any redevelopment activity.

  Mr. Yeo
  My hon. Friend will recall that we published proposals for public consultation in July last year. We have carefully considered the responses to the options we proposed. In the light of these responses, we have decided how to proceed. In about two months' time, we hope to make the instruments needed to commence the new controls, comprising a commencement order for the relevant parts of the Planning and Compensation Act 1991; a direction which makes clear which types of building are to be subjected to the new controls over demolition; and a general development amendment order, designed to ensure that the new controls operate in an efficient way, and without undue burden on either local authorities or potential developers.

  The main effect of the new system will be that those who wish to demolish a dwelling-house, or a building attached to a dwelling-house, will first need to notify the local planning authority and give 28 days for the authority to decide whether to call for details of the demolition, which it would then consider in the same way as a planning application—the right to demolish, subject to complying with the conditions, would not be removed or to make an article 4 direction, which would require a full planning application to be made, in which case there might be a requirement to pay the owner compensation. We do not expect the new system to result in a substantial number of planning applications for demolition, since in practice most of the details are likely to be sorted out in negotiation between the local planning authority and the developer in the context of his planning application for replacement buildings on any site.

  Devon County Structural Plan
  Mr. Steen
  To ask the Secretary of State for the Environment what consideration was given to inviting Devon's hon. Members to participate and give evidence to the public examination of the Devon county structural plan on 24 March; and if he will make a statement.

  Mr. Yeo
  It is normal practice to invite MPs to participate in an examination in public only if they had expressed an interest in the submitted proposals for alteration. Any request to participate will be considered by the panel chairman.

  Mr. Steen
  To ask the Secretary of State for the Environment what are the criteria on which the participation list for the public examination of the Devon county structural plan on 24 March was drawn up; and who was consulted.

  Mr. Yeo
  In selecting participants for an examination in public, the basic criterion will be the significance of the contribution which, from their knowledge or the views they have expressed, they can be expected to make to the discussion of the matters to be examined. The examination is not directed to hearing objections, and it is not intended that all those who have objected should be invited to attend.

  The list of selected matters and invited participants was produced in consultation with the panel chairman, as is normal practice. It was advertised by Devon county council on 16 January. The four-week period during which representations could be made ended on 13 February.

  Mr. Steen
  To ask the Secretary of State for the Environment what consideration was given to including voluntary amenity and environmental groups from Devon localities in the public examination of Devon county structural plan; and if he will invite the South Hams Amenity Federation to give evidence.

  Mr. Yeo
  In drawing up the list of participants for an examination in public, the aim is to select particpants who between them represent a broad range of viewpoints. A number of local environmental and amenity groups, including the Council for the Protection of Rural England, Devon Green party, Devon Friends of the Earth and Devon Conservation Forum have been invited to participate. It was decided that those participants invited to the examination, along with the written representations already received—including those of the South Hams Amenity Federation—would provide sufficient information for a decision to be reached on the alteration proposals.

  No further representations were received from the South Hams Amenity Federation during the four-week period for comments to be made about the published draft list of selected matters and invited participants. However, the chairman of the panel has assured me that any late request by the federation will be treated sympathetically.

  Empty Property, Devon
  Mr. Steen
  To ask the Secretary of State for the Environment what information he has on the number of empty(a) public and (b) private properties for each district of Devon.

  Mr. Yeo
  Local authorities report the number of their own dwellings which are empty and estimates of empty
  519
  dwellings owned by housing associations, by other public sector landlords, and by the private sector in their annual housing investment programme—HIP1—returns. "Other public sector" includes dewllings situated in the local authority area but owned by another local authority.

  The latest available figures, for April 1991, are in columns A71, A72, A73 and A74, respectively, of the "1991 HIP1 All Items Print". A copy is in the Library.

  Local Authority Debt
  Mr. Robert Banks
  To ask the Secretary of State for the Environment if he will set out the list of local authorities which have debts which are not taken account of in their standard spending assessment, with the amount of those debts individually.

  Mr. Key
  The capital financing element of standard spending assessments is based on an assessment of interest charges flowing from a notional debt figure. There are a number of reasons why notional debt may differ from actual debt. No records are kept of individual items of excluded capital expenditure.

  EC Directives
  Mr. Burns
  To ask the Secretary of State for the Environment when he intends to issue a consultation paper on the implementation of the urban waste water treatment directive and the nitrates directive; and if he will make a statement.

  Mr. Trippier
  We have today issued a consultation paper outlining the Government's proposals in England and Wales for criteria and procedures for identifying sensitive areas and less sensitive areas—urban waste water treatment directive—and "polluted waters"—nitrates directive. As far as I am aware the United Kingdom is the first member state to consult publicly on the way we intend to implement these directives. This, I believe, demonstrates the Government's commitment to openness in environmental decision making and to the proper implementation of these directives which will make an important contribution to improving our environment. A copy of the consultation paper has been placed in the Library of the House.

  Cash Limits
  Mr. Rowe
  To ask the Secretary of State for the Environment whether he has any changes to announce to his Department's cash limits for 1991–92.

  Mr. Yeo
  Yes. I propose to make the following changes:

  (i) The non-voted cash limit for DOE/OES will be increased by £478,000 from £93,894,000 to £94,372,000. This results from the provision of additional supplementary credit approvals to enable local authorities to raise finance to fulfil their obligations to contribute part of the cost of certain roads built by the Commission for the New Towns and new town development corporations in England. The increase will be wholly offset by a counterbalancing new towns receipt (see (iii)(b) below).

  (ii) The non-voted cash limit for DOE/LACAP will be increased by £89,260,000 from £3,019,202,000 to £3,108,462,000. This results from the provision of additional supplementary credit approvals to enable Milton Keynes BC and The Wrekin DC to raise finance to purchase housing stock from Milton
  520
  Keynes Development Corporation and Telford Development Corporation respectively. This increase is also wholly offset by counterbalancing new town receipts (see (iii)(b) below).

  (iii) The non-voted cash limit for DOE/NT (New Towns) will be increased by £95,262,000 from minus £449,800,000 to minus £354,538,000. This net increase is the result of the following individual changes:

  (a) an increase of £185,000,000, reflecting the effect on receipts of the present state of the property market. This increase will be charged to the reserve and will therefore not add to the planned total of public expenditure;

  (b) reductions of £478,000 and £89,260,000 respectively resulting from additional receipts from local authorities financed by the cash limit increases described in (i) and (ii) above.

  (iv) The external finance limit for Letchworth Garden City Corporation will be increased by £231,000 from minus £500,000 to minus £269,000. This reflects changes in the corporation's financing profile as a result of the continuing depression in the property market.

  Manchester Concert Hall
  Mr. Churchill
  To ask the Secretary of State for the Environment if he will make a statement on the proposed Manchester concert hall.

  Mr. Key
  My right hon. Friend the Secretary of State has today announced a grant of up to £22 million to Central Manchester development corporation towards the cost of the Manchester concert hall, which is part of the Great Bridgewater initiative. The concert hall will provide a much needed new home for the Hallé orchestra and is central to the Great Bridgewater regeneration initiative.

  Irish Sea (Science Co-ordinator)
  Mr. Andy Stewart
  To ask the Secretary of State for the Environment whether agreement has been reached on the appointment of an Irish sea science co-ordinator.

  Mr. Baldry
  I am glad to report that my Department and the Departments of the Environment and of the Marine of the Republic of Ireland have agreed to commission EOLAS, the Irish Science and Technology Agency, to provide the services of Mr. Richard Boelens for three years as Irish sea science co-ordinator. Mr. Boelens will act as secretary of the co-ordination group to be set up to review existing and proposed monitoring and research programmes in the Irish sea and to assess priorities for further work to improve our knowledge of environmental issues affecting the Irish sea.

  In the course of this work he will prepare an inventory of Irish sea research and monitoring, identify gaps in these programmes and needs for co-ordination and prepare, in liaison with the relevant agencies, proposals for meeting these needs. Consideration will also be given to the timing, content and research requirements of a further quality status report on the Irish sea.

  CITES Controls
  Mr. Ken Hargreaves
  To ask the Secretary of State for the Environment whether the Government support proposals before the conference of the parties to the Convention on International Trade in Endangered Species
  521
  of Wild Fauna and Flora—CITES—in Kyoto aimed at strengthening controls on trade in wild caught animals and birds.

  Mr. Baldry
  The Government have made clear their determination to work within CITES to ensure that wildlife species are not exploited by trade. The United Kingdom delegation to the CITES conference has played a leading role in negotiating proposals aimed at improving consultation with wildlife exporting countries and providing for tough action to crack down on trade which is being conducted at unsustainable levels. These proposals have been supported by the conference.

  Charterhouse Estates Ltd.
  Mr. Parry
  To ask the Secretary of State for the Environment if the Minister for Local Government and Inner Cities will consider visiting the Liverpool 1 area to look at the Charterhouse Estates Ltd's involvement in the inner-city area.

  Mr. Portillo
  [holding answer 5 March 1992]: During my visit to Liverpool on 6 March, I met the managing director of Charterhouse Estates Ltd and toured the Liverpool 1 area with him.

  Mortgage Rescue Schemes
  Mr. Harry Barnes
  To ask the Secretary of State for the Environment what information he has on the housing associations, building societies and local authorities within Derbyshire who are involved in negotiations with the Council of Mortgage Lenders to provide mortgage rescue schemes.

  Mr. Yeo
  [holding answer 10 March 1992]: Nine members of the Council of Mortgage Lenders have so far announced details of their mortgage rescue schemes, some of them involving agreements with housing associations; others are still being negotiated. I hope that borrowers in Derbyshire will benefit from these schemes, and from the other measures announced by my right hon. Friend the Chancellor of the Exchequer on 19 December, as will borrowers in other parts of the country. I understand that Amber Valley district council is intending to introduce a mortgage rescue scheme in conjunction with Walbrook housing association. Derby city council has said that it regards the introduction of a mortgage rescue scheme as a priority.

  Local Government Finance
  Mr. Harry Barnes
  To ask the Secretary of State for the Environment, pursuant to his answer to the hon. Member for Hornchurch (Mr. Squire) on 2 March,Official Report, columns 45–46, if he will produce three tables listing percentage figures for the 1992–93 settlement for (a) each district council, (b) each metropolitan district and (c) each shire county in England and Wales, based on the criteria used in that answer, in each case listing authorities in descending order according to the percentage size of the Government grants.

  Mr. Key
  [holding answer 10 March 1992]: The information requested is not available for individual authorities for 1992–93.

  Heritage and Archaeology
  Mr. Fisher
  To ask the Secretary of State for the Environment how many civil servants are employed in his Department on matters relating to(a) the heritage and (b) archaeology.

  Mr. Yeo
  [holding answer 10 March 1992]: The heritage division of my Department has 41 staff, 12 of whom deal with archaeology. They are supported by English Heritage who are my statutory advisers on conservation matters. My Department's conservation unit, which advises on the good management of the Government's own historic estate, has five staff. In addition, staff in this and other Departments who are engaged on building construction and maintenance programmes recognise and discharge responsibilities for heritage conservation.

  Mr. Fisher
  To ask the Secretary of State for the Environment what expenditure was made by his Department in the last financial year for which figures are available on(a) the heritage and (b) archaeology.

  Mr. Yeo
  [holding answer 10 March 1992]: The Department's expenditure on the heritage in 1990–91 was £148·4 million. The estimated outturn for 1991–92 is £176·5 million. Expenditure on archaeology, within the heritage total, is funded through English Heritage and the Royal Commission on the historical monuments of England, whose archaeology expenditure in 1990–91 was £8·1 million and £1·8 million respectively.

  Mentally Ill Homeless People
  Mr. O'Hara
  To ask the Secretary of State for the Environment (1) what funds are being made available through the Housing Corporation in 1992–93 to provide revenue funding for housing associations providing permanent housing for mentally ill homeless people ready to move out of specialist short-term hostels in central London;

  (2) how many permanent places for mentally ill homeless people currently living in specialist short-term hostsels in central London will be provided by housing associations in 1992–93.

  Mr. Dorrell
  I have been asked to reply.

  The Department revenue funds the specialist short-term hostels set up under the homeless mentally ill initiative at the rate of £14,630 per place per annum—1992–93 costs. Permanent accommodation for those moving on from the hostels is being provided via the Housing Corporation. In 1992–93 it expects to make available 150 new units and 150 units from housing association relets. The corporation monitor this provision regularly. The social care of people moving on from the short-term hostels is the responsibility of local social services authorities. To ensure that the transition takes place smoothly the Department has included within the homeless mentally ill initiative £500,000 per annum for the three years 1992–93 to 1994–95 to provide resettlement support.

SOCIAL SECURITY

  Part-time Students
  Mr. Meacher
  To ask the Secretary of State for Social Security what plans he has to restrict benefit entitlement for people who currently study part time under the 21-hour rule.

  Miss Widdecombe
  We have no such plans.

  Independent Living Fund
  Mr. Nigel Griffiths
  To ask the Secretary of State for Social Security if he will evaluate the performance of the independent living fund since its inception in 1988.

  Mr. Scott
  We are proud of the many achievements of the ILF since it was founded nearly four years ago. It has played an important role in the run-up to community care and is currently helping nearly 12,000 people to live independently in their own homes.

  Mr. Nigel Griffiths
  To ask the Secretary of State for Social Security if he will review his decision to abolish the independent living fund in March 1993.

  Mr. Scott
  A successor body will be established to take over all the cases where beneficiaries of the independent living fund are receiving help at the end of March 1993. This new body will continue to make cash payments to its beneficiaries in the same way as the fund does now.

  It is planned that from April 1993, people needing such help will be dealt with under the mainstream arrangements for community care.

  Mr. Thurnham
  To ask the Secretary of State for Social Security what provision will be made available to the independent living fund for 1992–93.

  Mr. Nigel Griffiths
  To ask the Secretary of State for Social Security (1) if it remains his policy to ensure that the independent living fund can help existing beneficiaries and admit new people during 1992–93;

  (2) how much his Department has allocated for funding the independent living fund for 1992–93; and if he will take steps to ensure that the independent living fund has sufficient funds to meet new applications throughout 1992–93.

  Mr. Scott
  In addition to the £82 million already proposed for the independent living fund in 1992–93, the Government have decided to grant a further £15 million, bringing a total provision to £97 million. The trustees assure me that this will be sufficient—in conjunction with other steps they are taking—to enable the fund to continue operating until April 1993.

  Parliamentary approval for the additional sum, which will be met from the reserve without adding to the planning total for public expenditure, will be sought in the usual way.

  Youth Training Scheme
  Mr. Nellist
  To ask the Secretary of State for Social Security how many young people in(a) Coventry, (b) the west midlands and (c) nationally have had their benefit cut as a result of coming off the youth training scheme prematurely or because they refused a place when offered one.
  524
  Mr. Jack
  The information requested is not available.

  Pensions
  Mr. Ashley
  To ask the Secretary of State for Social Security if he will give the percentage increase since 1979 in the real value of(a) retirement pension, (b) invalidity benefit and (c) widows' pension; and if he will give the latest figures for the numbers of people receiving each benefit.

  Miss Widdecombe
  Basic retirement pension, invalidity benefit and widows pension have each increased by 2·8 per cent., in real terms, after allowing for inflation between the two complete uprating years ending November 1979 and April 1990.

  The estimated average numbers of people, in thousands, in receipt of these benefits at any one time are in the table.

  '000

  Retirement pension

  10,000

  Invalidity benefit

  1,209

  Widows' pension

  285

  Note: The figures in the table are for Great Britain and are rounded to the nearest thousand; the source is "DSS Statistics". The retirement pension figure is based based on March 1991 data. The invalidity benefit figure is based on March 1990 data. The widows' pension figure is based on September 1990 data.

  Disabled People (Benefits)
  Mr. Thurnham
  To ask the Secretary of State for Social Security what changes he has recently made to benefits for disabled people and their carers.

  Mr. Scott
  We have already issued a quarter of a million disability living allowance claim packs—to people who are currently not entitled to benefit and to those who can now claim extra benefit. Our extensive TV and press advertising campaign has resulted in over 250,000 inquiries from people who want information about the new benefits. To them we have issued a specially designed colour-coded guide which not only explains the two new benefits but also covers the many other benefits available to disabled people.

  We have also begun to take claims for the new benefit, disability working allowance which is aimed at disabled people who are able to work, but have limited earnings' potential. The first awards of the benefit have already been made.

  We are shortly to make several other changes which will help disabled people and their carers.

  We have today laid regulations that raise to £40 the limit on the weekly amount that a carer can earn without it affecting their entitlement to invalid care allowance. This means that the limit will have increased by over 200 per cent. in the last two years.

  We have also laid regulations which will, from April, raise from 12 to 21 the number of hours of study that someone claiming invalid care allowance can undertake without it affecting their entitlement to that benefit.

  Other regulations will be laid shortly to bring the residence and presence conditions for severe disability allowance into line, from April, with those which we have introduced for disability living allowance. This means the removal of the long-criticised "10 in 20 years" residence test.
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  I am also pleased to announce that I laid yesterday regulations which will allow disabled people, who receive either invalidity benefit or severe disability allowance, to serve for one day a week as members of the new disability appeal tribunals and receive the full fee for taking on that invaluable work—without it affecting their entitlement to those benefits.

  National Insurance
  Sir Timothy Raison
  To ask the Secretary of State for Social Security if he has any plans for technical adjustments to the system of national insurance contributions and credits which would assist people to qualify for contributory benefits.

  Mr. Scott
  We propose to lay regulations shortly which will amend the Social Security (Credits) Regulations 1975 to provide that people who receive a payment in lieu of notice or certain other compensatory payments will no longer be prevented from obtaining unemployment credits for the period covered by the compensatory payment.

  This will assist people to qualify for contributory benefits by covering potential deficiencies in their contribution records.

  We are also laying the Social Security (Contributions) Amendment (No. 5) Regulations 1992, which will further assist people to qualify for contributory benefits by the reallocation of national insurance contributions—NICs —paid in one tax year to another tax year.

  Those who will benefit are employed earners who commence employment towards the end of the tax year and whose first payment of earnings from that employment is made in accordance with the employer's normal pay practice in the following tax year. If the NIC record in the first tax year is deficient for contributory benefits, the class 1—employed earners—NICs paid for the first payment of earnings can be treated as paid in respect of the tax year in which the employment began if that would enable the employee to satisfy the contribution conditions for benefit.

  Attendance Allowance
  Mr. Jacques Arnold
  To ask the Secretary of State for Social Security how many claims for attendance allowance were received in 1990–91.

  Mr. Scott
  In 1990–91, there were 445,000 claims for attendance allowance. This is a correction to the figure of 395,000 in table 10 of the "DSS Departmental Report", Cm 1914.

  Pensioners
  Sir Ian Gilmour
  To ask the Secretary of State for Social Security what percentage of(a) women and (b) men in 1980 and in the latest year for which the figures are available reached retirement age with entitlement to (i) the full basic state pension, (ii) some state earnings-related pension or additional pension, (iii) an occupational pension and (iv) a personal pension.

  Miss Widdecombe
  [holding answer 12 February 1992]: information is not available in the precise form requested, however such information as is available is given in the tables:
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  Table 1

  Per cent.

  1. Percentage of men age 65 at 28 November 1980 in receipt of:

  1. Any state retirement pension

  84·35

  ii. Full rate basic pension

  79·47

  iii. Some additional pension (SERPS)

  55·14

  2. Percentage of men age 65 at 31 March 1991 in receipt of:

  i. Any state retirement pension

  79·77

  ii. Full rate basic pension

  69·45

  iii. Some additional pension (SERPS)

  71·49

  3. Percentage of women age 60 at 28 November 1980 in receipt of:

  i. Any state retirement pension

  63·10

  ii. Full rate basic pension (own contributions)

  20·01

  iii. Some additional pension (SERPS)

  10·16

  4. Percentage of women age 60 at 31 March 1991 in receipt of:

  i. Any state retirement pension

  67·44

  ii. Full rate basic pension (own contributions)

  15·04

  iii. Some additional pension (SERPS)

  28·04

  Table 2

  The percentage of recently retired in receipt of an Occupational Pension

  Year

  Percentage

  Men

  1979

  61

  1988

  69

  Women

  1979

  20

  1988

  40

  Notes for Table 2:

  (a) The "recently-retired" are defined as men aged 65–69 and women aged 60–64.

  (b) Estimates are for the United Kingdom and are based on the 1979 and 1987 Government Actuary's Department (GAD) Occupational Pensions Surveys and the 1979 and 1988 Family Expenditure Surveys.

TRANSPORT

  Coach Parking, London
  Mr. Butler
  To ask the Secretary of State for Transport what progress has been made in meetings with representatives of the coach and tourist industries, London local authorities, the police and other Government Departments to alleviate coach parking problems in central London.

  Mr. Freeman
  I have today announced a series of initiatives which will help to improve the central London coach parking situation. The measures include the provision of more than 160 new coach parking spaces in or close to central London; the lifting of evening coach parking restrictions on the Victoria embankment and Park lane; the relaunch of the Bus and Coach Council code of conduct for the operating and parking of tourist coaches; arrangements for distribution of the revised code of conduct to coach drivers at continental channel ports and Dover; a new pay and park facility for coaches at the North Mall coach park; Sunday morning opening at the Tower of London; the freezing of charges at the Tower
  527
  coach park for a third consecutive year and a feasibility study for a radio call back experiment in the area close to Westminster abbey.

  Dial-a-Ride
  Mr. Evennett
  To ask the Secretary of State for Transport what arrangements have been made to fund the London dial-a-ride service.

  Mr. Freeman
  I am pleased to announce that the grant to London dial-a-ride services for 1992–93 will be £10·5 million. It has been most encouraging to see the rapid expansion of the scheme in recent years, and this announcement will allow London Transport to improve the services still further in 1992–93: increasing the number of dial-a-ride trips from some 740,000 in the present year to more than 800,000 next year. It will also enable the completion of the planned regionalisation of the service.

  Rail Passengers Charter
  Mr. Stevens
  To ask the Secretary of State for Transport if he will make a statement about the bonuses to be paid to British Rail board members in relation to the passengers charter performance standards.

  Mr. Freeman
  For 1990–91 BR board members could have earned a maximum 25 per cent. bonus on salary for meeting a series of targets, including up to 7 per cent. for quality of service. Members actually received a maximum of 4 per cent. which included 1 per cent. for quality of service.

  Details of a revised BR board bonus scheme for 1992–93, including quality of service targets based on the passengers charter, are currently being developed. On the basis of a possible maximum 10 per cent. bonus for quality, the actual bonus in 1991 would have been less than 2 per cent. of salary if the charter standards had applied, equivalent to around £4,000 for the chairman.

  Channel Tunnel Freight Services
  Mr. Grist
  To ask the Secretary of State for Transport whether he has yet approved any order for freight wagons to equip British Rail's proposed channel tunnel freight services.

  Mr. Freeman
  I have authorised British Rail to invest in initial builds of 450 intermodal wagons and up to 550 automotive wagons for channel tunnel freight services, at a total cost of up to £65 million. The intermodal wagons will be used to carry standard containers and swap bodies in terminal to terminal services between BR's network of regional freight terminals in Britain and key destinations on the continent. The fully enclosed automotive wagons will enable BR to offer high quality services for the delivery of finished cars for import and export, minimising the risk of damage to vehicles en route.

  Airedale Route Strategy
  Mr. Hind
  To ask the Secretary of State for Transport what progress has been made on the A650 Airedale route strategy; and if he will make a statement.

  Mr. Chope
  The Airedale strategy will eventually provide a high standard dual carriageway road from Skipton in the north-west, via Bradford, to the M62. Good 528
  progress has been made on a number of sections. I am today announcing preferred routes for the Shipley eastern bypass, which would link to a tunnel on section 4, and for the Hard Ings road improvement, which improves a section of single carriageway in Keighley to dual two-lane carriageway standard.

  We are also pressing ahead with the preparation of main works for section 3 of the route, with advance works at Park road in Bingley currently out to tender and expected to start soon. We are well advanced in the preparation for inviting consultants to bid for the commission to carry out the preliminary design work for the tunnel option for section 4 and will invite bids soon.

  Vehicle Mileages (Clocking)
  Mr. Hind
  To ask the Secretary of State for Transport what action he proposes to take to combat the clocking of vehicle mileages.

  Mr. Chope
  We are working closely with the private sector in the development of effective and practical proposals to combat this abuse. Some companies already offer mileage check information services for the public and the motor trade, and the introduction of more comprehensive schemes is being actively considered. To provide the fullest possible data to underpin these services a "mileage box" is to be included on the vehicle registration document. Vehicle mileages at both the time of sale and of purchase will be collected by the Driver and Vehicle Licensing Agency and passed to companies running mileage check services. I believe that this development will prove to be a significant step forward in our drive to stamp out the fraudulent alteration of vehicle odometers and will be welcomed by the motoring public and motor dealers alike.

  Airline Failures
  Mr. Hind
  To ask the Secretary of State for Transport whether he will introduce a scheme to compensate scheduled airline passengers for financial loss arising from the failure of an airline in the light of the Civil Aviation Authority's advice to him published in 1991.

  Mr. Rifkind
  I have considered the Civil Aviation Authority's advice and have decided in principle that it would he desirable to introduce such a scheme, to provide financial protection for passengers who book tickets on United Kingdom airlines. I envisage that, in line with the CAA's advice, a fund would be set up from which any compensation would be paid, financed by a levy on United Kingdom airlines. I do not expect the levy to have a significant effect on fares. It would be of short duration —a matter of months—and should not exceed £1 per traveller. The scheme would complement the financial protection arrangements which already exist for people who hook charter holidays by air.

  I am asking the chairman of the Civil Aviation Authority to develop detailed proposals along these lines, and to consult as appropriate. Primary legislation would be necessary to implement such proposals and an opportunity to introduce such legislation will be sought in due course.

  Red Routes
  Mr. Hind
  To ask the Secretary of State for Transport when he will be in a position to make public the full analysis of the survey of the red route pilot scheme carried out last autumn; and if he will make a statement.

  Mr. Chope
  I have today published the results of the autumn monitoring of the pilot scheme independently designed and assessed by the Transport and Road Research Laboratory. Copies are being placed in the Library, and I am writing to all London MPs about them. The report shows that red route measures bring shorter, more reliable journey times for existing traffic, notably for buses, ease the flow of traffic and greatly improve safety on and off the route. London Buses is planning to introduce a new, limited stop, bus service on the pilot route taking advantage of the benefits to buses being produced. The environment is enhanced through the reduction of stopping and starting on the route, the improvement of roadside conditions, and the attraction of traffic away from residential side roads. Improvements are being achieved in spite of an increase in the volume of traffic now using the route, nearly all of which appears to be coming from side-roads in the corridor. Variations in trading activity are recorded but they seem to depend more on the type of business being conducted and the economic climate than on red route measures.

  Traffic Management, London
  Mr. Malins
  To ask the Secretary of State for Transport when he will issue his draft traffic management and parking guidance for London for consultation under the Road Traffic Act 1991.

  Mr. Rifkind
  I have published draft traffic management and parking guidance for London for consultation, as required by the Road Traffic Act 1991. Copies are being placed in the Libraries of both Houses and are being sent to each London Member.

  The draft guidance explains London's transport needs and the Government's approach to meeting them. It refers to the Government's desire to maximise the use of public transport where it offers a realistic alternative to the car and to see a coherent approach to the management of traffic and parking, so that public and private transport can move efficiently, smoothly and reliably on the main routes and supporting action can improve conditions throughout London. In particular, it explains how the Government propose that the major traffic management initiatives in the Road Traffic Act 1991; red routes and the new system of local authority enforcement of "decriminalised" on-street parking controls, should contribute to the approach and tackle the problems of congestion in the short term. It will help the London traffic director to start planning the introduction of the red routes and the local authorities, the introduction of their new parking system.

  Comments on the draft have been invited by 12 June 1992.

  Railway Investment
  Mrs. Dunwoody
  To ask the Secretary of State for Transport how much Government financial assistance was given in relation to each train kilometre in(a) France and (b) Britain, over the last five years.
  530
  Mr. Freeman
  International comparisons of railway subsidy cannot be made with precision because of differences in accounting practice. For instance, past debt write offs mean that British Rail pays significantly less interest that SNCF. Comparative information is published by the International Union of Railways in "International Railway Statistics". I am arranging for copies to be placed in the Library.

  The following figures are available for Great Britain.

  £ per train kilometre

  BR (Great Britain)

  1985

  2·2

  1986

  2·0

  1987

  2·1

  1988

  1·3

  1989

  1·4

  1990

  1·5

  1 1991

  2·1

  1:Estimated.

  Notes:

  Train kilometres include all passenger and freight kilometres. There is no subsidy paid to BR for freight.

  Rail Stations (Security)
  Mr. Michael J. Martin
  To ask the Secretary of State for Transport what discussions he has had with British Rail concerning the improvement of the design of railway stations with the aim of reducing injury in the event of a terrorist bomb.

  Mr. Freeman
  My right hon. and learned Friend met the chairman of British Rail and London Transport and the chief constable of the British Transport police on 3 March to discuss security arrangements for BR and London Underground. The design of railway stations is primarily a matter for British Rail. I understand that BR has produced a code of practice for its architects, on future station design changes and security implications.

  Kent Rail Services
  Mrs. Dunwoody
  To ask the Secretary of State for Transport what discussions he has held with British Rail over improvements to Kent services and the placing of the order for the class 465 Networkers.

  Mr. Freeman
  I meet the chairman of BR regularly to discuss current issues, including improvements to Kent rail services. A total of 486 Kent link Networkers are already under construction at a cost of £364 million. BR is not yet in a position to say when the order for a further 188 Networkers will be placed.

  Docklands Light Railway
  Mr. Evennett
  To ask the Secretary of State for Transport when he will announce the results of the consultation on the proposal to direct London Transport to dispose of the Docklands light railway to the London Docklands development corporation.

  Mr. Rifkind
  Having considered the comments received in the consultation I have concluded that the strength of the case for uniting the DLR with the LDDC remains undiminished. I have, therefore, today directed London Regional Transport to dispose of the DLR to the LDDC for a nominal sum with effect from 1 April 1992.

  Worksop Bypass
  Mr. Ashton
  To ask the Secretary of State for Transport for what reasons his Department is withholding £330,000 in compensation and interest charges from Bassetlaw district council as the final payment for land for the A57 Worksop bypass; and when he expects the payment to be made.

  Mr. Chope
  [holding answer 10 March 1992]: The Department is not withholding compensation and interest payments from Bassetlaw district council. Agreement was reached in March 1990 on the compensation due and in December 1990 a 90 per cent. advance payment was made to the council—this was the maximum allowed by the legislation in force at the time. Under the new provisions of the Planning and Compensation Act 1991 payment of accrued interest is also required to be made, and a payment in respect of that amount will reach the council shortly. The outstanding balance and any further interest due will be paid on completion of the land ownership transfer procedures, in the usual way.

  Rail Investment
  Ms. Ruddock
  To ask the Secretary of State for Transport if he will set out(a) the level of investment by Network SouthEast in each year since 1962 at current prices and (b) the total operating grant paid to (i) British Rail and (ii) Network SouthEast in each year since 1962 at current prices.

  Mr. Freeman
  [holding answer 6 March 1992]: The information is as follows:

  NSE Investment (£ million at 1991–92 prices) (Capital and revenue)

  £ million

  19821

  192

  1983

  181

  1984–852

  168

  1985–86

  162

  1986–87

  183

  1987–88

  305

  1988–89

  381

  1989–90

  414

  1990–91

  323

  1991–923

  380

  1 NSE was formed in 1986. Previous comparable figures are available only from 1982.

  2 1984–85 was a 15-month period. The figure quoted is the 12-month equivalent.

  3 Estimated.

  Source: NSE.

EDUCATION AND SCIENCE

  Gifted Children
  Mr. Colvin
  To ask the Secretary of State for Education and Science if he will consider the statementing of children of exceptional ability.

  Mr. Fallon
  It is for LEAs to make appropriate provisions for gifted children.

  Mr. Colvin
  To ask the Secretary of State for Education and Science (1) what proportion of the resources made available for children with special needs is made available for the education of gifted children;
  532
  (2) how many local education authorities have able child resource centres;

  (3) what proportion of the national educational budget is devoted to providing additional resources for children of exceptional ability.

  Mr. Fallon
  This information is not available centrally. It is for individual local authorities and schools to determine the deployment of their resources to meet additional educational needs, including the needs of exceptionally able pupils.

  HIV and AIDS
  Mr. Colvin
  To ask the Secretary of State for Education and Science what account he has taken of the Education Act 1986 and the European convention on human rights in considering implementation of the recommendations of his pamphlet, "HIV and AIDS: a Guide for the Education Service"; and if he will make a statement.

  Mr. Atkins
  The purpose of my Department's publication "HIV and Aids: A Guide for the Education Service" is to present, for education professionals, the basic facts about HIV, draw attention to ways in which the education service can contribute to the dissemination of knowledge about HIV and AIDS, and give guidance on standard hygiene practices which educational institutions should adopt to guard against the risks of accidental transmission. My right hon. and learned Friend consistently made it clear, in line with section 46 of the Education (No. 2) Act 1986, that sex education, including education about the sexual transmission of HIV, should be given in such a manner as to encourage pupils to have due regard to moral considerations and the value of family life; and that detailed decisions about how such education is delivered in the classroom should take full account of local circumstances, the particular needs of pupils, and the views of parents. This approach is consistent with the requirements of the European convention on human rights on the need to respect the right of parents to ensure that their children's education conforms with their own religious and philosophical convictions.

  Teachers' Pay
  Mr. Bowis
  To ask the Secretary of State for Education and Science when he expects to confirm the Government's proposals for teachers' pay for 1992.

  Mr. Kenneth Clarke
  After careful consideration of the representations I have received from associations representing teachers and their employers, I have decided to accept all the recommendations of the School Teachers' Review Body. The order I have signed today will bring into effect the provisions in the 1992 School Teachers' Pay and Conditions Document from 1 April 1992. This will make it possible for all school teachers to receive the pay increases recommended by the review body in full and on time.

  Parents Charter
  Mr. Ground
  To ask the Secretary of State for Education and Science which local education authorities in England have distributed copies of the parents charter to parents in their areas; which local education authorities have refused to do so; and what alternative arrangements
  533
  have been made for distributing copies of the parents charter to parents in those areas where local education authorities are not doing so.

  Mr. Eggar
  Sample copies of the charter were sent to headteachers and chairmen of governors at every school, together with an order form for further copies. More than 16,400 schools—66 per cent.—requested some 4 million copies to distribute to parents. The charter was widely advertised in the national press with a freepost coupon or a freephone number for ordering copies. It is also available in public libraries and post offices. Some 1·9 million copies have now been distributed through these means.

  We are aware that a few local education authorities actively discouraged their schools from distributing copies of the charter, but we do not have comrehensive information about local authority attitudes. This is essentially a matter for schools, and the great majority have requested copies for distribution.

  Sex Education
  Mrs. Heal
  To ask the Secretary of State for Education and Science if he will make a statement on the provisions for the teaching of sex education in schools.

  Mr. Atkins
  School governing bodies are responsible, under the provisions of the Education (No 2) Act 1986, for deciding whether their schools should provide sex education beyond those aspects required by the national curriculum; and for maintaining a written record both of that decision and of their policy on the content and organisation of any six education they decide should be provided. Schools are required to ensure that any sex education they may provide encourages pupils to have due regard to moral considerations and the value of family life. The circular "Sex Education at School", issued by the Department in 1987, offers guidance on these provisions.

AGRICULTURE, FISHERIES AND FOOD

  Fishery Decommissioning Scheme
  Mrs. Margaret Ewing
  To ask the Minister of Agriculture, Fisheries and Food, pursuant to his answer of 27 February,Official Report, columns 612–14, what proportion of funding for the proposed decommissioning scheme for the fishing industry has been allocated by (a) the European Community and (b) Her Majesty's Government over the period concerned, giving these sums both as a percentage and as a capital sum.

  Mr. Curry
  My right hon. Friend has explained that expenditure on decommissioning will be limited to £25 million. Assuming that all expenditure is eligible the Community will reimburse between 50 and 70 per cent. depending on the method of withdrawal. However, the EC budget is funded in such a way that the United Kingdom taxpayer will have to meet 73 per cent. of the Community contribution as well as all the national contribution. The net result of this is that the United Kingdom taxpayer will have to contribute about £20 million of the £25 million available for decommissioning or in percentage terms about 80 per cent. of the total.

  Crown Immunity
  Dr. David Clark
  To ask the Minister of Agriculture, Fisheries and Food when he intends to lift immunity of Crown premises for food safety; what progress has been made on implementing this provision; when he intends to issue the code of practice in connection with this measure; and if he will make a statement.

  Mr. Gummer
  The Food Safety Act 1990 extends food safety law to Crown premises with effect from 1 April this year.

  Crown premises will need to be registered before 1 July 1992 in accordance with the Food Premises (Registration) Regulations 1991.

  A code of practice on the enforcement of the Food Safety Act 1990 in relation to Crown premises will be issued under section 40 of the Act later this month.

  Veterinary Medicines Directorate
  Mr. Quentin Davies
  To ask the Minister of Agriculture, Fisheries and Food what performance targets he has set for the Veterinary Medicines Directorate in 1992–93; and if he will make a statement.

  Mr. Gummer
  The chief executive of the Veterinary Medicines Directorate—VMD—has submitted his proposals to me and I have agreed that the VMD should be set the following performance targets for 1992–93:

  full cost recovery for the three business activities of licensing, policy work and residues monitoring;

  100 per cent. of new licence applications to be issued within 210 clock days; 80 per cent. within 120 days;

  an overall efficiency gain of 2 per cent.

  These are challenging targets, which will build on the improvements already made in efficiency and quality of service by the directorate since its establishment as a next steps agency, and for which I commend the chief executive and his staff. In addition, I have agreed with the chief executive that the VMD's corporate plan 1992–93 to 1994–95 should be published. Copies are being placed in the Library of the House.

  Cash Limits
  Mr. Quentin Davies
  To ask the Minister of Agriculture, Fisheries and Food whether he intends to make any changes to his Department's cash limits for 1991–92.

  Mr. Gummer
  Yes. The cash limit for Class III Vote 4 (other agricultural and food services, support for the fishing industry, arterial drainage, flood and coast protection) will be reduced by £2,000,000 from £267,044,000 to £265,044,000. Within this limit expenditure will be reduced by £1,900,000 on emergency and strategic food services reflecting a reduction in the size of the emergency food stockpile and by £100,000 on extensification to reflect a reduction in demand under these schemes.

  The reduced cash limit will offset an increase in the financial ceiling for United Kingdom hill livestock compensatory allowances.

ATTORNEY-GENERAL

  Authorised Practitioner Scheme
  Mr. Moss
  To ask the Attorney-General when the relevant provisions of the Courts and Legal Services Act 1990 will be implemented to establish the authorised practitioner scheme.

  The Attorney-General
  The consultation document on the draft Authorised Practitioner Regulations which was published last April produced a large number of responses representing a wide variety of views. Last December a further consultation was undertaken involving those bodies with a principal interest in the conveyancing market. Responses to the further consultation have confirmed that there is insufficient demand for authorisation to justify the implementation of the relevant provisions of the 1990 Act at the present time. In addition, the Law Commissioners and the Securities and Investments Board are presently reviewing aspects of the regulation of commissions in the financial services market, the outcome of which may affect the approach taken

  Public Record Office key performance targets—1992–93

  Indicator

  Target

  1. Efficiency

  Cost of selecting and accessioning records per unit quantity (foot-run).

  To establish a baseline cost for the year 1992–93 with a view to setting a target for 1993–94.

  Unit costs of providing record storage space, document productions and reader services.

  To increase the cost of providing records storage space per linear foot by no more that 5·5 per cent. from £0·90 to £0·951.

  To decrease the cost per cost per document produced to readers by 18 per cent. from £1·71 to £1·40.

  To decrease the total reader service costs per reader visit (Census microforms) by 10 per cent. from £2·18 to £1·96.

  To decrease the total reader service cost per reader visit (other records) by 8 per cent. from £6·85 to £6·28.

  Backlog of records awaiting review.

  To reduce the backlog of records over 30 years old which have not been reviewed, by 500 ft.

  Provision of acceptable storage conditions.

  The store 81 per cent. of records to an acceptable standard.

  Management efficiency in running services and projects.

  To establish systems to permit specific targets to be set for 1993–94.

  2. Quality of Service

  Hours during which the office is open to the public.

  To run a pilot scheme from 4 July 1992 to 31 December 1992 of opening the census reading rooms on a Saturday and to continue the service if customer demand is great enough.

  Provision of finding aids

  To produce a new edition of the "Current Guide' and to begin work on a single set of finding aids for all the records.

  Public availability of staff.

  On 90 per cent. of days on which the office is open to the public there will be a minimum of four staff available to assist the public at Kew, four staff in the census rooms and four staff in the other rooms at Chancery lane.

  Response time for answering correspondence

  Replies to letters requiring a response to stock letter will be sent within one week and those to other letters will be sent within three weeks.

  Speed of producing reprographic copies.

  Copies of records will be provided within the following periods:

  Electrostatic copies: Same day service: up to a stated maximum number of copies per person.

  Other orders: five working days.

  Prints from film (from existing microfilm): eight working days.

  Bromide prints: three weeks.

  A self-service copying service will be available at Kew and in the census rooms at all times.

  Quality of copies made.

  No more than 5 per cent. of copies to require to be re-taken.

  1 The cost of storage has been increased by the cost of installing the new records information system, which will enable longer term efficiency savings to be made.

  536
  towards the regulation of authorised practitioners in this respect. My noble and learned Friend the Lord Chancellor intends therefore to postpone implementation for the present. He will keep the position under review and will reassess the situation should there be a future increase in the demand for authorisation.

  Public Record Office
  Mr. Moss
  To ask the Attorney-General when the Public Record Office is to be established as an agency.

  The Attorney-General
  Further to my answer to my hon. Friend the Member for Twickenham (Mr. Jessel) on 23 January, at column 181, I am pleased to confirm that the Lord Chancellor will establish the Public Record Office as an executive agency on 1 April 1992. I will arrange for a copy of the Public Record Office's framework document to be placed in the Library.

  The table sets out the key performance targets that the Lord Chancellor has set for the Public Record Office for 1992–93.

  Personal Injury Claims
  Mr. David Porter
  To ask the Attorney-General whether the small claims procedure in the county courts will he extended to cover lower value personal injury claims.

  The Attorney-General
  The small claims arbitration procedure provides an accessible, informal and inexpensive means of resolving straightforward money claims through the county courts. The level at which claims are automatically referred to arbitration on receipt of a defence was doubled last year from £500 to £1,000. Plaintiffs claiming unspecified amounts, as is often the case where people claim compensation for personal injuries, are at present free to limit their claim to £1,000 if they wish to benefit from the advantages of the informal procedure. It is the intention of my noble and learned Friend the Lord Chancellor to encourage more personal injury litigants to benefit from these advantages, in a way which would safeguard equally the interests of both parties to a claim. The responses to a consultation paper published last year have suggested that provisions for costs should be part of the scheme. The Lord Chancellor is considering further what can be done to meet this suggestion.

SCOTLAND

  Environmental Grants
  Mr. Bill Walker
  To ask the Secretary of State for Scotland if he will make a statement concerning the amount of grant aid being made available under the special grants (environmental) programme in 1992–93 to voluntary bodies in Scotland working in the environmental field.

  Lord James Douglas-Hamilton
  I am pleased to announce that grant aid totalling £303,125 has been offered to voluntary bodies to assist them in carrying out environmental conservation, improvement or educational work in Scotland. The special grants (environmental) programme offers two different types of funding: core funding to help organisations with their central

  Project funding has been allocated to 12 organisations as follows:

  Organisation

  Project

  Grant £

  Age Concern (Orkney)

  Inter-island glass recycling project

  3,225

  CSV Media Green Action

  Aberdeen media action video project

  3,700

  Council for Scottish Archaeology

  Archaeological action information packs

  3,000

  Friends of the Earth (Scotland)

  Consumer awareness information pack

  5,000

  Lothian and Edinburgh Environmental Partnership

  Edinburgh and Lothians car sharing project

  3,550

  Scottish Native Woods Campaign

  Growing up with trees project pack

  4,000

  Scottish Wildlife Trust

  Wildlife information network

  5,000

  Skye Forum

  Salmon ensilage project

  3,750

  Slide Workshop

  Model school grounds information dissemination project

  900

  Sustrans Scotland

  Rutherglen bridge project

  5,000

  538
  administrative costs, and project funding for distribution to projects designed to further government environmental policy aims as set out in the White Paper "This Common Inheritance". Core funding has been allocated to 39 organisations as follows:

  Organisation

  Grant £

  Association for the Protection of Rural Scotland

  2,000

  Ayr Architectural Heritage Trust

  5,000

  Buchan Countryside Group

  2,000

  Centre for Human Ecology

  6,500

  Council for Scottish Archaeology

  13,500

  Community Service Volunteers

  6,500

  Environment Centre

  4,500

  Friends of the Earth (Scotland)

  12,000

  Garden History Society

  4,500

  Habitat Scotland

  3,000

  Heartland Radio Association

  2,000

  Heritage Education Trust

  1,500

  Highland Forum

  11,000

  John Muir Trust

  4,000

  Locus Breadalbane

  2,500

  Mid Craigie Community Business Ltd.

  1,000

  National Society for Clean Air

  3,500

  Royal Zoological Society Scotland

  3,000

  Rural Forum

  14,000

  Royal Society for the Protection of Birds

  9,000

  Scottish Conservation Projects

  25,000

  Scottish Ecological Design Association

  1,400

  Scottish Environmental Education Council

  24,000

  Scottish Environment News

  2,000

  Scottish Field School of Archaeology

  3,000

  Scottish Field Studies Association

  3,000

  Scottish Historic Buildings Trust

  11,700

  Scottish Native Woods Campaign

  5,500

  Scottish Rights of Way Society

  7,000

  Scottish Scenic Trust

  1,750

  Scottish Wildlife and Countryside Link

  9,000

  Scottish Wildlife Trust

  21,000

  Strathclyde Building Preservation Trust

  6,300

  Sustrans Scotland

  10,000

  Touchstone

  2,000

  Venture Scotland

  2,000

  Water of Leith Conservation Trust

  5,000

  West Galloway Fisheries Trust

  1,350

  Woodland Trust

  4,000

  TOTAL

  256,000

  539

  Organisation

  Project

  Grant £

  Touchstone

  Aldie Burn adventure trail

  5,000

  Water of Leith Conservation Trust

  Community environmental action

  5,000

  TOTAL

  £47,125

  Further sums are being held in reserve to support suitable proposals which may arise during the year. The experience of the scheme to date has been generally very good. I am satisfied that the grants now offered will greatly assist the voluntary organisations to increase their level of activity and do much useful work.

  EC Directives
  Mr. Bill Walker
  To ask the Secretary of State for Scotland when he intends to issue a consultation paper on the implementation of the urban waste treatment directive and the nitrates directive.

  Lord James Douglas-Hamilton
  We have today issued a Scottish consultation paper outlining the Government's proposals for the criteria and procedures to be used to identify sensitive areas and less sensitive areas in terms of the urban waste water treatment directive and "polluted waters" in terms of the nitrates directive. A copy has been placed in the Library of the House.

  Similar papers are being issued for England and Wales and for Northern Ireland.

  Traffic Offences (Fixed Penalties)
  Mr. Bill Walker
  To ask the Secretary of State for Scotland whether he proposes to make any changes to the extended fixed penalty system for road traffic offences.

  Lord James Douglas-Hamilton
  In the light of consultation with representative organisations, my right hon. Friend proposes to increase fixed penalty levels to £20 for non-endorsable offences and £40 for endorsable offences from 1 April 1992.

  Schools Inspectorate
  Mr. Rowlands
  To ask the Secretary of State for Scotland how many people are employed in Her Majesty's inspectorate of schools; and what increase or decrease is being proposed for Scotland.

  Mr. Michael Forsyth
  [holding answer 12 December 1991]: At the beginning of April, Her Majesty's inspectorate of schools in Scotland will consist of 107 professional and 65 support staff. Little change to these numbers is foreseen in the near future.

  Psychiatric Beds
  Mr. Maxton
  To ask the Secretary of State for Scotland what percentage of the average number of staffed beds for all NHS hospitals in Scotland was represented by psychiatric specialties in each year since 1980.
  540
  Mr. Michael Forsyth
  [holding answer 6 March 1992]: The information requested is shown in the table. During this period the percentage of psychiatric beds fell as the Government's care in the community policy took effect.

  National health service hospitals in Scotland—available staffed beds; psychiatric specialties as a percentage of all specialties; for years ending 31 March

  per cent.

  1980

  29·4

  1981

  29·2

  1982

  28·9

  1983

  29·0

  1984

  28·7

  1985

  29·0

  1986

  28·9

  1987

  28·6

  1988

  28·5

  1989

  28·0

  1990

  27·6

  1991

  27·5

  Higher and Further Education
  Mr. Dalyell
  To ask the Secretary of State for Scotland when he expects to appoint a chief executive for the Scottish Higher and Further Educational Funding Council; and what civil service grade the successful applicant will have.

  Mr. Michael Forsyth
  [holding answer 2 March 1992]: We intend to commence the recruitment process, through open competition, as soon as the Further and Higher Education (Scotland) Bill receives Royal Assent. The terms and conditions of service for the post will be announced later.

NORTHERN IRELAND

  Departmental Spending
  Mr. Meacher
  To ask the Secretary of State for Northern Ireland if he will give gross spending for his Department in(a) cash terms and (b) real terms using April 1979 as 100 both (i) as a percentage of gross domestic product and (ii) per 100,000 of the population for each year 1978–79 to the latest available year.

  Dr. Mawhinney
  The information requested is as follows:
  541

  Northern Ireland block

  Northern Ireland block as a percentage of United Kingdom gross domestic product

  Northern Ireland block expenditure per 100,000 population

  Financial year

  Cash terms

  Real terms (April 1979 = 100)

  Cash terms

  Real terms (April 1979 = 100)

  £ million

  £ million

  per cent.

  £ million

  £ million

  1978–79

  2,099

  2,099

  1·20

  138

  138

  1979–80

  2,451

  2,098

  1·17

  160

  137

  1980–81

  2,837

  2,051

  1·19

  185

  134

  1981–82

  3,158

  2,084

  1·21

  205

  136

  1982–83

  3,464

  2,133

  1·21

  225

  139

  1983–84

  3,710

  2,185

  1·20

  240

  142

  1984–85

  4,011

  2,248

  1·21

  259

  145

  1985–86

  4,209

  2,235

  1·16

  270

  144

  1986–87

  4,427

  2,277

  1·13

  283

  145

  1987–88

  4,758

  2,320

  1·10

  302

  147

  1988–89

  5,373

  2,444

  1·12

  340

  155

  1989–90

  5,645

  2,412

  1·08

  357

  152

  1990–91

  5,784

  2,279

  1·04

  364

  143

  Note:

  (i) Figures for 1978–79 to 1983–84 have been adjusted to the new planning total definition.

  (ii) Figures for 1988–89 and 1989–90 reflect the privatisation of Short Brothers and Harland.

  Social Security
  Mr. Meacher
  To ask the Secretary of Slate for Northern Ireland if he will estimate the cost of benefit expenditure on the unemployed and the administration costs of unemployment benefit arid redundancy payments in 1991–92.

  Mr. Hanky
  The information requested is as follows.

  Estimated Benefit Expenditure on Unemployed People—1991–1992

  Type

  Expenditure £ million

  Unemployment Benefit

  39·4

  Income Support

  189·0

  Redundancy Payments

  2·0

  Total

  230·4

  Estimated Administration Costs—1991–1992

  Benefits

  12·7

  Redundancy Payments

  0·2

  Mr. Meacher
  To ask the Secretary of State for Northern Ireland (1) how many offices, providing public access for the purpose of claiming benefit, including unemployment benefit, were in operation on 1 April 1979, and at the latest available date;

  (2) how many home visits, excluding specialist visits, including those for the purpose of investigating suspected fraud were made per 1,000 claimants in the latest available year; and how many were made in 1978–79.

  Mr. Hanley
  Social security operational matters are the responsibility of Mr. Alec Wylie, chief executive of the Social Security Agency. He will write to the hon. Member and copies of his reply will be placed in the Library and the Public Information Office.

  Criminal Injuries (Compensation)
  Mr. Beggs
  To ask the Secretary of State for Northern Ireland what steps are being taken to maintain the principle that all innocent victims of violence are entitled to fair compensation, within a reasonable time, following the introduction of new minimum levels of compensation for personal injury and mental injury or shock.

  Dr. Mawhinney
  The existing statutory criminal injuries compensation scheme in Northern Ireland provides fair 542
  and reasonable compensation to the innocent victims of violence. The scheme contains two thresholds or lower limits on compensation—one in respect of physical injuries and the other in respect of mental injury.

  Thresholds have been a feature of the scheme for many years. Their purpose is to exclude lower value claims from compensation and to set a limit which the Government believe that it would be reasonable to expect those criminally injured to bear themselves.

  Voters
  Mr. William Ross
  To ask the Secretary of State for Northern Ireland what is his estimate of the number of married women in Northern Ireland who would need to produce their marriage certificate as proof of identity in order to cast their ballot in the forthcoming general election.

  Dr. Mawhinney
  The information requested could be obtained only at disproportionate cost.

  Mr. William Ross
  To ask the Secretary of State for Northern Ireland what is his estimate of the number of people in Northern Ireland who hold each of the documents necessary to identify themselves at the forthcoming general election.

  Dr. Mawhinney
  This information could be obtained only at disproportionate cost. However, one of the documents concerned, the medical card issued by the Central Services Agency, is available to all electors in Northern Ireland free of charge. There is, therefore, no need for any elector to be without their vote.

  Household Statistics
  Mr. William Ross
  To ask the Secretary of State for Northern Ireland what is his estimate of the number of households in each parliamentary constituency in Northern Ireland.

  Dr. Mawhinney
  I understand from the chief electoral officer that the number of households in each parliamentary constituency in Northern Ireland is approximately as follows:
  543

  Constituency

  Approximate number of households

  Belfast East

  29,800

  Belfast North

  24,200

  Belfast South

  32,800

  Belfast West

  33,300

  East Antrim

  34,500

  East Londonderry

  36,300

  Fermanagh and South Tyrone

  30,900

  Foyle

  32,500

  Lagan Valley

  36,200

  Mid Ulster

  30,100

  Newry and Armagh

  30,500

  North Antrim

  33,600

  North Down

  35,800

  Strangford

  35,000

  South Antrim

  34,200

  South Down

  35,400

  Upper Bann

  33,200

  TOTAL

  558,300

  Tourist Board
  Mr. John D. Taylor
  To ask the Secretary of State for Northern Ireland when the present term of appointment of the chairman of the Northern Ireland tourist board ends; and when he will announce the name of the chairman for the next period of office.

  Mr. Needham
  The NITB chairman's appointment ends on 30 June 1994; the name of a chairman for the next period will be announced at an appropriate time before that date.

  Ordnance Survey
  Mr. Thornton
  To ask the Secretary of State for Northern Ireland if he will provide details about the launch of the Government's next steps agency administering the Ordnance Survey for Northern Ireland.

  Mr. Brooke
  The Ordnance Survey executive agency will be formally established on 1 April 1992.

  Its performance targets for the period 1 April 1992 to 31 March 1993 are as follows:

  To survey 33,175 house units in the continuous revision programme;

  to complete 756 data capture units representing 1,220 basic scale map sheets converted to digital format;

  to update the digital topographical database with 90 per cent. of the surveyed change within seven days of receipt of the field date;

  to despatch within seven working days 90 per cent. of orders for folded and basic scale maps; and

  to reduce unit costs so that the weighted mean percentage reduction of selected representative activities is 2 per cent.

  A framework document has been prepared for the agency and a copy has been placed in the Library.

  Driver and Vehicle Testing
  Mr. Thornton
  To ask the Secretary of State for Northern Ireland if he will provide details about the launch of the Government's "next steps" agency for administering the vehicle inspection and driving test centres in Northern Ireland.

  Mr. Brooke
  The Driver and Vehicle Testing Agency will be formally established on 1 April 1992.

  The key performance targets set for the agency for 1992–93 are:
  544

  Throughput of drivers tested (per person per day)

  Target—7·;6 tests per person per day.

  Throughput of vehicles tested (per person per day)

  Target—15·75 vehicle tests per person per day.

  Waiting time for driver testing

  Target—80 per cent. to be tested by 8 weeks; 100 per cent. by 10 weeks.

  Waiting time for vehicle testing

  Target—80 per cent. to be tested within 4 weeks; 100 per cent. within 5 weeks.

  Error rates (percentage of faulty inspections)

  Target—faulty inspections will not exceed 0·5 per cent. of tests conducted.

  Unit cost of driver of vehicle tests

  Target—composite unit cost £16·16.

  Level of complaints

  Target—complaints about booking arrangements should be less than 1 per cent. of applications received; complaints about the conduct of tests should be less than 1 per cent. of tests conducted.

  Customer satisfaction levels

  Target—Greater than 92 per cent. satisfaction with booking arrangements; Greater than 96 per cent. satisfaction with testing procedures.

  A copy of the framework document setting out the terms within which the agency will operate will be placed in the Library shortly.

  Compensation Schemes
  Mr. Waller
  To ask the Secretary of State for Northern Ireland if he will make a statement about progress towards the establishment of a "next steps" agency in the Northern Ireland Office to administer the compensation schemes.

  Mr. Brooke
  The Compensation Agency will be formally established on 1 April 1992. I have made arrangements for copies of the agency's framework document to be placed in the Library. I have set a number of key performance targets for the agency to achieve in its first year. These are:

  Financial Targets
  To live within a running costs budget of £3·5 million, reflecting a 2·1 per cent. cash efficiency saving.
  To manage the agency's budget for demand-led expenditure within the financial limit approved by the Department, including in-year adjustments, while ensuring that expenditure is within a margin of 0·5 per cent. of the approved provision.
  To reduce the unit cost of processing each type of compensation claim by at least 4 per cent. in real terms.

  Claims Processing Targets

  Target

  Criminal Injuries Claims

  Criminal Damage Claims

  Emergency Provisions Claims

  Number of claims cleared:

  11,750

  4,500

  4,600

  To reduce the average time taken to reach a decision on an application by:

  4 weeks

  4 weeks

  3 days

  To reduce the number of claims over 3 years old1 where no decision has been reached by:

  25 per cent.

  25 per cent.

  25 per cent.

  1 Over one year old in the case of emergency provisions claims.

  EC Directives
  Mr. Waller
  To ask the Secretary of State for Northern Ireland when he intends to issue a consultation paper on the implementation of the urban waste water treatment directive and nitrates directive.

  Mr. Needham
  We have today issued a consultation paper outlining the Government's proposals for Northern
  545
  Ireland for criteria and procedures for identifying sensitive areas and less sensitive areas—urban waste water treatment directives—and "polluted waters"—nitrates directive. As far as I am aware, the United Kingdom is the first member state to consult publicly on the way it is intended to implement these directives. This, I believe, demonstrates the Government's commitment to openness in environmental decision making and to the proper implementation of these directives which will make an important contribution to improving our environment.

WALES

  Job Losses, Clwyd
  Mr. Martyn Jones
  To ask the Secretary of State for Wales how many people have lost their jobs in Clwyd, South-West over the last(a) three months, (b) six months and (c) 12 months.

  Mr. David Hunt
  In the 12-month period to December 1991 there were 23 notified redundancies in Clwyd, South-West. None of these was in the last six months. These figures are the latest available and are still provisional.

  Elective Surgery
  Mr. Gareth Wardell
  To ask the Secretary of State for Wales when he will respond to the sixth report of the Welsh Affairs Committee, Session 1990–91, on elective surgery, House of Commons paper 390.

  Mr. David Hunt
  I am pleased to announce that the response has been published today as Command Paper 1863.

  Cancer Treatment
  Mr. Gwilym Jones
  To ask the Secretary of State for Wales what plans he has to develop cancer treatment services for the people of north Wales.

  Mr. David Hunt
  Having carefully reviewed all the options set out in the Deloitte, Haskins and Sells report I have decided that cancer patients in north Wales will best be served by the establishment of a dedicated cancer centre in north Wales itself. I have consequently, commissioned a detailed investment appraisal of this option. Provided the conclusions of this are satisfactory I am hopeful that a start on such a centre can be made in 1993.

  The remaining recommendations of the DHS report are primarily for health authorities in north Wales to consider in the light of their local strategies for health and the development of cancer services in the areas concerned.

  Neighbourhood Amenities
  Mr. Wigley
  To ask the Secretary of State for Wales if he will make it his policy to establish a community initiative fund to promote the development of neighbourhood facilities and amenities.

  Mr. Nicholas Bennett
  [holding answer 26 February 1992]: EC Community initiatives and associated funding are the responsibility of the European Commission. The Commission's mid-term review of the last reform of the EC structural funds, which is to include a chapter on
  546
  "Guidelines for the Future", is expected to issue later this month. One of the issues under consideration is the case for modifying objective 2 areas—areas of industrial decline, in Wales, Industrial South Wales and Clwyd—to give greater emphasis to urban regeneration. During the review, we will be pressing for designation of as many eligible areas as possible within Wales.

  Both the EC RECHAR and LEADER programmes, for industrial south Wales and rural mid-Wales respectively, have recently received European Commission approval and will make European regional development and European social fund grant assistance available for a wide range of measures in coalfield and rural areas, including social infrastructure and local community based developments.

  The Community Development Foundation—CDF— has set up an office in Wales with the aim of promoting greater understanding of the value of community development and assisting specific community projects in the Principality. My right hon. Friend the Secretary of State for Wales was pleased to launch this initiative formally in October 1990—one of the many community initiatives under the programme for the valleys—and provide urban programme aid to run two pilot schemes in Rhondda and Ogwr.

  The Welsh Development Agency is providing support for a community enterprise initiative within the valleys programme area, which is aimed at stimulating a range of community self-help projects offering economic benefit— for example, community businesses—encompassing the provision of advice as well as financial assistance. Some £200,000 per annum has been provided under this initiative by the WDA since the programme started.

  "Landscape Wales", the WDA's land reclamation and environmental programme, aimed at the restoration of the Welsh landscape, includes schemes which assist in the provision of local amenities—for example, sports fields, recreation facilities, country parks, picnic sites, cycle ways, the external improvement of redundant buildings in order to bring them into reuse for the benefit of the community, and so on. In 1991–92 the budget for Landscape Wales is £31 million.

  Last December, my right hon. Friend announced, as a further stage of the rural initiative, a fresh series of measures to strengthen and carry forward rural programmes across the economic, environmental and social fields. These measures include an annual competition of local authority capital projects designed for the benefit of rural communities. We are particularly keen that the community councils are allowed full opportunity to put forward proposals on behalf of their local communities, and that social as well as economic and environmental schemes are adequately represented. For 1992–93, the Secretary of State has allocated £6 million to fund the competition.

  The Development Board for Rural Wales is also actively involved in the social development of its area. In 1991–92, £1 million has been made available to launch the board's social development action programme, which covers youth, community, sports, arts and cultural development. Emphasis will also be placed on improving the environment, better entertainment and cultural provision, and enhancing activities which promote the Welsh language and culture.

OVERSEAS DEVELOPMENT

  Fiji
  Mrs. Clwyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs what aid Britain currently gives to Fiji; and whether the United Kingdom's assistance has been reconsidered in the light of the Harare declaration.

  Mrs. Chalker
  Our bilateral aid programme consists of technical co-operation in the form of the provision of expert manpower and advice from the United Kingdom together with the training of Fijians in areas where it is most needed.

  The Government keep their aid policy to Fiji, as elsewhere, under regular review.

  Withholding aid would not further the objective of a return to democracy. No useful purpose would be served, for example, by depriving the ordinary people of Fiji of medical services made possible by our aid. There has been no evidence recently of a pattern of regular or systematic abuse of basic human rights in Fiji.

  Angola
  Mr. Atkinson
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about his recent visit to Angola; and what information he now has about the recent deaths of British tourists whilst in Angola.

  Mrs. Chalker
  My planned visit to Angola from I to 3 February had to be cancelled owing to ill health. An Angolan Government investigation is under way into the murder of the British tourists. Our embassy is in close touch with both the Government and UNITA on this investigation.

FOREIGN AND COMMONWEALTH AFFAIRS

  Nuclear Weapons
  Dr. Thomas
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the most recent United Kingdom owned and controlled nuclear weapons withdrawn from deployment, and dismantled, as a result of negotiations, pursuant to article VI of the 1968 nuclear non-proliferation treaty.

  Mr. Lennox-Boyd
  The United Kingdom's nuclear defence requirements are reviewed on a regular basis and kept at the minimum necessary to ensure effective deterrence. Those weapons no longer required are taken out of service and dismantled. The Defence Secretary announced in October last year that we would be making substatial reductions in the United Kingdom's sub-strategic nuclear capability, including a reduction of about 50 per cent. in the number of our free-fall bombs.

  European Union
  Mr. Spearing
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the effect from 1 January 1993 of ratification by all member states of the treaty on European union.

  Mr. Garel-Jones
  The treaty on European union will enter into force on 1 January 1993, if all member states 548
  have ratified it before that date. On entry into force member states will become subject to the obligations of the treaty.

  Mr. Spearing
  To ask the Secretary of State for Foreign and Commonwealth Affairs what effect ratification of the treaty on European union will have on the official name and description of what is now the European Community.

  Mr. Garel Jones
  The treaty on European union provides that, throughout the treaty establishing the European Economic Community, the term "European Economic Community" shall be replaced by the term "European Community".

  Diplomats (Offences)
  Sir John Wheeler
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many serious offences were allegedly committed in 1991 by persons entitled to diplomatic immunity; and how many foreign diplomats were withdrawn from their posts in Britain in that year following alleged offences.

  Mr. Lennox-Boyd
  Forty alleged serious offences by persons entitled to diplomatic immunity were drawn to the attention of the Foreign and Commonwealth Office in 1991. "Serious offences" are defined in accordance with the Report to the Foreign Affairs Committee "The Abuse of Diplomatic Immunities and Privileges"—1985—as offences falling into a category which would in certain circumstances attract a maximum penalty of six months or more imprisonment. The majority involved drinking and driving, and shoplifting.

  Seven diplomats were withdrawn from their posts in Britain in 1991 following alleged offences, as against six in the previous year.

  Diplomats (Parking Fines)
  Sir John Wheeler
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will publish up-to-date figures recording the number of unpaid parking fines incurred by each diplomatic mission in London during 1991.

  Mr. Lennox-Boyd
  The information requested by my hon. Friend is given in the table, which also includes those international organisations which incurred unpaid fines. The figures may be reduced by late payment.

  The total of 1991–5,145—indicates a 22 per cent. reduction over the total 1990 figure—6,551—and is only 5 per cent. of the 1984 figure—108,932—the last to be published before the introduction in May 1985 of the Government's policy on parking by members of diplomatic missions. We welcome the further reduction in unpaid parking fines that has been achieved during 1991 and appreciate the co-operation of diplomatic missions since the introduction of the parking policy. We shall continue to monitor carefully the level of unpaid fines and bring pressure to bear on diplomatic missions to reduce this still further.

  Unpaid parking fines

  Diplomatic mission

  1991

  1990

  Saudi Arabia

  367

  346

  Russia (and former Soviet Union)

  363

  308

  Israel

  191

  131

  549

  Diplomatic mission

  1991

  1990

  Morocco

  165

  156

  Nigeria

  159

  70

  Greece

  155

  146

  Poland

  154

  531

  France

  144

  101

  China

  140

  92

  Canada

  135

  39

  Sudan

  132

  193

  Korea

  130

  152

  Turkey

  130

  76

  Qatar

  122

  83

  Cote d' Ivoire

  122

  183

  Egypt

  105

  105

  Jordan

  99

  71

  United Arab Emirates

  99

  185

  Pakistan

  97

  220

  Ghana

  84

  0

  Bulgaria

  81

  101

  Cameroon

  77

  191

  India

  73

  121

  Thailand

  72

  145

  Hungary

  68

  82

  Federal Republic of Germany

  66

  122

  Zambia

  64

  76

  Oman

  58

  70

  Uruguay

  57

  34

  Gambia

  56

  55

  Cyprus

  55

  110

  Barbados

  54

  48

  Spain

  50

  89

  Bangladesh

  49

  59

  Tanzania

  47

  24

  Portugal

  45

  69

  Tunisia

  43

  31

  Yugoslavia

  41

  101

  Zimbabwe

  38

  28

  Brazil

  38

  51

  Iraqi Interests Section

  38

  125

  Bahrain

  37

  18

  Italy

  35

  34

  Romania

  34

  60

  Gabon

  32

  43

  Brunei

  31

  63

  Sierra Leone

  28

  54

  Malaysia

  28

  84

  Guatemala

  27

  18

  Ethiopia

  27

  23

  Finland

  26

  16

  Yemen

  21

  71

  Malawi

  20

  8

  Liberia

  18

  38

  United States of America

  17

  15

  Venezuela

  17

  15

  Algeria

  16

  46

  Honduras

  16

  16

  Japan

  16

  22

  Guyana

  16

  39

  Syria

  16

  0

  Angola

  15

  86

  Panama

  14

  4

  Iran

  14

  0

  Vietnam

  13

  20

  Mauritius

  13

  21

  Cuba

  13

  20

  Eastern Caribbean States

  13

  7

  Jamaica

  12

  49

  Fiji

  10

  2

  Mexico

  9

  7

  Zaire

  9

  18

  Mongolia

  9

  12

  Lebanon

  9

  11

  Myanmar

  9

  14

  Bolivia

  9

  4

  Botswana

  8

  8

  Senegal

  8

  24

  Philippines

  8

  29

  Chile

  8

  20

  Sweden

  8

  6

  550

  Diplomatic mission

  1991

  1990

  Togo

  8

  8

  Lesotho

  7

  12

  Trinidad

  7

  10

  Nepal

  7

  2

  Kenya

  7

  18

  Peru

  7

  2

  Paraguay

  6

  11

  Czechoslovakia

  6

  30

  Belgium

  6

  18

  Ireland

  5

  0

  Somalia

  5

  18

  Iceland

  5

  12

  Australia

  5

  11

  Uganda

  5

  15

  Norway

  4

  15

  Bahamas

  4

  0

  Costa Rica

  4

  1

  Seychelles

  4

  25

  Austria

  3

  9

  Indonesia

  3

  22

  Singapore

  3

  6

  Netherlands

  3

  3

  Sri Lanka

  3

  7

  Mozambique

  3

  0

  Switzerland

  2

  0

  Swaziland

  2

  0

  South Africa

  2

  1

  Luxembourg

  2

  8

  Malta

  2

  1

  Papua New Guinea

  2

  0

  Argentina

  1

  0

  Ecuador

  1

  7

  El Salvador

  1

  1

  Benin

  1

  4

  Denmark

  1

  3

  Dominica

  1

  5

  Nicaragua

  1

  13

  Kuwait

  0

  218

  Afghanistan

  0

  3

  New Zealand

  0

  0

  Grenada

  0

  1

  Antigua and Barbuda

  0

  1

  Colombia

  0

  1

  International organizations

  Commonwealth Sec

  40

  49

  Cocoa

  5

  6

  INMARSAT

  3

  0

  Coffee

  2

  6

  EC

  2

  1

  IMO

  1

  0

  WEU

  1

  0

  UN

  0

  0

  Sugar

  0

  0

  5,145

  6,551

NATIONAL FINANCE

  Clearing Banks
  Mr. French
  To ask the Chancellor of the Exchequer what discussions he has held with chairmen of major clearing banks following his initiative last year on the treatment by banks of small businesses; what information he has on the measures taken to ensure that each bank has dealt satisfactorily with complaints, especially in relation to any compensation made to borrowers; and if he will make a statement.

  Mr. Norman Lamont
  I am pleased to say that seven banks—Midland, Lloyds, National Westminster, Barclays, TSB and the Bank of Scotland and the Royal Bank of Scotland—have now published codes of banking
  551
  practice for their business customers. The codes are well written, in plain English and they all reflect the seven principles I outlined in my statement on 17 July to the House Official Report, columns 181–83. In some cases they go beyond. All the codes explain how complaints may be pursued, and that would include any requests for compensation where errors have been made.

  The codes are, of course, only now being implemented. I have not held any further discussions with the chairmen of the banks. In the final analysis, it is the reaction of customers, not the Government, which matters, as the Treasury and Civil Service Select Committee said in its report published on Monday. I warmly welcome the Committee's encouragement to small businesses to compare the different banks' codes and stimulate competition by letting the banks know if they do not feel the codes meet their requirements in any way. Four of the banks have said explicitly that they will be reviewing their codes so that further improvements can be made in the light of customer opinion. I hope that the others will do the same. I believe these codes are an important step in improving the relationship between banks and their small business customers. But I hope that small businesses will also play their part in building and maintaining effective relationships with their bankers by discussing with them, in advance, any problems or opportunities they may foresee.

  North Sea Oil and Gas
  Mr. Bill Michie
  To ask the Chancellor of the Exchequer for what purposes the Government have used the revenues from North sea oil and gas production since 1979.

  Mr. Maples
  Revenues from individual taxes are not allocated to specific spending programmes.

  Retail Prices Index
  Mr. Dunn
  To ask the Chancellor of the Exchequer what plans he has for the retail price index following the abolition of the community charge and its replacement by the council tax.

  Mr. Norman Lamont
  [pursuant to his reply, 7 February 1992, c. 256]: I announced in my answer on 7 February my intention to reconvene the Retail Prices Index Advisory Committee. The membership of the RPIAC will be as follows:

  Membership of the retail prices index advisory committee 1992 Chairman

  Mr. W. P. McLennan (Director, Central Statistical Office)

  Members

  Mr. J. Astin (EUROSTAT, Luxembourg)

  Mr. S. Brittan (Financial Times)

  Professor D. Currie (London Business School)

  Professor M. C. Fleming (Loughborough University)

  Mr. K. H. B. Frere (Nominated by National Federation of Consumer Groups)

  Mr. S. G. B. Henry (Bank of England)

  Mr. T. Hoyes (Nominated by Age Concern)

  Mr. J. Hughes (Nominated by National Consumer Council)

  Mr. D. Lea OBE (Nominated by the Trades Union Congress)

  Miss R. Lea (The Mitsubishi Bank Ltd.)

  Dr. R. J. Maurice

  Mr. C. Mowl (Her Majesty's Treasury)

  Professor J. F. Pickering (Portsmouth Polytechnic)

  Professor G. Rhys (Cardiff Business School)

  Mrs. B. Rosewell (Business Strategies Ltd.)

  552

  Dr. P. Rowlatt (National Economic Research Associates)

  Mr. A. Sentance (Nominated by the Confederation of British Industry)

  Professor R. Turvey (London School of Economics)

  Mr. R. G. Ward (Central Statistical Office)

  Secretary

  Mr. D. J. Sellwood (Central Statistical Office)

  Assistant Secretary

  Mrs. M. S. Dolling (Central Statistical Office)

  One or two further members may be added later.

  Corporation Tax
  Mr. David Shaw
  To ask the Chancellor of the Exchequer what would be the cost to the Exchequer of exempting from corporation tax(a) the first £1,000 of profits and (b) the first £5,000 of profits in respect of (i) small limited companies and (ii) all limited companies; and if he will state the equivalent income tax cost for unincorporated businesses.

  Mr Maude
  [holding answer 6 March 1992]: On the assumption that a single exempt amount would be available to a company group and would be divided equally between the members of the group, the direct corporation tax cost is tentatively estimated to be:

  Exempt amount

  Companies liable at the small companies rate £ million

  All companies £ million

  1,000

  20

  30

  5,000

  100

  150

  The equivalent income tax cost in a full year for unincorporated businesses is of the order of £600 million for an exempt amount of £1,000 and £2·5 billion for an exempt amount of £5,000.

  These estimates are based on the existing distribution of taxable profits and therefore exclude probable behavioural changes. These cannot be quantified readily, but they are likely to increase the cost substantially.

  Income
  Mr. Nicholas Brown
  To ask the Chancellor of the Exchequer what is the estimated(a) mean and (b) median, (i) original, (ii) gross, (iii) disposable and (iv) post-tax income in 1991–92 and 1992–93, in the United Kingdom.

  Mr. Maude
  The estimates requested for 1991–92 and 1992–93 will not be available until data from the Family Expenditure Surveys for 1991 and 1992 have been analysed. The most recent estimates available, for 1989, were provided in the reply given to the hon. Member on 26 February, at column 501.

TRADE AND INDUSTRY

  Minimum Wage
  Mr. Moss
  To ask the Secretary of State for Trade and Industry what recent representations he has received from business men about the impact of a minimum wage in other EC countries on British industrial competitiveness.
  553
  Mr. Lilley
  I am aware of the very widespread concern among business men of the harmful impact a minimum wage in Britain would have on our industrial competitiveness with the consequent loss of output and jobs.

  Mr. Quentin Davies
  To ask the Secretary of State for Trade and Industry what would be the aggregate costs to British industry of introducing a statutory minimum wage of(a) £3, (b) £3·40 and (c) £3.80 an hour assuming the maintenance of constant employment levels.

  Mr. Lilley
  On the basis of earnings distributions in the April 1991 "New Earnings Survey", the estimated impact cost to British industry of introducing a statutory minimum wage is:

  Minimum Wage

  Increase in Costs

  £3·00 per hour

  Around £1·0 billion a year

  £3·40 per hour

  Around £2·5 billion a year

  £3·80 per hour

  Around £5·0 billion a year

  These estimates take no account of attempts to maintain earnings differentials.

  Manufacturing Investment
  Mr. Jim Marshall
  To ask the Secretary of State for Trade and Industry what representations he has recently received about manufacturing investment.

  Mr. Leigh
  In 1991, manufacturing investment was over one third higher than 10 years earlier.

  Industrial Policy
  Mr. Clelland
  To ask the Secretary of State for Trade and Industry when he will next meet representatives of the North East regional CBI to discuss industrial policy.

  Mr. Radice
  To ask the Secretary of State for Trade and Industry when he will next meet representatives of the North East regional CBI to discuss industrial policy.

  Mr. Lilley
  I next expect to meet representatives of the North-East regional CBI on 18 September 1992.

  Mrs. Heal
  To ask the Secretary of State for Trade and Industry when he will next meet representatives of the West Midlands regional CBI to discuss industrial policy.

  Mr. Lilley
  I next expect to meet representatives of the West Midlands regional council of the CBI on 12 March 1992.

  Multi-fibre Arrangement
  Mr. Riddick
  To ask the Secretary of State for Trade and Industry if he will make a statement on the latest situation regarding the multi-fibre arrangement.

  Mr. Sainsbury
  The multi-fibre arrangement has been extended for a period of 17 months to 31 December 1992, pending the outcome of the GATT Uruguay round negotiations.

  Estate Agents
  Mr. Illsley
  To ask the Secretary of State for Trade and Industry whether he proposes to introduce regulations in respect of misrepresentation by estate agents.
  554
  Mr. Leigh
  Misrepresentation about offers received or prospective purchasers was made an undesirable practice by an order that came into effect last July under section 3 of the Estate Agents Act 1989.

  My Department is currently reviewing the outcome of consultation on a proposed order under the Property Misdescriptions Act 1991. The order would specify those aspects of property in respect of which misdescription would be an offence.

  ECGD
  Mr. Pawsey
  To ask the Secretary of State for Trade and Industry what is the average premium rate of the Export Credits Guarantee Department in(a) France, (b) the United Kingdom and (c) Germany.

  Mr. Sainsbury
  The premium rates quoted by export credit agencies vary greatly according to such factors as the market, the buyer and the horizon of risk. The average premium rate will therefore reflect the risk of business insured. The average premium rate charged by ECGD on business insured to date in 1991–92 is 4·27 per cent. Similar information on the average rate charged by French and German export credit agencies is not available.

  Machine Tools
  Mr. Patchett
  To ask the Secretary of State for Trade and Industry when he next expects to meet representatives of the Machine Tool Technologies Association to discuss the effects of the recession on the machine tool industry.

  Mr. Leigh
  I have no plans for such a meeting.

  World Trade
  Mr. Burns
  To ask the Secretary of State for Trade and Industry what are the latest figures for the United Kingdom's share of world trade.

  Mr. Sainsbury
  The United Kingdom share of total world trade (visible and invisible imports and exports) was 7·7 per cent. in 1990. Our share of the volume of world exports of manufactured goods is estimated to have risen in 1991 for the third successive year.

  Mr. Soames
  To ask the Secretary of State for Trade and Industry what are the latest figures of the United Kingdom's share of world trade.

  Mr. Lilley
  The United Kingdom share of world exports of total manufacturers was 6·4 per cent. in 1990.

  Fraud
  Mr. Andrew MacKay
  To ask the Secretary of State for Trade and Industry if he has any plans to review the procedures in his Department for handling fraud cases; and if he will make a statement.

  Mr. Redwood
  As my hon. Friend will be aware, the handling of fraud cases imposes responsibility on a number of Ministers. My right hon. and learned Friend the Attorney-General is responsible for the Serious Fraud Office and Crown prosecution service, my right hon. Friend the Home Secretary is responsible for matters of criminal procedure and my noble and learned Friend the
  555
  Lord Chancellor has responsibility for matters relating to the judiciary. The prosecutions for fraud handled by my Department are cases which are not large or complex enough to have been accepted for handling by the Serious Fraud Office or the fraud investigation group of the Crown prosecution service.

  My hon. Friend will be aware of the work being carried out by the Royal Commission on Criminal Justice in relation to the handling of fraud cases. The Government are keen to see rapid and successful pursuit and prosecution of fraud.

  Engineering Industry
  Mr. O'Brien
  To ask the Secretary of State for Trade and Industry if he will make a statement on the current output levels of the engineering industry.

  Mr. Leigh
  Output in 1991 was 24 per cent. higher than in 1981.

  EC Presidency
  32. Mr. Barry Field
  To ask the Secretary of State for Trade and Industry whether he will make a statement about the role of his Department during the British presidency of the EC later in the current year.

  Mr. Lilley
  Without doubt the Government will face a very busy presidency. To us will fall a number of important tasks:

  the completion of the single market;

  preparing the Community for enlargement;

  developing the Community's links with eastern Europe and the former Soviet Union;

  dealing with the outcome of the GATT talks, be it success or failure;

  reform of the CAP, and;

  depending on the progress under the Portuguese presidency, perhaps taking forward the review of the Community's finances.

  While undertaking these tasks we shall encourage our partners to place greater emphasis on several key themes:

  first, deregulation: the rigorous scrutiny of all directives to ensure they do not impose unnecessary burdens;

  secondly, the implementation and enforcement nationally of Community directives;

  thirdly, the phasing out of beggar-my-neighbour credit and trade support policies;

  fourthly, the maintenance of competitive rather than interventionist policies.

  My Department will have a key role to play in our presidency. My colleagues and I will chair five Councils: Internal Market, Telecommunications, Industry, Research and Consumer Affairs. We will also field trade policy issues in the Foreign Affairs Council.

  I gave further information about my Department's priorities to an audience at the Institute of Directors on 21 February. A copy of my speech has been placed in the Library.

  Quality Standards
  Mr. Anthony Coombs
  To ask the Secretary of State for Trade and Industry how many companies in the United Kingdom have achieved the BS 5750 quality standard.

  Mr. Leigh
  Approximately 7,500 companies have been certified as complying with BS5750.

  Technological Innovation
  Dr. Thomas
  To ask the Secretary of State for Trade and Industry what proposals his Department plans to put forward on technological innovation at the forthcoming United Nations Conference on Environment and Development in Rio de Janeiro.

  Mr. Leigh
  My Department commissioned two reports looking at the role of technology transfer in the context of "Global Climate Change" and "Conservation of Biological Diversity" for the United Nations Conference on Environment and Development (UNCED). The reports were jointly funded with the Overseas Development Administration and the Department of the Environment respectively and have been well received by the international community. Copies of both reports are in the Library of the House.

  My Department is currently working with the Department of the Environment on producing case studies which examine technology co-operation that exists between the United Kingdom and the developing countries. These will be presented at the UNCED.

  During the UNCED in Rio de Janeiro there will also be an environmental technology exhibition in Sao Paulo, "ECOBRASIL 92". My Department is providing financial assistance to eligible British firms who wish to participate.

  My Department is actively promoting technological innovation by United Kingdom companies. The outcome of the UNCED may well lead to increased market opportunities for innovative environmental technology.

  Supervisory Bodies
  Mr. Austin Mitchell
  To ask the Secretary of State for Trade and Industry (1) pursuant to his answer of 22 November,Official Report, column 346, what information he has on the duration of a visit by the Chartered Association of Certified Accountants and the number of files which its compliance officers will examine during each visit;

  (2) pursuant to his answer of 22 November, Official Report, column 346, what information he has about the number of client files which the supervisory bodies will examine during each visit.

  Mr. Redwood
  I understand that, including time spent on preparation, discussion of the findings with the firm, review, and reporting conclusions and recommendations, the length of time spent on monitoring visits by the Chartered Association of Certified Accountants, in its capacity as a recognised supervisory body, will typically range from one and a half to four days.

  The association will monitor members of the Association of Authorised Public Accountants on the same basis under the terms of arrangement between those bodies.

  The number of files to be examined will vary according to the circumstances but will be sufficient for the compliance officer to determine whether the required standard of audit work has been attained.

  The joint monitoring unit of the three Institutes of Chartered Accountants will normally examine not less than three client files on each visit although in many cases the number of files to be examined will be considerably greater.

  Mr. Austin Mitchell
  To ask the Secretary of State for Trade and Industry if he will make a statement on the cost
  557
  of the Ernst and Young staff seconded to his Department, the functions they are performing, and their supervision by his Department.

  Mr. Redwood
  The Department has one member of staff on secondment from Ernst and Young at an annual cost, including salary, national insurance and superannuation which is linked to the civil service grade 7 salary scale.

  The secondee's main functions, performed under the direct supervision of a civil servant, are the authorisation of new insurance companies and the provision of expert advice on the supervision of insurance companies.

  Inward Investment
  Mrs. Currie
  To ask the Secretary of State for Trade and Industry if he will make a statement about the level of inward investment in the United Kingdom and in the United Kingdom's European competitors.

  Mr. Lilley
  The United Kingdom has been the most successful country in Europe in attracting inward investment.

  Single Market
  Mr. Harry Greenway
  To ask the Secretary of State for Trade and Industry what progress he plans to make on the single market during the United Kingdom presidency of the EC; and if he will make a statement.

  Mr. Sainsbury
  During the United Kingdom presidency, the Government intend to make progress on the remaining programme of measures, to ensure that the single market can be declared genuinely open for business on 1 January 1993.

  We shall be focusing on those measures which are central to the successful operation of the single market. The Government will also put particular emphasis on considering the quality, effectiveness and enforcement of legislation already in place.

  Making the single market work, rather than planning more new legislation, will be a central theme of our presidency.

  Monopolies and Mergers Commission
  Mrs. Gorman
  To ask the Secretary of State for Trade and Industry if he will make a statement on the future of the Monopolies and Mergers Commission.

  Mr. Lilley
  The Monopolies and Mergers Commission has a very important role under United Kingdom competition legislation as an independent investigative body.

  Car Exports
  Mr. John Garrett
  To ask the Secretary of State for Trade and Industry what representations he has made to the United States Government about the effect which the United States luxury tax is having upon British car manufacturers seeking to export to the United States; and what response he has received.

  Mr. Sainsbury
  Vigorous representations have been made to the Administration on the adverse impact of the luxury tax on United Kingdom car exports. While a formal reply is awaited to my right hon. Friend's request 558
  to the United States Secretary of the Treasury that exemption for cars should be included in the budget, we are continuing to put over the case for repeal in tandem with our own industry to both the Administration and senior Members of Congress.

  British Shipbuilders
  Mr. Franks
  To ask the Secretary of State for Trade and Industry if he will make a statement on British Shipbuilders' external financing limit for 1992–93.

  Mr. Leigh
  British Shipbuilders' external financing limit for 1992–93 was set at minus £5·0 million as recorded in the Government's expenditure plans 1992–93 to 1994–95 published in January 1992 (Cm 1904). I am now able to announce a reduced EFL for 1992–93 of minus £6·85 million which amounts to an improvement of £1·85 million. This has been made possible by the inclusion in British Shipbuilders' internal resources of forecast receipts from RENAVAL funding and interest earned on accumulated cash balances.

  Greenhouse Gases
  Mr. Devlin
  To ask the Secretary of State for Trade and Industry if he will publish the consultancy study commissioned by his Department on the implications for trade policy of measures to control greenhouse gas emissions.

  Mr. Lilley
  The study was commissioned jointly by my Department and the Department of the Environment. I have today placed a copy of its report in the Library of the House.

  Telephone Adaptations
  Mr. McCartney
  To ask the Secretary of State for Trade and Industry what discussions he has had with licensed telephone operators about making telephones adaptable and accessible to people with hearing difficulties; and if he will make a statement.

  Mr. Redwood
  [holding answer 9 March 1992]: The licences issued to BT, Mercury, Kingston Communications and all the fixed link public telecommunications operators under the Telecommunications Act 1984 require them to ensure that telephones for the hearing impaired are available to meet all reasonable demands and to install facilities for the hearing impaired in all their public call boxes. The licences under which most private systems are run require that certain telephones installed for emergency use, such as those in lifts, can be coupled inductively to suitable hearing aids.

  Mr. McCartney
  To ask the Secretary of State for Trade and Industry what information he has on available telecommunications systems in other countries to help people with hearing difficulties to use telephones; and if he will make a statement.

  Mr. Redwood
  [holding answer 9 March 1992]: Comprehensive information on how other countries' telecommunications systems cater for people with hearing difficulties could be obtained only at disproportionate cost.

  In the USA, the Hearing Aid Compatibility Act (1988) has made mandatory the fitting of inductive couplers to

  559
  certain types of telephones. In Europe, the European Telecommunications Standards Institute (ETSI), in which the United Kingdom is a major participant, requested funds from the European Commission last month to study the possible development of pan-European standards in this area. In framing this proposal, ETSI's Human Factors Committee noted that only two national regulations, on inductively coupled telephones and amplification for the hard of hearing, existed in Europe, both from the United Kingdom.

  Media Expenditure
  Mr. Fisher
  To ask the Secretary of State for Trade and Industry what expenditure was made, in the last financial year for which figures are available, on(a) film, (b) video, (c) publishing, (d) the record industry and (e) the press.

  Mr. Leigh
  [holding answer 10 March 1992]: In the current financial year, my Department has provided support for film totalling £5·6 million. Overall Government support for film in the current financial year amounts to £25·9 million.

  There are no specific support schemes for video, publishing, the record industry or the press.

  Employment Statistics
  Mr. Fisher
  To ask the Secretary of State for Trade and Industry how many civil servants are responsible in his Department(a) part time and (b) full time for (i) film, (ii) publishing, (iii) video, (iv) the record industry and (v) the press.

  Mr. Leigh
  [holding answer 10 March 1992]: There are nine civil servants in my Department with full-time responsibility for issues relating to film and video.

  For the other sectors there are no staff with specific responsibility, but the Department's market intelligence unit handles issues relating to most individual industries and market sectors.

  CFCs
  Mr. Cryer
  To ask the Secretary of State for Trade and Industry what was the quantity of chlorofluorocarbons exported from the United Kingdom in 1991.

  Mr. Leigh
  [holding answer 10 March 1992]: This information is not published, for reasons of commercial confidentiality.

  British Technology Group
  Mr. Robert G. Hughes
  To ask the Secretary of State for Trade and Industry what are the Government's plans for the sale of the British Technology Group.

  Mr. Lilley
  [pursuant to the reply, 4 March 1992,columns 183–84]: I am pleased to announce that an agreement for the sale of British Technology Group was entered into today, 11 March, following negotiations between Government and a management-led consortium. The initial proceeds will be £27·75 million.

  The consortium represents a balance between financial institutions, individuals, and organisations. The lead investor is CIN Venture Managers Limited (CIN Ven) the second largest European venture capital house. (CIN Ven
  560
  manage the unquoted securities portfolios of the pension funds of British Coal, British Rail and Barclays Bank). The consortium members include 10 other financial institutions, BTG management and staff, and up to 13 United Kingdom universities, under the aegis of the CVCP (the Committee of Vice Chancellors and Principals). A holding company has been formed to purchase the shares. Management and staff will participate in the company both directly, through individually subscribing for shares, and indirectly, through an employee share trust which will acquire up to 26 per cent. of the share capital. Apart from the trust, no individual member of the consortium will own more than 15 per cent. of the voting rights in the holding company.

  The consortium was selected as the preferred purchaser following a two-stage competitive bidding process against a number of criteria, which arose from the objectives for the sale of maximising proceeds consistent with a good prospect for the continuation of BTG's technology transfer activities. The Government are convinced that the consortium offers the best prospect that BTG's present activities will be continued as an independent organisation.

  The proceeds of the sale will be made up from two elements. The initial proceeds will be:

  £ million

  Initial consideration

  14·25

  Special dividend to be paid on completion

  12·00

  Dividend paid in February in respect of NEB

  1·50

  TOTAL

  27·75

  The initial consideration is dependent on certain working capital requirements being met at completion, which is due to take place on 31 March 1992 provided that certain conditions of the type commonly found in share purchase agreements are fulfilled by that date.

  Future proceeds will arise if over the next five years the business performs at a level in excess of the net revenues forecast by BTG management in its business plan. The Government will be entitled to 60 per cent. (less tax) of the sum by which aggregate net revenues exceed the target which has been agreed with the purchaser. Net revenues principally comprise the revenues from licences which accrue to the company less the payments which are made to inventors from those licence income streams. Further proceeds may also arise from clawback on the proceeds of sale of real property.

HOME DEPARTMENT

  Vagrancy Act Prosecutions
  Mr. Caborn
  To ask the Secretary of State for the Home Department how many people were(a) prosecuted and (b) convicted (i) of begging and (ii) sleeping out in north Yorkshire in 1979 and each year since then.

  Mr. John Patten
  The information for North Yorkshire police force area for the years 1979, 1981, 1983, 1985, 1987, 1988, 1989 and 1990 (which is provisional) is given in the table. To produce further information for the other years requested would involve disproportionate cost.
  561

  Number of persons prosecuted and convicted of begging and sleeping out offences under the Vagrancy Act 1824 in the North Yorkshire police force area 1979 to 19901

  Begging

  Sleeping out

  Year

  Prosecutions

  Convictions

  Prosecutions

  Convictions

  1979

  1

  —

  1

  1

  1981

  1

  1

  —

  —

  1983

  —

  —

  —

  —

  1985

  2

  2

  2

  2

  1987

  5

  5

  1

  1

  1988

  3

  3

  1

  1

  1989

  1

  1

  —

  —

  19901

  2

  2

  —

  —

  1 Provisional.

  Ethnic Minority Grants
  Mr. McLeish
  To ask the Secretary of State for the Home Department if he will state, for England and Wales, the total expenditure under section 11 of the Local Government Act 1966, for each year since 1982, identifying separately expenditure by training and enterprise councils in ethnic minority grants; and if he will make a statement.

  Mrs. Rumbold
  The total amount of section 11 grant paid to local authorities in each financial year between 1982–83 and 1990–91 was as follows:

  £ million

  1982–83

  60·8

  1983–84

  76·2

  1984–85

  76·3

  1985–86

  63·4

  1986–87

  102·2

  1987–88

  93

  1988–89

  88·8

  1989–90

  114·8

  1990–91

  135·5

  The figure for 1991–92 is not yet available. The new, separate, ethnic minority grant, under which funds will be paid by this Department to TECs to support projects undertaken by voluntary organisations, comes into effect from 1 April 1992.

  PC Seymour
  Mr. Fraser
  To ask the Secretary of State for the Home Department if he will publish the result of an appeal by former police constable Seymour which took place on 12 and 13 December in relation to events which took place in 1988 in Brixton.

  Mr. Peter Lloyd
  My right hon. Friend has allowed Mr. Seymour's appeal against finding. The parties to the appeal were notified by letter on 28 February.

  Community Charge
  Mr. Sheerman
  To ask the Secretary of State for the Home Department (1) to what extent the community charge court workload has led to(a) delay in processing general criminal court business, (b) the postponement of magistrates court hearings and (c) the arrangement of extra court sittings in each petty session division in England and Wales;

  (2) what assessment has been made of the additional costs to the magistrates court system caused by the processing of community charge summonses in England and Wales.
  562
  Mr. John Patten
  It is not possible to make an overall assessment of the possible impact of community charge enforcement proceedings on delays in criminal proceedings, which are the product of the interplay of many factors, especially since in some areas additional sittings have been arranged to accommodate liability order applications. Neither the number of such additional sittings nor the number of postponed sittings is, however, collected. It follows that it is not possible to calculate the extent to which the total estimated costs of community charge enforcement proceedings between 1 April 1990 and 31 December 1991 of £6·2 million represent additional costs.

  Mr. Sheerman
  To ask the Secretary of State for the Home Department how many community charge summonses have been withdrawn in England and Wales for the latest date for which figures are available; and how many are currently outstanding.

  Mr. John Patten
  This information is not collected centrally.

  Prison Catering
  Mr. Steinberg
  To ask the Secretary of State for the Home Department if he will give his latest estimate for the annual wage and food costs in the catering service at(a) Her Majesty's prison, Durham and (b) Her Majesty's prison, Belmarsh and state whether the catering service expenditure at either prison is likely to exceed the projected annual budget for the current financial year.

  Mrs. Rumbold
  [holding answer 10 March 1992]: The estimated expenditure on wage and food costs in the catering service at Her Majesty's prison Durham for the financial year 1991–92 is:

  £

  Prison service staff

  161,000

  Inmates

  12,000

  Victualling

  363,000

  TOTAL

  536,000

  The catering service for Her Majesty's prison Belmarsh is supplied by contract, the details of which are confidential for commercial reasons. The estimated victualling costs in addition to the contract costs are £279,000 for the financial year 1991–92.

  The total cost of the catering service is not separately identified in each establishment's budget. Moreover, victualling costs are on a per capita basis and thus vary depending on the size of the inmate population.

  Prison Service Review
  Sir John Wheeler
  To ask the Secretary of State for the Home Department if he has yet received the report of Sir Raymond Lygo's review of the management of the Prison Service.

  Mr. Kenneth Baker
  [pursuant to his reply, 16 December 1991, col. 13]: Sir Raymond Lygo submitted to me a report, published on 16 December 1991, which provided a cogent analysis of the problems of the management of the Prison Service in England and Wales, and offered a wide-ranging and coherent set of recommendations for tackling them. I am indebted to Sir Raymond, and to Lord Rayner who assisted in producing the report, for the speed and thoroughness with which the review was carried out. I am grateful for the wide range of comments on the report which have been received from both within and outside the Service—including from Lord Justice Woolf and His Honour Judge Tumim, Her Majesty's Chief Inspector of Prisons. I was impressed by the general level of support for the great majority of Sir Raymond's recommendations.

  The central recommendation in Sir Raymond's report is for the Prison Service to move to executive agency status under the "next steps" initiative. I have concluded that this is indeed the way forward for the Prison Service and I intend that the service should become an agency as from 1 April 1993. Consultations with the trade unions and other interested parties will begin shortly.

  In line with Sir Raymond's recommendations, I intend to create a supervisory board, which would have responsibility for advising the Home Secretary on strategic, policy and resource questions affecting the service. I believe that the supervisory board should be chaired by the Home Office Minister responsible for prison matters. I do not share Sir Raymond's view that there is a role for a part-time non-executive chairman to head the management board. The chief executive, who will be appointed by open competition, and who will chair the management board, will be directly accountable to the Home Secretary.

  Sir Raymond's other recommendations cover a wide range of personnel and management issues; they will be followed up appropriately in the coming months. I strongly endorse his recommendation that the Prison Service should be prepared to recruit from outside to management posts at headquarters and establishments, and expect to see that objective progressed vigorously.

  One recommendation to which I am not attracted is the extension of the wearing of uniform to all governors in establishments. I share the concerns expressed by a number of commentators about the impact that would have on the future direction of the service. I await with interest the recommendations of the current internal review on modes of dress in the service.

  Sir Raymond's important report merits a vigorous and decisive response. I believe that the move of the Prison Service to executive agency status, with the other measures which I have announced, will provide the right framework for placing the management of the service on a more professional footing, providing the most positive environment for staff to work in and, above all, ensuring the delivery of an improved service both to the public and to those held in custody.

  Solicitors' Fees
  Dr. Marek
  To ask the Secretary of State for the Home Department if he will refer the question of fixed fees for solicitors at magistrates courts to the Royal Commission on Criminal Justice.

  The Attorney-General
  I have been asked to reply.

  No. Fee structures are a matter for consultation with the legal professions. The Royal Commission is considering the question of standard fees in so far as it affects subjects within its remit, and has agreed to accept a submission from the Law Society. The Royal Commission's recommendations and any consequent changes to fee structures will be considered in due course.

HOUSE OF COMMONS

  INFO 92
  Mr. Meacher
  To ask the Chairman of the Information Committee if he will make INFO 92 available to hon. Members and their staff.

  Sir Fergus Montgomery
  INFO 92 is a factual and bibliographical database on progress achieved towards the single market in line with the European Commission's White Paper on the implementation of measures for completing the internal market. The Library expects to have online access to this database shortly. It may also be available on CD-ROM disk. If hon. Members wished to use it in their offices they would have to take out their own contract with one of the online hosts for which there would be a charge.

EMPLOYMENT

  Jobcentre, Burnley
  Mr. Pike
  To ask the Secretary of State for Employment (1) what is the cost of the proposed removal of Burnley jobcentre; and what will happen to the existing furniture and equipment;

  (2) what representations and consultations he has received regarding the proposed removal of Burnley jobcentre; and if he will make a statement.

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

  Industrial Tribunals
  Mr. Tony Lloyd
  To ask the Secretary of State for Employment if he will give his initial estimate of the number of applications to industrial tribunals for the years 1990–91 and for the year 1991–92, the number of tribunals actually registered for 1990–91 and the most up to date figures for the year 1991–92, the original allocation for running costs in both these years and the final total.

  Mr. Forth
  The figures are as follows:

  1990–91

  1991–92

  Applications registered

  43,243

  161,762

  Cases heard

  11,864

  213,344

  Original allocation

  £11,402,160

  £12,320,232

  Total running cost expenditure

  £12,222,824

  565

  1 (to end of February).

  2 (to end of January).

  The total running cost expenditure for the industrial tribunals in 1991–92 will not be known until the end of the current financial year.

  Youth Training
  Mr. McLeish
  To ask the Secretary of State for Employment if he will state for Great Britain as a whole, and separately for each region, the number of trainees

  Youth Training Starts with Training Providers 1991–92: Provisional Estimates1

  Region

  QTR 1

  QTR 2

  QTR 3

  (1 April-23 June)

  (24 June-15 September)

  (16 September-5 January)

  South East

  5,200

  11,200

  10,500

  London

  3,500

  5,800

  5,200

  South West

  2,400

  6,900

  6,700

  West Midlands

  6,400

  12,700

  6,600

  East Midlands

  6,100

  13,100

  8,200

  Yorkshire and Humberside

  8,100

  12,900

  7,300

  North West

  10,100

  19,400

  14,200

  Northern

  5,400

  9,200

  6,000

  Wales

  4,000

  6,200

  5,600

  England and Wales

  51,400

  97,300

  70,300

  Source: Osmosis.

  1 Figure subject to adjustment.

  Mr. McLeish
  To ask the Secretary of State for Employment if he will state for Great Britain as a whole, and separately for each region, the number of trainees entering youth training, who, under the terms of the training and enterprise councils operating agreement, are in the guarantee and extended guarantee groups for each quarter between April 1986 and the latest available date; and if he will make a statement.

  Mr. Jackson
  The information requested is not available.

  TECs
  Mr. McLeish
  To ask the Secretary of State for Employment if he will provide a list of the qualifications against which training and enterprise councils may claim an output-related funding bonus in youth training and employment training, and the numbers of output bonuses claimed against each qualification; and if he will make a statement.

  Mr. Jackson
  There are over 700 vocational qualifications which are accepted by the Employment Department in payments to TECs for output-related funding (ORF) in youth training and employment training. I have arranged for a copy of the January 1992 edition of the Department's listings of acceptable vocational qualifications to be placed in the Library. In addition to these vocational qualifications, TECs may in some cases claim for the achievement of GCSEs, A/S levels and A levels.

  Figures for ORF payments against individual vocational qualifications are not collected, and it would not be cost effective to do so. Available figures are for payments by national vocational qualification (NVQ) (or equivalent) level. Payments for the numbers of trainees achieving NVQs on ET and YT in England and Wales during the 1991–92 financial year to 5 January 1992 are given in the following table.
  566
  entering youth training, both in total, and disaggregated by employee and trainee status, for each quarter between April 1991 and the latest available date; and if he will make a statement.

  Mr. Jackson
  Information about the number of entrants is given in the following table. A breakdown by employed and trainee status is not available.

  Numbers of payments to TECs for trainees in England and Wales achieving national vocational qualifications (1 April 1991 to 5 January 1992)

  Number

  Youth training (including credits)

  NVQ level 1

  3,015

  NVQ level 2

  34,221

  NVQ level 3 or above

  10,262

  Employment training

  NVQ level 1 or 2

  19,060

  NVQ level 3 or 4

  1,293

  NVQ level 2 (for skills shortage trainees and labour market returners who also gain employment)

  555

  NVQ level 3 or 4 (for skills shortage trainees and labour market returners who also gain employment)

  111

  Source: TEC invoice.

  Employment Training
  Mr. McLeish
  To ask the Secretary of State for Employment if he will state for Great Britain as a whole, and separately for each region, the number of people entering employment training, both in total and disaggregated by employee and training status for each quarter between 1988 and the latest available date; and if he will make a statement.

  Mr. Jackson
  The information is not available as requested. Information about the number of employment training entrants since 1988 is given in the following table. Information about the employment status of people entering employment training is not collected centrally. The number of trainees with employment status has risen since the programme began and it is estimated that currently about 3 per cent. of all those in training have employed status. Those trainees without employed status have trainee status.
  567

  Employment Training Number of Entrants 1988–89—1989–90

  1988–89

  1989–90

  SEPT

  Quarter 3

  Quarter 4

  Quarter 1

  Quarter 2

  Quarter 3

  Quarter 4

  South East

  1,500

  5,700

  6,800

  6,400

  9,700

  6,400

  8,700

  London

  2,500

  8,500

  11,000

  8,800

  10,500

  9,500

  12,500

  South West

  1,100

  5,500

  6,900

  5,600

  5,000

  4,900

  6,500

  West Midlands

  2,500

  10,800

  14,300

  11,200

  11,200

  10,400

  13,400

  East Midlands

  1,800

  7,800

  9,700

  8,300

  8,900

  7,600

  9,400

  Yorkshire and Humberside

  3,000

  14,400

  16,900

  13,500

  12,800

  13,100

  15,500

  North West

  3,000

  14,700

  19,000

  16,900

  16,100

  14,600

  18,400

  Northern

  2,400

  9,600

  13,100

  11,500

  11,300

  9,600

  12,300

  Wales

  1,400

  6,700

  9,800

  7,900

  8,600

  7,200

  9,100

  Scotland

  2,300

  11,400

  14,800

  13,100

  13,500

  13,300

  15,500

  Great Britain

  21,500

  95,000

  122,200

  103,200

  107,600

  98,000

  121,800

  Source: ET Telephone Census.

  Employment Training

  Number of Entrants 1990–91-1989–90

  1990–91

  1991–92 (Provisional estimates)

  Quarter 1 (1 April-23 June)

  Quarter 2 (24 June-15 September)

  Quarter 3(16 September-5 January)

  South East

  24,500

  3,800

  5,200

  6,400

  London

  32,300

  4,300

  5,900

  10,400

  South West

  18,600

  2,300

  3,200

  4,400

  West Midlands

  32,100

  4,100

  6,700

  10,500

  East Midlands

  22,400

  3,400

  4,700

  7,400

  Yorkshire and Humberside

  39,800

  7,500

  8,900

  13,300

  North West

  46,100

  8,500

  10,500

  15,400

  Northern

  34,600

  5,300

  6,200

  8,500

  Wales

  22,900

  3,900

  5,100

  7,100

  Scotland

  47,700

  —

  —

  —

  TNPU1

  68,300

  —

  —

  —

  Great Britain2 England and Wales

  389,200

  43,100

  56,400

  83,500

  1 TECs and National Providers. Figures included in appropriate region in 1991–92.

  2 Information not available for Scotland for 1991–92.

  Source: OSMOSIS.

  Mr. McLeish
  To ask the Secretary of State for Employment if he will state for Great Britain as a whole, and for each region the number of trainees entering employment training who, under the terms of the training and enterprise councils operating agreement, are in the aim and guarantee groups for each quarter between 1988 and the latest available date; and if he will make a statement.

  Mr. Jackson
  As the information requested is contained in a number of tables I will write to the hon. Member.

  Tourism
  Mr. Gregory
  To ask the Secretary of State for Employment whether he will make a statement about Government policy on tourism in the United Kingdom.

  Mr. Howard
  I have published today, along with my right hon. Friends the Secretaries of State for Northern Ireland, Wales and Scotland, "Tourism in the UK—Realising the Potential". I have placed a copy in the Library.

  The document sets out the extent of the Government's support for the tourism industry, both financially and in creating an environment in which the industry can prosper. It describes activities and initiatives that directly or indirectly benefit tourism. It is an impressive record, which features the work of most Government Departments.
  568
  The document also announces a package of further measures to help the industry. They include:
  A major new foreign language initiative to improve the quality of service that the tourism industry can offer foreign visitors.
  The setting of standards for the times that visitors from abroad should expect to wait before being seen by a United Kingdom immigration officer.
  Consultation on possible changes to the liquor licensing laws in England and Wales which would provide for a system of children's certificates; for a new category of liquor licence specifically for cafe type premises; and possibly for other reforms, in order to make it easier for families to eat and drink together.
  Research into how the system of central Government grants to local authorities can best take account of the costs of serving day visitors.
  Measures to improve coach parking in London.
  The designation of 1993 as Industrial Heritage Year.
  A proposal by the United Kingdom Government to the European Commission for an initiative to ensure that all member states co-operate to give people with disabilities information on the tourist facilities available to them and to exchange best practice on this subject.

  Employment Service
  Mr. Stern
  To ask the Secretary of State for Employment what the targets for the Employment Service will be in 1992–93.

  Mr. Jackson
  Targets for the Employment Service in 1992–93 will be announced later in the year.

HEALTH

  Plasma
  Mr. David Nicholson
  To ask the Secretary of State for Health if he will permit the Bio Products Laboratory to offer for sale to national health service hospitals 8SM high purity factor VIII produced from plasma that has neither been tested nor screened for(a) hepatitis C or (b) ALT —alanine aminotransferase.

  Mr. Dorrell
  The Bio Products Laboratory markets products in accordance with the requirements of the United Kingdom licensing authority and of the European Community. These requirements include screening for HCV antibody, which demonstrates the presence of Hepatitis C.

  ALT testing in this country has been considered by experts who advised us that it is unnecessary. There is currently no European Community requirement for ALT testing.

  Hospital Closures
  Mr. Beggs
  To ask the Secretary of State for Health if he will make a statement on the provision of small hospital units in areas where former hospitals have been closed, since 1979.

  Mr. Dorrell
  The reforms of the NHS have centred upon the importance of establishing the role of district and family health authorities as the purchasers of hospital, community health and primary care services and prevention. They have important functions in translating patients' needs and concerns into improved services. One of the main aims of the reforms is to bring all those involved in securing and delivering health care services closer together so that they are more aware of the needs and wishes of patients, including those concerning the location of facilities, and can therefore be more responsive to them.

  Consultants
  Mr. Patchett
  To ask the Secretary of State for Health if he will hold discussions with the Trent regional health authority about the ratio of male to female consultants employed by the region.

  Mrs. Virginia Bottomley
  The Department, through the Opportunty 2000 scheme launched by my right hon. Friend the Prime Minister, has set the NHS the goal of improving the ratio of male to female consultants to four to one by 1994. Regional health authorities will be required to monitor appointments procedures and to ensure that all appointments committees receive equal opportunities training. The Department will shortly be scrutinising Trent's action plan for meeting all the goals set by Opportunity 2000 and will contine to hold discussions with the authority about the action to be taken to improve opportunities for women in medicine.

  GP Prescriptions
  Mr. Martyn Jones
  To ask the Secretary of State for Health what information he has on the difference between numbers of general practitioner prescriptions issued and those filled.
  570
  Mrs. Virginia Bottomley
  This information is not collected centrally.

  Unplanned Pregnancies and Sex Education
  Mrs. Heal
  To ask the Secretary of State for Health (1) what provisions exist for advising on unplanned pregnancies for the under-25s;

  (2) if he will make a statement on the provisions for the teaching of sex education for young people.

  Mrs. Virginia Bottomley
  Long–standing guidance to the NHS draws attention to the need for separate, informal family planning services for young people, with staff experienced in dealing with the particular needs of this group and their problems. New guidelines on family planning service provision, issued by the NHS management executive in January, remind health authorities of the special needs of young people and draw on the findings of a study funded by the Department into the family planning and counselling needs of young people. NHS provision in this area is complemented by the work of a number of voluntary organisations, which receive financial support from public funds, such as the Family Planning Association and Brook Advisory Centres. These organisations produce a range of information material for young people. The provision of sex education in schools is a matter for my right hon. and learned Friend the Secretary of State for Education and Science.

  Dentists
  Mrs. Heal
  To ask the Secretary of State for Health if he will give the figures from 1979 to 1992 inclusive for the amount collected by dentists for writing out prescriptions in England.

  Mr. Dorrell
  Dentists have been able to claim such a fee, in specified circumstances, since the introduction of the dental contract on 1 October 1990. The amount received by dentists in England and Wales for issuing prescriptions was as follows:

  1990—£39,639 (1 October 1990 to 31 December 1990)

  1991—£325,607 (1 January 1991 to 31 December 1991)

  Figures for England only are not available.

  Mrs. Heal
  To ask the Secretary of State for Health if he will give the details of circumstancess under winch dentists may charge for writing out a prescription.

  Mr. Dorrell
  A dentist may claim a fee for issuing a prescription where no other treatment is being given and no other fees are being claimed in a particular course of treatment. A dentist may, however, also claim a fee for a prescription issued when a patient has been visited at home and a claim is made for the associated fee for a domiciliary visit, or when the dentist has returned to and re-opened the surgery and a claim is made for the associated recalled attendance fee.

  Southern Derbyshire Health Authority
  Mrs. Currie
  To ask the Secretary of State for Health if he will give, for the Southern Derbyshire health authority, for the years 1986–87 and 1991–92 (estimate)(a) the number of nurses employed, (b) the number of doctors employed, (c) the number of professions ancillary to medicine and (d) the total staffing.

  Mr. Dorrell
  The information is in the table:
  571

  NHS directly employed staff in post by specific staff groups Southern Derbyshire district health authority

  Nursing and midwifery2 1

  Medical3 1

  Professions allied to medicine1

  Total staff1

  30 September 1986

  3,850

  190

  320

  7,510

  30 September 19915

  3,8004

  200

  400

  7,420

  Source: Department of Health (SM 13) annual census of medical and non-medical manpower.

  1 All figures are independently rounded to the nearest ten (10) whole-time equivalent.

  2 Includes agency staff.

  3 Includes permanent paid, honorary and locum staff but excludes consultants and senior registrars whose contracts are held by Trent region.

  4 Some nurse manager and student posts are no longer included in this definition.

  5 These figures have not yet been validated centrally.

  Mrs. Currie
  To ask the Secretary of State for Health what was the level of spending in Southern Derbyshire health authority for the years 1986–87 and 1991–92 (estimated), showing the rate of growth in cash and real terms.

  Mr. Dorrell
  The total revenue expenditure of the Southern Derbyshire health authority was £93·6 million (cash) in 1986–87. The authority estimates its 1991–92 revenue expenditure at £164·7 million (cash). This represents an increase of 76 per cent. in cash terms and 26 per cent. in real terms, measured at 1991–92 prices.

  Appointment of DHA Chairmen
  Mr. Jacques Arnold
  To ask the Secretary of State for Health if he will list the names of those people appointed to be chairmen of district health authorities with effect from 1 April.

  Mrs. Virginia Bottomley
  I have today placed in the Library a list of those people appointed as chairmen of district health authorities with effect from 1 April 1992.

  Ward Closures
  Mr. Cohen
  To ask the Secretary of State for Health if he will list the number of temporary ward closures and the number of beds involved, in each hospital in each London constituency since 1 November 1991, the occasions on which any hospital was unable to accept admissions from major incidents and the relevant times and dates.

  Mr. Dorrell
  This information is not collected centrally.

  Bone Marrow Transplants
  Mr. Kennedy
  To ask the Secretary of State for Health how many patients have died in each year since 1979 while waiting for bone marrow transplants to be carried out.

  Mrs. Virginia Bottomley
  This information is not available.

  Statistical Information
  Mr. Burns
  To ask the Secretary of State for Health what steps are being taken to meet future needs for statistical information on population and housing of the type currently provided by periodic censuses.

  Mr. Dorrell
  I have decided, together with my colleagues responsible for the census offices in Scotland and Northern Ireland, that there should be a review of the future needs for census-type information on population and housing in the United Kingdom and the options for providing it.

  Arrangements have therefore been made for the census offices of the United Kingdom—the Office of Population
  572
  Censuses and Surveys, the General Register Office (Scotland), and the Census Office (Northern Ireland)—to lead an evaluation and reappraisal of census policy in consultation with other Government Departments. This will cover what kind of information will be needed, how it is to be collected, how frequently it should be provided, and how it should be disseminated.

  The census offices will shortly begin to consult organisations and individuals with interests in the future of census-type information in the United Kingdom. This will include the national health service, local government, the academic community, commercial bodies, and the European Community.

  Copies of the paper on which the consultation will be based have been placed in the Library.

  Census Records
  Mr. Roger King
  To ask the Secretary of State for Health whether final approval has been given for the production and supply of the Economic and Social Research Council of samples of anonymised records from the 1991 census.

  Mr. Dorrell
  In my reply to my hon. Friend, the Member for Wolverhampton, North-East (Mrs. Hicks) on 1 February 1991 at column 682, I said that a final decision about producing and supplying samples of anonymised records (SARs) would be taken after the report of the technical assessor, Professor David Holt, once the confidentiality aspects had been considered.

  In his report, Professor Holt expressed his conclusions as follows.
  "As a reasonable statistical judgement, the risk of disclosure is negligible for the large majority of the population and thought to be extremely small for the remainder. International experience indicates that the levels of risk are consistent with a decision to go ahead with the release of SARs, and I so advise".

  Having considered the report, my right hon. Friend, the Secretary of State for Scotland, and I have given approval for the production by the registrars general of two samples of anonymised records.

  A copy of Professor Holt's report and the specifications of the two samples of anonymised records have been placed in the Library.

  Homelessness
  Mr. O'Hara
  To ask the Secretary of State for Health (1) how many units of permanent accommodation are to be provided in 1992–93 in central London for mentally ill homeless people moving out of specialist short-term hostels funded by his Department;

  (2) what resources his Department are to provide in 1992–93 to meet the needs of mentally ill homeless people

  573
  currently living in specialist hostels in central London once they are ready to move into more permanent accommodation;

  (3) what arrangements he has made to co-ordinate the provision of more permanent accommodation for mentally ill homeless people currently living in specialist short-term hostels in central London.

  Mr. Dorrell
  The Department revenue funds the specialist short-term hostels set up under the homeless mentally ill initiative at the rate of £14,630 per place per annum (1992–93 costs). Permanent accommodation for those moving on from the hostels is being provided via the Housing Corporation. In 1992–93 they expect to make available 150 new units and 150 units from Housing Association relets. The corporation monitor this provision regularly. The social care of people moving on from the short term hostels is the responsibility of local social services authorities. To ensure that the transition takes place smoothly the Department has included within the homeless mentally ill initiative £500,000 per annum for the three years 1992–93 to 1994–95 to provide resettlement support.

DEFENCE

  Gurkhas
  Mr. Thorne
  To ask the Secretary of State for Defence if he will set out the maximum levels of pensions payable in 1992–93 to Gurkha personnel specially or prematurely retired or discharged as part of the planned reduction in the Brigade of Gurkhas for(a) privates, (b) corporals, (c) sergeants, (d) warrant officers class I, (e) lieutenants, (f) captains and (g) majors with (i) six years' reckonable service, (ii) nine years' reckonable service and (iii) 12 years' reckonable service.

  Monthly rates of Gurkha addition—Hong Kong

  Effective Date—1 April 1991

  Rank

  Single unaccompanied

  Married accompanied

  Special Gurkha addition

  Rifleman

  470·10

  Less than 4 years service

  113·48

  186·43

  After 4 years service

  14418

  220·97

  After 5 years service

  159·94

  238·25

  After 6 years service

  174·91

  255·54

  After 7 years service

  190·29

  272·84

  After 10 years service

  198·24

  281·78

  After 12 years service

  206·09

  290·61

  Corporal

  219·71

  589·06

  320·81

  Sergeant

  224·80

  606·91

  328·76

  Warrant Officer Class I

  251·81

  687·00

  369·16

  Lieutenant (QGO)

  261·50

  714·37

  383·48

  Captain (QGO)

  288·56

  786·72

  422·97

  Major (QGO)

  318·48

  866·45

  466·60

  Monthly rates are £ Sterling at an exchange rate of HKS 12·60/£ as at 1 July 1991.

  Mr. Thorne
  To ask the Secretary of State for Defence if he will provide figures for 1992–93 of the maximum levels of special grant payment to Gurkha personnel specially or prematurely retired or discharged as part of the planned reduction in the Brigade of Gurkhas for(a) privates, (b) corporals, (c) sergeants, (d) warrant officers Class I, (e)
  574
  Mr. Archie Hamilton
  The Gurkhas' redundancy scheme provides for credit of service to be given to Gurkhas specially or prematurely retired or discharged before completing the normal maximum length of service for their rank. The effect is that the pensions shown in the table, which are the rates payable at their normal maximum length of service, will be paid to personnel made redundant with reckonable service within the bands listed. In addition privates and corporals made redundant with between four and 10 years service will receive a pension at the special rate of £15·34 per month at 1991–92 levels. Rates for 1992–93 are not yet available.

  Maximum Pensions Payable—April 1991

  Rank

  Reckonable Service on Redundancy

  Pension Rate

  Rifleman

  10—15 years

  20·46

  Corporal

  10—15 years

  22·08

  Sergeant

  12—18 years

  28·58

  Warrant Officer Class I

  15—22 years

  37·25

  Lieutenant—QGO

  17—24 years

  45·38

  Captain QGO

  21—28 years

  62·72

  Major—QGO

  21—28 years

  73·97

  QGO—Queen's Gurkha Officer.

  Monthly rates are in £ Sterling calculated at an exchange rate 34·50

  Indian Rupees/£.

  Mr. Thorne
  To ask the Secretary of State for Defence if he will specify for 1992–93 the single and married levels of (i) the Hong Kong Gurkha addition and (ii) the special rate Gurkha addition payable as a component of the special capital payment to Gurkha personnel specially or prematurely retired or discharged as part of the planned reduction in the Brigade of Gurkhas.

  Mr. Archie Hamilton
  The table shows the single and married accompanied levels of the Hong Kong Gurkha addition payable from 1 July 1991, and the rates of special Gurkha addition used in the calculation of special capital payments to Gurkhas made redundant. The rates of 1992–93 are not yet available.

  lieutenants, (f) captains and (g) majors with (i) six years' reckonable service, (ii) nine years' reckonable service and (iii) 12 years' reckonable service.

  Mr. Archie Hamilton
  The table shows the levels of special capital payment payable to Gurkhas made redundant, against the years of service for each rank for
  575
  which redundancy is currently envisaged. This amount is shown in pounds sterling as calculated at August 1991. Rates for 1992–93 are not yet available.

  Payments in respect of soldiers are calculated for class I personnel on the lowest band.

  Special capital payments for Gurkhas made redundant

  Year of service

  Rifleman £

  Corporal £

  Sergeant £

  WOI £

  Lieutenant (QGO) £

  Captain (QGO) £

  Major (QGO) £

  1

  —

  —

  —

  —

  —

  —

  —

  2

  —

  —

  —

  —

  —

  —

  —

  3

  —

  —

  —

  —

  —

  —

  —

  4

  1,254

  1,763

  —

  —

  —

  —

  —

  5

  1,680

  2,208

  —

  —

  —

  —

  —

  6

  2,150

  2,653

  —

  —

  —

  —

  —

  7

  2,931

  3,602

  —

  —

  —

  —

  —

  8

  3,493

  4,590

  —

  —

  —

  —

  —

  9

  4,347

  5,584

  —

  —

  —

  —

  —

  10

  5,674

  6,416

  —

  —

  —

  —

  —

  11

  4,737

  5,357

  —

  —

  —

  —

  —

  12

  3,903

  4,295

  5,531

  —

  —

  —

  —

  13

  2,927

  3,221

  5,531

  6,176

  6,487

  —

  —

  14

  1,951

  2,147

  5,531

  6,176

  6,487

  —

  —

  15

  Nil

  Nil

  4,425

  6,176

  6,487

  —

  —

  16

  —

  —

  3,318

  6,179

  6,487

  —

  —

  17

  —

  —

  2,212

  6,176

  6,487

  —

  —

  18

  —

  —

  Nil

  6,176

  6,487

  7,214

  —

  19

  —

  —

  —

  4,941

  6,487

  7,214

  —

  20

  —

  —

  —

  3,705

  6,487

  7,214

  —

  21

  —

  —

  —

  2,470

  5,189

  7,214

  —

  22

  —

  —

  —

  Nil

  3,892

  7,214

  —

  23

  —

  —

  —

  —

  2,594

  7,214

  7,994

  24

  —

  —

  —

  —

  Nil

  7,214

  7,994

  25

  —

  —

  —

  —

  —

  5,771

  7,994

  26

  —

  —

  —

  —

  —

  4,328

  7,994

  27

  —

  —

  —

  —

  —

  2,885

  7,994

  28

  —

  —

  —

  —

  —

  Nil

  7,994

  29

  —

  —

  —

  —

  —

  —

  6,395

  30

  —

  —

  —

  —

  —

  —

  4,796

  31

  —

  —

  —

  —

  —

  —

  3,197

  32

  —

  —

  —

  —

  —

  —

  Nil

  Mr. Thorne
  To ask the Secretary of State for Defence if he will make it his policy for the rules governing Gurkhas' pensions always to be interpreted to provide the maximum theoretical entitlement.

  Mr. Archie Hamilton
  It is the Department's policy that pensions are paid to Gurkhas at the rates to which they are entitled under the provisions of the appropriate code.
  576
  All figures take account of length of service increments, but not good service pay, which is calculated on an individual basis.

  Live Firing Ranges
  Mr. Steen
  To ask the Secretary of State for Defence if he will consider removing some of the live firing ranges from national parks to areas of army training land which the National Audit Office has identified as under-utilised.

  Mr. Archie Hamilton
  The live-firing facilities that the Ministry of Defence retains in certain national parks are mainly for field-firing of small arms, heavy calibre infantry or anti-tank weapons, or artillery. Alternative locations where this live-firing could be safely accommodated are already fully subscribed. Transfers are not a practical proposition at the present time.

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

Lord Slynn of Hadley
The Right Honourable Sir Gordon Slynn, Knight, having been appointed a Lord of Appeal in Ordinary and thereby created a Baron for life, by the style and title of Baron Slynn of Hadley, of Eggington in the County of Bedfordshire—Was, in his robes, introduced between the Lord Rochester and the Lord Wilberforce.

Lord Mustill
The Right Honourable Sir Michael John Mustill, Knight, a Lord Justice of Appeal, having been appointed a Lord of Appeal in Ordinary and thereby created a Baron for life, by the style and title of Baron Mustill, of Pateley Bridge in the County of North Yorkshire—Was, in his robes, introduced between the Lord Roskill and the Lord Alexander of Weedon.
Earl Attlee Earl Attlee—Sat first in Parliament after the death of his father.

EC Budget: UK Contribution
2.57 p.m.
Lord Boyd-Carpenter Lord Boyd-Carpenter asked Her Majesty's Government:
What is the total contribution made by the United Kingdom to the European Community in the current year; how this compares with the contribution of other member states; and how much of it is allotted to the subsidy paid to growers of tobacco.
The Minister of State, Department of Transport (Lord Brabazon of Tara): My Lords, the UK's gross contribution after abatement to the European Community budget in 1992 is forecast to be 7.5 billion ecus, equivalent to £5.5 billion. This represents nearly 13 per cent. of member states' gross contributions. Germany is the Community's largest contributor. At 16.8 billion ecus in 1992, its gross contribution represents nearly 29 per cent. of the total. The gross contributions of France and Italy are also both larger than that of the UK, at 19 per cent. and 15 per cent. respectively. The Community budget for 1992 makes provision for expenditure support for tobacco of 1.3 billion ecus, or £900 million.
Lord Boyd-Carpenter: My Lords, I thank my noble friend for those rather disturbing figures. Is he aware of the proposals by the EC substantially to increase the contributions? Is he in a position to say whether Her Majesty's Government are prepared to resist the increases?
Lord Brabazon of Tara: Yes, my Lords. We certainly agree, and have already stated, that the proposals for the increased provisions are far too large. The Commission's budgetary proposals cannot be implemented without the unanimous agreement of the Council of Ministers, and there is no question of the Government agreeing to the proposals.
Lord Ennals: My Lords, why should the taxpayers' money be used at all to subsidise tobacco growing? The Minister will be aware that today is National Non-Smoking Day. It may be that other events will sweep it off the front pages. However, since Ministers are trying to reduce the amount of smoking in this country, particularly among children, will the Minister say why taxpayers' money should be used to subsidise tobacco growers?
Lord Brabazon of Tara: My Lords, the United Kingdom has long criticised the operation of the CAP in this sector. It is the most expensive per hectare; production and budgetary expenditure have risen markedly over the years. The stabiliser has been inadequate, and fraud has been conspicuous. There is the conflict with health policy. A particularly unpleasant feature is that much expenditure is for subsidies on exports to third world countries. The Government would like to see this support come to an end.
Lord Mason of Barnsley: My Lords, is the Minister aware that each increase in cigarette taxation encourages more cigarette imports, both legal and smuggled? Apart from the revenue loss which is inevitable—Her Majesty's Government already lose much revenue through imports—this also undermines the Government's health policy. It means that cheap, high tar content cigarettes are entering the country and becoming more readily available to both young people and the unemployed. Does the noble Lord agree?
Lord Brabazon of Tara: My Lords, I believe that that is a completely different question from the one on the Order Paper.
Lord Bruce of Donington: My Lords, reverting to the first part of the Question asked by the noble Lord, Lord Boyd-Carpenter, is the Minister aware that the figures that he gave were the gross contribution of the United Kingdom? Much more important is the net contribution after all deductions and abatements which shows a much more unfavourable position for the UK. Is the noble Lord aware that under the new proposals put forward by the Commission at Maastricht, in a publication entitled The Means to Match our Ambitions, the United Kingdom contribution will increase even further? Some attempt will be made at the instigation of the Commission to make Britain fight for the abatement that it secured at Fontainebleau many years ago.
Lord Brabazon of Tara: My Lords, of course the figures I gave in my original Answer were the gross figures, but the UK's figure was after abatement. The net figures, as best I could produce them, appeared in a Written Answer to the noble Lord, Lord Stoddart of

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Swindon, on 25th February, at col. WA6 of Hansard. As regards the United Kingdom abatement, the Commission makes no proposals to change abatement at this stage. In any case, a change would require unanimity and we shall not throw away what we fought so hard to win.
Lord Harmar-Nicholls: My Lords, if we resist the extra contribution called for, can my noble friend say whether we will also resist the extra expenditure envisaged by the Community, particularly on the CAP?
Lord Brabazon of Tara: My Lords, as concerns the CAP and any extra expenditure on it, we welcome the Commission's recognition that the CAP needs reforming. Reform is needed to increase the exposure of agriculture to market forces and to reduce the burden of the CAP on both consumers and taxpayers.
Lord Mackie of Benshie: My Lords, in view of Her Majesty's Government's great disapproval of the expenditure on tobacco we have been discussing, what proposals have they made as regards growing other crops in the areas where tobacco growing is important to rural communities?
Lord Brabazon of Tara: My Lords, we welcome the proposals the Commission has now brought forward on the tobacco regime as part of its CAP reform package. Those proposals involve the abolition of intervention buying and export refunds, the imposition of quotas and a system of tightly controlled direct payments to growers. We support the Commission in those aims. As I said, we would ideally like the Commission to move towards phasing out all support for tobacco over a period of time. We recognise that that process would cause difficulties for growers whose opportunities for diversification are limited. To deal with that the Commission should devise appropriate alternative means of support.
Lord Stoddart of Swindon: My Lords, will the noble Lord confirm that Greece receives in net terms £1.8 billion per year in contributions from the EC? Will he also confirm that Greece receives the major tobacco subsidy and that its tobacco crop has the highest tar content of any tobacco crop in the world? Does he agree that government policy which seeks to increase the price of British cigarettes, with the result that they become the second highest priced cigarettes in the Community, and the proposed ban on advertising will lead only to additional imports of high tar cigarettes to the detriment of people's health in this country?
Lord Brabazon of Tara: My Lords, as I said, the second part of the question constitutes a different subject. There has been a net gain by Greece of £1.8 billion from the Community budget. I cannot, however, say how much of that money is connected with tobacco subsidies. I cannot confirm either the tar content of cigarettes produced in Greece.
Lord Donoughue: My Lords, given the fundamental contradiction between, on the one hand, taxing tobacco for health purposes and banning advertising
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in the EC while, on the other hand, subsidising lethal tobacco production to the tune of £1 billion, could not the Government use our coming presidency of the EC to establish a priority for eliminating this lunacy? Would it not surely be better to spend that £1 billion on research and investment in the countries of the southern Mediterranean to enable them to switch from this unwanted production?
Lord Brabazon of Tara: My Lords, as I said, the Commission has put forward some proposals for reform of the tobacco regime that we could support. Ideally, we should like to see support for that regime phased out altogether. We shall certainly press for that measure to be adopted during our presidency.
Lord Boyd-Carpenter: My Lords, does the original Answer of my noble friend to my Question mean that Her Majesty's Government have a veto on the proposed increases in Community expenditure, and if so will they exercise it?
Lord Brabazon of Tara: My Lords, as regards future expenditure, budget proposals cannot be implemented without the unanimous agreement of the Council of Ministers. There is no question of the Government agreeing to those proposals.

The Gas Industry
3.7 p.m.
Lord Dean of Beswick Lord Dean of Beswick asked Her Majesty's Government:
Whether the recently published annual returns of British Gas show that the objectives set by the Government for the privatised gas industry are now being achieved.
Lord Cavendish of Furness: My Lords, yes.
Lord Dean of Beswick: My Lords, I thank the Minister for that short Answer. However, he must be aware that a recently published report showed that British Gas had made just over £1.5 billion profit last year. That resulted in British Gas being on a collision course with Ofgas. We should bear in mind that during the passage of the Bill on the privatisation of the gas industry the Government indicated through various Ministers that the protection of the consumer would be safeguarded by the Government and Ofgas ensuring that British Gas would be prevented from adopting a monopoly position at the expense of the consumer. Has the industry addressed that matter? If it has not, when does it intend to do so?
Lord Cavendish of Furness: My Lords, since privatisation, domestic gas prices have fallen in real terms by about 13 per cent; industrial gas prices have fallen by about 29 per cent; and standing charges have fallen by about 22 per cent. Disconnections are now at their lowest level since records began. Competition is beginning to develop in the contract market and some 10 companies are now supplying gas in direct competition with British Gas. The Competition and

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Service (Utilities) Bill strengthens the powers of Ofgas and introduces standards of service for British Gas. It also strengthens the complaints procedure.
Lord Ezra: My Lords, bearing in mind the announcement today of the agreement reached between the Office of Fair Trading and British Gas on the extension of competition in the gas sector as regards commercial and industrial premises, will the Government indicate whether that is the full extent of the amount of competition they wish to see in that sector or whether this is a matter they will return to?
Lord Cavendish of Furness: My Lords, I welcome the agreement that was announced this morning. We are fully committed to the development of competition in all areas of the gas market. However, it must be recognised that this may take some time to occur.
Baroness Ewart-Biggs: My Lords, can the Minister say how many gas consumers have had their supply disconnected in the past year and whether the Government are satisfied with that situation?
Lord Cavendish of Furness: My Lords, following pressure from Ofgas, the number of domestic gas consumers disconnected for debt has fallen dramatically from a peak of nearly 61,000 in the year ending December 1987 to just over 18,600 in the year ending December 1991.
Lord Taylor of Gryfe: My Lords, does the Minister accept that the achievements he has listed have been to some extent the result of the pressure and effective operation of Sir James McKinnon, the Ofgas controller? Will he take Ofgas as an important model to be applied to other monopoly industries which have been privatised?
Lord Cavendish of Furness: My Lords, it is a great pleasure to agree with the noble Lord and to pay tribute to the work of Sir James McKinnon. We shall indeed use it as a model for the future.
Lord Mowbray and Stourton: My Lords, can my noble friend say what can possibly have got into the minds of noble Lords opposite who appear so unhappy with the news which he has given us?
Lord Cavendish of Furness: My Lords, I am not sure that they are unhappy. Perhaps they are disguising their real happiness at the good news.
Lord Donoughue: My Lords, does the Minister accept that the announcement this morning, though welcome, was of a limited nature? Does he agree, not only in relation to gas but also other monopolistic private utilities, that the developments show that we need a more systematic reappraisal of the role and objectives of the private utilities and the role of the regulators, which are developing in a rather ad hoc way, with the interests of the consumer and considerations of the environment being given a much higher statutory role?
Lord Cavendish of Furness: My Lords, I cannot agree with the noble Lord. The Bill which has just
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passed through the House addresses the problem of making the powers of all the regulators match the powers of all the most powerful regulator.
Lord Williams of Elvel: My Lords, does the noble Lord accept that the Bill which is passing through your Lordships' House has not yet been passed by the House? One of the features of the gas industry which is much approved on all sides of the House is the Gas Consumers' Council which has had a very strong influence in representing the consumer to both the regulator and British Gas. Is it not a pity, therefore, in the light of the noble Lord's recent comment, that that type of consumer council is not being extended to all the other utilities covered by the Bill?
Lord Cavendish of Furness: My Lords, this Question is limited to gas.
Lord Dean of Beswick: My Lords, in his reply to my supplementary question the noble Lord gave figures indicating how the price has been reduced in real terms. However, there is no doubt that Ofgas showed deep concern about the £1.5 billion plus profit that had been made and what it meant to the industry. It is not a question of sour grapes on this side of the House. Are the Government satisfied that the protection they promised the consumer is now a reality or close to being achieved?
Lord Cavendish of Furness: My Lords, I could not conceive of the noble Lord, Lord Dean of Beswick, suffering from sour grapes. The return on capital of British Gas on current cost accounting is 7.4 per cent. before tax and interest, which is hardly out of the way. Two-thirds of the profits made were generated from outside diversification. Perhaps it is worth saying that for every pound of profit British Gas spent £2 for the future of the business.

Carbon Dioxide: Disposal
3.13 p.m.
Viscount Hanworth Viscount Hanworth asked Her Majesty's Government:
What they consider to be the long-term possibilities and costs of extracting carbon dioxide from the flue gases of coal-fired power stations and burying the carbon dioxide in deep oceans or in spent oil drillings.
Lord Cavendish of Furness: My Lords, the Department of Energy is evaluating, in collaboration with United Kingdom industry and internationally under the auspices of the International Energy Agency, a range of technical options for the recovery of carbon dioxide from the flue gases of coal and gas-fired power stations and for its subsequent disposal.
Initial indications from those studies are that should such action ever be necessary as a means of reducing carbon dioxide emissions to the atmosphere considerable capital and operating expenditure would be required and there would be a substantial increase in the cost of generating electricity from fossil fuels.
Viscount Hanworth: My Lords, I thank the Minister for that reply, which probably provides as much information as he can give at the moment.
Lord Mason of Barnsley: My Lords, on the question of cost can the Minister say what is the recent estimated cost of fitting the flue-gas desulphurisation unit at the Drax coal-fired station and what progress is being made on further installations?
Lord Cavendish of Furness: My Lords, if the noble Lord were to put down a Question to that effect I should be very happy to answer it.
Lord Ennals: My Lords, is the Minister not aware that the Question is a very important one and that in my view his Answer was very unsatisfactory? Does the Minister accept that the reduction of CO2 emissions is a very high priority for the Earth Summit to be held in Rio in June this year? Should we not be taking a more positive view, such as now committing ourselves to ending emissions contributing to ozone depletion by 1995? Secondly, should we not make a commitment in respect of the point made by my noble friend Lord Mason? Surely we can give a more positive answer at this time.
Lord Cavendish of Furness: My Lords, the noble Lord, Lord Ennals, is hard to please. The study is taking place. I merely made the point that action would be expensive. It may not be wrong to say that the cost of electricity would be significantly increased and I could not rule out an increase of the order of 50 per cent, or more. Nevertheless, we are taking the option extremely seriously.
Lord Stoddart of Swindon: My Lords, I know that I shall be rather unpopular for asking this question, but are we absolutely certain, before we impose huge costs on coal-fired power stations, that it is only CO2 emissions which cause global warming? Are we convinced that sunspot activity and cloud formation do not have as much, if not more, effect on global warming? Would it not be wise to be certain of those factors before we impose such enormous costs on coal-fired power stations?
Lord Cavendish of Furness: My Lords, I do not know who the noble Lord thinks he will be unpopular with, but he has made a very important point. Many of those factors are still uncertain. So far as concerns the present study, one would need to consider the results and implications carefully and there would have to be environmental assessments of the problem in relation to where the CO2 would be dumped in the oceans.
Lord Ennals: My Lords, when does the Minister expect to have the results of the research to which he referred? Is it not vital to have the answers before the summit conference in June?
Lord Cavendish of Furness: My Lords, preliminary feasibility studies by the Energy Technology Support Unit and consultants have been completed. The main conclusions were presented last week at an international conference and will be published in due course. The studies were limited to particular
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technologies and the results should be regarded as indicative only. Copies will be placed in the Libraries of both Houses of Parliament.
Lord Donoughue: My Lords, given that investment in clean coal technology has recently been so low, will the Government give an assurance that if the results of the investigations are positive they will make the electricity generators accept an environmental obligation to install such clean coal technology in order to clean the carbon dioxide emissions?
Lord Cavendish of Furness: My Lords, I do not quite know what the noble Lord, Lord Donoughue, means by "positive". A great deal of information will come out of the studies and much will remain to be done. There is no question that as a result of the studies there will be immediate action. That is a long way off.

Bloodstock Transactions: VAT Rate
3.18 p.m.
Lord Donoughue Lord Donoughue asked Her Majesty's Government:
Whether they have any proposals to bring the United Kingdom's rate of VAT on bloodstock transactions on a par with those operating in France and Ireland, in order to keep the bloodstock breeding industry in this country.
The Minister of State, Department of Transport (Lord Brabazon of Tara): My Lords, the Government prefer a single positive VAT rate. That simplifies administration and lessens burdens on business. Member states' ability to maintain or introduce a reduced rate for bloodstock after 1992 depends on discussions in Brussels on the "reduced rate list". The UK could not match the Irish VAT rate after 1st January 1993 because EC finance Ministers agreed that super-reduced rates of below 5 per cent. can be kept only if they were in force on 1st January 1991 and conform with Community law. The UK has never applied a reduced rate to bloodstock.
Lord Donoughue: My Lords, bearing in mind that the EC Commission has already authorised France to have a VAT rate of 5.5 per cent. on bloodstock sales and Ireland will have a rate of 2.7 per cent. after 1993, is the Minister aware that rigidly insisting on a 17.5 per cent. rate will simply force buyers of bloodstock to abandon their traditional market in Britain to seek the lower VAT costs in France and Ireland? Is he further aware that the British bloodstock sales industry will be forced to follow those buyers abroad with disastrous impact on related industries, such as breeding, auctioneering, training, insurance and transportation? Why do the Government neglect that aspect and allow this highly respected and valuable industry to be driven abroad? Does the Minister agree that we need a level playing field with competitive VAT rates with France and Ireland?
Lord Brabazon of Tara: My Lords, the noble Lord assumes that the French will be able to retain their VAT rate. I understand that that is not certain. The EC Commission agreed that bloodstock should not be

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within a reduced rate. It could well be that the rate will rise to 12 per cent. As I said in my original Answer, the Irish will be able to keep their rate because it was a super-reduced rate which was in force on 1st January 1991.
The rate of VAT is not the sole factor in deciding the fate of an industry. Many large UK breeders have said that they have no plans to stop breeding in the UK although they may not be selling all their horses here. One should not be surprised at that in a single market.
Lord Harmar-Nicholls: My Lords, will the Minister confirm that if France does not upgrade—as, he said, the EC hopes—we shall then see to it that we have the level playing field for which the noble Lord asked? Or must we perpetually have an inferior position in what is a very important industry?
Lord Brabazon of Tara: My Lords, as I said in my original Answer we should prefer to have a single positive VAT rate. Many industries no doubt would plead special circumstances for a reduced rate but we have not encouraged them.
Lord Wyatt of Weeford: My Lords, is the Minister aware that only the Commission in Brussels can order equity in this matter between all the nations concerned? Is he further aware that at the Commission hearings last December I initiated such an intervention by the Commission which it is taking up? I hope that the Government will not interfere with the benign actions of Brussels in this matter.
Lord Brabazon of Tara: My Lords, we should like to see comparable VAT rates in this and other matters. As I said earlier, it is quite possible that France will have to increase its rate but, as I also said, the Irish are safe with theirs.
Lord Bruce of Donington: My Lords, will the Minister confirm that Her Majesty's Government will determine the rates for the United Kingdom irrespective of what Brussels may endeavour to impose upon us? Having asked that, does he think it wise that under our own authority we should retain our VAT rates at such a high rate, thus rendering the United Kingdom slightly uncompetitive with the bloodstock industries in France and Ireland?
Lord Brabazon of Tara: My Lords, we have agreed to a minimum rate in Europe. On the second part of the noble Lord's Question, as I said, we do not intend to reduce our rate for this industry.
Lord Molloy: My Lords, is the Minister aware that there exists an all-party bloodstock group with members from both Houses? Does he feel that it would perhaps be wise and sensible for the Government to have talks with the leaders of the all-party bloodstock group, from whom I am sure he will obtain some good advice and guidance to help him with this problem?
Lord Brabazon of Tara: My Lords, my right honourable friend the Chancellor of the Exchequer received representations from many different industries and, I believe, many from the bloodstock
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industry in the run-up to yesterday's Budget. I have no doubt that if the all-party group to which the noble Lord referred wishes to make representations, it will be heard.

Dissolution of Parliament
3.24 p.m.
Lord Hesketh: My Lords, it may be for the convenience of your Lordships to know that my right honourable friend the Prime Minister has today asked Her Majesty The Queen to proclaim the Dissolution of Parliament. Her Majesty has been graciously pleased to signify that she will comply with this request.
Parliament will be prorogued on Monday 16th March. The Dissolution will take place on the same day. The general election will take place on Thursday 9th April. The new Parliament will be summoned to meet on Monday 27th April when the first business will be the election of the Speaker in another place and the swearing-in of Members of both Houses. The state opening will be on Wednesday 6th May.
Today's business will remain as it appears on the Order Paper, though in the light of this announcement it is proposed to adjust the rest of this week's business in your Lordships' House.
With the leave of the House, I propose to make a further Statement about those adjustments later this afternoon. I shall arrange for adequate warning of that Statement to be given on the annunciators, but I can tell your Lordships now that it is likely to be after the first debate this afternoon, that in the name of the noble Lord, Lord Jenkins of Hillhead, which is limited to three hours. I therefore expect that the further Statement will be made at about six o'clock this evening.
It may, however, be for the convenience of the House to know that the only change proposed to tomorrow's business is that the Third Reading of the Further and Higher Education (Scotland) Bill will be taken immediately after the Report stage. My noble friend the Lord Privy Seal will this evening table a Business of the House Motion to suspend Standing Order 44, no two stages of a Bill to be taken on one day, which is usual in these cases, to be taken after Starred Questions tomorrow.
I observe that it is now 25 minutes past three and so the Statement will be made closer to 6.30 p.m. than six o'clock, as I mentioned earlier.
With the leave of the House, I should also like to say a word about the two debates standing in the names of the noble Lord, Lord Jenkins of Hillhead, and the noble Baroness, Lady Robson of Kiddington. As the mover is allowed 15 minutes, and the Minister should rise to reply not less than 20 minutes before the scheduled end of the debate, in the case of both debates this means that all other speeches should be limited to a maximum of six minutes. If any noble Lord were to speak at greater length, he would do so at the expense of subsequent speakers in that debate. With the greatest deference, I draw your Lordships'

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attention to the fact that when the sixth minute is indicated on the electronic clock we have entered the seventh minute.

Procedure of the House: Select Committee Report
3.27 p.m.
The Chairman of Committees (Lord Aberdare): My Lords, I beg to move, That the 2nd Report from the Select Committee on the Procedure of the House be agreed to. Perhaps I should mention just one or two items in the report. The first concerns references to the House of Commons and its Members. There is a suggested redraft of the Companion to the Standing Orders. The redraft contains very much what was in the previous Companion but adds one or two sentences for greater clarification.
The committee also considered the matter of referring to MPs and suggested using their names and not their constituencies, or, in the case of Ministers, using their ministerial titles.
On another matter, the committee recommends that no noble Lord should be entitled to have more than one Starred Question on the Order Paper on any one day. On Third Reading amendments, we endorse the present guidance: that it is undesirable that an issue which has been fully debated and decided at a previous stage of the Bill should be reopened by an amendment at Third Reading. We recognise that certain difficulties have arisen in respect of groupings and a suggestion is made for anyone who feels himself badly treated by that rule.
Finally—it is not in the report—we have had a number of points made to us about late sittings and time-limited debates. As the noble Lord the Leader of the House said yesterday, it was decided to set up a special sub-committee to look into the position at the next Session.
Moved, That the 2nd Report from the Select Committee be agreed to.—(The Chairman of Committees.)
Following is the report:
ORDERED TO REPORT:
REFERENCES TO THE HOUSE OF COMMONS AND ITS MEMBERS
1. On a number of recent occasions, doubt has arisen over what degree of criticism of the House of Commons and its members is appropriate in the House of Lords. The Committee decided that the current guidance in the Companion to the Standing Orders (pp 42–43) should be expanded to clarify the situation, in particular to stress the distinction between political and personal criticism. This distinction will never be clear-cut, but the Committee recommends that every effort should be made to ensure that personal criticisms are not expressed. The current text also makes no mention of Lords' freedom to quote from Commons parliamentary papers, and does not define the extent to which criticisms can be made of Parliament and of the House of Commons as an institution. We recommend the following redraft:
(ix) House of Commons
(a) Quotation of speeches
The content of a speech made in the House of Commons or a committee of the House in the current session may be
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summarised, but it is out of order to quote from such a speech unless it is a speech of a Minister in relation to Government policy.
This rule has been established for the purpose of avoiding anything which might bring the two Houses into conflict, and to prevent a debate in the House of Lords becoming a continuation of a debate in the House of Commons.
The House of Commons committee reports and the Vote may be quoted.
(b) Personal criticism of Members of the House of Commons
It is undesirable that any Member of the House of Commons should be mentioned by name, or otherwise identified, for the purpose of criticism of a personal, rather than a political, nature. Public activities by members of the House of Commons outside their parliamentary duties may be referred to.
(c) Criticism of Parliament as an institution
Criticisms of proceedings in the House of Commons and of Speaker's rulings are undesirable, but criticisms of the institutional structure of Parliament or the role and function of the House of Commons may be made.
2. The principle behind this revised text has been to make the rules for references to MPs and the House of Commons made in the House of Lords broadly similar to the rules governing references to peers in the House of Commons (as laid out in Erskine May). One feature of Commons practice not mirrored here is MPs' freedom to reflect upon the conduct of Members of either House in a substantive motion, such as an Early Day Motion. The Committee expressed deep concern at the inequality of treatment accorded to the members of the two Houses in this respect and will continue to pursue the matter.
3. The Committee also considered how MPs should be referred to in the House of Lords. Past practice has been to address MPs by their names, and not by reference to their constituencies. In the case of Ministers, there is also the option of using ministerial titles. It is not the practice to use "Right Honourable", "Honourable" and "Learned". The Committee recommends that guidance to this effect should be included in the next edition of the Companion.
STARRED QUESTIONS
4. The Committee considered a proposal that no Lord should be entitled to have more than one Starred Question on the Order Paper on any one day. It was argued that this proposal would improve both the variety and the topicality of Question Time. The Committee recommends that this proposal be adopted from the beginning of next session.
THIRD READING AMENDMENTS
5. The Companion to the Standing Orders (p 111) gives the following guidance concerning third reading amendments:
"It is considered undesirable that an issue which has been fully debated and decided upon at a previous stage of the Bill should be re-opened by an amendment on Third Reading."
The Committee endorses this guidance, in the interests of avoiding repetition in the House.
6. The growing use of groupings of amendments has made interpretation of this rule more difficult. Amendments are commonly grouped together which are not consequential on the first amendment of the group, but cover the same subject area. If there is a decision on an amendment in the group, it might be presumed that all amendments in the group would be caught by the third reading amendment rule. However, groupings are compiled in haste, and there are occasions when Lords find that their amendments have been placed in a grouping with amendments which they do not believe cover the same issue.
7. In such a case it is still open to the Lord to move his amendment separately at the earlier stage. The grouping of amendments is purely informal. But if Lords who disagree with the grouping do not take this opportunity, they should make clear in debate that they consider their amendment to cover a different issue. This can be taken into account when amendments are tabled for third reading. Otherwise it is likely that any Lord seeking to re-table the amendment at third reading would be advised that the amendment was in breach of the third reading rule.
MOVING OF CONSOLIDATION BILLS EN BLOC
8. In recent sessions, there have been a number of cases where several closely linked bills have been introduced to

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consolidate legislation in a particular area. When such bills are considered by the House at the same time, particularly at committee stage and third reading, there is a need for a succession of repetitive procedural motions. The Committee therefore recommends that the Lord Chancellor should be free to move stages of linked consolidation bills en bloc. Notice should be given by means of an italic note on the Order Paper, and any Lord should have the right to propose that a particular bill should be moved separately. On the rare occasion that a committee stage on re-commitment is required, we recommend that the House should be able to resolve itself into a committee on more than one linked consolidation bill, and that the committee should only report when all such bills had been considered. The procedure should be applied by a business of the House motion.
INDUCTION COURSE FOR PEERS
9. In its 2nd Report, 1990–91, the Committee recommended an experimental induction course to help new peers to learn about the House and its procedures. A course took place earlier this session, and the Committee considers that it was a success. We recommend that such courses should be held regularly.
Lord Cledwyn of Penrhos: My Lords, we are grateful to the Chairman of Committees for explaining the contents of the report. Perhaps I may refer briefly to paragraphs 1 and 2 of the report which I noted with interest. I refer to the last sentence in paragraph 2. It states:
"The Committee expressed deep concern at the inequality of treatment accorded to the members of the two Houses in this respect and will continue to pursue the matter".
It means that the Lord Privy Seal, the noble Lord, Lord Waddington, will pursue that rather important matter. We wish to make it clear that we on this side will give him full support.
On Question, Motion agreed to.

Constitutional Reform
3.30 p.m.
Lord Jenkins of Hillhead Lord Jenkins of Hillhead rose to call attention to the case for constitutional reform, including a fair voting system, fixed term Parliaments, a Bill of Rights and a control over their own affairs satisfactory to the peoples of Scotland and Wales; and to move for Papers.
The noble Lord said: My Lords, reeling under the shock of the surprise announcement which the Chief Whip has made, the secrecy of which was so carefully guarded, I beg to move the Motion standing in my name.
After yesterday's ephemera in another place, I shall endeavour to turn your Lordships' attention to longer-term constitutional issues. Looking back I am often struck by the thought that Chancellors who occupy an immensely central political position in their day are nonetheless able to do little except put footprints in the sand—footprints which are washed away by the next high tide of their successors. Perhaps I feel that more strongly, for my successor, the noble Lord, Lord Barber—I do not see him in his place— was a particularly effective washerwoman in that respect. But I do not wholly think so, for if one looks even within governments of the same party Mr. Lawson did not leave many of Sir Geoffrey Howe's monetary targets in place for long.
By contrast, in the Home Office—which is my other main experience in government—for good or ill, what
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one does lives much longer after one, and this is particularly true with constitutional matters. If economic management is almost inevitably too short term, our constitutional practices are too stubbornly unyielding to the changing needs of a changing nation and society. We still live broadly under a constitution based on a late 17th century compromise between monarchy and oligarchy which was much more concerned with the rights of Parliament than it was with those of the individual. A system that settled roughly into its present form by about 1868 has not vastly changed since then and has hardly changed in the past 40 years.
Yesterday the annual spring festival of the Budget —hardly less hallowed in our national life than the Boat Race—was abolished. Like most ancient British traditions, it was mid-Victorian in origin. I believe that the change—particularly as the penumbra of secrecy had been largely dissipated by this Government's passion for leaking and counter-leaking, briefing and counter-briefing—was more than due and I welcome it. But institutional reform should certainly not stop at just getting rid of the Gladstone budget box which even two decades ago I thought showed serious signs of structural exhaustion.
So, rather more seriously, is our present voting system. It was quite a good system so long as two parties, and two parties only, had an overwhelming grip on the loyalty and even the enthusiasm of the British electorate, so long as,
"every child that's born into this world alive was either a little Liberal or else a little Conservative",
with over the 50 years from 1900 to 1950 Labour being substituted for Liberal.
The reason that I earlier cited "the past 40 years" was that the 1951 election was the apogee of two-party dominance. At that election 83 per cent. of those on the electoral register voted, and of that 83 per cent. no less than 97 per cent. voted either Labour or Conservative. The result was that in 1951 the Labour Party was able to achieve the remarkable feat of polling 40 per cent. of the total electorate—that is, of those who did not vote as well as those who did—and still lose.
By contrast, in 1983 the Conservative Party polled 32 per cent. of the total electorate and won a majority of 140 seats. If that is not elective dictatorship—of which the noble and learned Lord, Lord Hailsham of Saint Marylebone, spoke so eloquently in 1976 when the system put him temporarily into opposition—I do not know what is.
What of course had occurred in the 32 years between 1951 and 1983 was that the 97 per cent. who flocked to the banner of one or other of the big parties had been reduced to barely 70 per cent. and that, partly because of the increasing inappropriateness of the system, the numbers bothering to vote had come down from 83 per cent. to just under 73 per cent. Thus a system which was reasonably appropriate 40 or even 30 years ago has become increasingly inappropriate, effectively disenfranchising large sections of the electorate, thus producing an alienation which shows itself in lower polls, and thus—a secondary effect—

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exacerbating the problem of a minority of the electorate producing large, nearly all-powerful, parliamentary majorities.
The effects of that are not confined to national government. The excuses for the weakening of local government, carried through by successive government measures in the 1980s, were almost all provided by the excesses of a few party caucuses given by the voting system a power out of all proportion to their popular support.
The justification for all that distortion is that it gives the electorate the inestimable benefits of strong, coherent one-party government. And how have that strength and coherence shown themselves? They have shown themselves in the legislative shambles of this Parliament, with the Government performing the unprecedented feat of repealing its own flagship measure within a single Parliament and buttressing it with such supporting nonsenses as the Football Spectators Bill and the Broadcasting Bill. Joy has definitely not been produced through alleged strength, and in any case the indications are that the electorate do not like one-party omnipotence but would prefer to see parties working together.
I am more than enough of a relativist to know that there is no perfect electoral system. There are some disadvantages to each system. Most of the objections to a proportional system need not apply under sensible variants of the system, but one or two will always remain. However, that is not a reason for sticking stubbornly to the present manifestly and massively unfair arrangements.
I turn more briefly to the other points in the Motion. Our practice in regard to the choice of election dates really is very odd if one stands back even the shortest distance and contemplates it. To give the starting pistol in a race to one of the competitors and to encourage him to fire it when he thinks that the others are least ready—when they are tying up their shoelaces or something of that kind—is not in accordance with the best athletic practice.
Nonetheless, I believe that in practice Prime Ministers have sufficiently often shot themselves through the foot with the starting pistol that it is the indignity rather than the unfairness which worries me here. We need all the respect that we can muster for politicians these days and Prime Ministers hovering on the brink rarely enhance their reputations. It was not the finest hour of the noble Lord, Lord Callaghan, when he kept the TUC waiting at the church in the autumn of 1978; and Mr. Major has not done himself much good with his hesitations of the past six months. On the whole I believe that a fixed four-year term would certainly be more rational, somewhat fairer and maybe militate against both the economic uncertainty and the awful cacophony which has been the too long-drawn-out overture to this election.
A Bill of Rights would essentially put into British law the fundamental human freedoms already recognised by our adherence to the European Convention on Human Rights. But those rights cannot now be enforced except by going to the Strasbourg Court, with all the expense, delay and
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general cumbersomeness for the individual which is involved in that; and for the country the disrepute of having more cases before that court, and more of them lost by the British Government than is the experience of any of the other participating states. It is a matter, first, of enabling the British courts to deal with our national dirty linen and not sending too much of it, expensively and often embarrassingly, to be dealt with at the Strasbourg laundry; and secondly, of redressing after 300 years the imbalance left by the fact that the 1688 Bill of Rights was much more about the rights of Parliament than about those of the individual.
I turn finally to devolution and particularly to the Scottish question. I do not see how it is possible now to deny that there is now a settled Scots wish, fluctuating in intensity but settled in direction, to have a substantially greater degree of control over their own affairs. I was persuaded of that well before I had any thought of becoming MP for Hillhead. I was fortified in that during my five years as a Scottish Member of Parliament. I thought that the degree of devolution should go quite far, with powers to raise and spend money but not to run a budget deficit, and should stop short of anything which might endanger the currency union, let alone the political union, the achievements of which, both historical and actual, would make its severance a disaster both for Scotland and for England.
In fact I never took that possibility seriously, as it is only the effects of recent government attitudes which have made me begin to change my mind about that. The unholy alliance, for such it is, between the Conservatives and the Scottish Nationalists which has recently reared its head is disreputable. To say to the Scottish people, as the Government are currently doing, that if they elect a majority of nationalists they can have independence but that if they vote for devolution and reform they cannot have it, is a frighteningly irresponsible attitude.
The Conservative Party used to call itself the Unionist Party. I recall a phrase of Arthur Balfour's when he set your Lordships' House off on one of the most unwise excursions in its long history—the root and branch opposition to nearly all the legislation of the 1905 Liberal Government. The object, he said, was to ensure that:
"the great Unionist Party should still control, whether in power or whether in Opposition, the destinies of this great Empire".
Well, the great Unionist Party in the first quarter of this century succeeded unnecessarily in completely severing the link with Ireland. It would be a supreme irony, but even more a supreme tragedy, if in the fourth quarter of this century, by sheer stiff-neckedness, it severed the link across the Scottish Border. My Lords, I beg to move for Papers.
3.46 p.m.
Lord Hailsham of Saint Marylebone: My Lords, the whole House always listens with pleasure and attention to whatever falls from the noble Lord, Lord Jenkins of Hillhead. I am sure that it will wish me to begin by congratulating him on selecting as a subject for debate the future of the constitution, which is very much in the air for public discussion.

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That said, except for his last two sentences I agreed with nothing in his speech. I am against all 57 varieties of alteration in the method of electing the House of Commons. I am against fixed-term parliaments. I am against a Bill of Rights in the sense in which it would have any significance —that is to say, in the American sense and not in the sense of our own statute of 1688 which can be altered as easily as any of our traffic laws. I am against the form of what was proposed in the last feature of the noble Lord's speech. I confess modestly to being British. My nationality would be destroyed if different systems of government were operated in the various regions of England, Northern Ireland, Scotland or Wales. I believe that a uniform system is better than a diverse system.
Almost half of the noble Lord's speech was devoted to the voting system. I shall not devote so much of my speech to that topic since I have to polish off the entire constitution in six minutes! The variations in the voting system—all 57 varieties—would be a recipe for nobody getting the government for which they had voted and nobody getting the programme for which they had voted. What would occur would be a botched-up compromise reached among various distinguished statesmen in—I fear, on this No Smoking Day —smoke-filled rooms and it would bear no relation to what people had voted for. It would also be a recipe for splinter groups of extreme views and of various bizarre kinds and a recipe for no organised or continuous policy in the centre of affairs.
I am against fixed-term parliaments. If we had fixed terms of parliaments, as happens in every country which has them, the phoney war which has been going on for the past few weeks would be going on throughout the second half of every four-year parliament in which the noble Lord, Lord Jenkins, has declared an interest. I am against the Bill of Rights in the sense in which it would have meaning. That is not because I do not favour the European Convention but because we cannot have two Bills of Rights. If that were the case, within six weeks there would be a divergence between the requirements of both.
I would say that the American experience is not altogether satisfactory. It failed to save the negro from chattel slavery for 80 years and from discrimination for the following 80 years. It led to the assassination by gunfire of a large number of successive presidents and an innumerable number of innocent citizens because of Article 2 of the Bill of Rights. There is no effective law of defamation because of Article 1.
The truth is that a Bill of Rights is obsolete by the time the ink is dry on the signatures. In this country we have one of the most sensitive, flexible and evolutionary constitutions in the whole history of civilised political life.
The noble Lord, Lord Jenkins of Hillhead, would not merely interfere with that system; he would destroy it. Our constitution can be reduced to perhaps three or four propositions. The first is that the sovereign in Parliament is the supreme legislative authority with unlimited powers. It is not elective dictatorship because it is a forum for discussion. The second is that one parliament cannot bind its successors. Therefore, we can change our laws without
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any Supreme Court intervention as often as they require changing and by evolutionary and gradual means. The third is that we go in for Cabinet government, with members of the Cabinet all in one House of Parliament or another and responsible to the whole Parliament for what they do, and not an elective system of offices of fixed terms like the American presidency.
So much for the Bill of Rights. I have already touched upon control by Scotland and Wales over their own affairs. The truth of the matter is that there is a case for regional government throughout the United Kingdom but that is not what is asked for in the Motion. I conclude simply by saying that I am British and proud of it. I do not wish to lose my nationality.
3.52 p.m.
Lord Cledwyn of Penrhos: My Lords, we are grateful to the noble Lord, Lord Jenkins of Hillhead, for this opportunity to debate constitutional reform and for his thoughtful speech. We also enjoyed the stimulating speech of the noble and learned Lord although I must proceed to differ from him on a number of points.
The debate assumes a greater significance because it takes place on the eve of a general election. People are entitled to know what plans the parties have for constitutional reform and what their implications are. Thus far, there has been no progress in the areas listed in the Motion, although we must not overlook the changes which have taken place and which continue to develop as a result of our membership of the European Community.
I regret to say that the record of the party opposite on constitutional reform has been less than stimulating. The Government have made it plain that they are opposed to any type of electoral reform and that they will not contemplate fixed term parliaments, a Bill of Rights or any form of devolution for Scotland or for Wales. Furthermore—and we have debated these issues in the House on two previous occasions in recent years—they have increased centralisation and have gravely eroded our individual and collective rights during their long tenure of 13 years.
Ministerial and bureaucratic authority has increased. Quangos have multiplied and local authorities have been undermined. Whole tiers of local government have been abolished and replaced by joint boards. Britain, which has always set an example, has been turned into one of the western world's most centralised and secretive states. That is a sad and depressing picture and I know that many noble Lord opposite are unhappy about it.
The noble Lord, Lord Jenkins, dealt with the complicated subject of electoral reform, also referred to by the noble and learned Lord. As noble Lords are aware, we have set up an inquiry into electoral reform and representation under the chairmanship of Professor Raymond Plant. His report will not be available for some weeks. Professor Plant has however made some important suggestions, one of which is

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that a constitutional convention to settle the voting system should be established. He made the interesting remark:
"In a sense the outcomes of politics are not legitimate unless the procedures are seen to be legitimate as well".
That subject has been debated and discussed throughout this century and in the last. It is not easy, as the noble Lord, Lord Jenkins, said, to find an ideal "fair" system. All the systems have advantages and disadvantages but a Labour Government will consider which is most appropriate for the House of Commons, the European Parliament and local government in the light of the Plant Report.
I regret to say that the general public are fed up to the back teeth with the Government's failure to be decisive. The way the Government have handled their legislative programme in the past few weeks has been deplorable. A Budget Statement followed by an election proclamation is not the way to run the country. Their truncation of a Finance Bill is not the way to conduct parliamentary affairs. Those are indeed arguments for a fixed term parliament.
As regards a Bill of Rights, as I have said on a previous occasion, we favour a Freedom of Information Act together with the measures set out in a Charter of Rights, which we have published. We propose to introduce legislation to guarantee the following: first, an individual's right to prohibit or restrict the collection of personal information; secondly, the parliamentary scrutiny of the security and intelligence services; thirdly, the equal treatment of all citizens of this country irrespective of their sex or racial origin; and, finally, equal access to the law as well as equal treatment before the law. We would also introduce a Bill of Rights to incorporate the European Convention on Human Rights. Of course, it will be necessary to look at the working of the convention at the time.
The noble Lord, Lord Jenkins, dealt with devolution. He will be aware that I have great sympathy with what he said. I have never wavered from the view that measures of devolution to Wales and Scotland are desirable and right. Lloyd George entered Parliament in 1890 on a home rule ticket and the founding fathers of the Labour Party took a similar view. Of course, independence is one thing and devolution is another. At a point in history when the countries of Europe are drawing closer together and when their sovereignty is diminished, I cannot think that total independence is a practical objective. However, to deny a measure of national responsibility to the two old nations in these islands when devolution operates across the world from the United States to Germany and Switzerland is short-sighted obstinacy.
For the Government to try to argue that there is no constitutional formula between independence and centralisation is to be blind to all that has happened in the countries which I have mentioned. If New South Wales and Nova Scotia can be given a measure of devolution, why should Wales and Scotland be treated with such disdain?
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Another task which must be undertaken in due course is the reform of this House. We have on several occasions raised that question, and the subject must be explored very carefully and without unnecessary delay.
I regret coming to the conclusion that the party opposite has no plans for any constitutional change. I suppose it is right to say that we have not yet fully adjusted to the new world, which this country, with others, helped to create. Dean Acheson said that Britain had lost an empire and not yet found a role. In fairness, Britain voluntarily dissolved the empire and has now found a role in the European Community, the Commonwealth and the United Nations. However, many of us still tend to look back with nostalgia. Side by side with the huge task of getting the economy right, of creating work for our people and giving them higher standards, we must have the courage and foresight to undertake essential constitutional changes. They cannot be achieved overnight, in a Session of Parliament, or even in an entire Parliament. We must however make a start, and that is what the next Labour Government propose to do.
4 p.m.
The Lord Bishop of Norwich: My Lords, I too am grateful to the noble Lord, Lord Jenkins of Hillhead, for his stimulating and wide-ranging introduction to the debate.
It may be felt unnecessary that anyone from these Benches should speak in this debate. The terms of the Motion are broad. They are principally concerned with Wales and Scotland rather than England and do not apparently raise any question of relations between Church and state. However, I want to make the point that the breadth of the Motion does not exclude a possible reform of this House. The noble Lord, Lord Cledwyn, specifically mentioned that. Such an issue would inevitably and rightly involve a consideration of the role of bishops in this House. Furthermore, any proposal for constitutional reform might find itself, even if that were not the intention, raising the whole question of the Church's establishment.
Through its establishment, the Church of England may seem to some people to enjoy privileges which are anachronistic, unjustified and in need of abolition. At the very least, some say, it would be more appropriate if those privileges were shared by other Churches. I should like to comment briefly on those views, even though I sense that they exist rather more outside this House than within it.
While it is true that the senior bishops of the Church of England enjoy the great privilege of Membership of this House, it is a fact that leaders of other Churches have publicly stated more than once that, far from resenting that privilege, they value it, because more often than not when we speak we do so not merely in the name of the Church of England but on behalf of the other Churches as well.
Relationships between the Churches are close and cordial, and we regularly consult each other about matters affecting the spiritual and moral welfare of the nation. That ecumenical growing together has been a major feature of Church life this century, and we

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continue to draw ever closer. Of course, we have the odd setback in that progress towards unity, but the Church lives with long perspectives. In that context, such setbacks should be seen as no more than hiccups which do not in the least affect our commitment to unity. We do not jealously guard our privileges on these Benches, and if a constitutional reform proposed a wider representation of leaders of other Churches we should no doubt support such a development. But in the meantime I believe it is true that we are able to represent a wide Christian constituency which goes far beyond the boundaries of the Church of England.
Privilege is an empty thing unless it is accompanied by responsibility. I am a relatively new Member of this House —the junior but one of the senior bishops, to be exact—but I have already come to a much deeper appreciation both of the crucial importance of this House in the affairs of the nation and also of the potential value of the contribution that can be made from these Benches. The courtesy shown by your Lordships is legendary, but I believe that it is more than good manners which expresses its appreciation of the presence of bishops. Our duties locally in our dioceses, as well as our national and international responsibilities, prevent us from being present as often as we should like. But I feel sure that your Lordships will agree that the Lords Spiritual have a vital function and responsibility in standing for the truth that the sacred and the secular, the spiritual and the material are not two separate aspects of life but are essentially intertwined.
Establishment consists not principally in the privileges enjoyed by a few Church leaders or in ceremonies of state, but in the responsibility felt by the Church to care for the nation as a whole. That central meaning of "Establishment" is seen not only in our national institutions but also in such places as the rural areas of my diocese, where the parson exists to serve not merely those who go to Church but the whole community. Equally, the villagers regard the parson as belonging to them all, and the Church building as theirs, whether or not they darken its doors. That is a meaning of Establishment. It is a tradition I value greatly which can easily be threatened by those in Church and state who fail to see the essential interconnection of the sacred and the secular.
I apologise to the noble Lord, Lord Jenkins of Hillhead, for raising matters beyond the scope of his Motion. Of course, it was not his intention to raise any questions concerning bishops in particular or the Establishment in general, but debates about constitutional matters can have reverberations in unanticipated and unexpected places. A debate about the Establishment of the Church of England may one day be appropriate, but it will need the most careful preparation and should not happen, as it were, by accident.
I personally hope that little will change in the near future because I very much enjoy being here.
4.5 p.m.
Lord Mayhew: My Lords, a number of voters will today be asking themselves to which constituency they belong. When one has one-member constituencies,
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one has to carve up the United Kingdom into 600-plus areas of roughly equal population. That means one cuts across natural communities. We cannot have constituencies like Bristol, Edinburgh or Manchester. They must be chopped up into unnatural artificial slices like Bristol East, Edinburgh West or Manchester Central.
Having decided to which constituency they belong, on 9th April the voters will advance to participate in an electoral system which, as the polls plainly show, they heartily dislike—a system clamped on them by the Conservative and Labour parties acting blatantly in their own interests. At the polling stations they will be faced with two serious restrictions on their liberty —both unique in the European Community. First, they will be forbidden to show which candidate they would like to win if their chosen candidate fails. They will be forbidden to do other than place one mark on the ballot paper which must be an "X"—the universal symbol of illiteracy.
That is a totally unnecessary and serious restriction on the liberty of the voter. Among other things it means that if their main concern is to beat the Tory candidate and the main challenger is Labour, they will be tempted to vote Labour even though they are Liberal Democrats. If they are Tory supporters and their main concern is to beat the Labour candidate, they would be wise to vote Liberal Democrat. On 9th April millions of electors will vote, not for the candidate they like most, but for the candidate most likely to defeat the candidate they like least.
Secondly, their ballot paper, unlike the ballot papers of other countries, will prevent their showing any preference for different candidates of the same party. They will be unable to show preference for a moderate as opposed to an extreme Labour candidate; for a hard-working Tory as opposed to an idle Tory; for a female Liberal Democrat as opposed to a male Liberal Democrat; for an Asian candidate as opposed to a white candidate, and so on. The Tory and Labour parties insist that those choices must be made in advance for the electors by party activists in smoke-filled rooms. Experience shows that such choices unfairly favour the male and the white. That is why there are so few women in Parliament; that is why there are so few MPs from ethnic minorities. It is from those smoke-filled rooms that the half-baked, extreme Leftist MPs manage to make their way to Westminster. The electors are not given a choice between a moderate and an extremist Labour MP.
When the results of the election are published on 9th April the commentators will point out that half the votes have been wasted; that 6 million or 7 million voters could have stayed at home without changing the result in any way at all. For 23 years I represented a safe Labour seat. At each election a small gallant group of constituents would visit the polling station and vote Tory. My admiration for them was unbounded. They turned out and wasted their vote at election after election until death mercifully removed them from the register. Nor were theirs the only votes to be wasted. Half my own voters could have stayed at home without making the slightest difference to the result.

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Objections to proportional representation have changed over the years; some have disappeared. The one most frequently heard today is that proportional representation tends to produce hung parliaments, as it does, and therefore puts too much power into the hands of minority parties. The experience of Germany is quoted; how the Free Democrats arranged first a Social Democratic government and then a Christian Democratic government. The flaw in that argument is that any king-making powers of a minority party arise solely from the mutual hostility of the larger parties. That has happened in Germany. The larger parties agree to come together and then the minority parties are marginalised. The Tory and Labour parties may not wish to do that, but it is their decision and their choice. They can do it if they like. If they insist on the politics of confrontation they naturally confer on minority parties considerable influence. In this case, the country will be fortunate to have, in the Liberal Democrats, a party capable of requiring them to abandon or modify their more extreme policies such as the poll tax for which they will have failed to get an electoral mandate.
4.10 p.m.
Lord Thomas of Gwydir: My Lords, in the short time at my disposal I intend to refer solely to Wales. I do so because I raised this matter a few weeks ago in the House and was unable to get a reply. What concerned me was what the noble Lord, Lord Cledwyn, said—that there is a forthcoming election and people are entitled to know what constitutional changes are proposed in Wales by the various parties there. I agreed with the noble Lord, Lord Cledwyn, when he said that. I waited with great interest to see what he was suggesting should be Labour Party policy for Wales in the forthcoming election.
We know that the Labour Party is in favour of an elected Assembly with fiscal powers for Scotland. I was a little concerned when all he gave us was something vague. He said that after the report a Labour Government would consider which was the best system for Wales. He referred to himself as one who had never wavered from the view that a measure of devolution in Wales was right. I certainly agree with that. Time and again I have listened with great interest to his powerful speeches in favour of a Parliament for Wales.
What concerned me was this. The Liberal Party in Wales is quite clear about its policy, Plaid Cymru is quite clear, and both their policies are tenable. They say that they wish to have an elected Assembly with tax-raising powers and a measure of legislative and executive independence from Westminster. I am sure that what concerns the people of Wales is what exactly is Labour Party policy. The only guide that one has had is from the 1990 document, The Future of Local Government in Wales. It states that the Labour Party intends to set up an elected body for Wales to deal with Welsh Office functions and with functions carried out on an all-Wales basis by nominated bodies. The document continues:
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"We recommend that the power of taxation should rest with Parliament".
The elected body is referred to as a "regional government". The document goes on:
"It will be important for the regional government to have the opportunity to scrutinise any parliamentary legislation and regulation with relevance to Wales so that it may make appropriate representations on them to the Secretary of State and the Government".
That is something which has concerned me somewhat. I, like the noble Lord, Lord Cledwyn, was a Secretary of State for Wales. Since 1964 I believe that the office has increased in value. It has done a great deal to help Wales. It is an effective institution. The Secretary of State is the legitimate executive authority for government policy in Wales. When he is abroad he speaks with authority for Wales and he is accepted as being the executive authority. It seems to me that the position of the opposition parties in Wales is to diminish that authority. That should be known so that the people of Wales understand exactly what is proposed.
Is it proposed that there should be an Assembly in Cardiff, presumably dominated in numbers by representatives of the populous South Wales? Is this regional government which is referred to in the 1990 document to be an executive talking shop unable to raise a penny in revenue and under the financial thrall of the Welsh Secretary? Is it intended that Wales should be relegated to what is in effect similar to a region of England? Is that what is intended?
This is a recipe for conflict between the Secretary of State and Westminster on the one hand and the Assembly on the other which may well lead to deadlock and economic disaster. I refer the House to what happened in 1979 when it was proposed that there should be a Parliament for Wales. There was a referendum in which 80 per cent, of the people said no. Following that, my party captured Montgomery, Brecon and Radnor and Anglesey, which were all places in favour of a Parliament for Wales. Plaid Cymru captured Meirionnydd and Caernafon. In 1983 the Conservative Party had 14 seats.
What that amounts to is that a panacea policy is not a real option. In Wales it is a decision between an autonomous Wales within a federal Europe or a continuation of the Union. My party believes in the continuation of the Union. Anything else would lead inevitably to a serious constitutional conflict. I shall adopt the words Mr. Kinnock used in 1979:
"It will be a costly millstone around the necks of the people of Wales".
4.16 p.m.
Lord Houghton of Sowerby: My Lords, I am terrified that in a debate of this kind the time allotted may at some time be three minutes instead of six. Then I suggest that we shall have a breathtaking debate in which there is no time to do anything except recite our catechism of political belief. What the noble and learned Lord, Lord Hailsham, did in his interesting speech was to give your Lordships a whole collection of his prejudices in a matter of six minutes. When we come to deal with the Motion we should pass it because we want the Papers. There will be a great

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many of them and it may be worthwhile reading some of them on all these subjects while we are waiting for the House of Commons to be elected.
I am not going to recite my political catechism or express my prejudices over a wide area. I am going to deal with a part of constitutional reform which requires us to look at our own navel. I say that reform of the House of Lords is part of constitutional reform. It has been much talked about. Since the Labour Party gave up the idea of abolishing us and found that we are extremely useful and effective, even when there is a Conservative government, they decided that some kind of reform is on the books and not total abolition.
Our defeat of the Government the other evening on the Education (Schools) Bill was not really to do any harm to the Government or to the Bill. It was to demonstrate to the Labour Party the fallacy of the myth which they still stick to; namely, that in this House the Conservative Party has a built-in majority. It has not. All these debates prove that when the Cross-Benchers apply their minds to problems, as they occasionally do with great depth and understanding, we can defeat a Conservative Government.
I want to take noble Lords back to what we did in this House before I came here in 1968. There was a scheme which your Lordships passed by 251 votes to 56 votes. That scheme was put forward by the Labour Party. The Bill introduced on 19th December 1968 was passed by a very large majority in the House of Commons. It looked as if we had an accord for the future of the House of Lords, but owing to a series of misjudgments of strategic importance the Bill eventually had to be withdrawn. What the Labour Government had overlooked was that in order to get a Bill through, even with a good deal of support in the House of Commons, a good command of the procedures of the House is required because a Bill cannot proceed unless there is the power to move, and obtain, the closure and so make progress on the Bill.
When the House of Lords reform Bill had been on the Floor of the House for nine days and was still on Clause 1, it was time for the Prime Minister to consider what should happen to it. I was chairman of the Parliamentary Labour Party at that time and the Prime Minister asked me what I would do with it. I said that I would drop it; but it remained on the agenda for the rest of that Session just to show that that government were not dropping anything.
We had an agreement, and I believe that that is the starting point for our consideration of the future of the House of Lords. Unless we deal with the House of Lords I do not think we shall make much progress on other items of reform.
In the remaining few seconds left to me I suggest that in the new Parliament we should attempt to get a corporate view in this House about our own future. That would be an exercise in wisdom, in mutual accommodation and in looking forward. Perhaps we should offer that corporate view based upon what was agreed in this House in 1968 because, if we look at it, a great deal is relevant and apposite today. Even the scheme that the Labour Party is talking about takes its roots in the report of the constitution committee—a committee of which I was a member—which linked
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the House of Lords with regional development. But I think that the House of Lords should be reformed quite independently of regional government. It is the repository of wisdom and experience. With suitable conditions of arriving here and departing—there is, of course, one condition of departing, but we do not like to face that—we are on the way to getting an agreed scheme.
Finally, let me say that no one party will get reform of the House of Lords through Parliament without a very large measure of all-party agreement. That is quite impossible. History shows that it is impossible for one party to carry through substantial constitutional reform of Parliament itself. Therefore, we should give some attention to our own position, our own future and what part we feel we can play in the forward looking period that we are entering, whichever party is returned. There is a good deal of forward looking necessary for this country.
4.23 p.m.
Lord Simon of Glaisdale: My Lords, in the current political atmosphere which has even invaded your Lordships' House, as is apparent from the speeches that have been made, there is little hope I fear for a still small voice from the Cross-Benches to carry much resonance. Nevertheless, I desire to intervene to make one overriding point. What has already appeared abundantly from the general discussion today is the desirability of these important matters being considered by a Royal Commission on the constitution.
The noble Lord, Lord Jenkins of Hillhead, has raised issues of far-reaching constitutional importance. Other issues, too, were raised by subsequent speakers. Those issues are not going to go away; nor are they going to be conjured away by rubbery phrases or putting down markers for subsequent negotiation in a hung Parliament. These are serious issues and not one has been raised that does not demand much further consideration than it has had.
My noble and learned friend Lord Hailsham, in his rumbustious speech, dealt with all the points that previously have been raised. But I missed one note which, to my mind, is the most percipient constitutional insight since the war. I refer to the danger in which we stand of an elective dictatorship. We cannot escape from that either.
I said that there was not a single issue that does not demand further consideration. Practically all of them will have abundant further consideration in a controversial way. I only desire to take one as an example—the question of devolution to Wales and Scotland. The further question that arises is that to which my noble and learned friend referred; namely, how far should that principle be carried into the English region? That is a profoundly important question. As soon as that is done, we have to consider what is the division of power between the regions, including Scotland and Wales, and the centre. That brings in the all-important question of how we are to deal with finance and taxation. At the moment both Scotland and Wales benefit financially from the union. We then have to decide whether it is right to face them

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with that sacrifice; though probably it is better to ask whether it is right that they should be faced with such a sacrifice. If we are to allow local taxation, what form should it take? There is much to be said for a local income tax, but the difficulties were spelt out at length in the Layfield Report. Those difficulties have to be faced, but they cannot properly be faced on the hustings.
Therefore, I end as I began, in a plea that these matters shall be considered carefully by a Royal Commission. Your Lordships will bear in mind the stark difference between, on the one side, the engendering of the American constitution, discussing constitutional conventions one after another and discussed at length by scholarly lawyers in the papers on the federal list, and the febrile constitution thought up in the heat of the moment during the French Revolution, none of which survived.
As I said, I end as I began by hoping that all parties —or at any rate the Conservative Party in its manifesto—will publish a commitment to a Royal Commission on the constitution.
4.30 p.m.
Lord Mackie of Benshie: My Lords, your Lordships will not be surprised if I talk about Scotland. I have been involved in politics for a long time. The first election in which I took part, although I was not a candidate, was in 1950. From then on in Scotland we in the Liberal Party—as it was then; it is the Liberal Democratic Party today—were talking about a Parliament for Scottish affairs. That is what we are talking about now. I should tell the noble and learned Lord that if our scheme comes into operation he will not have to cross any borders and nothing will be done to make him take out a visa. Indeed, we will offer him a dram when he comes to visit us with the greatest friendliness and we shall consider ourselves still British together.
The whole history of the Union is rather interesting in the way that it has developed. There is no shadow of a doubt that when the 1707 Act was passed there was much skulduggery in the arrangement of the measures. But there is also no shadow of a doubt that Scotland and Scotsmen benefited from the access to English colonies and from the development of the tobacco trade, which is much maligned at present. All that brought a degree of prosperity to Scotland which was exploited.
The Scots have always been great travellers. In the Baltic states in the days of the Hanseatic League I believe it was said that regulations were put out that dogs and Scotsmen were not allowed on the streets after dark. But since the Reformation the Scottish character has changed. Indeed, Scotsmen have made tremendous use of their talents all over the world. Of course they had to do so because they came from a poor country. But it is a country and a people with a culture. It has great poets—and not only Burns. It also has writers and painters, not only Raeburn. Moreover, it has had and has economists—some of
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whom are much misquoted today. It has all the capacity to be an entity on its own within the British constitution—if there was one.
I much regret that there has crept into the SNP's propaganda today an appalling blowing up of a natural pride in Scotland into a hatred of the English. I personally rather like the English. They are a nice people. They are kind to animals; indeed, I have many friends among them. But looking at the Scottish Office and its achievements—and there have been considerable achievements and very good Secretaries of State —we can see that it has been fighting a corner to try to adapt English legislation to Scottish affairs. What we need in Scotland is a centre of power in a Parliament for Scottish affairs.
The control of great companies has drifted south. Many of the Scottish industries are now controlled from London. All of that has led to the unease which sensible people in Scotland are feeling. It is the sensible people—and, happily, the nonsense about independence and Europe is dying down—who want a centre of power which would eliminate a great deal of the unease and make Scotland a centre for people to return to, to stay in and to develop in all sorts of ways.
There is an example of that process. It is often said to be an impractical one but it is, nevertheless, a recent example. I refer to Ulster. Despite the appalling racial hatred, technically the Stormont Parliament worked extraordinarily well. I shall merely give your Lordships two examples, both of which I know of from personal experience. The first involves agriculture. I remember well just after the war when a new method of preserving grass by using silage was introduced. The Irish Department of Agriculture grasped it at once, co-operating with the university and Professor Morrison. It produced sensible legislation to give farmers in Ulster with their wet climate a subsidy for building silos to the great value of the livestock industry.
The other example was the attraction that industry had to locate in Northern Ireland. They were superbly good at that in that closely-knit community. There we have an example of such a process working without breaking up the United Kingdom in any shape or form. It would work in Scotland. It would work well and improve the relationship. Indeed, the United Kingdom would be much more of a united kingdom than it is today.
4.35 p.m.
Baroness Carnegy of Lour: My Lords, it is always a pleasure to follow my neighbour, the noble Lord, Lord Mackie of Benshie. I go along with much of the earlier part of his speech. His party, the Liberal Democrats in Scotland, do not, I understand, favour the setting up of an Assembly along the lines of the Stormont Parliament but a Parliament along the lines which the Liberal Democrats and the Labour Party have spent so much time designing through the so-called constitutional convention. I think that most people would agree that the criteria by which we should judge such a parliament, whether it be that one

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or any other, is whether it would work and whether it would satisfy the Scots and so keep Scotland within the United Kingdom.
Now that the election campaign proper is beginning, it seems most important that the limitations of the scheme put forward by the Labour Party and the Liberal Democrats should be understood. If it is truly understood, I believe that only those who want a separate Scotland will vote for it. If one looks at it in detail, the scheme has a number of major flaws. It is possible that later speakers will point out some of them. One of the least discussed, and one which seems to me to be the most important, is the proposed funding system for the Scottish Parliament.
The proposal is that such funding should come from three sources: first, from revenue raised in Scotland from income tax and VAT—that is, income tax and VAT set in the UK Parliament; secondly, from a block grant from the United Kingdom Parliament based on assessed need negotiated with the Treasury on the current Barnett formula by which the Scottish Office is at present funded; and, thirdly, by the ability to add or lower income tax by a defined amount. It is suggested that the latter might be 3p more or less than the UK income tax level. That in itself produces a number of major problems. The revenue from income tax and VAT—the so-called "assigned revenues"—will vary as the United Kingdom Government vary tax and as the economy of Scotland varies as it expands and declines from time to time.
Further, as the Scottish Parliament's decision-making and legislation begin to diverge from that of the United Kingdom —the Scottish Parliament will be legislating for everything except foreign affairs, defence, social security and fiscal matters—and as Scottish local government flexes its muscles (we must remember that it spends 52 per cent. of the Scottish Parliament's spending) expenditure needs will as a result diverge from the base currently agreed within the United Kingdom, which may be higher or lower. In theory, as that happens the increase or decrease of 3p can come into play. But in practice the extent to which that will happen will depend upon the amount of the United Kingdom block grant. A very small reduction or increase in that block grant will have a major effect on Scottish income tax. That is the gearing syndrome that we see in current local government funding—the effect on the community charge of a quite small change in government block grant funding. In other words, the same thing would happen but to a very much greater degree.
Therefore, under the plan every year there will be an enormously contentious negotiation between the United Kingdom Parliament and the Scottish Parliament. On those negotiations will depend the level of funding of local government in Scotland and therefore what it can and cannot do, the ability of the Scottish Parliament to legislate in the way that it wants if that legislation would add to expenditure and the level of income tax for the Scots and whether it is above or below that south of the Border.
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Professor Arthur Midwinter of Strathclyde University, who is a great expert on local and central government funding in relation to Scotland, estimates that the United Kingdom Parliament will decide between 96 and 100 per cent, of the Scottish Parliament's funding. It seems to me that the people of Scotland will become so frustrated by those annual negotiations that as time goes on separation will become inevitable. Therefore, if we look in detail at only that aspect of the matter—and the proposals for a Scottish Parliament involve many others—only those who want the separation of Scotland from the United Kingdom in due course should vote for it.
4.41 p.m.
The Earl of Longford: My Lords, I should like to testify briefly to my conviction, which has been maturing for some time and which is now quite strong, that the Labour Party should adopt proportional representation as its policy. I hope that no one will tell me that that is opposed to the traditions of the party.
Not long ago I spent the evening in a famous monastery. After dinner I argued as best I could and against most of the monks in favour of women priests. They did not appear to agree with me, but I asked them at the end, "What is your objection to women priests?" The senior monk smiled and said, "Well, trad, I suppose". That is no doubt a strong argument in all walks of life, both secular and ecclesiastical. However, I do not think that there is anything in the tradition of the Labour Party to make it decide in favour of one method of election over another.
One can search the works of Sidney Webb without getting any enlightenment on the matter. So I turn to principles. We believe that all human beings are of equal importance—some would say, "In the sight of God", but I do not think that that can help us to decide this issue. We must look at it practically, taking a long and calm view.
I am glad to find that my party seems to be at least veering in the direction of proportional representation. I have persuaded myself that I am entitled to draw encouragement from the speech of my leader this afternoon and from other indications. I do not think that I am embarrassing my party in any way—even if it paid the slightest attention to my opinion, which is doubtful—in coming out boldly, strongly and quite unequivocally for proportional representation.
It is now almost 60 years since I began setting pupils at Oxford a weekly essay on proportional representation. The noble Lord, Lord Mayhew, was one of my pupils and, although I missed his speech this afternoon, I must say that I am not sure whether he benefited from the guidance that I offered him on those occasions. No doubt others will have seen the light more clearly. At any rate, I knew all the arguments backwards and forwards. One could not fail to know them if one listened to pupil after pupil reading out the same or a similar essay on PR year after year.
The arguments were well known then and they are well known now. Proportional representation reflects the mind of the public much more accurately. However, it was argued then—it can be argued much

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less convincingly now—that the first-past-the-post system—or whatever one likes to call it—produces a strong government. Those arguments have been going on for 60 years and as far as I am aware there are no new arguments. The question that remains is how one applies those arguments today.
I hope that I shall not be breaking the rules of party warfare if I express agreement with the line of argument that was taken by the noble Lord, Lord Jenkins of Hillhead. I hate to say, however, that I arrived at these conclusions on my own and that I am not speciously following the noble Lord simply on the strength of his eloquence this afternoon. I agree with what he said. If there were only two parties and one gained a big majority of the votes, the first-past-the-post system would be the best way of doing things. However, as we now have three firmly established parties, none of which will ever get a majority of the votes, we are therefore left permanently with a series of governments who, on the face of it, do not command the support of the country.
That is why I am driven to the conclusion that proportional representation would strike an objective observer, if such a person existed, as the fairest and most sensible system for Britain to adopt in the future. If I am told that that would give Labour a tactical advantage after the election, I must say that I cannot see any objection to that because, if one believes in a party, one is entitled to want to see it win. As long as the method that is adopted is honourable, one favours a match-winning tactic.
Therefore, to put it in a nutshell, because we must all speak briefly, I believe that justice and party considerations come together in this argument. They do not always do so in this life, but they do in this case. I am glad that my party seems to be moving marginally in the direction of proportional representation. I very much welcome that movement.
4.45 p.m.
The Earl of Perth: My Lords, we should all be grateful to the noble Lord, Lord Jenkins of Hillhead, not only for his speech but for the other powerful speeches that we have heard in the debate that he initiated. I refer, for example, to that of the noble Lord, Lord Cledwyn of Penrhos, with whom I found myself very much in agreement.
I shall speak about Scotland. I have just returned from the United States where I was surprised by the great interest that is taken in the Scottish position. A whole page of the New York Times was devoted to the Scottish question and the Wall Street Journal had a long leader on it. Perhaps I should begin by saying that I am all for the Union, but for the Union with devolution. I supported that campaign five years ago. We failed, but I am convinced that we must now have devolution.
As I read it, there are two extremes. The first is the status quo. I hope that I am wrong in thinking that that is the position of the Conservative Government because, if it is, I foresee trouble ahead. I do not know whether Ministers really appreciate the degree of feeling in Scotland that the Scots should be allowed to
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run their own show and about the fact that we were the guinea-pigs for the poll tax. Almost all of the people in Scotland are fed up with the way in which Whitehall has behaved. Whitehall does not know best in relation to Scottish affairs. That is one extreme which should be ignored or abandoned in the future.
The second extreme is that of the Scottish National Party, which calls for independence within Europe. As your Lordships know, the Community must be unanimous when accepting a new member. I am almost tempted to use the word "laughable" about the idea of the Community accepting Scotland as an independent member. Just think of the trouble that that would cause with Germany and its Länder, with Spain and Catalonia, or with other countries. It is wishful thinking and unrealistic.
So, what are we to do? I suggest something between the two extremes. If I had time I would quote from the leader in the Wall Street Journal which began with a quotation from Mrs. Howdie from Sir Walter Scott's "The Heart of Midlothian". Suffice it to say for the moment that she said that we must have leaders in Edinburgh so that we can throw stones at them if we do not agree with them. If the leaders are in London, no nail is long enough to get at them.
There we have it. In the days of Walter Scott, it was already clear that Edinburgh should be the centre for Scottish affairs, and I know that that is the position of the Labour Party, the Liberals and, in a curious way, of the Scottish Nationalists, but I am less clear about the Conservatives.
What is the minimum? I am clear that it is an Assembly in Edinburgh, directly or indirectly elected. Further, the division of the block grant should be decided by that Assembly. That will be different from what happens in England. The Scots have a conscience. They are not interested only in material prosperity. They have a special thought for the underprivileged. I am sure that that will affect the way the cake is cut.
Whether an Assembly should have the power to override the Secretary of State or levy taxation are questions to be decided once the general principle that we are to have some form of self-government in Edinburgh has been agreed. The answer is probably gradualism. That has been the history of the steady advance of Scottish rule for Scotland. When I say that, I have in mind that over the last 100 years one has seen a Scottish Secretary of State, a Scottish Secretary of State in the Cabinet and a Scottish Office centred largely in Edinburgh. The Government should not try to buck the trend.
I hope that the Conservatives will mention in their manifesto that there will be a Royal Commission, as my noble and learned friend Lord Simon of Glaisdale suggested. The issue is a deep and important one for the whole Union. We have been together for 300 years. We have shared great times, but the time for some change has come. We must change realistically and not too emotionally; but change there must be.
4.52 p.m.
Lord Hooson: My Lords, I intend to confine myself to the case for the people of Wales having more control over their affairs. Like all minority peoples in Western Europe, the Welsh people's hope for far more control over their own affairs has increased proportionately with the development of a more unified Europe which promises to provide an economic, fiscal and security umbrella. In people's minds the outmoded 19th century concept of sovereign independent states has been giving way steadily to the idea of surrendering such sovereignty in return for far greater prospects of long-term economic benefit and general security. Indeed, I hope that in the next century there will be no national boundaries, in Western Europe at least. The argument for boundaries is outmoded.
It is our view that devolution in Wales should evolve more gradually than in Scotland. The Act of Union of Scotland and England took place over 150 years after the formal Act of Union of England and Wales. That meant that Scotland retained its own legal system, and it had powerfully developed national institutions and financial institutions which Wales did not have. The Welsh identity was preserved by its language, its religion and its culture. Wales was without any formal institutions until the latter part of the 19th century when steps were taken to establish the University of Wales and the Welsh National Library, and we saw the development, under the Liberal Government of 1906 to 1914, of the Welsh Board of Health and the Joint Education Committee for Wales which was built on the foundations established by Acts such as the Welsh Intermediate Education Act. In our age we have seen the development of Cardiff as an administrative capital—many centuries after Edinburgh was the Scottish capital—and the setting up of the Welsh Office under a Secretary of State. There is general satisfaction in Wales, even among those who originally resisted the idea of a Secretary of State for Wales—many Members on the Conservative Benches opposed it—and with our administrative devolution. However, there is an increasing consciousness of the fact that Wales is ruled largely by quangos —bodies set up by government—with nominated members who often have few apparent qualifications for their positions, save that they may be described as "one of us", and who are appointed to run them without being accountable to any democratic institution.
I approve of the basis for the reform of local government in Wales now proposed by the Secretary of State; but in our view, that development in local government should be matched by the provision of a democratically elected body which can take over some of the functions or the oversight of our many quangos. The process should be evolutionary. In the first instance, we should have an elected senate with limited powers. Its main task would be to hammer out a practical measure of devolution for the future. I envisage that it will evolve naturally into a legislative body, although I would give it some legislative powers from the outset.
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There is an obvious parallel to the European Parliament, which began as a nominated body, became an elected body with advisory powers, is a forum for debate and is now seeking to evolve into a parliament with powers over the European Executive as well as having legislative powers. Its progress will depend upon the evolution of political thought within Europe and the practical necessity of having a European elected body to control the activities of the Brussels Commission. Likewise, in Wales we envisage a similar evolutionary approach which accords with common sense rather than a blueprint. I also envisage negotiations between the Westminster Parliament and the Welsh senate over a period of time. We should work steadily and sensibly towards devolution rather than seek to impose an immediate and so-called final solution.
In the course of that process, I believe that we shall see less of the adversarial politics than we have experienced in the past. The adversarial approach which British politics has inherited and which exists in our legal system could in the climate of modern conditions be a veritable impediment to progress. There is much greater scope these days for seeking a consensus and a gradualist approach to reform.
The vitally important first step is to have an elected body, democratically representing the interests of the people of Wales, within five years from now. Its initial powers may well be in the main advisory, but it can then evolve, gradually and securely, into a sub-parliament with powers to foster and develop the cultural, social and economic life of Wales in a way that is not being done today.
The setting up of the Welsh Office with its Secretary of State was an important step along the way, but the Welsh Office lacks legitimacy. Does the Secretary of State represent central government in Wales or does he represent Wales in government? It is impossible for him to speak as the true democratic voice of the Welsh people, especially when he represents a minority interest in Wales as does the Conservative Secretary of State.
Regional policy is now largely determined in Europe. There is a growing European dimension in the life of the Welsh people of which they are fully aware. The particular aspirations and distinctive political culture of Wales gathers strength on two fronts: on the European front with the realisation that there is an umbrella gradually replacing the British umbrella; and within Wales because, as people prepare to share their sovereignty, they aspire also to a greater control of their own affairs.
4.59 p.m.
Lord Renfrew of Kaimsthorn: My Lords, we are a pragmatic nation. We do not have an elaborate written constitution; we regulate our affairs by convention and by precedent; and we change them when there is good practical cause to do so, and not before—a point well made by my noble and learned friend Lord Hailsham.
The noble Lord who proposed the Motion might be felt to be applying a Cartesian logic, of seeking some lengthy syllogism, some Bill of Rights, some Code

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Napoléonique, some ordered tract, by which we might order our own affairs. But how many of the issues which he raises—all of them important—would best be addressed by this approach of the philosophe? It certainly has not got the French very far. The Fourth Republic was a shambles, sinking in a confusion of coalitions and ballets roses. The Fifth Republic was imposed, let us remember, by a president who came to power after unrest and armed rebellion; and very much less successful it looks when the central figure is a man of lesser stature.
One has only to look across the Channel to several European countries to see that proportional representation and fixed terms can have highly undesirable consequences: parliamentary instability; lame duck presidents marking time till their days run out; and, above all, the risk of giving undue influence to minority and sometimes extremist groups.
The great thing about our parliamentary system is that it works. Generally, there is a clear outcome and that is perhaps the most important point. It works through representative government—you know who your MP is; you elect him or her to represent you and you can go to that MP on constituency matters. That is something which is difficult to arrange under a proportional representative system.
Moreover, in a democracy governments change. Of 13 elections since 1945, the sitting government have won seven and lost six. That is a narrow lead in favour of incumbent governments which I personally would not wish to see diminished in the near future. Noble Lords will remember the dark days during the Wilson administration in 1974 when newspaper pundits like Cecil King proclaimed the country to be ungovernable. Not a bit of it! The constitutional difficulties, at any rate, were entirely illusory. Is this stable system what the noble Lord seeks to lose?
What then is wrong today? There are clearly several things wrong. The Scots and, to some extent, the Welsh—as we have heard this afternoon—sometimes feel that their voices are not heard or at any rate that they are not heeded. I think that they are often right.
However, I submit that it is not the constitutional system that is altogether at fault. In my view, successive governments and Prime Ministers often fail to spend time in Scotland or Wales and fail in practice to give British affairs a Scottish or a Welsh dimension as well as an English one. No new constitution would be required to rectify that omission. Again, no new system is needed to confer the rights which would be listed in a Bill of Rights. For example, oppositions have regularly promised to secure freedom of information by an appropriate Act in this country and to abolish unnecessary secrecy. But successive governments, of whatever colour, have invariably failed us in that respect.
Our successive parliamentary governments may have their shortcomings, but these are not constitutional shortcomings and I cannot support this philosophical Motion.
5.3 p.m.
Lord Taylor of Gryfe: My Lords, whatever issues will be debated in the United Kingdom during the forthcoming election, there is no doubt that devolution will be one of the major issues in Scotland. The situation is that in a recent opinion poll 50 per cent. of the people in Scotland voted for complete independence. The current rating of the parties is that 30 per cent. of the electors will vote for the complete independence advocated by the SNP.
We must understand that in Scotland there is a considerable feeling on this matter and the Government would be wise to take heed. Of the 72 MPs in Scotland, only the nine Conservatives are in favour of the status quo. Noble Lords will therefore understand that the people of Scotland feel that their voice is not being listened to.
The campaign for independence is being hyped up by two newspapers read by four-fifths of the population of Scotland: the Daily Record and the Sun. One—the Sun—is in favour of complete independence, for circulation purposes. That does not apply in the south with the London Sun, but it is true in Scotland. In the case of the Daily Record, the newspaper is in favour of the constitutional changes visualised by the convention. So the public in Scotland is to some extent being manipulated by a cynical circulation war.
Why is there this resentment and strong feeling in Scotland? Let us face the fact that the worst piece of legislation in the present Parliament was the poll tax. It was imposed on Scotland a year before it hit England. It passed through this House with little concern about it and only when it hit England did people recognise that it was an iniquitous tax and it was withdrawn or revised. We can understand the feeling of people in Scotland. I notice that the Chancellor said yesterday that the uniform business rate in England would remain at its present level. That places Scotland and Scottish industry at a disadvantage of £362 million a year. These issues have caused an upsurge of the feeling in favour of some degree of independence north of the Border.
I agree with all the speakers who have said that departure from the Union would be disastrous. That should be spelled out and taken out of the emotional arguments about Scottish nationalism. At the same time, I am attracted by the speech of the noble Lord, Lord Hooson, who has left the Chamber. He said that we must approach the subject in an evolutionary manner. I do not believe that the Scottish convention and other people who concern themselves with the matter have taken into account all the complications of what they seek to achieve. For example, the tax implications have been mentioned by the noble Baroness, Lady Carnegy of Lour. Income tax will be within the province of the new Scottish Parliament. People pay more income tax south of the Border because they receive higher wages in the South East than in Scotland. Consequently, in terms of income tax it would appear that to sustain present revenue levels income tax would increase in Scotland. The

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implications of that for inward investment and so on must be measured. Apart from income tax, the share of the national revenue must be discussed.
The whole problem of local government reorganisation has not been weighed in the balance. This is an expensive business because Scotland could become the most heavily governed country in Europe, with the Community, district, regional and what could become Strathclyde mark two sitting in Edinburgh as a Scottish convention.
The West Lothian question has not been solved. It concerns the ability of Scottish MPs to come to London and vote on English legislation while they have devolved powers to Edinburgh to deal with Scottish aspects. These issues and the West Lothian question must be faced.
I wonder whether the Scots really welcome the fact that the devolution demanded means the removal of the Secretary of State for Scotland from the British Cabinet. That is spelled out in the convention document. Does this diminish Scotland's influence in British politics? These issues must be faced within a scheme of devolution.
If the demand for devolution is as I have described it, then it would be wise for the Government not simply to say, "We are in favour of the status quo and everything in the garden is lovely". That is a recipe for trouble and growing tension within the United Kingdom. The Government should be much more willing to accept the fact that there is a strong feeling for devolution; there is too much centralised government and too much quango government in Britain at present which involves a reduction in the powers of the elected representatives. If the Government would face these issues, we might make sensible progress in the evolution of a correct balance. I hope that they will listen.
5.10 p.m.
Lord Wilson of Langside: My Lords, I should have liked to follow the remarks of the noble Lord, Lord Taylor of Gryfe, for there was much wisdom in his speech. However, in view of the timescale of this debate I wish to make a short, sharp point which arises out of the conclusion of the thought-provoking introduction to the debate by the noble Lord, Lord Jenkins of Hillhead. However, I hope I may also pick up on one or two points made earlier. In his thought-provoking and impressive speech the noble and learned Lord, Lord Simon of Glaisdale, referred to the appointment of a Royal Commission. I was involved during the dark, dismal days of the government of the noble Lord, Lord Wilson of Rievaulx, in setting up a Royal Commission in the late 1960s.
The report of that commission was profoundly disappointing. The best aspect of the report was the views held by the minority of members of the commission. Their views have provoked a good deal of thought and discussion. The only point in the speech of the noble Lord, Lord Jenkins of Hillhead, with which I could disagree with no equivocation at all concerned Scottish devolution. Up until that point I had agreed wholeheartedly with everything he said.
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But I had some reservations about his remarks on Scottish devolution, although I put it no higher than that.
It is difficult to change a unitary state into a state with separate devolved parliaments. That is an intensely difficult task. I have always thought it was a great pity that the federalists did not win in 1707. The fight then occurred between the federalists and those who accepted the English conception of the corporate state. Concern has been expressed about the state of mind of the Scottish people and about the dangers of ignoring their reactions. It is not only the Sun, the Daily Mirror or the Daily Record that support the Scottish Nationalist Party. The Scotsman also supports that party.
Noble Lords opposite appear to be restless. I have only spoken for one minute. I find it disconcerting to be confronted with their restless behaviour. I could not understand what was happening. We should remember that a referendum was fought on a Bill of the Labour Party in 1979. The polls suggested that anything from 65 per cent. to 80 per cent. of the people of Scotland would vote in favour of the referendum. In fact only 32 per cent. voted in favour and the rest either abstained or voted against. That occurred after a campaign had taken place in which the Labour Party and its many supporters in the Scottish establishment had argued that a no vote was implied in an abstention.
5.14 p.m.
Earl Russell: My Lords, the noble Lord, Lord Renfrew of Kaimsthorn, opposes this Motion on the ground that it is a philosophical Motion. That was what noble Lords on the Benches of the noble Lord said to my great grandfather in 1832. Thinking of the parallel, I am tempted to wonder whether at this moment in some obscure recess of Central Office a draft Tamworth Manifesto is even now in preparation. I shall answer the noble Lord in the words of Edmund Burke, who said that a state without the means of some change is without the means of its conservation. There are occasions when those means must be used.
Our constituency system of representation in Parliament is in essence the system devised by King Edward I based on the writs for the Parliament of 1295. In my opinion my great grandfather tinkered with the system not quite radically enough. But the point about this system is that it was never designed to represent parties. It does not work to represent parties. It has not been overhauled at any time since the evolution of the party system. I do not think we appreciate quite what a lottery it is.
My noble friend Lord Jenkins of Hillhead mentioned the general election of 1951. That is the only election since the war in which any political party has polled more than 50 per cent. of the votes and then lost. I remember as a boy of 13 listening to those results coming in and listening to the Labour Party turning all its majorities in South Wales and County Durham from majorities of 20,000 into majorities of 30,000, and never a seat the better for it!

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That was the moment at which my unease about the present electoral system began. I do not think we realise quite what odd results it is capable of producing. It is perfectly possible to imagine, if the Labour Party were to gain votes in areas where it has in the past come third, that a Conservative absolute majority might occur with 35 per cent. of the votes.
It is equally possible to imagine, if one agrees with Peter Kellner, that the electorate comprises four kinds of people —Conservative, Labour, Liberal Democrat and opposition. One can imagine an election which just about repeats the percentages of the poll of the previous election and wipes out the Government's majority. It is difficult to maintain consent to a system which is quite so unpredictable. During the course of this Parliament we have suffered a sea change in attitudes to consent.
At the previous election I thought the tide was running in favour of electoral reform, but it was—if I may so put it —a Mediterranean tide; that is, one has to be swimming to feel it. Now, as this debate has illustrated, we have an Atlantic tide. Whether it is a spring tide we shall not know until it reaches the flood which is yet some way ahead of us.
It seems to me that our present Government enjoy a far lesser sense of legitimacy than they did before. I believe the rise of the anti-poll tax federation is a phenomenon that ought to alarm us all. We are seeing the consequences of a loss of legitimacy. Also I believe we have not faced up to the immense extent of the power of parliamentary sovereignty. Absolute power is commonly defined as the power to make one's will law. How many times in this Chamber have we listened to a Minister on the Benches opposite bring in a Bill to repeal a court judgment while saying, "But our intention was"? There is an assumption here that their will is law, and that is dangerous.
We need a Bill of Rights. We also need European law, which is superior to an Act of Parliament, because in the European Communities Act 1972 Parliament has so willed it. As the noble and learned Lord, Lord Bridge of Harwich, has put it, Parliament's sacrifice of sovereignty was entirely voluntary. That is a good thing as absolute power is not good for the mind. It encourages slothful thinking.
We heard from the noble and learned Lord, Lord Hailsham of Saint Marylebone, an objection to devolution because he feels that power must be all in one place. The noble and learned Lord may wish to correct me, but I think that that is the Hobbesian illusion of a single sovereign power. It seems to me that we have the same problem with Conservative thinking on Scotland as with Conservative thinking on Europe and Conservative thinking on local government. They cannot imagine power being shared between a number of different places. They say that that might give us a botched up compromise. I wonder. Could it be much worse than what we have had for the past five years? Would we not perhaps be better off with a botched up compromise than with botched up absolute power?
5.20 p.m.
Viscount Hood: My Lords, I should like to add my remarks to those that have already been made on the subject of devolution or home rule for Scotland and the implications of independence. It is now about 100 years since home rule was a national issue. While the problems of Ireland have no relevance to Scotland, the problems of devolution have.
Finance is the first issue and my noble friend Lady Carnegie has already pointed out some of the implications. It is to be presumed that, if there were a parliament in Scotland either that parliament would have taxing powers or it would receive a large block grant from the Parliament in Westminster. I believe that either would prove an endless bone of contention between the two parliaments and the two countries.
There is a further more serious problem regarding representation at Westminster. Clearly, if there is a parliament in Scotland and powers relating to foreign affairs, defence and certain other matters are held in London, there must be Scottish representation in the Parliament in Westminster. The problem is not so much the number of representatives but their powers.
A hundred years ago two alternatives were discussed endlessly in relation to Ireland. The first was that the Irish Members would have full powers. If that applied in the case of Scotland, Scottish Members would have power over English affairs while English Members would not have any power over Scottish affairs. I think that Englishmen would consider that intolerable. The alternative is for there to be limited powers. That is a very difficult concept, even more difficult now than it was a hundred years ago. We are now members of the European Community and many issues are both domestic and international, and the line of demarcation would be impossible to establish. A.J. Balfour, who was then Leader of the Opposition, concluded that the problem was insoluble and that home rule was impracticable. I share that view.
That leads one inevitably to the question of independence. I am very much of the same view as my noble and learned friend Lord Hailsham. I am British, and over the years my family has played a part in the British Navy, not the English Navy. I shall touch on two of the practical problems which have been much mentioned in speeches in Scotland, namely, North Sea oil and a subject mentioned by my noble friend Lord Perth, membership of the European Community.
The position regarding North Sea oil is based on a 1964 convention of the United Nations which led to firm treaties with all the riparian powers, allocating the area which is now British. The North Sea is divided into 10-mile blocks on which major long-term contracts, involving huge sums, have been entered into with concessionaires. The United Kingdom cannot walk away from those contracts. It does not follow that an emerging independent Scotland would be acceptable to the other parties to the contract.
In addition, the issue of which oilfield goes with which coastline is a very difficult one. It may be that Scotland is closer to most of the oil than England, but the Shetlands are closer still, certainly to the major

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Brent field. That again is a very difficult issue and independence would not lead immediately to Scotland having the oil, which I read is constantly being said.
It would be essential for Scotland to be admitted to the European Community if it became independent. So much of its trade depends upon it being a member of the European Community. However, there is no precedent for a part of a member state being admitted to the European Community, and a number of members would strongly oppose that principle being established.
For those reasons I must stand for the status quo. It is much safer for Scotland to remain a part of the union. I believe that independence would be very damaging for England but it would be disastrous for Scotland.
5.26 p.m.
Lady Saltoun of Abernethy: My Lords, in six minutes I cannot speak about both reform of the House of Lords and Scotland so I shall speak about Scotland. I am wholeheartedly in support of the Union, which I believe has been of inestimable benefit to Scotland in the past and will be of even greater importance in our European future, where the United Kingdom must have greater influence than any of its component parts, or possibly the sum of its component parts.
It has been said—indeed it is continually being said—that we must change in order to preserve the Union. That may well be so, but if we are to change a system of government which has not served us all that badly, we must take the time to be very sure that what we put in its place will be an improvement on what has gone before, not just something different, and that our heads rule when we are considering what must be a highly emotive subject.
I am not very happy about the proposals of the constitutional convention for a devolved Parliament. I have read its report Towards Scotland's Parliament. It is heady stuff, but its proposals seem to me to be very general and to get us very little further than we were 14 years ago when the ill thought-out Scotland Bill, having been passed by both Houses of Parliament, was sensibly rejected by the people of Scotland in a referendum. I do not think that the constitutional convention's proposals will answer because I do not think that they have been thought through much more carefully. The convention simply has not got down to the nitty-gritty.
Too many unsolved problems remain. There is the West Lothian question, the question of the voting powers of Scottish MPs at Westminster; and the question of how many Members a Scotland with its own legislative assembly should send to Westminster. In addition there is the question of the assembly's tax-raising powers. It is no use members of the convention just hoping that, if they do not look at them, those nasty problems will go away. They will not.
It may be that the convention is going down the wrong road and that a totally different approach is needed. Perhaps instead of establishing yet another tier of government we should look at building up local
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government nationwide and giving it responsibility for much of what is at present the responsibility of central government. That could ease the burden on Westminster and enable both MPs and Peers to keep more reasonable hours. It could also solve the problem of over-government. If at the same time we went back to single tier local government, perhaps based on the old county councils in the main, with some small national co-ordinating bodies elected by the councils, we might save a great deal of expense while at the same time being able to reduce the number of MPs at Westminster.
One of the problems of a Scottish assembly is that whether it were elected on the first-past-the-post system or by some form of proportional representation, I do not see how one could get over the fact that Scotland would be governed by Strathclyde and Lothian regions. That is historically unacceptable to the northern inhabitants of the land, who are not in fact Scots (who were Irish immigrants) or Angles (who were English immigrants) but Picts or Norsemen. On a purely practical basis it is unacceptable because it means that rural Scotland would still be ruled by urban Scots. A local government solution might get over that.
I wonder whether the members of the convention ever troubled to read the Second Reading debate in this House on the Scotland Bill nearly 14 years ago. Winding up for the Opposition at the end of the third day the noble and learned Lord, Lord Hailsham—I hope that he will not mind me quoting him now—said:
"What one cannot do and what has never been done is to graft on to a unitary state some of the characteristics of a federation as to some of its parts". Whether one goes for an assembly or whether one goes down some other road, constitutional change in whatever form for any part of the United Kingdom must surely involve constitutional change for every other part of the United Kingdom; and that change must be acceptable to every other part of the United Kingdom. Perhaps I am wrong, yet I believe that the convention hopes that that will be the case but has not ascertained whether in fact it will be.
Other noble Lords, in particular the noble Lord, Lord Taylor of Gryfe, have talked of finance. Given that the figures in the report Government Expenditure and Revenues in Scotland, published the day before yesterday by the Scottish Office, are even approximately correct, how is the present level of government expenditure in Scotland to be maintained without increased taxation in Scotland? What worries me very much about the present proposals is that I cannot see how they can possibly work. I cannot see how Scotland can fail to become the most highly taxed part of the United Kingdom, nor how the proposed assembly can fail to be in continual conflict with Westminster. We need to return to the drawing board, and a Royal Commission might very well be the way forward.
I am very much afraid that the system proposed by the constitutional convention is bound to fail. When it has done so, people will not say, "We were wrong. We should have carried on being governed by Westminster. Let's go back to Westminster". Instead

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they will say, "We were wrong. We should have gone for total independence". That is what they will do and I very much fear that that will be the end of the United Kingdom and the beginning of a period of decline and strife such as Scotland has not known for centuries.
5.32 p.m.
Lord Perry of Walton: My Lords, like the noble and learned Lord, Lord Hailsham, I am proud of being British. But I also call myself a Scot and boast about it. Yet my Scottishness is very partial. Like most inhabitants of these islands, I am essentially a mongrel. It is true that my mother's maiden name was Flora Macdonald Macdonald but my father was half English and half Welsh. I was born in Scotland but have spent more than half my life in England. All my children were born in England but five of the six are much more vociferously Scottish than I am. For many of us, calling oneself a Scot is a conscious choice rather than an accident of birthplace or heredity. We are not a separate race but we are a kind of separate nation within a nation.
The awareness of nationhood in Scotland has been sharpened, as the noble Lord, Lord Taylor of Gryfe, said, by the unpopularity of Conservative governments of recent years. People felt that their views carried little weight at Westminster. They wanted a bigger say. It is true that there is a Scottish Office to administer Scottish affairs but it is staffed by Ministers whose views are not those of the Scottish electorate. That feeling of alienation from Westminster has led to the extreme separatism of the Scottish Nationalist Party and growing support for it. Yet we Scots are a canny lot. We may cast our bread upon the waters but only after making perfectly sure that the tide is coming in. The great majority do not want independence and the break-up of the nation. They want some of the powers of central government to be devolved to a Scottish parliament.
There are many varieties of such partial devolution. Labour and the Liberal Democrats in Scotland have come forward with one such scheme. The major problem about it—and the major problem about all schemes which devolve power to one region of a country and not to others—has been termed the West Lothian question. It can be answered most satisfactorily by a scheme which devolves the same powers to all the regions of the country.
The main stumbling block is that England does not easily divide into coherent regions. There would be no difficulty with Wales. But is there a necessity to subdivide England? Is England not a region like any other part? It is true that it has nearly 10 times the population of Scotland. But California has more than 10 times the population of Rhode Island and both have the same state rights devolved from the federal government. An English parliament would be given the same powers as a Scottish or Welsh one and the West Lothian question would not have to be asked. The British Parliament could consist of all the members of the regional parliaments and exercise government for all the non-devolved parts.
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I believe that that would work best with proportional representation. I see no logical justification for elections based on a first-past-the-post system. Assuming a two party system, when 51 per cent, of the electorate support Party A and and 49 per cent, support Party B, given a uniform distribution of people of all classes and occupations, there would be no Members of Parliament from Party B. All the Members of Parliament would come from Party A. It is only the non-uniform distribution that has yielded a relatively balanced legislature. Social changes could —indeed, I believe they are—leading to greater uniformity.
All arguments against PR are specious, for only PR will lead to a legislature which reflects the opinions of the population as a whole. If the population in high proportions wants two or three different parties, that is what it should have. To argue that only the first-past-the-post system yields a strong government —a government in which a party with less than 40 per cent, of support from the electorate can have an absolute majority of seats in the legislature—is essentially to deny democracy in favour of oligarchy and, worse, electoral dictatorship. In any case, where has that kind of strong government led us? Not to where I for one would have wanted to go.
5.37 p.m.
Lord Beloff: My Lords, the programme of constitutional reform outlined by the noble Lord, Lord Jenkins of Hillhead, and his fellows, is in itself so absolutely out of tune with the country's needs that it is odd for us to spend any time discussing it. It is based upon the rejection of experience, in particular of experience outside this country. The most extraordinary insularity enables noble Lords opposite to commend proportional representation as though it were a brilliant new idea. In fact, proportional representation has been in force in a great many countries in Europe and outside. Everywhere it has produced disastrous results. At the moment most countries are not trying to achieve proportional representation; they are trying their damnedest to find out how to get rid of it.
One example, which has been quoted before in your Lordships' House, is that of Israel. Proportional representation is the single most important obstacle to the peace process in the Middle East. I think few people would deny that. Nearer to home, there is Belgium, where a fragile national unity, particularly in the linguistic context, is being rent apart at the moment. The survival of the Belgian state, created by the international community in 1830, is certainly at risk. One may say, "Well, a small country like Belgium can't get it right." But what about a large country like Italy? At the moment, Italy is desperate to get rid of proportional representation, which has produced endless bargaining and haggling between a multiplicity of parties and groups and which is breaking up that country's national unity. Indeed, it is putting into question the work of Garibaldi and Cavour which we were all taught to admire: the creation of a unified Italy.

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One could go on. Wherever one looks, proportional representation has brought disaster. Why, then, should we wish it on ourselves? Proportional representation could be described as the HIV of the body politic. However it is introduced into the bloodstream, and the occasion may be gratifying, sooner or later fatal consequences invariably emerge.
Let us pass to another of the nostrums proclaimed by the noble Lord, Lord Jenkins of Hillhead, which has occupied a good deal of our time: devolution to Scotland and Wales. Again, we hear the most irrelevant comparisons with regard to what occurs elsewhere. I believe that it was the noble Lord, Lord Cledwyn, who said that Nova Scotia, New South Wales and Bavaria have rights. But they have rights within a federal system. The fact that Bavarians govern their own affairs does not mean that they can interfere in the way in which the inhabitants of Schleswig-Holstein govern their affairs. I have yet to find an advocate of devolution to Wales and Scotland who is fully prepared to accept the federal logic.
It is not a matter of the West Lothian question, or whether the egregious Mr. Robin Cook should be Secretary of State for Health in England and have a role in Scotland. It is a simple question of whether one can have an unequal distribution of power. The idea of the noble Lord, Lord Perry—that the matter could be solved by turning the United Kingdom into some kind of federal monstrosity—is extraordinary. Why should one-tenth of the population of the United Kingdom, or—if we understand that the Welsh support the concept too—one eighth of the population, dictate to the vast majority who prefer a unified system of government?
I do not believe that our constitution is perfect. I sometimes wake at night and think that this or that may be wrong. The noble Lord mentioned the possibility of a slight reform in our own affairs. Perhaps we should consider that. However, by and large, this catalogue of disasters—it can be proved to be disastrous from experience elsewhere—is surely a matter that we should take on board. We do not need these nostrums. It is perhaps appropriate that in a dying Parliament we should discuss a dying subject.
5.43 p.m.
Baroness Seear: My Lords, the noble Lord, Lord Beloff, plainly does not like proportional representation. However, the debate today has shown that there is a strong mood of support for some form of proportional representation. Perhaps I may say to the noble Lord, Lord Beloff, that he chooses the most unsuitable examples in order to support his dubious thesis. One does not have to have the form of proportional representation which the Israelis were unwise enough to inflict upon themselves. One does not have to have exact arithmetical proportional representation in order to achieve a fairer system than the one that we have in this country.
I am delighted at the deathbed repentance—we are not quite sure whether it is deathbed or repentance —from the Labour Front Benches that they are at last moving in the direction of proportional representation. It has taken them a mighty long time. I wish that
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they would reach that conclusion before we go into an election and not after. I took a bet recently with a well known member of the Labour Party that if that party loses the election we shall hear a great deal from it about proportional representation but that if it wins the election we shall hear no more. I hope that I shall be proved wrong, but it is nice to know that the Labour Party is moving in the direction I have described.
Examples have been quoted to indicate how unsuccessful proportional representation has been. But no one has referred to Germany. I had the interesting experience last week of taking part in a forum at the LSE on the subject: what would be the result of a hung parliament? In answer to the accusation that it would be undemocratic for a small party to have such great influence in a coalition— which is what a hung parliament would lead to—I stated that one does not have to look at the numbers of people elected to the House of Commons but at the number of votes cast in the country.
In the last election the Alliance Party achieved 23 per cent, of the poll. The Conservative Party got 42 per cent. I give a totally hypothetical situation. If there had been an agreed programme between those two parties it would have been a programme which had the support of 65 per cent, of the country. No government in recent years have achieved anywhere near such support. For a democracy to have that support is a very strong argument indeed. One of the problems for the Conservative Party has been that it had only a minority of support in the country at a time when difficult changes needed to be made. If difficult changes are to be accepted any government need to have behind them a strong basis of support among the electorate.
In the discussion about proportional representation last week, I had made the point that it was democratic and that through coalition it could give a stable government. Few Members of your Lordships' House would deny that what this country needs more than anything else is stable government over a period of time with an agreed programme so that businessmen and everyone else know where they are. One very much hopes that we shall have stability of some kind after the next election.
My speech was followed by that of a Social Democrat member of the German parliament. I had never met him before. To my surprise, he underwrote everything that I had said. He stated that in Germany under no circumstances would people accept as democratic a government which had only 42 per cent. of the country behind them. He stated that the coalition government had made for a much less adversarial approach. Much greater consensus had made it possible to concentrate on finding the best possible solutions to problems instead of continuously scoring party points. I suspect that in the country as a whole a move to a more consensual form of government would be welcome indeed. He explained how that was supported by a federal system. Herr Genscher once said to David Steel, "You British are extremely generous. You gave our country decentralisation in a federal system, industrial democracy and

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proportional representation. It served us fine. But you never took any of it for yourselves." I hope that after the election we shall proceed to take some of it for ourselves.
The next issue that has been most discussed is Scottish devolution. I agree entirely that Scottish devolution needs to be part of a federal development in this country. I believe that the noble and learned Lord, Lord Hailsham, agrees with that. Does the noble Lord, Lord Beloff, ever travel north? Does he ever listen to Lancashire people or Scottish people carrying on against the domination from London? We in the South East are not in the least popular in many other parts of the country. A move towards a federal system inside this country is surely urgently needed. I must say how tolerant the English are. I was looking at the Government Front Bench. I do not know the origins of the noble Earl, Lord Howe, but the other three noble Lords on the Front Bench are all from Scotland. There will be great danger of a break-up unless the Scottish demand for more power is met. Of course there are difficulties. But such considerations are part of a real examination of the constitutional position.
Huge changes are taking place in Europe which will affect government in this country. There are demands from Scotland, from Wales and from the regions of this country. There are demands for changes in the way the two Houses are run. I agree with the noble and learned Lord, Lord Simon of Glaisdale, that these important issues must be looked at altogether and not piecemeal and that a Royal Commission is urgently needed to deal with them.
5.50 p.m.
Lord Macaulay of Bragar: My Lords, the noble Baroness spoke of a deathbed repentance on the part of the Labour Party. I assure your Lordships that there is no question of the Labour Party being on its deathbed. Indeed, it is about to spring into life and take control of the affairs of this country after spending too long in the wilderness.
Unfortunately, the Motion tabled by the noble Lord, Lord Jenkins of Hillhead, is too wide for me to deal with comprehensively. Each topic in the Motion is worthy of a debate. It lists the voting system, fixed term parliaments, a Bill of Rights and control over their own affairs for Scotland and Wales. I am sure that your Lordships' House could have a three-hour debate on each topic. However, we have had to crush the debate on those topics into one three-hour period. I do not intend to review what each noble Lord said but perhaps I may mention a few issues.
In introducing the debate the noble Lord, Lord Jenkins of Hillhead, said that he would like to see the parties working together. That matter was also mentioned by the noble Baroness. Working together is not important, but agreeing together is. That is where coalitions fall apart. No matter how well disposed parties are towards each other, no matter what their long-term views are, when the political philosophy of one party overcomes the good will towards the other, the coalition tends to fall apart.
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The noble Lord, Lord Jenkins, also spoke of an unholy alliance between the SNP and the Government. I am not aware of when that alliance was signed or whether it has been promulgated elsewhere. In fact, it is not the case. In an act of political cowardice on the part of the Secretary of State for Scotland the Government have hidden behind the Union. They have said, "We are for the Union and for nothing else but the Union". They tried to focus on the issue of the Union but were caught out by the Scotsman debate in the Usher Hall. On that occasion 2,500 people attended to debate the case for devolution for Scotland. To use a football phrase, the Government were well and truly cuffed at the end of the day.
The Government must recognise that in Scotland there is a call not for independence but for people to be able to govern their own affairs because the Westminster machine cannot cope. If it cannot cope with the affairs of Scotland and Wales, those countries are entitled to have something else in its place which can deal with matters pertinent to both countries without destroying the Westminster machine. That is what we should look at.
I was disappointed to hear the noble and learned Lord, Lord Hailsham, refer to Scotland as a region. He shakes his head but he equated Scotland with a region. Perhaps I may remind the House that Scotland stands as a nation as part of the Act of Union between England and Scotland. It will always remain so and has no intention of becoming a region of this country. If other regions attain self-government, all well and good, but Scotland stands as a nation and always will. The sooner people down here realise that the better.
I was also disappointed to hear the noble Lord, Lord Mayhew, say that the letter X was a symbol of illiteracy. That was a contentious remark. My grandfather signed my mother's birth certificate with an X. That was his mark as a crofter in the Highlands. Fortunately that does not happen now, but one must not confuse illiteracy with lack of knowledge. My grandfather was a most knowledgeable man and the fact that he marked a birth certificate with an X did not mean that he was unaware of what was happening around him. The letter X is a symbol of the power of the people and noble Lords on the Benches opposite will find out about that on 9th April. I also wonder whether the noble Lord, Lord Mayhew, protested about smoke-filled rooms when he was being selected as a Member. But that is another matter.
We on this side of the House agree that there is a case for having a Royal Commission on the constitution. It would pull together all the strands of thought which were set out in the varied and knowledgeable speeches made today. It is a matter which should be considered. I wish to remind the noble Earl, Lord Perth, that there are four parties in Scotland, not three. That gives Scotland a different dimension.
The noble Lord, Lord Taylor of Gryfe, referred to a poll showing that 50 per cent, of people in Scotland were in favour of independence. That figure is now out of date; it is decreasing rapidly day by day. People are in favour of some form of devolution in order to allow

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Scotland to look after its own affairs. In Scotland there is a growing feeling not of antagonism towards England or Wales but that, if the Westminster machine cannot cope with Scotland's affairs and allow Scottish legislation to be dealt with properly and quickly, the machine should be overhauled or a new one put in its place in Scotland.
5.56 p.m.
The Lord Advocate (Lord Fraser of Carmyllie): My Lords, I have listened with interest to the points made by the noble Lord, Lord Jenkins of Hillhead, and others in the course of this debate. I immediately acknowledge the importance of the issues that they have raised. There have been some 23 contributions to the debate. I hope that it will not be taken amiss if during the time allocated to me I fail to respond to all the points raised.
I cannot but agree that constitutional reform of the kind that has been proposed would have far-reaching consequences for the United Kingdom, but I cannot accept that the effects of such changes would necessarily be either beneficial or desirable. No country can claim to have in place a set of faultless constitutional arrangements, but what is missing from the current discussion is the recognition of the very considerable strengths of our own existing system and institutions. We ignore those at our peril.
I shall deal first with proportional representation. The Government have always made it clear that they have no plans to introduce any form of proportional representation for local government elections in Great Britain or for elections in the United Kingdom to Westminster. The system that we have may not be perfect but it is simple, it is familiar and it is well understood by the electorate. I know that to my personal cost. It provides close and direct representation, whether it be in this House or on the local council, and it is much more likely to produce an overall majority for one party to provide strong and effective government at either local or national level. The noble Earl, Lord Longford, thought that that was a dated idea but it seems to me still to be as important as it was when he was lecturing students.
Proportional representation, on the other hand, in whatever form it takes, often results in some form of coalition based on a programme which the electorate has not had the opportunity to approve or disapprove. Voters can only guess what kind of coalition their party might have to enter into after an election, what new policies it might have to adopt and what compromises it might have to make to keep the coalition in existence. Furthermore, parties which poll few votes can exercise an influence out of all proportion to the number of people who voted for them and can keep on exercising it notwithstanding the fact that they continue to be placed low down in the poll. Nor has it proved to be a bulwark against the risk of extremist politics.
The noble Baroness, Lady Seear, made a splendidly adversarial speech in favour of the consensus that proportional representation would bring. However, I know that she and others are aware that ardent supporters of proportional representation regularly go
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apoplectic when they are reminded that it was within such a system that Hitler first engineered his rise to power. They also tend to brush aside the extraordinary influence that minor and extreme religious parties have had in Israeli affairs under what is arguably a very pure form of proportional representation. They must blush as they regard Italy going, in this Roman spring, into an election where there will be 100 parties which range from a very respectable Republican Party to the Housewive's League, Anybody's Party, the Yes Party and the Party of Love, which is represented by four women who have made careers out of taking off their clothes. What has welled up in Italy as a result of that multi-party approach is that there is now a growing demand for a referendum on the first-past-the-post system. The problem is that the 100 parties cannot agree on what the question should be.
Closer to home we have watched with no surprise the fall-out between the Labour and Liberal Democratic Parties in the Scottish convention over the right model for a Scottish assembly once it dawned on the Liberals that what was under discussion might in its practical application unduly benefit the Labour Party. While two models were put forward, no agreement could be reached. The short answer is that any search through all the models of proportional representation as applied by other countries throughout the world, including the EC, reveals there is no democratic Holy Grail. There is no wholly satisfactory replacement for our present system. I think the noble Lord, Lord Jenkins, acknowledged that.
The Liberal Democrats propose a single transferable vote system which necessarily requires the formation of large multi-member constituencies and in consequence—and this is important—severely erodes the links between a Member and his or her constituents. My mind boggles at the idea of a single parliamentary constituency stretching from the Mull of Kintyre to Muckle Flugga in the north of the Shetland islands.
As regards a Bill of Rights, possibly entrenched in a written constitution, which is also part of the noble Lord's Motion, the first thing to say is that such measures would fundamentally alter the constitutional balance between the courts, parliament and the government. The great virtue of our democratic system, with its unwritten constitution, lies in its flexibility; it is able to change and adapt in accordance with society's needs, through legislation, decisions of the courts and the evolution of constitutional conventions. We see no merit in substituting a written constitution or a Bill of Rights for the present delicate system of checks and balances which have been developed over centuries and which provide the safeguard of our democratic freedoms. It is worth reflecting that some of the most repressive regimes in the world have written constitutions: they are hardly a guarantee of liberty.
Aside from that, the Government would argue that a Bill of Rights is unnecessary because the possession of rights and freedoms is an inherent part of being a member of our society. That understanding is fundamental to the United Kingdom's constitutional arrangements. Rights do not need to be conferred:

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they exist unless Parliament decides that the needs of society are such that they must be restricted in some specific way. A written constitution or Bill of Rights would undermine the principle that it is Parliament which has the supreme responsibility to determine society's needs. In the Government's view it is infinitely better for Parliament to enact legislation in areas of public policy rather than to look to the judges, who are not elected to take the lead in these matters. Imposing the task of interpreting a Bill of Rights would inevitably propel judges into the political arena. Some might welcome that role but I do not believe that that is their true responsibility. Many of the matters commonly proposed for inclusion in a Bill of Rights in fact involve hard political choices which Parliament should make. As the noble and learned Lord, Lord McCluskey, made clear in his Reith lectures, the character of those choices is not altered because they are cast in the noble language of fundamental human rights.
The Government are a firm believer in, and supporter of, the European Convention on Human Rights. The United Kingdom played a major role in its drafting and in 1966 accepted a citizen's right of individual petition to the Commission much earlier than many of our European colleagues. But we are opposed to the incorporation of the convention into United Kingdom domestic law for much the same reasons as we object to a proposal for a Bill of Rights.
The noble Lord raised also the question of a fixed-term parliament. That there should be a maximum duration for the life of a parliament is not disputed and there would appear to be little disagreement as to the length of any such parliament. If there is to be a fixed period, the only real issue is the circumstances in which earlier dissolution is permissible. If the circumstances allowing for that are too restrictively stated, it is not difficult to envisage a wide variety of occasions when it could not be for the good of the country to require a parliament and government to continue without seeking a fresh mandate from the electorate. If conditions for early dissolution are too loosely framed, the change proposed would in effect be purely cosmetic.
I believe any public support for fixed terms is mistakenly based on the view that somehow the change would reduce the amount of confounded politicking to which the modern electorate is subjected. On the day after "Super Tuesday", when the American presidential elections are in far distant November, I conclude that such a change would increase rather than reduce that exposure to campaigning.
Perhaps I may turn now to what the Motion describes for Scotland and Wales as "control over their own affairs". I immediately question the assumption that there is any consensus on the degree of change which would be satisfactory to the people of Scotland, or, indeed, Wales. In the development of the debate in Scotland in recent months it is unfortunate that those who should know better have adopted the
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language of nationalism. The noble Lord who spoke before me must be well aware of how unfortunate that is.
I am sure that the noble Lord, Lord Jenkins, was horrified when the Liberal Member of Parliament for Gordon, in what was the noble Lord's former constituency of Hillhead, described some Conservatives at the weekend as quislings. I consider that to be a strong term of abuse, well beyond what is reasonable political invective. I hope that the noble Lord, who has great stature within his own party, during the weeks which lie ahead may invite his colleagues to address this matter calmly and rationally, as he did, and not surrender to the forces of xenophobia which are regrettably to be found in Scotland.
Opinion polls demonstrate to me only that there is a remarkable volatility in Scotland. As the debate has extended, there has been a steady rise in support for the status quo. As the various proposals are explored in depth, and when it is realised what are the costs and consequences of such radical moves, support wanes markedly. Today the CBI, after taking a long and cool look at all the proposed changes—when it did not start in favour of the status quo —concluded:
"The separation and devolution proposals would not stimulate Scottish companies to compete on price and quality in international markets, nor to secure higher levels of inward investment. The objectives of Scottish business are likely to be best achieved by an improvement of the current administrative arrangements within the United Kingdom".
If there is to be a debate in Scotland and the United Kingdom about the improvement in administrative arrangements, let us all join in.
I believe that the Union between Scotland and England has been a great and glorious success. The right reverend Prelate, in intervening, adopted a slightly apologetic note as though he should not interfere in these matters. On the contrary, this is a matter that affects all the people of the United Kingdom. Those who live in East Anglia under his religious charge have at least the same right to be interested in the matter as I do as a Presbyterian Scot.
As I understand it, the Liberal Democrat Party advances a scheme for federal reform for the United Kingdom as a whole. In spite of the highly dubious parallels which Sir David Steel brought back from Canada referring to asymmetrical federalism there, it seems to me that if it were to be adopted it could only be done on the logical basis of providing the constituent parts of the federation with the same rights and powers.
Within Scotland there is undoubtedly a desire that there should be an assembly which has legislative power. There is a separate legal system. In some respects we want there to be separate laws applying in Scotland that are different from those that apply south of the Border. But unless I speak to some very strange Englishmen, I have yet to find that those who live in Newcastle or Southampton seriously advance the idea that the laws that the High Court should be asked to apply and enforce on this side of the Border should be different for those living in Newcastle or Southampton. I am bound to say that I have found

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little or no indication that within England there is any desire whatsoever to see the break-up of the nation of England into federal units.
If we turn to what is on offer, as I understand it, from the Labour Party as part of what comes from the Scottish convention, it is something quite different. I do not propose to rehearse what is set out in its rather thin document. One issue that is not addressed within it is the one to which my noble friend Lord Beloff referred—what is commonly known as the West Lothian question. It has been much debated here and elsewhere. What was intriguing is that neither the noble Lord, Lord Cledwyn, who is familiar with matters of constitutional change, nor the noble Lord, Lord Macaulay, in their contributions sought in any way to address that most difficult of issues.
The only person in the Labour Party of whom I am aware who sought to address the difficult issue of what one does if one is a Scottish Member of Parliament and there are some issues dealt with by a Scottish assembly which are dealt with also by the House of Commons and this House was Robin Cook. When he honestly said that he could not see how he could be Minister for Health in respect of responsibilities in England if there was a Scottish assembly having responsibilities for health there, he was taken into the headmaster's study the next day; and I do not believe that any of us have truly determined whether he has wholly retreated from that position or whether there are others who have been leaning on him.
It is a critical matter. It is important that it should be addressed. There have been a number of calls from the noble and learned Lord, Lord Simon of Glaisdale, and others that the way to resolve the matter is by a Royal Commission. Royal Commissions can always be appointed. But as the noble Lord, Lord Wilson of Langside, pointed out—it may be longer ago than some people remember—there was indeed a Royal Commission looking at constitutional change for Scotland. I leave him with his characterisation of it as very unsatisfactory.
I believe that the status quo is what we should persist with. My right honourable friend the Secretary of State for Scotland called for a great debate on the matter in Scotland. I have no doubt, as others said during the course of the debate, that it will indeed be at the centre of the election campaign that is about to begin in Scotland as elsewhere.
My noble friend Lord Thomas had something to say on matters in Wales. I tread warily into Welsh affairs. However, it seemed to me that his concise summary of the position there was accurate. I remember with great affection and admiration, as he does, the powerful advocacy of Neil Kinnock—now the Leader of the Labour Party—in opposing root and branch any change in the arrangements for Wales.
My right honourable friend the Prime Minister said that if the Union between England and Scotland were to be disrupted and dissolved, it would diminish Scotland. I agree with him. He went further and said that the dissolution of the Union would diminish England. I agree with him. As a United Kingdom we are greater than the sum of our parts. Those of us who wish for some form of constitutional change, I hope
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—at least within this House—share my view that, however we may differ upon those matters and however much we debate them, that is a prize we must not surrender.
Noble Lords: Hear, hear!
Lord Jenkins of Hillhead: My Lords, I thank all noble Lords who have taken part in the debate and in particular the noble and learned Lord the Lord Advocate for his engaging with the arguments in an ingenious and occasionally amusing way. I do not think that he took the imaginative high ground in his speech. There are substantial replies to be made to many of the points that he made, but there is nothing that he said which will provoke me, at any rate, into indulging in the hyperbole of abuse in response to his speech.
In general, I do not greatly believe in second goes at the end of a debate. Nonetheless, as we are well within time, I shall take two minutes if I may. I regard this Motion not as revolutionary but as conservationist in order to preserve the best parts of what we have.
The noble Lord, Lord Renfrew, accused me of being a Cartesian, a philosophe and all sorts of dreadful things—at least he made them sound dreadful. I did not entirely recognise my general cautious, relative approach in the terms with which he played around. I was struck by the Burke quotation of my noble friend Lord Russell and I believe that the danger is that, "a state without the means of some change is without the means of its conservation".
The noble and learned Lord, Lord Hailsham of Saint Marylebone, took his stand on an absolute defence of the status quo on every point. I should love him to explain clearly to us at some time what he meant by his attack on elective dictatorship in 1978. I do not believe that he meant anything other than that for the time being the Labour Party was doing things, whereas he approved of them only when the Conservative Party were doing them. At some time I should like him to expound on exactly what he had in mind.
The noble Lord, Lord Beloff, made, I thought, a slightly intemperate speech. But then I remembered how greatly I enjoyed his intemperate speeches against the Government on educational matters and thought that one must take the rough with the smooth in these affairs. I therefore acquit him of any unreasonable intemperance. However, I thought he could hardly have been more wrong than when he said that these subjects are appropriate for a dying Parliament for they are dying subjects. Believe me, they are not. They are subjects about which we shall hear a great deal more in the future. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Future Business
6.20 p.m.
Lord Hesketh: My Lords, with the leave of the House, I should like to make a Statement about the rest of the week's business. As I said to your Lordships

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in my earlier Statement, tomorrow's business will be as previously arranged, with the exception that the Third Reading of the Further and Higher Education (Scotland) Bill will be taken immediately after the Report stage, subject to the agreement of your Lordships to the suspension of Standing Order 44.
The business for Friday will be as follows, again subject to the agreement of your Lordships to the Business of the House Motion: the Sexual Offences (Amendment) Bill, Second Reading and remaining stages; the Competition and Service (Utilities) Bill, Report and Third Reading; the Transport and Works Bill, Second Reading and remaining stages; and the Timeshare Bill, Second Reading and remaining stages. There will follow the orders at present on the Order Paper. Finally, the House will proceed to the Sea Fisheries (Wildlife and Conservation) Bill, Second Reading and remaining stages.
I should point out to your Lordships that the Clerk of the Parliaments has made arrangements for amendments to all Bills, which have not yet received their Second Readings, to be tabled forthwith. That means that your Lordships will, if you wish, be able to raise matters in Committee on those Bills which will be receiving their Second Reading on Friday.
The business for Monday will be dependent on the arrangements for business for the rest of this week in another place. I therefore intend to make a further business Statement tomorrow.
On a more domestic note, it may be for the convenience of your Lordships to know that dinner will be available in the Dining Room tomorrow night when the Barry Room will also of course be open. The Barry Room will, exceptionally, be open for lunch on Friday, as of course will the Dining Room. Tea will also be available in the Dining Room on Friday, and I do not anticipate that your Lordships need be concerned about dinner in the House on Friday night.

Water Pollution and Shortages
6.22 p.m.
Baroness Robson of Kiddington Baroness Robson of Kiddington rose to call attention to the problems affecting Britain's rivers, coasts and beaches, including pollution and water shortage, and to the remedies needed to deal with them; and to move for Papers.
The noble Baroness said: My Lords, many comments were made about the debate which we have just had; that it was a very wide subject and covered many aspects of our political democracy. It can also be said of this Motion that it covers a wide number of subjects. I am therefore delighted that so many noble Lords have agreed to take part in the debate because all of them have their own particular expertise to give to it. I am particularly delighted that the noble Lord, Lord Monteagle of Brandon, has decided to make his maiden speech, after quite a number of years, on this subject. I am sure that we all look forward to hearing what he has to say and to many future contributions from him after his maiden speech.
Britain is unique in Europe when it comes to
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looking after our own rivers, beaches and water supply. We are an island and we normally have, except for the past three years, a high rainfall. We cannot, therefore, like a number of other countries in the European Community, blame other countries on our borders for whatever is wrong with our rivers nor for the abstractions of water from them by other people. We are uniquely responsible for our own island. If there is anything wrong we have only ourselves to blame.
In looking at the rivers of this country I read with interest the report from the National Rivers Authority on its 1990 survey which shows that 89 per cent, of the rivers were of either good or fair quality. That is nice to know. But it is disturbing to find that 15 per cent, of rivers were downgraded between 1985 and 1990 and that that deterioration happened in what were top quality waters such as the Thames catchment area and in Devon and Cornwall.
In the same report the National Rivers Authority states that 28,718 pollution incidents were reported, of which 3,760 were considered serious. Out of that large number of serious pollution incidents there were only 484 successful prosecutions. I felt a particular concern when reading that the Wessex region, with 1,252 incidents, had only 29 successful prosecutions. The South-West region was equally bad. It is clear, therefore, that a much greater effort must be applied to achieving successful prosecutions and that the fines imposed on perpetrators must be increased in order to deter these incidents from occurring.
In the face of those figures it is even more disturbing to find—I realise that the noble Lord, Lord Crickhowell, is to speak in the debate—that the National Rivers Authority will receive £15 million less in funding in 1992–93 than originally forecast, having already suffered a 12 per cent, cut in its funding in October 1991.
An increasing number of our rivers and streams are now regularly drying out each year through over-abstraction. Some of them have dried out altogether. Around 50 rivers have been identified as suffering in that way. That is not simply due to the recent drought conditions. It has been going on for a number of years. Many of the rivers had dried out before the past three summers. Many rivers are suffering because it is cheaper to extract clean water near the source of rivers rather than further downstream.
This is all compounded by the practice of discharging into the rivers downstream from the abstraction points whereas in actual fact that process should be completely reversed. It would help enormously the water level in the rivers. It is also sad that much of this abstraction from our rivers is taking place under licences granted over 30 years ago. It does not take much imagination to realise that they must be reviewed.
All of us have come to take water for granted, or we did until quite recently. It was always understood that if there was a shortage somewhere we could build a new reservoir and the problem would be solved. That is no longer the answer to our water shortage. We have to educate people to realise that water is a very scarce

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commodity. Until we learn to appreciate that we are not going to take the right actions. For instance, I can remember as a youngster living on an island in the archipelago of Stockholm where there was no water. We had water butts collecting the rainwater so that we could water our gardens and wash with it, but we could not drink it. Is there any reason why we should not be as careful as that?
As the water shortage is not exactly the same in all parts of the country, as a nation we should consider the idea of having a water grid. I know it is an expensive exercise but I believe that eventually we shall have to consider it. Worst of all, we have an old system of distribution, now taken over by the water companies, in which the leakage of water is enormous, causing considerable wastage. It is estimated that more water is lost in one day in England than is supplied by the largest region in England in one day —the Thames region. So we are just extracting water and letting it run away in an uncontrolled fashion. That cannot continue. The water companies must plan to reduce leakage to 15 per cent, within five years. If necessary, in order to solve the problem of wastage of water, there will have to be some sanctions on price increases.
I turn now to the problem of our beaches. The Department of the Environment sent me a press release dated 12th November in which Mr. David Trippier stated that 76 per cent, of our beaches met the mandatory coliform bacteria standards in 1991as against 77 per cent, in 1990 and 76 per cent, in 1989. His comment on this was:
"These results are encouraging because overall compliance has remained steady".
How complacent can one get? Is that something on which to congratulate ourselves? Should we not be hoping to improve the standard over a period of three years?
On analysing those figures I found that 36 beaches which passed in 1990 failed in 1991. Of those 36 beaches nine were in the Southern region and 16 in the South-West region. This is only being judged against the present EC standards of coliform contamination. The compliance with the EC standard does not mean that a particular beach is safe, because the sampling does not take account of the presence of viruses in the water. The Government should press the EC to amend the bathing water directive to take account of contamination.
What happens to sewage and how it is treated is the single most important factor in determining the quality of our beaches. As a result of public outrage many years ago there was a move against short sea outfalls for sewage and a move towards the long sea outfalls. But even that relies on the "dilute and disperse" principle. There is a danger that the long sea outfall policy might prove to be the tall chimney policy of the 1960s all over again.
No discharge of human sewage should be allowed unless it has undergone both primary and secondary treatment. There are many minor restrictions that should be introduced, particularly in our river
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estuaries. For instance, there is no control over the sewage that is released from the enormous number of boats lying in marinas.
I believe that as we live on an island we have an advantage and we ought to be able to do better for ourselves. It is important that we introduce a coastal zone management plan. Many countries already have such plans. We lack an integrated view over coastal zone management. That is very important. Planning at the coast is fragmented and piecemeal. There is no one responsible authority. For example, in North Wales, after the breaching of the sea wall, there are now something like six or seven local authorities all doing different studies on how to repair that sea wall. Some of them are probably proposing to do something which could interfere with what is planned for further down the coast. Therefore, a coastal management plan is necessary, but it needs a single management authority for overall jurisdiction over coastal land, the inter-tidal zone and inshore waters.
At the moment MAFF is the lead department on sea and coastal defence matters; but that is purely historical because originally it was given that responsibility to prevent agricultural land from being flooded. The role of flood and coastal defence should be transferred from MAFF to the Department of the Environment. That department is already responsible for environmental protection and nature conservation and it leads on town and country planning, local authority finances, and environmental protection. It is also the sponsor of the National Rivers Authority. The Department of the Environment should be the overall responsible body. It is time that the Government created a unified authority for safeguarding our coastline.
The absence of a national policy for our coasts, with a multiplicity of government departments, statutory bodies and agencies being responsible, cannot work. The creation of a coastal management plan is of the utmost urgency. I beg to move for Papers.
6.37 p.m.
Lord Monteagle of Brandon: My Lords, it is with great trepidation that I make my maiden speech today. I took my seat in your Lordships' House in 1947–45 years ago—and I am afraid that since then, as far as concerns making speeches, I have been unduly influenced by the saying, "It is better to keep your mouth shut and be thought a fool, than to open it and leave no possible doubt". I have frequently been asked, "When are you going to make your maiden speech? Surely you must be an expert on something". I hasten to assure your Lordships that I am not an expert on anything.
I have been away from England for more than two months and only returned yesterday. I have therefore had no opportunity to research the problems of water shortages with anyone from the water companies or the National Rivers Authority. For that reason I have no doubt that some of your Lordships will tell me that my ideas are crazy and that I am talking nonsense. However, that is a risk I shall have to take and I ask for the indulgence of the House.

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I should like to mention a few of my random thoughts which I feel may be relevant. As the noble Baroness, Lady Robson of Kiddington, said, up to a few years ago a plentiful supply of water was freely available to everyone and totally taken for granted; one just turned on the tap and out it came. That has now changed, with many parts of England suffering drought conditions and it would seem to be sensible to take precautions before it is too late.
A number of articles have appeared in the press over the past year or so and while there are differences of opinion on how these problems can be solved it seems that a number of steps could be taken, although they would undoubtedly be expensive. Perhaps I could mention a few of them. It is thought that leakage accounts for approximately 25 per cent, to 30 per cent, of the water supply. Surely that is a very high figure. I do not know whether there are instruments or computers that can pinpoint where leakages occur, but I should have thought that it would not be impossible to devise something, if it has not been done already.
I speak with feeling on this particular point. A few years ago a tree was felled at my home, and as the ground was very wet the problem that arose was not discovered for a few days, by which time about 100,000 gallons had literally gone down the drain. I understand that more reservoirs are needed but that there are endless problems such as planning permission, public inquiries, building delays and so on. If it is difficult to build new reservoirs, would it not be possible to enlarge existing ones in some way?
I gather that there are various schools of thought over the feasibility of installing water meters and whether they would be effective. It would seem to me to be essential that they should be installed, particularly where water shortage is acute. I realise that that would cause problems over costs, especially for low-income large families, but perhaps some sort of rebate scheme could be used to help them. I am on a water meter and it certainly concentrates the mind wonderfully not to be wasteful.
I understand that in the Isle of Wight a metering experiment has cut consumption by 20 per cent, over five years. If such a saving could be made in one area, surely it could be achieved in others. Could not builders be encouraged to put water tanks in the attics or on the roofs of all new buildings to harness the rain-water? If that idea is feasible, could not existing house owners be encouraged to do the same, perhaps with a grant as an incentive? In public washrooms —for example, on motorway service stations—some of the taps are of the sprinkler type or shut off after a few seconds. Could not such taps be used in all public buildings?
In view of the fact that television is watched by millions of people, would it not be a good idea for the drought problems to be publicised by the BBC? That would surely be an ideal way to educate people. I quote from an article in Country Life. It reads:
"What is needed most urgently is a change in public attitudes to water".
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I understand that it is well known that desalination plants have always been astronomically expensive and that therefore they are not a practical solution. I believe that they are used by Middle Eastern countries, but perhaps they do not have the same worries about expense that we have.
I spend a considerable amount of time in Ireland, a country which has a well-deserved reputation for being very wet. It is sometimes said that the country needs a large umbrella over it and that its inhabitants need web feet in order to survive. However, over the past few years very dry conditions have existed in certain parts and people are now worried. I was told by an Irish plumber that he was recently called to check out an unoccupied council house. On arrival he found a tap running and on inquiring as to when the house was vacated he was told that it was two years ago. I only mention those points to show how, wherever one is, it is very unwise to take cheap and abundant water supplies for granted. I thank noble Lords for listening to me so patiently.
6.42 p.m.
Baroness White: My Lords, I am sure that I speak for Members from all parts of the House when I very warmly congratulate the noble Lord, Lord Monteagle of Brandon, on his maiden speech. After hearing such an excellent speech, I cannot think why in the world he waited so many years before making it. I found it extremely persuasive. I very much hope—and I am sure everyone will join me in this expression of interest —that we shall hear the noble Lord making frequent speeches on subjects with which he is plainly much concerned. I extend to him our warmest congratulations.
I should also like to congratulate the noble Baroness, Lady Robson of Kiddington, for having chosen as her topic for debate such an appropriate subject as water supply in all its various forms, and the state of our rivers, coasts and beaches, as well as more familiar subjects such as water pollution about which some of us have perhaps heard almost too much over the past few years.
Owing to the restrictions of time, I shall contain my remarks and direct them to the coastline and in particular to our heritage coasts. About one-third of the designated heritage coasts in the United Kingdom are to be found in my own country of Wales. I am, of course, familiar with them. But some of the very finest are to be found in England and are therefore in the care of the English authorities. In both countries a major role is played by the National Trust with which I have been having some discussions over the past few days.
Through the Enterprise Neptune scheme, the National Trust acquires and protects many miles of highly valued coastline in both countries. The trust assures me that the successful or perhaps less successful fate of those purchases is very much conditioned by the attitude of the local authority; that is, the county authority concerned. Where the county authority has members and officers who are really interested in the fate of the heritage coasts and where they are prepared to spend time—and, no doubt, these

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days only limited resources—on the matter, then excellent results can follow. But where such people are not particularly interested, then I am told that even purchase by the National Trust is not necessarily as successful as one might wish.
But, in any case, there are problems. I was especially glad to hear the noble Baroness talk about the need for integrated planning of the coastal areas. I should like to speak particularly about the Welsh situation. I am advised that roughly 70 per cent, of our Welsh coastline enjoys some form of statutory designation. That would lead one to believe that it should therefore be much easier to protect the coastline. But a heritage coast may be in a national park; it may be in an area of outstanding natural beauty (an AONB); it may have one or more sites of special scientific interest; or part of it could possibly be an environmentally sensitive area. All those designations can co-exist.
When one turns to the marine environment adjacent to the shore, the Crown Estate commissioners come into play below high water mark. But the jurisdiction of the local authorities in charge of the heritage coasts ends at low water mark. There are suggestions of marine consultation areas which I understand are favoured by the Department of the Environment and the Welsh Office. In other words, there is a bewildering over-designation, an uncoordinated designation, of the coastal areas. The Select Committee on the Environment in another place has been studying some of the problems. I understand— no doubt to take our minds off the forthcoming election—that we can shortly expect to see special guidance on coastal planning from the Department of the Environment.
Meanwhile, there are many interested parties; not only the National Trust but also the Heritage Coast Forum organisations. They are really growing apace. There is now an independent organisation for the Principality of Wales with its own steering committee which co-ordinates with that for England. There is talk of establishing similar bodies in Scotland and possibly even in Ireland. In addition the National Audit Commission has views on organising coastal defence and protection, for which the NRA, as the noble Lord, Lord Crickhowell, knows very well, has some responsibility, financially and otherwise.
As time presses, I cannot take the matter further, but the situation clearly calls for statesmanlike intervention and effort. All that one can do is to emphasise the problem and to urge that co-ordinated attention is paid to it as soon as possible. The noble Baroness, Lady Robson, is absolutely right to urge that attention should be drawn to the importance of coastal zone management.
6.50 p.m.
Lord Bridges: My Lords, the noble Baroness, Lady Robson, is to be congratulated on introducing a Motion on a subject of such lasting importance. I should also like to congratulate my noble kinsman, Lord Monteagle of Brandon, on his excellent maiden
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speech, which comes into the category of a long-awaited speech. I hope that we shall hear from him again soon.
I should like to address one area of which I have some direct knowledge. I refer to estuaries. It is only recently that the condition and importance of our estuaries have come to attract public notice. Previously, they did not seem to be of much importance, but we now understand the significance of these tidal rivers and of the flora and fauna which flourish in and around them. This is well understood by naturalists and ecologists and, increasingly, by members of the general public. However, we lack an administrative system that pays full attention to the needs of the estuaries and to ensuring that they receive proper environmental protection.
My specific point is that we do not have adequate administrative surveillance to oversee the growing use of the estuaries and to prevent abuse of them. Of course, the National Rivers Authority has control over the quality of the water in a river and has responsibilities in preventing flooding. But the NRA's role is limited and does not, in practice, cover many of the other activities that take place on estuaries. Let us take the case of my local tidal river in Suffolk, the Aide and Ore—confusingly, it changes its name mid-course. It is widely used for a variety of purposes, both commercial and pleasure. A number of small boats are engaged in commercial fishery, both in the river and off-shore. We have some flourishing oyster beds. There is traditional wildfowling for the pot by those living in the adjacent villages. There are also many small boats, ranging from sailing dinghies to large craft. For some years, we have had water skiers in the summer and, more recently, jet skis have arrived.
The river flows through an area that is designated as "Heritage Coast" and an area of outstanding natural beauty. Part of its course contains a site of special scientific interest, owned by English Nature; two separate, important bird sanctuaries, owned by the Royal Society for the Protection of Birds; and a new reserve that is being created by the Suffolk Wild Life Trust. All those activities need to be conducted with proper regard for each other and for the environment. To some extent that prevails, thanks to the good sense of those involved, but pressure on the river is increasing all the time. To encourage co-operation between those various bodies, a river association has been set up locally. It enjoys much goodwill and the prospects look promising.
However, all that activity depends entirely on voluntary co-operation and goodwill, and there are limits to what can be done. If a district or parish council, for example, wishes to prohibit excessive speed by motorcraft which damage the river and create hazards, it does not seem to have the legal power or—just as importantly—the administrative resources to track down and restrain persistent offenders. There are particular anxieties about those using jet skis, a sport which seems to attract noisy individualists who do not always take kindly to suggestions that they should confine their activities to a particular part of the river or to a certain time of the

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day or week. Jet skis are a special problem: many people feel about them much as the Chancellor of the Exchequer feels about portable telephones.
I do not wish to suggest that we need a heavy bureaucracy or cumbersome administrative structure to discipline people who enjoy using boats or walking along river banks. What I have in mind is the encouragement of more supervision over the increasing use being made of our estuaries. What we want is a restraining hand to prevent abuse.
There seems to be a lacuna in the legal system that affects the ability of local authorities to act effectively in the way I have suggested. At present, there appears to be a general right to use tidal waters for navigation, but there does not appear to be a set of principles to regulate or control such use. It is true that if a nearby large town or port has passed a law through Parliament to control its various activities and to give it certain powers, some power may be taken in by-laws, but that is by no means the case for all tidal rivers, and especially not for small but significant tidal rivers, such as I have mentioned.
My impression is that a new statutory provision is needed to give effect to what I have in mind. The best solution might be a law to permit or even encourage local authorities to issue by-laws for certain defined purposes for the protection of estuaries. I believe that that task is important and that we should plan new legislation to create a proper legal framework for the future.
At this stage in a Parliament, all that one can do is to note subjects that might be raised in the next Parliament. I believe that this subject requires attention and I hope that the Minister will be able to give me some encouragement in her reply.
6.56 p.m.
Lord Hampton: My Lords, I suspect that today we shall not receive the press coverage that this Motion deserves, but I nevertheless thank my noble friend Lady Robson for tabling it and for the way in which she spoke to it. I congratulate also the noble Lord, Lord Monteagle of Brandon, on his excellent maiden speech which anticipated some of my comments. I hope that we shall hear from him more frequently in future.
When I started work on this speech on Monday, I had before me a picture from that day's edition of The Times of the sun-baked bed of the Graaf-Reinet dam in the Cape Province of South Africa. It was not a beautiful picture, and the caption ran:
"One of the worst dry spells on record has led to crop failure and is forcing Southern African countries to import food amid fears of social unrest".
That should remind us in this country of how exceptionally fortunate we are in the availability of water, yet even here there are signs that demand is beginning to outstrip supply. It is on the problems that could arise from a shortage of water that I want to comment briefly, as did the noble Lord, Lord Monteagle.
I am not one of those who believe that economic growth as more than a temporary expedient is either possible or desirable, and I do not believe that it is
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right to seek to satisfy every demand without seeking sensible restraint. We were told only the other day to expect an increase before long of 42 per cent, in road transport activity. There seemed no suggestion that it might be better to exercise restraint in demand and not to have nearly three lorries for every two that are on the roads today—an idea that I find very disturbing.
I was brought up in a household where the breadboard had carved upon it the words, "Waste not, want not". The lean war years made those words particularly relevant, but the message remains true. In a magazine that was published last summer, the CPRE, the Council for the Protection of Rural England, said this:
"The time has now come to stop abusing our incredible good fortune. Anticipated climate changes may result in increasingly erratic rainfall patterns. The South and East of Britain may take on characteristics more like the Mediterranean, causing drastic changes to the countryside and wildlife and making drought a regular feature of life. With rising demands and limited resources a re-evaluation of the way we manage and exploit our water resources will be essential".
Those who seek to meet an unchecked demand for water advocate the building of quite a number of large reservoirs. I know that the noble Lord, Lord Nugent of Guildford, supports that policy, and I am sorry that, as one formerly closely connected with the water industry, he cannot be here today to make his case. I understand that at least four new reservoirs are proposed in the South of England—in Kent, Oxfordshire, Devonshire and Hampshire. I was disturbed to hear that scheme described as like adding a lane to the M.25 —stimulating demand but not satisfying it. As the CPRE asks:
"Should we really be flooding open countryside to create new reservoirs, which may make matters worse rather than better"?
There is an urgent need for a reassessment for our national use of water.
We are told that the average consumption of water per person per day in Britain is 136 litres. Surely with sensible restraints and without undue hardship there is room for economy. I submit two courses of action for consideration: first, the introduction of water meters, a subject mentioned by the noble Lord, Lord Monteagle. That may sound a sad step to have to take, and I cannot deal with the matter in detail now. Where it has been used it has been effective in easing demand.
Ofwat is the Government's economic regulator of the water industry, and it has recommended the water companies to consider selective metering where water resources are stretched. In a press release last December, the CPRE came out strongly:
"Water companies in those areas no longer have any excuse for dithering; we hope they will now take the plunge and introduce selective metering as soon as possible".
Secondly, with or without water meters, the public should be educated—my noble friend Lady Robson mentioned this point —in the need to avoid waste. An important part of that process would be advice on the best equipment to use. An enormous amount of good drinking water is flushed unnecessarily down our lavatories and many of our washing machines (users of as much as 12 per cent, of all domestic demand) are highly inefficient. Add to that the fact that leakages, as

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has been said, in some regions waste more than one third of the supply, then action in that field is clearly necessary.
I should be grateful if the Minister would answer a few questions. First, does she agree with the CPRE that,
"The time has come to stop abusing our incredible good fortune"?
Secondly, what incentive do the privatised water companies have, even with Ofwat on their backs, to encourage sensible economies in the use of water and to educate the public in possible methods of so doing?
7.3 p.m.
Viscount Mills: My Lords, as an employee of the NRA I am responsible for the fisheries in Lancashire. The major river catchment within that area is the Ribble, which faces the full range of environmental problems that beset our rivers. It is affected by industrial and agricultural pollution as well as by problems of sewage and water abstraction.
I could spend the rest of the speech discussing those problems, but that is not my purpose. The point I wish to make is that, although I am a fisheries manager trying to maintain, improve and develop fisheries, my work is dependent upon water quality, water resources and all the uses to which rivers are put—what has been described by my noble friend Lord Crickhowell as the cat's cradle of inter-relationships necessary to achieve integrated river basin management.
That metaphor is vivid and accurate, but it is not accepted by the House of Commons Environment Select Committee. That committee wishes to see a new national regulatory body unencumbered by operational functions and focused upon pollution control. The committee clearly believes that the regulation of water quality and the management of rivers can be carried out separately. I believe, and many who are far more expert than I have argued, that that view is too simplistic.
Water is a resource which both dictates to and is dictated by man's activities. Like any other resource it must be managed to achieve maximum benefit. Regulation of water quality is just one aspect of that management process, but it cannot be separated from all the other factors needed to achieve integrated management of a river system. Such integrated management depends upon two important concepts. The first is catchment management planning which identifies present and future uses of water and associated land, considers interactions and possible conflicts and provides an action plan for improvement. Such plans would, for example, protect fisheries which rely not just on water quality but on water quantity.
The second concept is the setting of statutory water quality objectives. From this year, legally binding standards for water quality are to be set for all inland and coastal waters. The setting of water quality objectives and standards will be complex, incorporating not just a wide range of environmental criteria but the need to protect the different uses made of any given stretch of water—uses which are at present controlled mainly by existing NRA functions. In
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addition, the water quality requirements of existing and proposed EC directives will be incorporated into those statutory water quality objectives.
The influence of such EC legislation upon the structure and working practices of the new environment agency should not be overlooked. For example, compliance with the urban waste water treatment directive may well lead to the strictly controlled input of organic material and nutrients into designated sensitive areas such as estuaries. Such controls would necessitate a high degree of integrated river and land use management. Similarly, it is hard to see how the proposed EC directive on the ecological quality of surface waters will be achieved merely by regulating water quality.
River catchment management planning, the achievement of statutory water quality objectives and compliance with EC directives will all require integrated river basin management. The environment committee itself expresses a strong preference for it to continue; yet it recommends breaking up some of the vital components. I do not believe that there is anything to be gained by stripping the pollution control function from other river management functions. Quite the contrary, I believe that much will be lost.
I shall now move rapidly downstream to the issue of our estuaries and coasts. There is no proposal by government to make the new environment agency responsible for regulating inshore marine pollution, despite the fact that effective management of our coasts, and in particular our estuaries, as the noble Lord, Lord Bridges, emphasised, is required urgently. I quote from the Land Ocean Interaction Study Science Plan published last month by the National Environmental Research Council:
"A piecemeal approach to the understanding and management of the coastal zone is no longer acceptable; effective management requires an understanding of how its ecosystems and physical regimes work and interact".
That plan identifies that effective pollution control in our estuaries and coastal zones is just not possible if it is not linked to the control of pollutants entering into land waters. However, as the noble Baroness, Lady Robson, said, there is at present no integrated management of the coastal zone, let alone any attempt to manage inland waters, estuaries and the coastal zone as a single resource. There is not even a national coastal management.
Although the Government are preparing a guidance paper, mentioned by the noble Baroness, Lady White, for all local authorities on coastal zone issues, it is unlikely to address the problems of conflict between agencies which work without the aid of a common plan. When will government produce a national coastal strategy to guide authorities and industry on the use of our coasts, and who will oversee it?
We are at a watershed. There is a need for a fully integrated environment agency. As the Prime Minister said:
"It is right that the integrity and indivisibility of the environment should be reflected in a unified agency".
I believe that the correct way forward is to integrate regulation and management throughout the water

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environment and that what is needed is not merely a pollution control agency but an agency for environmental protection and enhancement.
7.9 p.m.
Lord Dormand of Easington: My Lords, the Motion includes the word "beaches", and I wish to draw attention to a special problem which affects the North East in particular but which is seen also in other parts of the country. The problem arises from the dumping into the sea of coal waste from local pits, much of which returns to the beaches.
Those of us who have lived in the North East remember long stretches of golden sands, the playground of generations of families, which are now black deserts. Dozens of communities are paying the price of providing coal for the nation, quite apart from the more serious cost in the loss of life and limb and in lung diseases which occur through the mining of coal.
It is more than 20 years since I first raised the matter in another place. Here we are, all these years and 14 ministerial visits later, with the position unchanged. I see that the noble Baroness, Lady Blatch, is to reply to the debate tonight. Who knows? With her great energy and industry, we may see her set the ball rolling towards a final solution to the problem.
There are two basic problems: first, who is to pay for cleaning up such devastation; and secondly, how is it to be done? The principle of payment is at least clear under present policy. We are told that the polluter must pay. In this case, the villain is British Coal and, as Shakespeare said, "There's the rub". British Coal says it cannot afford to pay and if it is forced to do so it will mean the closure of yet more pits. I need hardly remind your Lordships that dozens of pits have already been closed and are still being closed with the loss of thousands of jobs and the destruction of scores of mining communities. I believe that the solution to this aspect of the problem is that the direct provision of government money is fully justified. I fail to see why some areas of the country should pay such a price for an operation which is essentially national in character.
The other problem as to how the cleaning up is to be done appears to be more difficult. I say "appears" because I am continually puzzled by the fact that it has been solved in other countries. I cannot believe that the conditions in this country are so different from those elsewhere that similar action cannot be taken here.
Some of your Lordships, I am sure, are asking why we should not fill up all the big holes in the ground that we see when we travel around the country. All the holes in the North East were filled up long ago, but again the cost of transporting thousands of tons of waste by road—and some of it also by rail—is high, to say nothing of all those lorries causing social unrest and irritation with their constant rumbling throughout the region.
Seven years ago an attempt was made to solve the problem with a new technique. The waste was pulverised and pumped with water out to sea. The intention was that the waste would be dumped so far
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out that because of the nature of its content it would not come back on to the beaches. That was a laudable attempt, but it failed for a number of technical reasons. Thus, once again no progress was made. Perhaps I should mention that there were also protests from conservationists who said that marine life was being affected. It was a legitimate objection and it added to the difficulties.
In a short debate such as this, it is not possible to go into greater detail on what many people in the North East regard as a great and intolerable injustice. I have no doubt that the biggest obstacle to progress is a lack of will by governments of both parties to tackle the problem seriously. Money and technical know-how are, as I hope I have made clear, essential ingredients in the solution. But with a determined government there is no doubt that the beaches will be at least as good as those of Bournemouth, Torquay and all the other seaside areas that have had the good fortune to escape the worst features of our industrial history.
7.15 p.m.
Lord Marlesford: My Lords, it was for me a particular pleasure to hear the maiden speech of my noble friend Lord Monteagle because I knew him long before he knew me. I was a humble and hard-pressed recruit at the Guards depot at Caterham when he was a young junior officer. To me he was a figure of infinite seniority and distinction. His maiden speech has reinforced that image.
We are fortunate that the noble Baroness introduced the Motion today. It is a subject on which many of us feel passionately. I wish to deal primarily with the heritage coast. We are all aware that once the beauty of our coast is lost it is difficult, if not impossible, to get it back again. I believe that we in Britain have much to teach the rest of Europe. We lead the way in many aspects of coastal conservation.
However, much more remains to be done. Our most sensitive coast is usually too precious to be left in private or local authority hands, for the simple reason that the pressures for commercial development are hard to resist. I agree with what the noble Lord, Lord Bridges, said. At home in Suffolk we share the same rivers and I hope that some of his suggestions will be introduced in the next Parliament.
The noble Baroness, Lady White, referred to the work of the National Trust and the tremendous contribution which Enterprise Neptune has made. I believe that the original target in 1965 was to bring 900 miles of the best coastline into protective ownership and 530 miles has already been secured. I hope it will not be long before Orfordness in Suffolk is added as a jewel to Neptune's crown. Another point important to us in East Anglia is the future of the Iken Cliffs. If they become available I hope Neptune will be able to take them over. I have no reason to believe that this is imminent but we must not miss chances. Government and statutory agencies must assist and support the National Trust with this splendid work.
Secondly, I wish to refer to the concept of Heritage Coast about which the noble Baroness, Lady White, spoke. I must declare an interest as a countryside

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commissioner. Heritage Coast is a designation whose history started in 1966, chronologically with Enterprise Neptune, although it took some time to get under way. It was not until Mr. Heath's government in 1972 that it was launched. Now, 927 miles, 34 per cent, of the coast of England and Wales, is designated as Heritage Coast. That must mean more than mere designation. We must move further forward from pure conservation as far as possible towards restoration. The points about which the noble Lord, Lord Bridges, spoke are appropriate to it.
This project is being carried forward to some extent by the Heritage Coast Forum. I feel some parenthood towards it because it came out of the 1988 Dartington heritage coast conference which I had the honour to chair. The Heritage Coast Forum is now chaired by a good friend of many of us, Maldwin Drummond, who is particularly well qualified for the job. It is an independent standing body and carries forward our cause.
I wish to say a word about a particular problem on the coast —litter. There is only one way to deal with it, and that is to pick it up. The new legislation imposes fresh and welcome obligations to do this, but often it is felt that the occasional picking up is enough. Litter should be picked up as often as is necessary. Picking up litter from the coast is a therapeutic occupation. I enjoy it greatly and recommend it to your Lordships. Where noble Lords are not available, it could be part of the community service programme for offenders. They could benefit as much as the coast.
We could teach Europe a great deal about coastal protection. Many noble Lords will be familiar with the environmental degradation which has occurred in Italy, France—in my opinion, the Cote d'Azur has been totally ruined—and in Greece. It is disappointing that the socialist government that was in power in Greece did not concern itself more with these matters and little progress was made during that era. One might have expected more action from a socialist government. Britain's heritage coast is part of Europe's heritage, and Europe's coast is part of the world's heritage. That is a flag we must carry forward.
I must refer to water supplies and the effect that over-abstraction of underground water supplies is having on our rivers and on our trees. In the early 1980s the world conservation strategy was launched. It was based on the concept of sustainable development. That must mean that water needs are met from the storage of surface water which would otherwise run into the sea in winter. There will be a limit to the amount of storage capability in some parts of England, particularly in the South East and in East Anglia. I do not favour the idea of a water grid as I do not think it is right to pipe water from the North West to the South East. The North West needs its water supplies to encourage development. If I lived in the North West, I would greatly resent my water supplies, which constitute a useful asset for development, being taken away to facilitate more development in the South East. The right answer is for those areas that have the water to take advantage of those supplies to encourage local development. Water is crucial for the economic development of this country.
7.21 p.m.
Lord Ashburton: My Lords, these are fascinating and important topics that the noble Baroness, Lady Robson, has brought forward for us to discuss. Like many other noble Lords, I am sure the only criticism I could make is that such a wide field is covered that we cannot possibly do justice to it in a two-hour debate. Nor, indeed, can one in the allotted span of six minutes do more than make a very few points. Inevitably the points I make will to some extent be repetitive.
It may help if I say where I, as it were, come from in this whole field. I was brought up in the country and from an early age was interested in and indeed influenced in the direction of being an amateur of nature in the broadest sense. More specifically, I am also a keen fisherman and therefore vitally interested in the variability and sustainability of water flows. As I live near Winchester on the chalk, the problems of that kind of area are most familiar to me and the aggregation of these interests with farming inevitably has sharpened and concentrated my ideas on environmental questions.
Plenty of water normally falls on these islands to satisfy even the growing demands of domestic, industrial and commercial consumers without resort to desalination or the more fanciful idea that is occasionally put forward of towing icebergs here to use as they melt. The potential growth of water demand is, however, considerable and this has of course to be taken into account. The task we have is quite simply put. It is that of trapping enough of the water before it runs off into the sea and conserving enough in reservoirs to even out the natural variability of flows.
Reservoirs are of two kinds—man-made and natural. Natural reservoirs are either lakes or the underground aquifers found in the chalk and limestone areas of the country. Reservoirs sited in popular areas are of great recreational use, providing of course sailing, fishing and water skiing, not to mention the use of jet skis—the bane of the life of the noble Lord, Lord Bridges. If properly landscaped, reservoirs can prove to be marvellous wildlife refuges. But they need to be watertight for the sake of efficiency and therefore rely on suitable rock and/or soil conformation. It is no good, for example, damming a chalk valley. In any case, though reservoirs once constructed are normally regarded as an asset to a neighbourhood, new planning permissions can and will be vigorously fought. Not in my backyard is a perfectly legitimate though perhaps somewhat over-denigrated human reaction which every one of us at times feels.
Chalk aquifers are of course ideal reservoirs. They are already there; they are out of sight and they produce on the whole extremely pure and plentiful water. It is small wonder therefore that in the past so many of the chalk aquifers of Hertfordshire and Buckinghamshire were over-exploited to the extent that their streams have either become trickles or in some cases ceased to exist at all.
In my part of the world the aquifers are still being tapped but newer schemes involving pumping water

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from the aquifers at times of acute shortage are now being instituted. These new schemes do not involve piping the water away from the headwaters of the rivers where the best aquifers naturally occur direct to the consumer but rather running the pumped water down the water courses themselves to where abstraction normally takes place. That is not always, I regret to say, as near the tidal limits as one would hope.
I should like here to pay tribute to the work of the National Rivers Authority for the remarkable research it put into these schemes before they were implemented. The NRA undertook the most comprehensive and detailed studies of hydrographic and hydrological data and the drilling of boreholes to establish the facts including—this is most vital—the speed of refilling of the aquifers from varying levels of rain. The NRA has also undertaken the most interesting surveys of aquatic and riparian flora and fauna under varying conditions over periods long enough in terms of years to give us a whole new scientific and factual view of phenomena we could only surmise about before. Undertakings were given not to use these schemes if the aquifers were showing, through constant monitoring, signs of being deplenished permanently.
But once installed these schemes which help to preserve and in some cases even enhance the ecology and environment of the streams, and both rural and —this is important—urban riparian areas, are, I fear, a potential Achilles' heel. I hope I am wrong but water demand from those who live away from rivers involves many more votes than those of the people who live along their banks. Undertakings given in good faith will in extremis succumb to pressure and the story of Hertfordshire and Buckinghamshire could be repeated.
At this moment we are experiencing an extraordinary run of low rainfall years and some streams are lower than they have ever been before. This run of dry years is not unprecedented in the period since rainfall records have been kept but it is certainly consistent with possible climatic change, and if this were to prove to be the case we could have real problems.
I have concentrated on the problems of the chalk land because I have experience of this, but all over the country the provision of water is of vital national importance. I am often surprised at the way people seem to regard water as something which should be free at the point of sale and available in unlimited quantity for every purpose. I am also surprised that people often regard climatic change, in particular higher temperatures and lower rainfall, as an unqualified boon.
At some stage I am sure we are going to have to face up to the construction of a national water grid. In anticipation of this need I believe we should be researching with urgency and with all the resources necessary the likely demands for water over the longer term, the likely or at least the possible climatic changes which may occur and then the design and the costs of a national water grid. At the same time there should be every attempt to make sure that the public realise
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that water is an expensive commodity and is not to be taken for granted. There are, after all, many places in the world, and not just the oil producing areas of the Gulf, where water costs a lot more than oil.
7.28 p.m.
Lord Addington: My Lords, as often happens when one speaks towards the end of a debate, much of what one wanted to say has already been said. In this case other noble Lords have spoken on this subject better than I could have done. Therefore I shall try to avoid repeating their points.
I feel rather put upon because I am followed by the noble Lord, Lord Crickhowell, who knows far more about this subject than I could ever dream of knowing. So I shall restrict my remarks to a few general points. As regards all matters of conservation I am always struck by the fact that there are virtually no wild areas left in this country. Man has been living on this island at too great a density of population to have left any habitat in anything like its natural state. Indeed, when people talk about our wild countryside and wild animals and birds I find that I have to remind them that the natural condition of Great Britain is a large forest and that we cannot go back.
The same is true of our river system. The wetlands which provided the sponge and water reserve for most of our rivers have largely disappeared through land reclamation. That process has been taking place since Roman times. We are continuing to remove a natural wildlife habitat. Once one removes the habitat of any species of wildlife one has effectively destroyed that species far more effectively than by any form of hunting. Not only has one destroyed the animal; one has also removed any chance of its being able to reproduce or even of allowing a small population to continue or expand. Therefore, when we consider our coastal areas and river banks and the wetlands alongside them emphasis should be placed on their preservation because they represent a reserve bank for our natural wildlife.
In addition, the wetlands of this country have traditionally provided the water reserve for our rivers. Much has already been said about the fact that we are taking far too much water out of our rivers and lakes, and even the reservoirs which we have created, especially when we have low rainfall. As the noble Lord, Lord Ashburton, said, low rainfall is not totally new but it may be becoming more common. Unless we are prepared to take positive action—and as we have changed our environment so much we must take positive action, since we cannot leave nature to repair itself because we have changed it too much to allow it to do so—we shall continue to experience those problems.
We are using our water system far more than we have in the past, for divers reasons. We have used it as a waste disposal system in our industrial progress, and that has led to damage. We also indulge in practices such as fish farming. On the face of it that would appear to be an environmentally friendly process. However, a river system, like land, can become exhausted if it is over-used. Fish farming produces

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effluent from the fish, which are kept in large densities. That tends to kill off the life in rivers due to the growth of algae which results from the increase in nutrients.
If crop rotation is the answer to land exhaustion, surely something similar should be applied to rivers if we are not ultimately to destroy them and make them unsuitable for the fish we grow in them. Fish farming is only a short-term project. Something on those lines must be encouraged. Within the confines of privately-owned rivers it is difficult to see how that can be done unless some new system can be worked out. I can offer no overall solution other than suggesting that the Government bring together the people responsible and make them discuss the problem urgently.
Another problem which has not yet been covered in the debate and on which I hope the Minister can provide an answer concerns the marine pollution control unit within the Department of Transport which responds to oil incidents. Apparently the unit can deal with a 14,000-tonne oil spill at sea within a 48-hour period. That is an impressive figure, I agree. Fourteen thousand tonnes of oil seems to be a great deal to be dealt with in that period. However, the "Exxon Valdez" distributed over 300,000 tonnes. More than 232,000 tonnes of oil were spilt by the "Amoco Cadiz". Will the Government ensure that tanker routes are strictly controlled and avoid sensitive coastal areas and that adequate clean-up facilities are provided to deal with a major spill? That is a matter which should be looked into and I shall be interested to hear whether they have any plans.
I see that my time is rapidly running out. All of us who are involved are going to have to pick up the cheque for the sins of our past. That is not a political point. It is something that we had not realised until now. Unless we adopt an aggressive and positive approach to the problems we shall not be able to save the environment we have today.
7.34 p.m.
Lord Crickhowell: My Lords, I agree with the noble Lord who has just spoken that we have to take a vigorous approach to tackle the inherited problems of the past. Speaking as Chairman of the National Rivers Authority, I have to obey the Addison Rules, which means that I can leave the Minister to reply to any criticisms of the NRA that have been made during the course of the debate. I hope that she will vigorously defend our prosecution policy, for example. However, I can make a contribution to the general subject under discussion. I am grateful to the noble Baroness, Lady Robson of Kiddington, for enabling me to make a few observations this evening.
It is a great pleasure to congratulate my noble friend Lord Monteagle of Brandon, who referred specifically and in some detail to the acute problem of water resources. I hope that he will study the discussion document on water resources development strategy which, as it happens, was published only this morning. That document forms part of the process of preparing a national water strategy in which the NRA
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is engaged. That will take some time because it is a major task, but it is under way and a great deal of work is being put into it.
In introducing the debate the noble Baroness, Lady Robson, said that Britain was unique. That is true, but I hope that we shall stop saying that we are uniquely bad. I was delighted when David Bellamy, when helping to launch an environmental project earlier this week, emphasised that we are by no means the dirty man of Europe. That is a message which needs to be repeated. If politicians and quango chiefs are not believed, perhaps David Bellamy will be. In some ways I believe that we are uniquely good. That is the case in the thoroughness of our supervisory arrangements and public supply of information. I wish that the rest of Europe was as good.
I continue to believe that the Water Act was one of the most important environmental measures ever passed in this country. The fact that the 1990 survey shows some disappointing results does not provide contradictory evidence because it reported on the period prior to the implementation of the new Act and does not give a picture of the position that will emerge over the next five years.
I believe that with the Water Act and the introduction of integrated pollution control we are in pole position in Europe. If we get the Environmental Protection Act right then we shall probably be better equipped than any other country in Europe to deal with the very great problems. We have to get it right and my noble friend Lord Mills was absolutely correct in what he had to say on the subject and on the need to aim not just at pollution control but at the enhancement and protection of the environment. Those were the Prime Minister's words when he announced the new Environment Agency, and that means an integrated approach. That approach is also necessary if we are to achieve the objectives of the draft ecological directive which is now being prepared in Europe.
Great progress has and is being made. Enormous investment is now under way. That is not just the £28 billion over 10 years which the water industry is undertaking or the striking improvement in operational practice in that industry since it came under the supervisory arrangements introduced by the Water Act but includes the very substantial investment now being undertaken by industry in general. However, in a sense all that has been aimed at achieving standards set in the past. It is only this year that we shall begin the introduction of the system of water quality objectives, again referred to by my noble friend Lord Mills, which will enable us to balance our use objective with the costs and practicality of the various options.
In setting those water quality objectives we must concern ourselves not just with point-source discharges but with the equally important problem of diffuse pollution. That is in part, but only in part, agricultural pollution and also pollution from storage of waste, discharge of waste from many farms and the serious problem of contaminated land. Indeed, we shall have to address the problem of contaminated land and mines very seriously in the period ahead.

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There has been a great deal of reference to drought, and drought without parallel in modern times in the South and East, particularly affecting the chalk aquifers. I said that we are preparing a water strategy, working with the other providers of water resources. But in the short term we shall have to get through some very difficult periods. We shall face some very difficult problems this summer.
Partly to help tackle the acute problems of some of our rivers, the NRA will introduce a moratorium on consent to licensed abstractions on those rivers which are under very severe stress as a result of the drought. There will have to be a wait before consents will be granted. I am sure that that must be right when particular rivers are under severe stress.
I agree with everyone who says that water is a valuable resource. People will have to pay for it, including the cost of protecting the environment. I also agree with much that has been said about the need to improve our coastal protection arrangements. There is an enormous job to be done. Great progress has been made in recent years and I hope that soon we shall see more rivers like the Tyne, which 10 years ago was a dead river and is now the best salmon river in England. I hope that we shall see many more rivers in the future giving evidence of the improvement that is taking place.
7.41 p.m.
Lord Beaumont of Whitley: My Lords, this has been a good and extremely informative debate. Many noble Lords have contributed from their special expertise. We are indebted to my noble friend Lady Robson for her suggestion of this topic for our discussion today and for the introduction she gave to it.
The whole question of the measurement of pollution and standards of our rivers was dealt with some five or six years ago when I was a member of Sub-committee F (the environmental sub-committee dealing with European legislation). I am not entirely certain whether the committee is still dealing with it. I was never able to fathom—particularly when we had a slight disagreement with most of the Continental countries, which had different problems from ours, as the noble Baroness said—why we did not enter much more into co-operation with the Republic of Ireland, which is the other country in the European Community that faces almost exactly the same problems and equally can collaborate with us in finding the cures.
I was very interested that the noble Lord, Lord Monteagle, in his valuable maiden speech raised the subject of Ireland and made a comparison. We can do rather more to co-operate than we have done in the past.
It is part of my duty in winding up the debate from this Bench to pick up some of the themes that have been mentioned. However, I shall start with an issue that has not been raised. I am sorry that my noble friend Lord Grey is not here. Owing to ill health he was unable to make the speech that he had planned. I had the pleasure of reading the speech that he would have made. It was extremely useful and I should like
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to read out just one paragraph from it. It raised a point whose particular application, although touched on by my noble friend Lord Addington, has not been mentioned. He said:
"The sad effect of pollution is a steadying decline in otters. Otters used to be common throughout the British Isles but are now restricted to the more rural areas of the west country, Wales, Northumbria and Scotland. Today it is estimated that there are only 15,000 otters left in Britain. The situation in Devon is grave. The Torridge and the Taw rivers are so polluted with PCB chemicals that the otter is unable to breed and many of the animals which still are there will be barren". That is just one more instance of the many illustrations that have been given in the debate today.
Another instance concerns coastal protection. My honourable friend in another place, Mr. Alan Beith, the Member of Parliament for Berwick-upon-Tweed, has been leading a campaign, which is in the interests of most of the local people, for the preservation of Druridge Bay. Because of agreements entered into 30 years years ago—how many of our problems stem from such agreements of 30 years ago!—Druridge Bay is losing all its sand. Its sand is literally being carted away. The whole of the area is being ruined by an extraction policy about which apparently nothing can be done.
Any number of points have been made and many noble Lords have raised one that I should like particularly to draw to your Lordships' attention; namely, the growing staging of oak trees all over the South of England as the water table falls. That can be seen any day of the week in Richmond Park only half an hour from Westminster.
These topics above all things need greater co-ordination. It is good to know that much has been done, and the noble Lord who has just spoken brought us some rather cheering news. But there is a need for greater co-ordination in the fight against deterioration. We must be sure to foresee what is likely to be a threat in the immediate future so that the generations to come do not look back—as we look back to 30, 40, 60 or 80 years ago—and say that all their problems were laid up for them by their grandfathers who did nothing to avoid them and were wasteful in the extreme. We are aware of the dangers. It is up to us to tackle them.
It is extremely important that all governments— this Government and any future government—take great care to differentiate between borrowing for current expenditure and borrowing for capital expenditure. We need great investment in capital expenditure.
7.48 p.m.
Baroness Nicol: My Lords, I congratulate the noble Baroness on her choice of subject—but it is impossible to deal with it in six minutes. Therefore I must be very selective. This afternoon we have had some extremely interesting speeches, not least the one made by the noble Lord, Lord Monteagle. I hope that we shall not have to wait for long before he speaks again.
I shall not enter the argument, despite the bait dangled in front of me by the noble Lord, Lord Crickhowell, about the benefits of who owns the industry at the moment. Whoever controls the industry, the same problems remain to be faced. First,

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there is the problem of pollution, about which so many noble Lords have spoken this afternoon. The noble Baroness, Lady Robson, illustrated very well that it is not thought to be under control.
I am a supporter of the NRA. It is doing an excellent job. Despite that, we have to face the fact that in 1980 there were 12,500 incidents of pollution recorded, and by 1990 that figure had risen to 28,143. Some of that undoubtedly will be due to increased reporting, but it is still a horrific total. Some of the watchdog organisations believe that the real figure is still higher. Clearly, there is a need for stronger statutory control on discharges and for better policing. I was interested to hear the noble Viscount, Lord Mills, setting out the controls that he hopes will be available to us in future. If those controls were acted upon, they would go a long way towards improving the situation.
However, high pollution levels are exacerbated by lower rainfall, especially in the South and East, where we face severe shortages this summer. I live in Cambridge where the situation is quite desperate. The shortages are made worse by a lack of will to control abstractions or perhaps the lack of facility for doing so, and by the old problem of leaking water mains. The noble Baroness referred to that in her introduction. Between 25 per cent, and 30 per cent, of all treated water is lost between the treatment works and the consumer. Despite the fact that modern technology allows rapid identification of areas of leakage, and despite new techniques for pipe laying and renewal, it seems that the industry has not succeeded in reducing that percentage. I remember drawing the attention of the House to the same figures in 1986 when we first discussed privatisation of the water industry.
Leakage of treated water also means wastage of chemicals and energy used in the treatment. The noble Baroness, Lady Robson, said that we must economise, as did the noble Lord, Lord Monteagle. We would have to examine that. It is a subject for a debate in itself because so much could be done to reduce our water demands. But failure to tackle those problems has led to a reduction of flow in many of our rivers in the South and East with disastrous effects for wildlife, angling and other water-based recreations including quiet enjoyment of the river bank.
Much has been said about estuaries and coastal areas. United Kingdom estuaries are biologically rich and remain ice free in winter. They have become therefore internationally important in terms of bird conservation. As a member of the council of the RSPB, I hope that I shall be forgiven for raising the matter in this context. In March 1990 at the last North Sea ministerial conference, the United Kingdom Government committed themselves to the "wise use" of our coasts. However, a recent survey by the RSPB revealed that 80 of Britain's estuaries faced some threat, and 30 of them faced permanent damage. The noble Lord, Lord Bridges, has listed the damages which threaten those estuaries. I shall not use my time in listing them again. But clearly we need to look more closely at what we are doing.
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Many areas are designated sites of special scientific interest. However, as we have discussed on so many occasions, that designation does not protect the site against damage. Now that the European Community's habitat directive has finally been agreed, and will be published in April, with two years for implementation, the Wildlife and Countryside Act will need to be amended to comply with the directive.
I shall have to put this question in these terms in view of the announcement made today. Will a future Conservative Government take action to identify those coastal and marine areas requiring protection under the new EC directive? What new measures would be introduced to protect such areas? English Nature has recently secured £250,000 to assist local authorities in coastal and estuarine areas in developing policies which are sympathetic to nature conservation. Would a future Conservative Government make sure that the same provision was made in Scotland and Wales? It is important that the same criteria are applied in all three countries.
The noble Baroness, Lady Robson, said that six or seven departments were involved with coastal planning. In fact, 33 government departments, statutory bodies and agencies have a finger in the pie. I have to repeat to the noble Baroness who will respond for the Government my constant plea: that the Government will consider again the need for a coherent coastal management policy because we still do not have one despite all the reassuring words stated in the past. If Shetland and Orkney can do it, surely we should be able to apply their criteria to the remainder of the United Kingdom.
I wish that there were more time to discuss what has been said today. My noble friend Lord Dormand of Easington referred to beaches. My noble friend Lady White had much to say about heritage coasts. Both subjects need to be examined. I cannot do so in six minutes. I support the Motion.
7.55 p.m.
The Minister of State, Department of the Environment (Baroness Blatch): My Lords, we are all up against time constraints today. I therefore do not believe that I can do justice to what has been not only an important subject but an interesting debate. We are all grateful to the noble Baroness, Lady Robson, for introducing the debate. Two hours is not long enough. I am grateful also to my noble friend Lord Monteagle of Brandon. We have waited 45 years for that speech. It was well worth waiting for. However, he left us in no doubt that he was far from being a fool. His contribution to the debate today was valuable and we implore him not to leave it too long before we hear from him again.
Living on a densely-populated island, it is inevitable that water plays a significant part in our national life. We expect a lot. We depend on rivers not only for drinking water supply, and for agricultural abstraction, but also as an inevitable disposal route for effluents. To all of us, as individuals, clean and wholesome water for everyday use is vital. We rightly expect our rivers and coastal waters to be clean, litter free and suitable for fishing and recreation. But we all

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like to think that water will always be available, in unlimited quantities, on tap—however much we may moan when it rains. It is therefore important that our water resources are effectively managed to meet all the uses that need to be made of them.
The Government are committed to securing lasting improvements in water quality, wherever they are needed, and to improved management of water resources, and has made a number of important changes over the past few years to achieve this. A cornerstone of our policy, contained in the 1989 Water Act (now consolidated into the 1991 Water Resources and Water Industry Acts), was the establishment of a separate and independent environmental regulator, concerned with all aspects of water problems throughout the whole of England and Wales. Accordingly, the Government set up the National Rivers Authority, in 1989. I congratulate my noble friend Lord Crickhowell on the work that he has done with that body.
One of the NRA's first major tasks was to review the situation which it inherited. The results of its 1990 river quality survey, published last December, provide an important baseline for the drawing up of objectives and the NRA's work in improving water quality. We are naturally disappointed that the results showed a small net deterioration in river quality since 1985. However, the survey was too soon to reflect the impact of water privatisation or the success of the NRA. The NRA attributed a large part of the small net overall change to the effects of drought, and changes in survey methods. And let us remember that around 90 per cent, of rivers in England and Wales remain of good or fair quality—suitable for drinking water supply after treatment and supporting fisheries. This compares with an average of around 75 per cent, throughout the European Community for rivers of broadly comparable quality. No other EC country betters the UK's position on river quality.
The NRA has been working to develop strategies for tackling pollution, and to chart its priorities for action. It has already published reviews covering the discharge consent system, blue-green algae, river quality, bathing waters, farm wastes, groundwater protection, and pollution incidents. More work of a similar kind is under way.
The Government have given the NRA wide powers to set and to review the standards set for discharges, to seek improvements, to take samples and to bring prosecutions where standards are not met. Only recently we gave the NRA power to secure fines of up to £20,000 in magistrates' courts. And the NRA can and does seek heavier fine in higher courts.
The number of successful prosecutions brought by the NRA has shown a marked increase. It was up by 42 per cent, from the NRA's first to its second year in business; a clear reflection of its commitment to tough and effective regulation of water quality. We also gave the NRA the powers to clean up after pollution and to recover costs. These are a direct reflection of the polluter pays principle and can be particularly effective.
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The noble Baroness, Lady Nicol, appeared to agree that growing environmental awareness has in part accounted for the increase. The NRA seeks to prosecute all those responsible for major pollution incidents. Its recent report indicates that nationally 43 per cent, of major incidents were successfully prosecuted in the same year. The figures show a significant rise in the number of prosecutions brought by the NRA.
The Government have also ensured that the water industry is investing to meet higher standards. The noble Lord, Lord Beaumont, said that we need more investment. I am happy to say that some £28 billion will be spent until the turn of the century on improvements, and some £14 billion will be for improved sewage disposal. Those sums were unthinkable under the old system of a state controlled water industry. Already a steady improvement is apparent in the performance of sewage treatment works. Non-compliance with long-term consent conditions was down to 12 per cent, in 1990 from 23 per cent, in 1986. We are also tackling farm pollution.
I have so far spoken largely about rivers. It is commonplace, even fashionable, to play down British achievement. If so, may I for a moment be thoroughly un-British and say a few positive things about bathing water quality. Monitoring of bathing waters under what is probably the most comprehensive sampling regime of any member state shows the dramatic improvements that have been made in recent years. In 1986, 51 per cent, of identified waters complied with the bathing water directive's coliform bacteria standards. Last year compliance had risen to 76 per cent. This is a real and positive achievement. By 1995 all but a handful of waters will have achieved compliance.
Compliance is assessed using the mandatory standard of total and faecal coliforms. That is the most usual basis for assessment and it is used by the Commission. Information on other parameters which are monitored is contained in a detailed summary placed each year in the Library and sent to the Commission. Informed opinion regards the enterovirus standard as unrealistic and meaningless. There will always be year-to-year variations in quality which reflect differences in year-to-year weather conditions.
We are not complacent—more needs to be done. Many of our old-established resorts have relied for too long on sewage disposal arrangements considered acceptable years ago but no longer capable of meeting the standards now expected. Our objective is to bring all the remaining non-compliant waters up to standard as quickly as possible. By 1995 we will have achieved this for all but a handful of waters. Many of the improvement schemes have been enhanced to include sewage treatment fully in accordance with UK policy to phase out discharge of untreated sewage to coastal waters and to meet the requirements of the urban waste water treatment directive, which we adopted last year well inside the timetable that it sets. This is a comprehensive and ambitious programme

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estimated to cost more than £2 billion —expenditure that it would have been difficult to contemplate a few years ago.
The directive lays down minimum standards for the provision of sewerage systems and sewage treatment, and its main impact in the UK will be with respect to coastal discharges. But it is also important for the quality of surface freshwaters. We announced earlier today the publication of a consultation paper outlining the Government's proposals in England and Wales for identifying sensitive and less-sensitive areas for the purpose of this directive, and "polluted waters" for the purpose of the nitrate directive which we adopted last December. As far as we are aware the UK is the first member state to consult publicly on the way we intend to implement these directives. This demonstrates our commitment to openness in environmental decision-making and to the proper implementation of these directives, which will make an important contribution to improving our environment.
I have set out the many things that the Government are already doing to secure better water quality. We are determined to do still more in the future. We have provided for a statutory framework of water quality objectives to be set by the Secretary of State within which the NRA will work. These will extend the present coverage of informal objectives to include for the first time coastal waters, lakes and groundwaters and will provide us with a powerful new weapon for achieving sustained, programmed improvements in water quality wherever they are needed. Water quality objectives will now be determined through an open public procedure of consultation; they will specify clear, unambiguous standards and the timescale for achieving them.
The NRA set out its proposals for a new system for classifying water quality in a detailed consultation paper published last December. We look forward to hearing from the NRA the results of this consultation process and will publish formal proposals later this year.
Many of those who have spoken this evening have expressed concern about the possibility of a widespread drought this summer and the implications in eastern England. The dry weather that we are experiencing is exceptional; rainfall records are being written afresh as the spell of below average rainfall continues. In fact, 1989 was the driest year since 1976; the 13-month period to March 1991 was the third driest this century. The period from November 1988 to February 1992 was the driest for over 200 years in the Anglian region, and so on.
It is just possible that abundant rain in the next few months will enable us to get through the summer without serious difficulties. But we cannot rely on it and must not be complacent. Nor can we rely on the whingers who complain that it is raining yet again.
The NRA and the water companies have the primary role in dealing with water shortages. Under Section 37 of the Water Industry Act 1991, the companies must develop and maintain an efficient and economical system of water supply in their areas. It is they who must in the first instance judge what
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measures are needed to deal with immediate water shortages. The NRA has the longer-term role of conserving, re-distributing and otherwise augmenting water resources in England and Wales. I commend its publication today.
But with an abnormal situation in prospect we have asked our officials to meet with the NRA and the water companies to discuss the special procedures and contingency arrangements which need to be made.
The measures available include hose pipe bans, reducing leakage—I have noted all that was said about that—improving inter-linkages between supply systems, and applying to the Secretary of State for the Environment for drought orders. All these are the responsibility of the water companies. For its part the NRA exercises control over spray irrigation and can also help where it owns and manages resources such as the Trent-Witham-Ancholme scheme. The NRA has been liaising with those holding abstraction licences in the South East to discuss what measures can be taken.
It is important too to get over to the public the message that we need to conserve water and not waste it. Too many people in this country believe that because water falls from heaven it ought to be free. That belief ignores the substantial raft of provisions and the vast industry that must be put in place to make the water drinkable. I say to people that it falls from heaven as in abundance in Pakistan but in its undrinkable form kills. We need the industry to ensure that the water that we drink is safe. But the message must go out from Parliament because it has the primary responsibility for that education.
The department is being kept fully informed of the steps being taken so that my officials have a full overview of the situation. The NRA and the water companies are fully aware of their responsibilities and are co-operating fully with my officials. This will continue as necessary while the situation develops.
My noble friend Lord Crickhowell was anxious about abandoned mines and contaminated land. They represent a most serious issue. We recognise that although they are not a major problem nationally, they present particular difficulties. The NRA is studying the extent of the problems as part of its continuing review process for pollution problems. We are also looking at the practical and financial problems which are raised.
The noble Lord, Lord Ashburton, is anxious about the siting of reservoirs. There is an appropriate framework of planning control for approving the siting of reservoirs for which the National Rivers Authority is a statutory consultee. The strategy for the future has been discussed in a report published today by the NRA. Of course, the water grid is one option but it is regarded as rather expensive. That was mentioned also by my noble friend Lord Marlesford and the noble Lord, Lord Bridges. They served to illustrate that there are varying views about the water grid option but I am sure that their views will be valued in consultation on the issue.
The noble Lord, Lord Bridges, expressed a view about the use of jet skis in estuaries. I recognise the anxieties generated by the use of jet skis. One function of coastal zone management, particularly in sensitive

1401
locations, is to identify appropriate recreational uses and, where necessary, to seek controls through the use of by-laws.
The noble Baroness, Lady Nicol, asked a number of questions about coastal zone management and heritage coasts, as did my noble friend Lord Marlesford and other noble Lords. Today the DoE is publishing for consultation a draft planning policy guidance note on coastal zone planning. The PPG strengthens our commitment to the protection of coastlines and brings up to date advice on coastal planning. It too commends to local authorities and others the value of the heritage coast model. We are also promoting regional coastal groups, including local authorities and the NRA, which examine regional coast defence needs. However, we do not believe that a single coastal zone management unit, the NRA or any other body, could successfully tackle all coastal issues. We need collaboration and co-ordination of all the agencies involved.
The noble Baroness, Lady Nicol, asked whether the Government would take action to identify coastal and marine areas requiring protection under the habitats directive. The Government are fully committed to implementing the directive which allows member states three years in which to draw up a national list of sites. The Joint Nature Conservation Committee and the country agencies for nature conservation are considering the criteria for selection contained in the directive and how they should be applied in detail in the United Kingdom. They will make recommendations to the Government.
On the Scotland, England and Wales question, all three country councils have power to pay grant to any person, including a local authority, who spends money on nature conservation. The total grant in aid provision for the three bodies in 1992–93 is £88.5 million, an increase of 19.8 per cent, over the current year. The Government consider that to be an adequate sum for the fulfilment of all the bodies' functions, including the grant giving powers.
If there were more time, I should like to go into how much work the water companies are doing on leakage control. Whenever they go under ground, for whatever reason, they address the issue of putting in new pipes. A great deal of new material and technology is being used to that end. However, a water leakage of 25 per cent, to 30 per cent, is unacceptable and that problem must be addressed.
Wholesale metering has been mentioned. That is undoubtedly an important option for conservation in the use of water. That forms one option in the document. I have no doubt that noble Lords will look at that. It is not a straightforward matter but it should be considered as one of a range of options. The department has commissioned a joint survey with Ofwat on the impact of compulsory water metering. That report is due later this year.
The noble Baroness, Lady Robson, is anxious about resources. The NRA's actions have shown that the fears of the worst doubters before its establishment are entirely groundless. We are firmly committed to ensuring that the NRA is able to carry out its role as
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a strong and effective regulator. The number of staff involved in pollution control has continued to increase by 38 per cent, since its establishment. The combination of grant in aid and income from discharges enables the NRA to increase expenditure in its core environmental functions from less than £150 million in 1990–91 to over £180 million in 1991–92 and around £200 million in 1992–93. In particular, expenditure on pollution control is budgeted to increase by 15 per cent, between 1991–92 and 1992–93.
My noble friend Lord Mills mentioned the single agency. That will be a major step forward. The agency will be able to develop a consistent and cohesive approach to environmental protection. It will be able to develop greater expertise and authority than the current arrangements allow. Above all, it will be a powerful voice in influencing the adoption of better environmental standards and practice.
The noble Lord, Lord Hampton, asked what incentives water companies have to encourage economy. In assessing the K factor, pass through costs are allowed for. We must link in the minds of people the cost of those improvements. That must be part of the downward pressure on bringing that message to bear.
I am grateful to the noble Lord, Lord Dormand of Easington, for bringing to our notice the particular problem of coal discharges on the Northumbrian beaches. As he points out, we are committed to the general principle that wherever possible the polluter, and not the taxpayer, pays. However, that is clearly a long-standing and difficult problem which I shall look into. I shall write further on that matter to the noble Lord.
The noble Lord, Lord Addington, is anxious about controls on tanker routes. He referred to the marine pollution unit. He rightly recognises the important measures taken by the Secretary of State responsible for transport both to provide navigational controls on congested areas of coastal waters and to make advance contingency plans to deal with incidents. Clearly accidents on the scale of the "Exxon Valdez" need to be avoided at all costs. They fall beyond the practical scope of immediate contingency plans, but I have no doubt that the unit is as well prepared as it can be.
The noble Lord, Lord Beaumont, mentioned Richmond Park and the effect on the trees there. Only last week I was in Richmond Park to designate it as an area of special scientific interest. It is now in very good hands and the problems mentioned by the noble Lord will be addressed as part of the management plan.
The noble Lord, Lord Addington, mentioned water resources and the protection of fish and other natural resources. Again, that is one of the reasons why the Government set up the NRA. We believe that the NRA will deal with such matters.
The noble Lord, Lord Beaumont, asked why we cannot work more closely with Ireland. The Government wish to work closely with all their Community partners on such measures, and that of course includes Ireland.
This Government are firmly committed to improving the quality of our water and the

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management of our water resources. We have demonstrated that commitment by a wide range of practical measures.
We are also looking to the future. Only today we published a consultation paper outlining our proposals in England and Wales for identifying sensitive and less sensitive areas under new Community legislation. We are not complacent. In view of the abnormal drought situation in prospect, my officials are already discussing with all the agencies the special procedures and contingency arrangements which are to be made. I assure your Lordships that the Department of the Environment will keep itself fully informed of the developing situation and the steps being taken on water resources.
However, the longer term is just as important. Therefore, I welcome the discussion document which the NRA published today. That is a valuable and timely contribution to securing our water resources for future generations. I thank the noble Baroness, and I commend to this House the Government's record and their proposals for the future.
Baroness Robson of Kiddington: My Lords, I thank the Minister for that extremely long and detailed reply to our debate. In her usual competent fashion, I believe that she answered the questions of every noble Lord. Whether we necessarily agree 100 per cent. with those answers is another matter. However, it is reassuring to have a Minister who takes so much trouble in replying to a debate. I thank all noble Lords who took part and who contributed on so many different interesting aspects of the problem raised by the Motion. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Osteopaths Bill [H.L.]
8.20 p.m.
Lord Walton of Detchant: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee. —(Lord Walton of Detchant.)
On Question, Motion agreed to.
House in Committee accordingly.
[The DEPUTY CHAIRMAN (Lord Skelmersdale) in the Chair.]
Clause 1 [Constitution and functions of the general Osteopathic Council and its Committees]:
Lord Walton of Detchant Lord Walton of Detchant moved Amendment No. 1:
Page 1, line 11, after first ("the") insert ("General").
The noble Lord said: In moving Amendment No. 1, I shall speak also to Amendments Nos. 7, 8, 10, 15, 24 to 28 and 30 to 31. These are all minor technical and drafting amendments to the Bill. I beg to move.
On Question, amendment agreed to.
Clause 1, as amended, agreed to.
Clause 2 agreed to.
Clause 3 [Information to be given by institutions granting qualifications in osteopathy]:
Lord Walton of Detchant Lord Walton of Detchant moved Amendment No. 2:
Page 2, line 2, after ("study") insert ("in osteopathy").
The noble Lord said: In moving Amendment No. 2, I shall speak also to Amendments Nos. 6, 16 and 32.
These are all minor amendments to the Bill. Amendment No. 2 to Clause 3 clarifies that only those educational institutions providing courses of study in osteopathy will be required to let the general council have information on the courses and examinations they conduct.
Amendment No. 6 to Clause 5 requires the general council to consult its education committee on whether a course of study will meet the required standards for the safe and competent practice of osteopathy.
Amendment No. 16 to Clause 7 ensures that in order to exercise his entitlement to be registered under the Act with full registration, an osteopath would first have to make an application for full registration, in the due form, to the registrar.
Amendment No. 32 to Clause 8 makes clear that the general council's rules on procedures on appeal will not cover proceedings in a court of law. I beg to move.
Clause 3, as amended, agreed to.
Clause 4 [Powers to appoint visitors]:
The Parliamentary Under-Secretary of State, Department of Health (Baroness Hooper)The Parliamentary Under-Secretary of State, Department of Health (Baroness Hooper) moved Amendment No. 3:
Page 2, line 14, leave out subsection (2).
The noble Baroness said: In moving Amendment No. 3 I shall speak also to Amendments Nos. 4,5, 9 and 11 to 14.
The Government believe that the Privy Council's involvement should be less than that envisaged in the Bill. These amendments would provide in Clause 4 for the education committee to decide the nature of the visits and to receive the visitors' reports. The amendments to Clause 5 would remove the requirements for the Privy Council, first, to recognise the standards of proficiency recommended by the general council for the safe and competent practice of osteopathy; secondly, to recognise or, if appropriate, withdraw recognition from a qualification as providing an acceptable basis for registration; and, thirdly, to make orders to give effect to such decisions.
As a result, all these responsibilities, with the exception of making orders, would fall to the general council to decide after appropriate consultation with its education committee.
It is our intention that decisions taken by the general council under this section would require the consent of the Privy Council before they could take effect and, in the case of withdrawing recognition from a qualification, only after the Privy Council has considered any representation or objections from the educational institutions concerned.
I can assure the Committee that these amendments would in no way diminish our view of the importance of ensuring that osteopaths should be trained to, and practise at, the very highest standards. I beg to move.
On Question, amendment agreed to.
Baroness Hooper Baroness Hooper moved Amendment No. 4:

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Page 2, line 30, leave out subsection (5).
On Question, amendment agreed to.
Clause 4, as amended, agreed to. Clause 5 [Recognition of standards and qualifications]:
Baroness Hooper Baroness Hooper moved Amendment No. 5:
Page 2, line 38, leave out from ("osteopathy") to end of line 40.
The noble Baroness said: This amendment has been spoken to. I beg to move.
On Question, amendment agreed to.
Lord Walton of Detchant Lord Walton of Detchant moved Amendment No. 6:
Page 2, line 41, after ("Council") insert ("after consultation with the Education Committee").
On Question, amendment agreed to.
Lord Walton of Detchant Lord Walton of Detchant moved Amendment No.7:
Page 2, line 44, leave out ("granting any") and insert ("acquiring a").
On Question, amendment agreed to.
Lord Walton of Detchant Lord Walton of Detchant moved Amendment No. 8:
Page 2, line 44, at end insert ("from that institution").
On Question, amendment agreed to.
Baroness Hooper Baroness Hooper moved Amendment No. 9:
Page2,line46,leaveoutfrom("may")to second ("qualification"), in line 47, and insert ("recognise that").
On Question, amendment agreed to.
Lord Walton of Detchant Lord Walton of Detchant moved Amendment No. 10:
Page 3, line 4, leave out ("granting any") and insert ("acquiring a").
On Question, amendment agreed to.
Baroness Hooper Baroness Hooper moved Amendments Nos. 11 to 14:
Page 3, line 7, leave out ("represent to the Privy Council that it is expedient") and insert ("direct").
Page 3, line 8, leave out ("should") and insert ("shall").
Page 3, line 9, leave out subsections (4) and (5) and insert:
("(4) No recognition or direction shall be given under this section without the consent of the Privy Council.
(5) Before giving, or refusing to give, their consent the Privy Council shall consider—

(a)any report made under section 4 which relates to the course, examinations or institution in question and any observations on or objections to any such report which have been duly made under subsection (4) of that section, and

(b)in the case of a proposed direction, any representations or objections made to them by the educational institution in question.").

Page 3, line 31, leave out ("specified in an Order made") and insert ("recognised").
The noble Baroness said: With the leave of the Committee I shall move Amendments Nos. 11 to 14 en bloc. I beg to move.
On Question, amendments agreed to.
Clause 5, as amended, agreed to.
Clause 6 [Keeping and publication of register of osteopaths]:
Lord Walton of Detchant Lord Walton of Detchant moved Amendment No. 15:
Page 4, line 3, leave out from ("sale") to end of line 6 and insert:
("(6) Where the General Council consider it appropriate, they may discharge their duty under subsection (5) by printing, publishing and making available for sale one or more supplements to the last published copy of the register.
(7) Any document published under subsection (5) or (6) shall be admissible as evidence of the contents of the register (except as respects any honours or distinctions accorded to a registered person).").
The noble Lord said: I beg to move.
Lord Desai: That leaves "available for". It ends half way. Is there not one more word to be left out? That is the way I read it after the omission.
Lord Walton of Detchant: I accept that.
On Question, amendment agreed to.
Clause 6, as amended, agreed to.
Clause 7 [Entitlement to registration]:
Lord Walton of Detchant Lord Walton of Detchant moved Amendment No. 16:
Page 4, line 8, after ("if") insert (",on an application for full registration duly made to the Registrar,").
On Question, amendment agreed to.
Lord Walton of Detchant Lord Walton of Detchant moved Amendment No. 17:
Page 4, line 12, after ("(ii)") insert ("in the case of an application for registration made before the end of the period of two years beginning with the day on which this section comes into force,").
The noble Lord said: In moving Amendment No. 17 I shall speak also to Amendment No. 20.
As the law currently stands anyone may call himself or herself an osteopath and practise as such in the United Kingdom. There is no obligation to undergo formal training of any kind. The patient therefore has no guarantee that people holding themselves out as practising osteopaths are competent or fit to do so. The purpose of this Bill is to give the public that assurance by making it a condition of registration that osteopaths are highly trained in their profession.
Yet we also recognise that there are osteopaths who, while not holding a formal qualification, have nonetheless safely and competently been practising osteopathy for many years. The Bill therefore provides two levels of registration for this group of practitioners: full registration to those who have safely and competently been practising osteopathy for a total of five out of the seven years preceding the opening of the register; and provisional registration for those who have been so practising for a total of four out of six years, subject to the condition that they will, within five years, complete any further training specified by the general council and pass any test of competence it may set.
It is our intention that registration under these criteria should be available for a transitional period only after which time an osteopath would be able to apply only for full registration on the basis that he holds a recognised qualification. As currently drafted, however, the Bill makes no provision for this transitional period. Following discussions with representatives of the profession we feel this should be

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a period of two years from the opening of the register which these amendments will introduce. I beg to move.
On Question, amendment agreed to.
Baroness Hooper Baroness Hooper moved Amendment No. 18:
Page 4, line 15, at end insert ("and").
The noble Baroness said: In moving this amendment I speak also to Amendments Nos. 19, 23 and 29. Amendments Nos. 19 and 23 are substantive amendments which would remove the statutory requirement that as a condition to being registered under the Act the osteopath has adequate public liability insurance for claims against him for negligence in his practice. Amendments Nos. 18 and 29 are consequential drafting amendments. The Government do not believe that the Bill should interfere with the workings of a free market by imposing a statutory requirement for insurance cover.
We would however expect the profession to regulate itself in this area and will look to the general council to exercise its rule-making powers to satisfy itself that osteopaths would have appropriate insurance cover. The amendments make clear that the general council's powers are sufficient in this area for the protection of the public. These rules would be subject to approval by the Privy Council. I beg to move.
On Question, amendment agreed to.
Baroness Hooper Baroness Hooper moved Amendment No. 19:
Page 4, line 16, leave out from ("character") to end of line 20.
On Question, amendment agreed to.
Lord Walton of Detchant Lord Walton of Detchant moved Amendment No. 20:
Page 4, line 22, after ("if") insert (",on an application for provisional registration duly made to the Registrar before the end of the period of two years beginning with the day on which this section comes into force,").
The noble Lord said: In moving this amendment I shall speak also to Amendments Nos. 21 and 22. The amendments also relate to the transitional arrangements. Amendments Nos. 21 and 22 are intended to provide a safety net for the student who, in good faith, had embarked on a course of study which he fully expected would lead to a recognised qualification but at some midway point ceased to be recognised by the general council as meeting the standards set for the safe and competent practice of osteopathy. As drafted, the Bill would permit a student in this position to apply for provisional registration and consequently to practise.
However, it is incongruous that a Bill which intends to establish a registration based on prescribed standards of training should make provision enabling a person to practise osteopathy on the basis that he had partially completed a training course which in its entirety would not, in the judgment of the general council, equip him with the skills required for safe and competent practice. We intend that the original spirit of this subsection will be retained by providing a system of credits towards a recognised qualification
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for a student caught in this position but separate from the conditions of entitlement to registration. I beg to move.
On Question, amendment agreed to.
Lord Walton of Detchant Lord Walton of Detchant moved Amendments Nos. 21 and 22:
Page 4, line 24, leave out ("either").
Page 4, leave out lines 29 to 34 and insert ("and").
On Question, amendments agreed to.
Baroness Hooper Baroness Hooper moved Amendment No. 23:
Page 4, line 35, leave out from ("character") to end of line 39.
On Question, amendment agreed to.
Lord Walton of Detchant Lord Walton of Detchant moved Amendment No. 24:
Page 4, line 42, leave out ("Act") and insert ("section").
On Question, amendment agreed to.
Lord Walton of Detchant Lord Walton of Detchant moved Amendments Nos.25 to 28:
Page 5, line 14, leave out ("Act") and insert ("section").
Page 5, line 18, leave out ("persons who have qualified as osteopaths") and insert ("any person who holds a qualification in osteopathy").
Page 5, line 21, leave out ("their qualifications are") and insert ("his qualification is").
Page 5, line 22, leave out ("the qualifications recognised under this Act") and insert ("a recognised qualification").
On Question, amendments agreed to.
Baroness Hooper Baroness Hooper moved Amendment No. 29:
Page 5, line 23, leave out from ("that") to end of line 24 and insert ("he is of good character").
On Question, amendment agreed to.
Clause 7, as amended, agreed to.
Clause 8 [Rules with respect to registration]:
Lord Walton of Detchant Lord Walton of Detchant moved Amendments Nos. 30 and 31:
Page 5, line 41, leave out ("and the charging of fees in respect of those matters").
Page 5, line 45, at end insert:
("( ) the charging of fees and the consequences (which may include removal from the register) of failing to pay any required fee;").
The noble Lord said: I spoke to these minor technical drafting amendments at the outset. I beg to move.
On Question, amendments agreed to.
Lord Walton of Detchant Lord Walton of Detchant moved Amendment No. 32:
Page 5, line 46, after ("procedure") insert (",otherwise than in relation to court proceedings,").
On Question, amendment agreed to.
Clause 8, as amended, agreed to.
Clause 9 agreed to.
Clause 10 [Preliminary investigation of complaints against osteopaths]:
Baroness Hooper Baroness Hooper moved Amendment No. 33:
Page 6, line 10, after ("has") insert ("at any time").
The noble Baroness said: With permission, in moving this amendment I shall speak also to Amendment No. 34. Amendment No.34 would remove the powers of the investigating committee to

1409
instigate an investigation on the basis that an osteopath is alleged to have been convicted outside the United Kingdom of a criminal offence. Amendment No. 33 is a drafting amendment.
Generally speaking, convictions in foreign courts have no particular standing or significance in this country and they could not, for example, be taken into account by an English court in considering what sentence to impose after conviction of an offence committed here. Further, it may not be possible to confirm what decision a foreign court reached in a particular case and, given the difference between legal systems, it will often not be possible to say with certainty whether the same actions would have resulted in a criminal conviction if committed in this country. We therefore feel that on balance this provision should be withdrawn. That is the intention of the amendment. I should perhaps add that removing these provisions would in fact put the investigating committee on a par with other professional bodies; for example, the General Medical Council's preliminary proceedings committee. I beg to move.
On Question, amendment agreed to.
Baroness Hooper Baroness Hooper moved Amendment No. 34:
Page 6, leave out lines 11 to 13.
On Question, amendment agreed to.
Lord Walton of Detchant Lord Walton of Detchant moved Amendment No. 35:
Page 6, line 28, leave out ("in the case mentioned in subsection (1) (b)").
The noble Lord said: This amendment would require the investigating committee to provide the osteopath with details of the allegations made against him in all circumstances and not just, as the Bill currently provides, in cases of alleged unacceptable professional conduct. I beg to move.
On Question, amendment agreed to.
Lord Walton of Detchant Lord Walton of Detchant moved Amendment No. 36:
Page 6, line 35, after ("Committee") insert ("or the Health Committee").
The noble Lord said: I will, with permission, move this amendment and speak to Amendments Nos. 37 to 39 and Amendment No. 41. Amendment No. 36 will bring the procedures to be followed in a referral to the health committee, by the investigating committee, in line with those to the professional conduct committee; namely, that the investigating committee must determine the specific terms of the complaint and inform the osteopath that it is being referred to the health committee. Amendments Nos. 37 to 39 are drafting amendments; Amendment No. 41 is consequential on Amendment No. 36. I beg to move.
On Question, amendment agreed to.
Lord Walton of Detchant Lord Walton of Detchant moved Amendments Nos. 37 to 39:
Page 6, line 35, after ("they") insert: (a);").
Page 6, line 36, leave out ("terms of the complaint") and insert ("details of the allegation").
Page 6, line 37, leave out ("it") and insert ("those details").
On Question, amendments agreed to.
Lord Walton of Detchant Lord Walton of Detchant moved Amendment No. 40:
Page 6, line 37, at end insert ("and
(b) may, if they are satisfied that it is necessary to do so for the protection of members of the public, make an order suspending his registration pending determination of the reference.
(3A) No order shall be made under subsection (3) (b) unless the registered osteopath concerned has been given an opportunity to appear before the Investigating Committee to give his reasons why such an order should not be made.").
The noble Lord said: Notwithstanding the seriousness of the allegations, the Bill as drafted makes no provision for the investigating committee to take any action against an osteopath pending the outcome of referral to the health or professional conduct committees. This amendment however will enable the investigating committee to impose an immediate suspension where it is satisfied that such action is necessary for the protection of the public. A right to protest to the investigating committee against such action is provided. I beg to move.
On Question, amendment agreed to.
Lord Walton of Detchant Lord Walton of Detchant moved Amendment No. 41:
Page 6, line 38, leave out subsection (4).
The noble Lord said: This amendment is consequential upon previous amendments which have been accepted. I beg to move.
On Question, amendment agreed to.
Lord Walton of Detchant Lord Walton of Detchant moved Amendment No. 42:
Page 6, line 46, leave out subsection (6).
The noble Lord said: The investigating committee is not part of a system in which there are appellate procedures in place. The only rights of appeal under the Bill come from Clause 14 which does not bite on the investigating committee. Consequently, subsection 10(6) is unnecessary. I beg to move.
On Question, amendment agreed to.
Clause 10, as amended, agreed to.
Clause 11 [References to the Professional Conduct Committee]:
Lord Walton of Detchant Lord Walton of Detchant moved Amendment No. 43:
Page 7, line 8, leave out from ("(1)") to end of line 16 and insert:
("Where a case has beenreferredto the Professional Conduct Committee under section 10, they may, if satisfied that it falls within paragraph (a) or (b) of subsection (1) of that section, take one or more of the following steps—
(a) admonish the registered osteopath concerned;").
The noble Lord said: In moving this amendment I shall speak also to Amendments Nos. 47, 48 and 65. Amendment No. 43 is a drafting amendment upon which Amendments Nos. 47 and 48, and Amendment No. 65 to Clause 14 are consequential. I beg to move.
On Question, amendment agreed to.
Baroness Hooper Baroness Hooper moved Amendment No. 44:
Page 7, line 20, at end insert ("or").
The noble Baroness said: In moving Amendment No. 44 I shall speak also to Amendment No. 45.

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Amendment No. 45 will remove the powers to fine and impose costs from the list of sanctions the professional conduct committee could impose on an osteopath and for these amounts to be recovered as if they were a civil debt. In the most severe cases, the professional conduct committee would be able to prevent the osteopath from continuing in his profession. Amendment No. 44 is a consequential drafting amendment. I beg to move.
On Question, amendment agreed to.
Baroness Hooper Baroness Hooper moved Amendment No. 45:
Page 7, line 22, leave out from second ("specified") to end of line 32.
On Question, amendment agreed to.
Lord Walton of Detchant Lord Walton of Detchant moved Amendment No. 46:
Page 7, line 32, at end insert:
("(2A) Where the Professional Conduct Committee have made an order for suspension under subsection (1) (c), they may order—

(a) that the current period of suspension shall be extended for such further period from the time when it would otherwise expire as may be specified in the order;

(b) that the name of the registered osteopath concerned be erased from the register; or

(c) that his registration shall, as from the expiry of the current period of suspension, be conditional on his compliance, during such period not exceeding three years as may be specified in the order, with such requirements so specified as the Committee think fit to impose for the protection of members of the public;

but they shall not extend any period of suspension under this section for more than three years at a time.
(2B) Where the Professional Conduct Committee have made an order under subsection (1) (d) or (2A) (c) for conditional registration, they may—

(a) order that the current period of conditional registration shall be extended for such further period from the time when it would otherwise expire as may be specified in the order; or

(b) revoke the order or revoke or vary any of the conditions;

but they shall not extend any period of conditional registration under this section for more than three years at a time.").
The noble Lord said: In moving this amendment I shall speak also to Amendments Nos. 47 and 48 which are consequential. This amendment would enable the professional conduct committee to review a period of suspension and either renew it for a further period of up to three years, to erase the osteopath's name from the register or to impose conditions on his registration. Similarly, it would enable the committee, on reviewing a period of conditional registration, to renew the existing conditions for a further period of up to three years, or to revoke the order, or revoke or vary any of the conditions. I beg to move.
On Question, amendment agreed to.
Lord Walton of Detchant Lord Walton of Detchant moved Amendments Nos. 47 and 48:
Page 8, line 3, leave out ("(2)") and insert ("(1)").
Page 8, line 8, leave out ("(2)") and insert ("(1)").
On Question, amendments agreed to.
Clause 11, as amended, agreed to.
Clause 12 [References to the Health Committee]:
Lord Walton of Detchant Lord Walton of Detchant moved Amendment No. 49.
Page 8, line 40, after ("of') insert ("members of).
The noble Lord said: In moving this amendment I shall speak also to Amendment No. 50. As currently drafted, the Bill would require the health committee, in deciding whether to suspend or to impose conditional registration on an osteopath who is unfit to practise, to consider which course of action would better secure the protection of the public and maintain public confidence in the profession. The words "protection of the public" imply, however, that before coming to its decision the health committee would have to weigh in the balance the threat of the osteopath's condition on the public at large, or possibly in a completely different part of the country. Similarly, in seeking to maintain public confidence in the profession the health committee would have to consider the impact of its decision on an unfit osteopath in, for example, Barnsley, and on public opinion in, say, Huddersfield. What is intended, however, and what these amendments will enable to happen, is that the health committee should base its decision on what is required for protection of those members of the public who would otherwise have been treated, or will continue to be treated, by the osteopath. I beg to move.
On Question, amendment agreed to.
Lord Walton of Detchant Lord Walton of Detchant moved Amendment No. 50:
Page 8, line 40, leave out ("and the maintenance of public confidence in the profession").
On Question, amendment agreed to.
Lord Walton of Detchant Lord Walton of Detchant moved Amendment No. 51:
Page 8, line 43, leave out ("one year") and insert ("three years").
The noble Lord said: If the health committee decides that an osteopath is unfit to practise it would be able either to suspend or impose conditions on his registration. As currently drafted, the Bill would enable the health committee to impose an initial suspension for a maximum period of one year only. The experience of equivalent committees under similar regulatory schemes, such as the health committee of the General Medical Council, for example, is that when faced with a long-term physical or mental condition, a maximum period of one year is too short and often requires the individual in question to reappear before the committee at regular intervals. This amendment would enable the health committee to make an initial order suspending the osteopath's registration for a maximum period of up to three years. I should perhaps add that provision is made in the Bill which would enable such an order to be reviewed in the osteopath's favour if it were subsequently considered to bo too onerous. I beg to move.
On Question, amendment agreed to.
Lord Walton of Detchant Lord Walton of Detchant moved Amendment No. 52:
Page 8, line 47, leave out ("if any").
The noble Lord said: In moving this amendment I shall speak also to Amendment No. 53. As currently drafted the Bill permits the health committee to take no action against an osteopath it has considered by reason of his physical or mental condition to be unfit to perform his professional functions. This clearly runs contrary to the intention and the inherent responsibilities incumbent on the health committee in safeguarding members of the public. Amendment No. 53 seeks, therefore, to remove this option thereby requiring the health committee either to suspend or to impose conditions on the registration of an osteopath who is unfit to practise. I beg to move.
On Question, amendment agreed to.
Lord Walton of Detchant Lord Walton of Detchant moved Amendment No. 53:
Page 8, line 48, leave out from ("(c)") to ("subject") in line 2 on page 9.
On Question, amendment agreed to.
Lord Walton of Detchant Lord Walton of Detchant moved Amendment No. 54:
Page 9, line 7, at end insert ("and").
The noble Lord said: In moving this amendment I shall, with the leave of the Committee, speak also to Amendment No. 55. Although it looks like a sizeable chunk of text, Amendment No. 55 essentially introduces two new provisions while tightening the drafting of the Bill. Amendment No. 54 is a consequential drafting amendment.
The first provision is that the health committee would be required to impose, rather than just to consider, the minimum period of suspension, or conditions, on the osteopath's registration that it considers reasonably necessary to safeguard members of the public. The second provides for the health committee to be able to impose less onerous conditions or a shorter period of suspension as well as to revoke such restrictions, which is the only alternative currently provided by the Bill, should it subsequently consider them too onerous. I beg to move.
On Question, amendment agreed to.
Lord Walton of Detchant Lord Walton of Detchant moved Amendment No. 55:
Page 9, line 9, leave out from ("proposals") to end of line 21 and insert:
("(5A) When making any order under subsection (4) (c), the health committee shall not impose a period of suspension which is longer, or conditions which are more onerous, than the minimum which they consider reasonably necessary to achieve the purpose mentioned in subsection (4) (a).
(6) If, at any time after the health committee have made an order under subsection (4) (c) ("the original order"), it appears to them of their own motion or on an application made to them in that behalf—

(a) that the continuation of the order is no longer reasonably necessary to achieve the purpose mentioned in subsection (4) (a); or

(b) that that purpose could be achieved with a shorter period of suspension or with less onerous conditions;

they may by order ("the new order") revoke the original order, or (as the case may be) vary it, either with immediate effect or with effect from such future date as may be specified in the new order.").
On Question, amendment agreed to.
Lord Walton of Detchant Lord Walton of Detchant moved Amendment No. 56:
Page 9, line 23, leave out ("has expired or").
The noble Lord said: In moving this amendment I shall, with the leave of the Committee, speak also to Amendments Nos. 57 to 63. As currently drafted, the Bill enables the health committee to renew an order suspending or imposing restrictions on an osteopath's registration after the original order has expired. That runs contrary to natural justice. It also states that the grounds for continuing suspension or conditional registration would be that the osteopath continues to suffer from the condition which led to the making of the original order. However, there are many long-term medical conditions which are capable of being sufficiently controlled through proper treatment so as no longer to impair the osteopath's abilities to perform his professional functions competently and safely.
The other amendments provide for any new orders to be subject to the same considerations as the original order; namely, that only the minimum restrictions considered reasonably necessary to safeguard members of the public should be imposed, that the new orders would be subject to downward variation or revocation if they were subsequently considered too onerous and that any further renewal should be made before the expiry of the existing order. The duration of new orders would be restricted to a maximum period of three years. I beg to move.
On Question, amendment agreed to.
Lord Walton of Detchant Lord Walton of Detchant moved Amendments Nos. 57 to 63:
Page 9, line 27, leave out from beginning to ("a"), in line 28, and insert ("remains unfit to perform his professional functions as an osteopath by reason of the condition which led to the making of the order or of).
Page 9, line 30, leave out ("still").
Page 9, line 32, at end insert ("for a period not exceeding three years").
Page 9, line 37, at end insert ("and").
Page 9, line 39, leave out from ("proposals") to end of line 44.
Page 9, line 45, leave out ("subsection (7)") and insert ("subsections (6) and (7)").
Page 9, line 47, at end insert:
("(8A) Subsection (5A) applies in relation to an order under subsection (7) as it applies in relation to one under subsection (4) (c).").
On Question, amendments agreed to.
Lord Walton of Detchant Lord Walton of Detchant moved Amendment No. 64:
Page 10, leave out lines 2 to 8, and insert:

("(a) may at any time hold a hearing in connection with the exercise by them of any of their functions under this section; and

(b) shall hold a hearing before making any determination under subsection (1) or any order under subsection (4) or (7), if the osteopath concerned has asked in writing for a hearing.

(10) At any hearing held by the health committee for purposes of this section the osteopath concerned may be represented by a barrister, advocate or solicitor or by any other person.").
The noble Lord said: Amendment No. 64 is essentially a drafting amendment designed to clarify

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the occasions when a hearing before the health committee can be held. That would be at any time of the committee's choosing, and at the written request of the osteopath, before it made any decision to impose or renew a period of suspension or conditional registration. At any hearing the osteopath could be represented by a person of his choosing. I beg to move.
On Question, amendment agreed to.
Clause 12, as amended, agreed to.
Clause 13 agreed to.
Clause 14 [Appeals from the Professional Conduct and Health Committees]:
Lord Walton of Detchant Lord Walton of Detchant moved Amendment No. 65:
Page 10, line 30, leave out ("(2)") and insert ("(1)").
On Question, amendment agreed to.
Clause 14, as amended, agreed to.
Clauses 15 to 23 agreed to.
In the schedule:
Lord Walton of Detchant Lord Walton of Detchant moved Amendment No. 66:
Page 17, line 1, leave out ("four") and insert ("eight").
The noble Lord said: With the leave of the Committee I shall, while moving this amendment, speak also to Amendment No. 67, which is a consequential drafting amendment, and to Amendment No. 68. It would be the responsibility of the education committee to promote high standards of education in osteopathy by specifying the standards required for registration, by visiting the bodies providing training and examinations and by coordinating all stages of education.
As currently drafted, the Bill provides for the membership of the education committee to include four co-opted members. Amendment No. 66 seeks to increase the number of co-opted members to eight, thereby enabling the committee to call upon a potentially wider range of experience which it might consider necessary in order to fulfil its responsibilities. Paragraph 17(2) of the schedule requires that co-opted members to the education committee must be employed in osteopathic teaching but not at a school or institution where a member of the general council is employed.
However, the profession is concerned that if restrictions on the credentials of the co-opted members are made in the Act, the education committee may not be able to perform its functions adequately. Amendment No. 68 would remove those restrictions from the legislation and would allow such matters to be decided at the discretion of the general council. I beg to move.
On Question, amendment agreed to.
Lord Walton of Detchant Lord Walton of Detchant moved Amendments Nos. 67 and 68:
Page 19, line 5, leave out from ("co-opt") to end of line 7 and insert ("further members on to the Committee, but the number of such further members at any time shall not exceed—

(a) in the case of the Investigating and Education Committees, eight, and

(b) in the case of the Professional Conduct and Health Committees, four.").

Page 19, line 8, leave out sub-paragraph (2).
On Question, amendments agreed to.
Schedule, as amended, agreed to.
House resumed: Bill reported with amendments.

Women's Refuges
8.56 p.m.
Earl Russell Earl Russell rose to ask Her Majesty's Government whether the provision of women's refuges should be regarded as a local or as a national responsibility.
The noble Earl said: My Lords, I believe that this is a completely non-party debate. At this stage of the proceedings, I think that that may be something of a relief to all of us. There are of course matters about which we agree as well as matters about which we disagree. I take it that we are agreed in all parties that help should be provided for women who are the victims of domestic violence; that women's refuges are a good way of providing such help; that refuges are much cheaper to administer than bed-and-breakfast accommodation; and that they also provide for women the sort of help and a sense of security which are not normally available in bed-and-breakfast accommodation. In fact there is a group therapy element in it.
I also take it that we are all agreed that refuges cannot normally be run for profit and that there is a need for some form of funding from public sources; that is, above housing benefit and income support. All those considerations are not in any way a matter of party debate. I believe that the Government are making great attempts to do the best they can in the area and have, especially since Mr. Patten's speech at King's College, London, been giving the subject a rather higher priority.
I have heard people who are active in the field speak of the noble Baroness, Lady Hooper, with the sort of warmth that one does not normally hear from members of pressure groups when speaking about Ministers. Therefore, I hope that there is no need for party contention here. I trust that it is a matter of agreement between us that refuges must provide for women a place to go outside their own area. There are many cases where women are followed by the man who was the source of the original injury. First, there are pleas to come home, and then, if they are not heeded, far too frequently they are followed by further violence.
There was the notorious case reported in the newspaper last week of the murder which took place inside a police station. That is an extreme and unusual case. But it is, I think, a caricature of something which if we look at the literature on the subject we all recognise happens. I regret to say that, in spite of the efforts of the judges in this area, the idea of "the man of property" is not yet extinct. Therefore, secure refuges frequently need to be located away from the woman's home area. For the same reason, any permanent rehousing needs to be away from her home area so that she can go out into the street without needing to look over her shoulder all the time, wondering who is behind her.
I should like to bring three questions to the attention of the House. The first is the familiar question: "Are we doing enough on this subject?"; the second is: "Are we doing it in the most effective way?"; and the third is: "Have we come to a stage in the growth of awareness about this problem when there is a need to consolidate the measures that have been entered into with a great deal of good will and in a great many quarters but which nevertheless still have about them something of the character of Topsy?".
The funding for refuges comes from a large variety of sources. A good deal of it comes from the Government, but under a great many different headings. It comes from the urban aid programme and from the Departments of Health and of Social Security under two different sections of the Health Services and Public Health Act 1968. Such funding also comes through the housing associations, formerly aided by hostel deficit grant, but now by its successor. On occasion, funding comes also from the local authorities—sometimes from their housing budgets, sometimes from their social services budgets and sometimes from a mixture.
So, the funding is available, but there still seems to be a considerable shortage of places. I wonder whether to an extent the Government might wish to plead that they are a victim of their own success and whether the increased numbers of women seeking places shows that there is a far greater pent-up demand in this area than we were aware of.
Women's Aid (Scotland) issued its annual report this weekend. It was reported in the Sunday Times in Scotland—there are certain advantages to having one's party conference in Scotland. That organisation states that the number of women who have been admitted to refuges in Scotland has doubled since 1982 but that the number who have had to be turned away has increased two-and-a-half times. That shows not only an increase in the number of women coming forward to refuges—although it is a great indication of that, the number of calls that are being made to helplines is perhaps a pointer of even more untapped demand—but also reflects the problem of the slower dispersal of women from refuges. That seems to be the result of the increasing difficulty in finding rented housing. But that is a larger subject than I wish to cover tonight.
Although there are various sources of funds, there is only one source of legal responsibility. Part III of the Housing Act 1985 places an obligation on all local authorities to house the homeless. Although there is specific provision for housing women who are the victims of domestic violence, an equally clear duty to take responsibility for their children does not seem to rest on the local authority social service departments. One area of difficulty seems to be the division of responsibility in local authority administered hostels between housing and social services. The departments do not always seem to be entirely successful at getting their acts together.
The 1985 Act lays down a responsibility only to house such women—not to house them in any particular manner. As I understand it, there is no
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specific responsibility to provide a refuge. If the provision of such housing is to remain the responsibility of the local authorities, I wonder whether such a specific responsibility should not be created. Many local authorities—I understand that there are five such authorities in Wales—simply do not want to take notice of the fact that this phenomenon exists. They find it uncomfortable to think about—a view with which I can sympathise—so they try not to notice it. The fact that it costs a great deal more to use bed-and-breakfast accommodation instead of a refuge seems to slip their attention.
Local authorities also have a responsibility to rehouse. Under paragraph 8(2)(c) of the code of guidance there is a responsibility not to send such women back to their own local authority for permanent rehousing. That is an important provision that needs to be maintained. If it needs strengthening in any way to be effective, then it should be strengthened because that point may slip the attention of local authorities, which tend to have a resistance to anything that is in effect a non-local obligation. It is the fact that we are talking about a "non-local" matter that raises the problem of trying to get local authorities to take responsibility.
The Minister may be surprised to hear anyone on these Benches suggest that any function might be taken away from a local authority because I admit that we more often make the opposite suggestion. Usually, we are talking about functions that are inherent in the local community. However, what strikes me about this matter is that we are not talking about a responsibility that arises from a local community but about a national responsibility. It is a national problem of women moving, not a problem affecting members of a home community only. Local authorities have always tended to resist taking responsibility for anyone from outside their boundaries.
Many centuries ago, it used to be a rule that single parents and their children were sent back to their home parish, but there was so much resistance to that that it was sometimes ruled that the home parish of the mother and the child were different. It took the intervention of central government to stop that.
That national character is even clearer if one thinks of the more specialised types of provision of refuge; for example, refuges for Asian women. Apart from any cultural arguments for them, there can be a strong language argument for them. I have heard of a case of a woman being taken up and down a local London high street after arriving at two in the morning severely injured until at last a local shopkeeper who spoke Punjabi was found. Your Lordships will see why I argue that there is a case for specialist Asian provision. After all, it does not make much sense for every local authority to keep a Punjabi speaker, a Bengali speaker and a Gujarati speaker in every area of the British Isles. It is because of that case for specialisation that I wonder whether this is inherently a national function.
A research report on the funding of refuges produced by Nicky Charles for Welsh Women's Aid has recommended a system of centralised specific

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funding. The point about "specific" is important. The system of housing benefit is designed for tenancies. It does not fit ideally with a floating population, which is what in a refuge one must be getting. There will always be some people who are there for one night only and who move on. There will always be a variation in the number of people in the room because one does not turn away people who arrive in distress at two in the morning. There is a greater misfit between that need and the housing benefit system than there was between the need and the old board-and-lodging system. That might be taken into account in any review of the funding.
From the Welsh report it seems that housing benefit does not altogether cover the costs. It worked out the cost of one family place—a mother and child or children—at £95 a week. That is not that exorbitant, but it seems that there are only three refuges in the whole of Wales where housing benefit covers that cost.
There is here a question which is worth thought. There is scope for consolidation. There is a question to investigate about whether the legal obligations are specific enough and whether they are in the right place. The alternatives to refuges are not necessarily satisfactory. I have mentioned the cost of bed-and-breakfast accommodation. If a refuge cannot cope, one may often end up with children in care. It is striking how many of the women in refuges bring with them children who have been sexually abused.
There is a case here for a new central system. We can all investigate how strong that case is without any party division between us. When we have that up and running, which will take quite a time, we might go on to wondering about what can be done to help with the rehabilitation of the men who created the original problem.
9.12 p.m.
Baroness Hamwee: My Lords, I am grateful to my noble friend for bringing this important matter to the attention of the House and for instigating the debate. I am the joint chairman of Chiswick Family Rescue which will be known to some of your Lordships as the first of the women's refuges, started by Erin Pizzey. It is now in its 21st year. It is sad that the problems are not just continuing but are increasing or perhaps being brought increasingly to our attention. It may also be appropriate in its 21st year that we should consider the role of women's refuges.
At Chiswick, which is only one of 200 refuges in this country, we see the scale of the problem. Chiswick runs a 24-hour crisis line and receives 10,000 calls each year. That represents 10,000 distressed women. Its referrals in the year to last April, from a number of agencies, totalled just under 2,500. Of those it is known—I say that because some of the sources of the referrals were not known —that 1,400 came from London. The balance came from well beyond the immediate area and may have come from outside London. Of the admissions, about 75 per cent, of the women came from the London area.
As my noble friend Lord Russell said, the issue is not just about funding, although it is notable that women's refuges have limited success in raising funds.
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I have recently seen an estimate that on average only 4 per cent, of income is raised from donations. Only a small number succeed in attracting funds from non-statutory sources. Certainly, our experience in Chiswick is that independent income is unpredictable. We are extremely grateful for it. There have been major donations; but I do not feel that it is appropriate. It is an uncertain existence to have to rely on donations.
Perhaps I may say a little more about Chiswick. The refuge is able to provide bed spaces—I use the words "bed spaces" because they give an indication of how crowded some of the refuges inevitably are—to just under 50 women. At any given time, 75 to 100 children are also accommodated. Chiswick runs—as it must—a nursery and other facilities for those children. It runs the facilities for the women and children with nine members of staff. Because of funding problems, last year six full-time refuge workers had to be made redundant. So a staff of 15, who had their work cut out anyway, was reduced to nine. Only three of the staff were available to do the case work. I am sure that your Lordships can imagine the amount of counselling required and the practical assistance that is needed by the 50 women residents.
Noble Lords will not be surprised to know that the workers at the refuge have to work very long hours. They share evening and weekend duties on the 24-hour crisis line. There are two nursery workers catering for the needs of all the children. As my noble friend mentioned, the costs to society from the situation are enormous. As domestic violence escalates, so do the costs to the police who have to make repeated calls to the same addresses, to the courts, to the hospitals who treat injuries, to the social services, and to the housing authorities. On average, residents at Chiswick stay in the refuges for 18 months to two years before they are able to be rehoused. Many are placed in bed and breakfast accommodation which is an expensive alternative, as we all know. There is a cost to society as well as a personal cost of which I was not aware. It is a horrifying statistic that 29 per cent. of all murders in Britain are of women killed by their partners.
It is not only the social services, hospitals and so on who count the cost. Many working hours are lost to industry and commerce as a result of women being assaulted. Children are left scarred by the experience, emotionally, psychologically and physically. I am told that some children arrive at Chiswick so traumatised that they are unable to speak. I am sure that we can all imagine the different symptoms that many children exhibit. I understand also that recent figures show that about 50 per cent, of all recorded crime is committed by young male adults. About 50 per cent, of them have grown up witnessing or experiencing abuse.
It is difficult to establish preventive programmes when funding is so difficult. In this country, we have relied very much on refuges and on the police to contain the problem, and containment is perhaps the right term. We have 200 refuges. To put it in perspective, although I have no quarrel with those who support the protection and care of animals, the 200 refuges for abused women compare with about

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1,500 refuges for animals. Those are the registered animal shelters; many more are unregistered. The 200 refuges are only one-eighth of the provision recommended in 1975 by the Select Committee on Violence in Marriage. Again, it is no surprise, given the funding difficulties, that many of the refuges are overcrowded and in a state of disrepair.
Those who work at Chiswick, the professionals, believe that we need to review our policies, programmes and legislation to co-ordinate the services and to co-ordinate the agencies involved in the problem. The following are required: an arrest, charge and prosecution policy; increased refuge provision; more services for children; second stage accommodation for women who are moving on from refuges; guidelines for the various agencies; training programmes; and training materials for professionals.
In Canada the federal government are spending 136 million dollars over a four-year period. They are adopting a three-pronged approach of prevention, enforcement and improved services. I understand that they estimate that the approach will save something over 390 million dollars over a period of 14 years and will involve less call on police time and hospital services, less dependence on state benefit and less need for foster care for children. As my noble friend so clearly stated, this is a cross-departmental problem. I know that the Minister is extremely sympathetic to the difficulties this matter raises. Chiswick Family Rescue refuge is aware of that sympathy but realises that its hands are tied.
However, I have two final reasons for stating that this is a national issue. We rely on front line workers to help us make policy. Chiswick Family Rescue has provided a resource for information and advice to the Home Office and to the police. The Home Office has asked the director of Chiswick Family Rescue to go to Canada to report back on the Canadian approach.
The women in refuges have taken a major step in leaving home. Many of them are not able to take that step. I am sure we were all shocked and outraged to learn of the recent case of Sally Emery. Her paralysis was such that she could not leave home and she watched as her child was killed. She is now in Holloway. I am not attempting to analyse that case but it must have come as an appalling realisation to many of us that women could be reduced to that state.
If women are able to leave home and find a sanctuary—they cannot find that sanctuary on their own doorsteps—they must be able to start to live as normal a life as possible as soon as they can. They will need help to do that. Their children must be able to live as normal a life as possible as soon as they can. The blunt fact is that abused women cannot risk staying in the same location. They cannot live in a location where, if they go outside the front door, they may encounter the person who has brought them to their abused state. Refuges cannot assist purely on a local basis because the risks are too high.
9.22 p.m.
Lord Meston: My Lords, I wish to speak only briefly in full support of the thrust of the remarks of both my noble friends. Like most lawyers practising family law, over the years I have had a good number of clients who are in women's refuges or who have been in a refuge. It is quite apparent that refuges are all-important first-aid posts in the immediate aftermath of the breakdown of a marital or other relationship. They provide not just protection for women, which is often much needed, but also shelter for children. The refuges offer a respite from the parental crossfire of which they are the innocent victims.
My observation is that the refuges also provide impressive emotional and practical support. Such support comes both from the staff and from other occupants. The support is particularly important when the newly arrived women and children are at their lowest ebb and when they are physically battered, frightened and lonely.
It is quite apparent that no one chooses to be in a refuge. The women are only there because they have no other bolt-hole, either in the wider family or in the community. The refuges with which I am familiar are both situated in new towns where the extended families of the victims of abuse are often far away. There is nowhere else to provide protection from the unwanted attention of the violent, obsessive or remorseful male partner.
The availability of refuges received very strong support from a Select Committee of another place in its 1975 report on violence in marriage, to which my noble friend has just referred. That report observed that in some areas the relationship between women's aid groups and local authorities was excellent. However, it pointed out that in other areas the relationship left much to be desired. I strongly suspect that the same is true today.
It is not just a question of providing hostels but of keeping them well equipped and reasonably repaired and decorated. Some women and children have to stay in refuges for some time, particularly in the present climate to which my noble friend Lord Russell referred. Responsible local authorities recognise that if they did not provide or subsidise refuges the alternative would often be scarce and grim hostels for the homeless or temporary accommodation, which the local authority also has to provide and finance.
Therefore, if, as it seems, there is no consistency in the provision or standard of amenity of refuges the matter must surely be considered on a national footing, if only to ensure reliable funding in place of the ad hoc arrangements to which both my noble friends referred.
I conclude by pointing out that in 1975 the report recommended one family place per 10,000 of the population as an initial target; that target to be adjusted as might prove appropriate. I ask the Minister whether there is any target now and whether it is being met.
Lord Desai: My Lords, we are very grateful to the noble Earl, Lord Russell, for introducing the topic

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and making us all pause and think seriously about the problem, which is clearly not only urgent but very serious. In the spirit in which the noble Earl spoke, I shall make this a non-partisan statement. I shall also try to minimise the overlap between what others have said and what I have to say.
The problem is clearly serious and the size of the problem has been pointed out. Since we have become aware of the problem of domestic violence to women —and the noble Baroness, Lady Hamwee, referred to the Chiswick refuge—the number of cases has grown, partly because we have been able to make some provision. However, we are all aware that the provision is woefully inadequate for the size of the problem.
The fragmentation of responsibility among different government departments has already been mentioned. The Department of Health, the Department of the Environment, the Home Office and the Department of Social Security are all involved. The responsibility rests on local authorities but the funding to allow them to help women's groups is also fragmentary and inadequate.
Perhaps I may raise one or two points which have not already been mentioned and which may be helpful. One of the ways in which women's refuges could derive income would be from rent. If the women concerned were to pay rent towards their stay that would be helpful. However, typically the problem is that women, especially women who have been subjected to domestic violence, are either not aware of their entitlements or, if they are aware of their entitlements, may have to claim them far from their home base because they have run away from where the violence occurred. From all I have read, it seems that there is great arbitrariness about how much entitlement to housing benefit is received. It depends very much on local rent officers. A code of guidance was issued to local authorities about Section 73 of the Housing Act 1985, but it does not seem to be followed in all cases. The arbitrary variation in what people are entitled to should be removed so far as possible.
One way to strengthen the capacity of women to seek shelter would be to strengthen their entitlements. In our society, even today many entitlements are channelled through the family. One problem of domestic violence is that the family is no longer the appropriate unit through which to channel a variety of income entitlements. We need to reconsider how we can restructure some of the entitlements that we want to extend to people in need and channel them not through the family but to the individual. That having been said, there clearly needs to be some kind of national guidelines in respect of what people are entitled to. Somehow, local authorities must be encouraged to follow a consistent practice as to what people can claim by way of rent.
I should like to say a few words about the position of Asian and black women. The noble Earl, Lord Russell, mentioned the case of Vandana Patel. For many reasons, it is a very serious case. It clearly shows that over a number of years, although the police have tremendously improved their understanding and appreciation of the problems of domestic violence,
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there is still further progress to be made. In the case mentioned, it seems that in an attempt to accommodate what was seen as a cultural variation of normal practice, a mistake was made. As the noble Earl, Lord Russell, said, there cannot be an expert knowledge of Asian languages in every local authority. Nonetheless, we need to rethink the problem in a very serious way.
I know more about Asian women than about Afro-Caribbean women. It seems to me that Asian women especially, because of a lack of knowledge of the English language and the structure of the family, are less used to claiming entitlements and are more dependent for day-to-day living not only on their spouse but on the community. The problem may be precisely that the community cannot be appealed to because the community may not sympathise with the woman. One must understand that. A woman may have to go far away from the place where domestic violence occurred. At that stage she needs a variety of help, some of which may relate to income entitlements and some being instructions on how to reconstruct her life in a new environment.
The women's aid groups are very helpful and, as was pointed out, many local authorities are very good to them. But there is a need for a denser network of aid groups and women's refuges across the country than we have so far. The situation of Asian women may have to be looked at again with some care.
I speak from a rather sparse knowledge about the matter, but it seems to me that it is more difficult for women without children to obtain help than it is for women with children. Women with children are helped by social security. It is not a matter for the Department of the Environment. I gather that women without children—and women who are subject to attacks which are not domestic but attacks from outside—find it difficult to get help. Again it is a serious problem faced by Asian women in the East End as well as other parts of London and elsewhere. If we were to frame a national code, we might be able to arrive at a solution to the problems relating to women with and without children.
First, we must improve, strengthen and standardise income entitlements for women and extend understanding among women of their entitlements. Secondly, although the available facilities are very good, they are insufficient. The financing of them is precarious. Having strengthened the income entitlement of "clients", we have to strengthen the funding of those bodies. That point has been made by other noble Lords. Whatever we do, we ought to make the funding of women's refugees more secure, more generous and more adequate to the existing need.
There are problems about which a government department would take charge. Without being partisan, we need a women's department which could co-ordinate the different problems that women face.
I do not wish to take up more time. Again I thank the noble Earl for bringing the difficulty to our attention. It is a problem that the majority—not the minority—faces. We are all agreed that it is serious. We are all agreed that we ought to help. We need to get our heads together to devise a better solution.
9.36 p.m.
Baroness Hooper: My Lords, I too am grateful to the noble Earl and to everyone who has contributed to the short debate for enabling us to concentrate on this area of anxiety and, by doing so, I am sure, to improve the level of awareness and consequently the level of provision.
The noble Earl and his noble friends made a powerful case for that area of concern to be a national responsibility. However, I must preface my remarks by saying that the Government regard the issue as primarily a local responsibility. I am aware of the difference in approach in other countries. Like the noble Baroness, Lady Hamwee, I am aware of the approach that Canada takes. It must be one of the leading countries in its action. As a Government we recognise that domestic violence is a serious problem which has serious consequences for everyone concerned. We have taken a number of initiatives which aim to improve the response to this criminal offence and to reduce its incidence.
In responding to domestic violence, we need to ensure that perpetrators are brought to justice—we have heard of very worrying cases which make us anxious—that victims should receive the necessary emotional and material support and that action should be taken to prevent future violence.
Such responsibility straddles a number of different government departments. As one of his three questions the noble Earl asked whether that was the most effective way of dealing with that responsibility. The action is overseen by the ministerial group on women's issues. That is our answer to the suggestion put forward by the noble Lord, Lord Desai, for a separate ministry. We believe that the activities of the ministerial group are most effective. Recent initiatives have included the issue of guidance to the police and to the Crown Prosecution Service to ensure a quick and effective response to incidents of violence in the home and a number of local schemes for tackling domestic violence which are being funded by the Government through the safer cities programme.
The Government also recognise that women who find it necessary to leave the marital home because they are the victims of domestic violence, or because they are in fear of domestic violence, are in an especially vulnerable position. As has been said, the refuge which pioneered the provision of accommodation and support for women in this predicament — and, indeed, for their children—was the Chiswick Family Rescue with which the noble Baroness, Lady Hamwee, is associated. It was started as a local initiative, initially without any help from statutory sources. I wish to take this opportunity to express my admiration and gratitude for the pioneering and ongoing efforts.
During the years that followed a network of other refuges was established, again almost invariably as a consequence of local initiatives. Sometimes they had a little direct or indirect help from local authorities, sometimes there was no statutory involvement. The Select Committee report on violence within marriage was published in 1975. It welcomed the expansion of refuge provision but commented that it was not
1426
enough. I am pleased that the provision has since expanded significantly beyond its 1975 position. There are now about 275 refuges in England and Wales, although I appreciate that that is still a great deal fewer than the target set out in the Select Committee report. The noble Lord, Lord Meston, referred specifically to that matter, asking whether the Government had set any targets. Making accurate estimates of need is particularly difficult. That must be recognised when considering the figures that were suggested in the report. For that reason the Government have not set any targets. They believe that it is sensible to leave the creation of new refuges to local initiatives on the reasonable presumption that if more refuges are needed that will be recognised locally.
The Women's Aid Federation of England was established in 1975 to co-ordinate and support the work of the refuge movement. Parallel women's aid federations were established in Scotland, Wales and Northern Ireland. They have all been grant-aided by the Government. In 1991–92 the Department of Health provided £137,000 for the Women's Aid Federation of England under Section 64 of the Health Services and Public Health Act 1968. In addition, it made a contribution towards the cost of employing a special adviser on child care. We must remember that at any given time more children than adult women are accommodated in refuges. In the same year, the Scottish Office and the Welsh Office made additional grants. The Northern Ireland Women's Aid Federation has also been grant-aided. We believe that it is appropriate that the federations should be grant-aided by central government because of their representative and supportive role. Their task is to help locally-provided refuges to do a better job both through co-ordinating their activities and providing expert advice and professional support. We greatly value the work that they do in that respect.
While dealing with that, I should point out that the Women's Aid Federation recognises the special needs of women from ethnic minorities, especially Asian women. Several refuges are especially geared to that sort of provision and the federation is able to advise. However, I appreciate the particular needs of that group, and it was useful to hear the views of the noble Lord, Lord Desai.
I said earlier that it was our view that the provision of women's refuges should be regarded primarily as a local responsibility. There are a number of ways in which centrally provided money is channelled indirectly to local refuges. In Northern Ireland, local refuges are grant-aided directly by the area health and social services boards. But I must stress that decisions on the allocation of this money are made by the boards and not by central government, so the principle of local autonomy is preserved.
In England, a number of refuges have obtained help towards the salaries of paid workers through the Manpower Services Commission and through the Urban Programme. The Urban Programme is administered by local authorities, which co-ordinate bids on behalf of local initiatives. Recently the grant has included provision for the support of refuges in

1427
inner city areas, mostly towards capital costs but also towards running expenses. In Wales, certain refuge worker posts are funded through the Urban Programme and some child worker posts under the Support for Child and Family Services Grant Scheme. Another important source of indirect central funding is the Housing Corporation, and it is estimated that in 1991–1992 about £5.1 million was allocated to housing associations providing refuges for women victims of domestic violence. In all these cases the important decisions about provision are made locally.
In arguing the case for a national network, the noble Earl, Lord Russell, referred to the fact that a great many women in refuges are accommodated a significant distance away from their matrimonial homes. In some cases that is because of a desire to escape social stigma but much more frequently it is because of the need by the woman to get some distance away from a violent husband, who is likely to search her out and harass her and in some cases inflict further violence. I accept that that happens, and I appreciate the reasons for it. It is recognised in the homelessness code of guidance which is followed by local authorities. But that is not an argument against the principle of local provision.
The approach is, however, dependent upon the adequacy of capital and revenue funding. I mentioned earlier the Urban Programme and the Housing Corporation, and I know that in England the accommodation used by a number of refuges has been provided by local authority housing departments and by housing associations. The most important source of revenue funding for refuges is social security, and that is likely to continue. Important changes in the social security arrangements for claimants in residential care are being introduced in April 1993 under the community care arrangements, but the arrangements that affect refuges will not change. Women's refuges come within the scope of community care, and I hope that refuges in England are already discussing with their social services authorities the contribution that they are able to make to social care provision and that they will be mentioned in the authorities' community care plans which are due to be published by the beginning of next month. It will then be for refuges to discuss with their local authorities the
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kind of contractual arrangements that are appropriate for providing the sort of care that they are able to offer.
I accept that it could be argued that women's refuges may not be among the top community care priorities of local authorities. Nevertheless, the implementation of community care is a long-term process. It creates a much greater transparency about the provision and gives the opportunity for people who are anxious about any deficiencies in that provision to make their views known. There are therefore continuing opportunities to adjust the balance of provision to meet the need. I hope that the community care arrangements will ensure a more satisfactory framework than any system based on central funding.
The noble Lord, Lord Desai, raised the issue of entitlement to benefit. Once a woman has established her entitlement to benefit, she is entitled to the full range of benefits including income support and housing benefit. She is therefore not dependent upon having a partner, and her entitlement is not reduced.
We have talked this evening about the provision of women's refuges. Some important and useful arguments have been advanced and they will certainly be considered in terms of future policy and decision making. I should like to conclude by quoting again from the 1975 Select Committee report. It said,
"refuges are not an entirely satisfactory solution to the problem, and we believe that our other recommendations, especially the legal ones, will have a significant effect for the future. Ideally, in the pattern of violent family break-up, it should be the perpetrator of the violence—the man—who leaves the home, not the wife and children".
I am sure that the noble Earl and others who have spoken in the debate will agree with that.

Avon Weir Bill [H.L.]
Returned from the Commons agreed to with amendments; the amendments were considered and agreed to.

Folkestone Harbour Bill [H.L.]
Returned from the Commons agreed to with amendments; the amendments were considered and agreed to.
House adjourned at eight minutes before ten o'clock.

  PRISON SERVICE MANAGEMENT REPORT: GOVERNMENT RESPONSE
  PRISON SERVICE MANAGEMENT REPORT: GOVERNMENT RESPONSE
  CZECH AND HUNGARIAN VISITORS: IMMIGRATION PROCEDURES
  CZECH AND HUNGARIAN VISITORS: IMMIGRATION PROCEDURES
  CZECH, POLISH AND HUNGARIAN VISITORS: INTERPRETERS
  CZECH, POLISH AND HUNGARIAN VISITORS: INTERPRETERS
  VAUXHALL CROSS: PURCHASE
  VAUXHALL CROSS: PURCHASE
  No. 2 MARSHAM STREET
  No. 2 MARSHAM STREET
  DOCK LANDS LIGHT RAILWAY: DISPOSAL
  DOCK LANDS LIGHT RAILWAY: DISPOSAL
  LONDON: TRAFFIC MANAGEMENT AND PARKING
  LONDON: TRAFFIC MANAGEMENT AND PARKING
  AIRLINE TICKETS: PASSENGER PROTECTION PROPOSAL
  AIRLINE TICKETS: PASSENGER PROTECTION PROPOSAL
  LONDON: RED ROUTE TRAFFIC SCHEME
  LONDON: RED ROUTE TRAFFIC SCHEME
  VEHICLE ODOMETERS: MILEAGE CHECK MEASURES
  VEHICLE ODOMETERS: MILEAGE CHECK MEASURES
  CHANNEL TUNNEL: FREIGHT WAGONS
  CHANNEL TUNNEL: FREIGHT WAGONS
  LONDON: COACH PARKING
  LONDON: COACH PARKING
  BRITISH TECHNOLOGY GROUP
  BRITISH TECHNOLOGY GROUP
  GAS ACT 1986: AUTHORISATION OF VISITING FORCES
  GAS ACT 1986: AUTHORISATION OF VISITING FORCES
  GAS ACT 1986: AUTHORISED PERSONS' CONTRIBUTION TO CONSOLIDATED FUND
  GAS ACT 1986: AUTHORISED PERSONS' CONTRIBUTION TO CONSOLIDATED FUND
  FOREIGN DIPLOMATS: ALLEGED FOREIGN DIPLOMATS: ALLEGED SERIOUS OFFENCES
  FOREIGN DIPLOMATS: ALLEGED FOREIGN DIPLOMATS: ALLEGED SERIOUS OFFENCES
  FOREIGN DIPLOMATIC MISSIONS: UNPAID PARKING FINES
  FOREIGN DIPLOMATIC MISSIONS: UNPAID PARKING FINES
  EC INSTITUTIONS: STAFF ESTABLISHMENT
  EC INSTITUTIONS: STAFF ESTABLISHMENT
  SMALL CLAIMS PROCEDURE
  SMALL CLAIMS PROCEDURE
  AUTHORISED PRACTITIONER SCHEME
  AUTHORISED PRACTITIONER SCHEME
  PUBLIC RECORD OFFICE: AGENCY STATUS
  PUBLIC RECORD OFFICE: AGENCY STATUS